Annual Report and Audited Financial Statements For the year ended 31 December Registered Number:

Annual Report and Audited Financial Statements For the year ended 31 December 2014 Registered Number: 441645 Crown Asia-Pacific Private Equity plc ...
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Annual Report and Audited Financial Statements For the year ended 31 December 2014 Registered Number: 441645

Crown Asia-Pacific Private Equity plc

This document is for information only and is not an offer to sell or an invitation to invest. In particular, it does not constitute an offer or solicitation in any jurisdiction where it is unlawful or where the person making the offer or solicitation is not qualified to do so or the recipient may not lawfully receive any such offer or solicitation. It is the responsibility of any person in possession of this document to inform themselves of, and to observe, all applicable laws and regulations of relevant jurisdictions. The information and any opinions contained herein have been obtained from or are based on sources, which are believed to be reliable, but their accuracy cannot be guaranteed. No responsibility can be accepted for any consequential loss from this information. Performance numbers shown are records of past performance and as such do not guarantee future performance. In addition, the information contained herein is unaudited.

Strictly confidential

Table of contents Directors and other information

4

Background to the Company

5

Investment Advisor’s report

6

Directors’ report

9

Custodian’s report

15

Independent Auditors’ report

16

Statement of comprehensive income

18

Balance sheet

19

Statement of changes in net assets attributable to shareholders

20

Cash flow statement

21

Notes to the financial statements

22

Portfolio of investments

39

Table of contents | Crown Asia-pacific Private Equity Annual report 2014 03

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Directors and other information Board of Directors

Trustee and Custodian

Urs Gaehwiler (Swiss)

Credit Suisse International, Dublin Branch

Paul Garvey (Irish)

Kilmore House

André Lagger (Swiss) (resigned 2 October 2014)

Park Lane

Roberto Paganoni (Dutch) (resigned 7 May 2014)

Spencer Dock

Robert Schlachter (Swiss) (appointed 29 July 2014)

Dublin 1

Tycho Sneyers (Belgian)

Ireland

Desmond Tobin (Irish) Secretary and Registered Office Independent Director

LGT Fund Managers (Ireland) Limited

Konrad Baechinger (Swiss)

Segrave House

Investment Advisor and Distributor

Dublin 2

LGT Capital Partners Limited

Ireland

19/20 Earlsfort Terrace

Schuetzenstrasse 6 8808 Pfaeffikon

Main contact:

Switzerland

Kathryn O’Driscoll

Main contacts:

Independent Auditors

Tycho Sneyers

PricewaterhouseCoopers

Robert Schlachter

Chartered Accountants and Statutory Audit Firm

Investment Manager

One Spencer Dock

LGT Capital Partners (Ireland) Limited

North Wall Quay

Segrave House

Dublin 1

19/20 Earlsfort Terrace

Ireland

Dublin 2 Ireland

Legal Advisor and Listing Sponsor Maples and Calder

Main contact:

Solicitors

Brian Goonan

75 St Stephen’s Green Dublin 2

Administrator/Transfer Agent

Ireland

LGT Fund Managers (Ireland) Limited Segrave House 19/20 Earlsfort Terrace Dublin 2 Ireland Main contact: Paul Garvey

04 Crown Asia-Pacific Private Equity Annual report 2014 | Directors and other information

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Background to the Company The following information is derived from and should

Investment objective

be read in conjunction with the full text and definitions section of Crown Asia-Pacific Private Equity plc’s (“CROWN

The objective of the Company is to provide investors with

ASIA-PACIFIC PRIVATE EQUITY”, “CAPE”, the “Company”

attractive long-term capital appreciation from a diversi-

or the “Fund”) prospectus (the “Prospectus”).

fied private equity portfolio mainly focused on the AsiaPacific region.

Structure The Company’s portfolio shall comprise substantially of Fund size Date of incorporation Initial closing date Final closing date Vintage year

USD 372.8 million

Asia-Pacific buyout and growth capital funds. The target

19 June 2007

is to allocate 80% of the subscribed capital to leading

13 July 2007

buyout and growth capital private equity partnerships.

13 January 2009

Finally, CAPE’s portfolio may comprise up to 20% in ven-

2007

Commitment period: Start date

13 July 2007

End date

13 July 2011

Fund expiry date Extension periods

13 July 2019 up to three one-year extensions

ture fund investments and up to 20% in secondary private equity partnership investments. The Company shall not invest more than 15% of subscribed capital in any one underlying primary private equity partnership. The Company’s investment in any one

The Company is a closed-ended investment company with

primary private equity partnership shall not equal to

variable capital, incorporated on 19 June 2007 with lim-

more than 20% of the targeted fund size of such primary

ited liability under the laws of Ireland. The Company was

private equity partnership.

authorized by the Central Bank of Ireland on 11 July 2007 pursuant to the provisions of Part XII of the Companies Act, 1990 and had a final closing on 13 January 2009. The Class A Shares, Class B Shares and Class O Shares of the Company were admitted to the Official List of the Irish Stock Exchange on 8 November 2007, 1 February 2008 and 16 July 2007, respectively. The Prospectus was reissued on 20 July 2010 to include updated financial information in accordance with the Prospectus (Directive 2003/71/EC) Regulations 2005. Supplements to the Prospectus were issued on 21 April 2011 and 1 July 2011. These Supplements were to allow the Company to issue guarantees under restricted conditions relating to the structuring of investments and to provide for the appointment of Credit Suisse International, Dublin Branch, as Custodian to the Company, respectively.

Background to the Company | Crown Asia-Pacific Private Equity Annual report 2014 05

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Investment Advisor’s report NAV SUMMARY CAPE’s net asset value (“NAV”) as of 31 December 2014 amounts to USD 290.6 million, a decrease of USD 2.9 million compared to the year ended 31 December 2013.

PORTFOLIO STRUCTURE PORTFOLIO STRUCTURE AS OF 31 DECEMBER 2014

Fund-of-funds

Private equity partnerships

Participations in companies

CROWN ASIA-PACIFIC PRIVATE EQUITY

Investors

23 Primary investments 7621) Companies

23 Investors 8 Secondary transactions (14 Partnerships)

NOTE: 1) Based on the latest available financial statements from the underlying private equity partnerships, i.e primarily 30 September 2014.

06 Crown Asia-Pacific Private Equity Annual report 2014 | Investment Advisor’s report

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PORTFOLIO REVIEW AT PARTNERSHIP LEVEL Commitments

FUND SIZES (IN USD MILLIONS) >2,000 17%

CAPE has committed USD 298.7 million (82.6% of total

< 500 38%

commitments) to 23 primary private equity partnerships and USD 62.6 million (17.4% of total commitments) to eight secondary transactions comprising 14 private equity partnerships. The total commitments of USD 361.3 million amount to 96.9% of the investors’ total subscribed capital 500 to 2,000 45%

of USD 372.8 million.

GEOGRAPHY 2)

Commitments structure 1)

Australia 2%

Japan 5% Other 6%

INVESTMENT TYPE

South-East Asia 6%

Secondary transactions 17%

China 38%

Pan-Asian 19%

Primary investments 83%

India 24%

Vintage years

2001 2002 2003 2011 3% 1% 2% 1% 2005 4% 2010 6% 2009 3%

2008 33%

select suitable accounting policies and then apply

cial statements presented on either the website of LGT Capital Partners Limited and/or any regulatory authority.

them consistently; > make judgements and estimates that are reasonable

The Company’s financial statements will be submitted

and prudent; and > prepare the financial statements on the going concern

to the Central Bank of Ireland and the Companies An-

basis unless it is inappropriate to presume that the

nouncements Services of the Irish Stock Exchange (the

Company will continue in business.

“ISE”). Any updated version of the Prospectus (to include all audited annual accounts of the Company) may be pub-

The Directors confirm that they have complied with the

lished in accordance with Part 8 of the Prospectus (Direc-

above requirements in preparing the audited financial

tive 2003/71/EC) Regulations 2005 on the website of the

statements.

Central Bank of Ireland and be deemed available to the public accordingly.

The Directors are responsible for keeping proper books of account which disclose with reasonable accuracy at any

The Directors have taken the view that the Fund is to

time the financial position of the Company and to enable

be considered outside the scope of the EU’s Alternative

them to ensure that the audited financial statements are

Investment Fund Managers Directive (“AIFMD”) on the

prepared in accordance with IFRS as adopted by the EU

basis that it is closed to new commitments from investors

and comply with the Irish Companies Acts, 1963 to 2013

(13 January 2009) and to investments (13 July 2011) as

(the “Companies Acts”). They are also responsible for

provided for in AIFMD. The Directors will conduct the

safeguarding the assets of the Company and hence for

business of the Fund accordingly and it is not proposed to

taking reasonable steps for the prevention and detection

update the Fund documentation to comply with any

of fraud and other irregularities.

additional disclosure requirements under AIFMD, unless instructed otherwise by the relevant authorities.

Directors’ report | Crown Asia-Pacific Private Equity Annual report 2014 09

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Responsibility statement In accordance with the Transparency (Directive 2004/109/ EC) Regulations 2007 each of the Directors, in their role as directors, and whose names appear on page 4 confirm

(iii) the Central Bank of Ireland in their Non-UCITS Notices and Guidance Notes; and (iv) the ISE through the ISE Code of Listing Requirements and Procedures.

that, to the best of their knowledge and belief: > the Company’s Annual Report and Audited Financial

The information referred to in points (i) to (iv) is available

Statements is prepared in accordance with IFRS as

for inspection at the registered office of the Company at

adopted by the EU, as applied in accordance with the

Segrave House, 19/20 Earlsfort Terrace, Dublin 2.

Companies Acts, 1963 to 2013, and gives a true and fair view of the assets, liabilities and financial position of

The Company is responsible for establishing and main-

the Company as at 31 December 2014 and its profit for

taining adequate internal control and risk management

the year then ended; and

systems of the Company in relation to the financial re-

> the Directors’ report includes a fair review of the de-

porting process. Such systems are designed to manage

velopment and performance of the business and the

rather than eliminate the risk of error or fraud in achiev-

position of the Company, together with a description

ing the Company’s financial reporting objectives and can

of the principal risks and uncertainties that it faces.

only provide reasonable and not absolute assurance against material misstatement or loss.

Corporate governance statement The Company has procedures and internal controls in place The following corporate governance statement is sourced

to ensure proper execution, reporting and maintenance of

from the Irish Funds Industry Association (the “IFIA”) and

transaction data using data capture and design-specific

is in compliance with European Communities (Directive

financial software and risk based review processes to en-

2006/46/EC) Regulations (S.I. 450 of 2009 and S.I. 83 of

sure all relevant accounting records are properly main-

2010).

tained and are readily available, including production of annual and semi-annual financial statements. The annual

On 15 February 2011, the Board of Directors formally

and semi-annual financial statements of the Company are

adopted the above-mentioned corporate governance

required to be approved by the Board of Directors of the

statement which was applied by the Company through-

Company and filed with the Central Bank of Ireland and

out 2014.

the ISE. The statutory financial statements are required to be audited by independent auditors who report annually

On 29 March 2012, the Board formally adopted a volun-

to the Board on their findings. There is no requirement for

tary Corporate Governance Code for Collective Invest-

the semi-annual financial statements to be audited.

ment Schemes & Management Companies (the “Voluntary Code”) issued on 14 December 2011 by the IFIA.

The Board evaluates and discusses significant accounting and reporting issues as the need arises.

As required by the Voluntary Code Konrad Baechinger was formally appointed as Independent Director on 1 June

The convening and conduct of shareholders’ meetings are

2013.

governed by the Articles of Association and the Companies Acts. Although the Directors may convene an extra­

Although there is no specific statutory corporate govern-

ordinary general meeting of the Company at any time,

ance statement applicable to Irish collective investment

the Directors are required to convene an annual general

schemes whose shares are admitted to trading on the ISE,

meeting of the Company within 18 months of incorpora-

the Company is subject to corporate governance practices

tion and 15 months of the date of the pre­vious annual

imposed by:

general meeting thereafter. Not less than twenty one

(i) the Companies Acts;

days notice of every annual general meeting and any

(ii) the Memorandum and Articles of Association of the

meeting convened for the passing of a special resolution

Company (the “Articles of Association”);

must be given to shareholders.

10 Crown Asia-Pacific Private Equity Annual report 2014 | Directors’ report

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Three shareholders present either in person or by proxy

be a Director, shall alone be responsible for his own acts

constitute a quorum at a general meeting. On a show of

and defaults and shall not be deemed to be the agent of

hands, every participating shareholder who is present in

the Director appointing him.

person or by proxy shall have one vote and all management shareholders who are present in person or by proxy

The business of the Company is managed by the Directors

shall have one vote in respect of all the management

insofar as the Companies Acts or Articles of Association

shares. On a poll every shareholder present in person or

do not require its approval at a general meeting of the

by proxy shall be entitled to one vote in respect of each

Company. The Directors are generally and uncondition-

participating share held by him and one vote in respect of

ally authorized to exercise all powers of the Company to

all of the management shares held by him. The chairman

allot relevant securities up to an amount equal to the au-

of a general meeting of the Company or at least five

thorized but as yet unissued share capital of the Compa-

shareholders present or any shareholder or shareholders

ny. The Directors have the discretion to make distributions

present representing at least one tenth of the shares in

in the form of share repurchase or dividends, provided

issue having the right to vote at such meeting may de-

that such method of distribution shall apply uniformly to

mand a poll.

shareholders. A Director may, and the Secretary on the request of a Director will, at any time summon a meeting

An ordinary resolution of the Company (or of the share-

of the Directors. Questions arising at any meeting of the

holders of a particular sub-fund or class of participating

Directors are determined by a majority of votes. In the

shares) requires a simple majority of the votes cast by the

case of an equality of votes, the Chairman has a second or

shareholders voting in person or by proxy at the meeting

casting vote. The quorum necessary for the transaction of

at which the resolution is proposed. A special resolution

business of the Directors may be fixed by the Directors,

of the Company (or of the shareholders of a sub-fund or

and unless so fixed at any other number shall be two.

a particular class of participating shares) requires a majority of not less than 75% of the total number of votes cast

Connected parties

in general meeting in order to pass a special resolution including a resolution to amend the Articles of Association.

The Board of Directors is satisfied that there are arrangements (evidenced by written procedures) in place, to ensure that the obligations set out in paragraph one of

Unless otherwise determined by an ordinary resolution of

NU 2.10 are applied to all transactions with connected

the Company in general meeting, the number of Direc-

parties; and the Board is satisfied that transactions with

tors may not be less than two nor more than twelve. Cur-

connected parties entered into during the year complied

rently, the Board of Directors of the Company is composed

with the obligations set out in this paragraph.

of six Directors, being those listed in these financial statements. The Directors shall have power at any time and

Company structure

from time to time to appoint any person to be a Director, either to fill a casual vacancy or as an addition to the

The Company has in issue three participating share classes

existing Directors. Any Director so appointed shall hold

(“A”, “B” and “O”) with equal rights and each class is sub-

office only until the following annual general meeting

ject to different management fees and/or performance

and shall then be eligible for re-election. The Company at

fees as described in the Prospectus.

any general meeting at which a Director retires or is removed shall fill the vacated office by electing a Director

In respect of the voting rights of the Company, every par-

unless the Company shall determine to reduce the num-

ticipating shareholder or holder of management shares

ber of Directors. Directors are not required to retire by

who is present in person or by proxy shall have one vote

rotation. Any Director may appoint any person (including

on a show of hands and, on a poll, every participating

another Director) to be his alternate Director and may

shareholder present in person or by proxy shall be enti-

in like manner at any time terminate such appointment.

tled to one vote in respect of each share held by him,

Save as otherwise provided in the Articles of Association,

while holders of management shares shall have one vote

an alternate Director shall be deemed for all purposes to

only in respect of all management shares held.

Directors’ report | Crown Asia-Pacific Private Equity Annual report 2014 11

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As of 31 December 2014, the percentage of total shares in

tivities and associated financing undertaken pursuant to

issue is 35.6%, 11.5% and 52.9% for the A, B and O class

this objective involves certain inherent risks.

of shares respectively. The details of any significant investors in the Company are disclosed in note 11 to the finan-

During the financial year to 31 December 2014, the Com-

cial statements.

pany generated a profit of USD 43.7 million which, in addition to the net capital distributed in the year, resulted

A transfer of shares will not be recognized if the trans-

in net assets of the Company of USD 290,564,023, com-

feree is not a Qualifying Investor. In addition, at the dis-

pared to USD 293,491,408 for the previous year ended

cretion of the Directors, a transfer of shares may not be

31 December 2013.

recognized or registered if such transfer would result in the occurrence of certain events as disclosed in the Pro-

The Company’s profits for 2014 are USD 39.1 million up

spectus.

from USD 4.6 million in 2013 mainly due to the gains experienced on primary investments made in 2007 and 2008.

An amendment to the Company’s Articles of Association, including the variation of the rights attached to any class

The top ten investments represent almost 63.0% of the

of shares, can only be approved by means of a special

investment gains while five investments represent 89.2%

resolution of the shareholders and with the prior consent

of the investment losses incurred in 2014.

of the Central Bank of Ireland. Current year investment gains are mainly focused on 2007 Books of account

and 2008 vintage investments while 55.4% of investment gains arise from investments in the small/middle market

The measures taken by the Directors to secure compliance

buyout space and the net gains arise predominantly in the

with the Company’s obligation to keep proper books of

Asia-Pacific region.

account are the use of appropriate systems and procedures which are carefully implemented by the Adminis-

An increase in the distributions received from investments

trator. The books of account are kept at the registered

during 2014 allowed the Company to distribute USD 58.9

office of the Company.

million to investors (or 15.8% of subscribed capital) compared to USD 43.6 million (or 11.7% of subscribed capital)

Review of business and future developments

in 2013. The Company called USD 12.3 million (or 3.3% of subscribed capital) during the year, bringing investors’

The Crown Asia-Pacific Private Equity plc fund started

contributed capital to 89.9% of their total subscriptions.

committing on 13 July 2007. As of 31 December 2014, the Company has committed a total of USD 361,316,729 to

At 31 December 2014 the total return for CAPE is 14.9%1).

both primary investments and secondary transactions. An overview of the commitments made to date is contained

The Company has a credit facility with LGT Bank (Ireland)

in the Investment Advisor’s report. A summary of the port-

Limited, further details of which are provided in note 12.

folio of investments is included in these financial statements but a more detailed analysis is available from the

The credit facility is used to fund short-term investment

Administrator on request. The Company’s investment ob-

commitments that are subsequently covered by calls re-

jective is to provide shareholders with attractive long-term

ceived from the Company’s investors.

capital appreciation by investing in a diversified portfolio of primary and secondary partnership investments that

The Directors do not propose to change the current strat-

focus on private equity transactions in companies that are

egy or investment objectives of the Company for the fore-

based or have their main business operations in the Asia-

seeable future.

Pacific region. The holding of investments, investing ac-

NOTE: 1) The total return percentage represents the current year’s movement, excluding movements in net contributed capital, in the net asset value.

12 Crown Asia-Pacific Private Equity Annual report 2014 | Directors’ report

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Risk management objectives and policies

The Company is an investment company with variable capital incorporated under the Companies Acts, 1963 to

The Company is exposed to a variety of financial risks in-

2013, and is authorized by the Central Bank of Ireland as

cluding: market, currency, interest rate, credit and liquid-

a designated investment company. The Directors may

ity risks and attributes great importance to professional

take all measures necessary to the extent permitted by

risk management. The Company has investment guide-

the Memorandum and Articles of Association, the Pro-

lines that set out its overall business strategies, its toler-

spectus and the Notices issued by the Central Bank of Ire-

ance for risk and its general risk management philosophy

land to carry out the Company’s objectives.

and has established processes to monitor and control the economic impact of these risks. The Investment Manager

At the discretion of the Directors, distributions may be

provides the Company with investment recommenda-

made in the form of share repurchases or dividends, pro-

tions that are consistent with the Company’s objectives.

vided that such method of distribution shall apply uni-

The nature of the Company’s risks and the actions taken

formly to all shareholders.

to manage these risks are analyzed in more detail in note 14 to these financial statements.

The names of the persons who were Directors at any time

Results and distributions

under Directors and other information on page 4. All

during the year ended 31 December 2014 are set out Directors served for the entire year, unless otherwise statThe results for the year are set out in the statement of

ed and their fees and expenses are disclosed in note 12.

comprehensive income. Directors’ and Secretary’s interests Distributions of USD 8,574,400, USD 7,828,800, USD 13,048,000, USD 10,438,400, USD 8,947,200 and USD

The Directors and Secretary and their families had no

10,065,600 were made on 14 March 2014, 30 April 2014,

direct interests in the shares of the Company at 31 De­

21 May 2014, 29 July 2014, 15 September 2014 and

cember 2014. Through their participations in co-invest-

22 December 2014 , respectively, by way of share repur-

ment agreements with LGT Capital Invest Limited, certain

chase.

Directors have an indirect interest in the shares of the Company. Certain current Directors of the Company are

ERISA declaration

or have been directors of LGT Capital Partners (Ireland)

The Company does not constitute “plan assets” as de-

Limited, LGT Bank (Ireland) Limited and LGT Fund Manag-

fined under the Employee Retirement Income Security

ers (Ireland) Limited during the year as follows: LGT Capital Partners (Ireland) Limited

LGT Bank (Ireland) Limited

LGT Fund Managers (Ireland) Limited

Act (“ERISA”) as less than 25% of the Company is owned

Paul Garvey

X

X

X

Directors

Robert Schlachter

X

The Directors have the power to appoint any person to be

Tycho Sneyers Desmond Tobin

X X

a Director. Any Director so appointed shall hold office

No Director had at any time during the year a material

until the next annual general meeting and shall then be

interest in any contract of significance, subsisting during

eligible for re-election. Directors are not required to re-

or at the end of the year, in relation to the business of the

tire by rotation. A Director must, however, be a person

Company.

by “benefit plan investors”. Events since the year end Events since the year end are disclosed in note 17 to the financial statements.

X X

X

approved for that purpose by the Central Bank of Ireland.

Directors’ report | Crown Asia-Pacific Private Equity Annual report 2014 13

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All Directors are non-executive directors as the managerial functions have been delegated to other entities. Konrad Baechinger became an independent director from 1 June 2013. Independent Auditors PricewaterhouseCoopers have expressed their willingness to continue in office in accordance with section 160(2) of the Companies Act, 1963.

On behalf of the Board Desmond Tobin Paul Garvey 12 February 2015

14 Crown Asia-Pacific Private Equity Annual report 2014 | Directors’ report

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Custodian’s report

to the members of Crown Asia-Pacific Private Equity plc

Report of the Custodian to the Shareholders

Opinion

We have enquired into the conduct of Crown Asia-Pacific

In our opinion, the Company has been managed during

Private Equity plc (the “Company”) for the year ended

the year, in all material respects:

31 December 2014 in our capacity as Custodian to the

> in accordance with the limitations imposed on the

Company.

investment and borrowing powers of the Company by the Memorandum and Articles of Association and by

This report including the opinion has been prepared for,

the Central Bank of Ireland under the powers granted

and solely for, the shareholders in the Company as a body,

to it by the Companies Act, 1990 Part XIII, and the In-

in accordance with the Central Bank of Ireland’s Non-

vestment Funds, Companies and Miscellaneous Provi-

UCITS Notice 7, and for no other purpose. We do not, in

sions Act, 2005; and

giving this opinion, accept or assume responsibility for

> otherwise in accordance with the provisions of the

any other purpose or to any other person to whom this

Memorandum and Articles of Association, the Com­

report is shown.

panies Act, 1990 Part XIII, and the Investment Funds, Companies and Miscellaneous Provisions Act, 2005.

Responsibilities of the Custodian Our duties and responsibilities are outlined in the Central

Credit Suisse International, Dublin Branch

Bank of Ireland’s Non-UCITS Notice 7. One of those duties

Dublin

is to enquire into the conduct of the Company in each annual accounting period and report thereon to the shareholders.

12 February 2015

Our report shall state whether, in our opinion, the Company has been managed in that period, in accordance with the provisions of the Company’s Memorandum and Articles of Association and the Non-UCITS Notices. It is the overall responsibility of the Company to comply with these provisions. If the Company has not so complied, we as Custodian must state why this is the case and outline the steps which we have taken to rectify the situation. Basis of Custodian opinion The Custodian conducts such reviews as it, in its reasonable opinion, considers necessary in order to comply with its duties as outlined in Non-UCITS Notice 7 and to ensure that, in all material respects, the Company has been managed: (i) in accordance with the limitations imposed on its investment and borrowing powers by the provisions of its constitutional documentation and the appropriate regulations; and (ii) otherwise in accordance with the Company’s constitutional documentation and the appropriate regulations.

Custodian’s report | Crown Asia-Pacific Private Equity Annual report 2014 15

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Independent Auditors’ report

to the members of Crown Asia-Pacific Private Equity plc

We have audited the financial statements of the Compa-

Scope of the audit of the financial statements

ny for the year ended 31 December 2014 which comprise the statement of comprehensive income, balance sheet,

An audit involves obtaining evidence about the amounts

statement of changes in net assets attributable to share-

and disclosures in the financial statements sufficient to

holders, the cash flow statement, the portfolio of invest-

give reasonable assurance that the financial statements

ments and the related notes.

The financial reporting

are free from material misstatement, whether caused by

framework that has been applied in their preparation is

fraud or error. This includes an assessment of: whether

Irish law and International Financial Reporting Standards

the accounting policies are appropriate to the Company’s

(IFRSs) as adopted by the European Union.

circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant ac-

Respective responsibilities of Directors and Auditors

counting estimates made by the Directors; and the overall presentation of the financial statements. In addition, we

As explained more fully in the Statement of Directors’ re-

read all the financial and non financial information in the

sponsibilities set out on page 9, the Directors are respon-

annual report to identify material inconsistencies with

sible for the preparation of the financial statements giv-

the audited financial statements and to identify any in-

ing a true and fair view. Our responsibility is to audit and

formation that is apparently materially incorrect based

express an opinion on the financial statements in accord-

on, or materially inconsistent with, the knowledge ac-

ance with Irish law and International Standards on Audit-

quired by us in the course of performing the audit. If we

ing (UK and Ireland). Those standards require us to com-

become aware of any apparent material misstatements or

ply with the Auditing Practices Board’s Ethical Standards

inconsistencies, we consider the implications for our re-

for Auditors.

port.

This report, including the opinions, has been prepared for

Opinion on financial statements

and only for the Company’s members as a body in accordance with Section 193 of the Companies Act, 1990 and for

In our opinion the financial statements:

no other purpose. We do not, in giving these opinions,

> give a true and fair view, in accordance with IFRSs

accept or assume responsibility for any other purpose or

as adopted by the European Union, of the state of the

to any other person to whom this report is shown or into

Company’s affairs as at 31 December 2014 and of their

whose hands it may come save where expressly agreed by

results and cash flows for the year then ended; and

our prior consent in writing.

> have been properly prepared in accordance with the requirements of the Companies Acts 1963 to 2013.

16 Crown Asia-Pacific Private Equity Annual report 2014 | Independent Auditors’ report

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Matters on which we are required to report by the Companies Acts 1963 to 2013 > We have obtained all the information and explanations which we consider necessary for the purposes of our audit. > In our opinion, proper books of account have been kept by the Company. > The financial statements are in agreement with the books of account. > In our opinion, the information given in the Directors’ Report is consistent with the financial statements. Matters on which we are required to report by exception We have nothing to report in respect of the provisions in the Companies Acts 1963 to 2013 which require us to report to you if, in our opinion, the disclosures of Directors’ remuneration and transactions specified by law are not made.

Fiona de Búrca for and on behalf of PricewaterhouseCoopers Chartered Accountants and Statutory Audit Firm Dublin 12 February 2015

NOTE: The Financial Statements are published at www.lgt-capital-partners.com. The Directors together with the Investment Manager are responsible for the maintenance and integrity of the website as far as it relates to Crown Asia-Pacific Private Equity plc. The work carried out by the Auditors does not involve consideration of the maintenance and integrity of the website and accordingly, the Auditors accept no responsibility for any changes that have occurred to the Financial Statements presented on the website. Legislation in the Republic of Ireland governing the presentation and dissemination of the Financial Statements may differ from legislation in other jurisdictions.

Independent Auditors’ report | Crown Asia-Pacific Private Equity Annual report 2014 17

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Statement of comprehensive income FOR THE YEAR ENDED 31 DECEMBER 2014 Amounts are reported in USD

Note

2014

2013

Operating income Interest income

597,267

334,522

1,744,998

535,733

(7,310)

(30,340)

46,254,047

6,925,924

48,589,002

7,765,839

Dividend income Losses on foreign exchange, net Net gain on investments at fair value through profit or loss

3

Total net income Operating expenses Investment management fee

5

(851,754)

(892,766)

Performance fee

5

(561,192)

1,628,244

Administration fee

5

(178,987)

(186,204)

Custodian and trustee fees

5

(118,778)

(121,804)

Audit fee

5

(39,195)

(27,703)

Partnership expenses

4

(2,997,153)

(3,316,100)

(127,640)

(124,963)

Total operating expenses

Other operating expenses

(4,874,699)

(3,041,296)

Operating profit

43,714,303

4,724,543

(29,192)

(70,564)

43,685,111

4,653,979

Withholding tax

(12,496)

(55,740)

Profit for the year

43,672,615

4,598,239

TOTAL COMPREHENSIVE PROFIT FOR THE YEAR

43,672,615

4,598,239

Finance costs Profit before taxation

The accompanying notes are an integral part of the financial statements. All amounts arose solely from continuing operations. There are no gains and losses other than those dealt with in the statement of comprehensive income.

On behalf of the Board Desmond Tobin Paul Garvey 12 February 2015

18 Crown Asia-Pacific Private Equity Annual report 2014 | Statement of comprehensive income

Strictly confidential

Balance sheet AS OF 31 DECEMBER 2014 Amounts are reported in USD

Note

2014

2013

– Cash and cash equivalents

6

8,759,084

4,359,780

– Accrued income and other receivables

7

14,745

16,204

8,773,829

4,375,984

Assets Current assets

Total current assets Non-current assets – Investments at fair value through profit or loss

282,705,364

294,976,462

Total non-current assets

8

282,705,364

294,976,462

TOTAL ASSETS

291,479,193

299,352,446

152,848,000

199,448,000

Capital and reserves attributable to shareholders – Share capital

11

– Retained earnings

137,716,023

94,043,408

Net assets attributable to shareholders

290,564,023

293,491,408

Current liabilities – Accrued expenses and other payables – Due to banks

9

353,978

361,038

10



5,500,000

353,978

5,861,038

561,192



561,192



291,479,193

299,352,446

Total current liabilities Non-current liabilities – Accrued expenses and other payables

9

Total non-current liabilities Total liabilities

The accompanying notes are an integral part of the financial statements.

NET ASSET VALUE BY SHARE CLASS (“NAV”) 1) As of 31 December 2014 Shares issued

As of 31 December 2013

Total NAV (in USD)

Number of shares in issue

NAV per share (in USD)

Total NAV (in USD)

Number of shares in issue

NAV per share (in USD)

“A”

98,500,205

595,063.16

165.53

100,202,007

699,461.91

143.26

“B”

31,277,272

191,797.90

163.07

31,690,387

226,375.62

139.99

“O”

160,786,546

885,789.27

181.52

161,599,014

1,032,452.86

156.52

Total

290,564,023

1,672,650.33

293,491,408

1,958,290.39

As of 31 December 2012 Shares issued

Total NAV (in USD)

Number of shares in issue

NAV per share (in USD)

“A”

107,909,499

769,218.55

140.28

“B”

34,762,516

249,429.28

139.37

“O”

174,926,754

1,130,327.46

154.76

Total

317,598,769

2,148,975.29

On behalf of the Board

Desmond Tobin

Paul Garvey

12 February 2015

NOTE: 1) The NAV per share in the table above may be different to individual investors’ NAV per share as disclosed in their capital account statements. This is because the NAV per share in the table above is based on average figures for all investors in each individual share class.

Balance sheet | Crown Asia-Pacific Private Equity Annual report 2014 19

Strictly confidential

Statement of changes in net assets attributable to shareholders FOR THE YEAR ENDED 31 DECEMBER 2014 Amounts are reported in USD

At 1 January 2013

Share capital

Retained earnings

Total

228,153,600

89,445,169

317,598,769



4,598,239

4,598,239

14,912,000



14,912,000

Total comprehensive profit for the year Issue of shares

(43,617,600)



(43,617,600)

Net (decrease)/increase for the year

Repurchase of own shares

(28,705,600)

4,598,239

(24,107,361)

At 31 December 2013

199,448,000

94,043,408

293,491,408

At 1 January 2014

199,448,000

94,043,408

293,491,408 43,672,615

Total comprehensive profit for the year



43,672,615

12,302,400



12,302,400

(58,902,400)



(58,902,400)

Net (decrease)/increase for the year

(46,600,000)

43,672,615

(2,927,385)

At 31 December 2014

152,848,000

137,716,023

290,564,023

Issue of shares Repurchase of own shares

The accompanying notes are an integral part of the financial statements.

20 Crown Asia-Pacific Private Equity Annual report 2014 | Statement of changes in net assets attributable to shareholders

Strictly confidential

Cash flow statement FOR THE YEAR ENDED 31 DECEMBER 2014 Amounts are reported in USD

2014

2013

Purchase of investments

(6,418,556)

(10,563,872)

Proceeds from return of capital in investments

30,852,557

19,702,964

Proceeds from realized gains on investments

34,091,144

22,072,495

Cash flows from/(used in) operating activities

Dividend income

1,744,998

535,734

Withholding tax

(12,496)

(55,740)

Interest received Operating expenses paid Net cash flows from operating activities

597,287

334,519

(4,315,843)

(4,698,593)

56,539,091

27,327,507

Cash flows from/(used in) financing activities (32,477)

(70,554)

Proceeds from bank loans

Interest paid

5,100,000

14,000,000

Repayments of bank loans

(10,600,000)

(11,500,000)

Payments for repurchase of own shares

(46,600,000)

(28,705,600)

Net cash flows used in financing activities

(52,132,477)

(26,276,154)

Net increase in cash and cash equivalents

4,406,614

1,051,353

4,359,780

3,338,767

(7,310)

(30,340)

8,759,084

4,359,780

Cash and cash equivalents at beginning of year Exchange losses on cash and cash equivalents CASH AND CASH EQUIVALENTS AT END OF YEAR

The accompanying notes are an integral part of the financial statements.

Cash flow statement | Crown Asia-Pacific Private Equity Annual report 2014 21

Strictly confidential

Notes to the financial statements 1. Summary of significant accounting policies (b) Use of estimates The principal accounting policies applied in the prepara-

The preparation of financial statements in conformity

tion of these financial statements are set out below.

with IFRS requires management to make estimates and as-

These policies have been consistently applied to all the

sumptions that affect the reported amounts of assets and

years presented, unless otherwise stated.

liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported

(a) Basis of preparation

amounts of revenues and expenses during the reporting

The financial statements of the Company have been pre-

year. The estimates and associated assumptions are based

pared in accordance with International Financial Report-

on historical experience and various other factors that are

ing Standards (“IFRS”) as adopted by the EU, and Irish

believed to be reasonable under the circumstances, the

statute comprising the Companies Acts, 1963 to 2013.

results of which form the basis of making the judgements about carrying values of assets and liabilities that are not

The financial statements have been prepared under the

readily apparent from other sources. Actual results could

historical cost convention, as modified by the revaluation

differ from these estimates (see note 2 also).

of financial assets and liabilities held at fair value through profit or loss.

(c) Foreign currency translation (i) Functional and presentation currency

The preparation of financial statements in conformity

Items included in the Company’s financial statements

with IFRS as adopted by the EU requires the use of ac-

are measured using the currency of the primary eco-

counting estimates. It also requires the Board of Directors

nomic environment in which it operates (the “Func-

to exercise its judgement in the process of applying the

tional Currency”). This is the US Dollar, which reflects

Company’s accounting policies.

the Company’s primary activity of investing in assets whose base currency is predominantly the US Dollar.

The areas involving a higher degree of judgement or complexity, or where assumptions and estimates are sig-

The Company has adopted the US Dollar as its presen-

nificant to the financial statements are disclosed in note

tation currency. Foreign currency assets and liabilities

1(b) and note 2.

are translated into US Dollar at the exchange rates ruling at the balance sheet date.

Standards and amendments to published standards that are mandatory for the financial year beginning on or

(ii) Transactions and balances

after 1 January 2014.

Foreign currency transactions are translated into US Dollar using the exchange rates prevailing at the dates

There are no IFRS or International Financial Reporting

of the transactions. Foreign exchange gains and losses

interpretations Committee (“IFRIC”) interpretations that

resulting from the settlement of such transactions and

are effective for the first time for the financial year begin-

from the translation at year end exchange rates of as-

ning on or after 1 January 2014 that would be expected

sets and liabilities denominated in foreign currencies

to have a material impact on the Company.

are recognized in the statement of comprehensive income. Translation differences on non-monetary items,

New standards, amendments and interpretations effective

such as financial assets and liabilities held at fair value

after 1 January 2015 and have not been early adopted

through profit or loss, are reported as part of the fair value gain or loss.

A number of new standards, amendments to standards and interpretations are effective for annual periods beginning after 1 January 2015, and have not been applied in preparing these financial statements. None of these are expected to have a significant effect on the financial statements of the Company.

22 Crown Asia-Pacific Private Equity Annual report 2014 | Notes to the financial statements

Strictly confidential

(d) Cash and cash equivalents

Financial assets that are classified as loans and receivables

Cash and cash equivalents comprise demand, call and

include balances due from brokers and accounts receiv­

term deposits with a maturity of three months or less. For

able.

the purpose of the cash flow statement, cash and cash equivalents comprise all cash, short-term deposits and

Financial liabilities that are not at fair value through prof-

other money market instruments, net of short-term over-

it or loss include balances due to brokers and accounts

drafts, with a maturity of three months or less. Cash and

payable.

cash equivalents are recorded at nominal value. Bank overdrafts, if any, are shown as current liabilities in the

(i) Recognition and derecognition

balance sheet.

The Company recognizes financial assets and financial liabilities on the date it becomes a party to the contractual

(e) Due from and due to brokers

provisions of the instrument.

Amounts due from and to brokers represent receivables for securities sold and payables for securities purchased

Financial assets are derecognized when the rights to re-

that have been contracted for but not yet settled or deliv-

ceive cash flows from the investments have expired or the

ered on the balance sheet date, respectively. Amounts

Company has transferred substantially all risks and re-

due from and to brokers are recorded initially at fair val-

wards of ownership.

ue and subsequently measured at amortized cost using the effective interest method.

Financial liabilities are derecognized when they are extinguished, that is, when the obligation specified in the con-

(f) Borrowings

tract is discharged, cancelled or expires.

Borrowings are recognized initially at fair value, net of transaction costs incurred. Borrowings are subsequently

Regular-way purchases and sales of investments are rec-

stated at amortized cost; any difference between the pro-

ognized on the trade date. From this date, any gains and

ceeds and the redemption value is recognized in the in-

losses arising from changes in fair value of the financial

come statement over the period of the borrowing using

assets or financial liabilities are recorded.

the effective interest method. Borrowings are shown as current liabilities unless the Company has the uncondi-

(ii) Measurement

tional right to defer settlement for at least 12 months

Financial instruments are measured initially at fair value.

after the balance sheet date. Interest expense is recog-

Transaction costs on financial assets and financial liabili-

nized on the basis of the effective interest method and is

ties at fair value through profit or loss are expensed im-

included in finance costs.

mediately.

(g) Financial assets and liabilities at fair value through

Subsequent to initial recognition, all instruments classi-

profit or loss

fied at fair value through profit or loss are measured at

The Company, in accordance with IAS 39, classifies its

fair value with changes in their fair value recognized in

investments as financial assets and liabilities at fair val-

the statement of comprehensive income.

ue through profit or loss category. The category of financial assets and liabilities at fair value through profit

(iii) Fair value measurement principles

or loss comprises: > financial instruments held for trading. These include

Listed securities

futures, forward contracts, options and swaps; and

The fair value of financial assets and liabilities traded in

> financial instruments designated at fair value through

active markets (such as publicly traded derivatives and

profit or loss upon initial recognition. These include

trading securities) are based on quoted market prices at

financial assets that are not held for trading purposes

the close of trading on the year end date. The Board of

and which may be sold.

Directors considers markets to be active when transac-

Notes to the financial statements | Crown Asia-Pacific Private Equity Annual report 2014 23

Strictly confidential

tions are occurring frequently enough on an ongoing ba-

ance sheet date of the Company in those situations

sis to obtain reliable pricing information on an ongoing

where no December valuation of the underlying fund

basis. If observed transactions are no longer regularly oc-

is available. This includes a detailed analysis of exits

curring, or the only observed transactions are distressed/

(trade sales, initial public offerings, etc.) which the

forced sales, the market would no longer be considered

fund investments have had in the period between the

active. In cases where it is judged that there is no longer

latest available reporting and the balance sheet date

an active market, any transactions that occur may never-

of the Company, as well as other relevant valuation

theless provide evidence of current market conditions

information. This information is a result of continuous

which will be considered in estimating a fair value using

contact with the investment managers and, specifical-

the valuation technique as described. Financial instru-

ly, by monitoring calls made to the investment manag-

ments are assessed separately when determining if there

ers, distribution notices received from the investment

is an active market. None of the investments outlined in

managers in the period between the latest available

the portfolio of investments belong to this category as

report and the balance sheet date of the Company, as

of 31 December 2014 (2013: nil).

well as the monitoring of other financial information sources and the assessment thereof;

Primary partnership investments

> reference to recent transaction prices;

The fair value of financial instruments that are not traded

> result of operational and environmental assessments:

in an active market are determined by using valuation

periodic valuation reviews are made of the valuations

techniques. Private equity investments for which market

of the underlying investments as reported by the in-

quotations are not readily available are valued at their

vestment managers to determine if the values are rea-

fair values by the Board of Directors. Private equity valu-

sonable, accurate and reliable. These reviews include a

ations are usually generated by the general partners or

fair value estimation using widely recognized valua-

managers of the underlying portfolio of investments on a

tion methods such as multiples analysis and discounted

quarterly basis and are actually received with a delay of at

cash flow analysis;

least one to two months after the quarter end date. As a

> review of management information provided by the

result, the year-end net asset value predominantly con-

managers/administrators of the fund investments on a

sists of portfolio valuations provided by the general part-

regular basis; and

ners of the underlying partnerships as of 30 September

> mark-to-market valuations for quoted investments

2014, adjusted for subsequent capital calls and distribu-

held by the fund investments which make up a signifi-

tions. If the Board of Directors comes to the conclusion

cant portion of the Company’s net asset value.

upon recommendation of the Investment Manager after applying the above-mentioned valuation methods, that

All fair valuations may differ significantly from values

the most recent valuation reported by the manager/ad-

that would have been used had ready markets existed,

ministrator of a fund investment is materially misstated,

and the differences could be material. The valuation of

it will make the necessary adjustments using the results of

the investments is performed on a regular basis, but at

its own review and analysis. The valuation adjustments

least quarterly.

relate to events subsequent to the last capital account valuation statement received but based upon informa-

Secondary partnership investments

tion provided by the general partner. In estimating the

The fair value measurement principles applied to second-

fair value of fund investments, the Investment Manager

ary investments are the same as those applied to primary

in its valuation recommendation to the Board of Directors

investments with the exception that commitments to sec-

considers all appropriate and applicable factors (includ-

ondary partnership investments are recognized in the

ing a sensitivity to non-observable market factors) rele-

Company’s accounts when the sale and purchase agree-

vant to their value, including but not limited to the fol-

ment is signed but cost and fair value are not recognized

lowing:

until such time as the general partners, consent has been

> reference to the fund investment’s reporting informa-

received and any rights of first refusals have expired.

tion including consideration of any time lags between the date of the latest available reporting and the bal-

24 Crown Asia-Pacific Private Equity Annual report 2014 | Notes to the financial statements

Strictly confidential

Where a general partner valuation specific to the Com-

(l) Payables and accrued expenses

pany is not available, a comparable valuation pertaining

Payables and accrued expenses are recognized initially at

to a similar commitment may be used as a representative

fair value and subsequently stated at amortized cost. Ex-

of the fair value of the Company’s investment.

penses are recognized in the statement of comprehensive income on an accruals basis.

(h) Financial assets and liabilities at amortized cost Financial assets classified as loans and receivables are car-

(m) Share issues and repurchases

ried at amortized cost using the effective interest rate

The share capital of the Company was reclassified from

method, less impairment losses, if any. Financial liabilities,

equity to debt in 2013 to better reflect the contractual

other than those at fair value through profit or loss, are

obligation between the Company and its shareholders in

measured at amortized cost using the effective interest

accordance with IAS 32. The reclassification has no impact

rate method.

on shareholders from an economic or controlling perspective.

(i) Allocation of proceeds from investments Distributions from primary investments are typically ap-

Shares are classified as financial liabilities under IAS 32.

plied to return of capital and realized gains on the basis

Only the Company can instruct the issuance or repurchase

of the allocation provided by the general partner. In the

of its shares. The Company issues shares in lieu of capital

absence of this allocation the distribution is applied as

calls requested from investors up to the maximum of their

a return of capital until all contributed capital has been

subscribed capital amount.

returned and thereafter applied to realized gains. Distributions from secondary investments are typically applied

The Company has the option to purchase shares from its

as a return of capital until such time as the contributed

investors by way of a share repurchase and the share cap-

capital has been recovered in full and thereafter applied

ital is reduced on the distribution date accordingly. Share

to realized gains. Any portion of the distributions which

repurchases can be instructed by the Company by way of

is identified as re-callable is included in the unfunded

distributing proceeds received from its investments, once

commitment of the relevant investment.

all outstanding obligations and expenses of the Company have been provided for, in accordance with the Company’s

(j) Dividends and interest income

distribution policy. The Company shall not unreasonably

Dividend income from financial assets at fair value

delay the distribution of liquidity available from the re-

through profit or loss is recognized in the statement of

alization proceeds from portfolio investments, to share-

comprehensive income within dividend income when the

holders.

Company’s right to receive payments is established. Interest from bank, investors and underlying debt securities at

(n) Segment reporting

fair value through profit or loss is recognized in the state-

Operating segments are reported in a manner consistent

ment of comprehensive income within interest income

with the internal reporting used by the chief operating

based on the effective interest rate.

decision-maker. The chief operating decision-maker, who is responsible for allocating resources and assessing perfor-

(k) Withholding tax

mance of the operating segments, has been identified as

The Company currently incurs withholding taxes imposed

the Investment Manager.

by certain countries on investment income and capital gains. Such income or gains are recorded gross of with-

The sole reportable operating segment of the Company is

holding taxes in the statement of comprehensive income.

investing in private equity investments. Asset allocation is

Withholding tax is shown as a separate item in the state-

based on a single, integrated investment strategy and the

ment of comprehensive income.

Company’s performance is evaluated on an overall basis. There were no changes in the reportable segments during 2014 or 2013.

Notes to the financial statements | Crown Asia-Pacific Private Equity Annual report 2014 25

Strictly confidential

2. Critical accounting estimates and judgements

4. Partnership expenses

The Company makes estimates and assumptions concern-

2014 USD

2013 USD

Management fees

3,440,967

2,694,220

Other partnership expenses

(443,814) 2,997,153

621,880 3,316,100

ing the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of

The Company will generally invest in limited partnerships.

assets within the next financial year are:

The manager of these partnerships, referred to as the Functional currency estimate

general partner, usually charges a fee and costs related to

The Board of Directors considers the US Dollar to be the cur-

the investment selection, monitoring and administrative

rency that most faithfully represents the economic effect of

processes, among others. These indirect fees may typically

the underlying transactions, events and conditions. The US

vary between 1% and 2.5% of either net asset value or

Dollar is the currency in which management measures its

commitments of such partnerships.

performance and reports its results for the Company. 5. Other expenses Fair value of non-quoted investments

The Administrator is paid a fee, which includes administra-

The Board of Directors uses its judgement to select a variety

tion and transfer agency services, quarterly in advance at

of methods and makes assumptions that are not always

the annual rate of 0.06% of the Company’s net asset value

supported by observable market prices or rates.

but subject to a minimum fee of EUR 60,000 per annum.

The majority of the Company’s investments use either U.S.

Custodian and trustee fees are accrued and paid monthly

GAAP or utilize a combination of IFRS and International

in arrears at an annual rate of 0.02% each of the Company’s

Private Equity and Venture Capital Valuation Guidelines

net asset value, with the former capped at USD 60,000 per

(“IPEV Guidelines”) to value their underlying investments.

annum.

The predominant methodology adopted by the general partners for the buyout investments in CAPE is a market

The Investment Manager is paid an annual fee calculated

approach which takes market multiples using a specified

as a percentage of the subscribed capital of the Company;

financial measure (e.g. EBIDTA), recent public market and

class A and class B shares are charged 0.75% and 1.00% per

private transactions and other available measures for valu-

annum from years one to five. Each year thereafter, class A

ing comparable companies.

and class B are charged 0.60% and 0.75% per annum of net asset value, respectively. For class O shares, no manage-

The use of valuation techniques requires them to make

ment fee shall be payable. The Investment Manager’s fee is

estimates. Changes in assumptions could affect the report-

paid quarterly in arrears.

ed fair value of these investments. The Investment Manager is also entitled to a performance 3. Net gain on investments at fair value through

fee that is accrued based on a percentage of the gain in the

profit or loss

Company’s value over the year, but only if it exceeds net 2014 USD

2013 USD

contributed capital plus an 8% compounded rate of return

34,426,717

22,044,963

O shares. The performance fee also depends on the type

(335,573)

27,532

Net movement in unrealized gain/(loss)

12,162,903

(15,146,571)

Net gain on investment at fair ­value through profit or loss

46,254,047

6,925,924

Net realized gain (Loss)/gain on foreign currency exchange

(the “Hurdle”). No performance fee is payable for class of investment, 5.0% (in the case of primary partnership investments and 10.0% (in the case of secondary partnership investments, on which the gain has arisen and will only be payable when the contributed capital and the Hurdle have been distributed back to the investors. There was a performance fee accrual of USD 561,192 as of 31 December 2014 (31 December 2013: None).

26 Crown Asia-Pacific Private Equity Annual report 2014 | Notes to the financial statements

Strictly confidential

Audit fees disclosed in the financial statements relate

used in making the fair value measurements. The hierar-

wholly to the Company’s statutory audit. There are no

chy has the following levels:

other fees paid to PricewaterhouseCoopers.

> Level 1 – quoted prices (unadjusted) in active markets

6. Cash and cash equivalents

> Level 2 – inputs other than quoted prices included

for identical assets or liabilities;

Cash at bank Fixed-term deposits

2014 USD

2013 USD

259,084

359,780

8,500,000 8,759,084

4,000,000 4,359,780

The cash at bank balance was held with Credit Suisse

within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and > Level 3 – inputs for the asset or liability that are not based on observable market data (unobservable inputs).

International, Dublin Branch. The fixed-term deposits of USD 1,000,000 and USD 7,500,000 were held with Credit

The level in the fair value hierarchy within which the fair

Suisse International, Dublin Branch for a two day and five

value measurement is categorized in its entirety is deter-

day period to 2 January 2015 and 5 January 2015 at a rate

mined on the basis of the lowest level input that is sig-

of 0.07% respectively.

nificant to the fair value measurement in its entirety. For this purpose, the significance of an input is assessed

In 2013, the cash at bank balance was held with Credit

against the fair value measurement in its entirety. If a fair

Suisse International, Dublin Branch. There were two

value measurement uses observable inputs that require

fixed-term deposits held with Credit Suisse International,

significant adjustment based on unobservable inputs,

Dublin Branch. One for USD 3,000,000 for the seven day

that measurement is a Level 3 measurement. Assessing

period to 2 January 2014 at a rate of 0.08% and a second

the significance of a particular input to the fair value

for USD 1,000,000 for the seven day period to 6 January

measurement in its entirety requires judgement, consid-

2014 at a rate of 0.08%.

ering factors specific to the asset or liability.

7. Accrued income and other receivables

Bank interest receivable Other receivables and prepaid expenses

The determination of what constitutes “observable” re-

2014 USD

2013 USD

quires significant judgement by the Board of Directors.

17

36

that market data that is readily available, regularly dis-

14,728 14,745

16,168 16,204

The Board of Directors considers observable data to be tributed or updated, reliable and verifiable, not proprietary, and provided by independent sources that are actively involved in the relevant market.

All amounts included above fall due within one year. Investments whose values are based on quoted market 8. Investments at fair value through profit or loss

prices in active markets, and therefore classified within

As of 31 December 2014, Crown Asia-Pacific Private Equity

Level 1, include active listed equities. The Company does

plc had subscribed interests in 37 funds (mainly limited

not adjust the quoted price for these instruments. The

partnerships). The total committed capital amounted to

Company does not hold any listed securities (2013: none).

USD 361,316,729 of which USD 328,368,326 has been contributed to date. The details of these funds are shown

Financial instruments that trade in markets that are not

in the portfolio of investments together with an outline

considered to be active but are valued based on quoted

of the Company’s commitments to the funds. The commit-

market prices, dealer quotations or alternative pricing

ments to these private equity partnerships will be funded

sources supported by observable inputs are classified

by contributions from the Company’s investors.

within Level 2. The Company currently has no instruments classified as Level 2 (2013: none).

IFRS 7 “Financial Instruments: Disclosures” requires the Company to classify fair value measurements using a fair

Instruments classified within Level 3 have significant

value hierarchy that reflects the significance of the inputs

unobservable inputs, as they trade infrequently. Level 3 instruments include private equity investments for which

Notes to the financial statements | Crown Asia-Pacific Private Equity Annual report 2014 27

Strictly confidential

observable prices are not available. The Company values

Total unrealized gains or losses in the above table are in-

these investments as described in note 1(g) of the finan-

cluded in the statement of comprehensive income under

cial statements. All the Company’s investments at 31 De-

net gain on investments at fair value through profit or

cember 2014 and 31 December 2013 are considered Level

loss.

3 investments. The assets and liabilities included in the above table are Prior to making a commitment to primary investments,

carried at amortised cost; their carrying values are a rea-

direct investments or purchasing secondary investments

sonable approximation of fair value.

the Fund’s Investment Manager carries out a comprehensive due diligence review of the proposed investment.

The strategies and percentage of fair value include the

This due diligence review encompasses: (i) prior invest-

following: Interest rate, foreign currency and other price

ment performance; (ii) legal terms and conditions; (iii)

risks represent the market risks to which such partner-

investment team review; and (iv) reference calls with

ships are directly exposed. Furthermore in the absence of

associated parties. Based on the outcome of the due

reliable market indicators, discernible market trends or

diligence review, the Investment Manager then makes

benchmarks, the Directors have evaluated that 5% is a

an investment decision on behalf of the Fund. The Invest-

reasonable possible change on a strategy by strategy basis

ment Manager continuously reviews all investments to

as calculated on page 32.

determine if fair values are being provided by the general partner and/or investment manager. If it is determined

2014 %

2013 %

that the values provided are not fair values under IFRS

Diversification by industry (FMV)

then the Investment Manager revalues the investment

Industrial products

18.6%

18.8%

Financial

17.5%

17.0%

Consumer products

13.4%

15.0%

Consumer services

12.0%

10.7%

IT

11.7%

13.2%

Industrial services

9.4%

9.5%

During the years ended 31 December 2014 and 31 Decem-

Life sciences

5.3%

4.9%

ber 2013, there were no transfers between the three lev-

Cleantech

4.2%

2.9%

els of financials assets.

Healthcare

2.9%

3.1%

Real estate

2.3%

2.7%

Telecom

1.7%

1.5%

1.0% 100.0%

0.7% 100.0%

using the techniques described in note 2 Critical accounting estimates and judgements and proposes a valuation adjustment to the Board of Directors.

The following table represents the roll forward valuation of Level 3 instruments at 31 December 2014 and 31 De-

Media Total

cember 2013: The following tables analyzes within the fair value hierarchy the Fund’s assets and liabilities (by class) at 31 Decem-

Investments at fair value through profit or loss

Valuation at 1 January

2014 USD

2013 USD

294,976,462

319,262,125

Additions

6,418,556

10,563,872

Disposals

(64,943,701)

(41,775,459)

Realized gains

35,265,328

24,066,081

Realized losses

(1,174,184)

(1,993,586)

Unrealized gains Unrealized losses Valuation at 31 December Change in unrealized gains or losses for Level 3 assets held at year end and included in other net changes in fair value on financial assets and financial liabilities at fair value through profit or loss

31,038,798

14,245,732

(18,875,895) 282,705,364

(29,392,303) 294,976,462

12,162,903

(15,146,571)

ber 2014 and 2013.

28 Crown Asia-Pacific Private Equity Annual report 2014 | Notes to the financial statements

Strictly confidential

AS OF 31 DECEMBER 2014 Amounts are reported in USD

Level 1

Level 2

Level 3

Total

8,759,084





8,759,084



14,745



14,745

8,759,084

14,745



8,773,829





282,705,364

282,705,364





282,705,364

282,705,364

8,759,084

14,745

282,705,364

291,479,193

Share capital



152,848,000



152,848,000

Retained earnings



137,716,023



137,716,023



290,564,023



290,564,023

Accrued expenses and other payables



353,978



353,978

Due to banks











353,978



353,978

Assets Current assets Cash and cash equivalents Accrued income and other receivables Total current assets Non-current assets Investments at fair value through profit or loss Total non-current assets TOTAL ASSETS Capital and reserves attributable to shareholders

Net assets attributable to shareholders Current liabilities

Total current liabilities Non-current liabilities



561,192



561,192

Total non-current liabilities

Accrued expenses and other payables



561,192



561,192

TOTAL LIABILITIES



291,479,193



291,479,193

Level 1

Level 2

Level 3

Total

4,359,780





4,359,780



16,204



16,204

4,359,780

16,204



4,375,984





294,976,462

294,976,462





294,976,462

294,976,462

4,359,780

16,204

294,976,462

299,352,446

Share capital



199,448,000



199,448,000

Retained earnings



94,043,408



94,043,408



293,491,408



293,491,408

AS OF 31 DECEMBER 2013 Amounts are reported in USD Assets Current assets Cash and cash equivalents Accrued income and other receivables Total current assets Non-current assets Investments at fair value through profit or loss Total non-current assets TOTAL ASSETS Capital and reserves attributable to shareholders

Net assets attributable to shareholders Current liabilities Accrued expenses and other payables Due to banks Total current liabilities



361,038



361,038

5,500,000





5,500,000

5,500,000

361,038



5,861,038

















5,500,000

293,852,446



299,352,446

Non-current liabilities Accrued expenses and other payables Total non-current liabilities TOTAL LIABILITIES

Notes to the financial statements | Crown Asia-Pacific Private Equity Annual report 2014 29

Strictly confidential

9. Accrued expenses and other payables

Management shares

2014 USD

2013 USD

212,512

214,503

Administration fee

48,882

51,176

Custodian and trustee fees

29,856

19,821

Audit fee

27,409

29,965

Due within one year Investment management fee

Commitment fee Trade creditors and accruals Interest payable on bank loan

5,111

7,667

30,208

34,621

– 353,978

3,285 361,038

561,192 561,192

– –

Management shares issued by the Company amount to USD 3, being three management shares of USD 1 each, fully paid. The management shares do not form part of the net asset value of the Company and are thus disclosed in the financial statements by way of this note only. In the opinion of the Board of Directors, this disclosure reflects the nature of the Company’s business as an investment fund.

Due after one year Performance fee

Participating shares The issued participating share capital is at all times equal

A performance fee provision of USD 561,192 was accrued

to the net asset value of the Company. Shares are issued

at the year end as the net assets exceeded the net capital

and redeemed in lieu of capital calls and distributions

contributed by investors to date, together with an 8%

made by the Company which in turn are limited by inves-

compound annual rate of return on their net contributed

tors, total subscribed capital and the Company’s distribu-

capital. The performance fee will not be paid to the

tion policy, respectively.

Investment Manager until such time as each investor has received an amount equal to its contributed capital plus

The voting rights of the participating shareholders are as

the compounded 8% rate of return on such net contrib-

outlined in the Directors, report and all share classes are

uted capital.

equal in respect of their voting rights. The issue and redemption of shares in the Company are determined by

10. Due to banks

the capital calls and distributions as declared by the Com2014 USD

2013 USD

pany in accordance with the provisions of the Prospectus.

– –

5,500,000 5,500,000

quest an issuance or redemption of shares. The Company

Short-term bank loan

As this is a closed-ended fund, the investors cannot rehas the option to purchase shares from investors by way

In 2013 the short-term bank loan of USD 5,500,000 was

of a share repurchase as part of its distribution policy.

held with LGT Bank (Ireland) Limited, for the two week period to 7 January 2014 at a rate of 2.6875%.

The Company has not issued any shares or other instruments that are considered to have a dilutive potential.

11. Share capital Significant investors Authorized

Five investors held ten per cent or more of the share cap-

The authorized share capital of the Company is divided

ital of the Company at the year end.

into three management shares of USD 1 each and 500,000,000 participating shares of no par value.

Share capital movements Number of shares in issue At beginning of year Issued Redeemed At end of year

Share class as of 31 December 2014

Share class as of 31 December 2013

“A”

“B”

“O”

“A”

“B”

“O”

699,461.91

226,375.62

1,032,452.86

769,218.55

249,429.28

1,130,327.46

29,297.06

9,714.06

41,104.21

36,565.48

12,059.60

51,248.94

(133,695.81) 595,063.16

(44,291.78) 191,797.90

(187,767.80) 885,789.27

(106,322.12) 699,461.91

(35,113.26) 226,375.62

(149,123.54) 1,032,452.86

30 Crown Asia-Pacific Private Equity Annual report 2014 | Notes to the financial statements

Strictly confidential

Significant investors 31 December 2014

against the assets of the Company. On 16 May 2014, the

Shares held

% of issued share capital

Investor reference CAPE014

225,438.61

13.5%

credit facility to the lower of USD 5,000,000 or 25% of the

Investor reference CAPE027

221,447.36

13.2%

NAV. On 11 December 2014, the terms of the credit facility were again amended to increase the final maturity

Investor reference CAPE007

177,157.85

10.6%

Investor reference CAPE004

177,157.85

10.6%

Investor reference CAPE001

177,157.85

10.6%

Shares held

% of issued share capital

Significant investors 31 December 2013

terms of the credit facility were amended to decrease the

date to 31 December 2015 (the “Final Maturity Date”). The facility was used for 184 days during the year. The average usage over these days was USD 2.3 million with

Investor reference CAPE014

265,438.07

13.6%

an average borrowing rate of 2.63%. The facility was

Investor reference CAPE027

258,113.25

13.2%

used for 243 days during 2013. The average usage over

Investor reference CAPE007

206,490.57

10.5%

these days was USD 3.9 million with borrowing rates

Investor reference CAPE004

206,490.57

10.5%

ranging from 2.6875% to 2.8750%.

Investor reference CAPE001

206,490.57

10.5%

As referred to in the Director’s report, board members 12. Related party disclosures

may have an indirect interest through a co-investment

Parties are considered to be related if one party has the

program in the Company and while an alignment of in-

ability to control the other party or exercise considerable

terests is common practice in the private equity industry

influence over the other party in making financial or oper-

these holdings are not material and would represent less

ating decisions. In the opinion of the Board of Directors, the

than one per cent of the shares in issue in the Company

parties referred to in the schedule accompanying this note

(2013: less than one per cent).

are related parties under IAS 24 “Related Party Disclosures”. Directors of this Company are also Directors of or conDirectors’ fees of USD 1,076 are charged in respect of

nected with shareholders invested in the Company. These

Konrad Baechinger’s services for 2014 (2013: USD 1,373).

shareholders have transacted on an equal basis as all other shareholders within the same class and they repre-

The Company has a credit facility with LGT Bank (Ireland)

sent 34.4% (2013: 34.3%) of the shareholdings in the

Limited for the lower of USD 5,500,000 or 25% of the

Company. These shareholders represented 34.9% (2013:

NAV, effective to 31 December 2014. The loan is secured

34.9%) of capital issued during the year and 34.9% (2013:

Schedule of related party transactions Related party/ Relationship/ Agreement(s)/ Direct/indirect

Terms and conditions

Transaction type

LGT Capital Partners (Ireland) Limited/ Common directorships/ Investment management agreement/ Direct

Note 5

LGT Fund Managers (Ireland) Limited/ Common directorships/ Administration agreement/ Direct

Note 5/9

Administration and transfer agency fee payable

LGT Bank (Ireland) Limited/ Common directorships/ Loan and paying agency agreement Direct

2014 USD

2013 USD

Investment management fee

851,754

892,766

Note 5/9

Investment management fee payable

212,512

214,503

Note 5

Investment performance fee

561,192



Note 5/9

Investment performance fee – payable

561,192



Note 5

Administration and transfer agency fee

178,987

186,204

48,882

51,176

Note 10

Due to banks



5,500,000

Note 12

Finance costs – interest charges

29,192

70,564

Note 12

Other operating expenses – commitment fees

24,028

30,417

Note 12

Other operating expenses – commitment fees payable

5,111

7,667



1,000

EUR 1,000 p.a. Other operating expenses – paying agency fees

Notes to the financial statements | Crown Asia-Pacific Private Equity Annual report 2014 31

Strictly confidential

34.9%) of the distributions made during the year by way

future cash flows of a financial instrument will fluctuate

of share repurchase. The three shareholders, representing

because of changes in market prices (other than those

a 34.4% (2013: 34.3%) holding in the Company, having

arising from interest rate risk or currency risk). The Board

shareholdings in excess of 10% are included as significant

of Directors reviews and agrees policies for managing

shareholders in note 11.

each of these risks and they are summarized below:

13. Exchange rates

(a) Market price risk

The financial statements are prepared in US Dollar. The

The investments held in the portfolio may be realized

following exchange rates have been used to translate

only after several years and their fair values may change

assets and liabilities in other currencies to US Dollar:

significantly over time. The Investment Manager makes investment decisions on behalf of the Company that are

At 31 December 2014

At 31 December 2013

AUD CHF

1.2220 0.9936

1.1178 0.8891

EUR

0.8264

0.7257

JPY

119.8897

105.1105

consistent with the Company’s objectives. The Investment Manager’s recommendations are reviewed by the Board of Directors before the investment decisions are implemented. The investment objective is to provide investors with access to a well-diversified private equity portfolio investing

14. Financial risk management

in a range of growth capital funds, buyout funds and ven-

The Company’s investment objective is to maximize the

ture capital funds mainly focused on the Asia-Pacific re-

long-term returns to shareholders by investing in a diversi-

gion. These funds and their respective investment manag-

fied private equity portfolio consisting of growth capital

ers are selected on qualitative research criteria including:

funds, buyout funds and venture capital funds mainly fo-

(i) past performance in relation to investment style, ex-

cused on the Asia-Pacific region. The holding of invest-

pected returns, benchmarks and degree of risk; (ii) busi-

ments, investing activities and associated financing under-

ness structure and team organization of the investment

taken pursuant to this objective involves certain inherent

manager; (iii) fit of the investment manager/investment

risks. The inherent risks can also be affected by the concen-

vehicle into the overall portfolio; (iv) amount under man-

tration of elements within the different risk categories.

agement and commitment of the principals of the invest-

Where significant concentration risks exist, they will be

ment manager; and (v) cost structure.

separately identified within the specific risk categories outlined in the note. The charts outlined in the Investment

At 31 December 2014, the Company’s market risk is af-

Advisor’s report shows geographical and industry-based

fected by four main components: (i) changes in actual

concentration levels. Below is a description of the princi-

market prices; (ii) interest rate risk; (iii) foreign currency

pal risks inherent in the Company’s activities along with

movements; and (iv) other price risks. Foreign currency

the actions it has taken to manage these risks.

risk and liquidity risk are covered in notes 14(b) and 14(e), respectively.

The Company’s assets and liabilities comprise financial instruments which include:

If the value of the investments (based on year-end values)

> private equity investments: these are held in accord-

had increased or decreased by 5% with all other variables

ance with the Company’s investment objective and

held constant, the impact on the statement of compre-

policies; and

hensive income would have been USD 14,135,268 (2013:

> cash, liquid resources and short-term debtors and credi-

USD 14,748,823). The Directors have deemed the 5% as a

tors that arise directly from its investment activities.

reasonable representation of a variable differential in the value of investments.

The main risks arising from the Company’s financial instruments are market price (including other price risks),

The Company is generally exposed to a variety of market

foreign currency, interest rate, credit and liquidity risks.

risk factors, which may vary significantly over time and

Other price risk relates to the risk that the fair value or

measurement of such exposure at any given point in time

32 Crown Asia-Pacific Private Equity Annual report 2014 | Notes to the financial statements

Strictly confidential

may be difficult given the flexibility, complexity and lim-

(d) Credit risk

ited transparency of the underlying investments. There-

The Company takes on exposure to credit risk, which is

fore, a sensitivity analysis is deemed of limited explana-

the risk that a counterparty will be unable to pay amounts

tory value or may be misleading.

in full when due. This risk applies to the assets of the Company all of which are unsecured. The counterparty risk

(b) Foreign currency risk

exposure is equivalent to the total value of the Company’s

A portion of the net assets of the Company are denomi-

assets. Impairment provisions are provided for losses that

nated in currencies other than the US Dollar (which is

have been incurred by the balance sheet date, if any.

the Company’s functional currency), with the effect that

There were no impairment provisions in the current year.

the balance sheet and total return can be significantly affected by currency movements.

The Company’s main credit risk concentration is from amounts held at counterparty banks and from the private

Table 1 sets out the Company’s direct exposure to foreign

equity investments in which the Company is invested. The

currency risk, none of which was hedged by the Company

Company seeks to mitigate its exposure to credit risk by

at the end of the year.

conducting its contractual transactions with institutions which are reputable and well established.

In accordance with the Company’s policy, the Investment Manager monitors the Company’s currency position on a

In accordance with the Company’s policy, the Investment

weekly basis and the Board of Directors reviews it on a

Manager monitors the Company’s credit position on a

regular basis.

monthly basis and the Board of Directors reviews it on a regular basis.

For the purpose of determining risk disclosures, in accordance with IFRS 7, currency risk is not considered to arise

The cash at bank balance is unsecured and is held with

from financial instruments that are non-monetary items

Credit Suisse International, Dublin Branch, the only rated

(e.g. equity investments).

counterparty credit risk (A/A-1). The credit rating of the Custodian as at 31 December 2014 was A/A-1 (2013: A/

If the exchange rates (based on year-end values) had in-

A-1). (The credit rating of LGT Bank (Ireland) Limited as at

creased or decreased by an equivalent percentage move-

31 December 2014 was A-1/A+ (2013: A-1/A+) (source:

ment as occurred in 2014, then with all other variables

Standard & Poor’s).

held constant, the impact on the statement of comprehensive income would have been USD 529,908 (2013: USD

(e) Liquidity risk

938,923).

The Company may have an inability to raise additional funds or to use credit lines, if any, to satisfy the commit-

(c) Interest rate risk

ments to the various private equity investments. In a

The Company invests in the desired currencies at both

private equity partnership investment, a commitment is

fixed and floating rates of interest. The interest rate risk

typically given to a newly established private equity part-

is that the fair value of cash and cash equivalents and

nership. In the ensuing three to six years, the partnership

loans payable will fluctuate with the changes in the mar-

draws down the available funds as and when attractive

ket rates. The influence of changes in the market rates of

investment opportunities become available. As a general

interest is not expected to be significant.

rule, the partnership already begins to realize shareholding interests before all the capital has been invested. This

The Company’s financial assets and liabilities, which are

means that the funds made available by the investors are

set out in table 2 are, with the exception of cash and cash

not expected to be 100% invested in the private equity

equivalents and loans, primarily non-interest bearing and

partnership. Historically, the average exposure ranges

are therefore not subject to significant amounts of risk

from 60% to 70%.

due to fluctuations in the interest rates.

Notes to the financial statements | Crown Asia-Pacific Private Equity Annual report 2014 33

Strictly confidential

In the event of liquidity shortfall, the Company has access

main risk relating to an investor default. The main provi-

to credit facilities and uncalled commitments which have

sions for dealing with a default allow the Company to

default provisions, if needed, provided for in the Prospec-

conditionally take ownership of a defaulting investor’s

tus. The Company can hold back making distributions to

holding with a view to sourcing a buyer and the imposi-

ensure its ability to meet current and future obligations.

tion of a 50% penalty on the sales proceeds.

The liquidity position owing to shareholders at the balance sheet date is represented by the assets minus liabili-

15. Taxation

ties of the Company.

Under current law and practice, the Company qualifies as an investment undertaking as defined in Section 739B

As mentioned in the Directors, report, the Company has

of the Taxes Consolidation Act, 1997, as amended (the

access to a credit facility, the lower of USD 5,000,000 and

“TCA”). On that basis, it is not chargeable to Irish tax on

25% of the Company’s net asset value, with LGT Bank (Ire-

its income or gains.

land) Limited. The Company also has a cash at bank position at 31 December 2014 of USD 8,759,084 (31 December

However, Irish tax may arise on the occurrence of a

2013: USD 4,359,780). The amounts outstanding on the

“chargeable event”. A chargeable event includes any dis-

total committed capital of the investments as at 31 De-

tribution payments to shareholders or any encashment,

cember 2014 are USD 32,948,403 (31 December 2013: USD

redemption, transfer or cancellation of shares and any

39,999,087), which are callable at anytime. These amounts

deemed disposal of shares for Irish tax purposes arising as

are off balance sheet and may be called up over the life

a result of holding shares in the Company for a period of

of the investments.

eight years or more.

Table 3 analyzes the Company’s financial assets and liabil-

No Irish tax will arise in respect of chargeable events in

ities based on the remaining period at the balance sheet

respect of a shareholder who is an Exempt Irish Investor

date to the contractual maturity date. The amounts in

(as defined in Section 739D of the TCA) or who is neither

table 3 are the contractual undiscounted cash flows. Bal-

Irish resident nor ordinarily resident in Ireland for tax pur-

ances due within 12 months equal their carrying balances,

poses at the time of the chargeable event, provided, in

as the impact of discounting is not significant. In accord-

each case, that an appropriate valid declaration in accord-

ance with the Company’s policy, the Investment Manager

ance with Schedule 2B of the TCA is held by the Company

monitors the Company’s liquidity position on a weekly

or where the Company has been authorized by Irish Rev-

basis and the Board of Directors reviews it on a regular

enue to make gross payments in absence of appropriate

basis.

declarations.

(f) Capital risk management

Distributions, interest and capital gains (if any) received

The capital of the Company is represented by the net as-

on investments made by the Company may be subject to

sets attributable to the holders of participating shares.

withholding taxes imposed by the country of origin and

The Company’s objective when managing the capital is

such taxes may not be recoverable by the Company or its

to safeguard the ability to continue as a going concern

shareholders.

in order to provide returns for holders of participating shares and benefits for other stakeholders and to maintain a strong capital base to support the development of the investment activities of the Company. The Investment Manager and Administrator monitor capital on the basis of the value of net assets attributable to holders of participating shares, and the position is reviewed by the Board periodically. The capital management of the Company is controlled by the Investment Manager with the

34 Crown Asia-Pacific Private Equity Annual report 2014 | Notes to the financial statements

Strictly confidential

Table 1: currency exposure Amounts are reported in USD At 31 December 2014

USD

EUR

CHF

AUD

JPY

Total

8,759,084

Assets Current assets Cash and cash equivalents Accrued income and other receivables Total current assets

8,759,084









17

14,728







14,745

8,759,101

14,728







8,773,829

Non-current assets Investments at fair value through profit or loss

278,491,335





1,076,630

3,137,399 282,705,364

Total non-current assets

278,491,335





1,076,630

3,137,399 282,705,364

Total assets

287,250,436

14,728



1,076,630

3,137,399 291,479,193

Capital and reserves attributable to shareholders Share capital

152,848,000







– 152,848,000

Retained earnings

137,716,023







– 137,716,023

Net assets attributable to shareholders

290,564,023







– 290,564,023

248,480

77,548

27,950

















248,480

77,548

27,950





353,978

Current liabilities Accrued expenses and other payables Due to banks Total current liabilities

353,978

Non-current liabilities Accrued expenses and other payables

561,192









561,192

Total non-current liabilities

561,192









561,192

291,373,695

77,548

27,950



– 291,479,193

USD

EUR

CHF

AUD

Total liabilities At 31 December 2013

JPY

Total

4,359,780

Assets Current assets Cash and cash equivalents Accrued income and other receivables Total current assets

4,359,780









36

16,168







16,204

4,359,816

16,168







4,375,984

Non-current assets Investments at fair value through profit or loss

290,037,796





2,313,903

2,624,762 294,976,462

Total non-current assets

290,037,796





2,313,903

2,624,762 294,976,462

Total assets

294,397,612

16,168



2,313,903

2,624,762 299,352,446

Capital and reserves attributable to shareholders Share capital Retained earnings Net assets attributable to shareholders

199,448,000







– 199,448,000

94,043,408









293,491,408







– 293,491,408

94,043,408

Current liabilities 246,275

81,142

33,621





361,038

Due to banks

Accrued expenses and other payables

5,500,000









5,500,000

Total current liabilities

5,746,275

81,142

33,621





5,861,038

Non-current liabilities Accrued expenses and other payables













Total non-current liabilities













299,237,683

81,142

33,621



– 299,352,446

Total liabilities

Notes to the financial statements | Crown Asia-Pacific Private Equity Annual report 2014 35

Strictly confidential

Table 2: interest rate exposure Amounts are reported in USD At 31 December 2014

Less than 1 month

3–6 months

Non-interest bearing

Total

8,759,084 – 8,759,084

– – –

– 14,745 14,745

8,759,084 14,745 8,773,829

– –

– –

282,705,364 282,705,364

282,705,364 282,705,364

8,759,084



282,720,109

291,479,193

Capital and reserves attributable to shareholders Share capital Retained earnings Net assets attributable to shareholders

– – –

– – –

152,848,000 137,716,023 290,564,023

152,848,000 137,716,023 290,564,023

Current liabilities Accrued expenses and other payables Total current liabilities

– –

– –

353,978 353,978

353,978 353,978

Non-current liabilities Accrued expenses and other payables Total non-current liabilities

– –

– –

561,192 561,192

561,192 561,192

Total liabilities





291,479,193

291,479,193

Less than 1 month

3–6 months

Non-interest bearing

Total

4,359,780 – 4,359,780

– – –

– 16,204 16,204

4,359,780 16,204 4,375,984

– –

– –

294,976,462 294,976,462

294,976,462 294,976,462

4,359,780



294,992,666

299,352,446

– – –

– – –

199,448,000 94,043,408 293,491,408

199,448,000 94,043,408 293,491,408

Current liabilities Accrued expenses and other payables Due to banks Total current liabilities

– 5,500,000 5,500,000

7,667 – 7,667

353,371 – 353,371

361,038 5,500,000 5,861,038

Non-current liabilities Accrued expenses and other payables Total non-current liabilities

– –

– –

– –

– –

5,500,000

7,667

293,844,779

299,352,446

Assets Current assets Cash and cash equivalents Accrued income and other receivables Total current assets Non-current assets Investments at fair value through profit or loss Total non-current assets Total assets

At 31 December 2013 Assets Current assets Cash and cash equivalents Accrued income and other receivables Total current assets Non-current assets Investments at fair value through profit or loss Total non-current assets Total assets Capital and reserves attributable to shareholders Share capital Retained earnings Net assets attributable to shareholders

Total liabilities

36 Crown Asia-Pacific Private Equity Annual report 2014 | Notes to the financial statements

Strictly confidential

Table 3: liquidity exposure Amounts are reported in USD At 31 December 2014

Less than 1 month

1–3 months

No stated maturity

Total

8,759,084 14,745 8,773,829

– – –

– – –

8,759,084 14,745 8,773,829

– –

– –

282,705,364 282,705,364

282,705,364 282,705,364

8,773,829



282,705,364

291,479,193

– – –

– – –

152,848,000 137,716,023 290,564,023

152,848,000 137,716,023 290,564,023

Current liabilities Accrued expenses and other payables Total current liabilities

353,978 353,978

– –

– –

353,978 353,978

Non-current liabilities Accrued expenses and other payables Total non-current liabilities

– –

– –

561,192 561,192

561,192 561,192

353,978



291,125,215

291,479,193

Less than 1 month

1–3 months

No stated maturity

Total

4,359,780 16,204 4,375,984

– – –

– – –

4,359,780 16,204 4,375,984

– –

– –

294,976,462 294,976,462

294,976,462 294,976,462

4,375,984



294,976,462

299,352,446

– – –

– – –

199,448,000 94,043,408 293,491,408

199,448,000 94,043,408 293,491,408

Current liabilities Accrued expenses and other payables Due to banks Total current liabilities

353,371 5,500,000 5,853,371

7,667 – 7,667

– – –

361,038 5,500,000 5,861,038

Non-current liabilities Accrued expenses and other payables Total non-current liabilities

– –

– –

– –

– –

5,853,371

7,667

293,491,408

299,352,446

Assets Current assets Cash and cash equivalents Accrued income and other receivables Total current assets Non-current assets Investments at fair value through profit or loss Total non-current assets Total assets Capital and reserves attributable to shareholders Share capital Retained earnings Net assets attributable to shareholders

Total liabilities At 31 December 2013 Assets Current assets Cash and cash equivalents Accrued income and other receivables Total current assets Non-current assets Investments at fair value through profit or loss Total non-current assets Total assets Capital and reserves attributable to shareholders Share capital Retained earnings Net assets attributable to shareholders

Total liabilities

Notes to the financial statements | Crown Asia-Pacific Private Equity Annual report 2014 37

Strictly confidential

16. Soft commission arrangements There were no soft commission arrangements affecting the Company during the years ended 31 December 2014 and 31 December 2013. 17. Events since the year end As of 12 February 2015, the Company has contributed USD 0.5 million to existing private equity partnership investments. On 12 January 2015, CAPE distributed USD 10.1 million to investors by way of a share repurchase. 18. Approval of financial statements The Directors approved the audited financial statements on 12 February 2015.

38 Crown Asia-Pacific Private Equity Annual report 2014 | Notes to the financial statements

Strictly confidential

Portfolio of investments FOR THE year ENDED 31 DECEMBER 2014 1), 2), 3) Partnership currency

Capital commitments: partnership currency

USD

Capital commitments: USD

2014 Fair value (USD)

15,000,000

15,000,000

JPY 1,279,000,000

10,668,139

2014 Percentage of total net assets attributable to shareholders (%)

2013 Fair value (USD)

13,624,318

4.7

14,395,717

4.9

3,137,399

1.1

2,624,762

0.9

2013 Percentage of total net assets attributable to shareholders (%)

Primary investments Vintage year 2007 P1 P2 P3

USD

20,000,000

20,000,000

12,571,851

4.3

15,361,381

5.2

P4

USD

20,000,000

20,000,000

23,676,871

8.1

23,791,430

8.1

P5

USD

15,000,000

15,000,000

12,248,966

4.2

16,978,036

5.8

P6

USD

10,000,000

10,000,000

9,399,331

3.2

8,504,856

2.9

P7

USD

20,000,000

20,000,000

10,811,143

3.7

11,390,478

3.9

P8

USD

19,000,000

19,000,000

12,295,498

4.2

12,831,872

4.3

P9

USD

5,000,000

5,000,000

4,182,499

1.4

4,450,559

1.5

P10

USD

20,000,000

20,000,000

14,921,898

5.1

15,888,192

5.4

Vintage year 2008 P11

USD

22,500,000

22,500,000

15,335,850

5.3

18,236,546

6.2

P12

USD

20,000,000

20,000,000

18,678,988

6.4

18,285,144

6.2

P13

USD

10,000,000

10,000,000

6,921,153

2.4

7,755,524

2.6

P14

USD

14,000,000

14,000,000

12,777,675

4.4

9,617,196

3.3

P15

USD

10,000,000

10,000,000

7,902,349

2.7

6,401,709

2.2

P16

USD

4,000,000

4,000,000

3,465,034

1.2

2,456,816

0.8

P17

USD

5,000,000

5,000,000

4,586,449

1.6

4,544,146

1.5

P18

USD

6,000,000

6,000,000

10,010,466

3.5

7,821,557

2.7

P19

USD

20,000,000

20,000,000

13,424,519

4.7

11,075,350

3.8

P20

USD

10,000,000

10,000,000

7,871,150

2.8

4,261,901

1.5

P21

USD

2,500,000

2,500,000

2,458,512

0.8

2,334,868

0.8

Vintage year 2009

Vintage year 2010 P22

USD

10,000,000

10,000,000

9,959,146

3.4

9,270,596

3.2

P23

USD

10,000,000

10,000,000

10,133,097

3.5

7,539,937

2.6

298,668,139

240,394,162

82.7

235,818,573

80.3

Sub-total primary investments

Notes: 1) Investments have been assigned an alphanumeric code for reasons of confidentiality. 2) A complete statement of portfolio changes is available to shareholders from the registered office of the Company free of charge. 3) The notes to the accounts are an integral part of the financial statements.

Portfolio of investments | Crown Asia-Pacific Private Equity Annual report 2014 39

Strictly confidential

FOR THE year ENDED 31 DECEMBER 2014 (CONTINUED) 1), 2), 3) Partnership currency

Capital commitments: partnership currency

Capital commitments: USD

2014 Fair value (USD)

2014 Percentage of total net assets attributable to shareholders (%)

2013 Fair value (USD)

2013 Percentage of total net assets attributable to shareholders (%)

USD

8,792,123

8,792,123

5,097,435

1.8

4,887,724

1.7

Secondary transactions Closing year 2007 Transaction No. 1 S1-1 Closing year 2008 Transaction No. 2 S2-1

USD

2,583,786

2,583,786

1,122,526

0.4

1,186,245

0.4

S2-2

USD

2,849,183

2,849,183

1,675,727

0.6

1,765,524

0.6

S2-3

USD

1,185,094

1,185,094









S2-4

USD

2,834,064

2,834,064

1,455,726

0.5

1,691,724

0.6

Closing year 2009 Transaction No. 3 S3-1

USD

5,567,496

5,567,496

6,084,911

2.1

4,579,846

1.6

S3-2

USD

4,564,634

4,564,634

7,892,686

2.7

7,930,873

2.7

Transaction No. 4 S4-1

USD

1,324,683

1,324,683

16,866

0.0

2,834,737

1.0

S4-2

USD

8,653,317

8,653,317

5,966,698

2.1

17,804,255

6.1

USD

5,341,599

5,341,599

4,182,499

1.4

4,450,559

1.5

USD

2,443,886

2,443,886

1,865,237

0.6

1,990,130

0.6

USD

10,759,578

10,759,578

5,874,261

2.0

7,722,369

2.6

Closing year 2010 Transaction No. 5 S5-1 Transaction No. 6 S6-1 Closing year 2011 Transaction No. 7 S7-1 Transaction No. 8 S8-1

AUD

1,632,473

1,335,853

42,597

0.0

43,998

0.0

S8-2

AUD

5,393,247

4,413,294

1,034,033

0.4

2,269,905

0.8

62,648,590

42,311,202

14.6

59,157,889

20.2

361,316,729

282,705,364

97.3

294,976,462

100.5

7,858,659

2.7

(1,485,054)

(0.5)

290,564,023

100.0

293,491,408

100.0

Sub-total secondary transactions Investments at fair value through profit or loss Other net assets and liabilities NET ASSETS ATTRIBUTABLE TO SHAREHOLDERS

Notes: 1) Investments have been assigned an alphanumeric code for reasons of confidentiality. 2) A complete statement of portfolio changes is available to shareholders from the registered office of the Company free of charge. 3) The notes to the accounts are an integral part of the financial statements.

40 Crown Asia-Pacific Private Equity Annual report 2014 | Portfolio of investments

Strictly confidential

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Crown Asia-Pacific Private Equity Annual report 2014 41

Strictly confidential

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42 Crown Asia-Pacific Private Equity Annual report 2014

LGT Capital Partners Ltd. Schuetzenstrasse 6 8808 Pfaeffikon Switzerland Phone +41 55 415 96 00 Fax +41 55 415 96 98 [email protected]

www.lgtcp.com

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