Annual Report 2015

Building a sustainable future for Oman

The strengthening of the Sultanate’s economic relations with the GCC, other Arab countries and regional groups,

and the positive interaction with the international economic system for the interests and benefit of Oman are very

important matters. They will enable us to participate in the huge growth of international trade and investment, and

make use of the expanding open markets.

His Majesty Sultan Qaboos bin Said

ANNUAL REPORT2015

State General Reserve Fund 4

Historical Milestones 6

Chairman’s Message 8

Board of Directors 10

Executive President Message 12

Key Achievements in 2015 16

Our Global Footprint 20

Investment Strategy 22

Portfolio's Performance 34

Joint Ventures with Friendly Countries 46

Governance and Transparency 50

Support Departments 56

Contents

32

About State General Reserve Fund (SGRF)

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It is the sovereign wealth fund of the State that undertakes the investment of any financial surplus forwarded to it. It is also the main investment arm of the country which acts on behalf of the government of Oman in managing and investing the surplus achieved by the state from Oil and Gas revenues. SGRF aims to achieve the best possible returns in the long-term to support the government’s efforts in diversifying income resources and securing returns for future generations, and to achieve stabilization to the supreme financial policies of the State.

The Fund was established in 1980 pursuant to Royal Decree number 1/1980. It has an independent juristic status which has full independence in managing its administrative and financial affairs. The Fund is supervised by the Ministry of Finance in accordance with the decisions issued by the Financial Affairs and Energy Resources Council (FAERC) in determining the policies and rules to be followed when investing the Fund’s money.

The resources of the Fund comprise of the following:

• Emerging resources resulting from exceeding the ceiling of the proposed oil prices during the approved five year development plan;

• Any surplus results by the end of the financial year;

• Revenues generated from the Fund’s investments;

• The tradable assets of the government that existed as surplus of the state prior to 1st January 1980;

• Any other funds that should be attached to SGRF if the government deems appropriate.

State General Reserve Fund invests mainly outside the Sultanate as is the case with most sovereign wealth funds around the world. It also plays a major role in investing inside the country through its subsidiary companies, and via its shareholding companies. The country has other funds, whose main objective is to invest inside the Sultanate.

Our Vision To be a substantial resource that strengthens the government’s efforts in achieving financial stability and diversity in the country’s economy, and an effective player in ensuring the continued development of the State. This ensures that the wealth of the country will be preserved for future generations.

Our Mission To achieve sustainable financial revenues through the investment of financial surplus of the State in various assets that have acceptable risks outside the Sultanate, and carrying out a leading role in catalyzing strategic projects inside the Sultanate.

Our Objectives • To maximize investment returns while prudently managing their

risk profiles • To achieve best possible returns on investments, taking into

account the distribution of risk criteria • To invest strategically with a long term time horizon • To be the leading entity in implementing best international

practices • To attract global investments and expertise to Oman through its

international network, and act as a catalyst in investing locally • To communicate and engage with the community in SGRF's

role in the future of Oman • To become the Center of Excellence in the economic and

financial sector by developing the national competencies

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The establishment of State General Reserve Fund pursuant to the Royal Decree 1/1980

The first direct investment in the real estate sector after the acquisition of Regent Wharf property in London, UK

The establishment of the Vietnam Oman Investment Company

The establishment of Uzbek Oman Investment Company

Issuance of Royal Decree number 58/2012 appointing H.E. Abdulsalam bin Mohammed Al Murshidi as the Executive President of SGRF

• Approving the investment strategy of the Fund and launching local initiatives aiming at catalyzing projects that have strategic dimensions through partnerships with international economic groups in various industrial, services, and logistics sectors.

• Forming specialized departments on risk management, compliance, internal audit and media.

Establishment of Oman National Investment Development Company (TANMIA), a local investment arm of SGRF.

The first direct investment in Private Equity after acquiring 6.1% of AWAS shares. AWAS is an Irish company operating in the aviation sector

The establishment of Oman Brunei Investment Company

The establishment of Oman India Joint Investment Fund

• SGRF Board approves SGRF’s corporate governance, and the internal regulations

• Expanding the short term assets portfolio to include deposits in the local banks

• Expanding the international bonds portfolio range to include emerging markets and Islamic sukuk

• Approving the new SGRF organizational structure

• The first direct investment in the mining sector after owning 29% of Kenmare Resources shares. The company is engaged in exploration and extraction of heavy metals like titanium, ilmenite, and zircon in the Republic of Mozambique.

• Launching SGRF’s first representative office abroad in The Tanzanian capital, Dar es Salaam,

• SGRF became a member in the International Forum of Sovereign Wealth Funds (IFSWF)

1980

1998 2006 2009 2011 2013 2015

2004 2008 2010 2012 2014

Historical Milestones

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The State General Reserve Fund (SGRF), which was established under the Royal Decree No. 1/1980, continues to play its major role as a leading investment arm of the Omani government, in line with the plans and directives of the prudent government and His Majesty Sultan Qaboos bin Said to diversify the sources of national income.

The sovereign fund continues to achieve its objectives for which it was established. SGRF is considered part of the government's efforts to ensure the welfare of future generations, diversify the sources of income and localize investments, through benefiting from the Fund's relationships and strategic partnerships around the world and with the local investment system.

Thanks to its effective investment policy, the Fund managed to show positive performance in 2015 despite the tough economic conditions globally due to the plunge in oil prices, the consequential slowdown of major economies and the tendency of several sovereign funds around the world to sell some of their assets. On the contrary, SGRF has not only maintained its assets, but also entered into promising partnerships and strategic investments.

We are sure that the executive management of the Fund will continue to enter into investments and partnerships that will come out with sustainable economic and cognitive benefits for the Sultanate and its future generations. At the same time, our confidence is reflected positively on the support, which we – as Board of Directors – will continue to offer to the executive management. I am taking this opportunity to extend our thanks and appreciation for the efforts they continuously exert to achieve the Fund's objectives, most important of which is maximizing

returns on investments, communicating with the community as regards to the Fund's role in the Sultanate's future, playing a leading role in the domestic investment and benefiting from the network of international relationships to attract investments to the Sultanate. All of these efforts will help SGRF to be an excellent centre of human resource management in the financial and economic sector.

Finally, we realize the challenges the global economy is facing and their impact on investments around the world. However, the performance of the global economy over the past three decades and the Fund's ability to overcome these challenges with the least possible losses make us optimistic about achieving a better future.

I am delighted to thank SGRF's Board of Directors for their support and contribution, as well as the executive management members who seek to create investment opportunities generating sustainable returns for the Sultanate's future generations. I ask Almighty Allah, the Supporter and Helper, to make this country safe and help us to always deliver the best for our future generations and the residents of this prosperous land.

Finally, I pray to Allah the Almighty to help the loyal citizens of this country to make more progress and prosperity, and to bless our efforts with success under the wise leadership of His Majesty Sultan Qaboos bin Said, may Allah protect and bless him.

Darwish Ismail Al Balushi Minister Responsible for Financial AffairsChairman

Chairman’s Message

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H.E Darwish Ismail Al Balushi

Minister Responsible for Financial Affairs Chairman

H.E Dr. Ali Mohammed Al Moosa

Vice President of the Council of Governors at Oman Central Bank, Member

H.E Dr. Mohammed Hamad Al Rumhi

Minister of Oil & Gas Member

H.E. Dr. Ali Masoud Al Sunaidi

Minister of Commerce and Industry Member

H.E Nasser Khamis Al Jashmi

Undersecretary of the Ministry of Finance Member

H.E Abdulsalam Mohammed Al Murshidi

Executive President of SGRF Member

Board of Directors

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Executive President Message

2015 has been one of the toughest year for capital markets in different parts of the world due to the sharp decline in oil prices and growing fears of recession in the Chinese economy. The year ended on a negative note for most international stock markets. Despite such challenges, SGRF managed to end the year with profits, thanks be to Allah the Almighty.

As for our Public Markets, despite the tough economic conditions of the year, the fund’s investment portfolio achieved better results compared to the benchmark index for the portfolio. Thanks to the flexibility of our investment policy which ensures tactical distribution of investments in the different parts of the world. The performance of the private markets portfolio has been positive and it has achieved 8.5% profits owing to the private equity investments.

In addition to the conventional investments in public & private markets, a number of diversified investments have been made in transport, logistic services and food processing sectors. This diversity has helped in consolidating the status of the Fund. The major investments include signing of the Heads of Agreement for developing Bagamoyo port in Tanzania, which is one of the key strategic projects of SGRF. The project is a joint venture with the Government of Tanzania and the Chinese Republic represented by China Merchant Group International, a world leader in the development and operation of ports and free zones.

The Fund increased its capital at the Oman India Joint Investment Fund (OIJIF) and established the Gulf Japan Food Fund (GJFF), to build a diversified investment portfolio in food processing sector to achieve added value for the capital, both on the medium and the long run. SGRF also entered into a strong partnership with the Omani private sector to enhance public private partnership (PPP), and support the Omani economy and the local community. The investments of SGRF also helped bring modern technologies to the Sultanate, through our partners who are world leaders in their domains.

In the real estate sector, SGRF focused on the added value projects and others that generate fixed income. To this end, the Fund has carried out 8 new real estate investments and entered into 27 new investment initiatives in 2015 including two new ones in the Sultanate of Oman, namely Mining Development Oman Company and Ibtikar Development Oman. Mining Development Oman Company will be hopefully converted to a holding company that will optimize the utilization of mineral

and mining resources in the Sultanate. At a later stage, 40% of company shares will be offered for public subscription by individuals and institutions. Ibtikar Development Oman, the first venture capital company, aims at promoting innovation in the Sultanate in areas such as technology, energy and food.

In 2015, SGRF sought to augment its foreign investments to achieve better yields, and at the same time enter into new local and international partnerships.

At SGRF, we have a firm belief that our aims will be materialized by having a strong institutional base. In 2015, we have developed and brought to life two policies, namely the business code of conduct and the anti-money laundry policy.

As for the institutional levels, 2015 witnessed the implementation of a number of new systems namely ‘PAM’ and ‘StatPro’ for performance evaluation. Moreover, SGRF has adopted the new Bloomberg system for trading and managing the Fund and assets at the international markets. In addition, the Fund has formed a quick response team for emergencies related to employee safety, and to ensure compliance with the safety standards and regulations.

On the human resources level, we have hired 62 new employees, which raises the total number of our staff to 174, of which 83% are Omanis. We have also introduced a system for career development which aims at promoting the second and third level leaders to higher positions, to ensure a smooth take over process. This system will have positive reflection on the performance of our organization in the years to come. This

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will also help us in retaining the top-performing staff and enhancing their loyalty to our organization. We have also updated our organizational chart to reflect the changes made in the designations and job roles.

At the end, I would like to express my sincere thanks and appreciation to His Majesty Sultan Qaboos bin Said, for his vision and guidance which aid the stability and growth of our national economy. We appeal to the Almighty Allah to shower his blessings on His Majesty the Sultan, and grant him long life, health and happiness.

I also take this opportunity to express my thanks and appreciation to the Board Members for their unlimited support. I also thank all our staff members for their dedication and hard work, which contributed to the achievements made by the SGRF in all domains.

Abdulsalam Mohammed Al Murshidi Executive President

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2015Key Achievements

The General Performance:

The annual return of the State General Reserve Fund has reached 7.1% since inception

Investments Portfolio in investment funds and mutual funds has achieved a return of

Private markets portfolio (private equity and real estate) gained

7.1%

14.6% 8.5%

1716

Signing the Heads of Agreement for developing the Tanzanian Bagamoyo Port.

Signing the MoU to establish Mining Development Oman Company

Omanisation

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100

80

60

40

20

02014 2015

78.8% 83%

• Laying the foundation stone and signing the Heads of Agreement for developing the Tanzanian Bagamoyo Port, under the patronage of His Excellency Tanzanian President Jakaya Mrisho Kikwete and in the presence of His Excellency Dr. Ahmed bin Mohammed Al Futaisi, Minister of Transport and Communications, who headed the Sultanate's delegation. This is one of the largest strategic projects of the Fund, implemented in partnership with the Government of Tanzania and People's Republic of China represented by China Merchant Group.

The Fund has undertaken around 27 new investments in 2015, including the direct participation in two investments in the Sultanate, as part of its local initiatives:

• Mining Development Oman

• Ibtikar Development Oman

The IT department provided an e-mail service and gave access to internal portal, which is available currently for the internal and external operations, with an operation availability of almost 99% uptime.

SGRF joined the Co-investment Roundtable of Sovereign and Pension Funds (CROSAPF).

In an effort to enhance transparency and disclosure, and to highlight the achievements made by the Fund, SGRF has issued 20 press releases and statements through different media channels.

• The SGRF board approved the ‘Business Code of Conduct’ policy to specify the guidelines and policies which should be followed by all employees to ensure sound business practices and encourage transparency.

• SGRF also approved the Anti-Money Laundry policy, which helps in protecting the Fund’s transactions from illegal practices including money laundering and finance of terrorism.

SGRF has appointed 62 employees at different units of the Fund; this represents a 58% growth compared to last year, and this is a record at SGRF for the number of new appointments in a year. The Omanisation level now stands at 83%. SGRF also supported a number of our staff to receive training or work placement with a number of organizations inside and outside the Sultanate.

• In the presence of the representatives of 57 countries, the Sultanate represented by SGRF has signed an agreement to establish the Asian Infrastructure Investment Bank (AIIB), whose authorized capital is estimated at nearly $100 billion. The bank, located in the capital of China Beijing, will finance the projects of state members and their agencies and institutions, as well as the international and regional agencies that are interested in the economic development in Asia. It is hoped that the sultanate will be the first benefiting from this bank.

Agreements: Investments and Local initiatives:

Information Technology: International Organizations:

Corporate Communications:

Governance: Human Resources:

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Our Global Footprint

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The Fund aims at building an investment portfolio centvred on a diversified pool of investment tools and assets including a wide range of geographies and sectors, in addition to strategic investments in order to ensure sustainable long term returns.

SGRF applies an investment strategy in a detailed and flexible manner, exhibiting a cautious approach in adhering to high standard in managing risk. The Fund also adopts international best practices in developing its investment strategy through its overall asset allocation framework and geographical distribution, in addition to the selection of attractive sectors. Strategy formulation is conducted by the Business Strategy Department through continuous monitoring and review of asset allocation weights and ensuring consistency with SGRF’s policy and the overall asset allocation framework, while taking the necessary steps to develop the framework in line with changing economic and market environments and cycle.

Investment Strategy

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Developed America ....................................................36%

Emerging America.........................................................2%

Developed Europe ......................................................33%

Emerging Europe ..........................................................5%

Emerging Asia ...............................................................7%

Middle East and Emerging Africa ................................7%

Asia Pacific ...................................................................9%

Other countries .............................................................1%

The Fund focuses on two main investment categories: Public Market Assets (tradable) that include global equity, fixed income bonds and short-term assets, and Private Market Assets (non-tradable) which include private investments in real estate, logistics, services, commercial, and industrial projects.

Asset AllocationThe fund allocates between 65% - 85% of its assets in Public Markets (tradable) and between 15% - 35% in Private Markets (non-tradable) as follows:

Business Strategy Department:The Business Strategy Department aims at developing the overall framework of the Fund’s asset allocation in a way that enhances the target returns while maintaining risks within acceptable levels.

The Department has developed a number of initiatives, particularly in the public markets domain where it continues to keep an eye on the evolution of investment products and assesses their compatibility with the fund’s investment strategy.

The Department assists the Fund’s management with the fund’s decision-making process through providing general economic overviews and focused economic analysis which examines and forecasts market trends, fiscal and monetary policies of major economies while linking this to the Fund’s investment strategy.

The Department also undertakes the sourcing, screening, selection of external financial institutions that manage the Fund’s money, ensuring the ability of these institutions to achieve the desired returns. This is done through studying various qualitative and quantitative measures such as historical track record and investment team stability, in addition to analyzing their risk management framework, compliance, accounting and control systems.

Among the most important achievements of the department:• The geographical coverage: In the field of analyzing

markets as well as political and economic conditions, the geographical coverage was extended to include Turkey, Russia, Uzbekistan, Tanzania, Ethiopia and Brazil.

• Monitoring the oil market: Given the importance of oil prices locally and at the level of global economic systems, they were monitored closely and periodically. The Investment Committee was briefed of the latest updates.

• Completing the preparation of guidelines for the portfolio and delivering them to the risk and compliance department to begin implementation.

• Creating a portfolio for the direct management of international stocks by the public markets team, as the team will select the best investment ideas for the stocks listed on the global capital markets.

• Establishing a new portfolio of diverse assets (multi-assets) that aims to take advantage of the existing opportunities in the different investment assets and the economic and geographic sectors.

• Developing the list of investments to reflect the best practices and thus adding the Fund's activity within acceptable risk limits to ensure better transparency and control rates.

*Note: the sum of percentages under each assets’ category (Tradable & Non-Tradable) does not necessarily add up to the minimum or maximum rates for each category

Assets Minimum Rate Targeted Distribution Maximum Rate

Total Current Assets 65 * 70 85*

Global Shares 25 35 45

Bonds 10 20 30

Short Term Assets 10 15 40

Total Non-Current Assets 15 * 30 35*

Private Equity 10 20 25

Real Estate 5 10 15

Geographical Distribution of Assets (Except Short-Term)

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When planning and implementing an investment strategy, the Fund analyses key economic indicators and their impact on the direction of the market around the globe, in the medium and long terms with the aim of identifying the emerging markets, key sectors, potential risks, and investment opportunities. Researchers at the Fund have identified six major trends which the management believe will have a significant impact, and represent promising investment opportunities. These trends listed below:

1. Increase of Middle Class around the Globe

Studies indicate that developing countries around the globe will witness a substantial growth in middle class. The countries include those from Asia - in particular, China, India and the Middle East. Countries in Africa will see a similar growth.

2. Patterns of Population Distribution

The world will witness growth in population. Studies revealed an increased percentage of the aging populations in developed countries. This is contrary to emerging economies which witness growth among young population.

By 2030, 60% of the world’s population will be

categorised as middle class

80% of this class will live in the emerging markets

By 2030, 75% of China’s population will be classified as middle class (rising from

the current 25%)

4. Change in the International Balance of Power

As Asian economies such as China and India gain more power in local production, population, military, and technology investments, it is expected that the international balance of power will lean towards developing countries by 2030. It is likely that the situation will lead to new alliances between various powers.

5. Modernisation

The increase in population, expansion of middle class, and immigration will lead to unprecedented increase in city expansion.

• 80% of modern growth that will be witnessed by the world in the coming 20 years will be in Africa and Asia.

• By 2050 the population percentage in the world living in cities will increase from the current 50% to 75%.

• The number of big cities (with populations in excess of 10 million) will increase from current 20 cities to 37 cities by 2025.

6. Scarcity of Natural Resources

With the extensive expansion, population growth and climate change, it is expected that natural resources will become scarcer, which opens up promising investment opportunities. • The International Energy Agency forecasts indicate an increase

of 40% in global energy demand by the year 2030, driven by economic growth, population growth and technological advances.

• The need to increase food production by 50% to meet the population needs of food.

• It is likely that the increased demand and lack of stability of production rates as a result of climate change will raise food prices by 2030.

• About 1 billion people will live in areas that suffer from water scarcity by 2030.

3. Technological Development

It is expected that technological development will have a huge impact on a lot of sectors, such as healthcare, agriculture, biological chemistry, telecommunications, nanotechnology, and energy, which will significantly increase productivity, efficiency, and services in all fields.

In 2012, people over sixty

represented 809 million (11%) of the

total population

By 2030 People over sixty will

reach 1,375 million (16%) of the total

population

By 2050 People over sixty will

reach 2050 million (22%) of the total

population

Investment Strategy and its relation with key global mega trends

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Public Markets Portfolio (Tradable Assets) Investments in this sector include financial securities subject to circulation that can easily be converted into cash any time at a reasonable cost. This class includes three major assets: global equities, international bonds, and short-term assets.

The Global equities portfolio invests in several main areas around the globe: North America, Europe, Asia Pacific, and emerging markets. These regions are comprised of more than 46 countries, which allows the fund to diversify its investments, leading to lower risks exposure. The Fund investments vary across ten economic sectors. These diversify the investment portfolio consistently with changes in international markets among the type of investments and the targeted areas. The aim is to minimise negative impact that may result due to adverse economic changes.

The public market portfolio also invests in 35 bonds markets around the world. The Fund is continuously seeking investments and strategies around the parameters of public markets, which develop and diversify the returns of the portfolio.

The assets of these portfolios vary and include government bonds in the emerging and developed markets, in addition to bonds issued by establishments with high ratings and sovereign Sukuks, Short-term assets including American Treasury Bills and deposits in local banks.

The public market investments have the ability to diversify the portfolio of the fund in a way that is consistent with the changes in international markets among the type of assets and targeted sectors, in addition to the geographical areas. The Fund is always seeking new investments and strategies in public markets, which maximizes and diversifies the returns with an acceptable and reasonable risk levels at the same time.

External Management of Investments SGRF takes a cautious approach in selecting the appropriate External Investment Manager based on the specified sector and investment area. The External Manager analyses market opportunities in accordance with the investment strategy of SGRF, and raises recommendations to the relevant committees to make the appropriate decision. SGRF continuously monitors the performance of External Investment Managers and ensures compliance with SGRF’s directives with respect to the performance criteria. SGRF works closely with them to benefit from their resources in research, technical skills and knowledge transfer.

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Targeted Sectors

Mining

Healthcare

Logistics & Ports

Retail

Food

المعايير المتبعة

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تقييم القطاعالمراد

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ANNUAL REPORT2015

The criteria used for

investment

Evaluate the sector to invest in

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Besides the investment in public markets, SGRF seeks to diversify its portfolio in the long-term through investment in non-tradable assets that are represented in unlisted private companies and real estate.

Private EquityThe private equity portfolio of the Fund is distributed onto a number of sectors in over 25 countries around the world. The investment in this category of assets focuses on a number of standards with a special focus on diversification and geographical distribution. The investment decision is not taken haphazardly but is rather preceded by financial, technical, legal and business studies that cover the different aspects of such investments including the different types of risks. The Fund is keen on forming strategic partnerships with the best investors in private equity, renowned business groups and other top performers in the markets where investments are made.

As part of its investment strategy in this field, SGRF focuses on certain economic sectors namely health care, mining, logistics & ports, food, and retail.

Private Market Portfolio (Private Equity and Real Estate)

Kumport Port - Turkey

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To achieve the prospective aims, SGRF at the same time and as part of its integrated human resources strategy is also keen on keeping its staff at the investment related departments abreast with the latest developments and trends. A number of new staff members joined SGRF in 2015. The Fund also seconded a number of its staff for varying periods, as part of the employee exchange program inside and outside the Sultanate.

The private equity portfolio is divided into three categories namely direct investments, investment funds and investments through joint ventures. SGRF has an independent department for asset management that follows the performance of its assets and takes necessary action to ensure betterment of such performance.

Real EstateReal estate with its different asset types and strategies is considered to be amongst the strong investment sectors; depending on the strategy and the allocation along the risk spectrum. Real estate offers capital preservation attributes and long-term income generation. Real estate investment is selected (taking into consideration each market) by diversifying among investments in tourism, commercial, or residential properties. The Real Estate department in SGRF diversifies its portfolio between core/core-plus, value-added and development projects to achieve the desired risk and return profile.

SGRF’s core real estate assets are defined as direct investments in developed markets benefiting from long-term lease contracts with strong tenant covenants aiming to achieve sustainable income. On the value-added real estate assets and development projects, SGRF enters into partnerships with real estate partners and developers in emerging and developed markets to leverage on their technical knowledge and expertise.

Contrary to the investment in real estate assets and development, which is direct investment for SGRF, real estate is one of the Fund’s indirect investments. Through its investment in major real estate funds, SGRF relies on the extensive experience and knowledge of the managers of these funds.

SGRF’s trends to invest locallyWe at SGRF, invest for a better future and sustainable development for generations to come. Hence, we are working to diversify our investments to serve this goal as well as other goals of the Fund. In addition to our investments in different continents of the world, we are targeting a number of areas where we believe in their ability to achieve economic and social added value for the people of the Sultanate of Oman and the economy as a whole. We are also working to harness the vast network of our international relations to bring international investments to the Sultanate, which are in line with the State’s plan.

The targeted sectors include those associated with the food industry, building materials industries and health services, which is one of the most important sectors that ensure the achievement of a decent life for future generations in the Sultanate, and which is within the sectors of focus for the Omani government, promoted through local initiatives and entering into regional and international investments across the government various investment arms.

In addition, the logistics sector and related projects is considered as one of the key infrastructural sectors upon which a large number of pharmaceutical, mining industries and other projects are based. The technology sector forms one of the promising areas to create sustainable economic opportunities in the Sultanate.

More importantly, the government is focusing on projects and initiatives that aim at developing the necessary knowledge and skills in recent/modern economic sectors in the Sultanate. Consequently, the Sultanate will become a platform for the provision of competencies and skills of higher qualifications in different present and future growth sectors.

Glass Point Project

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The Portfolios Performance

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The year 2015 witnessed several fluctuations in terms of economic performance and future prospects. The US economy has seen modest growth, while other developed markets continued to see difficulties. In addition, the emerging markets such as China suffered slowdown in growth to hit 6.9%, while the other emerging markets such as Brazil, South Africa and Russia saw bearish performance.

With the improvement of the US economic performance, the Federal Reserve has raised for the first time since 2006, the interest rate in December 2015. Despite the prevailing jitters in the beginning, the markets reacted positively to the US interest rate hike, which was accompanied by strong confidence that the global economy is able to recover. On the contrary, the Bank of Japan, the People's Bank of China and the European Central Bank continued to pursue their expansionary policies to counter the weak growth and combat deflation fears.

Influenced by the selloffs seen in the 3rd quarter of 2015, the global stocks ended the year on a negative note, amid concerns about the global economic outlook after a sharp fall in the Chinese currency. However, the recovery witnessed in the last quarter of 2015 was enough to

offset the 3rd quarter losses. The performance of the Pacific and European regions, except for the United Kingdom, was modestly positive, while the performance of North America was neither positive and nor negative, ending the year with moderate performance. Meanwhile, the United Kingdom and emerging markets were most affected and showed the worst performance. The 9.3% surge in the trade weighted dollar strongly impacted the performance of the US dollar during the year.

Brent crude continued its decline by 35% amid oversupply and weak demand amid global slowdown and rising oil inventories. The falling oil prices weighed on the performance of the Sultanate shares in global markets, to record negative performance and fall by 14.8%. The bearish outlook and decline in inflation rates encouraged many economic policy makers, with the exception of the US, to adopt new policies. However, the global bonds were strongly influenced by the robust performance of the US dollar, which was reflected on the various asset classes.

Public Market PortfolioMost important achievements

in 2015:

• Amending the specifications of short-term assets to improve

investments

• Linking the risk management system

with the trading system to facilitate pre-trading

reviews.

• Creating a guideline manual for the

internally-managed portfolios liquidity in the

short-term assets.

Throughout the year, SGRF adopted a cautious investment policy, through allocating few stakes for global and local equities, and maintaining high levels of Public Stock Markets Portfolio. Despite the modest returns for these type of assets, focusing on short-term assets rather than global equities and bonds safeguarded the Fund against the negative performance of the markets in 2015.

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Direct investments and joint ventures with friendly countries:

The direct investment portfolio, including the joint ventures with friendly countries, showed strong performance in 2015, as they achieved an internal rate of return (IRR) of 14.6%.

Laying the foundation stone for Bagamoyo Port – Tanzania

Furthermore, the portfolio grew by roughly 16% at the end of 2015 as the fund carried out additional investments locally and globally and raised additional credits for the outstanding investments. The Fund also divested its stakes in Freightliner, J. Jill and Numericable, in addition to selling a portion of its stakes in other investments, recording strong profits for its portfolio. The Fund has committed to invest in several new projects in 2016, from different sectors such as industry, energy, mining, infrastructure and logistics services. These projects are diversified geographically, including Asia, Africa and Europe.

Investment Funds:

Despite the slowdown of global economy as a result of falling oil prices, 2015 was a good year for the portfolio of private equity funds unlike the public markets which witnessed more volatility during the year. The capital of private equity funds around the world reached $527 billion in 2015, the third biggest figure recorded by this kind of investments since 2008. The value of acquisitions globally reached almost $300 billion, while the divestiture deals amounted to around $400 billion. These figures reflect the strength of the global merger and acquisition market.

As a result of this robust performance globally, the portfolio of private equity funds for SGRF has recorded the second biggest returns from the dividends achieved by the portfolio since the fund's inception. Most of these dividends came from commitments and transactions made from 2005 until 2008. To maintain the portfolio's healthy and balanced investment image, the fund continued its investments in the private equity funds, targeting the most prominent managers of private funds in the different regions and districts. In 2015, the sovereign fund made 10 commitments with investment funds in different sectors, applying different strategies and objectives to diversify the investment portfolio

Private Equity PortfolioMost important achievements

in 2015:

• Private Equity Portfolio achieved an IRR of 14.6%

• Two new

investments have been added as local initiatives

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ANNUAL REPORT2015

and distribute risks. The portfolio of private equity funds recorded strong dividends at the end of 2015 as the net investment returns (NIR) hit 7.2%. Thus, the portfolio's returns rose by roughly 60%.

Local Initiatives:As part of these initiatives, local investors have been added to the private equity portfolio in 2015:

• Mining Development Oman Co. (Under Establishment): In line with the government directives to diversify the sources of income and optimally utilize the mining sector through making use of the mineral resources in the Sultanate, within an integrated system for the development of the mining and logistics sectors'

infrastructure, it was agreed to establish of an Omani holding company in the field of mining and associated operations, with OMR 100 million in capital. The company's scope of work includes downstream such as mining industries and upstream such as exploration and drilling. The company will cooperate with the Omani private sector and support it either as a partner, a contractor, a supplier or a marketer of products and otherwise. The company will float shares for nationals, whether individuals or institutions.

• Ibtikar Development Oman Co. : Operates with initial capital of OMR 50 million, in which the State General Reserve Fund owns 60%. The company aims to support and finance entrepreneurs who have innovative business ideas, in addition to financing the

150

100

50

-

91

111

15 9

Private Equity Deal Flow in 2015

Deals approved by the investment

committee

Deals presented to the investment

committee

EvaluatedReceived

globally innovative projects that serve and benefit the national economy through the localization and transfer of knowledge to the Sultanate. Ibtikar will also work, through its staff that have a long and varied experience in finance, investment and management areas, to enhance the potential of start-ups in terms of guidance, gaining experience and studying the market and its variables, in addition to developing and financing their business to help these projects reach their maturity and stability.

Signing the MoU for establishing Mining Development Oman Company4140

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• SGRF exited from the Riverside Center mezzanine Debt Investment in Manhattan.

• The investment in Heron Tower (which was re-named to 101 Bishopsgate) achieved full occupancy in 2015, compared to 85% in 2014, resulting in a significant uplift in value.

• The Four Seasons Gresham Palace Hotel in Budapest performed strongly and achieved an occupancy rate of 70%; the strongest performing year for the hotel.

• SGRF acquired a 90% stake in the Marriott Opera Ambassador Hotel in Paris; an upscale 4 star hotel in a prestigious central location in Paris. The occupancy rate is 70%.

Overall, 2015 was a positive year for SGRF in terms of real estate. However, the foreign currency affected by the dollar value reflected negatively in the value of the real estate investments, predominantly in the developed markets within Europe and in North America. The key updates for the year 2015 are as follows:

Real Estate Portfolio

Most important achievements

in 2015:

• SGRF acquired a 90% stake in

the Marriott Opera Ambassador Hotel

in Paris

• SGRF acquired a 90% stake in the Hilton Hotel Group

in five Western European countries

Hilton Dusseldorf – Germany

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ANNUAL REPORT2015

180

160

140

120

100

80

60

40

20

0

167

80

11 8

Real Estate Deal Flow in 2015

Deals approved by the investment

committee

Deals presented to the investment

committee

ReviewedReceived

Real Estate Deal Flow by Asset Type - 2015

Logistic services 5%

Multiple use 6%

Residential 11%

Offices 37%

Retail 11%

Student hostels 3%

Defaulting debts 2%

Health care 1%

Hospitality 24%

Real Estate Deal Flow by regions - 2015

Developed Europe 29% (Western)

Emerging Europe 5% (Eastern)

North America 26%

Asia and Pacific 29%

Africa 2%

Latin America 1%

• SGRF also acquired a 90% stake in a portfolio of eight hotels in five Western European countries, marketed under the Hilton brand with a total of 2,260 keys.

• SGRF acquired a Central London Office Tower, along with CITI Group, in a location that is poised for significant growth. The office tower will be re-developed to increase the total built up area and to provide for Class A office space.

• SGRF co-invested alongside Starwood Capital Group in the acquisition of a stabilized yielding multi-family portfolio across five US states totaling 23,262 units. The occupancy rate has exceeded 94%.

• SGRF committed funds to a US based travel and leisure real estate fund managed by KSL, the only US based fund managers with a strong proven track record of investing in this sector. The Fund will invest in North America and Europe.

• SGRF committed funds to an Africa-focused real estate fund managed by Actis, one of the leading fund managers investing in Africa and the emerging markets. This is an opportunistic fund investing across 7 African countries.

• SGRF committed to investment with two of the strongest performing fund managers in SGRF’s real estate portfolio, and committed funds with Blackstone and Lonestar. Blackstone’s fund will target real estate opportunistic investments, primarily in the US, while Lonestar will invest in distressed and opportunistic commercial real estate debt and equity products, focusing mainly on Europe.

• SGRF is currently investing in 18 real estate funds covering most parts of the world.

In 2015, nine new staff have joined the real estate department out of which three are fresh graduates.

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The joint ventures that have been established with the friendly countries so far are the result of the Sultanate’s distinct diplomatic relations with these countries. These JVs are mostly concentrated in the Asian markets, which constitute a strong start to entering into these promising markets.

Joint Ventures with Friendly Countries

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Vietnam Oman Investment Co. (VOI) Vietnam Oman Investment Co. (VOI) was founded in 2008 as a joint venture between the State General Reserve Fund of Oman and the State Capital Investment Corporation of Vietnam, with an initial committed fund of US$ 75 million which was later increased to $125 million. The company invests in lucrative businesses and projects in Vietnam, especially in the sectors that enjoy competitive advantage of Vietnam and contribute to the long term sustainable growth of the economy.

As of today, the company has 8 investments which has achieved a growth of 31.42% since establishment.

The company had investments in infrastructure projects such as toll roads and power plants which are among the promising sectors in Vietnam. VOI managed to explore a number of great investment opportunities in areas such as ports, mining, water and others. The company has expanded its activity to other sectors such as agriculture and healthcare.

The company has recently sold one of its investments in Vietnam; the biggest producer of hydro electrical energy with a 77.2% growth.

Oman India Joint Investment Fund (OIJIF)This is a 50/50 joint investment fund between the SGRF and the State Bank of India. The Fund, which was established in 2011, invests in different economic sectors in India.

In 2015, the Fund has successfully completed the deployment of the investable corpus of Fund 1. It made 7 investments in total. It had also made an exit of one of these investments generating a gross IRR of 41.6%. By the end of the fiscal year in 2015, the value of SGRF remaining exposure to Fund 1 stood at about 1.2 x times the size of the investment.

After the success of Fund 1, work is underway to establish Fund 2 with an intended corpus of $300 million, of which SGRF will contribute 50% of the capital. The new investment portfolio is expected to deploy its investments in 2016, after completing legal formalities.

Oman Brunei Investment Co. Oman Brunei Investment Company was established in October 2009 as a 50/50 joint venture between the SGRF and Brunei Investment Corporation.

The company’s investment strategy focuses on the utilization of capital in companies with high growth potential through private equity. It also invests in the new projects or makes investments in joint ventures. The company seeks to achieve high yields not less than 12-15% and internal income through having a diversified portfolio that includes services, industry, health, education and tourism sectors.

Although 2015 has been full of challenges due to oil price dip, the performance of Oman Brunei Investment Company has been good. In total, the company has seven investments till the end of 2015. The active projects posted 9% growth rate in the fair value of assets in 2015.

Uzbek Oman Investment Co. (UOI) Pursuant to the decision of the governments of the Sultanate of Oman and the Republic of Uzbekistan, this fund was established in 2010 as a joint venture between the SGRF and the Uzbek Reconstruction and Development Fund, with a capital of $100 million (75% from Oman and 25% from Uzbekistan). The company was established as per a presidential decree which exempts the company from taxes for ten years. The company has been permitted to invest in foreign currencies. The joint venture has started considering some potential investments in different sectors. The company reviews 20 to 30 investments each year in sectors such as textile, food processing, pharmaceutical products, retail, financial services, technology and real estate.

The company, which already has two investments, announced 16% profits in 2014 with ambitious plans to invest more. Besides yields, the company seeks to avail a number of raw foodstuff and materials to the Sultanate.

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ANNUAL REPORT2015

At SGRF, we believe that success can only be achieved by gaining trust and building a strong name that is linked to transparency and governance. This is particularly true if such a name is to shoulder the responsibility of providing a decent life for the Sultanate’s future generations, as well as those living on its soil.

In light of this, SGRF has taken a number of steps that create a solid internal foundation to maintain high levels of governance and transparency. The most notable step taken towards achieving this goal is the issuance of the Authorities and Responsibilities Manual, and Investment Manual in 2013, which draw the roadmap for each department in SGRF in order to prevent any conflict of responsibilities or undesired overlap between the authorities granted to each department, and to maintain the integration between the duties of departments in a manner that achieves SGRF objectives.

In addition to the above, SGRF adopted the Code of Business Conduct. This is a guide for all SGRF staff outlining the ethics and behaviours, which all employees should emulate, as they reflect SGRF’s integrity. The goal behind this is to gain the trust of those whom SGRF deals with. SGRF also launched the Whistle Blowing policy so that each of SGRF employees becomes a guard and custodian of the Fund and wealth of the future generations.

Communication and transparency can only be achieved through developing a gateway that connects SGRF staff with the public home and abroad. And, a key to this objective was the launching of SGRF website in both Arabic and English, disclosing information about the nature of the Fund’s business, its investments and future vision.

Governance Framework:SGRF Management has been working towards updating and improving SGRF governance frameworks to keep pace with the latest requirements and achieve a better operational and investment performance. It also aims to realize the goals entrusted with the Fund, pursuant to Royal Decree No. 1/80, and its amendments, SGRF applies the best international practices in the area of governance to guarantee the enforcement of an effective and flexible system that interacts with the requirements of each stage without contravening the existing laws.

The governance structure of SGRF comprises of a set of executive, administrative and regulatory levels that include the SGRF regulative body represented by the Financial Affairs and Energy Resources Council (FAERC), SGRF Board of Directors, the Audit Committee, which is independent together with its Internal Audit Team, and the Executive team which includes the Management Committee, the Investment Committee, the Human Resources Committee, Tenders Committee, and the Information Technology Committee.

Governance and Transparency

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ANNUAL REPORT2015

Duties and Responsibilities:SGRF Regulative Body:

The Financial Affairs and Energy Resources Council (FAERC) serves as SGRF Regulative Body, which is responsible for the integrity of its operations and its financial status. The Council's responsibilities include overall supervision of SGRF, monitoring the integrity of financial operations, identifying its tasks and goals, approving its strategy and forming and defining Board of Directors’ roles and responsibilities.

FAERC is also responsible for appointing an investment custodian with the aim of preserving SGRF financial assets. The council is further involved in appointing one or more companies according to the Board’s recommendations to assess the Fund’s Investment Portfolio Management. FAERC’s other responsibilities include discussing and approving performance appraisal reports, appointing an external auditor and specifying the related fees in accordance with the recommendations of the Board of Directors. FAERC is also responsible for approving the Corporate Governance Framework and identifying the types of assets, including currencies that SGRF can invest in and approving the establishment of investment companies.

SGRF Board of Directors:

FAERC forms the SGRF Board of Directors and defines its jurisdiction, according to the recommendations of the Minister Responsible for Financial Affairs. The Board of Directors supervises the Executive Management in charge of SGRF investments. In particular, the Board of Directors is responsible

for ensuring the implementation of provisions of all relevant Royal Decrees. Moreover, the Board’s responsibilities include the approval of SGRF Strategic Asset Allocation, Investment Guidelines, Remuneration Structure, Governance Policy and Procedures Manuals, approval of the annual budget, issuing the decisions pertaining to selection of financial institutions for investment purposes. Other responsibilities include final approval of agreements and transactions falling outside the powers entrusted to the Executives of SGRF, and review of SGRF financial status and performance.

Audit Committee (AC):

The Audit Committee is responsible for overseeing the financial statements and financial reporting process. This committee is affiliated to the Board of Directors and helps it perform its regulatory responsibilities, which include ensuring the integrity of SGRF’s financial statements, the financial reporting process, internal accounting systems and financial control. It also reviews the performance of the Internal Audit Manager, the independent annual audit of the Fund statements, the engagement of the independent auditors and the evaluation of their performance. The responsibilities of the Audit Committee also include the compliance of SGRF to the legal, legislative and regulatory frameworks, including the controls and procedures of disclosure. Moreover, the Audit Committee is authorised to assess the administrative proceedings and the risk management process. The Internal Audit Manager submits the performance reports to the Audit Committee.

Investment Committee (IC):

The Investment Committee is the main body responsible for making investment decisions. It is also concerned with the implementation of the Fund strategies and allocation of the assets approved by the Board of Directors. Consequently, it takes responsibility for SGRF’s overall supervision of the investment portfolio. It also determines the tactical distribution of assets within the framework of the approved limits, decides on the implementation of the annual investments plans, and reviews the proposals of public, private and real estate investments prepared by the relevant business units.

Generally, the Investment Committee bases its resolutions on the proposals tabled by the various business units of the Fund, monitors the performance of the investment funds and make its recommendations for reconsidering the distribution of the strategic assets in line with global variables so that the Board of Directors can make a final decision about them.

Management Committee (MC):

The Management Committee determines the operational trend of SGRF. The committee coordinates and supervises SGRF’s non-investment activities. It facilitates discussions, and decision making on the initiatives and issues that determine the operational and business plans of the Fund.

Accordingly, the Management Committee plays the role of an intermediary that brings about synergy between business and support units and departments. It outlines the policies of the Fund to achieve efficient performance and internal communication between the Fund’s units within an integrated work system and a well-defined hierarchy.

Human Resources Committee (HRC):

The Human Resources Committee is responsible for drawing up HR’s overall strategy as well as policies and plans aiming at enhancing the

skills and competencies of SGRF human resources. This is made possible by appointing new efficient employees or training and qualifying the existing ones. In addition to finding solutions to the challenges relating to human resources, reviewing staff remuneration, bonuses, incentives and promotions, as well as reviewing and assessing the annual performance of the Fund personnel.

The annual plans of Human Resources are reviewed and approved by the Management Committee which also supervises the implementation of the strategy approved for the Fund human resources.

Tenders Committee (TC):

The Internal Tenders Committee of SGRF formulates tenders and bidding procedures for tenders worth less than the amount specified for the Tender Board. The Committee is mandated to assess the bids technically and commercially, and submit its recommendations to those authorized to accept or reject the recommendations.

The Committee includes a number of senior staff from SGRF and a representative from the Ministry of Finance, to ensure compliance with the procedures set forth for offering, evaluating and awarding tenders.

IT Committee (ITC):

The Information Technology Committee (ITC) was established in December 2013. The ITC has been created to provide the strategic and tactical guidance for managing SGRF’s overall technology systems for the short and long-term based on the approved IT strategy. It will ensure systems development and maintenance projects initiated are consistent with the strategic business goals.

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ANNUAL REPORT2015

Internal Audit and Control Systems Corporate Governance Manual:

SGRF has recently issued a Corporate Governance Manual. This Manual elaborates the responsibilities of each SGRF unit, it also contains the FAERC’s capacity as the SGRF’s Regulative Body, as well as SGRF Board of Directors and Executive Management. The aim behind this is to prevent any conflict of authorities between the Regulative Body, FAERC and the Executive Team, and to ensure smooth and effective performance.

The Manual also defines the roles of the Risk & Compliance, and Finance Departments, as well as the roles of the Management Committee, Human Resources Committee, Investment Committee, and Tenders Committee, including the mechanisms for selecting their members and the documentation of their meetings for transparency and to ease the auditing process.

Whistle Blowing Policy:

In 2014, SGRF launched the Whistle Blowing Policy. It is one of SGRF’s multiple lines of defence. The System has a high level of confidentiality to hide the identity of the whistle blower. The launching of this System came as a result of SGRF’s strong belief in the importance of standing together to prevent any SGRF staff from committing wrong practices that may damage SGRF’s reputation or jeopardize its financial status.

The system allows the whistle-blower to describe certain incidents or employees who violate the work systems or the procedures applicable at SGRF, whether the same has to

do with financial transactions like tenders and investments or administrative operations. Based on such reports, an independent committee carries out an internal investigation and then refers its report to the relevant authorities.

Internal and External Audit:

To ensure transparency and achieve the best control of its transactions, SGRF goes through three different auditing stages. Through the Internal Audit Committee, the financial statements as well as SGRF transaction-related data are drawn-up and audited. Besides this, the SGRF Board puts up its recommendations relating to the appointment of an independent auditor to the FAERC for approval of the same.

SGRF also undergoes a periodical audit by the State Audit, an independent regulative body that oversees the performance of different government authorities in the Sultanate, and presents its unbiased notes on the financial performance, investments and other SGRF transactions to ensure its compliance with the laws and regulations.

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Towards achieving its investment objectives, SGRF relies on an integrated system including a number of units and departments that provide the investment units with the necessary technical and administrative support. The system includes the following departments:

Most important achievements

in 2015:

• Activating the (PAM) system for investment and

accounting

• Activating the Statpro system

for the evaluation of the financial performance of

the Fund

Finance Department

The Finance Department prepares and submits reliable financial information as per the global financial standards, especially the information related to SGRF accounts, its financial performance and asset evaluation. The main role of the department is to prepare periodical financial statements, ensure their compliance with the Generally Accepted Accounting Principles (GAAP) and then submit them to the audit committee and the board of directors for approval. Such statements are also submitted to the Council of Financial Affairs and Energy Resources for approval.

Moreover, the Finance Department prepares the annual budget of the Fund and distributes it among the different units of the Fund. It also follows up the implementation and achievement of SGRF's goals. The department is responsible for preparing the periodical financial reports related to the overall and detailed financial performance of the different portfolios run by the Fund, in addition to comparing the performance of the portfolio managers, with the standard indicators of each portfolio. It also follows up remittances and settlements. The department supports the investment transactions through the Special Purpose Vehicle (SPV) through which SGRF runs its investments to achieve optimal financial efficiency.

In 2015, the department developed the commercial transaction system in the Fund electronically and linked it to the latest global technology “Swift with Bloomberg” that aims to implement the transactions such as buying stocks, bonds and currencies for the internal investment portfolios as well as settling them directly through the custodian “State Street”. In addition, the Portfolio Accounting and Management (PAM) system was successfully activated, and this is considered a comprehensive system through which several important transactions can be concluded such as remittances. The system can also provide financial reports, financial performance and accounting reports, as well as the reports related to risks and commitment. The department is keen on applying the new system (PAM) in parallel to the old one to ensure the transfer of all information.

Support Departments

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ANNUAL REPORT2015

Legal Department

The Legal Department is one of SGRF’s central departments. It studies the subjects referred to the department from the legal perspective, and gives its legal opinion in accordance to the applicable local, international laws, and regulations. The duties of the Department can be summed up as follows:

• Providing legal support over subjects pertaining to management of the investment projects carried out by SGRF in the past. In addition to giving the legal opinion on important decisions relating to the methods of managing these investments and the issues that emerge in relation thereto.

• Offering legal support on legal issues as well as formation of contracts and agreements pertaining to SGRF’s new investments, whether in terms of private equity, real estate or money markets, in accordance to the laws and regulations applicable to the country where investments are carried out.

• Supervising the arbitration and litigation procedures, which the Fund may be involved in.

• Providing advice and legal opinion on subjects related to the other Fund departments.

Risk and Compliance Management

The aim of the Risk and Compliance Management Department is to prepare guidelines that will govern the operations of all departments with relation to risk and compliance. It also promotes the risk and compliance culture among employees of the Fund, to ensure protection of the Fund and its staff against any risks.

The Department regularly evaluates the risk and compliance policies and provides advice in relation to enhancing internal controls. The Risk and Compliance Department analyzes all risks that originate from the operations of the Fund, including those related to its investment or management.

The Department coordinates with other departments in identifying and analyzing the risks, and develops strategic and practical plans, to reduce the possibility of such risks; and minimize the negative effects of such risks on the Fund.

Among the most prominent achievements in 2015 is the preparation of the Code of Business Ethics adopted by the Board of Directors after being presented to the Internal Audit Committee, and then the code was circulated to all staff to adhere to. In addition, the department also prepared an Anti-Mmoney Laundering Policy, which is a precautionary measure to ensure the safety of the Fund's financial transactions, and curb illegal activities, including money laundering and financing of terrorism.

At the level of risk management, the department is working to boost awareness and implementing procedures for minimizing the investment risks, through the implementation of practical steps related to all investment processes, including private markets, assets and public markets.

Most important achievements

in 2015:

• Preparing a Professional Work

Charter

• Preparing a system for combatting money

laundering and terrorism financing

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ANNUAL REPORT2015

Information Technology Department

The Information Technology Department supervises the provision and development of information systems for all departments of the Fund. It has a technical team which is highly experienced and possesses a broad range of skills for providing services and solutions to overcome the challenges of the information infrastructure.

In 2015, top technical experts joined the top management to help the department overcome the challenges in the next period. Subsequently, a new long-term strategy for information technology was mapped out to meet the operational and security requirements of the Fund. To fulfill SGRF's vision, a new IT strategy was set to address the gaps, build highly efficient sources and meet the international standards for the management of information technology and information security services.

The department provided an e-mail service as per the international benchmark to meet SGRF's operational and security requirements and managed to achieve the highest level of reliability. The service is available to business (internal and external), with an operation availability of almost 99% uptime.

Moreover, the department implemented risk management solutions which enable the Fund to oversee the security of Internet at all computers and other devices such as mobile phones connected to the Fund's network. This system plays an important role in identifying, verifying and mitigating risks and merger operations. By adopting best practices, the department managed successfully to expand remote access

to the Fund's internal portal at any time. This service allowed the Fund's staff to do their off-site jobs successfully through the safe and permanent access to this portal.

Human Resources

SGRF is focused on its people. Enhancing their capabilities is among the priorities of its strategic objectives due to their belief that employees are the most valuable asset and the most important factor for the Fund’s success. While the Fund is working to achieve the best investments in the financial and economic field, it is also keen to invest in the human element. Therefore, Human Resources Department always strives to provide the best initiatives and solutions that enable them to develop their people’s talents and skills to meet the Fund needs of the expertise and skills in order to manage the Fund's recent and future investments.

The Fund management is also committed to a strategic task which is preparing high efficiency local cadres who are capable of driving various financial and economic institutions in the country in the future. The department continued in 2015 to make some achievements and developments as the fund maintained a high rate of Omanisation reaching 83%, and the total number of appointments in various departments and units of the Fund amounted to 62, compared with 35 in 2014, due to the expansion witnessed by the Fund in various activities, especially investment. Moreover, the total number of employees amounted to 174 until the end of 2015, compared to 123 employees in 2014. The recruitment process has been carried

out transparently and impartially, as per specific procedures including advertisements in local newspapers and websites, as well as participating in the job fair held in Sultan Qaboos University and attracting distinctive competencies through a local and regional network of specialized recruitment agencies.

In order to achieve the ambitious investment objectives of the Fund, which expanded to include new economic sectors, the department continued its efforts to hire staff who are highly competent with outstanding experience, especially in the fields of medicine, mining, engineering and various sciences, in addition to the financial, accounting and administrative areas, to contribute to the successful achievement of plans and investment projects. The department has completed in 2015 the appointment of some experts in senior positions, including: • Senior Manager of Mining Investments • Senior Manager of Agriculture Investments • Senior Manager of Healthcare Investments • Senior Manager of Private Equity Investments

The department also enhanced the job performance evaluation system that has been successfully applied in 2014, with additional privileges encouraging the culture of productivity at work and developing the job hierarchy, including the job titles that comply with the new amendments.

Most important achievements in 2015:• Activating remote access to the Fund’s

e-portal from anywhere in the world

• Providing e-mail service for the internal and external transactions with almost

99% uptime

Most important achievements

in 2015:

• Omanisation 83%

• 62 new employees

appointed in 2015

• Taking part in SQU Job Fair

• Launching a new occupational

ladder that ensures better career

development for all staff

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ANNUAL REPORT2015

Types of training programs Number of beneficiaries

Internal courses 164

Long-term courses 8

Short-term courses 115

On-the-job-training outside the Sultanate with the associate institutions 2

Total 289

Administration Department

It is one of the executive departments that manage and implement the procurement processes, and provide services starting from distributing hardware, tools and offices for the departments of SGRF. It’s also entrusted with the health, safety and security of the premises, work environment, as well as facilitating expatriate staff with required procedures with the respective authorities.

In 2015, the department introduced and implemented the Sabre Reservation System, which is a computerized system used to carry out air ticket booking directly from the department. This helped save time and effort needed for the reservation process.

At the level of facility security and safety, a special team was formed to act in emergencies, and the surveillance system of security guards was improved to ensure security and safety at all times.

Most important achievements in 2015:

• Applying the Sabre System for ticketing • Saving through the optimum utilization of

internal resources

In the area of training and development, the department has implemented a wide range of courses and training programs which can be summarized, as follows:

Participation of SGRF at the SQU Job Fair

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ANNUAL REPORT2015

Corporate Communications

Corporate Communications Department is SGRF’s window to the outside world. The department was established at the end of 2013 to serve as a link between the Fund, it's staff, and the various segments of the society. The importance of the Corporate Communications department is derived from its role in managing the public perception about SGRF. The department endeavors to reflect a clear image of the Fund’s missions and efforts in achieving a better future for the generations. Based on the fund's keenness to develop this relationship and its belief in the principle of transparency and professionalism, it issued 20 statements and press releases to the public through various media channels, whether visual or print media, in addition to issuing the second Annual Report of the Fund showcasing data and information related to the Fund's performance and investments. SGRF strives to regularly and continuously provide all information and news related to its activities on its website: www.sgrf.gov.om

Most important achievements in 2015:

• Issuing 20 statements and press releases through the various mass

media outlets• Issuing the first annual report

for SGRF • Preparing policies to regulate the relationship between SGRF

and mass media, and setting the disclosure mechanism

64

www.sgrf.gov.om