REG - Africa OpportunityFd - Annual Financial Report
30/04/2026 18:30
For best results when printing this announcement, please click on link below:
https://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20260430:nRSd6833Ca&default-theme=true
RNS Number : 6833C Africa Opportunity Fund Limited 30 April 2026
30 April 2026
Africa Opportunity Fund Limited (AOF LN)
Announcement of Annual Results for the Year ended 31 December 2025
The Board of Africa Opportunity Fund Limited ("AOF", the "Company" or the
"Fund") is pleased to announce its audited results for the year ended 31
December 2025. The Company's full annual report and financial statements will
shortly be sent to shareholders and will be available to view and download
from the Company's website at: www.africaopportunityfund.com
(https://protect.checkpoint.com/v2/r02/___http:/www.africaopportunityfund.com___.YXAxZTpzaG9yZWNhcDpjOm9mZmljZTM2NV9lbWFpbHNfYXR0YWNobWVudDo5YTVlZmM1NGFlMTQxODYxZGRlM2UyN2JiNTc2NGQxZTo3OjVlMjM6NTljOTZiZWZhNjZhNjE4N2ZiYTQ4NGY5MDY4ZGU0OTdlZjUwNGY2Yjc1ZjJlZmNjNDg0MzIxMGQ4NjhhOGQyMTpwOkY6Tg)
.
The following text and financial information does not constitute the Company's
annual report but has been extracted from the annual report and financial
statements for the year ended 31 December 2025.
For further information please contact:
Africa Opportunity Fund Limited
Francis Daniels Tel: +2711 684 1528
Shore Capital (Corporate Broker)
Gillian Martin Tel: +44 20 7408 4050
Anita Ghanekar
Matthew Walton
The Company
Africa Opportunity Fund Limited ("AOF" or the "Company") is a Cayman Islands
incorporated closed-end investment company traded on the Specialist Fund
Segment ("SFS") of the London Stock Exchange ("LSE"). AOF's net asset value as
at 31 December 2025 was $17.3 million (2024: $13.8 million) and its market
capitalisation was $7.5 million (2024: $7.5 million).
Investing objective
The investing objective of the Company is to earn superior returns by
investing in businesses that it believes can flourish in Africa and, in doing
so, aiding capital formation and the mobilisation of savings with the
intention of growing wealth and productivity in Africa's economies. The
Company may invest in equity, quasi-equity or debt instruments, debt issued by
African sovereign states and government entities, and real estate interests.
The Directors and Africa Opportunity Partners LLC (the "Manager") believe in
the long-term attractiveness of investing in Africa, and that the holdings of
the Company require a long-term perspective to realise full value and that
maintaining an active investment approach will maximise long-term value.
Summary of Investment Strategy and Investment Policies and Restrictions
New investment policy (Effective 15 July 2024)
A change in investment strategy was deemed necessary due to the Directors' and
Shareholders' determination that the Company should re-establish itself as a
"going concern" with an indefinite life as opposed to the prior status during
the liquidation phase as a "not going concern" with a finite life.
Consistent with the 15 July 2024 adoption of the New Investment Policy as
approved at the Company's extraordinary general meeting ("EGM"), the Directors
considered it to be in the best interests of the Company and its shareholders
to terminate the liquidation strategy adopted effective 1 July 2019 and that
the Company's investment policy be changed to generate capital growth and
income through value investments in the continent of Africa. The Company's
investments will be focused on industries and companies that the Investment
Manager believes have scope for substantial profitable growth with the
capacity to thrive even in stressed macro-economic or macro-political
settings. Shareholders approved the adoption of the New Investment Policy
effective 15 July 2024.
The Manager adheres to the following policies and restrictions:
Geographical focus. The Company makes investments in companies or assets with
a material portion of their value derived from or located in Africa. Such
companies may be domiciled in Africa or outside Africa or, if listed, listed
either on an African stock exchange or a non-African stock exchange. The
geographic mix of investments varies over time depending on the relative
attractiveness of opportunities among countries and regions.
Type of investments. The Company may invest in equity, quasi-equity debt
instruments or real estate interests which may or may not represent
shareholding or management control, and debt issued by African sovereign
states and government entities. Investments may be made directly or through
special purpose vehicles, joint venture, nominee or trust structures.
Borrowings. The Company may use overdraft and other short-term borrowing
facilities to satisfy short-term working capital needs, including to meet any
expenses or fees payable by the Company. Borrowings may be utilised for
investment purposes with the prior approval of the Board. The Company has no
borrowing or gearing limits in its Articles but gearing, represented by
borrowings as a percentage of Net Asset Value, will not exceed 30% at the time
of drawdown.
Dividend policy
The Company has been accepted into the UK Reporting Fund Status regime.
Upon Shareholder approval at the 15 July 2024 EGM, the Company initiated a
change to the dividend distribution policy.
While the Company intends to continue to meet the requirements of the UK
Reporting Fund Status regime, it is the current intention of the Directors to
reinvest any income received from investee companies as well as the net
proceeds of any realisations in the Company's portfolio rather than distribute
dividends. However, the Directors may consider the payment of dividends (or
other methods of returning net proceeds to Shareholders in a tax efficient
manner) in the future when, in their view, the Company has sufficient
distributable profits after taking into account the working capital needs of,
and investment opportunities available to, the Company.
Life of the Company
The Company does not have a fixed life. Consistent with the 15 July 2024
adoption of the New Investment Policy as approved at the Company's EGM, the
Company will no longer propose continuation votes.
CHAIRPERSON'S STATEMENT
Africa Opportunity Fund Limited
Chairperson's Statement
2025 Review
2025 was a superb year for African stock markets.
Africa Opportunity Fund Limited (the "Fund" or "AOF") had a comparatively
modest 2025, as its net asset value rose 26% to $1.510 per share.(( 1 ))
This is against a backdrop of South Africa rising 61%, Nigeria 67%, Kenya
51%, and Egypt 46%. In non-African emerging markets, China rose 26%, Brazil
51%, and India 5%. Developed markets also did well, the US rising 18%, Japan
29%, Europe 36%, and the UK 35%.(( 2 )) African indices also performed
well. The MSCI EFM Africa index rose 74%, and the S&P Africa Top 40
Index rose 71%.(( 3 ))
Sub-Saharan Africa's macro-economy experienced solid economic growth in 2025,
with both its median country gross domestic product ("GDP") growth rate and
inflation rate at 4%.(( 4 )) The 2% fall in the 2025 UN Food and
Agricultural Organization World Food Price index stabilised the cost of food
for the average African household.(( 5 )) With respect to where the Fund has
investments, Kenya's oil import outflows diminished following the oil price
decline from $75 a barrel in 2024 to $61 per barrel in 2025; while Ghana's
balance of payments were buoyed by a windfall in foreign exchange receipts
caused primarily by a 65% rise in the gold price. These two countries
enjoyed a 2025 macro-economic spring as fiscal stress abated, currencies
appreciated against the Dollar, and nominal interest rates fell. The
sovereign debt crisis and foreign exchange pressures that stalked Ghana and
Kenya, ceased to occupy the front row of investor attention. As sovereign
spreads compressed for both countries, they received ratings upgrades while
their stock markets soared in value. Kenya Power - the Fund's Kenyan
investment - experienced a total return of 206% in 2025 as it declared its
first interim and final dividends in nine years and reported solid
profits.(( 6 ))
As mentioned, Ghana experienced a solid 2025 with real GDP at 6%.(( 7 ))
Complementing that growth was an inflation rate that collapsed from 24% in
December 2024 to 5% in December 2025,(( 8 )) a large current account surplus
equal to 8% of Ghana's GDP,(( 9 )) and a 40% appreciation of the Cedi against
the Dollar. Expanding gold and cocoa production, coupled with high prices of
both commodities, accounted for the elevated surplus. Ghana's new
administration set, and adhered to, a tone of fiscal sobriety by targeting and
attaining a budgetary primary surplus in 2025. It made significant strides
on both its economic and debt restructuring fronts. The Bank of Ghana cut
its monetary policy rate sharply in response to inflation rate trends. These
developments helped the shares of Enterprise Insurance rise 147% and MTN Ghana
rise 127%.(( 10 ))
Zimbabwe experienced a year of recovery marked by declining inflation, rising
real interest rates,(( 11 )) and 6% GDP growth.(( 12 )) It also benefited
from a strong gold price, increased output of platinum group metals ("PGMs"),
and favorable rains causing higher agricultural and hydro-power
production. Rising real interest rates tend to smother commercial real
estate valuations. Consequently, the aggregate ZiG market capitalisation of
First Mutual Properties and Mashonaland Holdings, in 2025, fell 25% in local
currency.(( 13 ))
The Fund's new investments were all in companies that generate hard
currency-denominated revenues - Anglogold Ashanti, Valterra, and Seplat.
Except for trimming its Anglogold Ashanti holding, AOF did not make any
disposals in 2025.
2026 Outlook
Following year-end, AOF successfully sold its second largest Zimbabwe holding,
First Mutual Properties, repatriating the USD proceeds thereafter. Holdings
such as Enterprise Group have continued to appreciate, and at the time of
writing this Chairperson's Statement in April 2026, AOF's unaudited NAV is
$2.43.
Since the Fund's launch in 2007, Africa has faced economic turmoil and
outbreaks of war, but its underlying economies have grown and the stock of
capital has deepened. The recent conflict in the Middle East adds a new
element of uncertainty, yet periods of turmoil create opportunities for the
Fund to make investments on attractive terms. We are optimistic about the
Fund's outlook, despite the current macroeconomic backdrop.
Africa market valuations, as captured by indices like the MSCI EFM Africa
Index, have continued their recovery from post Global Financial Crisis
historical lows.(( 14 )) The Fund will target investments among companies
that generate hard currency-denominated revenues, raise the productivity of
African consumers and producers, or increase the stock of long-term domestic
African financial capital.
In closing, I wish to extend my thanks to our shareholders for their continued
support.
Dr. Myma Belo-Osagie
Chairperson
April 2026
MANAGER'S REPORT
2025 marked the eighteenth full year of operation of Africa Opportunity Fund
Limited (the "Fund" or "AOF"). Its ordinary shares had an annual return of
26%. At year-end, Africa Opportunity Fund, L.P., - the investment subsidiary
of AOF, held $136,000 in cash, and $18 million in equity securities. The
Fund's principal underlying end-of-year holdings were in Ghana, Kenya,
Mauritius, and Zimbabwe.
The balance of this report will discuss a few of the Fund's holdings.
The Fund's Zimbabwean property holdings (Mashonaland Holdings and First Mutual
Properties) turned in decent returns. Zimbabwe's currency enjoyed a placid
2025 with very little devaluation or depreciation in the official or
unofficial foreign exchange markets. The total value of the Fund's Zimbabwe
portfolio fell 3.4% from $7.6 million at the end of December 2024 to $7.3
million at the end of December 2025.(( 15 )) Shortly after year-end, we
exited First Mutual Properties for a consideration of $2.2 million. Measured
against the $2.3 million aggregate cost of our purchases of First Mutual
Properties shares, this investment is hardly one that deserves celebration.
Our hopes for an economic recovery in Zimbabwe proved far too optimistic.
But we did learn a valuable lesson about the ability of real assets to
preserve value in an inflationary environment, and we are pleased to have
successfully achieved an exit.
Enterprise Group's shares delivered a total return of 156% in 2025, of which
the Cedi's appreciation against the Dollar accounted for 40%. Its December
2025 audited equity attributable to shareholders, year-on-year, rose 16% in
Cedis and 62% in Dollars to $128 million.(( 16 )) In Cedis, Enterprise's
2025 insurance revenues climbed 10% to 1.75 billion Cedis while its insurance
service results after reinsurance jumped 74% to 494 million Cedis.(( 17 ))
However, its net insurance service results plummeted 76% to 46 million Cedis
after absorbing a 398% increase to 448 million Cedis in net insurance finance
expense.(( 18 )) Ghana's strong macro-economic improvements, exemplified by
the collapse of its year-on-year inflation from 23.8% in December 2024 to 5.4%
in December 2025(( 19 )) and steep declines in short-term and long-term Cedi
interest rates,(( 20 )) lowered discount rates used to calculate Enterprise's
insurance liabilities with the effect of increasing the net present value of
those liabilities. Those effects are included in Enterprise's spike in 2025
net insurance finance expense.
Enterprise's audited 2025 net profit attributable to its shareholders,
year-on-year, fell 10% in Cedis to 218 million Cedis and rose 6% to $17
million.(( 21 )) Its net cash generated from operating activities fell 8% in
Cedis to 692 million Cedis and rose 6% in Dollars to $55 million. Our
initial impressions are Enterprise probably lost some pricing power as it
faced more intense competition in its core Ghanaian markets in 2025 and ceded
more of its general insurance business to reinsurers. Enterprise had a
respectable year in both Cedis and Dollars. Valued on a P/E ratio of 3.35x,
a dividend yield of 3.6%, and a P/B ratio of 0.45x, Enterprise's end-of-year
$57 million market capitalisation remained cheap(( 22 )). By the end of Q1
2026, its market capitalisation had soared to $187 million, placing it on a
P/E ratio of 9.5x, a dividend yield of 1.1% and a P/B ratio of 1.54x.
.
The Nairobi Stock Exchange Allshare Index enjoyed a 2025 total return, in both
Kenyan shillings and Dollars, of 51%.(( 23 )) Kenya Power's ordinary shares
enjoyed an excellent 2025 performance, with a total return of 206%, as it
resumed the declaration of dividends after a nine-year hiatus. Its market
capitalisation rose from $72 million at 2024 year-end to $205 million, while
enterprise value climbed from $760 million to $826 million. Its heavy debt
burden creates a setting in which Kenya Power's shares can re-rate materially
if its regulators continue to allow it to charge cost-reflective tariffs while
earning a return that covers both debt service and dividends to shareholders.
Its customers have surpassed 10 million, and it reached a record peak
electricity demand of 2439 megawatts in December. Reserve margin, on the
other hand, collapsed from the prudent international norm of 15% to
2.3%,(( 24 )) with the inevitable attendant increase in blackouts. It
reported, for its June-December 2025 period, a 11% increase in purchased
electricity units, a 7% rise in revenues to $890 million (vs. $833 million in
H1 2024/5), a modest 2% climb in operating profit to $124 million (vs. $121
million in H1 2024/25), and a 4% step up to $80 million of net profit (vs. net
profit of $77 million in H1 2024/5). A gratifying note was that free
cashflow (before debt amortisation) rose by 35% to $26 million (vs. $20
million in H1 2024/5).
In these times of high crude oil prices, Kenya Power remains vulnerable to a
steep depreciation of the Kenyan shilling that would raise the Kenyan shilling
value of its Dollar and Euro denominated loans and power purchase
agreements. We doubt that the plan to reduce that vulnerability through a
transfer of those loans to its sister company - Kenya Transmission
Company("Ketraco") - in consideration for the sale of its transmission lines
to Ketraco will occur. Ketraco is battling for its very existence in a
Kenyan court case brought by a Spanish contractor that acquired rights to
enforce an arbitral award against Ketraco in favor of another insolvent
Spanish contractor. Kenya Power continues to be hobbled by other
handicaps. Reducing its vulnerability to a steep depreciation of the Kenyan
shilling remains its most urgent challenge. Kenya Power's current $244
million market capitalization and $867 million enterprise value are
attractive: a P/E ratio of 1.3x, a dividend yield of 6.8%, and a P/B ratio of
0.27x.(( 25 )) Despite its many challenges, we remain cautiously optimistic
that Kenya Power can continue its current path of recovery.
The Fund targeted all its new investments among hard currency exporters:
Anglogold Ashanti ("Anglogold"), Valterra, and Seplat. Anglogold's total
return of 179% was the Fund's second highest return of 2025. We offloaded
10% of the Fund's holding in mid-October 2025. We must admit, though, that
we did not fully foresee last year's dramatic appreciation of the gold
price. We invested 2.3% of the Fund's February net asset value in shares of
Anglogold. It owns 10 mines on three continents - Africa, Australia, and
South America - plus some exploration assets in North America. Its market
capitalisation, at the time of investment, was $15.9 billion and its
enterprise value was $18.4 billion. By the end of December, Anglogold's
market capitalisation and enterprise value had risen, respectively, to $43.0
billion and $44 billion.(( 26 )) Anglogold's 36.5 million gold ounce mineral
reserves have a 12-year life. It has benefited handsomely from the
combination of record gold prices, rising production, subdued cost increases,
and accretive acquisitions. Its 2025 profits attributable to shareholders
soared 163% from $1.0 billion in 2024 to $2.6 billion(( 27 )) on a 16%
increase of sold gold from 2.679 million ounces in 2024 to 3.105 million
ounces in 2025.(( 28 )) Average gold price per ounce received by Anglogold
was $3468 and all-in sustaining costs per ounce was $1709.(( 29 ))
Consequently, cash generated from operations approximated $5.4 billion(( 30 ))
and it ended 2025 with $879 million of adjusted net cash.(( 31 )) It is
noteworthy that Anglogold has also steadily expanded the size of its gold
resources in the new "Beatty" gold district in southern Nevada with a maiden
reserve estimate of 4.9 million ounces for the Arthur gold project.(( 32 ))
The volatile gold price, with its attendant leveraged effects on the share
prices of miners like Anglogold, is a major source of anxiety for
shareholders. Anglogold's improving operational and cost profile, the
growing interest of central banks in purchasing gold for the non-Dollar
monetary assets share of their foreign exchange reserves, its rising dividend
yield and relative undervaluation when compared against other large gold
producers provide some support to Anglogold's current valuation.
The Fund reassessed its valuation methodology for determining the fair value
of Sand Tech Holding Limited. The methodology changed from a valuation based
on recent share transactions involving Sand Tech shares to a valuation based
on adjusted Net Asset Value. The change resulted in a reduction in Sand
Tech's fair value.
We shall strive to enhance the value of the Fund in this fog of doubts and
uncertainty. We continue to believe that the Fund's holdings are
undervalued.
Francis Daniels
Africa Opportunity Partners
April 2026
AFRICA OPPORTUNITY FUND LIMITED
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER
2025
Notes 2025 2024
USD USD
Income
Net gains on investment in subsidiaries at fair value
through profit or loss 6(a) 4,151,033 4,428,175
4,151,033 4,428,175
Expenses
Management fees 5(a) 350,000 131,963
Other operating expenses 62,205 104,657
Directors' fees 12 69,999 70,001
Audit and professional fees 124,609 220,419
606,813 527,040
Income for the year attributable to equity holders* 3,544,220 3,901,135
Earnings per share attributable to equity holders** 11 0.309 0.340
* There is no other comprehensive income for the year.
** The Earnings per share attributable to equity holders have been calculated
based on the weighted average number of shares in accordance with IAS 33.
AFRICA OPPORTUNITY FUND LIMITED
STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2025
Notes 2025 2024
USD USD
ASSETS
Cash and cash equivalents 8 8,838 205,356
Other receivables and prepayments 7 20,952 9,507
Investment in subsidiaries at fair value through profit or loss* 6(a) 17,387,935 13,686,902
17,417,725 13,901,765
Total assets
EQUITY AND LIABILITIES
LIABILITIES
Other payables 10 94,323 122,583
94,323 122,583
Total liabilities
17,323,402 13,779,182
Net assets attributable to shareholders
Ordinary share capital 9 (a), 9(b) 114,689 114,689
Share premium 9(b) 5,810,553 5,810,553
Retained earnings 11,398,160 7,853,940
17,323,402 13,779,182
Total equity
Net assets value per share:
- Ordinary shares 1.510 1.201
*The investment in subsidiaries at fair value through profit or loss include
the investment in the Master Fund -
Africa Opportunity Fund L.P.
AFRICA OPPORTUNITY FUND LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER
2025
Share Share Retained
Capital Premium Earnings Total
USD USD USD USD
At 1 January 2024 114,689 5,810,553 3,952,805 9,878,047
OPERATIONS:
Income/total comprehensive income for the year - - 3,901,135 3,901,135
114,689 5,810,553 7,853,940 13,779,182
At 31 December 2024
Share Share Retained
Capital Premium Earnings Total
USD USD USD USD
At 1 January 2025 114,689 5,810,553 7,853,940 13,779,182
OPERATIONS:
Income/total comprehensive income for the year - - 3,544,220 3,544,220
114,689 5,810,553 11,398,160 17,323,402
At 31 December 2025
AFRICA OPPORTUNITY FUND LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER
2025
Notes 2025 2024
USD USD
Operating activities
Income for the year 3,544,220 3,901,135
Adjustment for non-cash items:
Net (gains) on investment in subsidiaries at
fair value through profit or loss 6(a) (4,151,033) (4,428,175)
Cash used in operating activities (606,813) (527,040)
Net changes in operating assets and liabilities
Reduction in investments in subsidiaries at fair value
through profit or loss 6(a) 450,000 740,000
(Increase)/decrease in other receivables and prepayments (11,445) 1,531
Decrease in other payables (28,260) (38,102)
Net cash generated from operating activities 410,295 703,429
Net (decrease)/increase in cash and cash equivalents (196,518) 176,389
Cash and cash equivalents at 1 January 205,356 28,967
Cash and cash equivalents at 31 December 8,838 205,356
NOTES TO THE FINANCIAL STATEMENTS
1. GENERAL INFORMATION
Africa Opportunity Fund Limited (the "Company") was launched with an
Alternative Market Listing "AIM" in July 2007 and moved to the Specialist
Funds Segment "SFS" in April 2014.
Africa Opportunity Fund Limited is a closed-ended fund incorporated with
limited liability and registered in Cayman Islands under the Companies Law on
21 June 2007, with registered number MC-188243. The Company is exempted from
registering with CIMA under the Private Funds Act of the Cayman Islands given
that it is listed on the Specialist Funds Segment of the London Stock Exchange
which is approved by CIMA.
The Company had a limited life, and was not deemed a going concern, for the
2024 period through 14 July 2024. The Company has been deemed a going concern
for the period from 15 July 2024 through 31 December 2025. Shareholders
ratified the adoption of the New Investment Policy at a 15 July 2024 EGM, as
the Directors and shareholders considered it to be in the best interests of
the Company and its shareholders to terminate the liquidation strategy
previously adopted effective 1 July 2019. The shareholders also ratified the
removal of the continuation vote policy at the EGM. This ratification, and the
transition from a liquidation strategy to a continuing investment policy,
dictated that the Company be deemed to have an indefinite life and be
considered a going concern. See Note 4 for additional details regarding the
going concern status.
The Company aims to earn superior returns by investing in businesses that it
believes can flourish in Africa and, in doing so, aiding capital formation and
the mobilisation of savings with the intention of growing wealth and
productivity in Africa's economies. The Company has the ability to invest in a
wide range of asset classes including real estate interests, equity,
quasi-equity or debt instruments and debt issued by African sovereign states
and government entities.
The Company's investment activities are managed by Africa Opportunity Partners
LLC, a limited liability company incorporated in Delaware, United States and
acting as the investment manager pursuant to an Amended and Restated
Investment Management Agreement dated 21 June 2024.
To ensure that investments to be made by the Company and the returns generated
on the realisation of investments are both effected in the most tax efficient
manner, the Company has established Africa Opportunity Fund L.P. ("the Master
Fund") as an exempted limited partnership in the Cayman Islands. All
investments made by the Company are made through the limited partnership. The
limited partners of the limited partnership are the Company and AOF CarryCo
Limited. The general partner of the limited partnership is Africa Opportunity
Fund (GP) Limited. Africa Opportunity Fund Limited holds 100% of Africa
Opportunity Fund (GP) Limited.
The financial statements for the Company for the year ended 31 December 2025
were authorised for issue in accordance with a resolution of the Board of
Directors on 30 April 2026.
Presentation currency
The financial statements are presented in United States dollars ("USD"). All
figures are presented to the nearest dollar.
2. SUMMARY OF MATERIAL ACCOUNTING POLICIES
The material accounting policies applied in the preparation of these financial
statements are set out below. These policies have been consistently applied
from the prior year to the current year for items which are considered
material in relation to the financial statements.
Statement of compliance
The financial statements are prepared in accordance with IFRS Accounting
Standards as issued by the International Accounting Standards Board (IASB).
Basis of preparation
The Company satisfied the criteria of an investment entity under IFRS 10:
Consolidated Financial Statements. As such, its interest in the subsidiaries
has been classified as financial assets at fair value through profit or loss,
and measured at fair value. This consolidation exemption has been applied and
more details of this assessment are provided in Note 4 "critical accounting
judgements, estimates and assumptions." The financial statements have been
prepared under the historical cost convention except for financial assets and
financial liabilities measured at fair value through profit or loss.
Although these estimates are based on management's knowledge of current events
and actions, actual results ultimately may differ from those estimates. The
preparation of financial statements in conformity with IFRS requires the use
of certain critical accounting estimates. It also requires the Board of
Directors to exercise its judgment in the process of applying the Company's
accounting policies. The areas involving a higher degree of judgement or
complexity, or areas where assumptions and estimates are material to the
financial statements are disclosed in Note 4.
The Company presents its statement of financial position in order of
liquidity. An analysis regarding recovery within 12 months (current) and more
than 12 months after the reporting date (non-current) is presented in Note 14.
The Company's financial statements include disclosure notes on the Master
Fund, Africa Opportunity Fund L.P., given that the net asset value of the
Master Fund is a significant component of the Investment in subsidiaries at
fair value through profit or loss, of the Company. These additional
disclosures are made in order to provide the users of the financial statements
within an overview of the Master Fund performance.
Please refer to Note 1 and Note 4 for additional details regarding the going
concern status of the Company.
Foreign currency translation
(i) Functional and presentation currency
The Company's financial statements are presented in USD which is the
functional currency, being the currency of the primary economic environment in
which the Company operates. The Company determines its own functional currency
and items included in the financial statements of each entity are measured
using that functional currency. The functional currency of the Company is USD.
The Company chooses USD as the presentation currency.
(ii) Transactions and balances
Transactions in foreign currencies are initially recorded at the functional
currency rate prevailing at the date of transaction. Monetary assets and
liabilities denominated in foreign currencies are retranslated at the
functional currency spot rate of the exchange ruling at the reporting date.
All differences are taken to profit or loss. Non-monetary items that are
measured in terms of historical cost in a foreign currency are translated
using the exchange rates as at the dates of the initial transactions.
Non-monetary items measured at fair value in a foreign currency are translated
using the exchange rates at the date when the fair value is determined.
Financial instruments
A financial instrument is any contract that gives rise to a financial asset of
one entity and a financial liability or equity instrument of another entity.
Classification
(i) Financial assets at fair value through profit or loss
For the Company, financial assets classified at fair value through profit or
loss upon initial recognition include investment in subsidiaries.
Investment in subsidiaries
In accordance with the exception under IFRS 10 Consolidated Financial
Statements, the Company does not consolidate subsidiaries in the financial
statements. Investments in subsidiaries are accounted for as financial
instruments at fair value through profit or loss in accordance with IFRS 9 -
Financial Instruments.
Management concluded that the Company meets the definition of an investment
entity as it invests solely for returns from capital appreciations, investment
income or both, and measures and evaluates the performance of its investments
on a fair value basis. Accordingly, consolidated financial statements have not
been prepared.
The Company measures the investment in subsidiaries at fair value through
profit or loss at fair value. Subsequent changes in the fair value of these
investments are recorded in 'Net gain or loss on investment in subsidiaries at
fair value through profit or loss.
(ii) Financial assets at amortised cost
The Company measures financial assets at amortised cost if both of the
following conditions are met:
· The financial asset is held within a business model with the objective to
hold financial assets in order to collect contractual cash flows
· The contractual terms of the financial asset give rise on specified dates
to cash flows that are solely payments of principal and interest on the
principal amount outstanding
(iii) Other financial assets and liabilities
This category includes all financial assets and liabilities, which are carried
at amortised cost. The Company includes in this category amounts relating to
other receivables and other payables.
(a) Initial recognition
The Company recognises a financial asset or a financial liability when, and
only when, it becomes a party to the contractual provisions of the instrument.
Purchases or sales of financial assets that require delivery of assets within
the time frame generally established by regulation or convention in the
marketplace are recognised directly on the trade date, i.e., the date that the
Master Fund commits to purchase or sell the asset.
(b) Initial measurement
Financial assets and liabilities at fair value through profit or loss are
recorded in the statement of financial position at fair value. All transaction
costs for such instruments are recognised directly in profit or loss.
(c) Subsequent measurement
Financial assets and liabilities at amortised costs are subsequently measured
using the effective interest method and are subject to impairment. Gains and
losses are recognised in profit or loss when the asset is derecognised,
modified or impaired.
(e) 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 Company has transferred its rights to receive cash flows from
the asset.
The Company derecognises a financial liability when the obligation under the
liability is discharged, cancelled or expires.
Impairment of financial assets
The Company recognises an allowance for expected credit
losses (ECLs) for all financial assets measured at amortised cost. When
measuring ECL, the Company uses reasonable and supportable forward-looking
information, which is based on assumptions for the future movement of
different economic drivers and how these drivers will affect each other. Loss
given default is an estimate of the loss arising on default. It is based on
the difference between the contractual cash flows due and those that the
entity would expect to receive, taking into account cash flows from credit
enhancements. The Company considers a financial asset in default when
contractual payments are 90 days past due.
However, in certain cases, the Company may also
consider a financial asset to be in default when internal or external
information indicates that the Company is unlikely to receive the outstanding
contractual amounts in full before taking into account any credit enhancements
held by the Company. A financial asset is written off when there is no
reasonable expectation of recovering the contractual cash flows.
At the reporting date, there was no receivable from
related party. As a result, no ECL has been recognised.
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 legally enforceable 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.
Determination of fair value
The Company, at the feeder level, measures its investments in subsidiaries at
net asset value (NAV) at each reporting date. Please refer to Note 6 for
additional details.
For investments at the master fund level, 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 without any deduction for transaction costs.
For all other financial instruments at the master level that are 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 as to how they are measured is provided in Note 6.
The Company uses the following hierarchy for determining and disclosing the
fair value of the financial instruments by valuation technique:
· Level 1: quoted (unadjusted) market prices in
active markets for identical assets and liabilities.
· Level 2: valuation techniques for which the lowest
level input that is material to the fair value measurement is directly or
indirectly observable.
· Level 3: valuation techniques for which the lowest
level input that is material to the fair value measurement is unobservable.
Net gain or loss on financial assets at fair value through profit or loss
This item includes changes in the fair value of financial assets held for
trading or 'at fair value through profit or loss' and excludes expenses.
Unrealised gains and losses comprise changes in the fair value of financial
instruments for the year and from reversal of prior year's unrealised gains
and losses for financial instruments which were realised in the reporting
period.
Classification of financial instruments,
liabilities and equity.
The shares are classified as equity if those shares have all the following
features:
(a) It entitles the holder to a pro rata share of the Company's net
assets in the event of the Company's liquidation.
The Company's net assets are those assets that remain after deducting all
other claims on its assets. A pro rata share is determined by:
(i) dividing the net assets of the Company on liquidation into units of
equal amount; and
(ii) multiplying that amount by the number of the shares held
by the shareholder.
(b) The shares are in the class of instruments that is subordinate
to all other classes of instruments. To be in such a class the instrument:
(i) has no priority over other claims to the assets of the
Company on liquidation, and
(ii) does not need to be converted into another instrument
before it is in the class of instruments that is subordinate to all other
classes of instruments.
(c) All shares in the class of instruments that is subordinate to all
other classes of instruments must have an identical contractual obligation for
the issuing Company to deliver a pro rata share of its net assets on
liquidation.
In addition to the above, the Company must have no other financial instrument
or contract that has:
(a) total cash flows based substantially on the profit or loss, the change
in the recognised net assets or the change in the fair value of the recognised
and unrecognised net assets of the Company (excluding any effects of such
instrument or contract) and
(b) the effect of substantially restricting or fixing the residual return
to the shareholders.
The shares satisfy the above conditions and thus meet the requirements to be
classified as equity. Movement in fair value is shown in the Statement of
Profit or Loss and Other Comprehensive Income as an 'income/(loss) for the
year attributable to equity holders'.
Cash and cash equivalents
Cash and cash equivalents comprise cash at bank. Cash and cash equivalents are
measured at amortised cost. The statement of cash flows presents cash and cash
equivalents as at the bank balances of the reporting date.
3. CHANGES IN ACCOUNTING POLICIES AND DISCLOSURES
The Company applied for the first-time the below standards and amendments,
which are effective for annual periods beginning on or after 1 January 2025. A
number of new and amended standards became effective during the financial
year. Management has concluded that none of these standards were relevant to
the Company.
3.1 ACCOUNTING STANDARDS AND INTERPRETATIONS ISSUED BUT NOT YET
EFFECTIVE
The following relevant standards, amendments to existing standards and
interpretations were in issue but not yet effective. The Company will adopt
these standards, if applicable, when they become effective. No early adoption
of these standards and interpretations is intended by the Board of directors.
Effective for
accounting period
Amendments to IFRS 9 and IFRS 7: Classification and Measurement of Financial 1 January 2026
Instruments
Amendments to IFRS 18: Presentation and Disclosure in Financial Statements 1 January 2027
The Company is currently assessing and identifying the aspects of these
amendments that will impact the financial statements and notes to the
financial statements. The Directors are of opinion that the above standards
are not expected to have an impact on the Company's financial statements.
4. CRITICAL ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS
The preparation of the Company's financial statements requires management to
make judgements, estimates and assumptions that affect the reported amounts
recognised in the financial statements and disclosure of contingent
liabilities. However, uncertainty about these assumptions and estimates could
result in outcomes that could require a material adjustment to the carrying
amount of the asset or liability affected in future periods.
Judgements
In the process of applying the Company's accounting policies, management has
made the following judgements, which have the most material effect on the
amounts recognised in the financial statements:
Going concern
The Company had a limited life, and was not deemed a going concern, for 2024
period through 14 July 2024. The Company has been deemed a going concern for
the period from 15 July 2024 through 31 December 2025. At the Extraordinary
General Meeting ("EGM") of the Company held on 15 July 2024, the shareholders
voted in favor of a New Investment Policy which ended the liquidation strategy
and the process of periodic shareholder continuation votes. The shareholders
also ratified the removal of the continuation vote policy at the EGM. This
ratification, and the transition from a liquidation strategy to a continuing
investment policy, dictated that the Company be deemed to have an indefinite
life and be considered a going concern.
Below is a brief synopsis of the investment strategy as approved with the
adoption of the New Investment Policy and consistent with the Company's
Circular dated 24 June 2024:
The Investment Manager, relying on the extensive experience of the management
team, selects a limited number of investment opportunities. In selecting those
investment opportunities, the Investment Manager will adhere to an analytical
process, elements of which include: classifying each investment opportunity in
the appropriate categories of an asset-based equity opportunity, an
earnings-based equity opportunity, distressed debt, corporate debt, African
sovereign debt, arbitrage, or special situations.
The Company will screen potential investee companies according to its value
investing principles. It will seek to invest in investee companies valued at
substantial discounts to their intrinsic value. In terms of industries, the
Company's search will include companies with a record of profitable exports
from Africa, catalysts for productivity growth in Africa, companies
participating in the growth of long-term real savings, companies managing the
growth, and operations, of African infrastructure and networks, and companies
able to lower profitably the real prices of goods and services consumed by
African consumers.
The assessment of equity investment opportunities involves:
· in the case of an asset-based equity opportunity, determining whether
the equity securities of the company or entity under consideration commands a
valuation which is materially lower than the Investment Manager's estimate of
that company's or entity's intrinsic value. The determination of a company's
or entity's intrinsic value is based on a variety of standards such as
comparing the book value of the assets of the company or entity against the
price the Investment Manager believes would be paid for a similar asset in a
private transaction, or the valuations of listed peers of that company or
entity;
· in the case of an earnings-based equity opportunity, determining
whether the equity securities of the company or entity under consideration
possesses both a high real return on assets and earnings yield higher than the
local currency denominated government debt of the country in which the assets
of that company are located;
· comparing the valuation of the company or entity in question against
valuations of its listed and private peers (where possible) in different parts
of Africa, non-African emerging markets and developed markets;
· understanding the industry in which the company or entity under
consideration operates, the prospects of that industry and the prospects of
competitors of the company or entity in question. This aspect will frequently
require discussions with industry participants;
· comparing each security issued by the relevant company or entity
against its other classes of issued securities to determine which security
offers the best risk-reward ratio to the Group; and
· estimating the product of the probability of loss and the quantum of
loss of an investment opportunity to set off against the product of the
probability of gain and the quantum of gain of that investment to determine
the risk-adjusted potential return on that investment opportunity. As a
general proposition, the higher the anticipated probability of loss of an
investment, the smaller the likely investment.
Provided the investment opportunity falls within the investment policy of the
Group, the Investment Manager will have, on behalf of the Group, the
discretion to make and dispose of investments. However, in the event that an
investment will constitute more than 20% of Net Asset Value at the time of
investment the prior approval of the Board will be required. Before any
investment is undertaken by the Group, all appropriate due diligence will be
undertaken, and this will include checking the United States's sanctions list.
Special consideration will also be given to money laundering and terrorist
financing risks and any and all politically exposed persons who may be a part
of, or have close links with, any target company.
Determination of functional currency
The determination of the functional currency of the Company is critical since
recording of transactions and exchange differences arising thereon are
dependent on the functional currency selected. As described in Note 2, the
directors have considered those factors therein and have determined that the
functional currency of the Company is the United States Dollar.
Assessment for an investment entity
An investment entity is an entity that:
(a) Obtains funds from one or more investors for the purpose of
providing those investor(s) with investment management services;
(b) Commits to its investor(s) that its business purpose is to invest
funds solely for returns from capital appreciation, investment income, or
both; and
(c) Measures and evaluates the performance of substantially all of its
investments on a fair value basis.
An investment entity must demonstrate that fair value is the primary
measurement attribute used. The fair value information must be used internally
by key management personnel and must be provided to the entity's investors. In
order to meet this requirement, an investment entity would:
· Elect to account for investment property using the fair
value model in IAS 40 Investment Property
· Elect the exemption from applying the equity method in
IAS 28 for investments in associates and joint ventures, and
· Measure financial assets at fair value in accordance
with IFRS 9.
In addition, an investment entity should consider whether it has the following
typical characteristics:
· It has more than one investment, to diversify the risk
portfolio and maximise returns;
· It has multiple investors, who pool their funds to
maximise investment opportunities;
· It has investors that are not related parties of the
entity; and
· It has ownership interests in the form of equity or
similar interests.
The Board considers that the Company continues to meet the definition of an
investment entity as it invests solely for returns from capital appreciations,
investment income or both, and measures and evaluates the performance of its
investments in subsidiaries on a fair value basis. In addition, the Company
has more than one investor and the major investors are not related parties of
the Company. Accordingly, consolidated financial statements have not been
prepared. IFRS 10 Consolidated Financial Statements provides "investment
entities' an exemption from the consolidation of particular subsidiaries and
instead require that an investment entity measures the investment in each
eligible subsidiary at fair value through profit or loss in accordance with
IFRS 9 Financial Instruments.
Assumptions and Estimates
The key assumptions concerning the future and other key sources of estimation
uncertainty at the reporting date, that have a material risk of causing a
material adjustment to the carrying amounts of assets and liabilities within
the next financial year, are discussed below. The Company based its
assumptions and estimates on parameters available when the financial
statements were prepared. However, existing circumstances and assumptions
about future developments may change due to market changes or circumstances
arising beyond the control of the Company. Such changes are reflected in the
assumptions when they occur. When the fair value of financial assets and
financial liabilities recorded in the statement of financial position cannot
be derived from active markets, their fair value is determined using a variety
of valuation techniques that include the use of mathematical models.
Fair value of financial instruments
The Company's investment manager considers the valuation techniques and inputs
used in valuing the subsidiaries as part of its due diligence, to ensure they
are reasonable and appropriate. The NAV of the subsidiary is used to measure
fair value. In measuring this fair value, the NAV of the subsidiary is
adjusted, as necessary, to reflect restrictions on redemptions, future
commitments, and other specific factors of the subsidiary and Investment
Manager. Given that the Company controls the Master Fund, no adjustment has
been deemed necessary to the NAV of the Master Fund to reflect any
restrictions that may have been applicable had the Company held a minority
stake in the Master Fund. Moreover, given that the Master Fund invests more
than 95% in quoted securities, the Company has classified its investments in
subsidiary as level 2.
IFRS 13 requires disclosures relating to fair value measurements using a
three-level fair value hierarchy. The level within which the fair value
measurement is categorised in its entirety is determined on the basis of the
lowest level input that is material to the fair value measurement in its
entirety as provided in Note 6. Assessing the significance of a particular
input requires judgement, considering factors specific to the asset or
liability. To assess the significance of a particular input to the entire
measurement, the Company performs sensitivity analysis or stress testing
techniques.
5a. AGREEMENTS
Investment Management Agreement
Effective 15 July 2024, the Company and the Investment Manager have, upon the
approval of the Reorganisation Resolution at the EGM in July 2024, entered
into the Amended and Restated Investment Management Agreement which amends the
fees payable to the Investment Manager as follows:
Management fees
A fixed management fee equal to USD 350,000 per annum. The management fee
charged during 2025 was USD 350,000 per annum (2024: USD 163,013).
Realisation fees
The Investment Manager was entitled to the following realisation fees during
the period of 1 January 2024 to 15 July 2024 from the net proceeds of all
portfolio realisations (including any cash returned by way of a Compulsory
Redemption):
On distributions of cash to Shareholders: 1 per cent of the net amounts
realised.
Effective 15 July 2024, with the adoption of the New Investment Policy at the
July 2024 EGM, the realisation fee was terminated.
The revisions to the arrangements with the Investment Manager, constitute a
related party transaction under the Company's related party policy, and in
accordance with that policy, the Company was required to obtain: (i) the
approval of a majority of the Directors who are independent of the Investment
Manager; and (ii) a fairness opinion or third-party valuation in respect of
such related party transaction from an appropriately qualified independent
adviser.
The aggregate realisation, management and performance fees for the financial
year ended 31 December 2025 amounted to USD 350,000 management and performance
fees for the year ended 31 December 2024 were USD 163,013 of which USD 163,013
relates to management fees.
Administrative Agreement
Effective 01 January 2025, NAV Fund Services (Cayman) Ltd. was appointed to
serve as the Administrator for the Company. Prior to 01 January 2025, SS&C
Technologies Inc. served as the Administrator for the Company. Administrative
fees are expensed at the Master Fund level and have been included in the NAV
of the subsidiary.
Custodian Agreements
A Custodian Agreement has been entered into by the Master Fund and Standard
Chartered Bank (Mauritius) Ltd, whereby Standard Chartered Bank (Mauritius)
Ltd ("SCB") would provide custodian services to the Master Fund and would be
entitled to a custody fee of between 18 and 25 basis points per annum of the
value of the assets held by the custodian and a tariff of between 10 and 45
basis points per annum of the value of assets held by the custodian. The
custodian fees are expensed at the Master Fund level and have been included in
the NAV of the subsidiary.
Following the exit of SCB from the Zimbabwe market in 2024, Custodial
Agreements were entered into by the Master Fund and FBC Bank Limited ("FBC"),
whereby FBC would provide custodian services and hold direct custody of
Zimbabwe securities and would be entitled to a custody fee of 10 basis points
per annum on the market value of the assets held by the custodian. The
custodian fees are expensed at the Master Fund level and have been included in
the NAV of the subsidiary.
5b. SUMMARY OF MATERIAL ACCOUNTING POLICIES AT THE MASTER FUND LEVEL
Africa Opportunity Fund LP (the "Master Fund") is incorporated in the Cayman
Islands and is not subject to regulatory review. Management has voluntarily
disclosed all the policies and notes to the accounts of the Master Fund to
provide shareholders of the Company with a better insight.
The primary accounting policies are similar as in Note 2. Those policies which
only relate to the Master Fund's financial statements are set out below. These
policies have been consistently applied from the prior year to the current
year for items which are considered material in relation to the financial
statements.
Financial instruments
A financial instrument is any contract that gives rise to a financial asset of
one entity and a financial liability or equity instrument of another entity.
(a) Classification
The Master Fund classifies its financial assets and liabilities in accordance
with IFRS 9 into the following categories:
(i) Financial assets at fair value through profit or loss
These include equity securities that are not held for trading. These financial
assets are classified at FVTPL on the basis that they are part of a group of
financial assets which are managed and have their performance evaluated on a
fair value basis, in accordance with risk management and investment strategies
of the Company, as set out in each of their offering documents. The financial
information about the financial assets is provided internally on that basis to
the Investment Manager and to the Board of Directors.
Derivatives - Options
Derivatives are classified as held for trading (and hence measured at fair
value through profit or loss) unless they are designated as effective hedging
instruments (however the Company does not apply any hedge accounting). The
Master Fund's derivatives relate to option contracts.
Options are contractual agreements that convey the right, but not the
obligation, for the purchaser either to buy or sell a specific amount of a
financial instrument at a fixed price, either at a fixed future date or at any
time within a specified period.
The Master Fund purchases and sells put and call options through regulated
exchanges and OTC markets. Options purchased by the Master Fund provide the
Master Fund with the opportunity to purchase (call options) or sell (put
options) the underlying asset at an agreed-upon value either on or before the
expiration of the option. The Master Fund is exposed to credit risk on
purchased options only to the extent of their carrying amount, which is their
fair value.
Options written by the Master Fund provide the purchaser the opportunity to
purchase from or sell to the Master Fund the underlying asset at an
agreed-upon value either on or before the expiration of the option.
Options are generally settled on a net basis.
Derivatives relating to options are recorded at the level of the Master
Fund. The financial statements of the Company do not reflect the derivatives
as they form part of the net asset value (NAV) of the Master Fund which is
fair valued.
(ii) Financial assets at amortised cost
The Master Fund measures financial assets at amortised cost if both of the
following conditions are met:
· The financial asset is held within a business model with the
objective to hold financial assets in order to collect contractual cash flows.
· The contractual terms of the financial asset give rise on specified
dates to cash flows that are solely payments of principal and interest on the
principal amount outstanding.
Financial assets at amortised cost are subsequently measured using the
effective interest (EIR) method and are subject to impairment. Gains and
losses are recognised in profit or loss when the asset is derecognised,
modified, or impaired. The Master Fund's financial assets at amortised cost
comprise 'trade and other receivables' and 'cash and cash equivalents in the
statement of financial position.
(iii) Other financial assets and liabilities
This category includes all financial assets and liabilities, which are carried
at amortised cost. The Master Fund includes in this category amounts relating
to trade and other payables.
(a) Recognition
The Master Fund recognises a financial asset or a financial liability when,
and only when, it becomes a party to the contractual provisions of the
instrument.
Purchases or sales of financial assets that require delivery of assets within
the time frame generally established by regulation or convention in the
marketplace are recognised directly on the trade date, i.e., the date that the
Master Fund commits to purchase or sell the asset.
(b) Initial measurement
Financial assets at fair value through profit or loss are recorded in the
statement of financial position at fair value. All transaction costs for such
instruments are recognised directly in profit or loss.
Financial assets at amortised cost and financial liabilities (other than those
classified as held for trading) are measured initially at their fair value
plus any directly attributable incremental costs of acquisition or issue.
(c) Subsequent measurement
The Master Fund measures financial instruments which are classified at fair
value through profit or loss at fair value. Subsequent changes in the fair
value of those financial instruments are recorded in 'Net gain or loss on
financial assets at fair value through profit or loss. Interest earned
elements of such instruments are recorded separately in 'Interest revenue'.
Dividend expenses related to short positions are recognised in 'Dividends on
securities sold not yet purchased'. Dividend income/distributions received on
investments at FVTPL is recorded in "Net gain or loss on financial assets at
fair value through profit or loss".
Financial assets and liabilities at amortised costs are subsequently measured
using the effective interest method and are subject to impairment. Gains and
losses are recognised in profit or loss when the asset is derecognised,
modified or impaired.
(d) Subsequent measurement
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 Master Fund 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.
(e) 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 Company 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 Master Fund has transferred substantially all the risks and
rewards of the asset, or (b) the Master Fund has neither transferred nor
retained substantially all the risks and rewards of the asset but has
transferred control of the asset. When the Master Fund has transferred its
rights to receive cash flows from an asset (or has entered 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 Master Fund's continuing involvement in the
asset.
The Master Fund derecognises a financial liability when the obligation under
the liability is discharged, cancelled or expires.
Determination of fair value
The Master Fund measures its investments in financial instruments,
specifically equities, 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 Master
Fund. The fair value for financial instruments traded in active markets at the
reporting date is based on their quoted price without any deduction for
transaction costs.
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 as to how they are
measured is provided in Note 6.
The Master Fund uses the following hierarchy for determining and disclosing
the fair value of the financial instruments by valuation technique:
· Level 1: quoted (unadjusted) market prices in
active markets for identical assets and liabilities.
· Level 2: valuation techniques for which the lowest
level input that is material to the fair value measurement is directly or
indirectly observable.
· Level 3: valuation techniques for which the lowest
level input that is material to the fair value measurement is unobservable.
Impairment of financial assets
The Master Fund recognises an allowance for expected
credit losses (ECLs) for all financial assets measured at amortised cost. ECLs
are based on the difference between the contractual cash flows due in
accordance with the contract and all the cash flows that the Master Fund
expects to receive, discounted at an approximation of the original effective
interest rate. The expected cash flows will include cash flows from the sale
of collateral held or other credit enhancements that are integral to the
contractual terms.
ECLs are recognised either on a 12-month or lifetime basis. For credit
exposures for which there has not been a significant increase in credit risk
since initial recognition, ECLs are provided for credit losses that result
from default events that are possible within the next 12-months (a 12-month
ECL). For those credit exposures for which there has been a significant
increase in credit risk since initial recognition, a loss allowance is
required for credit losses expected over the remaining life of the exposure,
irrespective of the timing of the default (a lifetime ECL).
The Master Fund considers a financial asset in default when contractual
payments are 90 days past due. However, in certain cases, the Master Fund may
also consider a financial asset to be in default when internal or external
information indicates that the Master Fund is unlikely to receive the
outstanding contractual amounts in full before taking into account any credit
enhancements held by the Master Fund. A financial asset is written off when
there is no reasonable expectation of recovering the contractual cash flows.
For trade receivables, the Master Fund applies a simplified approach in
calculating ECLs. Therefore, the Master Fund does not track changes in credit
risk, but instead recognises a loss allowance based on lifetime ECLs at each
reporting date. At the reporting date, the assessment of the Master Fund's
debt instruments which include other receivables and cash and cash equivalents
were considered as de minimis. As a result, no ECL has been recognised as any
amount would have been insignificant.
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 legally enforceable 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 expenses. At the
Master Fund Level, the fair value gains and losses exclude interest and
dividend income.
Unrealised gains and losses comprise changes in the fair value of financial
instruments for the year and from reversal of prior year'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 at the Master Fund level. Refer to the accounting policy for
financial liabilities, other than those classified 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
financial assets at amortised cost for recognition and measurement.
Interest revenue and expense
Interest revenue and expense are recognised in profit or loss for all
interest-bearing financial instruments using the effective interest method.
Dividend revenue
Dividend revenue is recognised when the Master Fund's right to receive the
payment is established. Dividend revenue is presented gross of any
non-recoverable withholding taxes, which are disclosed separately in profit or
loss of the Master Fund.
6. FINANCIAL ASSETS AND LIABILITIES AT FAIR VALUE THROUGH
PROFIT OR LOSS
6(a). Investment in subsidiaries at fair value
The Company has established Africa Opportunity Fund L.P., an exempted limited
partnership in the Cayman Islands to ensure that the investments made and
returns generated on the realisation of the investments made and returns
generated on the realisation of the investments are both effected in the most
tax efficient manner. All investments made by the Company are made through the
limited partner which acts as the master fund. At 31 December 2025, the
limited partners of the limited partnership are the Company (96%) and AOF
CarryCo Limited (4%). The general partner of the limited partnership is Africa
Opportunity Fund (GP) Limited. Africa Opportunity Fund Limited holds 100% of
Africa Opportunity Fund (GP) Limited.
2025 2024
USD USD
Investment in Africa Opportunity Fund L.P. 17,381,745 13,682,218
Investment in Africa Opportunity Fund (GP) Limited 6,190 4,684
Total investment in subsidiaries at fair value 17,387,935 13,686,902
Fair value at 01 January 13,686,902 9,998,727
Reduction in investment in subsidiaries* (450,000) (740,000)
Net gain on investment in subsidiaries at fair value 4,151,033 4,428,175
Fair value at 31 December 17,387,935 13,686,902
* The reduction in investment in subsidiaries relates to capital withdrawn
from the Master Fund by the Company.
6(b). Fair value hierarchy
The Company uses the following hierarchy for determining and disclosing the
fair value of the financial instruments by valuation technique:
Level 1: quoted (unadjusted) market prices in active markets for identical
assets and liabilities.
Level 2: valuation techniques for which the lowest level input that is
material to the fair value measurement is directly or indirectly observable.
Level 3: valuation techniques for which the lowest level input that is
material to the fair value measurement is unobservable.
Note: The assets and liabilities of the Master Fund have been presented but do
not represent the assets and liabilities of the Company as the Master Fund has
not been consolidated.
· Fair value hierarchy of the Company
31 December
2025 Level 1 Level 2 Level 3
COMPANY USD USD USD USD
Investment in subsidiaries 17,387,935 - 17,387,935 -
31 December
2024 Level 1 Level 2 Level 3
COMPANY USD USD USD USD
Investment in subsidiaries 13,686,902 - 13,686,902 -
· Fair value hierarchy of the Master Fund
The Company has investment in Africa Opportunity Fund L.P., the Master Fund,
amounting to USD 17,387,935. The underlying investments of the Master Fund
amounts to USD 18,287,575. Details on the financial assets of the Master Fund
and fair value hierarchy are as follows:
31 December 2025 Level 1 Level 2 Level 3
MASTER FUND USD USD USD
Financial assets at fair value
through profit or loss
Equity securities 18,287,575 10,451,253 7,340,938 495,384
18,287,575 10,451,253 7,340,938 495,384
31 December 2024 Level 1 Level 2 Level 3
MASTER FUND USD USD USD
Financial assets at fair value
through profit or loss
Equity securities 13,031,893 3,302,361 9,729,532 -
13,031,893 3,302,361 9,729,532 -
6(c). The valuation technique of the investment in subsidiaries at
Company level is as follows:
The Company's investment manager considers the valuation techniques and inputs
used in valuing these funds as part of its due diligence, to ensure they are
reasonable and appropriate. The NAV of the subsidiary is used to measure fair
value. In measuring this fair value, the NAV of the subsidiary is adjusted, as
necessary, to reflect restrictions on redemptions, future commitments, and
other specific factors of the subsidiary and Investment Manager. Given that
the Company controls the Master Fund, no adjustment has been deemed necessary
to the NAV of the Master Fund to reflect any restrictions that may have been
applicable had the Company held a minority stake in the Master Fund. Moreover,
given that the Master Fund invests more than 95% in quoted securities, the
Company has classified its investments in subsidiary as level 2.
6(d). The valuation techniques of the investments at Master Fund level
are as follows:
Equity investments
These pertain to equity investments which are quoted for which there is a
market price. As a result, they are classified within level 1 of the hierarchy
except for the valuation of listed on the Zimbabwe Stock Exchange which have
been classified as level 2 given that their quoted share price has been
discounted as at 31 December 2025 as follows:
Valuation of investments listed on the Zimbabwe Stock Exchange
The total carrying value of the investments held by the Master Fund amounted
to USD 18,287,575 as at 31 December 2025 (Note 6(b)), of which USD 7,340,929
(2024: USD 7,603,652) represents investments listed on the Zimbabwe Stock
Exchange. Based on quoted prices on the Zimbabwe Stock Exchange, these
investments would have been valued at USD 9,324,255 (2024: USD 12,170,608).
However, owing to the ongoing market instability, hyperinflationary economy
and difficulty repatriating ZiG currency to USD, a discount has been applied
to the market price to arrive at the fair value of USD 7,340,929 (2024: USD
7,603,652).
In April 2024, the Governor of the Reserve Bank of Zimbabwe introduced the
Zimbabwe Gold Notes and Coins ("ZiG") as the new currency of Zimbabwe. The
intent of the recalibrated monetary policy is to address the state of price
and exchange rate instability in the economy. The structured currency
introduced is anchored by a composite basket of foreign currency and precious
metals (primarily gold) held as reserves by the Reserve Bank. The starting
exchange rate was determined by the prevailing closing interbank exchange rate
as at 5 April and the London PM Fix price of gold as at 4 April 2024. The
intervening exchange rate is determined by the inflation differential between
ZiG and the USD inflation rates and the movement in the price of the basket of
precious minerals held as reserves. In prior years, the Company discounted the
ZiG, as it had previously done with the ZWL, due to the perceived inability to
repatriate funds at, or close to, the official rate. The Company adjusted the
official exchange rate by utilising the inflation differential with the US
Dollar. The Company adjusted its model to reflect a 20% surrender requirement
on the basis that the reported CPI captured only 80% of actual inflation, as
it had done with the previous ZWL discount. This discount factor changes every
month.
As at reporting date, an alternate valuation procedure has been performed, and
it was concluded that the utilisation of the parallel rate is more
representative of market conditions. The Company weighed a potential inability
to access investment proceeds in USD, to experience a foreign exchange loss
while awaiting repatriation or of being tendered Zimbabwe T-Bills in lieu of
USD as more significant a risk. Based on quoted price on the Zimbabwe stock
exchange, these investments would have been valued at USD 9,324,255. After
much deliberation and consideration of the inherent subjectivity of these
risks, management acquiesced to the utilisation of the parallel rate which was
33 at the reporting date (the official rate was 25.98), reducing the discount
to 21.3%. The value of the Zimbabwe investments recorded in the books of the
Company, after applying this revised discount factor, was USD 7,340,929.
Unquoted equity investments
Sand Technology Holdings ("Sand Tech") (formerly known as African Leadership
University) is a global solutions company with expertise in enterprise and
industrial artificial intelligence. The Investment Manager valued Sand Tech on
the basis of an observable arms-length transaction between existing
shareholders selling a portion of their shares and an unaffiliated third
party. The transactions were agreed via an omnibus share purchase agreement
dated 28 September 2022 with dates of the agreements evidencing the first,
second, third, and fourth tranches, respectively, 30 September 2022, 5
December 2022, 6 March 2023 and 5 June 2023 (the fourth tranche was converted
to partial purchases in June and September 2023, the overall number of shares
remaining consistent), and thus were utilised as the basis of the valuation as
at 31 December 2024. During the year, the directors have re-assessed the
valuation approach and determined that a Net Asset Value ("NAV") approach
would be used to determine fair value, which resulted in a write down of
approximately $1.6 million. The NAV approach relies on company-specific
financial information and the determination of fair value does not apply
market multiples.
Unquoted equity investments
2025 2024
USD USD
Investment in Sand Tech Holdings 495,384 2,125,800
Financial asset and liabilities at fair value at fair value through profit
or loss
2025 2024
USD USD
Investment in Sand Tech Holdings:
At 1 January 2,125,800 2,125,800
Change in unrealised loss (1,630,416) -
At 31 December 495,384 2,125,800
Total loss included in the statement of profit or loss and other comprehensive
income of Africa Opportunity Fund L.P. for asset held at the end of the (1,630,416) -
reporting period.
Valuation techniques
The Company invests in a private company which is not quoted in an active
market. Transactions in such investments do not occur on a regular basis. The
Company uses the net asset value technique for these positions.
Valuation Process
Valuations are the responsibility of the Board of Directors of the Company.
The valuation workings are based on the business plans received from the
portfolio companies, with adjustments made if deemed necessary. The
assumptions in the business plan are reviewed for reasonableness, to the
extent possible with available market information. The appropriateness of the
valuation methodology used is also considered.
Changes in valuation techniques
There was a change in valuation technique during the year and it was
determined that NAV is the basis to be used to measure fair value.
Quantitative information of significant unobservable inputs - Level 3
Fair Value Fair Value Valuation Techniques Unobservable Inputs Sensitivity Analysis (+5%/-5%)
Description 2025 2024 2025 2024 2025 2024 2025 2024
Sand Tech NAV per 24,769 /
Holdings Limited 495,384 2,125,800 NAV Recent Price Share N/A (24,769) N/A
6(e). Statement of profit or loss and other comprehensive income of the
Master Fund for the year ended 31 December 2025.
The net gain on financial assets at fair value through profit or loss
amounting to USD 4,151,033 (2024: net gain of USD 4,428,175) is due to the
gains arising at the Master Fund level and can be analysed as follows:
2025 2024
USD USD
Income
Dividend revenue 480,709 257,104
Interest revenue 369 -
Net gains on financial assets and liabilities at fair value
through profit or loss 4,032,573 4,550,614
4,513,651 4,807,718
Expenses
Net foreign exchange loss 16,438 10,654
Custodian fees, brokerage fees, commission and administration 97,446 167,905
Professional fees 3,132 -
Other operating expenses 2,245 9,433
119,261 187,992
Operating profit before tax 4,394,390 4,619,726
Less withholding tax (51,354) (9,840)
Total Comprehensive profit for the year 4,343,036 4,609,886
Attributable to:
AOF Limited (direct interests) 4,149,528 4,426,751
AOF Limited (indirect interests through AOF (GP) Ltd) 1,505 1,424
4,151,033 4,428,175
AOF CarryCo Limited (NCI) 192,003 181,711
4,343,036 4,609,886
The financial assets and liabilities of the Master Fund are analysed as
follows:
(i) Net gains on financial assets and liabilities at fair
value through profit or loss held by Africa Opportunity Fund L.P.
2025 2024
USD USD
Net gains on fair value of financial assets at fair value
through profit or loss 4,032,573 4,550,614
Net gains 4,032,573 4,550,614
(ii) Financial asset and liabilities at fair value through
profit or loss held by Africa Opportunity Fund L.P.
2025 2024
USD USD
Held for trading assets:
At 1 January 13,031,893 8,727,712
Additions 1,623,596 1,475
Disposal (400,487) (247,908)
Net gains on financial assets at fair value through profit or loss 4,032,573 4,550,614
At 31 December (at fair value) 18,287,575 13,031,893
Analysed as follows:
- Listed equity securities 17,792,191 10,906,093
- Unquoted equity securities 495,384 2,125,800
18,287,575 13,031,893
(iii) Net changes on fair value of financial assets at fair value
through profit or loss
2025 2024
USD USD
Realised 34,759 88,877
Unrealised 3,997,814 4,461,737
Total gains 4,032,573 4,550,614
7. OTHER RECEIVABLES AND PREPAYMENTS
2025 2024
USD USD
Other receivables and prepayments 20,952 9,507
20,952 9,507
8. CASH AND CASH EQUIVALENTS
2025 2024
USD USD
Cash at bank 8,838 205,356
9(a). ORDINARY SHARE CAPITAL
Company
2025 2025 2024 2024
Number USD Number USD
Authorised share capital
Ordinary shares with a par value of
USD 0.01 1,000,000,000 10,000,000 1,000,000,000 10,000,000
Issued share capital
Ordinary shares with a par value of
USD 0.01 11,468,907 114,689 11,468,907 114,689
The directors have the general authority to repurchase the ordinary shares in
issue subject to the Company having funds lawfully available for the purpose.
However, if the market price of the ordinary shares falls below the Net Asset
Value, the directors will consult with the Investment Manager as to whether it
is appropriate to instigate a repurchase of the ordinary shares.
The Company intends to report or pay dividends in order to remain an UK
Reporting Fund, however, there is no assurance that the Company will be able
to pay dividends. In compliance with the current investment strategy, which
does not anticipate the payment of dividends, Directors retain the right to
return cash through compulsory redemptions, by way of dividend or any other
distribution as permitted by the Listing Rules.
9(b). SHARE CAPITAL AND SHARE PREMIUM
Share Share Ordinary
Capital Premium Shares
USD USD Number
At 1 January 2024 114,689 5,810,553 11,468,907
Changes during the period:
Redemption of ordinary shares - - -
At 31 December 2024 114,689 5,810,553 11,468,907
Changes during the period:
Redemption of ordinary shares - - -
At 31 December 2025 114,689 5,810,553 11,468,907
Mandatory Redemption
The Directors, at their sole discretion, can effect a compulsory redemption of
the Ordinary Shares on an ongoing basis and can therefore undertake a staged
return of capital to shareholders. During the years ended 31 December 2025,
and 31 December 2024, there were no redemptions. As at 31 December 2025 and 31
December 2024 the Company had 11,468,907 Ordinary Shares in issue.
Ordinary and C share Merger, Issuance of Contingent Value Rights
In 2014, AOF closed a Placing of 29.2 million C shares of US$0.10 each, at a
placing price of US$1.00 per C share, raising a total of $29.2 million before
the expenses of the Issue. The placing was closed on 11 April 2014 with the
shares commencing trading on 17 April 2014. AOF's Ordinary Shares and the C
Shares from the April placing were admitted to trading on the LSE's Specialist
Fund Segment ("SFS") effective 17 April 2014.
The Fund merged the C share class and the ordinary shares as contemplated in
the April 2014 issuance of the C share class, and with the consent of the
Board of Directors, on 23 August 2017. The C Class shares were converted into
ordinary shares.
The Shoprite arbitral award issued in 2016. The arbitral award resulted in AOF
not being considered legal owner of the specific Shoprite Holdings, therefore,
the Shoprite investment was written off. To effectuate this merger, Contingent
Value Rights certificates for any residual rights with respect to Shoprite
shares listed on the Lusaka Stock Exchange were issued to the ordinary
shareholders of record on 21 August 2017. Information regarding the merger
was distributed and released to the market prior to, and upon execution of,
the merger. This information and information relative to the CVRs can be found
on the Fund's website.
10. OTHER PAYABLES
Notes 2025 2024
USD USD
Management Fee Payable 241 241
Directors Fees Payable 12 17,500 17,501
Other Payables 76,582 104,841
94,323 122,583
Other payables are non-interest bearing and have an average term of six
months. The carrying amounts of other payables approximates their fair value.
11. EARNINGS PER SHARE
The earnings per share (EPS) is calculated by dividing the increase or
decrease in net assets attributable to shareholders by the number of ordinary
shares. The EPS for 2025 and 2024 represent both the basic and diluted EPS.
2025 2024
Ordinary shares Ordinary shares
Earnings per share attributable to equity holders USD 3,544,220 3,901,135
Number of shares in issue 11,468,907 11,468,907
Change in net assets attributable to shareholders per share USD 0.309 0.340
Weighted Average number of shares in issue 11,468,907 11,468,907
Change in net assets attributable to shareholders per share USD 0.309 0.340
12. RELATED PARTY DISCLOSURES
The Directors consider Africa Opportunity Fund Limited (the "Company") as the
ultimate holding company of Africa Opportunity Fund (GP) Limited and Africa
Opportunity Fund L.P.
% equity % equity
Country of interest interest
Name incorporation 2025 2024
Africa Opportunity Fund (GP) Limited Cayman Islands 100.00 100.00
Africa Opportunity Fund L.P. Cayman Islands 95.66 96.00
Type of Nature of Volume Balance at
Name of related parties relationship transaction USD 31 Dec 2025
USD
Africa Opportunity Partners LLC Investment Manager Management fee expense 350,000 241
NAV Consulting Inc. Administrator Administration fees 15,881 2,500
Directors Directors Directors' fees 69,999 17,500
Type of Nature of Volume Balance at
Name of related parties relationship transaction USD 31 Dec 2024
USD
Africa Opportunity Partners LLC Investment Manager Management fee expense 131,963 -
SS&C Technologies Administrator Administration fees 75,413 -
Directors Directors Directors' fees 70,001 17,501
The terms and conditions of the amount with related parties are as
follows:
(i) Unsecured interest free and settlement occurs in
cash;
(ii) No guarantees have been given or received on these
balances
Key Management Personnel (Directors' fee)
Except for Robert Knapp who has waived his fees, each director has been paid a
fee of USD 35,000 per annum plus reimbursement for out-of pocket expenses
during both 2025 and 2024.
Robert Knapp, who is a director of the Company, also forms part of the
executive team of the Investment Manager. Details of the agreement with the
Investment Manager are disclosed in Note 5a. He has a beneficiary interest in
AOF CarryCo Limited.
Details of investments in the Company by the Directors are set out below:
No of shares held Direct interest held %
2025 6,453,386 56.27
2024 6,254,094 54.53
13. TAXATION
Under the current laws of Cayman Islands, there is no income, estate, transfer
sales or other Cayman Islands taxes payable by the Company. As a result, no
provision for income taxes has been made in the financial statements.
Dividend revenue is presented gross of any non-recoverable withholding taxes,
which are disclosed separately in the statement of comprehensive income for
the Master Fund (see footnote 6(e)). Withholding taxes are not separately
disclosed in the statement of cash flows as they are deducted at the source of
the income.
A reconciliation between tax expense and the product of accounting profit
multiplied by the applicable tax rate is as follows:
2025 2024
USD USD
Total comprehensive gain 3,544,220 3,901,135
Income tax expense calculated at 0% - -
Withholding tax suffered outside Cayman Islands - -
Income tax expense recognized in profit or loss - -
* Withholding taxes are borne at the master
fund level and amounted to USD 51,354 (2024: USD 9,840). These have been
included in the NAV of the subsidiary.
14. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
14(a). AT THE COMPANY'S LEVEL
Introduction
The Company's objective in managing risk is the creation and protection of
shareholder value. Risk is inherent in the Company's activities. It is managed
through a process of ongoing identification, measurement, and monitoring,
subject to risks limits and other controls. The process of risk management is
critical to the Company's continuing profitability. The Company is exposed to
market risk (which includes currency risk, interest rate risk and price risk),
credit risk and liquidity risk arising from the financial instruments it
holds.
Risk management structure
The Investment Manager is responsible for identifying and controlling risks.
The Board of Directors supervises the Investment Manager and is ultimately
responsible for the overall risk management approach of the Company.
Fair value
The carrying amount of financial assets and liabilities at fair value through
profit or loss are measured at fair value at the reporting date. The carrying
amount of cash and cash equivalents and other payables approximates their fair
value due to their short-term nature.
Market risk
Market risk is the risk that the fair value or future cash flows of a
financial instrument will fluctuate because of changes in market prices and
includes interest rate risk, foreign currency risk and equity price risk. The
Company is not directly exposed to market risk. The Company holds investments
in subsidiaries, Africa Opportunity Fund L.P. (Master Fund) and Africa
Opportunity Fund (G.P.) Limited which are valued at their net asset value. The
Company is thus exposed to market risk indirectly through investments held by
the Master Fund.
Equity price risk
Equity price risk is the risk that the fair value of equities decreases as a
result of changes in the levels of the equity indices and the values of
individual stocks. The equity price risk of the Company arises from the net
asset value (NAV) of the underlying funds, the Master Fund and AOF GP. The
effect on equity would have the same impact on the profit for the year. The
equity price risk at Company level is analysed as follows:
Effect on
Company Change in Equity
NAV price 2025
USD
Investment in subsidiaries at fair value through profit or loss 10% 1,738,794
-10% (1,738,794)
Effect on
Company Change in Equity
NAV price 2024
USD
Investment in subsidiaries at fair value through profit or loss 10% 1,368,690
-10% (1,368,690)
Currency risk
All of the Company's financial assets and financial liabilities are
denominated in its functional currency and, accordingly, the Company is not
directly exposed to currency risk.
The Company is indirectly exposed to currency risk through its investment in
the Master Fund. The Master Fund's investments are denominated in various
currencies. The effect of a change in USD against other currencies at the
Master Fund level will have the same impact at the Company level and will form
part of the NAV of the subsidiary (refer to note 14(b)).
Interest rate risk
Interest rate risk arises from the possibility that changes in interest rates
will affect future cash flows or the fair values of financial instruments. The
Company's financial assets and liabilities are non-interest bearing;
therefore, the Company is not exposed to interest rate risk and thus, no
sensitivity analysis has been presented.
Credit risk
The Company takes on exposure to credit risk, which is the risk that a
counterparty will be unable to pay amounts in full when due. Financial assets
that potentially expose the Company to credit risk consist principally of cash
and cash equivalent balances. The extent of the Company's exposure to credit
risk in respect of these financial assets approximates their carrying values
as recorded in the Company's statement of financial position.
The carrying amount of financial assets represents the maximum credit
exposure. The maximum exposure to credit risk at the reporting date was:
2025 2024
Company Company
Carrying Carrying
amount amount
Notes USD USD
Cash and cash equivalents 8 8,838 205,356
The cash and cash equivalents assets of the Company are maintained with
Standard Chartered Bank (Mauritius) Ltd. Standard Chartered Bank has an A3
Senior Unsecured Debt issuer rating from Moody's rating agency, a Baa2
Subordinated Debt rating from Moody's rating agency, a BBB+ long-term issuer
credit rating from Standard and Poor's rating agency, and an A-2 short-term
credit rating from Standard and Poor's rating agency.
Concentration risk
The Company does not have any concentration risk as at 31 December 2025. Given
that the Company has invested in Africa Opportunity Fund L.P (the Master Fund)
which holds investments in various countries in Africa, the concentration risk
therefore arises primarily at the Master Fund Level.
Liquidity risk
Liquidity risk is the risk that the Company will not be able to meet its
financial obligations as they fall due. The Company's approach to managing
liquidity is to ensure, as far as possible, that it will always have
sufficient liquidity to meet its liabilities when due, under both normal and
stressed conditions, without incurring unacceptable losses or risking damage
to the Company's reputation.
The Company manages liquidity risk by maintaining adequate reserves, by
continuously monitoring forecast and actual cash flows. The table below
illustrates the maturity profile of the Company's financial liabilities based
on undiscounted payments.
Year 2025 Due Due Due
Due Between 3 Between 1 greater
Due on within 3 and 12 and 5 than 5
demand Months Months years years Total
USD USD USD USD USD USD
Financial liabilities
Other payables - 94,323 - - - 94,323
Total liabilities - 94,323 - - - 94,323
Year 2024 Due Due Due
Due Between 3 Between 1 greater
Due on within 3 and 12 and 5 than 5
demand Months Months years years Total
USD USD USD USD USD USD
Financial liabilities
Other payables - 122,583 - - - 122,583
Total liabilities - 122,583 - - - 122,583
Capital Management
Total capital is considered to be the total equity as shown in the statement
of financial position.
The Company is a closed-end fund and repurchase of shares in issue can be done
with the consent of the Board of Directors. The Company is not subject to
externally imposed capital requirements.
The objectives for managing capital are:
· To invest the capital in investment meeting the description,
risk exposure and expected return indicated in the admission document.
· To achieve consistent capital growth and income through
investment in value, arbitrage and special situations opportunities derived
from the African continent.
· To maintain sufficient size to make the operation of the
Company cost effective.
The primary objective of the Company's capital management is to ensure that it
maintains a strong credit rating and healthy capital ratios in order to
support its business and maximise shareholder value.
14(b). AT THE MASTER FUND'S LEVEL
The financial risks at Master Fund Level are described as follows:
Fair value
The carrying amount of financial assets and liabilities at fair value through
profit or loss held at Master Fund level are measured at fair value at the
reporting date. The carrying amount of other receivables, cash and cash
equivalents, trade and other payables and amount payable to related party at
Master Fund levels approximates their fair value due to their short-term
nature.
Market risk
The market risk lies primarily at the Master Fund level. Short selling
involves borrowing securities and selling them to a broker-dealer. The Master
Fund has an obligation to replace the borrowed securities at a later date.
Short selling allows the Master Fund to profit from a decline in market price
to the extent that such decline exceeds the transaction costs and the costs of
borrowing the securities, while the gain is limited to the price at which the
Fund sold the security short. Possible losses from short sales may be
unlimited as the Master Fund has an obligation to repurchase the security in
the market at prevailing prices at the date of acquisition.
With written options, the Master Fund bears the market risk of an unfavourable
change in the price of the security underlying the option. Exercise of an
option written by the Master Fund could result in the Master Fund selling or
buying a security at a price significantly different from its fair value.
A contract for difference creates, as its name suggests, a contract between
two parties speculating on the movement of an asset price. The term 'CFD'
which stands for 'contract for difference' consists of an agreement (contract)
to exchange the difference in value of a particular currency, commodity share
or index between the time at which a contract is opened and the time at which
it is closed. The contract payout will amount to the difference in the price
of the asset between the time the contract is opened and the time it is
closed. If the asset rises in price, the buyer receives cash from the seller,
and vice versa. The Master Fund bears the risk of an unfavourable change on
the fair value of the CFD. The risk arises mainly from changes in the equity
and foreign exchange rates of the underlying security.
The Master Fund's financial assets are susceptible to market risk arising from
uncertainties about future prices of the instruments. Since all securities
investments present a risk of loss of capital, the Investment Manager
moderates this risk through a careful selection of securities and other
financial instruments. The Master Fund's overall market positions are
monitored on a daily basis by the Investment Manager.
The directors have based themselves on past and current performance of the
investments and future economic conditions in determining the best estimate of
the effect of a reasonable change in equity prices, currency rate and interest
rate.
Equity price risk
Equity price risk is the risk that the fair value of equities decreases as a
result of changes in the levels of the equity indices and the values of
individual stocks.
The equity price risk exposure arises from the Master Fund's investments in
equity securities, from equity securities sold short and from equity-linked
derivatives (the written options). The Master Fund manages this risk by
investing in a variety of stock exchanges and by generally limiting exposure
to single investments and to industry sectors, as possible.
Management's best estimate of the effect on the profit or loss for a year due
to a reasonably possible change in equity indices, with all other variables
held constant is indicated in the table below. There is no effect on 'other
comprehensive income' as the Master Fund have no assets classified as
'available-for-sale' or designated hedging instruments.
In practice, the actual trading results may differ from the sensitivity
analysis below and the difference could be material. An equivalent decrease in
each of the indices shown below would have resulted in an equivalent, but
opposite impact.
Effect on net assets
attributable to
Master Fund Change in Shareholders
NAV price 2025
USD
Financial assets at fair value through profit or loss 10% 1,828,758
-10% (1,828,758)
Effect on net assets
attributable to
Master Fund Change in Shareholders
NAV price 2024
USD
Financial assets at fair value through profit or loss 10% 1,303,189
-10% (1,303,189)
Currency risk
The Master Fund's investments are denominated in various currencies as shown
in the currency profile below. Consequently, the Company is exposed to the
risk that the exchange rate of the United States Dollar (USD) relative to
these various currencies may change in a manner which has a material effect on
the reported values of its assets denominated in those currencies. To manage
its risks, the Master Fund may enter into currency arrangements to hedge
currency risk if such arrangements are desirable and practicable.
The following table details the Master Fund's sensitivity to a possible change
in the USD against other currencies. The percentage applied as sensitivity
represents management's assessment of a reasonably possible change in foreign
currency denominated monetary items by adjusting the translation at the
year-end for the change in currency rates at the Master Fund level. A positive
number below indicates an increase in profit where the USD weakens against the
other currencies. In practice, actual results may differ from estimates and
the difference can be material. The effect of a change in USD against other
currencies at the Master Fund level as per the table below will have the same
impact at the company level and will form part of the NAV of the subsidiary.
The sensitivity analysis shows how the value of a financial instrument will
fluctuate due to changes in foreign exchange rates against the US Dollar, the
functional currency of the Company.
Currency Risk - Year 2025
Effect on net assets attributable to
Currency shareholders in (USD)
Master Fund
Change: 30% -30%
Ghana Cedi (1,693,588) 1,693,588
Kenyan Shilling (766,220) 766,220
South African Rand (280,434) 280,434
Zimbabwe Zig (444) 444
Change: 5% -5%
Great British Pound (19,857) 19,857
Currency Risk - Year 2024
Effect on net assets attributable to
Currency shareholders in (USD)
Master Fund
Change: 30% -30%
Ghana Cedi (686,086) 686,086
Kenyan Shilling (268,720) 268,720
South African Rand (31,530) 31,530
Change: 5% -5%
Great British Pound (565) 565
Interest rate risk
Interest rate risk arises from the possibility that changes in interest rates
will affect future cash flows or the fair values of financial instruments. The
fair values of the Master Fund's debt securities fluctuate in response to
changes in market interest rates. Increases and decreases in prevailing
interest rates generally translate into decreases and increases in fair values
of those instruments.
The investments in debt securities have fixed interest rate and the income and
operating cash flows are not exposed to interest rate risk. The change in fair
value of investments based on a change in market interest rate (a 50 basis
points change) is not material and has not been disclosed.
Credit risk
Financial assets that potentially expose the Master Fund to credit risk
consist principally of cash balances and interest receivable. The extent of
the Master Fund's exposure to credit risk in respect of these financial assets
approximates their carrying values as recorded in the Master Fund's statement
of financial position (note 15). The Master Fund takes on exposure to credit
risk, which is the risk that a counterparty will be unable to pay amounts in
full when due.
The carrying amount of financial assets represents the maximum credit
exposure. The maximum exposure to credit risk at the reporting date was:
2025 2024
Master Fund Master Fund
Carrying Carrying
amount amount
USD USD
Other receivables, excluding
prepayments 178,939 159,056
Cash and cash equivalents 135,626 1,522,662
Concentration risk
At 31 December 2025 the Master Fund held investments in Africa which involves
certain considerations and risks not typically associated with investments in
other developed countries. Future economic and political developments in
Africa could affect the operations of the investee companies.
Analysed by geographical distribution of underlying assets:
Master Fund Master Fund
2025 2024
USD USD
Equity Securities
Ghana 5,645,289 2,288,751
Zimbabwe 7,342,411 7,605,127
Kenya 2,554,067 895,734
Other 1,414,298 2,125,800
South Africa 948,820 116,481
Nigeria 382,690 -
Total 18,287,575 13,031,893
Analysed by industry of underlying assets:
Master Fund Master Fund
2025 2024
USD USD
Equity Securities
Real Estate 7,340,929 7,603,651
Financial Services 5,772,764 2,406,708
Utilities 2,554,067 895,734
Other 1,415,780 2,125,800
Materials 821,345 -
Energy 382,690 -
Total 18,287,575 13,031,893
Maturity Analysis
All figures are expressed in USD.
As at 31 December 2025 Within 12 Months After 12 Months Total
ASSETS
Cash and cash equivalents 135,626 - 135,626
Other receivables 184,072 - 184,072
Equity securities 17,792,191 - 17,792,191
Unquoted equity securities - 495,384 495,384
Total assets 18,111,889 495,384 18,607,273
LIABILITIES
Other payables 429,530 - 429,530
Total liabilities 429,530 - 429,530
All figures are expressed in USD.
As at 31 December 2024 Within 12 Months After 12 Months Total
ASSETS
Cash and cash equivalents 1,522,662 - 1,522,662
Other receivables 159,056 - 159,056
Equity securities 10,906,093 - 10,906,093
Unquoted equity securities - 2,125,800 2,125,800
Total assets 12,587,811 2,125,800 14,713,611
LIABILITIES
Other payables 428,904 - 428,904
Total liabilities 428,904 - 428,904
15. ANALYSIS OF NAV OF MASTER FUND ATTRIBUTABLE TO ORDINARY SHARES
2025 2024
USD USD
ASSETS
Cash and cash equivalents 135,626 1,522,662
Other receivables 184,072 159,056
Financial assets at fair value through profit or loss 18,287,575 13,031,893
Total assets 18,607,273 14,713,611
EQUITY AND LIABILITIES
Liabilities
Other payables 429,530 428,904
Total liabilities 429,530 428,904
Net assets attributable to members' account 18,177,743 14,284,707
16. SEGMENT INFORMATION
For management purposes, the Company is organised in one main operating
segment, which invests in equity securities, principally via the Master Fund.
All of the Company's activities are interrelated, and each activity is
dependent on the others. Accordingly, all material operating decisions are
based upon analysis of the Company as one segment. The financial results from
this segment are equivalent to the financial statements of the Company as a
whole.
For geographical segmentation at the Master Fund level, please refer to Note
14.
17. PERSONNEL
The Company did not employ any personnel during the year (2024: nil).
18. COMMITMENTS AND CONTINGENCIES
There are no commitments or contingencies at the reporting date.
19. EVENTS AFTER REPORTING DATE
As at the date of the approval of these financial statements, the directors
are aware of the recent geopolitical tensions and armed conflicts in the
Middle East and do not underestimate the seriousness of these events and the
impact this will have on the global economy. The directors continue to assess
the impact on the Company, as the impact on global energy markets, the
increased burden on African consumers from an inflationary environment and the
impact on countries with significant sovereign indebtedness, are all areas for
analysis and concern. While the Company does not have any transactions with
countries in the affected regions, the ongoing conflict has global
implications. At this time, the directors have determined that the events do
not have a material impact on the financial statements. Nevertheless, due to
the uncertainty surrounding the duration and extent of the conflict and the
potential for broader economic impacts, management will continue to monitor
the situation closely.
Other than the above, the directors are not aware of any material event since
the end of the reporting date which would require additional disclosure or
adjustment to the financial statements for the year ended 31 December 2025.
SHARE PRICE
Prices of Africa Opportunity Fund Limited are published daily in the Daily
Official List of the London Stock Exchange. The shares trade under Reuters
symbol "AOF.L" and Bloomberg symbol "AOF LN".
MANAGER
Africa Opportunity Partners LLC.
COMPANY INFORMATION
Africa Opportunity Fund Limited is a Cayman Islands incorporated closed-end
investment company admitted to trading on the SFS operated by the London Stock
Exchange.
CAPITAL STRUCTURE
The Company has an authorized share capital of 1,000,000,000 ordinary shares
of US$0.01 each of which 11,468,907 are issued and fully paid.
REGISTERED NUMBER
Registered in the Cayman Islands number MC-188243.
Website
www.africaopportunityfund.com
1 (The Fund's unaudited year-end net asset value per share released in
January 2026 climbed from $1.308 to $1.510 because the Fund's auditors deemed
the prevailing parallel Dollar rate of the ZiG to be more relevant than the
ZiG currency discount calculated by the Fund's internal ZiG currency model.
Zimbabwe had one local currency in 2025 called the Zimbabwe investment Gold
currency (known as the "ZiG"). This change produced material currency gains
that were partially offset by a reduction in the fair value of Sand Tech
Holdings for the net asset value of $1.510 per share. )
2 (Reference indices are calculated in US Dollars using: Nigeria NSE
Allshare Index, South Africa FTSE/JSE Africa Allshare Index, Nairobi NSE
Allshare Index, Egypt Hermes Index, Moex Russia Index (previously known as
Russia MICEX Index), Brazil IBOV Index, the Shanghai Shenzen 300 CSI Index,
the India SENSEX Index, the S&P 500, the Stoxx Europe 600 Index, the FTSE
100 and the Nikkei 225. Source is Bloomberg.)
3 (Bloomberg.)
4 (International Monetary Fund, Regional Economic Outlook Sub-Saharan
Africa, Oct 2025, Table SA1, p.12)
5 (Bloomberg.)
6 (Bloomberg.)
7 Bank of Ghana, Summary of Macroeconomic and Financial Data, February 2026,
Table 2-Real Sector Indicators, Note 1, page 2.
8 Bank of Ghana, Summary of Macroeconomic and Financial Data, January 2026,
Table 1-Year-on-Year Inflation, page 1.
9 Bank of Ghana, Summary of Macroeconomic and Financial Data, January 2026,
Table 6-External Developments (Cumulative), Balance of Payments, page 7.
10 Bloomberg.
11 Reserve Bank of Zimbabwe website (www.rbz.co.zw (https://www.rbz.co.zw/)
), inflation rates, ZiG consumer price indices; annualized inflation rates for
April 2025 was 86% and 15% for December 2025. Reserve Bank of Zimbabwe,
Monetary Policy Statement at a Glance, 27 February 2026, p.0, paragraph 14,
and p.5ii. Base Policy Rate maintained at 35% from September 2024.
Therefore, real Base Policy Rate rose from 35%-86%(-51%) in April 2025 to
35%-15% (+20%) in December 2025.
12 International Monetary Fund, Zimbabwe 2025 Article IV Report, Table 1, p.
10, IMF Country Report No. 25/282
13 The combined market capitalizations of First Mutual Properties and
Mashonaland Holdings on December 31, 2024, was ZiG 321,321,600 and, on
December 31, 2025, was ZiG 241,776,000.
14 Bloomberg, MSCI EFM Africa Index (MXFMEAF Index) Price/Cash Flow
multiples of 7.38x (2022), 7.76x (2023), 9.64 (2024), and 11.56 (2025) .
15 The Fund's unaudited net asset value per share released in January 2026
climbed from $1.308 to $1.510 because the Fund's auditors deemed the
prevailing parallel Dollar rate of the ZiG to be more relevant than the ZiG
currency discount calculated by the Fund's internal ZiG currency model. This
change produced material currency gains that were partially offset by a
reduction in the fair value of Sand Tech Holdings for the net asset value of
$1.510 per share..
16 The Cedi's value against the Dollar on December 31, 2025, December 31,
2024, December 31, 2023, December 31, 2022, December 31, 2021, were,
respectively 10.47 Cedis, 14.7 Cedis, 11.95 Cedis, 10.15 Cedis, 6.18 Cedis,
and 5.87 Cedis.
17 Enterprise Group's numbers are extracted from PR. No. 171/2026 Enterprise
Group PLC Annual Report and Financial Statements for the Year Ended 31
December 2025, published by the Ghana Stock Exchange on April 28, 2026 and
from Enterprise Group PLC Annual Report and Financial Statements for the Year
Ended 31 December 2024.
18 The net effect of discounting, interest accretion, and financial
remeasurement on insurance and reinsurance contract balances of Enterprise
Group during a financial year.
19 Bank of Ghana Summary of Economic and Financial Data, 27 January 2026,
p.3.
20 Ibid., pps. 1 and 3, Table 1 (Year-on-Year Inflation (%) and Table 3a
(Interest Rates (Percent per Annum)-Monetary Policy Rate and Treasury
Instruments. The Bank of Ghana's Monetary Policy Rate fell from 27% in
December 2024 to 18% in December 2025. Treasury Instruments. 364-Day Bill
(interest equivalent) fell from 29.95% in December 2024 to 12.92% in December
2025.
21 Average 2024 Cedi/$ rate was 14.48 Cedis/$; average 2025 Cedi/$ rate was
12.56 Cedis/$. Bloomberg.
22 Bloomberg, December 31, 2025 is the date of valuation of Enterprise.
23 Bloomberg
24 Peter Twesigye, Research Lead: Power Market Reforms and Regulation,
University of Cape Town; The Conversation, Power Cuts are the new normal in
Kenya-what went wrong and how to fix it.
https://theconversation.com/power-cuts-are-the-new-normal-in-kenya-what-went-wrong-and-how-to-fix-it-276611.
25 Bloomberg, March 31, 2025 is the date of valuation of Kenya Power.
26 Bloomberg
27 Anglogold Ashanti 2025 Annual Report, p.156
28 Anglogold Ashanti Q4 2025 and Full Year Earnings Release, p.7
29 Ibid, p.7.
30 Anglogold Ashanti 2025 Annual Report, p.159
31 Anglogold Ashanti Q4 2025 and Full Year Earnings Release, p.2
32 Anglogold Ashanti 2025 Mineral Resource and Mineral Reserve Report as of
December 31, 2025, p.8
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END FR SDIFMSEMSELL
Copyright 2019 Regulatory News Service, all rights reservedRecent news on Africa Opportunity Fund
See all newsREG - Africa OpportunityFd - Net Asset Value(s)
AnnouncementREG - Africa OpportunityFd - Net Asset Value(s)
AnnouncementREG - Africa OpportunityFd - Notice of AGM
AnnouncementREG - Africa OpportunityFd - Monthly Report
AnnouncementREG - Africa OpportunityFd - Net Asset Value(s)
Announcement