TIDMGIF
RNS Number : 4162N
Gulf Investment Fund PLC
25 September 2023
Gulf Investment Fund PLC
25 September 2023
Legal Entity Identifier: 2138009DIENFWKC3PW84
Gulf Investment Fund plc (GIF)
Annual report for the year ended 30 June 2023
- Net asset value up 20.3% vs benchmark down 1.3%
- Share price increased 18.8% in the 12 months
- GIF shares ended the period trading at 1.9% premium to NAV (5-year average discount 7.3%)
- Dividend of US cents 7.02 paid in the year, a yield 4.0%
Anderson Whamond, Chairman of Gulf Investment Fund plc,
said:
"Gulf Investment Fund's 21.6% outperformance in the 12 months,
compared to the index which fell, came from stockpicking and active
decisions on country weightings in the region. For example, the
fund was overweight Consumer Discretionary, Industrials and
Healthcare. This is a reminder that the GCC is now much more than
just an oil and gas story. The GCC region is also rapidly becoming
globally more significant in geopolitics, in business, sport and
tourism.
"There are strong reasons why more international investors will
be attracted to the region. We have a healthy GDP growth with
non-hydrocarbon sectors growing even faster, as well as significant
social reforms and major infrastructure spending projects."
Anderson Whamond
Chairman
Gulf Investment Fund Plc
+44 (0) 1624 630400
William Clutterbuck / Rachel Cohen
H/Advisors Maitland
+44 (0) 20 7379 5151
gulfinvestmentfund-maitland@h-advisors.global
Chairman's Statement
I present your company's Annual Report and Financial Statements
for the 12 months to 30 June 2023.
In the 12 months, Gulf Investment Fund PLC's (GIF) net asset
value per share (NAV) rose 20.3% (including dividends) to
US$2.3556, outperforming the benchmark (S&P GCC Composite
Index) which fell 1.3%, by 21.6%. Over the year the share price
increased 18.8% from US$2.02 to US$2.40.
The NAV of the company has grown 171.1% (including dividends)
since the investment mandate widened from Qatar-focused to
Gulf-wide in December 2017. Since then the company has outperformed
its benchmark by 90.6%. $100 invested in the company in December
2017 is now worth $271. If $100 had been invested in the benchmark
it
would be worth $180.5. This shows the value of active management and effective stock picking.
Over the 12 months to the end of June 2023 the company paid US
cents 7.02 of dividends which is a yield 4.0% of the NAV at 30 June
2021. This is in line with the enhanced dividend policy introduced
in April 2021.
GCC is a higher growth economic region, mostly overlooked by
international investors
GIF is the only London-listed investment company focussed on
Gulf Cooperation Council (GCC) countries. These states now
represent 7.2 % of the MSCI Emerging index, a big increase from
1.20% in June 2017.
The GCC is now much more than just an oil and gas story. In the
12 months ending June 2023, GIF was overweight in Consumer
Discretionary (11.4% of NAV), Industrials (27.9% of NAV) and
Healthcare (5.6% of NAV). Detail on the portfolio and investment
perspective is in the Managers report which follows.
The GCC region is rapidly becoming more significant in
geopolitics, in business, sport and tourism. There are strong
reasons that this, the outperformance of the company and the
economic performance of the region will attract a wider investor
audience, globally.
The Board has worked through the year to encourage interest from
a wider range of investors by enhancing the visibility, liquidity,
and investor appeal of the company. This includes a revamp of the
website to make it easier to use and relevant to retail investors,
and the commissioning of research reports. I am encouraged by the
fact we were able to take advantage of our share block listing
facility and issued 450,000 ordinary shares during the last 12
months. At the end of June 2023 GIF was trading at a small premium
to NAV which is a significant rerating over the last 18 months.
Since the publication of the last annual report, the company has
undertaken two tender offers. In September 2022, the tender offer
resulted in a buy-back and cancellation of 178,064 ordinary shares.
Following approval of the 2023 bi-annual tender offers, the company
undertook the first 2023 tender offer in March/April, when a
further 251,672 ordinary shares were repurchased and cancelled.
Taking into account both share issuance and tender offers, the
number of shares in issue as at the end of June has risen to
41,125,480 shares.
Following the year end, a further 375,000 ordinary shares have
been issued utilising the block listing facility. In addition, we
have introduced a sterling market quote in order to maximise the
ability for UK investors to invest in the company. The sterling
quote can be traded using the ticker GIFS.
Results
Results for the 12 months showed a profit of $16.46m generated
from fair value adjustments, realised gains/losses and dividend
income. This is equivalent to a basic earnings per share of US
cents 40.14 (2022 US cents 34.09).
Ongoing charges rose to 1.89% from 1.67% in the previous year.
The charges were calculated in accordance with the Association of
Investment Companies methodology . The increase mostly reflects the
cost investment we made in making the company more attractive to a
wider range of investors.
Outlook
The global economy is still under the overhang of the Russian
invasion and war on Ukraine and economic softness from higher
interest rates. Meanwhile, changes in oil and gas prices will
continue to impact GCC economies, as countries deal with budget
challenges.
The Board continues to view the future of GIF with confidence.
This is underlined by healthy GDP growth in the region generally,
but particularly in non-hydrocarbon sectors which are helping to
balance the economies of GCC countries. Drivers of this are the
significant social reforms across the region and especially in
Saudi Arabia, the region's major economy; tourism, major
infrastructure spending projects; and Qatar's North Field gas
expansion.
Tender Offer
In September 2023 we will be announcing details of the second
tender offer for 2023. As before the tender offer will be subject
to the condition that the company would have a minimum of
38,000,000 shares in issue, after the tender.
Board
I would like to take this opportunity to thank Neil Benedict,
who has decided to step down at the end of the year for all his
efforts over the years on behalf of the company. I have relied on
his good counsel since taking over as chairman last year.
We are fortunate to be able to welcome Paddy Grant to the board
commencing on 1st October 2023. Paddy brings a wealth of knowledge
of the region having worked for both JP Morgan and Schroders in the
Middle East for over 20 years.
Investment Adviser
Jubin Jose, portfolio manager at the Investment Adviser, intends
to step down at the end of December 2023. He will be replaced as
portfolio manager by Bijoy Joy who is currently Assistant Portfolio
Manager of GIF, and who has been involved with Jubin in the
day-to-day management of the fund for nearly 10 years.
The Board believe that Bijoy is well suited to manage the fund
and to continue to deliver the fund's investment objective for
shareholders. He will be supported by Robin Thomas , who has been
on the team for over 10 years, and the eleven-strong QIC equity
research team.
Annual General Meeting
I look forward to welcoming shareholders to our fifteenth Annual
General Meeting later in the year at the company's registered
office at Exchange House, 54-62 Athol Street, Douglas, Isle of
Man.
Anderson Whamond
Chairman
22 September 2023
Business Review
This provides information about the Company's business and
results for the year ended 30 June 2023. It should be read in
conjunction with the Report of the Investment Manager and the
Investment Adviser on pages 7 to 15 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 the
opportunities for growth offered by the expanding GCC economies by
investing, through its wholly owned subsidiary, in listed or soon
to be listed companies on one of the GCC exchanges.
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 investment policy is on pages 16 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 S&P GCC Composite 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
The Board regularly monitors the discount/premium to net asset
value. The Directors renew their authority at the AGM 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 and
where it is accretive to net asset value per share.
Currently there is no live buy-back programme in operation.
Buy-backs have been replaced by a programme of bi-annual tender
offers launched in March and September each year, in each case for
up to 100 per cent. of each Shareholder's holding of Shares as at
the relevant Record Date (each a "Contractual Bi-Annual Tender
Offer"), subject to a minimum size condition. Shareholders on the
Register at the relevant Record Date will be invited to either (i)
continue their full investment in the Company; or (ii) save for
Restricted Shareholders, tender some or all of their Shares held at
that date. The Directors believe that the implementation of the
Contractual Bi-Annual Tender Offers should provide those
Shareholders who want it with the additional liquidity they require
going forward.
The Company will seek the requisite authorities required from
its Shareholders to undertake the Contractual Bi-Annual Tender
Offers at each Annual General Meeting.
On 9 May 2022 the Company made an application to the London
Stock Exchange for a block listing of 2,700,000 Ordinary Shares of
US$0.01 each ("Shares") to be admitted to trading on the Specialist
Fund Segment of the London Stock Exchange's main market for listed
securities ("Admission").
The Shares to be issued under the block listing may be issued
pursuant to the Company's existing authorities to issue new Shares
on a non pre-emptive basis, to satisfy continuing market demand for
the Shares and to manage the premium to NAV at which the Shares
trade.
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 enhanced 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. Apart from the key risks outlined below, the possibility of
a tender offer up to 100% of the share capital of the Company and
the Company's continuation is identified as an ongoing risk.
In addition to the tender offer noted on page 4 the key risks
which have been identified and the steps taken by the Board to
mitigate these are as follows:
Market
The Company's underlying 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 Notes 1 and 2 on pages 49 to
54.
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 to 2004 and since its shares are listed on the
London Stock Exchange, the Disclosure Guidance and Transparency
Rules and Market Abuse Regulation (MAR) (together the "FCA
Rules")'. A breach of company law or FCA Rules could result in the
Company and/or the Directors being fined or the subject of criminal
proceedings and, in the case of a breach of the FCA 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 FCA 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 31.
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 Notes 1(c), 2,
6 and 8.
Report of the Investment Manager and Investment Adviser
Regional market overview:
Country
/ Region Index 30-Jun-22 31-Dec-22 2H2022 30-Jun-23 1H2023 LTM
Qatar DSM Index 12,191 10,681 -12.4% 10,075 -5.7% -17.4%
Saudi Arabia SASEIDX Index 11,523 10,478 -9.1% 11,459 9.4% -0.6%
Dubai DFMGI Index 3,223 3,336 3.5% 3,792 13.7% 17.6%
Abu Dhabi ADSMI Index 9,375 10,211 8.9% 9,550 -6.5% 1.9%
Kuwait KWSEAS Index 7,409 7,292 -1.6% 7,030 -3.6% -5.1%
Oman MSM30 Index 4,123 4,857 17.8% 4,768 -1.8% 15.7%
Bahrain BHSEASI Index 1,840 1,895 3.0% 1,958 3.3% 6.4%
S&P GCC (Price SEMGGCPD
Return) Index 150 139 -7.1% 143 2.9% -4.4%
S&P GCC (Total SEMGGCTD
Return) Index 276 259 -6.3% 273 5.3% -1.3%
Brent CO1 Comdty 115 86 -25.2% 75 -12.8% -34.8%
MSCI EM MXEF Index 1,001 956 -4.4% 989 3.5% -1.1%
MSCI World MXWO Index 2,546 2,603 2.2% 2,967 14.0% 16.5%
---------------- --------------- ---------- ---------- ------- ---------- ------- -------
Source: Bloomberg; LTM: Last Twelve Months
GCC market fell in 4Q 2022 and 1Q 2023 in tandem with declining
trend in oil price as fears of economic slowdown and stubborn
inflation ripple across global markets. Nevertheless, GCC market
gained some ground in 2Q 2023, up 5.8 per cent, in tandem with
global markets as investors anticipate US rate hikes nearing an end
and stabilizing oil price on the back of OPEC+ production cut. Over
the last twelve months, GCC market fell by 1.3 per cent in tandem
with the EM market (down 1.1 per cent) but in contrast to the
developed world market (up 16.5 per cent).
The slower pace of interest rate hikes and sustained public and
private investments in the GCC region remain the key driver for the
GCC economic growth in 2023 and ahead.
Among the GCC markets, performance was mixed during 1H 2023.
Dubai gained the most, rising 13.7 per cent followed by Saudi
Arabia (up 9.4 per cent), and Bahrain (up 3.3 per cent). Abu Dhabi
witnessed the steepest fall of 6.5 per cent followed by Qatar (down
5.7 per cent), Kuwait (down 3.6 per cent), and Oman (down by 1.8
per cent).
Over the last twelve months, Dubai was the best performing
market in the GCC region, rising 17.6 per cent followed by Oman (up
15.7 per cent), Bahrain (up 6.4 per cent), and Abu Dhabi (up 1.9
per cent). Elsewhere, Qatar (down 17.4 per cent) and Kuwait (down
5.1 per cent) corrected the most, while Saudi Arabia fell
marginally by 0.6 per cent.
GCC: Stabilizing oil price and sustained public and private
spending
The IMF in its Regional Economic Outlook has revised the GDP
growth rate of GCC countries to 2.9 per cent for 2023, followed by
3.3 per cent in 2024. Economic growth momentum in the Gulf region
is expected to remain solid driven primarily by private consumption
and the effect of major infrastructure projects in Saudi.
The Gulf region continues to implement social and economic
reforms to increase contribution of the non-hydrocarbon share in
the economy. The region has already achieved a significant feat in
various sectors such as tourism and industrials.
The fiscal position across the GCC countries is expected to
moderate from 6.0 per cent to 2.4 per cent of the GDP in tandem
with crude oil price decline by 34.8 per cent in the last twelve
months.
Table: IMF real GDP growth forecast 2023 and 2024
Real GDP growth 2020 2021 2022 2023e 2024e
GCC -4.7% 3.5% 7.7% 2.9% 3.3%
GCC oil GDP -5.4% 0.0% 12.4% 1.0% 2.2%
GCC non-oil GDP -4.1% 5.2% 4.9% 4.2% 3.9%
================= ====== ===== ====== ====== ======
Source: IMF Regional Economic Outlook, May 2023
Table: Government fiscal balances
% of GDP 2020 2021 2022 2023e 2024e
Saudi Arabia -10.7 -2.3 2.5 -1.1 -1.2
UAE -2.5 4.0 9.0 4.3 3.7
Qatar 1.3 4.4 14.2 14.7 11.1
Kuwait -11.4 2.3 11.6 7.0 4.2
Bahrain -16.3 -11.6 -5.6 -8.2 -9.0
Oman -16.1 -3.2 6.3 0.3 0.9
GCC -8.0 0.0 6.0 2.4 1.6
============== ====== ====== ===== ====== ======
Source: IMF Regional Economic Outlook, May 2023
OPEC+ lower production quota to further tighten supply
In April 2023, OPEC+ announced a production cut of 1.66 million
barrels per day, adding to the previous production cut of 2 million
barrels per day in October 2022. Total production cut stands at
3.66 million barrels per day which equals to 3.6% of global demand.
Even with the announcement of production cuts in April 2023, oil
price remained range bound amid global economic uncertainty and
slower economic recovery in China.
In a more recent meeting in June 2023, OPEC+ agreed to continue
the April production cut until the end of 2024. On top of that,
Saudi Arabia committed to an additional voluntary 1 million barrel
per day cut in July 2023, which can be extended.
GCC countries fiscal breakeven oil price (2023E)
Embedded image removed - please refer to the Company's website
www.gulfinvestmentfundplc.com for charts depicting fiscal breakeven
oil price.
The IMF estimates from May 2023 show fiscal oil price breakeven
for Saudi, Bahrain and Oman remain within the range of previous
estimates. Oil price breakeven for UAE and Qatar was lowered as
both the countries continue to benefit from non-oil economic
activities.
Key developments in GCC countries
Saudi government initiatives boost tourism
Saudi Arabia plans to invest US$800 billion in the tourism
sector over the next 10 years. Saudi Arabia has already achieved a
significant leap in the tourism sector as GDP contribution
increased from 3 per cent in 2019 to 4.5 per cent in 2022. The
target is to receive as much as 100 million visits per year from
both domestic and international tourists and contribute 10 per cent
to GDP by 2030. The number of hotel keys in Saudi Arabia is
expected to increase by 60 per cent from 129,000 keys to 212,000
keys by 2030. Saudi also announced a measures to boost tourism such
as 4-day free stop-over visa, instant e-visa for UK, US, and
Schengen visa holders.
Saudi Arabia launches 4 special economic zones in a bid to boost
industrial activities
As part of National Industrial Strategy to boost industrial
activities in the country, Saudi Arabia launched 4 special economic
zones. The new zones will focus on growth sectors of advanced
manufacturing, cloud computing, medical technology and maritime.
The special economic zones will offer investors financial and
non-financial incentives such as competitive corporate tax rates,
duty-free imports of machinery and raw materials, 100 per cent
foreign ownership, easier set-up procedures and simpler rules
around employment of foreign workers.
Qatar contracts for North Field expansion
QatarEnergy secured its second significant natural gas supply
agreement with China in less than a year. QatarEnergy and China
National Petroleum Corporation (CNPC) have signed a 27-year deal
for the delivery of 4 million tonnes of LNG annually. As part of
the agreement, CNPC will also acquire a 5% stake in the eastern
expansion of Qatar's North Field LNG project, which has a capacity
of 8 million tonnes per year.
QatarEnergy also signed a long-term LNG supply agreement with
Bangladesh's state-owned gas company, Petrobangla. The 15-year
agreement entails the supply of 2 million tonnes of LNG annually,
with deliveries expected to commence in January 2026.
Thailand's state-controlled energy company, PTT, is in
discussion with Qatar for a 15-year LNG supply agreement regarding
a potential supply of 1 or 2 million tonnes per annum of LNG.
Kuwait: $27.6bn infrastructure projects
Kuwait's Vision 2035 has made infrastructure a focus, leading to
an upgrades of the country's infrastructure. KPMG highlights that
Kuwait has a pipeline of infrastructure projects worth
approximately $27.6 billion in the bidding stage.
Kuwait is undertaking a significant environmental project to
restore and re-vegetate 42 square kilometers of land, making it the
largest such initiative globally. The Kuwait Oil Company is set to
participate in four major contracts for land regreening in the
north and south of the country.
Oman to stimulate non-hydrocarbon sector
Oman has announced the establishment of a $5.2 billion
investment fund, Oman Future Fund. The fund is to stimulate the
country's economy, promote private sector participation, and
finance profitable investment projects that contribute to economic
diversification. The fund will dedicate a portion of its capital to
support investments in small and medium enterprises in Oman.
Bahrain plans 50 mega projects
Bahrain plans to launch over 50 mega projects in sectors such as
housing, education, health, digitalization, and artificial
intelligence. These projects, outlined in the draft national budget
for 2023-2024, are to enhance the country's development and
infrastructure. The cost of the projects is estimated at BD1.123
billion, with BD608.6 million allocated for this year and BD514.1
million for the following year.
GCC central banks slows interest rate hikes following Fed
The Fed raised interest rates by 25 bps in the months of
February, March and May in 2023. In lockstep, Saudi Central Bank
increased its repo rate and reverse repo rates by 25 bps each to
5.75 per cent and 5.25 per cent, respectively in May. The Qatar
Central Bank hiked its deposit rate by 25 bps to 5.50 per cent, its
lending rate by an equal amount to 6.0 per cent and its repo rate
to 5.75 per cent. The Central Bank of the United Arab Emirates
increased the base rate of its overnight deposit facility by 25 bps
to 5.15 per cent from 4.90 per cent.
Robust GCC IPO pipeline
GCC saw 20 listings in 1H 2023, raising $5.1 Bn. Saudi had 16
IPOs, raising $1.1 Bn and UAE had 3 IPOs raising around $3.7
Bn.
In the region, UAE's ADNOC gas became the largest IPO (proceeds
of $2.5 Bn) with an oversubscription of 50x. Recently listed
Saudi-based pharma company, Jamjoom was the second largest IPO in
the region raising around $336 Mn followed by Abraj Energy from
Oman, raising $244 Mn (oversubscribed 8.7x).
IPOs in the pipeline for 2H 2023 remain robust, 29 IPOs are
expected to list taking the total to 49 IPOs for the full year
2023, surpassing the number of IPOs (46) for 2022.
Aramco and TotalEnergies to build $11 Bn petrochemical complex
in Saudi Arabia
The petrochemical complex will house the largest mixed-load
steam cracker in the GCC capable of producing 1.65 million tons per
annum of ethylene, the first in the region to be integrated with a
refinery. It will also include two state-of-the-art polyethylene
units using Advanced Dual Loop technology, a butadiene extraction
unit, and other associated derivatives units.
Moody's upgrades Saudi banks outlook from stable to positive
Outlook upgrade is mainly driven by sustained momentum in
non-hydrocarbon sectors of the economy where the banks do most of
their business. Demand for credit is high and loan performance is
improving, and this is likely to translate into robust profits for
banks.
GIF Performance:
During the last 12 months, GIF NAV rose 20.3 per cent against
that of S&P GCC Total Return Index which fell 1.3 per cent.
Since the investment mandate widened from Qatari-focused to
Gulf-wide in December 2017, NAV has risen 171.1 per cent, against
the 80.5 per cent return recorded by S&P GCC total return
index. On 30 June 2023, GIF share price was trading at a 1.9 per
cent premium to NAV vs. five-year average discount of 7.3 per
cent.
GIF recorded a solid performance in 1H 2023, rising 20.6 per
cent vs S&P GCC (up 5.3 per cent), outperforming the benchmark
by 15.2 per cent. GIF annualized performance since December 2017
(when the investment mandate changed from Qatar-focused to
Gulf-wide) was 19.6 per cent vs S&P GCC 11.2 per cent
annualized and MSCI EM Index down 1.9 per cent annualized.
Embedded image removed - please refer to the Company's website
www.gulfinvestmentfundplc.com for charts depicting Gulf Investment
Fund performance
Portfolio structure
Compared to the benchmark, GIF is overweight Qatar (25.8 per
cent vs an index weighting of 10.4 per cent), underweight UAE (8.8
per cent vs benchmark weight of 17.1 per cent) and Kuwait (4.9 per
cent vs benchmark weight of 10.3 per cent). GIF has a market
exposure to Saudi Arabia (59.1 per cent vs benchmark weight of 60.5
per cent). Qatar macroeconomic resilience and the stocks' defensive
characteristics makes the country attractive. And it trades at a
discount to its GCC peers.
GIF ended the 2Q 2023 with 30 holdings: 21 in Saudi Arabia, 6 in
Qatar, 2 in the UAE, and 1 in Kuwait; maintaining its concentrated
portfolio approach. The cash position was 1.4 per cent as of 30
June 2023.
Embedded image removed - please refer to the Company's website
www.gulfinvestmentfundplc.com for charts depicting Country
allocation.
Top 10 holdings
Company Country Sector % share of GIF NAV
Qatar Gas Transport Qatar Energy 7.5%
Qatar Navigation Qatar Industrials 7.4%
Saudi National Bank Saudi Arabia Financials 6.4%
Middle East Healthcare Saudi Arabia Health Care 5.6%
Integrated Holding Co. Kuwait Industrials 4.9%
Emaar Properties UAE Real Estate 4.8%
Seera Group Saudi Arabia Consumer Discretionary 4.6%
United International Transportation Co. Saudi Arabia Industrials 4.5%
Maharah Human Resources Saudi Arabia Industrials 4.1%
Company for Co-op Insurance Saudi Arabia Financials 4.1%
========================================= ============== ======================== ===================
Source: QIC
Sector Allocation
Embedded image removed - please refer to the Company's website
www.gulfinvestmentfundplc.com for charts depicting sector
allocation.
Over the last twelve months, GIF increased its exposure to
financials, healthcare, consumer discretionary, industrial and
material sectors on the back of attractive valuation and growth
prospects.
The fund's exposure to the financial sector increased from 32.7
per cent to 35.0 per cent. Notably, in the insurance sub-sector,
the fund added Bupa, Tawuniya and Gulf Insurance Group to capture
the solid premium growth momentum driven by a combination of
increasing insured lives and favorable pricing environment. The
insurance names contributed positively to the portfolio
performance.
Healthcare sector increased from 5.2 per cent to 5.6 per cent,
attributed to further addition in Middle East Healthcare in 1Q
2023. The company's stock price was up 112.3 per cent since
February 2023, following its recent earnings beat on the back of
strong outpatient and inpatient growth as well as greater
efficiency on ramping up of new and existing facilities.
Consumer discretionary increased from 1.8 per cent of NAV to
11.4 per cent of NAV as the sector is well-positioned to benefit
from robust domestic growth in Saudi underpinned by favorable
demographics. The Fund added Seera, Leejam and Alamar Foods into
the portfolio over the last twelve months. Seera is poised to gain
from tourism growth prospects as part of Saudi Vision 2030 program,
which aims to increase inbound tourism numbers to 100 million and
to raise the tourism sector contribution to GDP 10%.
Leejam was added tactically in 4Q 2022 to capture margin
recovery, led by membership growth and better operational leverage.
The company's announcement of a joint venture with UAE-based
Burjeel provided platform for further growth potential. Elsewhere,
the fund participated in Alamar Foods IPO in July 2022, riding on
the company's sales and store count expansion.
Exposure to the industrials sector also increased from 23.5
percent of NAV to 27.9 per cent of NAV as the Fund introduced Saudi
Ground Services and Riyadh Cables Group into the portfolio. Saudi
Ground Services will be a key beneficiary of the tourism boom while
Riyadh Cables is well-placed to benefit from the offtake of mega
and giga projects in Saudi Arabia. Additionally, the Fund has also
increased exposure in holdings such as Qatar Navigation, Budget,
and Integrated Holding Co. Fund's exposure to the materials sector
increased from nil to 3.0 per cent of NAV, mainly driven by the
addition of Yanbu Cement into the portfolio.
On the other hand, the fund exposure in energy sector was
reduced from 12.7 per cent of NAV to 7.5 per cent of NAV on lower
exposure to Nakilat and the exit of Aldrees Petroleum. Meanwhile,
exposure to the communication services sector was reduced from 5.6
per cent of NAV to 2.6 of NAV as it exited Vodafone Qatar and Saudi
Telecom.
Profile of Top Five Holdings:
Qatar Gas Transport (7.5 per cent of NAV)
Qatar Gas Transport Company (Nakilat) is a leader in energy
transportation, with the world's largest LNG shipping fleet of 74
vessels. It is responsible for transporting the country's LNG
production to its global customers and is integral to the state's
LNG supply chain. Transition of fleet management in house has
enhanced profitability. In addition, major ship building capacity
agreements are to be signed to build 100+ vessels and Nakilat is
well placed to be a major beneficiary of this LNG expansion which
will provide further growth tailwinds.
Qatar Navigation (7.4 per cent of NAV)
Qatar Navigation (Milaha) is one of the largest and most
diversified maritime and logistics companies in the Middle East
with a focus on providing marine transport and services, as well as
supply chain solutions. Qatar's North Field Expansion (NFE) plan
which is expected to boost LNG production capacity from 77 MTPA to
126 MTPA will create demand for transportation and offshore vessels
in the medium to long term. Additionally, stake in Nakilat (36.3%)
is expected to boost bottom-line. Warehousing and freight
forwarding activities could see an uplift due to new global
partnership as well as work related to NFE.
Saudi National Bank (6.4 per cent of NAV)
Saudi National Bank (SNB) is Saudi Arabia's largest financial
institution and one of its most powerful institutions. It provides
a range of conventional and Shariah-compliant personal, business,
and private banking solutions to individuals, corporate and
institutional customers. SNB will play a vital role in catalysing
the delivery of Vision 2030 of Saudi Arabia and supporting economic
transformation. SNB robust balance sheet, resilient business model,
and healthy liquidity position enhance the bank's capability to
compete locally and regionally, as well as to enable trade and
capital movements between the Kingdom and regional and global
markets.
Middle East Healthcare Company (5.6 per cent of NAV)
Middle East Healthcare Co (MEH) is one of the largest hospital
chains in Saudi Arabia with nearly 1,300 beds in operation. MEH is
geographically diversified within KSA with growth expected from
increasing utilization rate of new hospitals in Dammam and Makkah,
and over 300 beds expansions upcoming in Riyadh and Jeddah. In
FY23, the revenue per patient from government clients is also
expected to improve with continued accreditations of the facilities
while volume flows will increase due to measures taken for improved
patient experience and insurance policy changes.
Integrated Holding Company (4.9 per cent of NAV)
Integrated Holding Company is headquartered in Kuwait City,
engages in the provision of engineering solutions to the logistics
industry. It specializes in total logistics solutions, equipment
hiring and leasing, heavy lift services, oil, gas and power
(energy) solutions. IHC has significant and increasing presence in
Qatar and Saudi Arabia. In Qatar, IHC is an indirect beneficiary of
North Field Expansion project due to equipment leasing contracts
through the projects' direct contractors. In KSA, IHC will attain
growth through the several planned giga-projects.
GCC Outlook:
The outlook for the GCC in 2023 remains positive, driven by
benign inflation, giga & mega infrastructural projects, and
continuous reforms across social and economic policies. The IMF
projects GCC to grow by 2.9 per cent and 3.3 per cent in 2023 and
2024, respectively; after growing at 7.7 per cent in 2022 from a
lower base. This compares to World GDP growing at 2.8 per cent in
2023 and 3.0 per cent in 2024.
The IMF expects CPI inflation in the GCC to be 2.9 per cent and
2.3 per cent in 2023 and 2024 vs 4.7 per cent and 2.6 per cent for
the advanced economies, respectively. The lower inflation in the
GCC economies gives the necessary bandwidth to the GCC governments
to continue and/or increase their fiscal spending at a time when
the contribution from oil is expected to decline driven by
production cuts by Opec+ and a slowdown in global economy.
The pace of structural reforms in the GCC was maintained during
the covid period of 2020-2022 due to which growth in the non-oil
GDP is expected from fixed investments, private consumption, and
high government spending ensuring diversification and unabating
increase of the non-oil share in the economy.
The global economy is under an overhang of an ongoing invasion
of Ukraine by Russia, and an economic softness due to high-interest
rates. Against such a backdrop, the GCC is a bright spot on the
global map where the above-mentioned headwinds are positively
offset by domestic public and private spending.
Valuation:
Market Market Cap. PE (x) PB (x) Dividend Yield (%)
Qatar 141 11.53 10.45 1.31 1.24 4.87 5.31
Saudi
Arabia 2,904 16.91 14.69 2.22 2.07 3.57 4.09
Dubai 146 8.65 9.15 0.99 0.92 4.59 4.78
Abu
Dhabi 728 22.24 22.24 2.99 2.99 2.69 2.69
Kuwait 147 15.15 12.72 0.56 N/A 4.75 5.28
S&P GCC 3,535 15.06 13.73 1.59 1.48 3.74 4.24
MSCI EM 19,825 13.16 11.10 1.52 1.19 3.02 3.23
MSCI
World 63,116 17.68 16.29 2.81 2.61 2.12 2.27
======== ================= ============ ============= ============= ============= ================== =============
Source: Bloomberg, Market Cap. as of 30 June 2023
Epicure Managers Qatar Limited Qatar Insurance Company
S.A.Q.
22 September 2023 22 September 2023
Investment Policy
Investment objective
The Company's investment objective is to capture the
opportunities for growth offered by the expanding GCC economies by
investing, through its wholly owned subsidiary, in listed companies
on one of the GCC exchanges or companies soon to be listed on one
of the GCC exchanges.
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 invests in listed companies on any GCC Exchanges in
addition to companies soon to be listed. The Company may also
invest in listed companies, or pre-IPO companies, in other GCC
countries. The Company will also be permitted to invest in
companies listed on stock markets not located in the GCC which will
have a significant economic exposure to and/or derive a significant
amount of their revenues from 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.
The following investment restrictions are 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 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 investment funds or
ETFs that invest in Qatar or other countries in the GCC region will
be limited to 10 per cent. of Net Asset Value at any time
(calculated at the time of investment).
Investing restrictions
The investing restrictions for the Company are as follows:
(i) Foreign ownership restrictions
Investments in most GCC listed companies by persons other than
citizens of that specific GCC country have an ownership restriction
wherein the law precludes persons other than citizens of that
specific GCC country 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 certain
companies listed on the GCC exchanges.
(ii) Investment guidelines
The Company has established certain investment guidelines. These
are as follows (all of which calculated at the time of
investment):
-- No single investment position in the S&P GCC Composite
constituent may exceed the greater of: (i) 15 per cent. of the Net
Asset Value of the Company; or (ii) 125 per cent. of the
constituent company's index capitalisation divided by the index
capitalisation of the S&P GCC Composite 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
S&P GCC Composite Index constituent may at the time of
investment exceed 15 per cent. of the NAV of the Company; and
-- No holding may exceed 5 per cent. of the outstanding shares
in any one company (including investment in Saudi Arabian listed
companies by way of derivative investment in P-Note or Swap
structured financial products); and
(iii) Conflicts management
The Investment Manager, the Investment Adviser, their officers
and other personnel are involved in other financial, investment or
professional activities, which may on occasion give rise to
conflicts of interest with the Company. The Investment Manager will
have regard to its obligations under the Investment Management
Agreement to act in the best interests of the Company, and the
Investment Adviser will have regard to its obligations under the
Investment Adviser Agreement to act in the best interests of the
Company, so far as is practicable having regard to their
obligations to other clients, where potential conflicts of interest
arise. The Investment Manager and the Investment Adviser will use
all reasonable efforts to ensure that the Company has the
opportunity to participate in potential investments that each
identifies that fall within the investment objective and strategies
of the Company. Other than these restrictions set out above, and
the requirement to invest in accordance with its investing policy,
there are no other investing restrictions.
Returns and distribution policy
The Company's primary investment objective is to achieve capital
growth. However, the Company has instituted an annual dividend
policy to return to shareholders distributions at least equal to
reported income for each reporting period. shareholders should note
that this cannot be guaranteed and the level of distributions for
any period remains a matter to be determined at the discretion of
the Board.
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 2023, a resolution will be proposed that the Company
continues in existence. More than 50 per cent. of shareholders
voting must vote in favour for this resolution to be passed. If the
resolution is passed, a similar resolution will be proposed at
every third annual general meeting thereafter. If the resolution is
not 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.
Environmental, social and governance standards
The adoption of environmental, social, and governance (ESG)
standards and principles by governments and regulators in the GCC
will play a key role in the sustainable economic recovery of the
region. It is the ambition of the Fund's Manager to identify and
mitigate key risk factors that could violate various ESG related
criteria.
The Board and the Manager believe that integrating these
considerations into our Investment Policy is in line with the
Fund's aim of delivering long-term capital growth to investors . We
have always placed a strong importance on corporate governance in
our process and are now integrating further social and
environmental considerations into our investment process.
As part of the screening, we commit to not invest in companies
that have exposures to the following areas:
Countries facing UN sanctions
Conventional Weapons and firearms (producer)
Conventional Weapons and firearms (other)
Controversial weapons
Tobacco (producer)
Adult Entertainment (producer)
Adult Entertainment (other)
Gambling (operator)
Animal Testing
Thermal Coal
We source the ESG scores from 3rd party providers on a half
yearly basis for our investment universe and further screen them by
rejecting or minimizing exposures to companies with low scores.
Currently, a challenge facing ESG-concerned GCC investors is the
lack of consistent disclosures from corporates on top of the
varying regulations and standards in operation globally. The
Manager expects that governments in the GCC will seek to improve
and standardise disclosures and ESG-related obligations in the
coming years. T he official multi-year economic and strategic
'visions' in Saudi Arabia, Qatar, Kuwait and the UAE include focus
on sustainability, diversification and environmentally friendly
practices. We are encouraged to see improvements in corporate
sustainability reporting standards with an increased focus of
generating annual sustainability reports by companies in the
region.
We are already seeing the setting up of national sustainability
goals, revamping water security programs, launching diversity
initiatives, introducing ESG financial disclosure standards and
publishing of ESG guidelines for exchange listings. There has been
a shift towards investing in renewable energies, launching green
bonds and other green financing initiatives, with a view to
facilitating green solutions across a range of sectors.
Developments such as these will further assist the Manager to
integrate ESG considerations into our investment process.
State of ESG in GCC
Various targets set by the GCC countries are as below (details
from APCO-GCC BDI 2022 report) :
Saudi Arabia
Saudi plans to reach net zero by 2060. The country is expected
to invest heavily in carbon capture and clean hydrogen. It targets
to reach net zero through a "Carbon Circular Economy" approach,
which advocates "reduce, reuse, recycle and remove"
Environmental, social and governance standards continued
State of ESG in GCC continued
UAE
The UAE committed to achieve net zero by 2050, making it the
first nation in the region to do so. The UAE invested in renewable
energy ventures worth around USD 16.8 billion in 70 countries with
a focus on developing nations. It has also provided more than USD
400 million in aid and soft loans for clean energy projects.
Qatar
Qatar calls for a reduction in carbon emissions to net zero by
2050. It is the world's largest producer of Liquefied Natural Gas
(LNG) and aims to expand production to 127 million tonnes annually
by 2027. LNG helps tackle climate change globally in weaning off
high-polluting fuels like oil and coal.
Kuwait
Kuwait does not have a documented net zero commitment. The
country aims to reduce its greenhouse gas emissions by 7.4% by
2035.
Oman
Oman's upstream oil and gas sector is evaluating a target of
zero emissions by 2050, according to its Second Nationally
Determined Contribution (NDC) report, which was recently submitted
to the United Nations Framework Convention on climate change.
Bahrain
Bahrain pledges to reach net zero emissions by 2060. It will
adopt a circular carbon economy strengthened by various offsetting
schemes including carbon-capture technology and afforestation.
Report of the Directors
The Directors hereby submit their annual report together with
the audited financial statements of Gulf Investment Fund plc (the
"Company") for the year ended 30 June 2023.
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 (GCC) countries. The Company's
investment policy is detailed on pages 16 to 19.
Results and Dividends
The results of the Company for the year and its financial
position at the year- end are set out on pages 44 to 48 of the
financial statements.
The Directors manage the Company's affairs to achieve capital
growth and the Company has instituted a twice yearly dividend
policy.
In the Circular published by the Company on 25 March 2021 the
Board announced the implementation of an enhanced dividend policy
targeting an annual dividend equivalent to 4 per cent. of Net Asset
Value at the end of the preceding year, to be paid in semi-annual
instalments.
The net asset value per share at 30 June 2022 was US$2.0256 and
pursuant to the above stated policy the directors recommend a
dividend of 8.10 cents per share in respect of the year ended 30
June 2023 to be paid in two tranches. For the year ended 30 June
2022, the Directors declared a dividend of 7.02 cents per share
which was paid in two tranches with US$1,442,793 (3.51 cents per
share) being paid on 21 October 2022 to shareholders on the
register as at 9 September 2022 (the "Record Date") and
US$1,439,176 (3.51 cents per share) being paid on 17 March 2023 to
shareholders on the register as at 10 February 2023 (the "Record
Date").
Directors
Details of Board members at the date of this report, together
with their biographical details, are set out on page 32.
Director independence and Directors' and other interests have
been detailed in the Directors' Remuneration Report on pages 36 and
37.
Creditor payment policy
It is the Company's policy to adhere to the payment terms agreed
with individual suppliers and to pay in accordance with its
contractual and other legal obligations.
Gearing policy
Borrowings will be limited, as at the date on which the
borrowings are incurred, to 5% of NAV (or such other limit as may
be approved by the shareholders in general meeting). The Company
will not make use of any hedging mechanisms.
There were no borrowings during the year (2022: US$ nil).
Donations
The Company has not made any political or charitable donations
during the year (2022: US$ nil).
Adequacy of the Information supplied to the auditors
The Directors who held office at the date of approval of this
Directors' Report confirm that, so far as each is aware, there is
no relevant audit information of which the Company's auditors are
unaware; and each Director has taken all steps that he ought to
have taken as a Director to make himself aware of any relevant
audit information and to establish that the Company's auditors are
aware of that information.
Statement of going concern
The Directors are satisfied that the Company has adequate
resources to continue to operate as a going concern for the
foreseeable future and have prepared the financial statements on
that basis, however shareholders have been given the opportunity to
participate in 100% bi-annual tenders. They will also vote for the
continued existence of the Company at the annual general meeting
(AGM) in 2023 and every third AGM thereafter. Which could lead to a
change in the future outlook during the going concern
assessment.
Independent Auditors
KPMG Audit LLC has expressed its willingness to continue in
office in accordance with Section 12 (2) of the Companies Act 1931
to 2004.
Annual general meeting
The Annual General Meeting of the Company will be held later in
the year at the Company's registered office.
A copy of the notice of Annual General Meeting will be a
separate document to 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.
The notice of the Annual General Meeting and the Annual Report
will be available at www.gulfinvestmentfundplc.com .
Corporate governance
Full details are given in the Corporate Governance Report on
pages 23 to 31 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, or the Company is aware of the following
significant holdings in its Share Capital.
Ordinary Shares
Name %
----------------
Qatar Insurance Company S.A.Q. 42.11
----------------
City of London Investment Management
Co (London) 40.96
----------------
Hargreaves Lansdown Asset Management
(Bristol) 3.91
----------------
Interactive Investor (Manchester) 3.17
----------------
Union Bancaire Privee (Geneva) 3.15
----------------
A J Bell Securities (Tunbridge
Wells) 1.10
----------------
Substantial shareholdings continued
The above percentages are calculated by applying the
shareholdings as notified to the Company or the Company's awareness
to the issued Ordinary Share Capital as at 30 June 2023.
On behalf of the Board
Anderson Whamond
Chairman
22 September 2023
Exchange House
54-62 Athol Street
Douglas
Isle of Man
IM1 1JD
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 to
2004. The Board confirms that the Company is in compliance with the
relevant provisions of the Companies Acts.
Compliance with the Association of Investment Companies (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 - via examining compliance
against the AIC Code of Corporate Governance.
The Board of the Company has considered the principles and
provisions AIC Code of Corporate Governance as published in
February 2019 (the AIC Code). The AIC Code addresses the principles
and provisions 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 the Company. The AIC Code is
available on the AIC's website: www.theaic.co.uk.
The Board considers that reporting against the principles and
recommendations of the AIC Code, which has been endorsed by the
FRC, 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.
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
-- Interaction with the workforce
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 a
n 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.
The Board has considered principal and emerging risks and in
doing so has identified no emerging risks to be identified.
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. 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 regularly enough 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
accordance 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.
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, Anderson Whamond, Neil Benedict and
David Humbles. 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 David
Humbles. 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.gulfinvestmentfundplc.com .
Significant Issues
During its review of the Company's financial statements for the
year ended 30 June 2023, the Audit Committee considered the
following significant issue as communicated by the auditor during
their reporting:
Valuation and existence of investment in subsidiary
The valuation of the investment in subsidiary, including
valuation and existence of the portfolio of investments held by the
subsidiary, is undertaken in accordance with the accounting
policies, disclosed in Notes 1(a) and 1(b) to the financial
statements. All underlying investments are considered liquid and
priced based on quoted prices in active markets and have been
categorised as Level 1 or level 2 within the IFRS 13 fair value
hierarchy. The underlying 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. An independent custodian, HSBC Bank Middle East Limited, are
used to hold the assets of the underlying investment portfolio. The
underlying 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 non-executive
Directors who are identified by the Board as being independent. Its
members are Neil Benedict (Chairman), Anderson Whamond, and David
Humbles. 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.gulfinvestmentfundplc.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 non-executive Directors. The Nomination Committee
comprises Anderson Whamond (Chairman), Neil Benedict, and David
Humbles. 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 who are independent
non-executive Directors. The Management Engagement Committee
members are Neil Benedict (Chairman), Anderson Whamond and David
Humbles. The Management Engagement Committee will meet at least
quarterly and is responsible for reviewing the performance of the
Investment Manager and other service providers, to ensure that the
Company's management contract is competitive and reasonable for the
shareholders and to review and make recommendations to the Board on
any proposed amendment to or material breach of the management
contract and contracts with other service providers.
Board Attendance
The number of formal meetings during the year of the Board, and
its Committees, and the attendance of the individual Directors at
those meetings, is shown in the following table:
Board Audit Remuneration Nomination Management
Committee Committee Committee Engagement
Committee
Total number
of meetings
in year 9 6 2 1 4
------ ----------- ------------------------- ----------- ------------
Meetings Attended (entitled to attend)
-------------------------------------------------------------------------
Anderson Whamond
(Chairman and
Chairman of
Nomination Committee) 9 (9) 6 (6) 2 (2) 1 (1) 4 (4)
------ ----------- ------------------------- ----------- ------------
Neil Benedict
(Chairman of
Remuneration
Committee and
Chairman of
Management Engagement
Committee) 9 (9) 6 (6) 2 (2) 1 (1) 4 (4)
------ ----------- ------------------------- ----------- ------------
David Humbles
(chairman of
Audit Committee) 9 (9) 6 (6) 2 (2) 1 (1) 4(4)
------ ----------- ------------------------- ----------- ------------
The Annual General Meeting was held on 22 December 2022.
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 misstatement 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, 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 Investment
Manager and Investment Adviser, including its internal audit
function 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 2023 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
33.
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.
Viability statement
The Board makes an assessment of the longer term prospects of
the Company beyond the timeframe envisaged under the going concern
basis of accounting having regard to the Company's current position
and the principal risks it faces.
The Board does this by performing robust risk assessments using
a detailed risk matrix at each of its scheduled audit committee
meetings.
The Company is a long-term investment vehicle and the Directors,
therefore, believe that it is appropriate to assess its viability
over a long-term horizon. The Board considers that assessing the
Company's prospects over a period of five years is appropriate
given the nature of the Company and the inherent uncertainties of
looking out over a longer time period. The Directors believe that a
five year period appropriately reflects the long term strategy of
the Company and over which, in the absence of any adverse change to
the regulatory environment, they do not expect there to be any
significant change to the current principal risks and to the
adequacy of the mitigating controls in place.
Notwithstanding the above the Company's shareholders will have
the opportunity to vote for the cessation of the Company at the
annual general meeting in 2023 which will be proposed as an
ordinary resolution. In the event that the continuation vote is not
passed the Directors will be required to put forward proposals to
shareholders to the effect that the Company be wound up,
liquidated, reorganised or unitised. If the continuation vote is
passed, a further continuation vote will be proposed at every third
annual general meeting thereafter. In addition, the Directors are
committed to bi-annual tenders, subject to shareholder approval.
The directors have a reasonable expectation that the company will
continue after the tender offers. However, until the shareholders
both vote and tender, the outcome of the tenders is impossible to
predict.
Promoting the Company's Success
In accordance with corporate governance best practice, the Board
is now required to describe to the Company's shareholders how the
Directors have discharged their duties and responsibilities over
the course of the financial year following the guidelines set out
in the UK under section 172 (1) of the Companies Act 2006 (the
"s172 Statement"). This Statement, from 'Promoting the Success of
the Company' to "Long Term Investment" on page 30 provides an
explanation of how the Directors have promoted the success of the
Company for the benefit of its members as a whole, taking into
account the likely long-term consequences of decisions, the need to
foster relationships with all stakeholders and the impact of the
Company's operations on the environment.
The purpose of the Company is to act as a vehicle to provide,
over time, financial returns (both income and capital) to its
shareholders.
The Company's Investment Objective is disclosed on page 5. The
activities of the Company are overseen by the Board of Directors of
the Company. The Board's philosophy is that the Company should
operate in a transparent culture where all parties are treated with
respect and provided with the opportunity to offer practical
challenge and participate in positive debate which is focused on
the aim of achieving the expectations of shareholders and other
stakeholders alike. The Board reviews the culture and manner in
which the Investment Adviser operates at its regular meetings and
receives regular reporting and feedback from the other key service
providers.
The Company is a long-term investment vehicle, with a
recommended holding period of five or more years. It is externally
managed, has no employees, and is overseen by an independent
non-executive board of directors. Your Company's Board of Directors
sets the investment mandate, monitors the performance of all
service providers (including the Investment Adviser) and is
responsible for reviewing strategy on a regular basis. All this is
done with the aim of preserving and, indeed, enhancing shareholder
value over the longer term.
Shareholder Engagement
The following table describes some of the ways we engage with
our shareholders:
AGM The AGM provides an opportunity
for the Directors to engage
with shareholders, answer their
questions and meet them informally.
The next AGM will take place
later in the year in the Isle
of Man. We encourage shareholders
to lodge their vote by proxy
on all the resolutions put forward.
Annual report We publish a full annual report
each year that contains a strategic
report, governance section,
financial statements and additional
information. The report is available
online and in paper format.
---------------------------------------
Company announcement We issue announcements for all
substantive news relating to
the Company. You can find these
announcements on the website.
---------------------------------------
Results announcement We release a full set of financial
results at the half year and
full year stage. Updated net
asset value figures are announced
on a weekly basis.
---------------------------------------
Website Our website contains a range
of information on the Company
and includes a full monthly
portfolio listing of our investments
as well as podcasts by the Investment
Manager. Details of financial
results, the investment process
and Investment Manager together
with Company announcements and
contact details can be found
here: www.gulfinvestmentfundplc.com
---------------------------------------
Investor relations The Management Engagement Committee
evaluates the level and effectiveness
of the handling of investor
relations.
---------------------------------------
Quarterly reports The investment manager produces
in depth quarterly investment
reports to the market - these
can also be found on the Company's
website.
---------------------------------------
Other Service Providers
The other key stakeholder group is that of the Company's third
party service providers. The Board is responsible for selecting the
most appropriate outsourced service providers and monitoring the
relationships with these suppliers regularly in order to ensure a
constructive working relationship. Our service providers look to
the Company to provide them with a clear understanding of the
Company's needs in order that those requirements can be delivered
efficiently and fairly. The Board, via the Management Engagement
Committee, ensures that the arrangements with service providers are
reviewed at least annually in detail. The aim is to ensure that
contractual arrangements remain in line with best practice,
services being offered meet the requirements and needs of the
Company and performance is in line with the expectations of the
Board, Manager, Investment Manager and other relevant stakeholders.
Reviews include those of the Company's custodian, share registrar,
broker and auditor.
Principal Decisions
Pursuant to the Board's aim of promoting the long term success
of the Company, the following principal decisions have been taken
during the year:
Portfolio The report of the Investment Manager and Investment
Adviser on pages 7 to 15 details the key investment decisions taken
during the year and subsequently. The Investment Manager has
continued to monitor the investment portfolio throughout the year
under the supervision of the Board.
ESG As highlighted on page 18, the Board is responsible for
overseeing the work of the Investment Manager and this is not
limited solely to the investment performance of the portfolio
companies. The Board also has regard for environmental, social and
governance matters that subsist within the portfolio companies.
Audit KPMG Audit LLC was re-appointed as auditor at the last AGM
on 22 December 2022.
Long Term Investment
The Investment Manager's investment process seeks to outperform
over the longer term. The Board has in place the necessary
procedures and processes to continue to promote the long term
success of the Company. The Board will continue to monitor,
evaluate and seek to improve these processes as the Company
continues to grow over time, to ensure that the investment
proposition is delivered to shareholders and other stakeholders in
line with their expectations.
Communities and the environment
The Board expects the Manager, supported by its governance
function, to engage with investee companies at the appropriate time
on ESG matters in line with good stewardship practices.
The Board is also conscious of the importance of providing an
investment product which meets the needs of its investors,
including retail investors and pensioners.
The Board is conscious of the need to take appropriate account
of broader ESG concerns and to act as a good corporate citizen.
On behalf of the Board
Anderson Whamond
Chairman
22 September 2023
Board of Directors
Anderson Whamond (Non-Executive Chairman)
Anderson has over 35 years' experience in the banking and
financial services sector. He is a non-executive director of The
International Stock Exchange Group Limited, and a non-executive
director of the Irish domiciled Magna Umbrella Fund and the OAKS
Emerging & Frontier Umbrella Fund. Previously, he was a
non-executive director of Cayman Islands-domiciled OCCO Eastern
European Fund.
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 Senior Managing Director at Sonenshine Partners a New
York private investment bank. Neil is a fellow member of the
Institute of Chartered Accountants in England and Wales.
David Humbles (Non-Executive Director)
David Humbles was born in 1960 and is British. He worked in the
downstream oil industry for 25 years and relocated to the Isle of
Man in 1998 as Director of Total. In 2003, David purchased Abbey
Properties Ltd which owns and manages a property complex in the
north of the island. David owns Westminster Properties Ltd which
manages a large portfolio of residential and commercial properties
on the island. David was Managing Director of Oakmayne, a
residential developer in London . He has previously served on the
board of two AIM listed companies.
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 company financial
statements for each financial year. Under the law they have elected
to prepare the company financial statements in accordance with
International Financial Reporting Standards (IFRSs) and applicable
law.
Under company law the Directors must not approve the financial
statements unless they are satisfied that they give a true and fair
view of the state of affairs of the Company and of the profit or
loss for that period. In preparing each of the Company's financial
statements, the Directors are required to:
-- select suitable accounting policies and then apply them consistently;
-- make judgements and estimates that are reasonable, relevant and reliable;
-- state whether applicable standards have been followed,
subject to any material departures disclosed and explained in the
financial statements;
-- assess the company's ability to continue as a going concern,
disclosing, as applicable, matters related to going concern;
and
-- use the going concern basis of accounting unless they either
intend to liquidate the Company or to cease operations or have no
realistic alternative but to do so.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Company's
transactions and disclose with reasonable accuracy at any time the
financial position of the Company and enable them to ensure that
its financial statements comply with the Companies Acts 1931 to
2004. They are responsible for such internal control as they
determine is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due to
fraud or error, and have general responsibility for taking such
steps as are reasonably open to them to safeguard the assets of the
Company and to prevent and detect fraud and other
irregularities.
Under applicable law and regulations, the Directors are also
responsible for preparing a Directors' Report and Corporate
Governance Statement that complies with that law and those
regulations.
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.
Disclosure Guidance and Transparency Rules responsibility
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;
-- 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
position, 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, together with a description of the
principal risks and uncertainties that they face.
On behalf of the Board
Anderson Whamond
Chairman
22 September 2023
Audit Committee Report
An Audit Committee has been established in compliance with the
FCA's Disclosure Guidance and Transparency Rule 7.1, the UK
Corporate Governance Code and the AIC Code of Corporate Governance
consisting of independent Directors. Its authority and duties are
clearly defined within its written terms of reference. David
Humbles is Chairman of the Audit Committee, which also comprises Mr
Anderson Whamond 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 22
December 2022. 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 approves a policy regarding non-audit services
provided by the auditor.
The Audit Committee also monitors the risks to which the Company
is exposed, provide policy re: non-audit services from the auditor
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 22
September 2023.
David Humbles
Chairman of the Audit Committee
22 September 2023
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 Anderson Whamond
and David Humbles.
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 M anagement 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
22 September 2023
Directors' Remuneration Report
This report meets the relevant rules of the Financial Conduct
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 GBP200,000 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 GBP35,000, the Chairman of the
Audit Committee GBP26,250, the other Director GBP24,500.
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 2023 30 June 2022
GBP GBP
---------------------------------------------------------------------------------------- ------------- -------------
Nicholas Wilson (Chairman)* - 21,875
Anderson Whamond (Chairman)** 35,000 27,020
David Humbles (Chairman of Audit Committee) 26,250 26,250
Neil Benedict (Chairman of Remuneration Committee and Management Engagement Committee) 24,500 24,500
85,750 99,645
---------------------------------------------------------------------------------------- ------------- -------------
US$ charge reflected in the financial statements 103,374 130,055
---------------------------------------------------------------------------------------- ------------- -------------
*Resigned 30 December 2021
**Appointed 1 January 2022
Expenses totalling US$35,498 (2022: US$20,518) were incurred by
the Directors and reimbursed during the year.
No other remuneration or compensation was paid or payable by the
Company during the period to any of the Directors.
Directors' and other interests
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 the Company:
30 June 2023 30 June 2022
Director Shares Shares
------------- -------------
Anderson Whamond 50,000 -
------------- -------------
For and on behalf of the Board
Neil Benedict
Chairman of the Remuneration Committee
22 September 2023
Report of the Independent Auditors, KPMG Audit LLC, to the
members of Gulf Investment Fund plc
Our opinion is unmodified
We have audited the financial statements of Gulf Investment Fund
plc (the "Company"), which comprise the statement of financial
position as at 30 June 2023, the income statement, statement of
comprehensive income, statement of changes in equity, statement of
cash flows for the year then ended, and notes, comprising
significant accounting policies and other explanatory
information.
In our opinion, the accompanying financial statements:
-- give a true and fair view of the state of the Company's
affairs as at 30 June 2023 and of the 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
requirements of the Companies Acts 1931 to 2004.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) ("ISAs (UK)") and applicable law. Our
responsibilities are described below. We have fulfilled our ethical
responsibilities under, and are independent of the Company in
accordance with, UK ethical requirements including the FRC Ethical
Standard as applied to public interest entities. We believe that
the audit evidence we have obtained is a sufficient and appropriate
basis for our opinion.
Material uncertainty relating to going concern
The risk Our response
-------------------------------------- -------------------------------------- --------------------------------------
Going Concern: Disclosure quality: Our procedures included:
Refer to Audit Committee Report on The financial statements explain how We obtained and inspected a Board
page 34. the Board has formed a judgement that approved written assessment of going
it is appropriate concern on the Company
We draw attention to note 13.1 to the to adopt the going concern basis of and corroborated the assessment with
financial statements which indicates preparation for the Company. our knowledge of the business.
that the Company
is subject to 100% bi- annual tender That judgement is based on an We considered the risk that the
offers in March and September each evaluation of the inherent risks to outcome of the 100% bi-annual tender
year. As indicated the Company's business model offers in March and September
in that note, should the amount and how those risks might affect the each year could effect the Company
tendered result in the remaining Company's financial resources or for at least a year from the date of
outstanding shares being ability to continue approval of the financial
below a set minimum size, a process operations over a period of at least statements (the "going concern
would commence that may lead to the a year from the date of approval of period") by inspecting minutes of
winding up or liquidation the financial statements, meetings held by the directors
of the Company. in particular in relation to the 100% and inquiring with management as to
bi-annual tender offers each year. their assessment of the likelihood of
This condition constitutes a material uptake of the tender
uncertainty that may cast significant The risk for our audit is whether or offers.
doubt on the Company's not those risks are such that they
ability to continue as a going amounted to a material Assessing Transparency:
concern. uncertainty that may cast significant We considered whether the going
Our opinion is not modified in this doubt about the ability of the concern disclosure in note 13.1 to
respect. Company to continue as the financial statements
a going concern. If so, that fact is gives a full and accurate description
required to be disclosed (as has been of the directors' assessment of going
done) and, along concern, including
with a description of the the identified risks and
circumstances, is a key financial dependencies.
statement disclosure
-------------------------------------- -------------------------------------- --------------------------------------
Other key audit matters: our assessment of the risks of material
misstatement
Key audit matters are those matters that, in our professional
judgement, were of most significance in the audit of the financial
statements and include the most significant assessed risks of
material misstatement (whether or not due to fraud) identified by
us, including those which had the greatest effect on: the overall
audit strategy; the allocation of resources in the audit; and
directing the efforts of the engagement team. Going concern is a
significant key audit matter and is described in the 'Material
uncertainty relating to going concern' section of our report. These
matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we
do not provide a separate opinion on these matters. In arriving at
our audit opinion above, the other key audit matter was as follows
(unchanged from 2022):
The risk Our response
------------------------------- ----------------------------- ------------------------------------------------------
Valuation and existence Incorrect valuation Our procedures included:
of the investment and existence
at fair value through The investment in Control design:
profit or loss (comprising subsidiary is stated -- Documenting and assessing the processes in place
investment in subsidiary) at fair value of US$96m to record investment transactions and
(US$96m,2022: US$83.2m) (2022: US$83.2m), to value the portfolio;
Refer to page 26 (Significant based on its net asset Tests of detail:
Issues identified value, representing -- Auditing the accounts of the subsidiary as part
by the Audit Committee) 99% (2022: 99.8%) of the audit of the Company; -- Assessing
and note 1(a) (note of total assets. the accounting policies adopted by the subsidiary
relating to investment The underlying portfolio to ensure these are consistent with the
in subsidiary) and of investments held Company's accounting policies. In particular,
note 1(b) (note relating by the subsidiary ensuring that the portfolio of investments held
to investments held is stated at fair by the subsidiary is stated at fair value and
by the subsidiary). value of US$94.6m ensuring net asset value of the subsidiary
(2022: US$73.9m), represents
representing 97.7% fair value;
(2022: 88.7%) of the -- Agreeing the valuation of 100 per cent of
Company's net assets investments in the subsidiary's portfolio to
on a look-through externally quoted prices (in the case of P-Notes
basis (by value) and this represents the quoted price of the underlying
is considered to be equity);
the key driver of -- Assessing the credit worthiness of the P-Note
the results of the issuers by examining their credit ratings
Company. or financial statements in the absence of a credit
Regarding the underlying rating and inspecting the P-Note legal
portfolio of investments instruments to assess whether they provide the full
held by the subsidiary, return of the underlying share;
incorrect asset pricing
or a failure to maintain
proper title of assets
could have a significant
impact on the investment
portfolio valuation
and the return generated
for shareholders of
the Company.
Of the investments
held by the subsidiary,
a total of US$52.4m
(2022: US$28.3m) was
held via P-Notes;
held to obtain exposure
to Saudi Arabia, where
direct investment
in equities is not
possible for foreign
investors.
Additional risks arise
regarding the P-Notes
as follows:
- they are issued
by counterparty financial
institutions and therefore
are subject to counterparty
risk; and
----------------------------- ----------------------------------------------------
The risk Our response
----------------------- -------------------------------------------------------------------------------------------
- they are classified -- Agreeing 100 per cent of investment holdings in the subsidiary's portfolio to
as level 2 in the independently
fair value hierarchy received third party confirmations from investment custodians.
as there is no quoted Assessing transparency
price in an active -- Consideration of the appropriateness, in accordance with relevant accounting
market for the P-Note standards,
instrument itself of the disclosures in respect of the P-Notes, including their level in the fair value
- instead they are hierarchy.
priced based on the
quoted price of the
underlying equity
to which they relate.
----------------------- -----------------------------------------------------------------------------------------
Our application of materiality and an overview of the scope of
our audit
Materiality for the financial statements as a whole was set at
US$950,000, determined with reference to a benchmark of total
assets of US$97,027,090, of which it represents approximately 1.0%
(2022: 1.0%).
In line with our audit methodology, our procedures on individual
account balances and disclosures were performed to a lower
threshold, performance materiality, so as to reduce to an
acceptable level the risk that individually immaterial
misstatements in individual account balances add up to a material
amount across the financial statements as a whole. Performance
materiality for the Company was set at 75% (2022: 75%) of
materiality for the financial statements as a whole, which equates
to US$712,000. We applied this percentage in our determination of
performance materiality because we did not identify any factors
indicating an elevated level of risk.
We reported to the Audit Committee any corrected or uncorrected
identified misstatements exceeding US$47,000, in addition to other
identified misstatements that warranted reporting on qualitative
grounds.
Our audit of the Company was undertaken to the materiality level
specified above, which has informed our identification of
significant risks of material misstatement and the associated audit
procedures performed in those areas as detailed above.
Going concern
The directors have prepared the financial statements on the
going concern basis as they do not intend to liquidate the Company
or to cease its operations, and as they have concluded that the
Company's financial position means that this is realistic for at
least a year from the date of approval of the financial statements
(the "going concern period"). As stated above, they have also
concluded that there is a material uncertainty related to going
concern.
An explanation of how we evaluated the directors' assessment is
set out in the 'material uncertainty relating to going concern'
section of our report.
Our conclusions based on this work:
-- we consider that the directors' use of the going concern
basis of accounting in the preparation of the financial statements
is appropriate; and
-- we have nothing material to add in relation to the directors'
statement in the notes to the financial statements on the use of
the going concern basis of accounting and their identification
therein of a material uncertainity over the Company's use of that
basis for the going concern period and we found the going concern
disclosure in note 13.1 to be acceptable.
Fraud and breaches of laws and regulations - ability to
detect
Identifying and responding to risks of material misstatement due
to fraud
To identify risks of material misstatement due to fraud ("fraud
risks") we assessed events or conditions that could indicate an
incentive or pressure to commit fraud or provide an opportunity to
commit fraud. Our risk assessment procedures included:
-- enquiring of management as to the Company's policies and
procedures to prevent and detect fraud as well as enquiring whether
management have knowledge of any actual, suspected or alleged
fraud;
-- reading minutes of meetings of those charged with governance; and
-- using analytical procedures to identify any unusual or unexpected relationships.
As required by auditing standards, we perform procedures to
address the risk of management override of controls, in particular
the risk that management may be in a position to make inappropriate
accounting entries. On this audit we do not believe there is a
fraud risk related to revenue recognition because the Company's
revenue streams are simple in nature with respect to accounting
policy choice, and are easily verifiable to external data sources
or agreements with little or no requirement for estimation from
management. We did not identify any additional fraud risks.
We performed procedures including
-- Identifying journal entries and other adjustments to test
based on risk criteria and comparing any identified entries to
supporting documentation; and
-- incorporating an element of unpredictability in our audit procedures.
Identifying and responding to risks of material misstatement due
to non-compliance with laws and regulations
We identified areas of laws and regulations that could
reasonably be expected to have a material effect on the financial
statements from our sector experience and through discussion with
management (as required by auditing standards), and from inspection
of the Company's regulatory and legal correspondence, if any, and
discussed with management the policies and procedures regarding
compliance with laws and regulations. As the Company is regulated,
our assessment of risks involved gaining an understanding of the
control environment including the entity's procedures for complying
with regulatory requirements.
The Company is subject to laws and regulations that directly
affect the financial statements including financial reporting
legislation and taxation legislation and we assessed the extent of
compliance with these laws and regulations as part of our
procedures on the related financial statement items.
The Company is subject to other laws and regulations where the
consequences of non-compliance could have a material effect on
amounts or disclosures in the financial statements, for instance
through the imposition of fines or litigation or impacts on the
Company's ability to operate. We identified financial services
regulation as being the area most likely to have such an effect,
recognising the regulated nature of the Company's activities and
its legal form. Auditing standards limit the required audit
procedures to identify non-compliance with these laws and
regulations to enquiry of management and inspection of regulatory
and legal correspondence, if any. Therefore if a breach of
operational regulations is not disclosed to us or evident from
relevant correspondence, an audit will not detect that breach.
Context of the ability of the audit to detect fraud or breaches
of law or regulation
Owing to the inherent limitations of an audit, there is an
unavoidable risk that we may not have detected some material
misstatements in the financial statements, even though we have
properly planned and performed our audit in accordance with
auditing standards. For example, the further removed non-compliance
with laws and regulations is from the events and transactions
reflected in the financial statements, the less likely the
inherently limited procedures required by auditing standards would
identify it.
Context of the ability of the audit to detect fraud or breaches
of law or regulation continued
In addition, as with any audit, there remains a higher risk of
non-detection of fraud, as this may involve collusion, forgery,
intentional omissions, misrepresentations, or the override of
internal controls. Our audit procedures are designed to detect
material misstatement. We are not responsible for preventing
non-compliance or fraud and cannot be expected to detect
non-compliance with all laws and regulations.
Other information
The directors are responsible for the other information. The
other information comprises the information included in the annual
report but does not include the financial statements and our
auditor's report thereon. Our opinion on the financial statements
does not cover the other information and we do not express an audit
opinion or any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our
responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent
with the financial statements or our knowledge obtained in the
audit, or otherwise appears to be materially misstated. If, based
on the work we have performed, we conclude that there is a material
misstatement of this other information, we are required to report
that fact. We have nothing to report in this regard.
Disclosures of emerging and principal risks and longer term
viability
We are required to perform procedures to identify whether there
is a material inconsistency between the directors' disclosures in
respect of emerging and principal risks and the viability
statement, and the financial statements and our audit knowledge. We
have nothing material to add or draw attention to in relation
to:
-- the directors' confirmation within the Viability statement
(page 28) that they have carried out a robust assessment of the
emerging and principal risks facing the Company, including those
that would threaten its business model, future performance,
solvency or liquidity;
-- the emerging and principal risks disclosures describing these
risks and explaining how they are being managed or mitigated;
-- the directors' explanation in the Viability statement (page
28) as to how they have assessed the prospects of the Company, over
what period they have done so and why they consider that period to
be appropriate, and their statement as to whether they have a
reasonable expectation that the Company will be able to continue in
operation and meet its liabilities as they fall due over the period
of their assessment, including any related disclosures drawing
attention to any necessary qualifications or assumptions.
Corporate governance disclosures
We are required to perform procedures to identify whether there
is a material inconsistency between the directors' corporate
governance disclosures and the financial statements and our audit
knowledge.
Based on those procedures, we have concluded that each of the
following is materially consistent with the financial statements
and our audit knowledge:
-- 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 Company's position and performance,
business model and strategy;
-- the section of the annual report describing the work of the
Audit Committee, including the significant issues that the audit
committee considered in relation to the financial statements, and
how these issues were addressed; and
-- the section of the annual report that describes the review of
the effectiveness of the Company's risk management and internal
control systems.
We have nothing to report on other matters on which we are
required to report by exception
We have nothing to report in respect of the following matters
where the Companies Acts 1931 to 2004 require us to report to you
if, in our opinion:
-- proper books of account have not been kept and proper returns
adequate for our audit have not been received from branches not
visited by us; or
-- the financial statements 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.
Respective responsibilities
Directors' responsibilities
As explained more fully in their statement set out on page 33,
the directors are responsible for: the preparation of the financial
statements including being satisfied that they give a true and fair
view; such internal control as they determine is necessary to
enable the preparation of financial statements that are free from
material misstatement, whether due to fraud or error; assessing the
Company's ability to continue as a going concern, disclosing, as
applicable, matters related to going concern; and using the going
concern basis of accounting unless they either intend to liquidate
the Company or to cease operations, or have no realistic
alternative but to do so.
Auditor's responsibilities
Our objectives are to obtain reasonable assurance about whether
the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue our
opinion in an auditor's report. Reasonable assurance is a high
level of assurance, but does not guarantee that an audit conducted
in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or
error and are considered material if, individually or in aggregate,
they could reasonably be expected to influence the economic
decisions of users taken on the basis of the financial
statements.
A fuller description of our responsibilities is provided on the
FRC's website at www.frc.org.uk/auditorsresponsibilities .
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.
Edward Houghton
Responsible Individual
For and on behalf of KPMG Audit LLC
Chartered Accountants and Recognised Auditors
Heritage Court
41 Athol Street
Douglas
Isle of Man
IM1 1LA
22 September 2023
Income Statement
Note Year ended 30 Year ended 30 June
June 2023 2022
US$'000 US$'000
---------------------------- ------ -------------- ---------------------------
Income
Net income/(loss) in
investment at fair value
through profit or loss 17,060 (11,947)
Dividend received from
subsidiary - 28,570
Interest income on loan 206 212
Other income - 1
Total net income 17,266 16,836
---------------------------- ------ -------------- ---------------------------
Expenses
Expenses 7 810 653
Total operating expenses 810 653
---------------------------- ------ -------------- ---------------------------
Profit before tax 16,456 16,183
Income tax expense - -
---------------------------- ------ -------------- ---------------------------
Profit for the year 16,456 16,183
---------------------------- ------ -------------- ---------------------------
Basic earnings per share
(cents) 4 40.14 34.09
---------------------------- ------ ----------------------------------- ------
Diluted earnings per
share (cents) 4 40.14 34.09
---------------------------- ------ ----------------------------------- ------
The Directors consider that all results derive from continuing
activities.
Statement of Comprehensive Income
Year ended 30 June 2023 Year ended 30 June 2022
US$'000 US$'000
--------------------------------------------------------------- ------------------------ ------------------------
Profit for the year 16,456 16,183
Other comprehensive income - -
Items that are or may be reclassified subsequently to profit
or loss:
Currency translation differences - -
--------------------------------------------------------------- ------------------------ ------------------------
Total items that are or may be reclassified subsequently to - -
profit or loss
--------------------------------------------------------------- ------------------------ ------------------------
Other comprehensive income for the year - -
--------------------------------------------------------------- ------------------------ ------------------------
Total comprehensive income for the year 16,456 16,183
---------------------------------------------------------------- ------------------------ ------------------------
Statement of Financial Position
Note At 30 June 2023 At 30 June 2022
US$'000 US$'000 US$'000 US$'000
------------------------------------------------- ----- ---------------- ----------------
Assets
Investment at fair value
through profit or loss
- comprising: 1(a)
* equity interest in subsidiary 93,766 76,705
* loan to subsidiary 2,320 6,500
96,086 83,205
Other receivables and
prepayments 60 65
Cash and cash equivalents 881 67
------------------------------------------------- ----- ---------------- ----------------
Total assets 97,027 83,337
================================================= ===== ================ ================
Equity
Issued share capital 5 411 411
Share premium 1,008 -
Reserves 95,457 82,853
---------------- ----------------
Total equity 96,876 83,264
------------------------------------------------- ----- ---------------- ----------------
Current liabilities
Other payables and accrued
expenses 6 151 73
------------------------------------------------- ----- ---------------- ----------------
Total current liabilities 151 73
------------------------------------------------- ----- ---------------- ----------------
Total equity and liabilities 97,027 83,337
================================================= ===== ================ ================
The financial statements were approved by the Directors on 22
September 2023 and signed on their behalf by:
Anderson Whamond David Humbles
Chairman Director
Statement of Changes in Equity
Share capital Share premium Reserves Total
US$'000 US$'000 US$'000 US$'000
---------------------------------------------------- -------------- -------------- --------- ---------
Balance at 1 July 2021 576 - 90,375 90,951
Total comprehensive income for the year
Profit for the year - - 16,183 16,183
Total comprehensive income for the year - - 16,183 16,183
---------------------------------------------------- -------------- -------------- --------- ---------
Contributions by and distributions to owners
Dividends paid - - (2,418) (2,418)
Shares subject to tender offer (165) (20,947) (21,112)
Tender offer expenses - - (340) (340)
Total contributions by and distributions to owners (165) - (23,705) (23,870)
---------------------------------------------------- -------------- -------------- --------- ---------
Balance at 30 June 2022 411 - 82,853 83,264
---------------------------------------------------- -------------- -------------- --------- ---------
Share capital Share premium Reserves Total
US$'000 US$'000 US$'000 US$'000
---------------------------------------------------- -------------- -------------- --------- ---------
Balance at 1 July 2022 411 - 82,853 83,264
Total comprehensive income for the year
Profit for the year - - 16,456 16,456
Total comprehensive income for the year - - 16,456 16,456
---------------------------------------------------- -------------- -------------- --------- ---------
Contributions by and distributions to owners
Dividends paid - - (2,882) (2,882)
Shares subject to tender offer (4) - (835) (839)
Tender offer expenses - - (135) (135)
Proceeds from shares issued 4 1,008 - 1,012
Total contributions by and distributions to owners - 1,008 (3,852) (2,844)
---------------------------------------------------- -------------- -------------- --------- ---------
Balance at 30 June 2023 411 1,008 95,457 96,876
---------------------------------------------------- -------------- -------------- --------- ---------
Statement of Cash Flows
Year ended 30 Year ended 30 June
June 2023 2022
US$'000 US$'000
---------------------------- -------------- -------------------
Cash flows from operating
activities
Dividend received from
subsidiary - 28,570
Interest income from
loan to subsidiary 212 197
Loan to subsidiary 4,180 (4,566)
Operating expenses paid (734) (391)
Net cash generated from
operating activities 3,658 23,810
----------------------------- -------------- -------------------
Financing activities
Dividends paid (2,882) (2,418)
Cash used in tender offer (839) (21,112)
Tender expenses (135) (340)
Proceeds from issue of 1,012 -
shares
Net cash used in financing
activities (2,844) (23,870)
----------------------------- -------------- -------------------
Net decrease in cash
and cash equivalents 814 (60)
Effects of exchange rate - -
changes on cash and cash
equivalents
Cash and cash equivalents
at beginning of the year 67 127
----------------------------- -------------- -------------------
Cash and cash equivalents
at end of the year 881 67
----------------------------- -------------- -------------------
Notes to the Financial Statements
1(a) Investment at fair value through profit or loss
30 June 2023 30 June 2022
US$'000 US$'000
-------------------------------- ------------- -------------
Equity interest in subsidiary 93,766 76,705
Loan to subsidiary 2,320 6,500
-------------------------------- ------------- -------------
Total investment in subsidiary 96,086 83,205
-------------------------------- ------------- -------------
The Company has one subsidiary, Epicure Qatar Opportunities
Holdings Limited ("the Subsidiary"), which holds the portfolio of
investments and has the investment management and custodian
agreements. The investment in subsidiary is stated at fair value
through profit or loss in accordance with the IFRS 10 Investment
Entity Consolidation Exception. The fair value of the investment in
Subsidiary is based on the year-end net asset value of the
Subsidiary as reported by the Administrator. The loan to
Subsidiary, with an aggregate principal amount of US$2,320,179
(2022: US$6,500,000), is included within this balance. The loan 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. Additions and
disposals regarding the investment in subsidiary are recognised on
trade date.
1(b) Financial assets at fair value through profit or loss held by the Subsidiary
The Subsidiary holds a portfolio of quoted equities and P-Notes
which are classified as fair value through profit or loss. The fair
value for quoted equities is based on the current bid price ruling
at the year-end without regard to selling prices. The fair value of
P-Notes is based on the quoted year-end bid price of the underlying
equity to which they relate. P-Notes are promissory notes issued by
certain counterparty banks that are designed to offer the holder a
return linked to the performance of a particular underlying equity
security or market and used where direct investment in the relevant
underlying equity security or market is not possible for regulatory
or other reasons. To the extent dividends are received on the
securities to which the P-Notes are linked, these are taken to
investment income.
At 30 June 2023 the Subsidiary held 23 P-Notes (2022: 17) with a
value of US$52,441,930 (2022: US$28,259,031), held to obtain
exposure to Saudi Arabia where direct investment in equities is not
possible for foreign investors.
Purchases and sales of investments are recognised on trade date
- the date on which the Company commits to purchase or sell the
asset. Investments are initially recorded at fair value, and
transaction costs for all financial assets and financial
liabilities carried at fair value through profit and loss are
expensed as incurred.
Gains and losses (realised and unrealised) arising from changes
in the fair value of the financial assets are included in the
income statement in the year in which they arise.
Investments held by the Subsidiary
30 June 2023: Financial assets at fair value through profit or
loss; all quoted equity securities or P-Notes:
Security name Number US$'000
------------------------------------------------------------------------- --------------- ---------
Qatar Gas Transport (QGTS QD) 6,445,120 7,197
Qatar Navigation (QNNS QD) 2,477,030 7,040
National Commercial Bank 626,357 6,140
Middle East Healthcare* 285,754 5,389
Integrated Holding Company 3,297,916 4,648
Seera Group Holdings* 624,400 4,422
United International Transportation Co* 222,799 4,338
Maharah Human Resources* 263,618 3,952
Company for Co-op Insurance* 105,000 3,882
Emaar Properties Company (EMAAR UH) 2,182,000 3,807
Qatar Islamic Bank (QIBK QD) 770,000 3,745
------------------------------------------------------------------------- --------------- ---------
30 June 2023: Financial assets at fair value through profit or loss; all quoted
equity securities
or P-Notes:
Security name Number US$'000
------------------------------------------------------------------------- --------------- ---------
Saudi Ground Services* 384,395 3,512
Emirates National Bank of Dubai (ENBD UH) 827,000 3,332
Yanbu Cement* 255,506 2,917
Saudi British Bank B12LSY7* 279,000 2,828
Gulf Insurance* 299,099 2,521
Arabian Contracting Services* 52,655 2,497
Banque Saudi Fransi - SHAMAL 05.06.19* 225,000 2,497
Qatar National Bank (QNBK QD) 563,000 2,384
United Electronics Company* 116,000 2,268
Qatar Insurance (QATI QD) 3,742,999 2,230
Bawan Company* 195,354 1,881
Leejam Sports Co* 54,628 1,874
Commercial Bank of Qatar (CBQK QD) 1,040,462 1,655
Alamar Foods* 41,450 1,446
Bupa Arabia Co* 27,927 1,375
Riyadh Cables* 76,240 1,328
Jahez International* 5,689 956
Emaar Properties Company USD* 485,000 861
Alkhorayef Water and Power Tech* 17,500 742
Qatar Insurance USD* 750,000 474
Emirates NBD USD Stock* 115,000 463
Jamjoom Pharmaceuticals Factory Company* 867 21
94,622
------------------------------------------------------------------------ --------------------------
*P-notes
Investments held by Subsidiary
30 June 2022: Financial assets at fair value through profit or
loss; all quoted equity securities or P-Notes:
Security name Number US$'000
-------------------------------------------- ------------ ----------
Commercial Bank of Qatar (CBQK QD) 4,376,921 8,226
Qatar Gas Transport (QGTS QD) 6,896,794 7,084
Qatar Navigation (QNNS QD)* 2,133,250 4,900
Emaar Properties Company (EMAAR UH)* 3,018,122 4,272
National Commercial Bank** 239,000 4,197
Air Arabia* 6,400,182 3,606
Saudi Telecom* 130,500 3,377
Qatar National Bank (QNBK QD) 552,152 3,022
Dubai Islamic Bank (DIB UH) 1,924,164 3,012
Middle East Healthcare* 345,000 2,947
United International Transportation Co* 230,304 2,759
Emirates NBD USD Stock* 748,978 2,671
Emirates National Bank of Dubai (ENBD UH) 715,000 2,550
Integrated Holding Co 1,850,000 2,398
Maharah Human Resources* 128,963 2,093
Mannai Corporation (MCCS) 893,705 2,044
Alinma Bank* 191,000 1,700
Almarai Co Ltd* 120,000 1,676
Gulf International Services (GISS QD) 2,850,000 1,629
Saudi Airlines Catering Co* 71,000 1,343
Al Hammadi Company* 132,000 1,263
Aldrees Petroleum and Transport Serv Co* 69,000 1,217
Vodaphone Qatar 2,758,493 1,205
Barwa Real Estate (BRES QD) 960,000 872
Saudi International Petrochemical* 60,000 801
Fawaz Abdulaziz Al* 260,000 788
Qatar International Islamic Bank (QIIK) 263,401 771
Qatar Gas Transport USD* 402,256 413
Abdullah Al Othaim Markets Co 15,000 413
--------------------------------------------- ----------- --------
30 June 2022: Financial assets at fair value through profit or
loss; all quoted equity securities or P-Notes (continued):
Security name Number US$'000
-------------- ------- --------
Banque Saudi Fransi - SHAMAL* 24,000 303
Arab National Bank = Shamal* 38,000 299
73,851
-------
* P-Notes.
1(c) Risks relating to financial instruments
Risks relating to financial instruments comprise market price
risk, credit risk, interest rate risk, liquidity risk and foreign
currency risk. These are detailed below and in notes 2, 6 and
8.
Credit risk
Credit risk is the risk that a counterparty to a financial
instrument will fail to discharge an obligation or commitment that
it has entered into with the Company.
The carrying amounts of financial assets best represent the
maximum credit risk exposure at the statement of financial position
date. This relates also to financial assets carried at amortised
cost.
At the reporting date, the financial assets exposed to credit
risk comprised the following:
30 June 2023 30 June 2022
US$'000 US$'000
--------------------------- ------------- -------------
Loan to subsidiary 2,320 6,500
Cash and cash equivalents 881 67
Other receivables 22 28
--------------------------- ------------- -------------
3,223 6,595
--------------------------- ------------- -------------
The maximum exposure to credit risk is represented by the
carrying amount of each financial asset in the statement of
financial position. 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. All amounts are due within one month of
the year end.
Investments held by the subsidiary are held by the Custodian,
HSBC Bank (Middle East) Ltd.
P-Notes held by the Company's subsidiary are issued by
counterparty financial institutions and therefore the Company is
exposed to credit risk in relation to these financial institutions.
The value of P-Notes held at the year-end is disclosed in note
1(a). The counterparties are Merrill Lynch International & Co
C.V. (guaranteed by Bank of America Corporation), EFG-Hermes MENA
Securities Limited (guaranteed by EFG-Hermes Holding S.A.E.) and
HSBC Bank Middle East (guaranteed by HSBC Bank plc).
The credit ratings of the financial institutions are as
follows:
Merrill Lynch international A+
Bank of America Corporation A-
HSBC Bank plc A+
The ratings for Merrill Lynch and Bank of America are from
Standard and Poors and the rating for HSBC is from Fitch.
EFG Hermes MENA Securities Limited and EFG Hermes Holding S.A.E.
do not have a credit rating. However, the Board and Investment
Advisor have reviewed their credit worthiness and consider it to be
acceptable.
The investments in P-Notes, which are over-the-counter equity
linked instruments, expose the Company to the risk that the
counterparties to the instruments might default on their
obligations to the Company. The Directors consider the risk to be
insignificant.
The Subsidiary uses the banking services of HSBC Bank (Middle
East) Ltd and Barclays (Isle of Man) PLC. HSBC has a credit rating
of A2 assigned by Moody and Barclays has a credit rating of A- from
Standard and Poors.
Other receivables principally relate to loan interest receivable
from the Subsidiary.
Interest rate risk
The Company's loan to subsidiary bears interest and is stated at
fair value, which is considered to be equivalent to cost as the
loan is repayable on demand, bears interest at floating rate and
there is negligible credit risk. The underlying portfolio held by
the Subsidiary comprises equities or equity linked securities. Cash
held is invested at short-term market interest rates. As a result,
the Company 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 with respect to cash balances held by the
Company and the Subsidiary.
The table below summarises the Company's exposure to interest
rate risks. It includes the Company'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 2023 Less 1-3 months 3 months 1-5 years Over Non-interest Total
than to 1 5 bearing
1month year years
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
-------------------- -------- ----------- --------- ---------- -------- ------------- --------
Financial
assets
Equity interest
in subsidiary - - - - - 93,766 93,766
Loan to subsidiary 2,320 - - - - - 2,320
Other receivables
and prepayments - - - - - 22 22
Cash 881 - - - - - 881
-------------------- -------- ----------- --------- ---------- -------- ------------- --------
Total financial
assets 3,201 - - - - 93,788 96,989
-------------------- -------- ----------- --------- ---------- -------- ------------- --------
Financial
liabilities
Other payables
and accrued
expenses - - - - - 151 151
-------------------- -------- ----------- --------- ---------- -------- ------------- --------
Total financial
liabilities - - - - - 151 151
-------------------- -------- ----------- --------- ---------- -------- ------------- --------
Total interest 3,201 - - - -
rate sensitivity
gap
-------------------- -------- ----------- --------- ---------- --------
30 June 2022 Less 1-3 months 3 months 1-5 years Over Non-interest Total
than to 1 5 bearing
1month year years
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
-------------------- -------- ----------- --------- ---------- -------- ------------- --------
Financial
assets
Equity interest
in subsidiary - - - - - 76,705 76,705
Loan to subsidiary 6,500 - - - - - 6,500
Other receivables
and prepayments - - - - - 28 28
Cash 67 - - - - - 67
-------------------- -------- ----------- --------- ---------- -------- ------------- --------
Total financial
assets 6,567 - - - - 76,733 83,300
-------------------- -------- ----------- --------- ---------- -------- ------------- --------
Financial
liabilities
Other payables
and accrued
expenses - - - - - 73 73
-------------------- -------- ----------- --------- ---------- -------- ------------- --------
Total financial
liabilities - - - - - 73 73
-------------------- -------- ----------- --------- ---------- -------- ------------- --------
Total interest 6,567 - - - -
rate sensitivity
gap
-------------------- -------- ----------- --------- ---------- --------
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.
2 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).
The investment in subsidiary held by the Company is classified
as level 2 in the fair value hierarchy - being based on the net
asset value of the Subsidiary.
All the underlying listed equity investments held by the
Subsidiary are classed as level 1 investments. The P-Notes held by
the Subsidiary are classed as level 2. The analysis of investments
held by the Subsidiary between level 1 and level 2 is as
follows:
Financial assets at fair value Level Level 2 Level Total
through profit or loss at 30 1 US$'000 3 US$'000
June 2023 US$'000 US$'000
Assets:
--------- --------- --------- ---------
Equity investments 42,180 - - 42,180
--------- --------- --------- ---------
P-Notes - 52,442 - 52,442
--------- --------- --------- ---------
42,180 52,442 - 94,622
--------- --------- --------- ---------
Financial assets at fair value Level Level Level Total
through profit or loss at 30 1 2 3 US$'000
June 2022 US$'000 US$'000 US$'000
Assets:
--------- --------- --------- ---------
Equity investments 45,591 - - 45,591
--------- --------- --------- ---------
P-Notes - 28,260 - 28,260
--------- --------- --------- ---------
45,591 28,260 - 73,851
--------- --------- --------- ---------
The fair value of other financial instruments both held by the
Company and the Subsidiary, including cash and short-term
receivables and payables is a reasonable approximation of fair
value.
Market price risk
The Company's strategy for the management of investment risk is
driven by the Company's investment objective. The main objective of
the Company is to capture the opportunities for growth offered by
the Gulf Cooperation Council region ("GCC") by investing in GCC
countries.
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 Company's market price risk is managed through the
diversification of the underlying investment portfolio held by the
Subsidiary. Approximately 97% (2022: 89%) of the net assets
attributable to holders of Ordinary Shares is invested in equity
securities and P-Notes held by the Subsidiary, on a look through
basis.
At 30 June 2023, if the market value of the investment portfolio
held by the Subsidiary had increased/decreased by 1.5% (as per the
movement in the SEMGGCPD Index post year-end measured at 6 July
2023) with all other variables held constant, this would have
increased/decreased net assets attributable to shareholders by
approximately US$1.42 million (30 June 2022 : 5.10% : US$3.77
million). Market price volatility is expected to increase due to
geo-political uncertainty and global inflationary pressures.
3 Net asset value per share
The net asset value per share as at 30 June 2023 is US$2.3556
per share (30 June 2022: US$2.0256) based on 41,125,480 (30 June
2022: 41,105,216) Ordinary shares in issue as at that date.
4 Earnings per share
Basic and diluted earnings per share are calculated by dividing
the profit attributable to equity holders of the Company by the
weighted average number of Ordinary shares in issue during the
year.
30 June 2023 30 June 2022
----------------------------------------------------------------- ------------- -------------
Profit attributable to equity holders of the Company (US$'000) 16,456 16,183
Weighted average number of Ordinary shares in issue (thousands) 40,993 47,474
----------------------------------------------------------------- ------------- -------------
Basic and diluted earnings per share (cents per share) 40.14 34.09
----------------------------------------------------------------- ------------- -------------
5 Share capital
30 June 2023 30 June 2022
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:
41,125,480 (2022:41,105,216) Ordinary
shares of US$0.01 each in issue,
with full voting rights 411 411
Nil (2022: Nil) Ordinary shares of - -
US$0.01 each held in treasury
Issued share capital 411 411
---------------------------------------- ------------- -------------
On 14 October 2022 the Company completed the purchase of 178,064
Tendered Shares and on 21 April 2023 the Company completed the
purchase of 251,672 Tendered Shares. This was in accordance with
the Tender Offer launched on 23 November 2020. These Tendered
Shares were cancelled. In addition on 20 December 2022 the Company
issued 75,000 ordinary shares, on 1 June 2023 the Company issued
50,000 ordinary shares, on 2 June 2023 the Company issued 100,000
ordinary shares, on 6 June 2023 the Company issued 50,000 ordinary
shares, on 13 June the Company issued 125,000 ordinary shares and
on 16 June 2023 the Company issued 50,000 ordinary shares. This was
in accordance with the block listing application which became
effective on 10 May 2022. The issued share capital is now
41,125,480 shares with no shares held in treasury. As a result, the
total number of shares with voting rights is 41,125,480.
Capital management
The Board's policy is to maintain a strong capital base so as to
maintain investor, creditor and market confidence and to sustain
future development of the Company. The Board manages the Company's
affairs to achieve Shareholder returns through capital growth
rather than income and monitors the achievement of this through
growth in net asset value per share.
Capital comprises share capital and reserves. Neither the
Company nor the Subsidiary is subject to externally imposed capital
requirements.
6 Other payables and accrued expenses
30 June 2023 30 June 2022
US$'000 US$'000
------------------------------- ------------- -------------
Administration fee payable 40 39
Accruals and sundry creditors 111 34
------------------------------- ------------- -------------
151 73
------------------------------- ------------- -------------
Liquidity risk
The Company manages its liquidity risk by maintaining sufficient
cash for operations and the ability to realise market positions.
The Company's liquidity position is monitored by the Investment
Manager and the Board of Directors.
The residual undiscounted contractual maturities of financial
liabilities are in the table below:
30 June 2023 Less 1-3 3 months 1-5 years Over 5 No stated
than months to 1 year years maturity
1 month
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
------------------------ --------- -------- ----------- ---------- -------- ----------
Financial liabilities
Other creditors 151 - - - - -
and accrued expenses
------------------------ --------- -------- ----------- ---------- -------- ----------
151 - - - - -
------------------------ --------- -------- ----------- ---------- -------- ----------
30 June 2022 Less 1-3 3 months 1-5 years Over 5 No stated
than months to 1 year years maturity
1 month
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
------------------------ --------- -------- ----------- ---------- -------- ----------
Financial liabilities
Other creditors 73 - - - - -
and accrued expenses
------------------------ --------- -------- ----------- ---------- -------- ----------
73 - - - - -
------------------------ --------- -------- ----------- ---------- -------- ----------
7 Expenses
30 June 2023 30 June 2022
US$'000 US$'000
------------------------------------------------ ------------- -------------
Administrator and Registrar's fees (see below) 160 161
Audit fees 83 35
Custodian fees (see below) 3 3
Directors' fees and expenses* 139 151
Directors' insurance cover 38 51
Broker fees 46 58
Other expenses 341 194
------------------------------------------------ ------------- -------------
810 653
------------------------------------------------ ------------- -------------
*Directors fees amounted to US$103,374 and Directors expenses
were US$35,108.
Investment management fees and custodian fees borne by the
Subsidiary were US$691,179 and US$90,904 respectively (2022:
US$752,984 and US$87,304 respectively).
Investment m anager's fees
Annual fees
The Investment Manager was entitled to an annual management fee
of 1.25% of the Net Asset Value of the Company, calculated monthly
and payable quarterly in arrears. The Investment Management
Agreement was subject to termination on 31 October 2013 with a
revised agreement coming into effect from 1 November 2013. Under
the revised agreement the annual fee reduced to 1.05% of the net
asset value of the Company and further reduced to an annual fee of
0.90% of the net asset value of the Company from 1 November 2016.
This was due for termination on 31 October 2019 but was rescinded
and the fee continues at a rate of 0.80% which was effective from 1
January 2021.
Annual management fees for the year ended 30 June 2023 amounted
to US$691,179 (30 June 2022: US$752,984) and the amount accrued but
not paid at the year-end was US$185,131 (30 June 2022: US$180,013).
This fee is borne by the Subsidiary.
7 Expenses
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$12,000, payable
quarterly in arrears. The Administrator receives an additional fee
of US$1,200 per month for providing monthly valuation data to the
Association of Investment Companies.
The Administrator assists in the preparation of the financial
statements of the Company and provides general secretarial
services.
The Administrator may utilise the services of a CREST accredited
registrar for the purposes of settling share transactions through
CREST. The cost of this service will be borne by the Company. It is
anticipated that the cost will be in the region of GBP12,000 per
annum subject to the number of CREST settled transactions
undertaken.
Administration fees paid for the year ended 30 June 2023
amounted to US$159,975 and US$17,047 for additional services (30
June 2022: US$161,493 and US$17,047 respectively). Outstanding
Administration fees at the year-end amounted to US$39,996 (30 June
2022: US$39,600).
Custodian fees
The Custodian is entitled to receive fees of US$7,200 per annum
and US$25 per processed transaction.
In addition the Custodian is entitled to receive fees of 8 basis
points per annum in respect of Qatari securities held by the
Subsidiary and 10 basis points per annum in respect of non-Qatari,
GCC securities held by the Subsidiary 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 ended 30 June 2023
amounted to US$94,054 (30 June 2022: US$90,254) and the amount
accrued but not paid at the year-end was US$9,091 (30 June 2022:
US$7,173). This fee is borne by the Subsidiary.
8 Foreign currency translation
The US Dollar is the currency in which the financial statements
are presented ("the presentational currency") as reporting to
shareholders is in US Dollars and the shares are quoted in US
Dollars. The US Dollar is also the functional currency.
Monetary assets and liabilities denominated in foreign
currencies as at the date of these financial statements are
translated to US Dollar at exchange rates prevailing on that date.
Income and expenses are translated into US Dollar based on exchange
rates on the date of the transaction. All resulting exchange
differences are recognised in the income statement at the exchange
rate prevailing on the statement of financial position date. Items
of income and expense are translated at exchange rates on the date
of the relevant transactions or an average rate.
Foreign exchange risk
The Company's operations, via the Subsidiary, are conducted in
jurisdictions which generate revenue, expenses, assets and
liabilities in currencies other than US Dollar. As a result, the
Company is subject to the effects of exchange rate fluctuations
with respect to these currencies. The Company's policy is not to
enter into any currency hedging transactions.
At the reporting date the Company had the following exposure,
including assets and liabilities held by the Subsidiary:
Currency 30 June 2023 30 June 2022
% %
--------------- ------------- -------------
Qatari Riyal 25.89 38.91
US Dollar 61.64 35.42
UAE Dirham 7.40 20.02
Kuwaiti Dinar 4.80 5.44
Saudi Arabia
Riyal 0.25 0.14
British Pound 0.02 0.07
--------------- ------------- -------------
The following table sets out the Company's total exposure to
foreign currency risk and the net exposure to foreign currencies of
the monetary assets and liabilities, including those held by the
Subsidiary:
30 June 2023 Assets Liabilities Net exposure
US$'000 US$'000 US$'000
--------------------- -------- ------------ -------------
US Dollar 60,026 (316) 59,710
Qatari Riyal 25,084 - 25,085
UAE Dirham 7,174 - 7,174
Kuwait Dinar 4,649 - 4,649
British Pound 57 (39) 18
Saudi Arabia Riyal 239 - 239
Omani Riyal 1 - 1
--------------------- -------- ------------ -------------
97,230 (355) 96,876
--------------------- -------- ------------ -------------
30 June 2022 Assets Liabilities Net exposure
US$'000 US$'000 US$'000
--------------------- -------- ------------ -------------
US Dollar 32,644 (3,156) 29,488
Qatari Riyal 32,394 - 32,394
UAE Dirham 16,670 - 16,670
Kuwait Dinar 4,797 (265) 4,532
British Pound 62 - 62
Saudi Arabian Riyal 118 - 118
--------------------- -------- ------------ -------------
86,685 (3,421) 83,264
--------------------- -------- ------------ -------------
Foreign currency sensitivity risk (Company)
At 30 June 2023 had the US Dollar weakened/strengthened by 1%
(2022 : weakened/strengthened 1%) in relation to all currencies,
with all other variables held constant, net assets attributable to
equity holders of the Company would have increased/decreased by the
amounts shown below:
Foreign currency sensitivity risk on a look through basis,
including the Subsidiary.
30 June 2023 US$'000
--------------- --------
British Pound -
Kuwaiti Dinar 46
UAE Dirham 72
Saudi Arabia
Riyal 2
--------------- --------
Effect on
net assets 120
--------------- --------
30 June 2022 US$'000
--------------- --------
British Pound -
Kuwaiti Dinar 45
UAE Dirham 167
Saudi Arabia -
Riyal
--------------- --------
Effect on
net assets 212
--------------- --------
The Qatari Riyal is pegged to the US Dollar.
9 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 subject
to taxation at the rate of 0% in the Isle of Man.
10 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
Subsidiary holds shares in Qatar Insurance Company S.A.Q. (see note
1(b)). 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 (via the Subsidiary) and through common
Directors. Fees paid and payable to the Investment Manager are
disclosed in notes 6 and 7.
Epicure Managers Qatar Limited is a wholly owned subsidiary of
the Investment Adviser, Qatar Insurance Company S.A.Q.
11 The Company
Gulf Investment Fund plc (the "Company") was incorporated and
registered in the Isle of Man under the Isle of Man Companies Acts
1931 to 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. On 19 May 2021
the Company transferred to the Specialist Fund Section of the Main
Market of the London Stock Exchange.
On 30 September 2022, the Company concluded a tender offer for
178,064 shares at a price of US$1.9498 per share. These shares were
purchased by the Company and the funds paid to tendering
shareholders on 14 October 2022.
On 11 April 2023, the Company concluded a tender offer for
251,672 shares at a price of US$1.9555 per share. These shares were
purchased by the Company and the funds paid to tendering
shareholders on 21 April 2023.
In the Circular published by the Company on 25 March 2021 the
Board announced the implementation of an enhanced dividend policy
targeting an annual dividend equivalent to 4 per cent. of Net Asset
Value at the end of the preceding year, to be paid in semi-annual
instalments.
The Net Asset value per Share at 30 June 2021 was US$1.7552 per
share and pursuant to the above stated policy, the directors
declared dividends for the year ended 30 June 2022 of 3.51 cents
per ordinary share.
The first dividend was paid on 21 October 2022 to ordinary
shareholders on the register as at 9 September 2022 (the "Record
Date").
The final dividend was paid to shareholders on 17 March 2023 to
ordinary shareholders on the register as at 10 February 2023 (the
"Record Date").
The Company applied to the London Stock Exchange for a block
listing of 2,700,000 ordinary shares of US$0.01 each to be admitted
on the Specialist Fund Segment of the Exchange. This admission
became effective on 10 May 2022. Since then: 20 December 75,000
shares were issued; 1 June 2023 50,000 shares were issued; 2 June
2023 100,000 shares were issued; 6 June 2023 50,000 shares were
issued; 13 June 2023 125,000 shares were issued and 16 June 2023
50,000 shares were issued.
The Company's agents and the Investment manager perform all
significant functions. Accordingly, the Company itself has no
employees.
Duration
The Company currently does not have a fixed life but the Board
considers it desirable that Shareholders should have the
opportunity to review the future of the Company at appropriate
intervals. Accordingly, it was resolved that shareholders are able
to participate in bi-annual tender offers for up to 100% of the
share capital.
12 The Subsidiary
The Company has the following subsidiary company:
Country of incorporation Percentage of
shares held
----------------------------- -------------------------- --------------
Epicure Qatar Opportunities British Virgin
Holdings Limited 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 BVI
Companies Act 2001, as a limited liability company with
registration number 1415393. The principal activity of the
Subsidiary is holding investments on behalf of the Company.
13 Significant accounting policies
Accounting policies for certain items have been included in the
relevant note.
13.1 Basis of preparation
Principal activities
The Company's principal activities, investment objective and
strategy and principal risks and uncertainties and the planned
tender offers in 2023 are described in the Chairman's Statement,
Business Review, Investment Policy and Corporate Governance
Report.
Statement of compliance
These financial statements have been prepared in accordance with
International Financial Reporting Standards ("IFRS") and Isle of
Man Companies Act 1931 to 2004.
In accordance with IFRS 10, 'Consolidated financial statements',
the Directors have concluded that the Company falls under the
definition of an investment entity because the Company has the
following characteristics:
-- the Company has obtained funds for the purpose of providing
investors with investment management services;
-- the Company's investing policy, which was communicated
directly to investors, is investment solely for returns from
capital appreciation and investment income; and
-- the performance of investments is measured and evaluated on a fair value basis.
As a result, the Company does not consolidate its subsidiaries,
instead it is required to account for these subsidiaries at fair
value through profit or loss in accordance with IFRS 9, 'Financial
instruments' and prepares separate company financial statements
only.
Basis of measurement
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, which are stated at fair
value.
Use of judgements and estimates
In preparing these financial statements the Company has made
judgements, estimates and assumptions that affect the application
of the accounting policies and the reported amounts of assets,
liabilities, income and expenses. Actual results may differ from
these estimates.
Estimates and underlying assumptions are reviewed on an ongoing
basis. Revisions to estimates are recognised prospectively.
Going concern
These financial statements have been prepared on the going
concern basis, as the Board of Directors has a reasonable
expectation that the Company has the resources to continue in
business for the foreseeable future. In making this assessment, the
Directors have considered a wide range of information relating to
present and future conditions, including the 100% bi-annual tender
offers.
The Company has implemented a programme of bi-annual tender
offers in March and September each year, in each case for up to 100
per cent. of each Shareholder's holding of Shares as at the
relevant Record Date (each a "Contractual Bi-Annual Tender Offer"),
subject to a minimum size condition that the post Tender Offer
share capital is not less than 38 million shares. In the event the
Minimum Size Condition is not met in respect of any Tender Offer,
that Tender Offer will not proceed. The Directors will instead put
forward proposals to Shareholders for the Company to be wound up
with a view to returning cash to Shareholders or to enter into
formal liquidation.
Shareholders on the Register at the relevant Record Date will be
invited to either (i) continue their full investment in the
Company; or (ii) save for Restricted Shareholders, tender some or
all of their Shares held at that date. The Directors believe that
the implementation of the Contractual Bi-Annual Tender Offers
should provide those Shareholders who want it with the additional
liquidity they require going forward.
Subject to the result of the Tender Offer, the Company would not
be able to continue in operation if the Shareholders approve the
proposal to wind up or liquidate the Company. This represents a
material uncertainty that may cast significant doubt upon the
Company's ability to continue as a going concern and, therefore, to
continue realising its assets and discharging its liabilities in
the normal course of business. The financial statements do not
include any adjustments that would result from the basis of
preparation being inappropriate.
It is also noted that there is a planned continuation vote at
the annual general meeting in 2023 and every third year
thereafter.
Functional and presentation currency
These financial statements are presented in USD Dollar, which is
the Company's presentational and functional currency. All financial
information presented in USD Dollar has been rounded to the nearest
thousand dollar.
Disclosure on changes in significant accounting policies
The accounting policies applied in the Company financial
statements are the same as those applied in the Company financial
statements for the year ended 30 June 2022.
There were no new and revised IFRSs, which become effective for
annual periods beginning on or after 1 January 2022, that have been
adopted in these financial statements.
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 Company's accounting policies. The
financial statements do not contain any critical accounting
estimates.
13.2 Consolidated financial statements
Consolidated financial statements have not been presented in
order to comply with the requirements of the IFRS 10 Investment
Entity Consolidation Exception. The Directors have also applied the
exemption from the preparation of consolidated accounts available
under the Isle of Man Companies Act 1982, section 4(2)(i), on the
grounds that they would be of no real value to members of the
Company, in view of the insignificant amounts involved. This is on
the basis that the profit and net asset value reported in the
consolidated accounts would be the same as they are reported in the
Company accounts.
13.3 Segment reporting
The Company is organised into one operating segment, comprising
the investment in a portfolio of equity securities in the GCC
region via the wholly owned subsidiary. The financial performance
of this portfolio is presented to and monitored by the Board of
Directors, being the chief operating decision makers as defined
under IFRS 8. All of the Company's activities are interrelated, and
each activity is dependent on the others. Accordingly, all
significant operating decisions are based upon analysis of the
Company as one segment. The financial results from this segment are
equivalent to the financial statements of the Company as a
whole.
13.4 Investment in and loan to subsidiary
Investment in subsidiary is stated at fair value through profit
and loss based on the net asset value of the Subsidiary as reported
by the Administrator. The loan to subsidiary is included within
this valuation. Interest income on the loan to subsidiary is
recognised in the Income Statement using the effective interest
method.
13.5 Treasury shares
When shares recognised as equity are repurchased, the amount of
the consideration paid, which includes directly attributable costs,
is recognised as a deduction from equity. Repurchased shares that
are not cancelled are held as treasury shares and have no voting
rights and do not receive dividends. When treasury shares are sold
or reissued subsequently, the amount received is recognised as an
increase in equity and the resulting surplus or deficit on the
transaction is presented within reserves.
13.6 Cash and cash equivalents
Cash comprises cash on hand and demand deposits. Cash
equivalents are short-term highly liquid investments that are
readily convertible to known amounts of cash and that are subject
to an insignificant risk of changes in value.
13.7 Future changes in accounting policies
New and amended IFRSs in issue but not yet effective and not
early adopted
The following new standards, amendments and interpretations are
in issue but not yet effective for these financial statements and
have not been early adopted by the Company. The following amended
standards are not expected to have a material impact on the
Company's results:
-- IFRS 17 insurance contracts - effective from January 2023.
-- Amendments to IFRS 17 - effective from January 2023.
-- Disclosure of accounting policies (amendments to IAS1 and
IFRS practice statement 2) - effective from January 2023.
-- Definition of accounting estimate (amendments to IAS 8).
-- Deferred tax related asset and liabilities arising from a
single transaction - amendments to IAS 12 income taxes - effective
1 January 2023.
-- Sale or contribution of assets between an investor and its
associate or joint ventures (amendments to IFRS 10 and IAS 28).
-- Classification of liabilities as current or non-current
(amendments to IAS S1) - effective from January 2024.
-- Lease liability in a sale and leaseback amendments to IFRS 16.
-- Sale or contribution of assets between an investor and its
associate or joint venture (amendments to IFRS 10 and IAS 28).
There are no other standards, amendments or interpretations to
existing standards that are not yet effective, that would have a
material impact on the Company's reported results.
14 Post balance sheet events
Jubin Jose, portfolio manager at the Investment Adviser, intends
to step down at the end of December 2023. He will be replaced as
portfolio manager by Bijoy Joy who is currently Assistant Portfolio
Manager of GIF, and who has been involved with Jubin in the
day-to-day management of the fund for nearly 10 years.
The Board believe that Bijoy is well suited to manage the fund
and to continue to deliver the fund's investment objective for
shareholders. He will be supported by Robin Thomas , who has been
on the team for over 10 years, and the eleven-strong QIC equity
research team.
The first interim dividend of 4.05 cents per share, for the year
ended 30 June 2023, was announced on 7 September 2023 with a
payment date of 20 October 2023.
The Company issued a further 375,000 ordinary shares after the
year end.
In order the maximise the ability for UK investors to invest in
the Company, on 13 September 2023 the Board introduced an
additional market quote in Sterling (the " Sterling Quote ") for
the Company's existing ordinary shares on the London Stock
Exchange.
Appendix
Unaudited consolidated financial information
Consolidated Income Statement
Year ended 30 Year ended 30 June
June 2023 2022
US$'000 US$'000
---------------------------- ------------------------------------ -------------------
Income
Dividend income on quoted
equity
investments 2,895 3,487
Realised gain on sale
of financial assets at
fair value through profit
or loss 4,453 26,906
Net changes in fair value
on financial assets at
fair value through profit
or loss 10,816 (12,607)
Interest income 29 13
Net foreign exchange loss (55) (67)
Total net income 18,138 17,732
----------------------------- ------------------------------------ -------------------
Expenses
Investment manager's
fees 691 752
Other expenses 940 771
Total operating expenses 1,631 1,523
----------------------------- ------------------------------------ -------------------
Profit before tax 16,507 16,209
Income tax expense 51 26
----------------------------- ------------------------------------ -------------------
Profit for the year 16,456 16,183
----------------------------- ------------------------------------ -------------------
Basic earnings per share
(cents) 40.14 34.09
----------------------------- ------------------------------------ -------------------
Diluted earnings per
share (cents) 40.14 34.09
----------------------------- ------------------------------------ -------------------
Notes:
1) Consolidated information has been presented to assist the
user in interpreting the results of the Company and to be
consistent with previous years. This information consolidates the
results of the Subsidiary with the Company. It is based on IFRS
requirements that would apply if the IFRS 10 consolidation
exception for investment entities did not apply to the Company.
2) Where relevant to understanding the risks of financial
instruments held by the Company certain disclosures relating to the
subsidiary's assets and liabilities have been given in the notes to
the Financial Statements and would be relevant to understanding the
consolidated position presented in this appendix.
Appendix
Unaudited consolidated financial information
Consolidated Statement of Comprehensive Income
Year ended 30 June 2023 Year ended 30 June 2022
US$'000 US$'000
--------------------------------------------------------------- ------------------------ ------------------------
Profit for the year 16,456 16,183
Other comprehensive income
Items that are or may be reclassified subsequently to profit
or loss:
Currency translation differences - -
--------------------------------------------------------------- ------------------------ ------------------------
Total items that are or may be reclassified subsequently to - -
profit or loss
--------------------------------------------------------------- ------------------------ ------------------------
Other comprehensive income for the year - -
--------------------------------------------------------------- ------------------------ ------------------------
Total comprehensive income for the year 16,456 16,183
---------------------------------------------------------------- ------------------------ ------------------------
Appendix
Unaudited consolidated financial information
Consolidated Statement of Financial Position
At 30 June 2023 At 30 June 2022
US$'000 US$'000
------------------------------ ---------------- ----------------
Assets
Financial assets at fair
value through profit or
loss 94,622 73,851
Other receivables and
prepayments 328 2,731
Cash and cash equivalents 2,512 6,951
------------------------------- ---------------- ----------------
Total assets 97,462 83,533
=============================== ================ ================
Equity
Issued share capital 411 411
Share premium 1,008 -
Reserves 95,457 82,853
Total equity 96,876 83,264
------------------------------- ---------------- ----------------
Current liabilities
Other payables and accrued
expenses 586 269
------------------------------- ---------------- ----------------
Total current liabilities 586 269
------------------------------- ---------------- ----------------
Total equity and liabilities 97,462 83,533
=============================== ================ ================
Consolidated Statement of Changes in Equity
Share capital Distributable Reserves Share premium Other reserves Total
reserves
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
-------------------------------- -------------- -------------- --------- -------------- --------------- --------
Balance at 1 July 2022 411 (6,356) 87,366 - 1,843 83,264
Total comprehensive income for
the year
Profit for the year - - 16,456 - - 16,456
Other comprehensive income
Foreign exchange translation - - - - - -
differences
-------------------------------- -------------- -------------- --------- -------------- --------------- --------
Total other comprehensive - - - - - -
expense
-------------------------------- -------------- -------------- --------- -------------- --------------- --------
Total comprehensive income for
the year - - 16,456 - - 16,456
-------------------------------- -------------- -------------- --------- -------------- --------------- --------
Contributions by and
distributions to owners
Dividends paid - - (2,882) - - (2,882)
Shares subject to tender offer (4) (839) - - 4 (839)
Tender offer expenses - (135) - - - (135)
Proceeds from shares issued 4 - - 1,008 - 1012
Total contributions by and
distributions to owners - (974) (2,882) 1,008 4 (2,844)
-------------------------------- -------------- -------------- --------- -------------- --------------- --------
Balance at 30 June 2023 411 (7,330) 100,940 1,008 1,847 96,876
-------------------------------- -------------- -------------- --------- -------------- --------------- --------
Appendix
Unaudited consolidated financial information
Balance at 1 July 2021 576 15,096 73,601 - 1,678 90,951
Total comprehensive income for the year
Profit for the year - - 16,183 - - 16,183
Other comprehensive income
Foreign exchange translation differences - - - - - -
---------------------------------------------------- ------ --------- -------- ------ ---------
Total other comprehensive expense - - - - - -
---------------------------------------------------- ------ --------- -------- ------ ---------
Total comprehensive income for the year - - 16,183 - - 16,183
---------------------------------------------------- ------ --------- -------- ------ ---------
Contributions by and distributions to owners
Dividends paid - - (2,418) - - (2,418)
Shares subject to tender offer (165) (21,112) - - 165 (21,112)
Tender offer expenses - (340) - - - (340)
Total contributions by and distributions to owners (165) (21,452) (2,418) - 165 (23,870)
---------------------------------------------------- ------ --------- -------- ------ ---------
Balance at 30 June 2022 411 (6,356) 87,366 - 1,843 83,264
---------------------------------------------------- ------ --------- -------- ------ ---------
Appendix
Unaudited consolidated financial information
Consolidated Statement of Cash Flows
Year ended 30 Year ended 30 June
June 2023 2022
US$'000 US$'000
------------------------------- -------------- -------------------
Cash flows from operating
activities
Purchase of investments (214,990) (227,246)
Proceeds from sale of
investments 212,223 254,051
Dividends received 2,746 3,394
Operating expenses paid (1,599) (1,283)
Interest received 30 13
Net cash generated from/(used
in) operating activities (1,590) 28,929
-------------------------------- -------------- -------------------
Financing activities
Dividends paid (2,882) (2,418)
Cash used in tender offer (835) (21,112)
Tender expenses (135) (340)
Proceeds from shares issued 1,012
Net cash used in financing
activities (2,840) (23,870)
-------------------------------- -------------- -------------------
Net (decrease)/increase
in cash and cash equivalents (4,430) 5,059
Effects of exchange rate
changes on cash and cash
equivalents (9) 90
Cash and cash equivalents
at beginning of the year 6,951 1,802
-------------------------------- -------------- -------------------
Cash and cash equivalents
at end of the year 2,512 6,951
-------------------------------- -------------- -------------------
Glossary
Alternative performance measures (APM)
An APM is a measure of performance or financial position that is
not defined in applicable accounting standards and cannot be
directly derived from the financial statements. The Company's APMs
are set out below and are cross-referenced where relevant to the
financial inputs used to derive them as contained in other sections
of the Annual Financial report.
Ongoing charges ratio
Ongoing charges (%) = Annualised ongoing charges divided by
Average undiluted net asset value in the period
Ongoing charges are those expenses of a type which are likely to
recur in the foreseeable future, whether charged to capital or
revenue, and which relate to the operation of the investment
company as a collective fund. Ongoing charges are based on costs
incurred in the year as being the best estimate of future costs and
include the annual management charge. As recommended by the AIC in
its guidance, ongoing charges are calculated using the Company's
annualised revenue and capital expenses (excluding finance costs,
direct transaction costs, custody transaction charges,
non-recurring charges and taxation) expressed as a percentage of
the average daily net assets of the Company during the year. The
inputs that have been used to calculate the ongoing charges
percentage are set out in the following table:
Ongoing charges calculation* 30 June 2023 30 June 2022
US$'000 US$'000
Management fee 691 752
------------- -------------
Other operating expenses 940 793
------------- -------------
Total management fee and other
operating expenses 1,631 1,545 a
------------- -------------
Average net assets in the year 86,063 92,533 b
------------- -------------
Ongoing charges (c=a/b) 1.89% 1.67% c
------------- -------------
*Including expenses of the Subsidiary.
Discount and premium
Shares can frequently trade at a discount to net asset value
(NAV). This occurs when the share price (based on the mid-market
share price) is less than the NAV and investors may therefore buy
shares at less than the value attributable to them by reference to
the underlying assets. The discount is the difference between the
share price and the NAV, expressed as a percentage of the NAV. As
at 30 June 2023, the share price was USD2.4000 and the audited NAV
per share was 2.3536, giving a premium of 1.97%. A premium occurs
when the share price (based on the mid-market share price) is more
than the NAV and investors would therefore be paying more than the
value attributable to the shares by reference to the underlying
assets.
Year to date net asset value
This is the fall or rise, calculated as a percentage, in value
of the Company's assets attributable to one ordinary share since 31
December 2022. The net asset value per share is calculated by
dividing 'equity shareholders' funds' by the total number of
ordinary shares in issue (excluding treasury shares). The rise in
year-to-date NAV is set out in the table below:
Date Equity Number of Net asset
ordinary shares value per
in issue share
31 December 2022 81,534,639 41,002,152 1.9885 a
----------- ----------------- ----------- -------
30 June 2023 96,875,500 41,125,480 2.3556 b
----------- ----------------- ----------- -------
YTD Change in NAV 18.46% c
(c=(b-a)/a)
----------- ----------------- ----------- -------
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END
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