The material accounting policies applied in the preparation of these Consolidated Financial Statements are set out below. These policies have been consistently applied to all periods presented, unless otherwise stated.
4.1 Changes in accounting policies and disclosures
(a) New and amended standards adopted by the Company
Several amendments and interpretations apply for the first time effective 1 January 2024 but do not have a material effect on the Company’s Consolidated Financial Statements and did not require retrospective adjustments.
- Non-current Liabilities with Covenants (Amendments to IAS 1) and Classification of Liabilities as Current or Non-current (Amendments to IAS 1)
- Lease Liability in a Sale and Leaseback (Amendments to IFRS 16)
- Supplier Finance Arrangements (Amendments to IAS 7 and IFRS 7).
(b) New standards, amendments and interpretations that are not yet effective and might be relevant for the Company
At the date of authorisation of these financial statements, the Company has not applied the following new and revised IFRS Accounting Standards that have been issued but are not yet effective:
- Lack of Exchangeability (Amendments to IAS 21)
- Classification and Measurement of Financial Instruments (Amendments to IFRS 9 and IFRS 7)
- IFRS 18 Presentation and Disclosure in Financial Statements.
The Directors of the Company are currently assessing the impact the amendments will have on future reporting periods; however, they are not expected to have a significant impact.
4.2 Basis for consolidation
The Consolidated Financial Statements have been prepared using uniform accounting policies for like transactions and other events in similar circumstances. The Consolidated Financial Statements include the financial statements of the Company and its wholly owned subsidiary, after the elimination of all significant intercompany balances and transactions.
IFRS 10 exempts investment entities from consolidating controlled investees.
The Company meets the definition of an investment entity, as the following conditions are met:
- The Company obtains funds from investors and provides investment management services.
- The business purpose of the Company is to invest into private equity funds and to purchase, hold and dispose of investments directly in portfolio companies with the goal of achieving returns from capital appreciation and investment income.
The Company also has further typical characteristics of an investment entity as defined by IFRS:
- The performance of these investments is measured and evaluated on a fair value basis.
- The Company holds multiple investments and has multiple investors.
- It has investors that are not related parties of the Company.
- It has ownership interests in the form of equity or similar interests.
An investment entity is still required to consolidate a subsidiary where that subsidiary provides services that relate to the investment entity’s investment activities and the subsidiary does not itself qualify as investment entity. OCI Financing (Bermuda) Limited is considered a wholly owned subsidiary because it provides financing services to the Company and does not qualify itself as an investment entity under IFRS 10. The Oakley Funds do not provide services that relate to the Company’s investment activities.
The Company therefore measures its investments at fair value through profit and loss in accordance with the investment entity exemption. The Company does not consolidate any of its investments in the Oakley Funds and the Direct Investments.
As of 31 December 2024, the Company’s Limited Partner ownership in the Oakley Funds are:
- Fund II ownership of 36.2% (2023: 36.2%)
- Fund III ownership of 40.7% (2023: 40.7%)
- Fund IV ownership of 27.4% (2023: 27.4%)
- Fund V ownership of 28.1% (2023: 28.06%)
- Origin I ownership of 28.2% (2023: 28.2%)
- Origin II Fund ownership of 24.0% (2023: 25.33%)
- PROfounders Fund III ownership of 38.8% (2023: 39.7%)
- Touring I ownership of 40.1% (2023: 65.36%).
4.3 Investments
(a) Classification
The Company classifies its investments based on both the Company’s business model for managing those financial assets and the contractual cash flow characteristics, if any, of the financial assets. The portfolio of financial assets is managed, and performance is evaluated on a fair value basis. The Company is primarily focused on fair value information and uses that information to assess the assets’ performance and to make decisions. The Company has not taken the option to irrevocably designate any equity securities as fair value through other comprehensive income.
The contractual cash flows of the Company’s debt securities are solely principal and interest, however, these securities are neither held for the purpose of collecting contractual cash flows nor held both for collecting contractual cash flows and for sale. The collection of contractual cash flows is only incidental to achieving the Company’s business model’s objective.
Consequently, the Company classifies its investments in private equity funds, direct equity investments and debt securities as financial assets held at fair value through profit and loss at inception.
(b) Recognition and measurement
Financial assets held at fair value through profit and loss are recognised initially on the trade date, which is the date on which the Company becomes a party to the contractual provisions of the instrument. Financial assets held at fair value through profit and loss are recognised initially at fair value, with transaction costs recognised in profit or loss.
Net gains and losses from financial assets held at fair value through profit and loss include all realised and unrealised fair value changes and foreign exchange differences and are included in the consolidated statement of comprehensive income in the period in which they arise.
Quoted investments are subsequently carried at fair value. Fair value is measured using the last reported sales price, where the last reported sales price falls within the bid-ask spread. In circumstances where the last reported sales price is not within the bid‐ask spread, the Board of Directors, in consultation with Oakley Capital Limited (the 'Investment Adviser/'Administrative Agent'), will determine the point within the bid-ask spread that is most representative of fair value.
Unquoted investments, including both equities and debt, are subsequently carried in the consolidated balance sheet at fair value. Fair value is determined in accordance with the Company’s investment valuation policy, which is compliant with the fair value guidelines under IFRS 13 and the International Private Equity and Venture Capital (IPEV) Valuation Guidelines.
(c) Derecognition
The Company derecognises regular-way sales of financial assets using trade-date accounting. Or, if the Company transfers the rights, to receive the contractual cash flows in a transaction in which substantially all the risks and rewards of ownership of the financial asset are transferred. Or in which the Company neither transfers nor retains substantially all the risks and rewards of ownership and does not retain control of the financial asset. Any interest on such transferred financial assets that is created or retained by the Company is recognised as a separate asset or liability.
On derecognition of a financial asset, the difference between the carrying amount of the asset (or the carrying amount allocated to the portion of the asset derecognised), and consideration received (including any new asset obtained less any new liability assumed) is recognised in profit or loss. Any gains or losses recognised are considered unrealised until the full cost value of the investment in the Fund has been returned to the Company. Any subsequent distributions from the Funds are then considered realised gains.
4.4 Cash and cash equivalents
Cash and cash equivalents include deposits held on call with banks and other short-term deposits. The Company considers all short-term deposits with an original maturity of 90 days or less as equivalent to cash.
4.5 Trade and other receivables
Trade receivables are recognised at fair value less any impairment. Other receivables are measured initially at fair value and are measured subsequently at amortised cost using the effective interest method less any impairment.
4.6 Trade and other payables
Trade and other payables are initially recognised at fair value and are subsequently measured at amortised cost using the effective interest method.
4.7 Interest income
Interest income on unquoted debt securities held at fair value through profit and loss is calculated using the effective interest method. It is accrued on a time-proportionate basis, by reference to the principal outstanding and the effective interest rate applicable, which is the rate that discounts estimated future cash receipts over the expected life of the debt security to its net carrying amount on initial recognition. Interest income is recognised gross of withholding tax, if any. Interest income on unquoted debt securities is recognised as a separate line item in the consolidated statement of comprehensive income and classified within operating activities in the consolidated statement of cash flows.
4.8 Interest expense
Interest expense is recognised as a non-operating expense in the consolidated statement of comprehensive income and is calculated using the effective interest rate method. Accruals are made periodically based on the outstanding principal amount and applicable interest rates over the duration of the outstanding liability. Any material direct costs associated with obtaining financing, such as loan origination fees, are amortised over the term of the related liability.
4.9 Expenses
Expenses are recognised on the accruals basis.
4.10 Share capital
Ordinary shares issued by the Company are recognised based on the proceeds or fair value received or receivable, with the excess of the amount received over their nominal value being credited to the share premium account. Direct issue costs are deducted from equity.
4.11 Earnings per share
The Company presents basic and diluted earnings per share data for its ordinary shares. Basic earnings per share are calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the period. Diluted earnings per share are determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding for the effects of all potentially dilutive ordinary shares.
4.12 Borrowings
Borrowings are recognised as liabilities in the consolidated balance sheet at their fair value, net of directly attributable transaction costs, with subsequent measurement at amortised cost using the effective interest rate. Any material directly attributable transaction costs are capitalised and amortised over the borrowing's term.