TIDMPACL
RNS Number : 8515B
Pacific Alliance China Land Limited
25 September 2018
25 September 2018
Pacific Alliance China Land Limited
Unaudited results for the six months ended 30 June 2018
Pacific Alliance China Land Limited ("PACL" or the "Company"),
an AIM-traded, closed-end investment company, has today announced
its financial results for the six months to 30 June 2018.
Highlights
-- Net asset value as at 30 June 2018 was US$65.7 million,
representing US$2.7985 per share, a 2.9% decrease from 31 December
2017.
-- On 30 June 2018, the Company's share price closed at US$2.61,
representing a 10.5% increase from 31 December 2017 and a 7.2%
discount to the unaudited NAV per share.
-- PACL's NAV and share price have both consistently
outperformed major benchmark indices including the FTSE 350 Real
Estate Index (F3REAES) and the FTSE AIM All-Share Index (AXX) since
inception.
Portfolio and Fund Developments
-- The Company announced a mandatory share repurchase with a
total amount of US$78 million in June 2018. The Investment Manager
will continue to work on the repatriation process.
Patrick Boot, Managing Director, Pacific Alliance Real Estate
Limited commented that:
In the second half of 2018, we expect both China's economy and
the property market to further stabilize. The Manager will continue
to focus on the timely repatriation of RMB and distribution of
repatriation proceeds to shareholders.
For further information please contact:
MANAGER: LEGAL COUNSEL:
Patrick Boot, Managing Partner Jon Lewis, General Counsel
Pacific Alliance Real Estate Limited PAG
T: (852) 2918 0088 T: (852) 2918 0088
pboot@pagasia.com jlewis@pagasia.com
BROKER: NOMINATED ADVISER:
Gillian Martin Philip Secrett
Liberum Capital Limited Grant Thornton UK LLP
T: (44) 20 (0) 20 3100 2000 T: (44) 20 7383 5100
www.liberum.com Philip.J.Secrett@uk.gt.com
MEDIA RELATIONS:
Stephanie Barry
PAG
T: (852) 3719 3375
sbarry@pagasia.com
Notes to Editors:
About Pacific Alliance China Land Limited
Pacific Alliance China Land Limited ("PACL") (AIM: PACL) is a
closed-end investment company. PACL was admitted to trading on the
AIM Market of the London Stock Exchange in November 2007. PACL is
focused on investing in a portfolio of existing properties, new
developments, distressed projects and real estate companies in
Greater China.
For more information about PACL, please visit:
www.pacl-fund.com
Pacific Alliance China Land Limited is a member of PAG (formerly
known as Pacific Alliance Group), the Asian alternative investment
fund management group. Founded in 2002, PAG is now one of the
region's largest Asia-focused alternative investment managers with
funds under management across Private Equity, Real Estate and
Absolute Return strategies.
For more information about PAG, please visit:
www.pagasia.com
PACIFIC ALLIANCE CHINA LAND LIMITED
(Incorporated in the Cayman Islands with limited liability)
UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIODED
30 JUNE 2018
PACIFIC ALLIANCE CHINA LAND LIMITED
(Incorporated in the Cayman Islands with limited liability)
Chairperson's Statement
As of 30 June 2018, the net asset value (NAV) of Pacific
Alliance China Land Limited (the "Company" or "PACL") was US$65.7
million, or US$2.7985 per share, representing a 2.9% decrease from
31 December 2017.
China's GDP grew at 6.8% year-on-year in the first half of 2018,
which was higher than the Government's target of 6.5%. This was
largely due to continued state investment in infrastructure on the
back of regional development projects including the Belt and Road
Initiative. The service sector, which accounts for 54.3% of China's
overall economy, expanded 7.6% year-on-year in the first half,
outpacing increases in primary and secondary industries. As a
result, the government is likely to maintain a stable monetary
policy and support reasonable fiscal expansion that should allow
China to continue to achieve a moderate and sustainable level of
growth.
Most tier-one and tier-two cities saw moderate growth in terms
of both price and transaction volumes, given the Chinese
government's stricter property tightening measures. New-home prices
increased in 41 of the 70 cities tracked by the government during
May, compared with 40 in April. New home prices increased 0.2% in
Shanghai during May, while new home prices in Beijing and Shenzhen
declined 0.2% and 0.6% month-on-month, respectively. Investment in
real estate development gained 8.5% in the first six months of
2018. The Manager expects that the central government will continue
to adopt differentiated housing policies for different cities. The
government will continue to tighten controls in tier-one and
tier-two cities where housing inventories are low, and continue to
loosen controls in lower-tier cities in order to boost demand and
help facilitate a reduction of inventories in those oversupplied
markets.
As all of the Company's investments have been exited we will
continue to focus all our efforts on the timely repatriation of RMB
and the distribution of repatriated proceeds to shareholders. On
behalf of the Board of Directors, I would like to thank you for
your continued commitment and support.
Margaret Brooke
Chairperson
PACIFIC ALLIANCE CHINA LAND LIMITED
(Incorporated in the Cayman Islands with limited liability)
Investment Manager's Report
On 30 June 2018, the Company's share price closed at US$2.61,
representing a 10.5% increase from 31 December 2017 and a 7.2%
discount to the unaudited NAV per share. The Company's NAV and
share price have both outperformed major benchmark indices
including the FTSE 350 Real Estate Index (F3REAES) and the FTSE AIM
All-Share Index (AXX) on a consistent basis since inception.
Portfolio Summary
As at 30 June 2018, the Company held cash of US$68.7 million (of
which US$63.5 million was held onshore in RMB, pending
repatriation), as well as investments with a cost of approximately
US$1.8 million and a fair value of US$0.2 million.
Investments and Fair value (gross) Type % of total
Cash US$
----------------- -------------------- ------------ -----------
FX Hedging 189,032 Derivatives 1.00%
Cash 68,722,753 Cash (2) 99.00%
----------------- -------------------- ------------ -----------
TOTAL (1) 68,911,785 100.00%
----------------- -------------------- ------------ -----------
Note
(1) The gross investment value includes an amount attributable to the PACL II shareholders.
(2) Of the total cash of US$68.7 million, US$63.5 million was held as RMB in PRC banks.
Distribution
The timeline below is the Manager's best estimate of amounts and
timing regarding future distributions to shareholders. The
repatriation process involves many steps and requires numerous
approvals. As always, the Manager will work to speed up the process
where possible.
Project Source Estimated Estimated
Distribution Distribution
Amount Timing
Auspice* Net profit US$78 June 2018(completed)
from the million
sale of
Wanda shares
-------------- -------------- ---------------------
Auspice** The original US$64.6 December
invested million 2018
capital ***
for Auspice
and other
onshore
projects
-------------- -------------- ---------------------
Estimated US$142.6
Total million
-------------- -------------- ---------------------
*Project Auspice proceeds (net profit portion) were successfully
repatriated in early June and a further distribution was completed
on 22 June 2018.
** Currently the RMB cash assets are held by a Tianjin Wholly
Foreign Owned Enterprise (WFOE), a statutory tax and liquidation
audit is required as part of the liquidation process. The manager
is currently working on speeding up the liquidation process of the
WOFE.
*** The distribution is calculated based on the current NAV and
estimated future operating expenses to be incurred, FX rate of
6.621 as of 29 June 2018 was adopted for the calculation. NAV of
US$65.7m- operating expenses of US$1.1m.
Conclusion
In the second half of 2018, we expect China's economy and
property market to further stabilize. The Manager will continue to
focus on the timely repatriation of RMB and distribution of
repatriation proceeds to shareholders.
PACIFIC ALLIANCE CHINA LAND LIMITED
(Incorporated in the Cayman Islands with limited liability)
Investment Manager's Report (Continued)
30 June 31 December
2018 2017
US$ US$
Realized Gain
Investment income (2,081,274) (1,284,378)
Dividend income - -
Deposit interest 1,443,228 1,960,007
------------------ ------------------
(638,046) 675,629
Change in Unrealized Gain/(Losses)
Derivatives (92,439) (5,419,594)
Other real estate investments - (1,513,834)
Listed stock - -
Share of (gains payable to)/losses
receivable from PACL II (274,286) 295,415
Foreign exchange(3) 479,111 11,690,979
------------------ ------------------
112,386 5,052,966
------------------ ------------------
(525,660) 5,728,595
PACIFIC ALLIANCE CHINA LAND LIMITED
(Incorporated in the Cayman Islands with limited liability)
UNAUDITED CONSOLIDATED STATEMENT OF ASSETS AND LIABILITIES
AS AT 30 JUNE 2018
As at As at
30 June 31 December
Note 2018 2017
US$ US$
Assets
Derivative contracts, at fair value
(Cost: US$1,761,200;
2017: US$3,468,680) 5 189,032 281,471
Prepayment and other receivables 6 517,085 1,165,130
Cash and bank balances 68,722,753 176,563,063
-------------------- --------------------
Total assets 69,428,870 178,009,664
------------------- -------------------
Liabilities
Provision for taxation 8 2,577,763 9,986,124
Amounts due to PACL II Limited 12(a) 216,626 1,142,339
Performance fee payable 10 133,162 133,162
Provision for investment agency fees 11 - 1,415,585
Accrued expenses and other payables 775,404 54,171
-------------------- --------------------
Total liabilities 3,702,955 12,731,381
------------------- -------------------
Net assets 65,725,915 165,278,283
Analysis of net assets
Share capital 7 234,865 573,564
Retained earnings 65,491,050 164,704,719
-------------------- --------------------
Net assets (equivalent to US$2.7985
per share based on 23,486,409 outstanding
shares; 2017: US$2.8816 per share
based on 57,356,356 outstanding shares) 65,725,915 165,278,283
Approved by the Board of Directors
Director
The accompanying notes on pages 11 to 26 are an integral part of
these consolidated financial statements.
PACIFIC ALLIANCE CHINA LAND LIMITED
(Incorporated in the Cayman Islands with limited liability)
UNAUDITED CONSOLIDATED CONDENSED SCHEDULE OF INVESTMENTS
AS AT 30 JUNE 2018
AS AT 30 JUNE 2018 AS AT 31 DECEMBER 2017
Investments % of % of Cost/principal Fair % % of Cost/principal Fair
- Assets net effective value of effective value
assets equity net equity
interest assets interest
held held
US$ US$ US$ US$
Derivatives 0.29% 0.17%
Others 0.29% 1,761,200 189,032 0.17% 3,468,680 281,471
-------------------- -------------------- -------------------- --------------------
1,761,200 189,032 3,468,680 281,471
The accompanying notes on pages 11 to 26 are an integral part of
these consolidated financial statements.
PACIFIC ALLIANCE CHINA LAND LIMITED
(Incorporated in the Cayman Islands with limited liability)
UNAUDITED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE PERIODED 30 JUNE 2018
Period from Period from
1 January 1 January
to to
Note 30 June 2018 30 June 2017
US$ US$
Income
Interest income 1,443,228 979,993
------------------ ------------------
Total income 1,443,228 979,993
----------------- -----------------
Expenses
Management fees 10 (1,569,260) (1,877,219)
Legal and professional fees (178,577) -
Other expenses (278,875) (658,741)
------------------ ------------------
Total expenses (2,026,712) (2,535,960)
----------------- -----------------
Net investment losses (583,484) (1,555,967)
----------------- -----------------
Realized and unrealized gains/(losses)
from investments and foreign currency
Net realized gains from investments
and foreign currency transactions - 241,486
Tax expense 9 (2,081,274) (203,680)
Net change in unrealized losses from
investments and losses on translation
of assets and liabilities in foreign
currencies 4 386,672 (857,381)
Net increase/(decrease) in payable
to PACL II Limited from losses/(gains)
attributable to PACL II Limited 12(a) (274,289) 112,734
------------------ ------------------
Net realized and unrealized losses
from investments and foreign currency (1,968,891) (706,841)
----------------- -----------------
Net decrease in net assets from operations (2,552,375) (2,262,808)
The accompanying notes on pages 11 to 26 are an integral part of
these consolidated financial statements.
PACIFIC ALLIANCE CHINA LAND LIMITED
(Incorporated in the Cayman Islands with limited liability)
UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN NET ASSETS
FOR THE PERIODED 30 JUNE 2018
Share capital
and share Capital Retained
Note premium surplus earnings Total
US$ US$ US$ US$
At 1 January 2017 615,967 - 176,129,666 176,745,633
Repurchase of
tendered
shares 7 (42,403) - (11,957,595) (11,999,998)
Net increase in net
assets from
operations - - 532,648 532,648
-------------------- ------------------ -------------------- --------------------
At 31 December 2017
and
1 January 2018 573,564 - 164,704,719 165,278,283
Repurchase of
tendered
shares 7 (338,699) (96,661,294) (96,999,993)
Net decrease in net
assets from
operations - - (2,552,375) (2,552,375)
-------------------- ------------------ -------------------- --------------------
At 30 June 2018 234,865 - 65,491,050 65,725,915
The accompanying notes on pages 11 to 26 are an integral part of
these consolidated financial statements.
PACIFIC ALLIANCE CHINA LAND LIMITED
(Incorporated in the Cayman Islands with limited liability)
UNAUDITED CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE PERIODED 30 JUNE 2018
Period from Period from
1 January 1 January
to to
30 June 31 December
Note 2018 2017
US$ US$
Net (decrease)/increase in net assets
from operations (2,552,375) 532,648
Adjustments to reconcile net (decrease)/increase
in net assets from operations to net cash
generated from operating activities
Purchase of investments - (105,000)
Change in unrealized gain/(loss) 92,439 6,162,573
Receivable/(payable) from gain/(loss) attributable
to PACL II Limited 274,286 (295,415)
Change in prepayment and other receivables 648,045 27,942,852
Change in amounts due to PACL II Limited (1,200,000) 1,200,000
Change in performance fees payable 10 - (478,419)
Change in provision for taxation (7,408,361) (10,258,568)
Change in accrued expenses and other payables (694,351) (794,825)
-------------------- --------------------
Net cash generated from operating activities (10,840,317) 23,905,846
------------------ ------------------
Cash flows from financing activities
Repurchase of shares 7 (96,999,993) (11,999,998)
-------------------- --------------------
Net cash used in financing activities (96,999,993) (11,999,998)
------------------ ------------------
Net (decrease)/increase in cash and cash
equivalents (107,940,310) 11,905,848
Beginning balance 176,563,063 164,657,215
-------------------- --------------------
Ending balance, representing cash and
bank balances 68,722,753 176,563,063
Supplementary information to statement of cash flows
Interest income received 1,443,228 1,960,007
Tax Paid (9,148,880) (11,625,321)
The accompanying notes on pages 11 to 26 are an integral part of
these consolidated financial statements.
PACIFIC ALLIANCE CHINA LAND LIMITED
(Incorporated in the Cayman Islands with limited liability)
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIODED 30 JUNE 2018
1 Organization
Pacific Alliance China Land Limited (the "Company") was
incorporated on 5 September 2007 in the Cayman Islands. It is a
closed-end Cayman Islands registered, exempted company. The address
of its registered office is PO Box 472, 2nd Floor, Harbour Place,
Grand Cayman KY1-1106, Cayman Islands.
The Company's ordinary shares are traded on the AIM market of
the London Stock Exchange. The Company can raise additional capital
up to the authorized share capital as described in Note 7.
The principal investment objective of the Company and its
subsidiaries (collectively, the "Company") is to provide
shareholders with capital growth and a regular level of income from
investments in existing properties, new developments, distressed
projects and real estate companies in Greater China.
The Company's investment activities are managed by Pacific
Alliance Real Estate Limited ("PARE" or the "Investment Manager").
The Company appointed Sanne Fiduciary Services Limited to act as
the custodian of certain assets of the Company, and as the
administrator and registrar pursuant to the Administration
Custodian and Registrar Agreement.
On 25 July 2014, the Company's investment policy was changed to
(a) restrict new investments solely to supporting existing
investments, (b) allow the use of renminbi cash assets (which are
subject to exchange controls) for low risk short-term investments,
and (c) focus future investment management efforts on the
realization of the portfolio and the return of net realization
proceeds to shareholders.
As of 30 June 2018, all investments under management were
realized and all the sale proceeds had been received by underlying
special purpose vehicles. For project Auspice, the profit and
invested capital is expected to be repatriated by the end of 2018.
The Company will not be liquidated until the repatriation process
is fully completed.
The unaudited consolidated financial statements were approved by
the Board of Directors on 25 September 2018.
2 Summary of significant accounting policies
The following significant accounting policies are in conformity
with accounting principles generally accepted in the United States
of America ("US GAAP"). The Company applies the provisions of
Financial Accounting Standards Board ("FASB") Accounting Standard
Codification ("ASC") 946-10, Financial Services - Investment
Companies (the "Guide"). The Company is an investment company under
the Guide. Such policies are consistently followed by the Company
in the preparation of its consolidated financial statements.
PACIFIC ALLIANCE CHINA LAND LIMITED
(Incorporated in the Cayman Islands with limited liability)
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIODED 30 JUNE 2018
2 Summary of significant accounting policies (Continued)
(a) Principles of consolidation
These consolidated financial statements include the financial
statements of the Company. Subsidiaries are fully consolidated from
the date on which control is transferred to the Company and
deconsolidated from the date that control ceases. Inter-company
transactions between group companies are eliminated upon
consolidation.
The Company uses wholly and partially owned special purpose
vehicles ("SPVs") to hold and transact in certain investments. The
Company's policy is to consolidate, as appropriate, those SPVs in
which the Company has control over significant operating, financial
or investing decisions of the entity.
Except when an operating company provides services to the
Company, investment in an operating company is carried at fair
value (refer to Note 2(c) below for fair value measurement).
(b) Use of estimates
The preparation of consolidated financial statements in
conformity with US GAAP requires the Company's management to make
estimates and assumptions that affect the reported value of assets
and liabilities and disclosures of contingent assets and
liabilities as at 30 June 2017 and the reported amounts of income
and expenses for the period then ended. The areas involving a
higher degree of judgment or complexity, or areas where assumptions
and estimates are significant to the financial statements are
disclosed in Note 2(k).
(c) Investments
The Company may hold both listed securities and unlisted
securities, which by nature have limited marketability. The Company
also engaged in secured lending transactions.
(i) Recognition and derecognition
Regular purchase and sale of investments are accounted for on
the trade date, the date the trade is executed. Costs used in
determining realized gains and losses on the disposal of
investments are based on the specific identification method for
unlisted or unquoted investments. Cost includes legal and due
diligence fees associated with the acquisition of investments.
Transfer of investments is accounted for as a sale when the
Company has relinquished control over the transferred assets. Any
realized gains and losses from investments are recognized in the
consolidated statement of operations.
(ii) Fair value measurement
The Company is an investment company under the Guide. As a
result, the Company records and re-measures its investments on the
consolidated statement of assets and liabilities at fair value,
with unrealized gains and losses resulting from changes in fair
value recognized in the consolidated statement of operations.
Fair value is the amount that would be received to dispose of
the investments in an orderly transaction between market
participants at the measurement date, i.e. the exit price. Fair
value of investments is determined by the Valuation Committee of
the Company, which is established by the Investment Manager and the
Board of Directors.
PACIFIC ALLIANCE CHINA LAND LIMITED
(Incorporated in the Cayman Islands with limited liability)
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIODED 30 JUNE 2018
2 Summary of significant accounting policies (Continued)
(c) Investments (Continued)
(ii) Fair value measurement (Continued)
Investments in securities traded on a recognized exchange are
valued at the traded price on the exchange in which such security
was traded on the last business day of the period.
The fair values of unlisted or unquoted securities are based on
the Company's valuation models, including earnings multiples (based
on the budgeted earnings or historical earnings of the issuer and
earnings multiples of comparable listed companies) and discounted
cash flows. The Valuation Committee also considers the relevant
developments since acquisition of the investments, the original
transaction price, recent transactions in the same or similar
instruments, completed third-party transactions in comparable
instruments, reliable indicative offers from potential buyers and
rights in connection with realization. Judgement is used to adjust
valuation as necessary for factors such as non-maintainable
earnings, tax risk, growth stage, and cash traps. Cross-checks of
primary techniques are made against other secondary valuation
techniques.
The Company's secured loan transactions are recorded at fair
value, which is determined based on discounted cash flow analyses.
Those analyses consider the position size, liquidity, current
financial condition of the borrowers, the third-party financing
environment, reinvestment rates, recovery lags, discount rates, and
default forecasts.
In determining fair valuation of certain unlisted securities,
the Valuation Committee uses as reference valuations made by
independent valuers which rely on the financial data of investees
and on estimates made by the management of the investee companies
as to the effect of future developments. The independent valuers
also assist in the selection of valuation techniques and models.
Loans receivable are recorded at fair value in accordance with the
guidance set forth in Note 4, and the valuation techniques applied
usually take into account the estimated future cash flows,
liquidity, credit, market and interest rate factors. However, there
are inherent limitations in any valuation technique due to the lack
of observable inputs.
Currency options are valued by the Investment Manager using
observable inputs, such as quotations received from the
counterparty, dealers or brokers, whenever available and considered
reliable.
Estimated fair value may differ significantly from the value
that would have been used had a readily available market for such
investments existed and these differences could be material to the
financial statements. Additional information about the level of
market observability associated with investments carried at fair
value is disclosed in Note 4.
(d) Other receivables and payables
Other receivables and payables are initially measured at fair
value and subsequently measured at amortized cost.
(e) Cash and cash equivalents
Cash represents cash at banks and does not include restricted
cash such as fixed deposits pledged as security for bank loans.
Cash equivalents are defined as short-term, highly liquid
investments which mature within three months or less of the date of
purchase.
PACIFIC ALLIANCE CHINA LAND LIMITED
(Incorporated in the Cayman Islands with limited liability)
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIODED 30 JUNE 2018
2 Summary of significant accounting policies (Continued)
(f) Share capital
Ordinary shares are classified as equity. Where the Company
purchases the Company's equity share capital, the consideration
paid is deducted from equity until the shares are cancelled or
reissued. Where such ordinary shares are subsequently reissued, any
consideration received is included in equity.
(g) Foreign currency translation
The books and records of the Company are maintained in United
States Dollars ("US$"), which is also the functional currency.
Assets and liabilities, both monetary and non-monetary, denominated
in foreign currencies are translated into US$ by using prevailing
exchange rates as at financial reporting date, while income and
expenses are translated at the exchange rates in effect during the
period.
Gains and losses attributed to changes in the value of foreign
currencies for investments, cash balances and other assets and
liabilities are reported as foreign exchange gain and loss in the
consolidated statement of operations.
(h) Taxation
The Company may be subject to taxes imposed in jurisdictions in
which it invests and operates. Such taxes are generally based on
income and gains earned. Taxes are accrued on investment income,
realized gains, and unrealized gains, as appropriate, when the
income and gains are earned. The Company accrues for liabilities
relating to uncertain tax positions only when such liabilities are
probable and can be reasonably estimated in accordance with the
authoritative guidance contained in ASC 740 Income Taxes described
in Note 8.
The Company files tax returns as prescribed by the tax laws of
the jurisdictions in which it operates. The Company uses the asset
and liability method to provide income taxes on all transactions
recorded in the consolidated financial statements. This method
requires that income taxes reflect the expected future tax
consequences of temporary differences between carrying amounts of
assets or liabilities for book and tax purposes. Accordingly, a
deferred tax asset or liability for each temporary difference is
determined based on the tax rates that the Company expects to be in
effect when the underlying items of income and expense are
realized.
(i) Recognition of income and expenses
Interest income on bank balances is accrued as earned using the
effective interest method.
Dividend income is recognized on the ex-dividend date and is
recorded net of withholding taxes where applicable.
Expenses are recorded on an accrual basis. Provision of deferred
expenses is made as if the investments are liquidated and realized
at value stated as at the year-end.
PACIFIC ALLIANCE CHINA LAND LIMITED
(Incorporated in the Cayman Islands with limited liability)
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIODED 30 JUNE 2018
2 Summary of significant accounting policies (Continued)
(j) Critical accounting estimates and assumptions
Estimates and judgements are continually evaluated and are based
on historical experience and other factors, including expectations
of future events that are believed to be reasonable under the
circumstances. 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 assets and liabilities within
the next financial year are addressed below.
(k) Critical accounting estimates and assumptions
(i) Fair value of investments
The fair value of unlisted or unquoted securities and loans
receivable is determined by using valuation techniques. Judgement
is used to select a variety of methods and make assumptions that
are mainly based on market conditions existing at the end of each
reporting period.
Although best judgment is used in estimating fair value, there
are inherent limitations in any valuation technique. Estimated fair
value may differ significantly from the value that would have been
used had a readily available market for such investments existed
and these differences could be material to the consolidated
statement of assets, liabilities and partners' capital. Additional
information about the level of market observability associated with
investments carried at fair value is disclosed in Note 4 below.
(ii) Fair value of investments
The fair value of unlisted or unquoted securities and loans
receivable is determined by using valuation techniques. Judgement
is used to select a variety of methods and make assumptions that
are mainly based on market conditions existing at the end of each
reporting period.
Although best judgment is used in estimating fair value, there
are inherent limitations in any valuation technique. Estimated fair
value may differ significantly from the value that would have been
used had a readily available market for such investments existed
and these differences could be material to the consolidated
statement of assets, liabilities and partners' capital. Additional
information about the level of market observability associated with
investments carried at fair value is disclosed in Note 4 below.
(ii) Taxation
The Company may be subject to income taxes in jurisdictions it
invests and operates. Significant judgement is required in
determining the worldwide provision for income taxes. There are
many transactions and calculations for which the ultimate tax
determination is uncertain. The Company recognizes liabilities for
anticipated tax audit issues based on estimates of whether
additional taxes will be due. Where the final tax outcome of these
matters is different from the amounts that were initially recorded,
such differences will impact the current and deferred income tax
assets and liabilities in the period in which such determination is
made.
PACIFIC ALLIANCE CHINA LAND LIMITED
(Incorporated in the Cayman Islands with limited liability)
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIODED 30 JUNE 2018
3 Concentration of risks
(a) Market risk
Market risk represents the potential loss in value of financial
instruments caused by movements in market variables, such as equity
prices.
Investments were made with a focus on Greater China. Political
or economic conditions and the possible imposition of adverse laws
or currency exchange restrictions in that region could cause the
Company's investments and the respective markets to become less
liquid and also the prices to become more volatile.
The Company's investments had concentration in a particular
industry or sector and performance of that particular industry or
sector had a significant impact on the Company.
The Company's concentration of investments in a particular
industry or sector is presented on the consolidated condensed
schedule of investments.
The Company's investments were subject to the risk associated
with investing in private equity securities. Investments in private
equity securities were illiquid and subject to various restrictions
on resale and there can be no assurance that the Company will be
able to realize the value of such investments in a timely
manner.
(b) Interest rate risk
Interest rate risk arises from the fluctuations in the
prevailing levels of market interest rates which affect the fair
value of financial assets and liabilities and future cash flows.
The Company has bank deposits, restricted cash, loans receivable
and bank loans that expose the Company to interest rate risk. The
Company has direct exposure to interest rate changes in respect of
the valuation and cash flows of its interest bearing assets and
liabilities.
(c) Currency risk
The Company has assets and liabilities denominated in currencies
other than the US$, the functional currency. The Company is
therefore exposed to currency risk as the value of assets and
liabilities denominated in other currencies may fluctuate due to
changes in exchange rates. The net assets of the Company before the
impact of currency hedging are denominated in the following
currencies:
As at As at
30 June 31 December
2018 2017
US$ US$
Renminbi 157,400,664 158,456,062
Pounds Sterling (1,234,793) (1,234,793)
Singapore Dollars 71 72
Hong Kong Dollars (96,686) (96,686)
The Investment Manager manages the Company's currency exposure
through use of currency options. Refer to Note 5.
PACIFIC ALLIANCE CHINA LAND LIMITED
(Incorporated in the Cayman Islands with limited liability)
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIODED 30 JUNE 2018
3 Concentration of risks (Continued)
(d) Credit risk
The Company is exposed to credit risk, which is the risk that a
counterparty to or an issuer of a financial instrument will cause a
financial loss for the other party by failing to discharge an
obligation. As at 30 June 2018 the main concentrations of credit
risk to which the Company is exposed arise from derivative
contracts, prepayments and other receivables, and cash and bank
balances.
Whilst the loans receivable are structured to provide the
Company with adequate collateral in the event of default,
enforcement may be subject to the legal system of the countries
where the relevant agreements are entered. Even when a contract is
enforced, the collateral may not be sufficient to fully compensate
the Company for default losses. In an attempt to mitigate the
losses, the Company, where possible, obtains independent valuations
of the collateral on a regular basis and monitors the fair value of
collateral relative to the loan amounts plus accrued interest; and
where necessary, requires additional cash or collateral from the
borrower to manage its exposure.
However, these valuations do not guarantee the ultimate
realizable value of the collateral.
The legal system of the countries in which the Company invests
vary widely in their development, degree of sophistication,
attitude and policies towards bankruptcy, insolvency, liquidation,
receivership, default and treatment of creditors and debtors.
Furthermore, the effectiveness of the judicial system of the
countries in which the Company invests varies, thus the Company (or
any entity in which the Company holds a direct or secondary
interest) may have difficulty in successfully pursuing claims in
the courts of such countries. To the extent that the Company or an
entity in which the Company holds a direct or secondary interest
has obtained a judgement but is required to seek its enforcement in
the courts of the countries in which the Company invests, there can
be no assurance that the court will enforce such judgement.
As at 30 June 2018, the Company has cash and bank balances
amounting to US$68,722,753 (2017: US$176,563,063) held in multiple
different bank accounts with a number of different financial
institutions. The Company attempts to minimize its credit risk
exposure on its cash and bank balances by monitoring the size of
its credit exposure to any one counterparty and by only entering
into banking relationships with reputable financial
institutions.
(e) Liquidity risk
The Company was exposed to liquidity risk as the majority of the
investments of the Company were illiquid while some of the
Company's liabilities were with short maturity as of 30 June 2018.
Illiquid investments included any securities or instruments which
are not actively traded on any major securities market or for which
no established secondary market exists where the investments can be
readily converted into cash. As at 30 June 2018, all investments
were fully realized and currently assets are held in cash or
disposal receivables as of 30 June 2018. Most of the disposal
receivables are expected to be received by fourth quarter of 2018.
Management considered that there was no such liquidity risk exposed
by the Company as of 30 June 2018.
China currently has foreign exchange restrictions, especially in
relation to the repatriation of foreign funds. Any unexpected
foreign exchange control in China may cause difficulties in the
repatriation of funds. The Company invests in China and is
therefore exposed to the risk of repatriating funds out of China on
a timely basis to meet its obligations. Please refer to Note 3(c)
above for the Company's exposure to renminbi. The Company is
closed-end and, thus, not exposed to redemptions of shares by its
shareholders.
PACIFIC ALLIANCE CHINA LAND LIMITED
(Incorporated in the Cayman Islands with limited liability)
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIODED 30 JUNE 2018
4 Investments
The Company discloses the fair value of its investment in a
hierarchy that prioritizes the inputs to valuation techniques used
to measure the fair value. The hierarchy gives the highest priority
to valuations based upon unadjusted quoted prices in active markets
for identical assets or liabilities (Level 1 measurements) and the
lowest priority to valuations based upon unobservable inputs that
are significant to the valuation (Level 3 measurements). Three
levels of the fair value hierarchy are as follows:
Level 1
Inputs that reflect unadjusted quoted prices in active markets
for identical assets or liabilities that the Company has the
ability to access at the measurement date.
Level 2
Inputs other than quoted prices included within Level 1 that are
observable for the asset or liability either directly or
indirectly, including quoted prices for similar assets or
liabilities in active markets, quoted prices for identical or
similar assets or liabilities in markets that are not considered to
be active, inputs other than quoted prices that are observable for
the asset or liability, and inputs that are derived principally
from or corroborated by observable market data by correlation or
other means.
Level 3
Unobservable inputs based on the best information available in
the circumstances, to the extent observable inputs are not
available (including the Company's own assumptions used in
determining the fair value of investments).
Inputs to measure fair values broadly refer to the assumptions
that market participants use to make valuation decisions, including
assumptions about risk. Inputs may include price information,
volatility statistics, specific and broad credit data, liquidity
statistics and other factors. An asset or a liability's level
within the fair value hierarchy is based on the lowest level of any
input that is significant to the fair value measurement. However,
the determination of what constitutes "observable" requires
significant judgment. The Valuation Committee considers observable
data to be such market data which is readily available, regularly
distributed or updated, reliable and verifiable, not proprietary
and provided by multiple, independent sources that are actively
involved in the relevant market. The categorization of an asset or
a liability within the hierarchy is based upon the pricing
transparency of the asset or liability and does not necessarily
correspond to the Valuation Committee's perceived risk of that
asset or liability.
In determining an instrument's placement within the hierarchy,
the Valuation Committee follows the following:
Level 1 Investments in listed stocks and derivatives that are
valued using quoted prices in active markets and are therefore
classified within Level 1 of the fair value hierarchy.
Level 2 Investments in illiquid listed stocks are valued using
the last traded prices of the listed stocks after factoring in
discounts for liquidity. Such investments are generally classified
within Level 2 of the fair value hierarchy.
PACIFIC ALLIANCE CHINA LAND LIMITED
(Incorporated in the Cayman Islands with limited liability)
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIODED 30 JUNE 2018
4 Investments (Continued)
Level 3 Assets are classified within Level 3 of the fair value
hierarchy if they are traded infrequently and therefore have little
or no price transparency. Such assets include investments in
unlisted stocks, bonds, derivatives and loans receivable.
Investments classified within Level 3 have significant unobservable
inputs, as they trade infrequently or not at all. When observable
prices are not available for these securities, the Valuation
Committee uses one or more valuation techniques (e.g., the market
approach or the income approach) for which sufficient and reliable
data is available. Within Level 3, the use of the market approach
generally consists of using comparable market transactions, while
the income approach generally consists of the net present value of
estimated future cash flows, adjusted as appropriate for liquidity,
credit, market and/or other risk factors.
The inputs used by the Valuation Committee in estimating the
value of Level 3 investments include the original transaction
price, recent transactions in the same or similar instruments,
completed or pending third-party transactions in the underlying
investment or comparable issuers, subsequent rounds of financing,
recapitalizations and other transactions across the capital
structure, offerings in the equity or debt capital markets, and
changes in financial ratios or cash flows. Valuation of Level 3
investments may also be adjusted to reflect illiquidity and/or
non-transferability with the amount of such discount estimated by
the Valuation Committee in the absence of market information.
The following table summarizes the fair value of all instruments
within the fair value hierarchy:
Level 1 Level 2 Level 3 Total
US$ US$ US$ US$
As at 30 June 2018
Investments -
derivatives - 189,032 - 189,032
-------------------- -------------------- -------------------- --------------------
- 189,032 - 189,032
As at 31 December
2017
Investments -
derivatives - 281,471 - 281,471
-------------------- -------------------- -------------------- --------------------
- 281,471 - 281,471
As at 30 June 2018, derivatives of US$189,032 (31 December 2017:
US$281,471) were held directly by the Company.
All Level 3 investments held had been disposed as at 31 December
2017, therefore there was no valuation review of Level 3
investments as at 30 June 2018.
PACIFIC ALLIANCE CHINA LAND LIMITED
(Incorporated in the Cayman Islands with limited liability)
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIODED 30 JUNE 2018
5 Derivative instruments
The Company transacts in derivative instruments including
options with each instrument's primary risk exposure being equity,
credit and foreign exchange. The Company enters into currency
options to hedge itself against foreign currency exchange rate risk
for its foreign currency denominated assets and liabilities due to
adverse foreign currency fluctuations against the US dollar.
The fair value of these derivative instruments is included
within the consolidated statement of assets and liabilities with
changes in fair value reflected as net realized gains/(losses) from
investments or net change in unrealized gains/(losses) from
investments within the consolidated statement of operations. The
Company does not designate derivatives as hedging instruments under
FASB ASC 815. The Partnership held Level 2 derivative contracts as
follows:
As at 30 June Fair Value Contractual/notional
2018 amounts
Assets Liabilities Assets Liabilities
US$ US$ US$ US$
Currency options 189,032 - 74,000,000 -
-------- ------------ ----------- ------------
189,032 - 74,000,000 -
======== ============ =========== ============
As at 31 December Fair Value Contractual/notional
2017 amounts
Assets Liabilities Assets Liabilities
US$ US$ US$ US$
Currency options 6,339,045 - 159,000,000 -
---------- ------------ ------------ ------------
6,339,045 - 159,000,000 -
========== ============ ============ ============
The following table indicates the gains and losses on
derivatives, by contract type, as included in the consolidated
statement of operations.
Period ended 30 June 2018
Average Average Change in Gains/(losses)
notional Number of Unrealized
contracts Gains/losses
US$ US$ US$ US$
Currency options 74,000,000 - (92,439) -
----------- ----------- -------------- ---------------
74,000,000 - (92,439) -
=========== =========== ============== ===============
Period ended 31 December 2017
Average Average Change in Gains/(losses)
notional Number of Unrealized
contracts Gains/losses
US$ US$ US$ US$
Currency options 128,000,000 - (5,419,594) (742,980)
------------ ----------- -------------- ---------------
128,000,000 - (5,419,594) (742,980)
============ =========== ============== ===============
The above gains/losses on derivatives are included in
realized/change in unrealized gain from investments in the
consolidated statement of operations.
PACIFIC ALLIANCE CHINA LAND LIMITED
(Incorporated in the Cayman Islands with limited liability)
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIODED 30 JUNE 2018
6 Prepayment and other receivables
As at As at
30 June 31 December
2018 2017
US$ US$
Interest receivable 450,000 710,605
Prepayment and other receivables 67,085 454,525
------------------ ------------------
517,085 1,165,130
7 Share capital, share premium, capital surplus and tendered shares
Number
of
shares Share Share Capital Tendered
outstanding capital premium surplus shares Total
US$ US$ US$ US$ US$
As at 1
January
2017 61,596,638 615,967 - - - 615,967
Re-purchase
of tendered
shares (4,240,282) (42,403) - - - (42,403)
-------------------- ---------------- -------------------- ---------------- -------------------- --------------------
As at 31
December
2017 and 1
January
2018 57,356,356 573,564 - - - 573,564
Re-purchase
of tendered
shares (33,869,947) (338,699) - - - (338,699)
-------------------- ---------------- -------------------- ---------------- -------------------- --------------------
As at 30
June
2018 23,486,409 234,865 - - - 234,865
As at 30 June 2018, the total number of authorized ordinary
shares was 10,000,000,000 (2017: 10,000,000,000) with par value of
US$0.01 (2017: US$0.01) per share. As at 30 June 2018, the Company
had 23,486,409 (2017: 57,356,356) ordinary shares in issue.
8 Taxation
The Company adopted the authoritative guidance contained in FASB
ASC 740 on accounting for and disclosure of uncertainty in tax
positions, which required the Directors to determine whether a tax
position of the Company is more likely than not to be sustained
upon examination, including resolution of any related appeals or
litigation processes, based on the technical merits of the
position. For tax positions meeting the more likely than not
threshold, the tax amount recognized in the financial statements is
reduced by the largest benefit that has a greater than 50%
likelihood of being realized upon ultimate settlement with the
relevant taxing authority.
The uncertain tax positions identified by the Directors mainly
include:
PACIFIC ALLIANCE CHINA LAND LIMITED
(Incorporated in the Cayman Islands with limited liability)
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIODED 30 JUNE 2018
8 Taxation (Continued)
(a) Whether any of the Company and its offshore SPVs would be
deemed as a China Tax Resident Enterprise ("TRE") under the China
Corporate Income Tax ("CIT") Law. If an offshore entity is deemed
as a China TRE, its income would be subject to China CIT at
25%.
(b) Whether any of the Company and its offshore SPVs that may
derive income would be deemed as having an establishment or place
in China. If an offshore entity has an establishment or place in
China, income derived by the offshore entity that is derived from
China by the establishment or place or income that is effectively
connected to the establishment or place would be subject to China
CIT at 25%.
(c) Whether any of the Company and its offshore SPVs is subject
to Hong Kong profits tax. An entity would be subject to Hong Kong
profits tax if (i) the entity carries on a trade, profession or
business in Hong Kong; (ii) profits are derived from that trade,
profession or business carried on in Hong Kong (excluding gains of
a capital nature); and (iii) the profits arise in or are derived
from Hong Kong, i.e. have a Hong Kong source.
The Investment Manager has assessed that the Company and its
offshore SPVs are not TREs in China and do not have any
establishment or place of business in China. Gains from the
disposal of investments in China by the Company or its SPVs may be
subject to China withholding tax at 10% without considering the
potential relief that may be available under any tax treaty between
the tax jurisdiction of the transferor and China. In addition,
where Chinese equity investments are held via an offshore
intermediate holding company, exit of the Chinese equity investment
disposal of shares in the offshore intermediate holding company
could be regarded as an indirect transfer of the Chinese equity
investment. According to the General Anti Avoidance Rules under the
China CIT Law, if an investment holding structure and investment
exit via indirect transfer do not have a reasonable commercial
purpose, the Chinese tax authority is empowered to disregard such
arrangement and impose withholding tax on the gains from such an
indirect transfer. The directors have reviewed the structure of the
investment portfolio and assessed the potential withholding tax
implications and considered adequate provision to China tax has
been made on the Company's financial statements.
As at 30 June 2018, the Investment Manager has analyzed the open
tax years of all jurisdictions subject to tax examination and the
provision deferred tax and uncertain tax amounted to US$1,834,430
(2017: US$9,242,791) and US$743,333 (2017: US$743,333)
respectively. The Investment Manager has reviewed the structure of
the investment portfolio and assessed the potential withholding tax
implications and considered adequate provision to China tax has
been made on the Company's consolidated financial statements.
The Investment Manager has reviewed the structure of the
Company's investment portfolio and considered the Company's
exposure to countries in which it invests to be properly reflected
in the Company's consolidated financial statements.
Under current Cayman Islands legislation applicable to an
exempted company, there is no income tax, capital gains or
withholding tax, estate duty, or inheritance tax payable by the
Company in the Cayman Islands.
PACIFIC ALLIANCE CHINA LAND LIMITED
(Incorporated in the Cayman Islands with limited liability)
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIODED 30 JUNE 2018
9 Tax Expense
A reconciliation of tax expense is as follows:
Period from
01 January
to 30 June
2018 $
Corporate Income Tax 238,333
Withholding Tax 1,842,941
Tax Expense 2,081,274
10 Management fees and performance fees
Pursuant to the Investment Management Agreement dated 20
November 2007, the Investment Manager was appointed to manage the
investments of the Company. The Investment Manager will receive an
aggregate management fee of 2% per annum of the quarterly Net Asset
Value ("NAV"). The management fee is paid quarterly in advance
based on the NAV at the first day of each fiscal quarter. For the
period ended 30 June 2018, total management fees amounted to
US$1,569,260 (30 June 2016: US$1,877,219); payable amounted to
US$742,645 (31 December 2017: US$Nil).
The Investment Manager is also entitled to receive performance
fees from the Company in the event that the year-end NAV is greater
than the higher of (a) the year-end NAV for the last year in which
a performance fee was payable ("High Water Mark"); and (b) the NAV
on Admission increased by a non-compound annual hurdle rate of 8%
("Hurdle").
The performance fees will be calculated as follows:
-- 0% of the relevant increase in the year-end NAV if the
year-end NAV is at or below the Hurdle;
-- 100% of the relevant increase in the year-end NAV above the
Hurdle up to a non-compound annual rate of 10% (the "Catch-up");
and
-- 20% of the relevant increase in the year-end NAV above the Catch-up.
For the period ended 30 June 2018, total performance fees
amounted to US$Nil (30 June 2017: US$Nil). As at 30 June 2018,
performance fees payable amounted to US$133,162 (31 December 2017:
US$133,162).
Under the Investment Management Agreement, the performance fees
earned by the Investment Manager shall be paid 75% in cash and 25%
in the Company's ordinary shares ("share portion"). The Company may
elect to meet its share obligation either by issuing new shares at
NAV or purchasing the equivalent number of shares in the
market.
11 Investment agency fees
To facilitate the disposal of an investment, the Company entered
into a consulting agreement with an unrelated third party (the
"Consultant"). Under the agreement, the Company is obligated to pay
an investment agency fee to the Consultant based on a percentage of
the net realized gain of the investment earned by the Company upon
realization.
For the period ended 30 June 2018, investment agency fee of
US$1,415,585 (2017: US$Nil) was paid based on the realized and
unrealized gain on the investment net of certain expenses and tax
attributable to the investment.
PACIFIC ALLIANCE CHINA LAND LIMITED
(Incorporated in the Cayman Islands with limited liability)
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIODED 30 JUNE 2018
12 Related party transactions
Apart from the related party transactions disclosed in Note 10,
the Company also had the following significant related-party
transactions.
(a) Restructuring with PACL II Limited
On 2 March 2009, the Company held an extraordinary general
meeting to approve a tender offer that allowed shareholders to
exchange all or part of their shares for shares in PACL II Limited
("PACL II"), a Cayman Islands private vehicle that will be used to
realize and distribute cash from exited investments based on the
investment and asset positions held by the Company as at 31
December 2008 ("Tender Offer Portfolio"). PACL II is also managed
by the Investment Manager. It was due to, without any further
action on the part of its shareholders, automatically wind up and
dissolve in three years upon when its ordinary shares were first
issued. On 5 January 2012, the duration of PACL II was extended by
one year to 2 March 2013 upon the written election by the
Investment Manager. On 28 February 2013, the duration of PACL II
was further extended by two years to 4 March 2015 upon the written
election by the Investment Manager and a majority of the
shareholders. On 30 January 2015, the Investment Manager made an
election to extend the duration of PACL II by one year to 4 March
2016.
As part of this restructuring, the Company repurchased
180,166,107 shares at a tender price of US$1.01 per share in
exchange for holders of these shares receiving the same number of
shares in PACL II.
Under the terms of the tender offer, PACL II is entitled to
receive 50.33% of the proceeds from the Tender Offer Portfolio,
which reflects a 5% discount of its proportionate share of the
Tender Offer Portfolio. As such, the amount due to PACL II is
recorded as a payable by the Company, adjusted at each period end
based on the movement in the fair value of the underlying assets
and the income and expense attributable to the Tender Offer
Portfolio. The amount is unsecured and non-interest bearing. The
following table summarizes the movements in amount due from/(to)
PACL II.
As at As at
30 June 31 December
2018 2017
US$ US$
Opening (1,142,339) (237,755)
Distributions to PACL II - -
Fund transfer from PACL II to the
Fund 1,200,000 (1,200,000)
Net decrease/(increase) in payable
from gains/(losses) attributable
to PACL II (274,287) 295,416
------------------ ------------------
Closing (216,626) (1,142,339)
(b) Directors' remuneration
The Company pays each of its Directors an annual fee of
US$57,500 (2017: US$30,000). If a Director is a member of the
Valuation Committee or Audit Committee, the Director also receives
an additional annual fee of US$10,000, and the Chairman of either
Committee receives an additional annual fee of US$5,000. During the
period ended 30 June 2018, Jon-Paul Toppino agreed to waive his
directors' fees and committee fees.
PACIFIC ALLIANCE CHINA LAND LIMITED
(Incorporated in the Cayman Islands with limited liability)
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 JUNE 2018
12 Related party transactions (Continued)
(c) Share capital held by funds managed by fellow subsidiaries of the Investment Manager
In February and June 2018, PAX LP sold 890,644 and 3,681,901
(2017:572,451) ordinary shares of the Fund as part of the Fund's
share repurchase transaction (see Note 7) which closed on the same
date. As at 30 June 2018, PAX LP held 3,170,736 (2017:7,743,281)
shares of the Company, representing 13.5% (2017:13.5%) of total
outstanding shares of the Company.
PAX LP is managed by a fellow subsidiary of the Investment
Manager.
13 Financial highlights
Net asset value per share at the end of the period is as
follows:
2018 2017
US$ US$
Per share data (for a share outstanding
throughout the period)
Net asset value as at opening of the
period 2.8816 2.8694
Net investment gain (loss) (0.0248) (0.0564)
Net realized and unrealized gains (losses)
from investments (0.0583) 0.0686
-------------- --------------
Net asset value as at closing of the
period 2.7985 2.8816
The following represents the ratios to average net assets and
other supplemental information:
From 1 January From 1 January
to to
30 June 2018 30 June 2017
Total return before performance fees
(1) (2.88%) (1.28%)
Performance fees 0.00% 0.00%
Total return after performance fees
(1) (2.88%) (1.28%)
Ratios to average net assets (2)
Total expenses (1.47%) (1.57%)
Net investment loss (0.42%) (1.01%)
(1) Total return represents the change in NAV (before and after
performance fees), adjusted for cash flows in relation to capital
transactions for the period.
(2) Average net assets is derived from the beginning and ending
NAV, adjusted for cash flows in relation to capital transactions
for the period. For the period ended 30 June 2018, the average net
assets amounted to US$137,703,388 (2017: US$170,595,207).
PACIFIC ALLIANCE CHINA LAND LIMITED
(Incorporated in the Cayman Islands with limited liability)
NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 JUNE 2018
14 Commitment and contingency
In the normal course of business, the Company may enter into
arrangements that contain a variety of representations and
warranties that provide general indemnification under certain
circumstances. The Company's maximum exposure under these
arrangements is unknown, as this would involve future claims that
may be made against the Company and which have not yet occurred.
However, based on experience, the Directors expect the risk of loss
to be remote, and, therefore, no provision has been recorded.
15 Subsequent events
The Manager has performed a subsequent events review from 1 July
2018 through to 25 September 2018, being the date that the
financial statements were available to be issued, and has
determined and has determined there were no subsequent events
requiring adjustment or disclosure in the financial statements.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR LAMPTMBATMRP
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