Ann: Response to ASX Query - Half Year Accounts, page-19

I wouldn't be too complacent about PNC's accounting - who cares about shorters, it is more about holders selling.

The (annualised) gross returns on the PDP portfolio appear to have fallen from about a 50% return in 2015 to about 40% last year and in the first half was 33%, which is the worst half by far - 1H18 was 39%.

I do wonder if the decision is being made for self serving reasons. As the returns are far worse than previous periods, obviously some of the factors being used to generate an amortised cost might be relatively unfavourable ATM. In fact the auditor pretty much states this is the case IMO. "Subsequently measuring PDPs at amortised cost could have a material impact on opening retained earnings on initial adoption of AASB 9 and on revenue from operations, net impairment losses on financial assets and financial assets at fair value through profit or loss for the half-year."

Add to this that they only have about $20m available credit headroom, and a stated desire to not increase their gearing, then we are looking at a capital raising in the near future.

After seeing that dodgy graph in the AGM presentation, and the recent resignation of the COO after that, the "off broadway" senate enquiry, holding back on loan writing, and their accountant providing a qualified review of the accounts, there seems to be some sort of underlying desperation, or a keen focus on (less experienced) retail investors. Some red flags.

Looks cheap on earnings guidance, but then why worry about the PDP amortised val if the returns will continue? Currently the only hint we have is the current PDP val, which seems in line with last year as a proportion of .

I have no way of knowing, but my guess is that they don't want to share their ongoing assumptions for the PDP portfolio performance.

All IMO