Loans and receivables are carried at amortised cost using the
effective interest method less any allowance for impairment. Gains
and losses are recognised in profit or loss when the loans and
receivables are derecognised or impaired, as well as through the
amortisation process.
Financial liabilities, other than those classified as at fair
value through profit or loss, are measured at amortised cost using
the effective interest method. Gains and losses are recognised in
profit or loss when the liabilities are derecognised, as well as
through the amortisation process.
The effective interest method is a method of calculating the
amortised cost of a financial asset or a financial liability and of
allocating the interest income or interest expense over the
relevant period. The effective interest rate is the rate that
exactly discounts estimated future cash payments or receipts
through the expected life of the financial instrument or, when
appropriate, a shorter period to the net carrying amount of the
financial asset or financial liability. When calculating the
effective interest rate, the Group estimates cash flows considering
all contractual terms of the financial instruments, but does not
consider future credit losses. The calculation includes all fees
paid or received between parties to the contract that are an
integral part of the effective interest rate, transaction costs and
all other premiums or discounts.
v) Derecognition
A financial asset (or, where applicable, a part of a financial
asset or part of a group of similar financial assets) is
derecognised where:
-- The rights to receive cash flows from the asset have expired;
or
-- The Group has transferred its rights to receive cash flows
from the asset or has assumed an obligation to pay the received
cash flows in full without material delay to a third party under a
'pass-through' arrangement; and
-- Either (a) the Group has transferred substantially all the
risks and rewards of the asset, or (b) the Group has neither
transferred nor retained substantially all the risks and rewards of
the asset, but has transferred control of the asset.
When the Group has transferred its rights to receive cash flows
from an asset (or has entered into a pass-through arrangement), and
has neither transferred nor retained substantially all the risks
and rewards of the asset nor transferred control of the asset, the
asset is recognised to the extent of the Group's continuing
involvement in the asset.
The Group derecognises a financial liability when the obligation
under the liability is discharged, cancelled or expires.
Determination of fair value
The Group measures its investments in financial instruments at
fair value at each reporting date.
Fair value is the price that would be received to sell an asset
or paid to transfer a liability in an orderly transaction between
market participants at the measurement date. The fair value
measured is based on the presumption that the transaction to sell
the asset or transfer the liability takes place either in the
principal market for the asset or liability or, in the absence of a
principal market, in the most advantageous market for the asset or
liability. The principal or the most advantageous market must be
accessible to the Company.
The fair value for financial instruments traded in active
markets at the reporting date is based on their quoted price or
binding dealer price quotations, without any deduction for
transaction costs.
Where the Company has assets and liabilities with offsetting
market risks, it uses mid-market prices as a basis for establishing
fair values for the offsetting risk positions and applies the bid
or ask price to the net open position as appropriate.
For all other financial instruments not traded in an active
market, the fair value is determined by using appropriate valuation
techniques. Valuation techniques include: using recent arm's length
market transactions; reference to the current market value of
another instrument that is substantially the same; discounted cash
flow analysis and option pricing models making as much use of
available and supportable market data as possible. An analysis of
fair values of financial instruments and further details including
the Group's hierarchy for determining and disclosing the fair value
of the financial instruments is provided in Note 5(c).
Impairment of financial assets
The Group assesses at each reporting date whether a financial
asset or group of financial assets classified as loans and
receivables is impaired. A financial asset or a group of financial
assets is deemed to be impaired if, and only if, there is an
objective evidence of impairment as a result of one or more events
that have occurred after the initial recognition of the asset (an
incurred 'loss event') and that loss event has an impact on the
estimated future cash flows of the financial asset or the group of
financial assets that can be reliably estimated.
Evidence of impairment may include indications that the debtor,
or a group of debtors, is experiencing significant financial
difficulty, default or delinquency in interest or principal
payments, the probability that they will enter bankruptcy or other
financial reorganisation and, where observable data indicate that
there is a measurable decrease in the estimated future cash flows,
such as changes in arrears or economic conditions that correlate
with defaults. If there is objective evidence that an impairment
loss has been incurred, the amount of the loss is measured as the
difference between the asset's carrying amount and the present
value of estimated future cash flows (excluding future expected
credit losses that have not yet been incurred) discounted using the
asset's original effective interest rate. The carrying amount of
the asset is reduced through the use of an allowance account and
the amount of the loss is recognised in profit or loss as 'Credit
loss expense'.
Impaired debts, together with the associated allowance, are
written off when there is no realistic prospect of future recovery
and all collateral has been realised or has been transferred to the
Company
Interest revenue on impaired financial assets is recognised
using the rate of interest used to discount the future cash flows
for the purpose of measuring the impairment loss.
Performance fee
Under the terms of the Partnership Agreement, the Manager is
entitled to an aggregate annual carried interest ('Performance
Allocation') from the Limited Partnership equivalent to 20 per
cent, of the excess of the Net Asset Value (as at 31 December in
each year) over the sum of (i) the annual management fee for that
year and (ii) a non compounding annual hurdle amount equal to the
Net Asset Value as at 31 December in the previous year, as
increased by the one year US Dollar LIBOR rate (as derived from
Bloomberg) calculated at the same date. The Performance Allocation
is subject to a 'catch up' and a 'high watermark' requirement.
Offsetting financial instruments
Financial assets and financial liabilities are offset and the
net amount reported in the statement of financial position if, and
only if, there is a currently enforceable legal right to offset the
recognised amounts and there is an intention to settle on a net
basis, or to realise the asset and settle the liability
simultaneously.
Net gain or loss on financial assets and liabilities at fair
value through profit or loss
This item includes changes in the fair value of financial assets
and liabilities held for trading or designated upon initial
recognition as 'at fair value through profit or loss' and excludes
interest and dividend income and expenses.
Unrealised gains and losses comprise changes in the fair value
of financial instruments for the period and from reversal of prior
period's unrealised gains and losses for financial instruments
which were realised in the reporting period.
Realised gains and losses on disposals of financial instruments
classified as 'at fair value through profit or loss' are calculated
using the Average Cost (AVCO) method. They represent the difference
between an instrument's initial carrying amount and disposal
amount, or cash payments or receipts made on derivative contracts
(excluding payments or receipts on collateral margin accounts for
such instruments).
Due to and due from brokers
Amounts due to brokers are payables for securities purchased (in
a regular way transaction) that have been contracted for but not
yet delivered on the reporting date. Refer to the accounting policy
for 'financial liabilities, other than those classified as at fair
value through profit or loss' for recognition and measurement.
Amounts due from brokers include margin accounts and receivables
for securities sold (in a regular way transaction) that have been
contracted for but not yet delivered on the reporting date. Refer
to accounting policy for 'loans and receivables' for recognition
and measurement.
Interest revenue and expense
Interest revenue and expense are recognised in the statement of
comprehensive income for all interest-bearing financial instruments
using the effective interest method.
Dividend revenue and expense
Dividend revenue is recognised when the Group's right to receive
the payment is established. Dividend revenue is presented gross of
any non-recoverable withholding taxes, which are disclosed
separately in the statement of comprehensive income. Dividend
expense relating to equity securities sold short is recognised when
the shareholders' right to receive the payment is established.
Stated capital
Ordinary shares and C shares are classified as equity.
Cash and cash equivalents
Cash and cash equivalents comprise cash at bank. Cash
equivalents are short term, highly liquid investments that are
readily convertible to known amounts of cash and which are subject
to an insignificant risk of change in value.
Related parties
Africa Opportunity (LSE:AOF)
Historical Stock Chart
Von Jun 2024 bis Jul 2024
Africa Opportunity (LSE:AOF)
Historical Stock Chart
Von Jul 2023 bis Jul 2024
