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.
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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
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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