TIDMSIHL
RNS Number : 0904A
Symphony International Holdings Ltd
24 March 2017
SYMPHONY INTERNATIONAL HOLDINGS
PUBLICATION OF ANNUAL REPORT FOR THE
YEARED 31 DECEMBER 2016
24 March 2017
Symphony International Holdings Limited (the "Company", "SIHL"
or "Symphony"), the London listed investor in fast growing Asian
consumer businesses, today announces the publication of its 2016
annual report, which is available on its website at
www.symphonyasia.com.
FOR FURTHER INFORMATION
For further information:
Anil Thadani +65 6536 6177
Symphony Asia Holdings Pte. Ltd.
IMPORTANT INFORMATION
This announcement is not for release, publication or
distribution, in whole or in part, directly or indirectly, in or
into the United States or any other jurisdiction into which the
publication or distribution would be unlawful. These materials do
not constitute an offer to sell or issue or the solicitation of an
offer to buy or acquire securities in the United States or any
other jurisdiction in which such offer or solicitation would be
unlawful. The securities referred to in this document have not been
and will not be registered under the securities laws of such
jurisdictions and may not be sold, resold, taken up, transferred,
delivered or distributed, directly or indirectly, within such
jurisdictions.
No representation or warranty is made by the Company as to the
accuracy or completeness of the information contained in this
announcement and no liability will be accepted for any loss arising
from its use.
This announcement is for information purposes only and does not
constitute an invitation or offer to underwrite, subscribe for or
otherwise acquire or dispose of any securities of the Company in
any jurisdiction. All investments are subject to risk. Past
performance is no guarantee of future returns. Prospective
investors are advised to seek expert legal, financial, tax and
other professional advice before making any investment
decisions.
This announcement is not an offer of securities for sale into
the United States. The Company's securities have not been, and will
not be, registered under the United States Securities Act of 1933
and may not be offered or sold in the United States absent
registration or an exemption from registration. There will be no
public offer of securities in the United States.
Statements contained in this announcement regarding past trends
or activities should not be taken as a representation that such
trends or activities will continue in the future. The information
contained in this document is subject to change without notice and,
except as required by applicable law, neither the Company nor the
Investment Manager assumes any responsibility or obligation to
update publicly or review any of the forward-looking statements
contained herein. You should not place undue reliance on
forward-looking statements, which speak only as of the date of this
announcement.
The Company and the Investment Manager are not associated or
affiliated with any other fund managers whose names include
"Symphony", including, without limitation, Symphony Financial
Partners Co., Ltd.
SYMPHONY INTERNATIONAL HOLDINGS LIMITED
Financial Results for the year ended 31 December 2016
Symphony International Holdings Limited (the "Company", "SIHL"
or "Symphony") announces the financial results for the year ended
31 December 2016. The financial statements of the Company have been
prepared in accordance with International Financial Reporting
Standards (IFRS). The financial statements are audited by KPMG
LLP.
Independent auditors' report
Members of the Company
Symphony International Holdings Limited
Report on the audit of the financial statements
Opinion
We have audited the accompanying financial statements of
Symphony International Holdings Limited (the Company), which
comprise the statement of financial position of the Company as at
31 December 2016, the statement of profit or loss and other
comprehensive income, statement of changes in equity and statement
of cash flows of the Company for the year then ended, including a
summary of significant accounting policies and other explanatory
information, as set out on pages FS1 to FS33.
In our opinion, the accompanying financial statements of the
Company are properly drawn up in accordance with International
Financial Reporting Standards (IFRS) so as to give a true and fair
view of the financial position of the Company as at 31 December
2016 and of the financial performance and changes in equity and
cash flows of the Company for the year ended on that date.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (ISAs). Our responsibilities under those
standards are further described in the Auditors' responsibilities
for the Audit of the Financial Statements section of our report. We
are independent of the Company in accordance with the IESBA Code of
Ethics for Professional Accountants (IESBA Code), and we have
fulfilled our other ethical responsibilities in accordance with the
IESBA Code. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion.
Key audit matters
Key audit matters are those matters that, in our professional
judgement, were of most significance in our audit of the financial
statements of the current period. These matters were addressed in
the context of our audit of the financial statements as a whole,
and in forming our opinion thereon, and we do not provide a
separate opinion on these matters.
Valuation of financial assets at fair value through profit or loss
(Level 3)
(Refer to Note 16 to the financial statements, page FS22 et seq.)
--------------------------------------------------------------------------------------------
The key audit matter How the matter was
addressed in our audit
------------------------------------------------------------ ------------------------------
The Company's investments We have evaluated the
are measured at fair value valuers' competence,
and amount to US$638 million capabilities and objectivity.
at 31 December 2016. The We challenged the assumptions
Company holds its investment made by involving our
directly or through the valuation specialists
unconsolidated subsidiaries. and have corroborated
The underlying investments the reasons for any
comprise both quoted and unexpected movements
unquoted securities. from prior valuations.
The Company has identified For the land related
investments amounting investments and rental
to US$117 million which properties, we compared
require significant judgement the valuation of similar
in the determination of properties in comparable
the fair values as significant locations, grade and
unobservable inputs are zoning. We compared
used in the estimation. the market values to
Changes in these unobservable recent transactions
inputs could have a material which are relatively
impact on the valuation comparable to the nature
of the investments. of the investment.
* For land related investments in Thailand, Japan and For operating businesses,
Malaysia, the Company uses the comparable valuation we assessed whether
method with the price per square metre as the most the comparable enterprise
determinative parameter. model is appropriate
to be applied under
the circumstances,
* For rental properties in Thailand, an income approach whether the comparable
is used to determine the fair values, where rental enterprises operate
growth rate, occupancy rate and discount rate are key in similar businesses
input parameters. and whether the EBITDA
multiples and share
prices are consistent
* For operating businesses in Thailand, the Company with publicly available
measures the investments using the enterprise values information. We used
by applying comparable traded multiples and applies a our valuation specialists
discount for the lack of marketability. to assess the appropriateness
of the discount rate
used for the lack of
marketability.
The Company uses external
valuers to measure the
fair value of the land
related investments and
rental properties. The
Company uses an internal
model to value the operating
businesses.
------------------------------------------------------------ ------------------------------
Our findings
------------------------------------------------------------ ------------------------------
We found no matters of concern regarding the objectivity and competency
of the external valuers and the valuations are within an acceptable
range.
We found the assumptions made by management to be conservative but
within an acceptable range.
--------------------------------------------------------------------------------------------
Management is responsible for the other information. The other
information comprises the information included in the annual
report, but does not include the financial statements and our
auditors' report thereon. Our opinion on the financial statements
does not cover the other information and we do not express any form
of assurance conclusion thereon.
In connection with our audit of the financial statements, our
responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent
with the financial statements or our knowledge obtained in the
audit or otherwise appears to be materially misstated. If, based on
the work we have performed, we conclude that there is a material
misstatement of this other information, we are required to report
that fact. We have nothing to report in this regard.
Responsibilities of management and directors for the financial
statements
Management is responsible for the preparation of financial
statements that give a true and fair view in accordance with IFRS,
and for devising and maintaining a system of internal accounting
controls sufficient to provide a reasonable assurance that assets
are safeguarded against loss from unauthorised use or disposition;
and transactions are properly authorised and that they are recorded
as necessary to permit the preparation of true and fair financial
statements and to maintain accountability of assets.
In preparing the financial statements, management is responsible
for assessing the Company's ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and
using the going concern basis of accounting unless management
either intends to liquidate the Company or to cease operations, or
has no realistic alternative but to do so.
The directors' responsibilities include overseeing the Company's
financial reporting process.
Auditors' responsibilities for the audit of the financial
statements
Our objectives are to obtain reasonable assurance about whether
the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an
auditors' report that includes our opinion. Reasonable assurance is
a high level of assurance, but is not a guarantee that an audit
conducted in accordance with ISAs will always detect a material
misstatement when it exists. Misstatements can arise from fraud or
error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these financial
statements.
As part of an audit in accordance with ISAs, we exercise
professional judgement and maintain professional scepticism
throughout the audit. We also:
-- Identify and assess the risks of material misstatement of the
financial statements, whether due to fraud or error, design and
perform audit procedures responsive to those risks, and obtain
audit evidence that is sufficient and appropriate to provide a
basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting
from error, as fraud may involve collusion, forgery, intentional
omissions, misrepresentations, or the override of internal
controls.
-- Obtain an understanding of internal controls relevant to the
audit in order to design audit procedures that are appropriate in
the circumstances, but not for the purpose of expressing an opinion
on the effectiveness of the Company's internal controls.
-- Evaluate the appropriateness of accounting policies used and
the reasonableness of accounting estimates and related disclosures
made by management.
-- Conclude on the appropriateness of management's use of the
going concern basis of accounting and, based on the audit evidence
obtained, whether a material uncertainty exists related to events
or conditions that may cast significant doubt on the Company's
ability to continue as a going concern. If we conclude that a
material uncertainty exists, we are required to draw attention in
our auditors' report to the related disclosures in the financial
statements or, if such disclosures are inadequate, to modify our
opinion. Our conclusions are based on the audit evidence obtained
up to the date of our auditors' report. However, future events or
conditions may cause the Company to cease to continue as a going
concern.
-- Evaluate the overall presentation, structure and content of
the financial statements, including the disclosures, and whether
the financial statements represent the underlying transactions and
events in a manner that achieves fair presentation.
We communicate with the directors regarding, among other
matters, the planned scope and timing of the audit and significant
audit findings, including any significant deficiencies in internal
controls that we identify during our audit.
We also provide the directors with a statement that we have
complied with relevant ethical requirements regarding independence,
and to communicate with them all relationships and other matters
that may reasonably be thought to bear on our independence, and
where applicable, related safeguards.
From the matters communicated with the directors, we determine
those matters that were of most significance in the audit of the
financial statements of the current period and are therefore the
key audit matters. We describe these matters in our auditors'
report unless law or regulation precludes public disclosure about
the matter or when, in extremely rare circumstances, we determine
that a matter should not be communicated in our report because the
adverse consequences of doing so would reasonably be expected to
outweigh the public interest benefits of such communication.
The engagement partner on the audit resulting in this
independent auditors' report is Hong Cho Hor Ian.
KPMG LLP
Public Accountants and
Chartered Accountants
Singapore
13 March 2017
Statement of financial position
As at 31 December 2016
Note 2016 2015
US$'000 US$'000
Non-current assets
Financial assets at fair
value through profit or
loss 3 638,222 627,292
------- -------
638,222 627,292
------- -------
Current assets
Other receivables and prepayments 4 67 220
Cash and cash equivalents 5 15,793 73,142
15,860 73,362
------- -------
Total assets 654,082 700,654
======= =======
Equity attributable to equity
holders
of the Company
Share capital 6 414,080 413,358
Reserves 7 62,960 62,074
Accumulated profits 168,713 220,154
------- -------
Total equity carried forward 645,753 695,586
------- -------
Current liabilities
Interest-bearing borrowings 8 4,953 4,772
Other payables 9 3,362 296
Bank overdraft 5 14 -
Total liabilities 8,329 5,068
------- -------
Total equity and liabilities 654,082 700,654
======= =======
The financial statements were approved by the Board of Directors
on 13 March 2017.
----------------------------------------
----------------------------------------
Anil Thadani Sunil Chandiramani
Director Director
13 March 2017 13 March 2017
Statement of comprehensive income
Year ended 31 December 2016
Note 2016 2015
US$'000 US$'000
Other operating income 1,020 1,435
Other operating expenses (4,890) (7,407)
Management fees (15,000) (15,000)
(18,870) (20,972)
Share options expense (1,162) (1,986)
-------- --------
Loss before investment results
and income tax (20,032) (22,958)
Fair value changes in financial
assets at fair value
through profit or loss 8,571 38,425
(Loss)/Profit before income
tax 10 (11,461) 15,467
Income tax expense 11 - -
-------- --------
(Loss)/Profit for the year (11,461) 15,467
Other comprehensive income
for the year, net of tax - -
-------- --------
Total comprehensive income
for the year (11,461) 15,467
Earnings per share:
US Cents US Cents
Basic 12 (2.17) 2.94
======== ========
Diluted 12 (2.17) 2.90
======== ========
Statement of changes in equity
Year ended 31 December 2016
Share Accumulated Total
capital Reserves profits equity
US$'000 US$'000 US$'000 US$'000
At 1 January 2015 409,127 61,596 234,688 705,411
Total comprehensive
income for the
year - - 15,467 15,467
-------- -------- ----------- --------
Transactions with
owners of the Company,
recognised directly
in equity
Contributions by
and distributions
to owners
-------- -------- ----------- --------
Issuance of shares 2,723 - - 2,723
Value of services
received for issue
of share options - 1,986 - 1,986
Exercise of share
options 1,508 (1,508) - -
Dividend paid of
US$0.05 per share - - (30,001) (30,001)
-------- -------- ----------- --------
Total transaction
with owners of
the Company 4,231 478 (30,001) (25,292)
-------- -------- ----------- --------
At 31 December
2015 413,358 62,074 220,154 695,586
======== ======== =========== ========
At 1 January 2016 413,358 62,074 220,154 695,586
Total comprehensive
income for the
year - - (11,461) (11,461)
-------- -------- ----------- --------
Transactions with
owners of the Company,
recognised directly
in equity
Contributions by
and distributions
to owners
-------- -------- ----------- --------
Issuance of shares 446 - - 446
Value of services
received for issue
of share options - 1,162 - 1,162
Exercise of share
options 276 (276) - -
Dividend paid of
US$0.06 per share - - (39,980) (39,980)
-------- -------- ----------- --------
Total transaction
with owners of
the Company 722 886 (39,980) (38,372)
-------- -------- ----------- --------
At 31 December
2016 414,080 62,960 168,713 645,753
======== ======== =========== ========
Statement of cash flows
Year ended 31 December 2016
Note 2016 2015
US$'000 US$'000
Cash flows from operating activities
(Loss)/Profit before income tax (11,461) 15,467
Adjustments for:
Exchange loss 3,606 6,341
Interest income (1,020) (1,435)
Interest expense 24 23
Fair value changes in financial assets at
fair value through profit or loss (8,571) (38,425)
Share options expense 1,162 1,986
(16,260) (16,043)
Changes in working capital:
Decrease/(Increase) in other receivables
and prepayments 155 (182)
Increase/(Decrease) in other payables 17 (12)
(16,088) (16,237)
Interest received (net of withholding tax) 1,306 1,181
Net cash used in operating activities (14,782) (15,056)
-------- --------
Cash flows from investing activities
Net (purchase)/proceeds from disposal of
financial assets at fair value through profit
or loss (6,025) 35,402
Net cash (used in)/from investing activities (6,025) 35,402
-------- --------
Cash flows from financing activities
Net proceeds from issue of share capital 446 2,723
Interest paid (24) (24)
Dividend paid (36,938) (30,001)
Proceeds from borrowings 85 67
-------- --------
Net cash used in financing activities (36,431) (27,235)
-------- --------
Net decrease in cash and cash equivalents (57,238) (6,889)
Cash and cash equivalents at 1 January 73,142 80,376
Effect of exchange rate fluctuations (125) (345)
-------- --------
Cash and cash equivalents at 31 December 5 15,779 73,142
======== ========
Notes to the financial statements
These notes form an integral part of the financial
statements.
The financial statements were authorised for issue by the Board
of Directors on 13 March 2017.
1 Domicile and activities
Symphony International Holdings Limited (the Company) was
incorporated in the British Virgin Islands (BVI) on 5 January 2004
as a limited liability company under the International Business
Companies Ordinance. The address of the Company's registered office
was changed from P.O. Box 957, Offshore Incorporations Centre, Road
Town, Tortola, British Virgin Islands to Vistra Corporate Services
Centre, Wickhams Cay II, Road Town, Tortola VG1110 British Virgin
Islands effective 13 February 2017. The Company does not have a
principal place of business as the Company carries out its
principal activities under the advice of its Investment
Manager.
The principal activities of the Company are those relating to an
investment holding company while those of its unconsolidated
subsidiaries consist primarily of making strategic investments with
the objective of increasing the net asset value through long-term
strategic private equity investments in consumer-related
businesses, predominantly in the hospitality, healthcare and
lifestyle sectors (including branded real estate developments), as
well as investments in special situations and structured
transactions which have the potential of generating attractive
returns.
2 Summary of significant accounting policies
2.1 Basis of preparation
The financial statements have been prepared in accordance with
International Financial Reporting Standards (IFRS).
The financial statements have been prepared on a fair value
basis, except for certain items which are measured on a historical
cost basis. The financial statements are presented in thousands of
United States dollars (US$'000), which is the Company's functional
currency, unless otherwise stated.
The preparation of financial statements in conformity with IFRS
requires management to make judgements, estimates and assumptions
that affect the application of accounting policies and reported
amounts of assets, liabilities, income and expenses. Actual results
may differ from these estimates.
The estimates and underlying assumptions are reviewed on an
ongoing basis. Revisions to accounting estimates are recognised in
the period in which the estimates are revised and in any future
periods affected.
In particular, information about assumptions and estimation
uncertainties that have a significant risk of resulting in a
material adjustment within the next financial year are included in
the following notes:
-- Note 13 - Valuation of share options
-- Note 16 - Fair value of investments
Except as disclosed above, there are no other significant areas
of estimation uncertainty or critical judgements in the application
of accounting policies that have a significant effect on the amount
recognised in the financial statements.
2.2 Subsidiaries
Subsidiaries are investees controlled by the Company. The
Company controls an investee if it is exposed to, or has rights to,
variable returns from its involvement with the investee and has the
ability to affect those returns through its power over the
investee.
The Company is an investment entity and does not consolidate its
subsidiaries and measures them at fair value through profit or
loss. In determining whether the Company meets the definition of an
investment entity, management considered the structure of the
Company and its subsidiaries as a whole in making its
assessment.
2.3 Functional currency
Items included in the financial statements of the Company are
measured using the currency that best reflects the economic
substance of the underlying events and circumstances relevant to
the Company (the functional currency).
For the purposes of determining the functional currency of the
Company, management has considered the activities of the Company,
which are those relating to an investment holding company. Funding
is obtained in US dollars through the issuance of ordinary
shares.
2.4 Foreign currencies
Foreign currency transactions
Transactions in foreign currencies are translated to the
functional currency of the Company at the exchange rates ruling at
the dates of the transactions. Monetary assets and liabilities
denominated in foreign currencies at the financial reporting date
are retranslated to the functional currency at the exchange rate
prevailing at that date.
Non-monetary assets and liabilities denominated in foreign
currencies that are measured at fair value are retranslated to the
functional currency at the exchange rates at the date on which the
fair value was determined. Non-monetary items in a foreign currency
that are measured based on historical cost are translated using the
exchange rate at the date of the transaction.
Foreign currency differences arising on retranslation are
recognised in profit or loss.
2.5 Financial instruments
The Company early adopted IFRS 9 Financial Instruments ("IFRS
9") for the first time from 12 November 2009, being the earliest
date it was available for adoption. The Company elected to apply
IFRS 9 retrospectively as if it had always applied. IFRS 9
specifies the basis for classifying and measuring financial assets.
Classification is determined based on the Company's business model
measured at either amortised cost or fair value. IFRS 9 replaces
the classification and measurement requirements relating to
financial assets in IAS 39 Financial Instruments: Recognition and
Measurement. In 2010, 2013 and 2014, IFRS 9 was updated to include
revised guidance on the classification and measurement of financial
instruments, a new expected credit loss model for calculating
impairment on financial assets, and new general hedge accounting
requirements. The final version of IFRS 9 (2014) is effective for
periods beginning on or after 1 January 2018.
Non-derivative financial instruments
Non-derivative financial instruments comprise financial assets
at fair value through profit or loss, other receivables and
prepayments, cash and cash equivalents, and other payables.
Non-derivative financial instruments are recognised initially at
fair value plus, for instruments not at fair value through profit
or loss, any directly attributable transaction costs, except as
described below. Subsequent to initial recognition, non-derivative
financial instruments are measured as described below.
A financial instrument is recognised if the Company becomes a
party to the contractual provisions of the instrument. Financial
assets are derecognised if the Company's contractual rights to the
cash flows from the financial assets expire or if the Company
transfers the financial asset to another party without retaining
control or transfers substantially all the risks and rewards of the
asset. Regular way purchases and sales of financial assets are
accounted for at settlement date, i.e., the date that an asset is
delivered to or by the Company. Financial liabilities are
derecognised if the Company's obligations specified in the contract
expire or are discharged or cancelled.
Cash and cash equivalents
Cash and cash equivalents comprise cash and bank balances,
deposits with financial institutions, and placements in money
market funds. Bank overdrafts that are repayable on demand and that
form an integral part of the Company's cash management are included
as a component of cash and cash equivalents for the purpose of the
statement of cash flows.
Financial assets at fair value through profit or loss
Financial assets are measured at fair value through profit or
loss. This includes financial assets that are held for trading and
investments that the Company manages based on their fair value in
accordance with the Company's documented risk management and/or
investment strategy.
Equity instruments are measured at fair value through profit or
loss unless the Company irrevocably elects at initial recognition
to present the changes in fair value in other comprehensive income
as described below.
Upon initial recognition, financial assets measured at fair
value through profit or loss are recognised at fair value and any
transaction costs are recognised in profit or loss when incurred.
Subsequent to initial recognition, financial assets at fair value
through profit or loss are measured at fair value, and changes
therein, which takes into account any dividend income, are
recognised in profit or loss.
Others
Other non-derivative financial instruments are measured at
amortised cost using the effective interest method, less any
impairment losses.
Share capital
Ordinary shares are classified as equity as there is no
contractual obligation for the Company to deliver cash or another
financial asset to another entity, or to exchange financial assets
or financial liabilities with another entity under conditions that
are potentially unfavourable to the Company.
Incremental costs directly attributable to the issue of ordinary
shares are recognised as a deduction from equity, net of any tax
effects.
2.6 Impairment
Financial assets
A financial asset, other than financial assets at fair value
through profit or loss, is assessed at each reporting date to
determine whether there is any objective evidence that it is
impaired. A financial asset is considered to be impaired if
objective evidence indicates that one or more events have had a
negative effect on the estimated future cash flows of that
asset.
An impairment loss is calculated as the difference between its
carrying amount and the present value of the estimated future cash
flows discounted at the original effective interest rate.
Individually significant financial assets are tested for
impairment on an individual basis. The remaining financial assets
are assessed collectively in groups that share similar credit risk
characteristics.
All impairment losses are recognised in profit or loss in the
statement of comprehensive income. An impairment loss is reversed
if the reversal can be related objectively to an event occurring
after the impairment loss was recognised. For financial assets
measured at amortised cost, the reversal is recognised in profit or
loss in the statement of comprehensive income.
Non-financial assets
The carrying amounts of the Company's non-financial assets are
reviewed at each financial reporting date to determine whether
there is any indication of impairment. If any such indication
exists, the asset's recoverable amount is estimated. For goodwill,
recoverable amount is estimated at each reporting date, and as and
when indicators of impairment are identified.
An impairment loss is recognised if the carrying amount of an
asset or its cash-generating unit exceeds its recoverable amount. A
cash-generating unit is the smallest identifiable asset group that
generates cash flows that largely are independent from other assets
and groups. Impairment losses are recognised in profit or loss in
the statement of comprehensive income unless it reverses a previous
revaluation, credited to other comprehensive income, in which case
it is charged to other comprehensive income.
The recoverable amount of an asset or cash-generating unit is
the greater of its value in use and its fair value less costs to
sell. In assessing value in use, the estimated future cash flows
are discounted to their present value using a pre-tax discount rate
that reflects current market assessments of the time value of money
and the risks specific to the asset or cash-generating unit.
An impairment loss in respect of goodwill is not reversed. In
respect of other assets, impairment losses recognised in prior
periods are assessed at each reporting date for any indications
that the loss has decreased or no longer exists. An impairment loss
is reversed if there has been a change in the estimates used to
determine the recoverable amount. An impairment loss is reversed
only to the extent that the asset's carrying amount does not exceed
the carrying amount that would have been determined, net of
depreciation or amortisation, if no impairment loss had been
recognised.
2.7 Share-based payments
The share option programme allows the option holders to acquire
shares of the Company. The fair value of options granted to the
Investment Manager is recognised as an expense in profit or loss in
the statement of comprehensive income with a corresponding increase
in equity. The fair value is measured when the services are
received and spread over the period during which the Investment
Manager becomes unconditionally entitled to the options.
The proceeds received net of any directly attributable
transactions costs are credited to share capital when the options
are exercised.
The fair value of Management Shares granted to the Investment
Manager is recognised as an expense, with a corresponding increase
in equity, over the vesting period, i.e. when the Investment
Manager becomes unconditionally entitled to the Management
Shares.
2.8 Revenue recognition
Dividends
Dividend income is recognised on the date that the shareholder's
right to receive payment is established, which in the case of
quoted securities is the ex-dividend date.
2.9 Finance income
Interest income from deposits with financial institutions and
placements in money market funds and loans to associates, joint
ventures and investee companies is recognised as it accrues, using
the effective interest method.
2.10 Finance expense
All borrowing costs are recognised in profit or loss in the
statement of comprehensive income using the effective interest
method.
2.11 Income tax expense
Income tax expense comprises current and deferred tax. Income
tax expense is recognised in profit or loss in the statement of
comprehensive income except to the extent that it relates to items
recognised directly in equity or in other comprehensive income, in
which case it is recognised in equity or in other comprehensive
income.
Current tax is the expected tax payable on the taxable income
for the year, using tax rates enacted or substantively enacted at
the financial reporting date, and any adjustment to tax payable in
respect of previous years.
Deferred tax is recognised in respect of temporary differences
between the carrying amounts of assets and liabilities for
financial reporting purposes and the amounts used for taxation
purposes. Deferred tax is not recognised for:
-- temporary differences arising from the initial recognition of goodwill; and
-- temporary differences on the initial recognition of assets or
liabilities in a transaction that is not a business combination and
that affects neither accounting nor taxable profit or loss;
The measurement of deferred taxes reflects the tax consequences
that would follow the manner in which the Company expects, at the
end of the reporting period, to recover or settle the carrying
amount of its assets and liabilities. Deferred tax is measured at
the tax rates that are expected to be applied to the temporary
differences when they reverse, based on the laws that have been
enacted or substantively enacted by the reporting date.
Deferred tax assets and liabilities are offset if there is a
legally enforceable right to offset current tax liabilities and
assets and they relate to income taxes levied by the same tax
authority on the same taxable entity, or on different tax entities,
but they intend to settle current tax liabilities and assets on a
net basis or their tax assets and liabilities will be realised
simultaneously.
A deferred tax asset is recognised to the extent that it is
probable that future taxable profits will be available against
which the temporary differences can be utilised. Deferred tax
assets are reviewed at each reporting date and are reduced to the
extent that it is no longer probable that the related tax benefit
will be realised.
In determining the amount of current and deferred tax, the
Company takes into account the impact of uncertain tax positions
and whether additional taxes and interest may be due. The Company
believes that its accruals for tax liabilities are adequate for all
open tax years based on its assessment of many factors, including
interpretations of tax law and prior experience. This assessment
relies on estimates and assumptions and may involve a series of
judgements about future events. New information may become
available that causes the Company to change its judgement regarding
the adequacy of existing tax liabilities. Such changes to tax
liabilities will impact tax expense in the period that such a
determination is made.
2.12 Earnings per share
The Company presents basic and diluted earnings per share data
for its ordinary shares. Basic earnings per share is calculated by
dividing the profit or loss attributable to ordinary shareholders
of the Company by the weighted average number of ordinary shares
outstanding during the year, adjusted for own shares held. Diluted
earnings per share is determined by adjusting the profit or loss
attributable to ordinary shareholders and the weighted average
number of ordinary shares outstanding, adjusted for own shares
held, for the effects of all potentially dilutive ordinary shares,
share options granted to Investment Manager and warrants.
2.13 Segment reporting
An operating segment is a component of the Company that engages
in business activities from which it may earn revenues and incur
expenses, including revenues and expenses that relate to
transactions with any of the Company's other components. Operating
segments are reported in a manner consistent with the internal
reporting provided to the chief operating decision-maker. The chief
operating decision-maker has been identified as the Board of
Directors of Symphony Asia Holdings Pte. Ltd that makes strategic
investment decisions.
2.14 New accounting standards and interpretations not yet adopted
A number of new standards, amendments to standards and
interpretations are effective for annual periods beginning after 1
January 2016 and have not been applied in preparing these financial
statements. None of these are expected to have a significant impact
on the Company's financial statements.
3 Financial assets at fair value through profit or loss
2016 2015
US$'000 US$'000
Investments 638,222 627,292
======= =======
4 Other receivables and prepayments
2016 2015
US$'000 US$'000
Amount due from investment
manager 5 -
Interest receivables 3 10
Other receivables 1 171
Other prepayments 58 39
67 220
======= =======
5 Cash and cash equivalents
2016 2015
US$'000 US$'000
Fixed deposits with financial
institutions 7,602 49,606
Cash at bank 8,191 23,536
------- -------
Cash and cash equivalents in
the statement of financial position 15,793 73,142
Bank overdraft (14) -
------- -------
Cash and cash equivalents in
the statement of cash flows 15,779 73,142
======= =======
The effective interest rate on fixed deposits with financial
institutions as at 31 December 2016 was 0.094% to 0.9% (2015: 0.09%
to 0.80%) per annum. Interest rates reprice at intervals of one to
four weeks.
6 Share capital
Company
2016 2015
Number Number
of shares of shares
Fully paid ordinary shares, with no par value:
At 1 January 528,096,195 523,557,998
Exercise of share options 742,616 4,538,197
At 31 December 528,838,811 528,096,195
=========== ===========
Share capital in the statement of financial position represents
subscription proceeds received from, and the amount of liabilities
capitalised through, the issuance of ordinary shares of no par
value in the Company, less transaction costs directly attributable
to equity transactions.
The Company does not have an authorised share capital and is
authorised to issue an unlimited number of no par value shares.
The holders of ordinary shares are entitled to receive dividends
as declared from time to time and are entitled to one vote per
share at shareholder meetings of the Company. All shares rank
equally with regard to the Company's residual assets. In the event
that dividends are declared, the holders of the unexercised share
options are entitled to receive the dividends (refer to note 13 for
more details).
7 Reserves
Equity compensation reserve
The equity compensation reserve comprises the value of
Management Shares and share options issued or to be issued for
investment management and advisory services received by the Company
(refer to note 13).
8 Interest-bearing borrowings
The interest-bearing term loan amounting to US$4,953,000
(JPY579,282,000) [2015: US$4,772,000 (JPY574,595,000)] is
denominated in Japanese Yen. Interest is charged at 0.43% to 0.45%
(2015: 0.43% to 0.55%) per annum and reprices on a quarterly basis.
The loan principals are repayable quarterly unless the loan is
rolled-over.
9 Other payables
2016 2015
US$'000 US$'000
Accrued operating expenses 217 194
Amount due to a director 100 100
Amount due to a shareholder 3,043 -
Interest payable 2 2
3,362 296
======= =======
The amounts due to a director and a shareholder are unsecured,
interest free and repayable on demand.
10 (Loss)/Profit before income tax
(Loss)/Profit before income tax includes the following:
2016 2015
US$'000 US$'000
Other operating income
Interest income from:
* fixed deposits and placements in money market fund 180 386
* loans to unconsolidated subsidiaries 840 1,049
1,020 1,435
======= =======
Other operating expenses
Exchange loss, net 3,606 6,341
Non-executive director remuneration 400 400
Interest expense 24 23
------- -------
11 Income tax expense
The Company is incorporated in a tax-free jurisdiction, thus, it
is not subject to income tax.
12 Earnings per share
2016 2015
US$'000 US$'000
Basic and diluted earnings
per share are based on:
Net (loss)/profit for the
year attributable to
ordinary shareholders (11,461) 15,467
======== =======
Basic earnings per share
Number Number
of shares of shares
2016 2015
Issued ordinary shares at
1 January 528,096,195 523,557,998
Shares issued 742,616 4,538,197
----------- -----------
Issued ordinary shares at
31 December 528,838,811 528,096,195
=========== ===========
Weighted average number
of shares (basic) 528,498,445 526,772,554
=========== ===========
Diluted earnings per share
2016 2015
Weighted average number
of shares (basic) 528,498,445 526,772,554
Effect of share options 5,070,268 5,713,299
Weighted average number
of shares (diluted) 533,568,713 532,485,853
=========== ===========
Number of outstanding options
Exercise price of US$1.00 82,782,691 82,782,691
Exercise price of US$0.60 28,052,387 28,795,003
----------- -----------
110,835,078 111,577,694
=========== ===========
At 31 December 2016, there were 110,835,078 (2015: 111,577,694)
outstanding share options to subscribe for ordinary shares of no
par value. At 31 December 2016, 102,501,778 (2015: 94,911,094) of
the unexercised share options had fully vested. 82,782,691 (2015:
82,782,691) of the share options have an exercise price of US$1.00
and have not been included in the computation of diluted earnings
per share as their effect would have been anti-dilutive. At 31
December 2016, 19,719,087 (2015: 12,128,403) of the share options
have an exercise price of US$0.60 (2015: US$0.60) and have been
included in the computation of diluted earnings per share. At 31
December 2016, 8,333,300 (2015: 16,666,600) of the share options
had not yet vested and had an exercise price of US$0.60 (2015:
US$0.60) and have not been included in the computation of diluted
earnings per share.
13 Significant related party transactions
Key management personnel compensation
Key management personnel of the Company are those persons having
the authority and responsibility for planning, directing and
controlling the activities of the Company.
During the financial year, directors' fees amounting to
US$400,000 (2015: US$400,000) were declared as payable to four
directors (2015: four directors) of the Company. The remaining two
directors of the Company are also directors of the Investment
Manager who provides management and administrative services to the
Company on an exclusive and discretionary basis. No remuneration
has been paid to these directors as the cost of their services form
part of the Investment Manager's remuneration.
Other related party transactions
On 10 July 2007, the Company entered into an Investment
Management and Advisory Agreement with Symphony Investment Managers
Limited ("SIMgL") pursuant to which SIMgL would provide investment
management and advisory services exclusively to the Company. On 15
October 2015, SIMgL was replaced by Symphony Asia Holdings Pte.
Ltd. (with SAHPL and SIMgL, as the case maybe, hereinafter referred
to as the "Investment Manager"). The Company entered into an
Investment Management Agreement with SAHPL, which replaced the
Investment Management and Advisory Agreement (as the case may be,
hereinafter referred to as the "Investment Management Agreement").
The key persons of the management team of the Investment Manager
comprise certain key management personnel engaged by the Investment
Manager pursuant to arrangements agreed between the parties. They
will (subject to certain existing commitments) devote substantially
all of their business time as employees, and on behalf of the
Investment Management Group, to assist the Investment Manager in
its fulfilment of the investment objectives of the Company and be
involved in the management of the business activities of the
Investment Management Group. Pursuant to the Investment Management
Agreement, the Investment Manager is entitled to the following
forms of remuneration for the investment management and advisory
services rendered.
a. Management fees
Management fees of 2.25% per annum of the net asset value,
payable quarterly in advance on the first day of each quarter,
based on the net asset value of the previous quarter end. The
management fees payable will be subject to a minimum amount of
US$8,000,000 per annum and a maximum amount of US$15,000,000 per
annum;
In 2016, Management fees amounting to US$15,000,000 (2015:
US$15,000,000) have been paid to the Investment Manager and
recognised in the financial statements.
b. Management shares
The Company did not issue any management shares during the year.
At the reporting date, an aggregate of 10,298,725 (2015:
10,298,725) management shares had been issued, credited as fully
paid to the Investment Manager.
c. Share options
Share options can be used to subscribe for ordinary shares of
the Company.
In the structuring of the compensation payable under the
Investment Management and Advisory Agreement, the value of the
share options was considered to be measurable using the Binomial
Tree option pricing model. Measurement inputs include share price
on measurement date, exercise price, expected volatility, expected
option life, expected dividends and risk-free interest rate.
The number and exercise price of share options granted to the
Investment Manager are as follows:
Number of options
Exercise
Grant date 2016 2015 Vesting Conditions price
-------------------- ----------- ----------- ---------------------------- --------
Options granted to
Investment Manager
Fully vested in five
tranches over a period
of five years and will
expire on the tenth
anniversary of the date
On 3 August 2008 82,782,691 82,782,691 of grant US$1.00
Vest in five equal tranches
over a period of five
years and will expire
on the tenth anniversary
On 22 October 2012 41,666,500 41,666,500 of the date of grant US$0.60
Total share options
outstanding at 1
January 111,577,694 116,115,891
Exercised during
the year 742,616 4,538,197 US$0.60
Total share options
outstanding at 31
December 110,835,078 111,577,694
Exercisable at 31
December
82,782,691 82,782,691 US$1.00
19,719,087 12,128,403 US$0.60
The share options expense arising from these options is
recognised in accordance with the accounting policy set out in Note
2.7. In respect of these options, the assumptions used in
determining the fair value are set out in the following table.
Fair value of share options and assumptions
31 March 30 June 30 September 31 December
2016
Fair value US$0.22 US$0.23 US$0.24 US$0.28
Share price US$0.73 US$0.76 US$0.76 US$0.80
Exercise price US$0.60 US$0.60 US$0.60 US$0.60
Expected volatility 29.80% 29.75% 30.25% 31.58%
Expected option life 6.6 years 6.3 years 6.1 years 5.8 years
Expected dividends 3.42% 3.29% 3.29% 3.13%
Risk-free interest rate 1.5% 1.2% 1.3% 2.2%
============== ============== ============== ==============
2015
Fair value US$0.41 US$0.35 US$0.26 US$0.31
Share price US$0.82 US$0.75 US$0.66 US$0.71
Exercise price US$0.60 US$0.60 US$0.60 US$0.60
Expected volatility 31.73% 30.20% 29.87% 30.48%
Expected option life 7.6 years 7.3 years 7.1 years 6.8 years
Expected dividends Nil Nil Nil Nil
Risk-free interest rate 2.1% 2.5% 2.2% 2.5%
============== ============== ============== ==============
The expected volatility is based on the historic volatility,
adjusted for any expected changes to future volatility driven by
publicly available information.
There are no market conditions associated with the share
options. Service conditions and non-market performance conditions
are not taken into account in the measurement of the fair value of
services to be received at the measurement date.
Share options expenses amounting to US$1,162,000 (2015:
US$1,986,000) have been recognised in the financial statements.
In the event that a dividend is declared, the holders of
outstanding share options will be paid an amount equivalent to the
amount which would have been paid as if all share options that have
been granted, whether vested or otherwise, have been exercised. At
least 50% of such amount (the "Designated Amount") will be applied
towards the exercise of the outstanding share options based on the
lower of the total number of vested share options held at the date
of the dividend declaration and the number of vested share options
held at the date of the dividend declaration which can be exercised
with such amount. Any balance of the Designated Amount remaining
after the exercise price of all vested share options may be
retained by the share option holder. If the market price of the
Company's shares is less than the exercise price of the options at
the dividend declaration date, the Designated Amount will be
retained by the Company and applied by the Company on behalf of the
share option holder to (a) exercise options when the market price
of the shares exceed the exercise price any time prior to the
expiration of the share options or (b) acquire shares on the market
with the Designated Amount if the Company's share price remains
less than the exercise price at the time of expiry of the options
that will then be distributed to the share option holder (at no
consideration). Any balance of the Designated Amount remaining
after the application by the Company in the manner described above
will be returned to the share options holder.
During the year, the Investment Manager exercised 742,616 (2015:
4,538,197) share options at US$0.60 (2015: US$0.60) each, which
included the application of 50% of the dividends it received from
the Company on all unexercised share options of the Company.
Other than as disclosed elsewhere in the financial statements,
there were no other significant related party transactions during
the financial year.
14 Commitments
In September 2008, the Company entered into a loan agreement
with a joint venture, held via its unconsolidated subsidiary, to
grant loans totaling US$3,900,000 (THB140,000,000). As at 31
December 2016 and 31 December 2015, US$3,300,000 (THB120,000,000)
has been drawn down. The Company is committed to grant the
remaining loan amounting to US$600,000 (THB20,000,000), subject to
terms set out in the agreement.
In the general interests of the Company and its unconsolidated
subsidiaries, it is the Company's current policy to provide such
financial and other support to its group of companies to enable
them to continue to trade and to meet liabilities as they fall
due.
15 Operating segments
The Company has investment segments, as described below.
Investment segments are reported to the Board of Directors of
Symphony Asia Holdings Pte. Ltd., who review this information on a
regular basis. The following summary describes the investments in
each of the Company's reportable segments.
Segment results, assets and liabilities include items directly
attributable to a segment as well as those that can be allocated on
a reasonable basis.
Business activities which do not meet the definition of an
operating segment have been reported in the reconciliations of
total reportable segment amounts to the financial statements.
Healthcare Includes investments in Parkway
Life Real Estate Investment
Trust (PREIT) and IHH Healthcare
Bhd (IHH) and a Global Healthcare
Services Portfolio
Hospitality Includes investment in Minor
International Public Company
Limited (MINT)
Lifestyle Includes investments in C
Larsen (Singapore) Pte Ltd
and the Wine Connection Group
(WCG) and Christian Liaigre
Group (CLG) and WCIB International
Co. Ltd.
Lifestyle/Real Estate Includes investments in Minuet
Ltd, SG Land Co. Ltd. and
a property joint venture in
Niseko, Hokkaido, Japan and
Desaru Peace Holdings Sdn
Bhd
Cash and temporary Includes government securities
investments or other investment grade
securities, liquid investments
which are managed by third
party investment managers
of international repute, and
deposits placed with commercial
banks
Information regarding the results of each reportable segment is
included below:
Cash
Lifestyle/ and
real temporary
Healthcare Hospitality Lifestyle estate investments Total
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
2016
Investment
income:
* Interest income 816 - - 24 180 1,020
* Fair value changes of financial assets at fair value
through profit
or loss (1,558) 3,466 (2,376) 7,388 1,651 8,571
---------- ----------- --------- ---------- ----------- -------
(742) 3,466 (2,376) 7,412 1,831 9,591
---------- ----------- --------- ---------- ----------- -------
Investment
expense:
* Exchange loss (30) * (2,719) (835) (22) (3,606)
---------- ----------- --------- ---------- ----------- -------
Net investment
results (772) 3,466 (5,095) 6,577 1,809 5,985
========== =========== ========= ========== =========== =======
2015
Investment
income:
* Interest income 1,026 - - 23 386 1,435
* Fair value changes of financial assets at fair value
through profit
or loss 8,171 40,758 (3,381) (8,494) 1,371 38,425
---------- ----------- --------- ---------- ----------- -------
9,197 40,758 (3,381) (8,471) 1,757 39,860
---------- ----------- --------- ---------- ----------- -------
Investment
expense:
* Exchange loss (1,187) * 9 (4,801) (362) (6,341)
---------- ----------- --------- ---------- ----------- -------
Net investment
results 8,010 40,758 (3,372) (13,272) 1,395 33,519
2016
Segment assets 125,145 325,895 70,496 104,198 28,281 654,015
========== =========== ========= ========== =========== =======
Segment liabilities - - - 4,953 - 4,953
========== =========== ========= ========== =========== =======
2015
Segment assets 128,269 361,895 14,972 111,421 83,877 700,434
========== =========== ========= ========== =========== =======
Segment liabilities - - - 4,774 - 4,774
========== =========== ========= ========== =========== =======
* Less than US$1,000
Reconciliations of reportable segment profit or loss and
assets
2016 2015
US$'000 US$'000
Profit or loss
Net investments results 5,985 33,519
Unallocated amounts:
* Management fees (15,000) (15,000)
* Share option expense (1,162) (1,986)
* Non-executive director remuneration (400) (400)
* General operating expenses (884) (666)
-------- --------
(Loss)/Profit for the year (11,461) 15,467
======== ========
Assets
Total assets for reportable
segments 654,015 700,434
Other assets 67 220
-------- ----------
Total assets 654,082 700,654
======== ==========
Liabilities
Total liabilities for reportable
segments 4,953 4,774
Other payables 3,362 294
Bank overdraft 14 -
-------- ----------
Total liabilities 8,329 5,068
======== ==========
Geographical information
In presenting information on the basis of geographical
information, revenue, comprising dividend income from investments,
is based on the geographical location of the underlying investment.
Assets are based on the principal geographical location of the
assets or the operations of the investee companies. None of the
underlying investments which generate revenue or assets are located
in the Company's country of incorporation, BVI.
Singapore Malaysia Thailand Japan Mauritius Other Total
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
2016
Investment
income:
* Interest income 180 - - - 816 24 1,020
* Fair value changes of financial assets at fair value
through profit or loss 2,126 (3,593) 8,816 25 - 1,197 8,571
--------- -------- -------- ------- --------- ------- -------
2,306 (3,593) 8,816 25 816 1,221 9,591
--------- -------- -------- ------- --------- ------- -------
Investment
expense:
* Exchange loss (183) - - - (21) (3,402) (3,606)
--------- -------- -------- ------- --------- ------- -------
Net investment
results 2,123 (3,593) 8,816 25 795 (2,181) 5,985
========= ======== ======== ======= ========= ======= =======
Singapore Malaysia Thailand Japan Mauritius Other Total
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
2015
Investment
income:
* Interest income 386 - - - 1,026 23 1,435
* Fair value changes of financial assets at fair value
through profit or loss (1,688) 9,631 29,162 (57) - 1,377 38,425
--------- -------- -------- ------- --------- ------- -------
(1,302) 9,631 29,162 (57) 1,026 1,400 39,860
--------- -------- -------- ------- --------- ------- -------
Investment
expense:
* Exchange loss (382) - - - (1,159) (4,800) (6,341)
--------- -------- -------- ------- --------- ------- -------
Net investment
results (1,684) 9,631 29,162 (57) (133) (3,400) 33,519
2016
Segment assets 76,260 76,288 434,677 9,292 (9,896) 67,394 654,015
========= ======== ======== ======= ========= ======= =======
2016
Segment liabilities 4,953 - - - - - 4,953
========= ======== ======== ======= ========= ======= =======
2015
Segment assets 137,116 86,602 456,645 9,014 61 10,996 700,434
========= ======== ======== ======= ========= ======= =======
2015
Segment liabilities 4,774 - - - - - 4,774
========= ======== ======== ======= ========= ======= =======
16 Financial risk management
The Company's financial assets comprise mainly financial assets
at fair value through profit or loss, other receivables, and cash
and cash equivalents. The Company's financial liabilities comprise
interest-bearing borrowings, bank overdrafts and other payables.
Exposure to credit, price, interest rate, foreign currency and
liquidity risks arises in the normal course of the Company's
business.
The Company's Board of Directors has overall responsibility for
the establishment and oversight of the Company's risk management
framework. The Company's risk management policies are established
to identify and analyse the risks faced by the Company and to set
appropriate controls. Risk management policies and systems are
reviewed regularly to reflect changes in market conditions and the
Company's activities.
Credit risk
Credit risk is the risk of financial loss to the Company if a
customer or counterparty to a financial instrument fails to meet
its contractual obligations.
Investments in the form of advances are made to investee
companies which are of acceptable credit risk. Credit risk exposure
on the investment portfolio is managed on an asset-specific basis
by the Investment Manager.
Cash and fixed deposits are placed with financial institutions
which are regulated.
As at 31 December 2016, the Company has credit risk exposure
relating to fixed deposits placed with financial institutions and
placements in money market funds totalling US$15,779,000 (2015:
US$73,142,000). Other than these balances, there were no
significant concentrations of credit risk. The maximum exposure to
credit risk is represented by the carrying amount of each financial
asset in the statement of financial position.
The balances with unconsolidated subsidiaries and other
receivables were not past due nor impaired at the reporting
date.
Market risk
Market risk is the risk that changes in market prices, such as
interest rates, foreign exchange rates and equity prices will
affect the Company's income or the value of its holdings of
financial instruments. The objective of market risk management is
to manage and control market risk exposures within acceptable
parameters, while optimising the return on risk.
Interest rate risk
The Company's exposure to changes in interest rates relates
primarily to its interest-earning fixed deposits placed with
financial institutions and interest-bearing term loans. The
Company's fixed rate financial assets and liabilities are exposed
to a risk of change in their fair value due to changes in interest
rates while the variable-rate financial assets and liabilities are
exposed to a risk of change in cash flows due to changes in
interest rates. The Company does not enter into derivative
financial instruments to hedge against its exposure to interest
rate risk.
Sensitivity analysis
A 100 basis point ("bp") and 5 bp move in interest rate against
the following financial assets and financial liabilities at the
reporting date would increase/(decrease) profit or loss by the
amounts shown below. The analysis assumes that all other variables
remain constant.
Impact on Impact on
Profit or loss Profit or loss
100 bp 5 bp 100 bp 5 bp
increase decrease increase decrease
2016 2016 2015 2015
US$'000 US$'000 US$'000 US$'000
Deposits with financial
institutions 76 (4) 496 (25)
Interest-bearing
borrowings (50) 2 (48) 2
--------- --------- --------- ---------
26 (2) 448 (23)
========= ========= ========= =========
Foreign exchange risk
The Company is exposed to transactional foreign exchange risk
when transactions are denominated in currencies other than the
functional currency of the operation. The Company does not enter
into derivative financial instruments to hedge its exposure to Thai
Baht, Singapore dollars, Hong Kong dollars, Japanese Yen, Malaysian
Ringgit and Euro as the currency position in these currencies is
considered to be long-term in nature and foreign exchange risk is
an integral part of the Company's investment decision and
returns.
The Company's exposure, in US dollar equivalent, to foreign
currency risk on other financial instruments is as follows:
Singapore Japanese Thailand Malaysian
Dollars Yen Baht Ringgit Others
US$'000 US$'000 US$'000 US$'000 US$'000
2016
Financial assets at fair value
through profit or loss 31,370 9,291 86,053 56,057 45,163
Other receivables * - - - 5
Cash and cash equivalents 2,161 - * - 201
Interest-bearing borrowings - (4,953) - - -
Accrued operating expenses (204) - (1) - (12)
Bank overdraft - - - - (13)
Net exposure 33,327 4,338 86,052 56,057 45,344
========= ======== ======== ========= =======
2015
Financial assets at fair value
through profit or loss 30,198 9,015 79,886 65,493 *
Other receivables * - - - 171
Cash and cash equivalents 1,354 - * - 125
Interest-bearing borrowings - (4,772) - - -
Accrued operating expenses (172) - (2) - (20)
Bank overdraft - - - - -
--------- -------- -------- --------- -------
Net exposure 31,380 4,243 79,884 65,493 276
========= ======== ======== ========= =======
* Less than US$1,000
Sensitivity analysis
A 10% strengthening of the US dollar against the following
currencies at the reporting date would increase/(decrease) profit
or loss by the amounts shown below. The analysis assumes that all
other variables, in particular interest rates, remain constant.
Profit or loss
2016 2015
US$'000 US$'000
Singapore Dollars (3,332) (3,138)
Japanese Yen (434) (424)
Thailand Baht (8,605) (7,988)
Malaysian Ringgit (5,606) (6,549)
Others (4,534) (28)
======= =======
A 10% weakening of the US dollar against the above currencies
would have had the equal but opposite effect on the above
currencies to the amounts shown above, on the basis that all other
variables remain constant.
Price risk
The valuation of the Company's investment portfolio is dependent
on prevailing market conditions and the performance of the
underlying assets. The Company does not hedge the market risk
inherent in the portfolio but manages asset performance risk on an
asset-specific basis.
The Company's investment policies provide that the Company
invests a majority of capital in longer-term strategic investments
and a portion in special situations and structured transactions.
Investment decisions are made by management on the advice of the
Investment Manager.
Sensitivity analysis
All of the Company's underlying investments that are quoted
equity investments are listed on either The Stock Exchange of
Thailand, Singapore Exchange Securities Trading Limited or Bursa
Malaysia. A 10% increase in the price of the equity securities at
the reporting date would increase profit or loss after tax by the
amounts shown below. The analysis assumes that all other variables
remain constant.
Profit or loss
2016 2015
US$'000 US$'000
Underlying investments in
quoted equity securities
at fair value through profit
or loss 45,137 48,922
======= =======
A 10% decrease in the price of the equity securities would have
had the equal but opposite effect on the above quoted equity
investments to the amounts shown above, on the basis that all other
variables remain constant.
Liquidity risk
Liquidity risk is the risk that the Company will not be able to
meet its financial obligations as they fall due.
The Company's approach to managing liquidity is to ensure, as
far as possible, that it will have sufficient liquidity to meet its
liabilities when due, under both normal and stressed conditions,
without incurring unacceptable losses or risking damage to the
Company's reputation. The Company monitors its liquidity risk and
maintains a level of cash and cash equivalents deemed adequate by
the Investment Manager to finance the Company's operations and to
mitigate the effects of fluctuations in cash flows. Funds not
invested in longer-term strategic investments or investments in
special situations and structured transactions are temporarily
invested in liquid investments and managed by a third party manager
of international repute, or held on deposit with commercial
banks.
The following are the contractual maturities of financial
liabilities, including estimated interest payments and excluding
the impact of netting agreements:
Cash flows
-------------------------------------------
After
Contractual 1 year
Carrying cash Within but within After
amount flows 1 year 5 years 5 years
US$'000 US$'000 US$'000 US$'000 US$'000
2016
Non-derivative
financial liabilities
Interest-bearing
borrowings 4,953 4,953 4,953 - -
Other payables 3,362 3,362 3,362 - -
Bank overdraft 14 14 14 - -
-------- ----------- ------- ----------- --------
8,329 8,329 8,329 - -
======== =========== ======= =========== ========
2015
Non-derivative
financial liabilities
Interest-bearing
borrowings 4,772 4,772 4,772 - -
Other payables 296 296 296 - -
5,068 5,068 5,068 - -
======== =========== ======= =========== ========
Capital management
The Company's policy is to maintain a strong capital base so as
to maintain investor, creditor and market confidence and to sustain
future development of the business. Capital consists of total
equity. The Company seeks to maintain a balance between higher
returns that might be possible with higher levels of borrowings and
the advantages and security afforded by a sound capital position.
There were no changes in the Company's approach to capital
management during the year.
The Company is not subject to externally imposed capital
requirements.
Accounting classification
The classification of financial assets and liabilities, are as
follows:
Fair value
through
profit Loans Other financial
Note or loss and receivables liabilities Total
US$'000 US$'000 US$'000 US$'000
2016
Financial assets
at fair value
through profit
or loss 3 638,222 - - 638,222
Other receivables
and prepayments 4 - 67 - 67
Cash and cash
equivalents 5 - 15,793 - 15,793
638,222 15,860 - 654,082
========== ================ =============== =======
Interest-bearing
borrowings 8 - - (4,953) (4,953)
Other payables 9 - - (3,362) (3,362)
Bank overdraft 5 - - (14) (14)
- - (8,329) (8,329)
========== ================ =============== =======
2015
Financial assets
at fair value
through profit
or loss 3 627,292 - - 627,292
Other receivables
and prepayments 4 - 220 - 220
Cash and cash
equivalents 5 - 73,142 - 73,142
627,292 73,362 - 700,654
========== ================ =============== =======
Interest-bearing
borrowings 8 - - (4,772) (4,772)
Other payables 9 - - (296) (296)
Bank overdraft - - - -
- - (5,068) (5,068)
========== ================ =============== =======
Fair value
The financial assets at fair value through profit or loss are
measured using the adjusted net asset value method, which is based
on the fair value of the underlying investments. The fair values of
the underlying investments are determined based on the following
methods:
i) for quoted equity investments, based on quoted market bid
prices at the financial reporting date without any deduction for
transaction costs;
ii) for unquoted investments, with reference to the enterprise
value at which the portfolio company could be sold in an orderly
disposition over a reasonable period of time between willing
parties other than in a forced or liquidation sale, and is
determined by using valuation techniques such as (a) market
multiple approach that uses a specific financial or operational
measure that is believed to be customary in the relevant industry,
(b) price of recent investment, or offers for investment, for the
portfolio company's securities, (c) current value of publicly
traded comparable companies, (d) comparable recent arms' length
transactions between knowledgeable parties, and (e) discounted cash
flows analysis; and
iii) for financial assets and liabilities with a maturity of
less than one year or which reprice frequently (including other
receivables, cash and cash equivalents, accrued operating expenses,
other payables and bank overdraft) the notional amounts are assumed
to approximate their fair values because of the short period to
maturity/repricing.
The objective of valuation techniques is to arrive at a fair
value measurement that reflects the price that would be received to
sell the asset or paid to transfer the liability in an orderly
transaction between market participants at the measurement
date.
Fair value hierarchy for financial instruments
The table below analyses financial instruments carried at fair
value, by valuation method. The different levels have been defined
as follows:
-- Level 1: Inputs that are quoted market prices (unadjusted) in
active markets for identical instruments.
-- Level 2: Inputs other than quoted prices included within
Level 1 that are observable, either directly (i.e. as prices) or
indirectly (i.e. derived from prices). This category includes
instruments valued using: quoted market prices in active markets
for similar instruments; quoted prices for identical or similar
instruments in markets that are considered less than active; or
other valuation techniques in which all significant inputs are
directly or indirectly observable from market data.
-- Level 3: Inputs that are unobservable. This category includes
all instruments for which the valuation technique includes input
not based on observable data and the unobservable inputs have a
significant effect on the instruments' valuation. This category
includes instruments that are valued based on quoted prices for
similar instruments but for which significant unobservable
adjustments or assumptions are required to reflect differences
between instruments.
Level 1 Level 2 Level 3 Total
US$'000 US$'000 US$'000 US$'000
2016
Financial assets
at fair value
through profit
or loss - - 638,222 638,222
======= ======= ======= =======
2015
Financial assets
at fair value
through profit
or loss - - 627,292 627,292
======= ======= ======= =======
As explained in Note 2.2, the Company qualifies as an investment
entity and therefore does not consolidate its subsidiaries.
Accordingly, the fair value levelling reflects the fair value of
the unconsolidated subsidiaries and not the underlying quoted
equity investments. There were no other transfers from Level 1 to
Level 2 or Level 3 and vice versa during the years ended December
2016 and 2015.
The fair value hierarchy table excludes financial assets and
financial liabilities such as cash and cash equivalents, other
receivables and payables and interest-bearing borrowings and bank
overdraft because their carrying amounts approximate their fair
values due to their short-term period to maturity/repricing.
Level 3 valuations
The following table shows a reconciliation from the beginning
balances to the ending balances for fair value measurements in
Level 3 of the fair value hierarchy.
2016 2015
Financial assets
at fair value
through profit
or loss
US$'000
Balance at 1 January 627,292 630,053
Fair value changes in profit
or loss 8,571 38,425
Additions/(Deductions) 2,359 (41,186)
Balance at 31 December 638,222 627,292
======== ========
Significant unobservable inputs used in measuring fair value
This table below sets out information about significant
unobservable inputs used at 31 December 2016 in measuring the
underlying investments of the financial assets categorised as Level
3 in the fair value hierarchy excluding investments purchased
during the year that are valued at transaction prices as they are
reasonable approximation of fair values and ultimate investments in
listed entities.
Fair Fair
value value Sensitivity
at at to changes
31 December 31 December Range in significant
2016 2015 Valuation Unobservable (Weighted unobservable
Description US$'000 US$'000 technique input average) inputs
------------- ------------ ------------ ----------- --------------- ------------ -----------------
Rental
growth 0% - 6%
rate (2015: The estimated
6% - 10%) fair value
would increase
77% - if the rental
Occupancy 82% (2015: growth rate
rate 80% - and occupancy
95%) rate were
higher and
13% the discount
Rental Income Discount (2015: rate was
properties 9,592 12,265 approach rate 13%) lower.
US$51
to US$1,865
per square The estimated
meter fair value
Price per (2015: would increase
square US$53 if the price
Land Comparable meter for to US$1,484 per square
related valuation comparable per square meter were
investments 94,606 99,161 method land meter) higher.
4.7x to
116.9x,
median
Enterprise 10.9x The estimated
value (2015: fair value
using 5.4x to would increase
comparable EBITDA 17.2x, if the EBITDA
Operating traded multiple median multiple
business 12,637 14,831 multiples (times) 10.2x) was higher.
Discount 20% The estimated
for fair value
would increase
if the discount
for lack
of marketability
were lower.
lack of (2015:
marketability 20%)
The rental growth rate represents the growth in rental income
during the leasehold period while the occupancy rates represent the
percentage of the building that is expected to be occupied during
the leasehold period. Management determines the rental growth rate
and occupancy rate after considering the current market conditions
and comparable occupancy rates for similar buildings in the same
area.
The discount rate is related to the current yield on long-term
government bonds plus a risk premium to reflect the additional risk
of investing in the subject properties. Management determines the
discount based on its judgement after considering current market
rates.
The comparable recent sales represent the recent sales prices of
properties that are similar to the Company's properties, which are
in the same area. Management adopts independent valuation report to
determine the value per square meter based on the average recent
sales prices.
The EBITDA multiple represents the amount that market
participants would use when pricing investments. The EBITDA
multiple is selected from comparable public companies with similar
business as the underlying investment. Management obtains the
median EBITDA multiple from the comparable companies and applies
the multiple to the EBITDA of the underlying investment. The amount
is further discounted for considerations such as lack of
marketability.
The discount for lack of marketability represents the discount
applied to the comparable market multiples to reflect the
illiquidity of the investee relative to the comparable peer group.
Management determines the discount for lack of marketability based
on its judgement after considering market liquidity conditions and
company-specific factors.
The investment entity approach requires the presentation and
fair value measurement of immediate investments; the shares of
intermediate holding companies are not listed. However, ultimate
investments in listed entities amounting to US$451,373,016 (2015:
US$489,220,722) are held through intermediate holding companies;
the value of these companies are mainly determined by the fair
values of the ultimate investments.
Although the Company believes that its estimates of fair value
are appropriate, the use of different methodologies or assumptions
could lead to different measurements of fair value. For fair value
measurements in Level 3 assets, changing one or more of the
assumptions used to reasonably possible alternative assumptions
would have the following effects on the profit or loss:
------------- -------------
2016 ------------ 2015 -------------
Effect on profit Effect on profit
or loss or loss
Favourable (Unfavourable) Favourable (Unfavourable)
US$'000 US$'000 US$'000 US$'000
Level 3 assets 14,836 (15,915) 16,517 (17,083)
========== ============== ========== ==============
The favourable and unfavourable effects of using reasonably
possible alternative assumptions have been calculated by
recalibrating the valuation model using a range of different
values.
For rental properties, the projected rental rates and occupancy
levels were increased by 5% for the favourable scenario and reduced
by 5% for the unfavourable scenario. The discount rate used to
calculate the present value of future cash flows was also decreased
by 1% for the favourable case and increased by 1% for the
unfavourable case compared to the discount rate used in the
year-end valuation.
For land related investments (except those held for less than
12-months where cost approximates fair value), the price per square
meter of the land is increased by 15% in the favourable scenario
and reduced by 15% in the unfavourable scenario.
For operating businesses (except those where a last transacted
price exists within the past 12-months that provides the basis for
fair value) that are valued on a trading comparable basis using
enterprise value to earnings before interest, tax, depreciation and
amortisation ("EBITDA"), EBITDA is increased by 15% and decreased
by 15% in the favourable and unfavourable scenarios.
17 Unconsolidated subsidiaries
Details of the unconsolidated subsidiaries of the Company are as
follows:
Place of
incorporation Equity interest
Principal
Name of subsidiary activities and business 2016 2015
% %
Symphony (Mint)
Investment Limited
(Formerly Symphony
Capital Partners Investment Republic
Limited) holding of Mauritius 100 100
Symphony International Investment Republic
Limited holding of Mauritius 100 100
Symphony Investment
Management Limited Investment British Virgin
and its subsidiary: holding Islands 100 100
Daphon Holdings Investment Republic
Pte. Ltd. holding of Singapore 100 100
Lennon Holdings
Limited Investment Republic
and its subsidiary: holding of Mauritius 100 100
Britten Holdings Investment Republic
Pte. Ltd. holding of Singapore 100 100
Investment British Virgin
Teurina Limited holding Islands 100 100
Gabrieli Holdings
Limited Investment British Virgin
and its subsidiaries: holding Islands 100 100
Place of
incorporation Equity interest
Principal
Name of subsidiary activities and business 2016 2015
% %
Ravel Holdings
Pte. Ltd. and Investment Republic
its subsidiaries: holding of Singapore 100 100
Schubert Holdings Investment Republic
Pte. Ltd. holding of Singapore 100 100
Haydn Holdings Investment Republic
Pte. Ltd. holding of Singapore 100 100
Thai Education
Holdings Pte. Investment Republic
Ltd. holding of Singapore 100 -
Lloyd Webber Holdings Investment British Virgin
Limited holding Islands 100 100
Maurizio Holdings
Limited and its Investment British Virgin
subsidiary: holding Islands 100 100
Groupe CL Pte. Investment Republic
Ltd. holding of Singapore 100 100
Investment British Virgin
True United Limited holding Islands 100 100
Investment British Virgin
True Wisdom Limited holding Islands 100 100
Segovia Holdings Investment British Virgin
Limited holding Islands 100 100
Investment British Virgin
Anshil Limited holding Islands 100 100
Buble Holdings Investment British Virgin
Limited holding Islands 100 100
O'Sullivan Holdings
Limited and its Investment British Virgin
subsidiary: holding Islands 100 100
Bacharach Holdings Investment British Virgin
Limited holding Islands 100 100
Brahms Holdings Investment British Virgin
Limited holding Islands 100 100
Schumann Holdings Investment British Virgin
Limited holding Islands 100 100
Symphony Healthcare Investment British Virgin
Holdings Limited holding Islands 100 100
Dynamic Idea Investments Investment British Virgin
Limited holding Islands 100 -
18 Underlying investments
Details of the underlying investments in unquoted equities of
the Company are as follows:
Place Ordinary Preference
of shares shares
incorporation Equity interest Equity interest
Principal
Name activities and business 2016 2015 2016 2015
% % % %
Property
La Finta Limited(1) development Thailand 49 49 - -
Property
Minuet Limited(1) development Thailand 49.98 49.98 - -
SG Land Co.
Limited(1) Real estate Thailand 49.91 49.91 - -
C Larsen (Singapore) Distribution Republic
Pte Ltd(2) of furniture of Singapore 0.1 0.1 100 100
Chanintr Living Distribution
Limited(2) of furniture Thailand 0.1 0.1 - -
Well Round Property
Holdings Limited(2) development Hong Kong 37.5 37.5 - -
Silver Prance Property
Limited(2) development Hong Kong 37.5 37.5 - -
Desaru Peace
Holdings Sdn Property
Bhd(2) development Malaysia - - 49 49
Hospitality Cayman
Oak SPV Limited and lifestyle Islands 13.4 13.4 - -
Macassar Holdings
SARL Lifestyle France 49.9 - 49.9 -
Wellington
College International
Bangkok International
Co. Ltd. Education Thailand 40 - - -
(1) Joint venture
(2) Associate
19 Subsequent events
On 27 January 2017, the Company's wholly owned subsidiary,
Dynamic Idea Investments Limited, which holds the Company's
interest in the Christian Liaigre Group, entered into an assignment
agreement to take-up part of a bridge loan related to this
investment. The associated cost for the assignment was less than 5%
of NAV.
The Company announced on 16 January 2017 the initiation of a
share Buyback Programme with the intention to acquire at least 10%
of its shares in issue on an annual basis. As at 13 March 2017, the
Company had acquired and cancelled 7,100,000 shares at a total cost
of US$6,460,000.
Subsequent to the year end, the Company sold 7,265,000 units of
PREIT in multiple transactions that generated proceeds of
US$12,070,000.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR JBMTTMBJTBMR
(END) Dow Jones Newswires
March 24, 2017 03:00 ET (07:00 GMT)
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