The Investment Manager invests the majority of the Company's
gross asset value in China's first, second and third tier cities.
Remaining gross asset value may be invested in Hong Kong, Macau and
Taiwan should the directors of the Company and the Investment
Manager consider that such investments offer potentially attractive
returns. Whilst the Company's approach is fundamentally
opportunistic, the Investment Manager invests in residential
properties, office real estate and retail, hospitality and
industrial real estate.
Type of Investments
Investments are funded by way of cash. Ordinary shares of the
Company will not be used as consideration for any investment. The
Investment Manager makes investments through investee companies,
which are special purpose vehicles established offshore to hold
investments. Investments may also be made using a Chinese domestic
holding entity with a pre-approved level of registered capital
which is licensed to enable foreign entities to acquire real estate
in the PRC.
Investment Size
The Company's individual investments range from $13 million to
$40 million although initial investments may be smaller if the
Company anticipates follow-on investments may be required. No
single initial investment will exceed 20% of gross asset value at
the time of investment.
Control of Investments
The Company seeks to own a substantial interest in its
investments or, where necessary, secure adequate minority
protection rights.
Realization of Investments
The Company intends to exit individual investments when the
Investment Manager and the Investment Committee believe realisation
would be in the best interests of the Company and consistent with
its investment objective. The Company anticipates the average
holding period of investments will be between 12 and 36 months.
Borrowings
There is no limit in the articles of the Company as to the
amount of debt the Company may incur. As is typical with property
development and investment, Investee Companies may use leverage for
individual developments. The level of debt incurred may vary
depending on the laws and regulations pertaining to the debt market
with regard to any specific investment and the ability of the
relevant Investee Company to service the debt. The Investment
Manager has the authority under the investment management agreement
between the Company and the Investment Manager to arrange recourse
borrowings on behalf of the Company up to an aggregate maximum of
50% of the Company net asset value from time to time, calculated at
the time such borrowings are undertaken. All recourse debt incurred
on behalf of the Company above this level will require majority
Board approval.
Collective Investment Schemes and Cross-Holdings
The Company may not invest more than an aggregate maximum of 10%
of the gross asset value of the Company in units or shares in
collective investment schemes or in other listed closed-end
investment funds.
CONSOLIDATED STATEMENT OF ASSETS AND LIABILITIES
AS AT 31 DECEMBER 2011
Note 2011 2010
US$ US$
Assets
Investments, at fair value (Cost:
US$128,798,042;
2010: US$155,493,106) 3,4,5,6 312,461,715 335,751,186
Other receivables 185,259 1,500,000
Restricted cash 7,13(d) 43,330,560 -
Cash and bank balances 117,196,263 64,596,405
-------------------- --------------------
Total assets 473,173,797 401,847,591
------------------ ------------------
Liabilities
Provision for taxation 10 62,264,914 46,706,527
Amounts due to PACL II Limited 13(a) 55,890,197 101,159,458
Bank loan 7,13(d) 38,121,000 -
Performance fee payable 11,13(b) 12,542,028 12,341,008
Provision for investment agency fees 12 7,841,354 -
Accrued expenses and other payables 1,756,219 135,878
-------------------- --------------------
Total liabilities 178,415,712 160,342,871
------------------ ------------------
Net assets 294,758,085 241,504,720
Analysis of net assets
Share capital 8 1,898,339 1,898,339
Share premium 8 187,935,554 187,935,554
Capital surplus 8 1,816,917 1,816,917
Tendered shares 8 (49,293,340) (52,378,592)
Retained earnings 152,400,615 102,232,502
-------------------- --------------------
Net assets (equivalent to US$2.1073
(2010: US$1.7480) per share based
on 139,876,717 (2010: 138,156,860)
outstanding shares) 294,758,085 241,504,720
Approved by the Board of Directors
The accompanying notes are an integral part of these
consolidated financial statements.
CONSOLIDATED SCHEDULE OF INVESTMENTS
AS AT 31 DECEMBER 2011
2011 2010
% of % of
effective effective
% of equity % of equity
Investments net interest Cost/ net interest Cost/
- Assets assets held principal Fair value assets held principal Fair value
US$ US$ US$ US$
COMMON STOCKS 85.98% 112.99%
Aviation,
China 0.00% 6.00%
Hainan Airport
Group Limited - - - - 6.00% 4.90% 10,002,500 14,500,000
Real Estate
Development,
China 85.98% 106.98%
Huzhou Jingrui
Real Estate
Co. Ltd 5.94% 49.00% 7,423,167 17,495,501 7.32% 49.00% 7,423,167 17,668,314
Qingdao Vanke
Real Estate
Co. Ltd - - - - 7.50% 40.00% 5,860,000 18,119,561
Jiangyin
Aijia
Investment 10.10% 15.00% 22,725,000 29,777,820 8.99% 15.00% 22,725,000 21,721,598
SZITIC
Commercial
Property
Co Ltd 25.91% 30.00% 5,548,341 76,372,900 36.55% 30.00% 12,500,000 88,260,042
Dalian Wanda
Commercial
Real Estate
Co Ltd 17.93% 0.50% 22,414,500 52,853,760 22.58% 0.50% 22,414,500 54,540,000
Beijing Hines
Jing Sheng
Real Estate
Development
Co Ltd 26.10% 40.00% 20,880,000 76,938,054 24.04% 40.00% 20,880,000 58,055,978
BONDS 16.61% 20.27%
Real Estate
Development,
China 16.61% 20.27%
Times Property
Holdings
Co. Ltd 16.61% 40,000,000 48,957,746 20.27% 40,000,000 48,957,746
LOANS
RECEIVABLE 3.33% 5.77%
Real Estate
Development,
China 3.33% 5.77%
Spirit Charter
Investment
Limited (1) 3.33% 9,807,034 9,807,034 5.77% 13,687,939 13,927,947
DERIVATIVES 0.09% 0%
Others 0.09% - 258,900 0% - -
128,798,042 312,461,715 155,493,106 335,751,186
(1) The principal above represents the principal calculated
according to the Fund's accounting purpose, which is different from
the loan principal calculated in accordance with the legal
agreements whereby the cost is paid prior to the repayment of
interest component.
The accompanying notes are an integral part of these
consolidated financial statements.
CONSOLIDATED STATEMENT OF OPERATIONS
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