Oryx International Growth Fund Ld Annual -8-

reclassified to profit or loss at a later date. However, dividends on such investments are recognised in profit or loss, rather than other comprehensive income unless they clearly represent a partial recovery of the cost of the investment. Investments in equity instruments in respect of which an entity does not elect to present fair value changes in other comprehensive income would be measured at fair value with changes in fair value recognised in profit or loss.

The standard requires that derivatives embedded in contracts with a host that is a financial asset within the scope of the standard are not separated; instead the hybrid financial instrument is assessed in its entirety as to whether it should be measured at amortised cost or fair value.

IFRS 10 - Consolidated Financial Statements, IFRS 12 - Disclosure of Interests in Other Entities, IFRS 13 - Fair Value Measurements were issued by the IASB in May 2011.

All of these standards are effective for annual periods beginning on or after 1 January 2013. The Group is currently in the process of assessing the impact, if any, of these standards on the Group's financial statements.

Adoptions of new standards

The following new standards and amendments are mandatory for the financial year beginning 1 January 2010.

IAS 27, 'Consolidated and Separate Financial Statements' - A revised version of IAS 27 was issued in May 2010. The revised standard requires the effects of all transactions with non-controlling interests to be recorded in equity if there is no change in control and these transactions will no longer result in goodwill or gains and losses. The standard also specifies the accounting when control is lost. Any remaining interest in the entity is re-measured to fair value, and a gain or loss is recognised in profit or loss. IAS 27 (revised) has had no impact on the current period, as none of the non-controlling interests have a deficit balance; there have been no transactions whereby an interest in an entity is retained after the loss of control of that entity.

'Improvements to IFRS' (issued in May 2010) - The Improvements project contains numerous amendments to IFRS that the IASB considers non-urgent but necessary. 'Improvements to IFRS' comprise amendments that result in accounting changes for presentation, recognition or measurement purposes, as well as terminology or editorial amendments related to a variety of individual IFRS standards. Most of the amendments are effective for annual periods beginning on or after 1 January 2010. No material changes to accounting policies arose as a result of these amendments.

Amendments to IAS 39 Financial Instruments: Recognition and Measurement - Eligible Hedged Items - The amendments did not have a significant impact on the Group's financial statements.

a) Income Recognition

Dividend income is recognised when the right to receive income is established. Usually this is the ex-dividend date for equity securities. Deposit interest is accrued on a day-to-day basis. Loan interest is accounted for using the effective interest method. All income is shown gross of any applicable withholding tax.

b) Investments

Classification

All investments of the Company, together with its subsidiaries ('the Group'), are designated into the financial assets at fair value through profit or loss category. The investments are purchased mainly for their capital growth and the portfolio is managed, and performance evaluated, on a fair value basis in accordance with the Group's documented investment strategy. Therefore the Directors consider that this is the most appropriate classification.

This category comprises financial instruments designated at fair value though profit or loss upon initial recognition - these include financial assets that are not held for trading purposes and which may be sold. These are principally investments in listed and unlisted equities.

Fair value measurement principles

Financial instruments are measured initially at fair value being the transaction price. Subsequent to initial recognition on trade date, all instruments classified as fair value through profit or loss are measured at fair value with changes in their fair value recognised in the Statement of Comprehensive Income. Transaction costs are separately disclosed in the Statement of Comprehensive Income.

Listed investments have been valued at the bid market price ruling at the Statement of Financial Position date. In the absence of the bid market price, the closing price has been taken, or, in either case, if the market is closed on the Consolidated Statement of Financial Position date, the bid market or closing price on the preceding business day.

Fair Value of unlisted investments are derived in accordance with the International Private Equity and Venture Capital Association (IPEVCA) guidelines. Their valuation includes all factors that market participants would consider in setting a price. The primary valuation techniques employed to value the unlisted investments are earnings multiples, recent transactions and the net asset basis. Cost is considered appropriate for early stage investments. The relevance of this methodology can be eroded over time and in these cases the carrying values will be adjusted to reflect fair value.

For certain of the Group's financial instruments, including cash and cash equivalents, interest and dividends and interest receivable and amounts due to and from broker, the carrying amounts approximate fair value due to their immediate or short-term maturity.

Derecognition of financial assets occur when the rights to receive cash flows from financial instruments expire or are transferred and substantially all of the risks and rewards of ownership have been transferred.

Fair value measurement should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering market participant assumptions, IFRS 7 establishes a fair value hierarchy that gives the highest priority to unadjusted quoted prices in active markets (Level 1) and lowest priority to unobservable inputs (Level 3). The three levels of the value hierarchy are as follows.

Level 1: Inputs that reflect unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date;

Level 2: Inputs reflect quoted prices of similar assets and liabilities in active markets and quoted prices of identical assets and liabilities in markets that are considered to be inactive, as well as inputs other than quoted prices that are observable for the asset or liability either directly or indirectly; and

Level 3: Inputs that are unobservable for the asset or liability and reflect the Investment Manager's own assumptions in accordance with the accounting policies disclosed within note 2 to the financial statements.

c) Other receivables

Other receivables do not carry any interest and are short term in nature and are accordingly stated at their amortised cost as reduced by appropriate allowances for impairment.

d) Cash and cash equivalents

Cash and cash equivalents consist of cash in hand and short term deposits in banks with original maturities of less than three months.

e) Other Payables and Accrued Expenses

Other payables and accrued expenses are not interest bearing and are stated at their amortised cost.

f) Foreign Currency Translation

Items included in the Group's financial statements are measured using the currency of the primary economic environment in which it operates (the "functional currency"). This is the pound sterling which reflects the Group's primary activity of investing in sterling securities. The Group's shares are also issued in sterling.

Foreign currency assets and liabilities have been translated at the exchange rates ruling at the Consolidated Statement of Financial Position date. Transactions in foreign currency during the period have been translated into pounds sterling at the spot exchange rate in effect at the date of the transaction. Realised and unrealised gains and losses on currency translation are recognised in the Consolidated Statement of Comprehensive Income.

g) Realised and Unrealised Gains and Losses

Realised gains and losses arising on the disposal of investments are calculated by reference to the cost attributable to those investments and the sales proceeds, and are included in the Consolidated Statement of Comprehensive Income. Unrealised gains and losses arising on investments held at the Consolidated Statement of Financial Position date are also included in the Consolidated Statement of Comprehensive Income.

h) Financial Liabilities

All bank loans and borrowings are initially recognised at cost, being the fair value of the consideration received, less issue costs where applicable. After initial recognition, all interest bearing loans and borrowings are subsequently measured at amortised cost. Any difference between cost and redemption value has been recognised in the Consolidated Statement of Comprehensive Income over the period of the borrowings on an effective interest basis.

Financial liabilities are derecognised from the Consolidated Statement of Financial Position only when the obligations are extinguished either through discharge, cancellation or expiration.

i) Equity

Share Capital represents the nominal value of equity shares.

Share Premium represents the excess over nominal value of the fair value of consideration received for equity shares, net of expenses of the share issue. Share premium is debited for the excess of redemption price over par value of shares.

Other Reserves and the Capital Redemption Reserve include all current and prior results as disclosed in the Consolidated Statement of Comprehensive Income. Other Reserves also includes the deduction for the excess of consideration paid over nominal value on share buy-backs.

j) Expenses

Expenses are recognised in the consolidated Statement of Comprehensive Income upon utilisation of the service or at the date they are incurred.

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