Annual Financial Report
SYMPHONY INTERNATIONAL HOLDINGS
PUBLICATION OF ANNUAL REPORT FOR THE
YEAR ENDED 31 DECEMBER 2015
31 March 2016
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 2015 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 2015
Symphony International Holdings Limited (the "Company", "SIHL" or "Symphony") announces the financial results for the year ended 31 December 2015. 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.
Introduction
SIHL is an investment company incorporated as a limited liability company under the laws of the British Virgin Islands. The Company's shares were listed on the London Stock Exchange on 3 August 2007. SIHL's investment objective is to create value for shareholders through longer-term strategic investments in high growth innovative consumer businesses, primarily in the healthcare, hospitality and lifestyle sectors (including branded real estate developments).
Investment Manager's Report
This "Investment Manager's Report" should be read in conjunction with the financial statements and related notes of the Company. The financial statements of the Company were prepared in accordance with the International Financial Reporting Standards ("IFRS") and are presented in U.S. dollars. The Company reports on each financial year that ends on 31 December. In addition to the Company's annual reporting, NAV and NAV per share are reported on a quarterly basis being the periods ended 31 March, 30 June, 30 September and 31 December. The Company's NAV reported quarterly is based on the sum of cash and cash equivalents, temporary investments, the fair value of unrealised investments (including investments in unconsolidated subsidiaries, associates and joint ventures) and any other assets, less any other liabilities. The financial results presented herein include activity for the period from 1 January 2015 through 31 December 2015, referred to as "the year ended 31 December 2015".
OUR BUSINESS
Symphony is an investment company incorporated under the laws of the British Virgin Islands. The Company's shares were listed on the London Stock Exchange on 3 August 2007. Symphony's investment objective is to create value for shareholders through longer term strategic investments in high growth innovative consumer businesses, primarily in the healthcare, hospitality and lifestyle sectors (including branded real estate developments), which are expected to be among the fastest growing sectors in Asia, as well as through investments in special situations and structured transactions.
Symphony's Investment Manager is Symphony Asia Holdings Pte. Ltd. ("SAHPL"), which replaced Symphony Investment Managers Limited ("SIMgL") on 15 October 2015, (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 as the Investment Manager) that replaced the Investment Management and Advisory Agreement (with SIMgL as the Investment Manager) ("Investment Management Agreement") on 15 October 2015. Symphony Capital Partners Limited ("SCPL") is a service provider to the Investment Manager. The common shareholders and their respective interests in SIMgL and SAHPL are the same.
SAHPL's licence for carrying on fund management in Singapore is restricted to serving only accredited investors and/ or institutional investors. Symphony is an accredited investor.
INVESTMENTS
At 31 December 2015, the total amount invested by Symphony since admission to the Official List of the London Stock Exchange in August 2007 was US$342.0 million. SIHL's total cost of investments after taking into account shareholder loan repayments, partial realisations and the cost of fully realised investments was US$261.5 million at 31 December 2015 from US$286.5 million a year earlier. As at 31 December 2015, the healthcare, hospitality, lifestyle, lifestyle/ real estate sectors and a structured investment accounted for 23.4%, 26.6%, 7.0%, 39.9% and 3.1% of total cost of investments, respectively.
The fair value of investments, excluding temporary investments (but including structured investments), held by Symphony was approximately US$639.1 million at 31 December 2015, up from US$636.4 million a year earlier. This change comprised an increase in the value of investments by US$27.7 million less shareholder loan repayments and proceeds from partial and full exits of US$25.0 million.
COMPOSITION OF PORTFOLIO INVESTMENTS BY COST (%)
|
|
12/31/2013 |
12/31/2014 |
12/31/2015 |
|
|
|
|
|
|
Healthcare |
30.6% |
29.3% |
23.4% |
|
Hospitality |
26.9% |
24.3% |
26.6% |
|
Lifestyle |
3.3% |
6.7% |
7.0% |
|
Lifestyle / real estate |
39.2% |
36.9% |
39.9% |
|
Structured investment |
0.0% |
2.8% |
3.1% |
COST AND FAIR VALUE OF INVESTMENT
|
|
|
Company at 31 December 2015 |
||
|
|
|
Cost |
Fair value |
% of NAV |
|
|
|
US$'000 |
US$'000 |
|
|
|
|
|
|
|
|
Healthcare |
|
61,118 |
127,292 |
18.3% |
|
Hospitality |
|
69,502 |
361,929 |
52.0% |
|
Lifestyle |
|
18,636 |
14,792 |
2.1% |
|
Lifestyle / Real estate |
|
104,394 |
124,532 |
17.9% |
|
Structured investment |
|
8,100 |
10,588 |
1.5% |
|
Subtotal |
|
261,476 |
639,132 |
90.2% |
|
|
|
|
|
|
|
Temporary investments |
|
|
56,458 |
8.1% |
|
Net asset value (1) |
|
|
695,590 |
100.0% |
(1) NAV is based on the sum of our cash and cash equivalents, temporary investments, the fair value of unrealised investments (including investments in subsidiaries and associates) and any other assets, less all liabilities.
As at 31 December 2015, we had the following investments:
MINOR INTERNATIONAL PUBLIC COMPANY LIMITED
Minor International Public Company Limited ("MINT") is a diversified consumer business and is one of the largest hospitality and restaurant companies in the Asia-Pacific region. Anil Thadani (a Director of the Company) currently serves on MINT's board of directors. Sunil Chandiramani (a Director of the Company) currently serves as an advisor to MINT's board of directors. MINT is a company that is incorporated under the laws of Thailand and is listed on the Stock Exchange of Thailand.
MINT owns 59 hotels and manages 79 other hotels and serviced suites with 17,714 rooms. In addition to owning hotels under the Four Seasons, St. Regis and Marriott brands, MINT owns and manages hotels under its own brand names that include Anantara, Oaks, Elwana, Avani, Tivoli and Per AQUUM in 22 countries.
As at 31 December 2015, MINT also owned and operated 1,851 restaurants (comprising 957 equity-owned outlets and 894 franchised outlets) under the brands The Pizza Company, Swensen's, Sizzler, Dairy Queen, Burger King, Beijing Riverside, Thai Express and The Coffee Club amongst others. Approximately two-thirds of these outlets are in Thailand with the remaining number in other Asian countries and the Middle East. MINT's operations also include contract manufacturing and an international lifestyle consumer brand distribution business in Thailand focusing on fashion, cosmetics through retail (307 outlets), wholesale and direct marketing channels under brands that include GAP, Esprit, Bossini, Red Earth, Pedro, Tumi and Zwilling Henckels amongst others.
MINT reported revenue, EBITDA and net profit growth (before non-recurring items) of 15%, 9% and 9%, respectively. The growth was driven by a strong performance from MINT's hotel & mixed-use and restaurant businesses.
MINT's hotel and mixed-use business had revenues (excluding non-recurring items) of THB23.6 billion during 2015, which is 23% higher than the same period a year earlier. MINT increased the number of rooms in its portfolio that are owned (including majority owned and joint ventures) and managed by 2,527 and 466 during the year, respectively. During 2015, MINT expanded its hospitality business inorganically and organically. In January 2015, MINT announced its entry into Europe and South America with the acquisition of six hotels. New projects in Australia, Malaysia, the Middle East and North Africa were also announced during the 2015 financial year. MINT's hospitality business also benefited from an improvement in the overall tourism environment in Thailand during 2015 where MINT's occupancy rates increased to 72% from 58% a year earlier.
At the end of 2015, MINT's total number of restaurants reached 1,851 comprising 957 equity-owned outlets and 894 franchised outlets. Approximately 64% were in Thailand with the remaining number in other Asian countries and the Middle East. Approximately 143 restaurants were added during 2015 and total system sales increased by 11.2% during the same period. The retail trading and contract manufacturing businesses were under pressure in 2015 due to an overall slowdown in domestic discretionary spending as well as the negative impact from the Bangkok bombing.
Symphony's gross and net investment cost in MINT is approximately US$74.0 million and 69.5 million, respectively at 31 December 2015. On the same date, the fair value of Symphony's investment in MINT was US$361.9 million, up from US$323.2 million a year earlier. The change in value of approximately US$38.7 million was predominantly driven by an increase in the share price of MINT by 22.8%, which was partially offset by a 9.5% depreciation of the Thai baht during the same period.
MINUET LIMITED
Minuet Limited ("Minuet") is a joint venture between the Company and an established Thai partner. The Company has a direct 49% interest in the venture and is considering several development and/or sale options for the land owned by Minuet, which is located in close proximity to central Bangkok, Thailand. As at 31 December 2015, Minuet held approximately 380 rai (61 hectares) of land in Bangkok, Thailand.
The Company initially invested approximately US$78.3 million by way of an equity investment and interest bearing shareholder loans. Since the initial investment by the Company, Minuet has received proceeds from rental income and partial land sales. As at 31 December 2015, the Company's investment cost (net of shareholder loan repayments) was approximately US$60.9 million. The fair value of the Company's interest in Minuet on the same date was US$80.2 million (31 December 2014: US$87.7 million) based on an independent third party valuation of the land plus the net value of the other assets and liabilities of Minuet. The change in value is predominantly due to a depreciation of the Thai baht during the year by 9.5%.
PARKWAY LIFE REAL ESTATE INVESTMENT TRUST
Parkway Life Real Estate Investment Trust ("P-REIT") is one of Asia's largest listed healthcare real estate investment trusts by asset size. It is listed on the Singapore Exchange. PREIT was established by Parkway Holdings Limited to invest primarily in income producing real estate and/or real estate related assets in the Asia-Pacific region that is/are used primarily for healthcare and/or healthcare-related purposes.
As at 31 December 2015, P-REIT's total portfolio size stood at 47 properties with a value of approximately S$1.6 billion. P-REIT owns the leasehold to three Singapore hospitals, which are leased to Parkway Holdings Limited on long-term leases, and a mixture of leasehold and freehold ownership of 43 properties in Japan (comprising 42 nursing homes and one pharmaceutical manufacturing unit) and strata titled units/ lots within Gleneagles Medical Centre, Kuala Lumpur, Malaysia. The Company holds 38.5 million units in P-REIT, which equates to a shareholding of approximately 6.4%.
PREIT reported net property income of S$96.0 million in 2015, which is 2.4% higher from the same period a year ago. The growth was driven by PREIT's asset recycling initiative, which involved the acquisition of higher yielding properties in 2015 relative to properties divested in the prior financial year.
Dividend per unit increased by 15.3% in 2015 year-over-year to Singapore 13.29 cents. PREIT's gearing at 31 December 2015 was 35.3%, which is well within the 60% limit allowed under the Monetary Authority of Singapore's Property Funds Guidelines and will allow for further yield accretive acquisitions.
As at 31 December 2015, Symphony's investment cost in PREIT was US$33.8 million. The fair value on the same date was US$63.2 million (31 December 2014: US$68.5 million). The change in value was predominantly due to a weakening of the Singapore dollar by 7.0% during the year and a decline in unit price by approximately 1.3%.
IHH HEALTHCARE BERHAD
IHH Healthcare Berhad ("IHH") is one of the largest healthcare providers in the world by market capitalisation. Its portfolio of healthcare assets includes Parkway Holdings Limited,
Pantai Holdings Berhad, International Medical University, Acibadem Saglik Yatirimlari Holding A.S. ("Acibadem") and a minority shareholding in Apollo Hospitals Enterprises Limited. IHH has a broad footprint of assets in Asia as well as Turkey, Abu Dhabi, Central and Eastern Europe that employs over 25,000 people and operates close to 10,000 licensed beds in 49 hospitals worldwide.
IHH reported revenue, EBITDA and net profit growth (excluding non-recurring items and contributions from PREIT) for full year 2015 of 15%, 12% and 17%, respectively. The growth was driven by an increase in patient volumes and revenue intensity from existing operations, ramp of business in newer facilities and the acquisition of hospitals.
Parkway Pantai saw in-patient admissions increase by 4.9% and decrease by 0.9% in Singapore and Malaysia, respectively. The increase in Singapore was driven by an incremental number of local patients while the decline in Malaysia can be attributed to the impact of a general decline in consumption following the implementation of GST in Malaysia in April 2015. Average revenue per inpatient admission increased 2.7% and 11.9% in Singapore and Malaysia, respectively, on higher revenue intensities from more complex cases. The Mount Elizabeth Novena Hospital continued to ramp up business with revenue increasing 34% year-over-year in 2015. New acquisitions that include Continental and Global Hospitals in India also positively contributed to growth during the year.
Acibadem saw a decrease in admissions by 0.6% in 2015, which was more than offset by growth in average revenue per inpatient admission that grew by 15.3% during the same period. Overall, Acibadem's revenue and EBITDA (excluding the effects of the depreciation of the Turkish Lira) in 2015 increased by 16% and 14%, respectively.
The Company invested US$50.1 million in February 2012 to acquire shares in Integrated Healthcare Hastaneler Turkey Sdn Bhd, which were subsequently converted into 56,203,299 shares of IHH at the time of IHH's IPO in July 2012. During 2015, the Company sold approximately 14 million shares held in IHH in the market through a series of transactions given an increase in the share price of IHH. The Company's cost, net of proceeds from this sale, amounted to approximately US$27.1 million at 31 December 2015. On the same date, the fair value of the Company's investment in IHH was US$64.1 million (31 December 2014: US$77.1 million). IHH's share price increased by 35.8% during the year, which was partially offset by a depreciation of the Malaysian ringgit by 22.8% during the same period.
PROPERTY JOINT VENTURE IN MALAYSIA
The Company has a 49% interest in a property joint venture in Malaysia with an affiliate of Destination Resorts and Hotels Sdn Bhd, a hotel and destination resort investment subsidiary of Khazanah Nasional Berhad, the investment arm of the Government of Malaysia. The joint venture is developing a beachfront country club and private villas on the south-eastern coast of Malaysia that will be branded and managed by Amanresorts.
The development is ongoing and operations are expected to commence at the end of 2016. The property will include a Club, 46 club suites and prototype villas. When fully developed the site will have a total of 52 villas.
The Company invested approximately US$29.0 million in January 2012 for its interest in Desaru. Based on an independent third party valuation, the investment was valued at US$22.5 million at 31 December 2015 (31 December 2014: US$27.5 million). The change in value is predominantly reflective of the weakening of the Malaysian ringgit by 22.8% during 2015.
OTHER INVESTMENTS
In addition to the investments above, Symphony has five additional investments, each of which constitute less than 5% of SIHL's NAV at 31 December 2015. Pending investment in suitable opportunities, Symphony has placed funds in certain temporary investments. As at 31 December 2015, cash and cash equivalents that predominantly comprised bank deposits amounted to US$73.1 million.
CAPITALISATION AND NAV
As at 31 December 2015, the Company had US$413.4 million in issued share capital and its NAV was approximately US$695.6 million. Symphony's NAV is the sum of its cash and cash equivalents, temporary investments, the fair value of unrealised investments (including investments in subsidiaries, associates and joint ventures) and any other assets, less any other liabilities. The audited financial statements contained herein may not account for the fair value of certain unrealised investments. Accordingly, Symphony's NAV may not be comparable to the net asset value in the audited financial statements. The primary measure of SIHL's financial performance and the performance of its subsidiaries will be the change in Symphony's NAV per share resulting from changes in the fair value of investments.
The NAV and NAV per share for the 2013, 2014 and 2015 fiscal years and for the quarterly periods ended on March 31, June 30, September 30 and December 31, 2015 are highlighted below in the table.
NAV, SHARES OUTSTANDING AND NAV PER SHARE ON A QUARTERELY BASIS (1)
|
|
|
Company |
|
|
As at |
12/31/13 |
12/31/14 |
12/31/15 |
|
|
|
|
|
|
NAV (US$ 000') |
605,874 |
705,411 |
695,590 |
|
Number of shares (000') |
515,225 |
523,558 |
528,096 |
|
NAV per share (US$) |
1.18 |
1.35 |
1.32 |
|
Diluted NAV per share (2) (US$) |
1.17 |
1.34 |
1.30 |
|
|
|
Company |
|
|
As at |
03/31/15 |
06/30/15 |
09/30/15 |
|
|
|
|
|
|
NAV (US$ 000') |
711,655 |
669,901 |
613,160 |
|
Number of shares (000') |
523,558 |
528,096 |
528,096 |
|
NAV per share (US$) |
1.36 |
1.27 |
1.16 |
|
Diluted NAV per share (2) (US$) |
1.35 |
1.26 |
1.16 |
(1) Unaudited
(2) Adjusting for the impact of in the money vested but unexercised options
Symphony was admitted to the Official List of the London Stock Exchange ("LSE") on 3 August 2007 under Chapter 14 of the Listing Manual of the LSE. The proceeds from the IPO amounted to US$190 million before issue expenses pursuant to which 190.0 million new shares were issued in the IPO. In addition to these 190.0 million shares and 94.9 million shares pre-IPO, a further 53.4 million shares were issued comprising of the subscription of 13.2 million shares by investors and SIHL's investment manager, the issue of 33.1 million bonus shares, and the issue of 7.1 million shares to SIHL's investment manager credited as fully paid raising the total number of issued shares to 338.3 million.
The Company issued 4,119,490 shares, 2,059,745 shares, 2,059,745 shares and 2,059,745 shares on 6 August 2010, 21 October 2010, 4 August 2011 and 23 October 2012, respectively, credited as fully paid, to the Investment Manager, Symphony Investment Managers Limited. The shares were issued as part of the contractual arrangements with the Investment Manager.
On 4 October 2012, SIHL announced a fully underwritten 0.481 for 1 rights issue at US$0.60 per new share to raise proceeds of approximately US$100 million (US$93 million net of expenses) through the issue of 166,665,997 new shares, fully paid, that commenced trading on the London Stock Exchange on 22 October 2012.
As part of the contractual arrangements with the Investment Manager, 82,782,691 and 41,666,500 share options were granted to subscribe for ordinary shares at an exercise price of US$1.00 and US$0.60 on 3 August 2008 and 22 October 2012, respectively. The share options vest in equal tranches over a five-year period from the date of grant. The Investment Manager exercised share options amounting to 4,054,970, 4,278,330 and 4,538,197 on 8 May 2014, 10 June 2014 and 17 April 2015, respectively, at the exercise price of US$0.60 per share. Together with the shares issued to the Investment Manager, the shares issued pursuant to the rights issue and shares issued pursuant the exercise of options, increased the Company's fully paid issued share capital to 528.1 million shares.
REVENUE AND OTHER OPERATING INCOME
Management concluded during 2014 that the Company meets the definition of an investment entity and adopted IFRS 10, IFRS 12 and IAS 27 standards where subsidiaries are de-consolidated and their fair value is measured through profit or loss. As a result, revenue, such as dividend income, from underlying investments in subsidiaries is no longer consolidated.
During the 2015 fiscal year, Symphony recognised other income of US$1.4 million, which comprised interest income from bank deposits and loan interest from unconsolidated subsidiaries. This compares with other income of US$1.8 million in 2014 comprising the same items.
EXPENSES
Other operating expenses
Other operating expenses include fees for professional services, exchange losses, interest expense, insurance, communication, travel, Directors' fees and other miscellaneous expenses and costs incurred for analysis of proposed deals. For the year ended 31 December 2015, other operating expenses amounted to US$7.4 million (2014: US$5.2 million). The change in other operating expenses is predominantly due to an increase in exchange losses by US$2.4 million, which was partially offset by lower professional service fees and other operating expenses.
Management fee
The management fee amounted to US$15.0 million for the year ended 31 December 2015 (2014: US$15.0 million). The management fee was calculated on the basis of 2.25% of NAV (with a floor and cap of US$8 million and US$15 million per annum, respectively).
Share options expense
Under the terms of the Investment Management Agreement, the Investment Manager was granted Share Options to subscribe for shares of the Company. On 3 August 2008, the Investment Manager was granted 82,782,691 Share Options to subscribe for shares at US$1.00 each and on 22 October 2012, the Investment Manager was granted 41,666,500 Share Options to subscribe for shares at US$0.60 each. The share options vest in five equal tranches over a period of five years. The 82,782,691 Share Options granted on 3 August 2008 were fully invested and expensed by the end of the 2012 financial year.
An expense was recognised based on the fair value of the Share Options calculated using the Binomial Tree option-pricing model at 31 March, 30 June, 30 September and 31 December, respectively. The total expense during the 2015 financial year was US$2.0 million (2014: US$3.9 million) that was recognised in the statement of comprehensive income.
LIQUIDITY AND CAPITAL RESOURCES
At 31 December 2015, Symphony's cash balance was US$73.1 million. Symphony's primary uses of cash are to fund investments, pay expenses and to make distributions to shareholders, if and when declared by our board of directors. Taking into account current market conditions, it is expected that Symphony has sufficient liquidity and capital resource for its operations. The primary sources of liquidity are capital contributions received in connection with the initial public offering of shares, related transactions and a rights issue (See description under "Capitalisation and NAV"), in addition to cash from investments that it receives from time to time.
This cash from investments is in the form of dividends on equity investments, payments of interest and principal on fixed income investments and cash consideration received in connection with the disposal of investments. Temporary investments made in connection with Symphony's cash management activities provide a more regular source of cash than less liquid longer-term and opportunistic investments, but generate lower expected returns. Other than amounts that are used to pay expenses, or used to make distributions to our shareholders, any returns generated by investments are reinvested in accordance with Symphony's investment policies and procedures. Symphony may enter into one or more credit facilities and/or utilise other financial instruments from time to time with the objective of increasing the amount of cash that Symphony has available for working capital or for making opportunistic or temporary investments. At 31 December 2015, the Company had total interest-bearing borrowings of US$4.8 million (2014: US$4.7 million) associated with our property related investment in Niseko, Hokkaido, Japan.
|
|
Anil Thadani |
|
|
Chairman, Symphony Asia Holdings Pte. Limited Director, Symphony International Holdings Limited 18 March 2016 |
DIRECTORS RESPONSIBILITY STATEMENT
We, the Directors of Symphony International Holdings Limited (the "Company"), confirm that to the best of our knowledge:
a. the Financial statements of the Company prepared in accordance with International Financial Reporting Standards (IFRS), give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company taken as a whole as at and for the year ended 31 December 2015; and
b. the Investment Manager's Report includes a fair review of the development and performance of the business for the year ended 31 December 2015 and the position of the Company taken as a whole as at 31 December 2015, together with a description of the risks and uncertainties that the Company faces; and
c. the accounting records have been properly maintained.
On behalf of the Board of Directors
|
Pierangelo Bottinelli |
|
Anil Thadani |
|
Chairman, Symphony International Holdings Limited 18 March 2016
|
|
Chairman, Symphony Asia Holdings Pte. Limited Director, Symphony International Holdings Limited 18 March 2016
|
¶Independent auditors' report
Members of the Company
Symphony International Holdings Limited
Report on the financial statements
We have audited the accompanying financial statements of Symphony International Holdings Limited (the Company), which comprise the statement of financial position as at 31 December 2015, and the statements of comprehensive income, changes in equity and cash flows for the year then ended, and notes, comprising a summary of significant accounting policies and other explanatory information, as set out on pages FS1 to FS33.
Management's responsibility for the financial statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance with International Financial Reporting Standards, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
Auditors' responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on our judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the entity's preparation and fair presentation of the financial statements 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 entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the financial statements give a true and fair view of the financial position of the Company as at 31 December 2015, and of its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards.
KPMG LLP
Public Accountants and
Chartered Accountants
Singapore
18 March 2016
|
Statement of financial position As at 31 December 2015
|
|
|||
|
|
Note |
2015 |
2014 |
|
|
|
|
US$'000 |
US$'000 |
|
|
|
|
|
|
|
|
Non-current assets |
|
|
|
|
|
Financial assets at fair value through profit or loss |
3 |
627,292 |
630,053 |
|
|
|
|
627,292 |
630,053 |
|
|
Current assets |
|
|
|
|
|
Other receivables and prepayments |
4 |
220 |
43 |
|
|
Cash and cash equivalents |
5 |
73,142 |
80,376 |
|
|
|
|
73,362 |
80,419 |
|
|
Total assets |
|
700,654 |
710,472 |
|
|
|
|
|
|
|
|
Equity attributable to equity holders |
|
|
|
|
|
Share capital |
6 |
413,358 |
409,127 |
|
|
Reserves |
7 |
62,074 |
61,596 |
|
|
Accumulated profits |
|
220,154 |
234,688 |
|
|
Total equity carried forward |
|
695,586 |
705,411 |
|
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
Interest-bearing borrowings |
8 |
4,772 |
4,748 |
|
|
Other payables |
9 |
296 |
313 |
|
|
Total liabilities |
|
5,068 |
5,061 |
|
|
Total equity and liabilities |
|
700,654 |
710,472 |
|
The financial statements were approved by the Board of Directors on 18 March 2016.
──────────────────── ────────────────────
Anil Thadani Sunil Chandiramani
Director Director
18 March 2016 18 March 2016
|
Statement of comprehensive income Year ended 31 December 2015
|
|||
|
|
Note |
2015 |
2014 |
|
|
|
US$'000 |
US$'000 |
|
|
|
|
|
|
Other operating income |
|
1,435 |
1,847 |
|
Other operating expenses |
|
(7,407) |
(5,191) |
|
Management fees |
|
(15,000) |
(15,000) |
|
|
|
(20,972) |
(18,344) |
|
Share options expense |
|
(1,986) |
(3,871) |
|
Loss before investment results and income tax |
|
(22,958) |
(22,215) |
|
Fair value changes in financial assets at fair value |
|
38,425 |
137,896 |
|
Profit before income tax |
10 |
15,467 |
115,681 |
|
Income tax expense |
11 |
- |
- |
|
Profit for the year |
|
15,467 |
115,681 |
|
Other comprehensive income for the year, net of tax |
|
- |
- |
|
Total comprehensive income for the year |
|
15,467 |
115,681 |
|
|
|
|
|
|
Earnings per share: |
|
|
|
|
|
|
US Cents |
US Cents |
|
|
|
|
|
|
Basic |
12 |
2.94 |
22.23 |
|
Diluted |
12 |
2.90 |
22.08 |
|
|
Share |
Equity compensation reserve |
Accumulated profits |
Total |
|
|
US$'000 |
US$'000 |
US$'000 |
US$'000 |
|
|
|
|
|
|
|
At 1 January 2014 |
402,054 |
59,798 |
144,018 |
605,870 |
|
|
|
|
|
|
|
Total comprehensive income for the year |
- |
- |
115,681 |
115,681 |
|
|
|
|
|
|
|
Transactions with owners of the Company, recognised |
|
|
|
|
|
Issuance of shares |
5,000 |
- |
- |
5,000 |
|
Value of services received for issue of share options |
- |
3,871 |
- |
3,871 |
|
Exercise of share options |
2,073 |
(2,073) |
- |
- |
|
Dividend paid of US$0.04 per share |
- |
- |
(25,011) |
(25,011) |
|
Total transaction with owners of the Company |
7,073 |
1,798 |
(25,011) |
(16,140) |
|
At 31 December 2014 |
409,127 |
61,596 |
234,688 |
705,411 |
|
|
Share |
Equity compensation reserve |
Accumulated profits |
Total |
|
|
US$'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 |
|
|
|
|
|
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$0.05 per share |
- |
- |
(30,001) |
(30,001) |
|
Total transaction with owners of the Company |
4,231 |
478 |
(30,001) |
(25,292) |
|
At 31 December 2015 |
413,358 |
62,074 |
220,154 |
695,586 |
|
Statement of cash flows Year ended 31 December 2015
|
|||
|
|
Note |
2015 |
2014 |
|
|
|
US$'000 |
US$'000 |
|
Cash flows from operating activities |
|
|
|
|
Profit before income tax |
|
15,467 |
115,681 |
|
Adjustments for: |
|
|
|
|
Exchange loss |
|
6,341 |
3,895 |
|
Interest income |
|
(1,435) |
(1,847) |
|
Interest expense |
|
23 |
34 |
|
Fair value changes in financial assets at fair value through profit or loss |
|
(38,425) |
(137,896) |
|
Share options expense |
|
1,986 |
3,871 |
|
|
|
(16,043) |
(16,262) |
|
Changes in working capital: |
|
|
|
|
Increase in other receivables and payments |
|
(182) |
(4) |
|
(Decrease)/Increase in other payables |
|
(12) |
14 |
|
|
|
(16,237) |
(16,252) |
|
Interest received (net of withholding tax) |
|
1,181 |
1,856 |
|
Net cash used in operating activities |
|
(15,056) |
(14,396) |
|
|
|
|
|
|
Cash flows from investing activities |
|
|
|
|
Purchase of financial assets at fair value through |
|
- |
(11,035) |
|
Proceeds from disposal of financial assets at fair value through profit or loss |
|
35,402 |
- |
|
Net cash from/(used in) investing activities |
|
35,402 |
(11,035) |
|
|
|
|
|
|
Cash flows from financing activities |
|
|
|
|
Net proceeds from issue of share capital |
|
2,723 |
5,000 |
|
Interest paid |
|
(24) |
(35) |
|
Dividend paid |
|
(30,001) |
(25,011) |
|
Proceeds from borrowings |
|
67 |
193 |
|
Net cash used in financing activities |
|
(27,235) |
(19,853) |
|
|
|
|
|
|
Net decrease in cash and cash equivalents |
|
(6,889) |
(45,284) |
|
Cash and cash equivalents at 1 January |
|
80,376 |
126,231 |
|
Effect of exchange rate fluctuations |
|
(345) |
(571) |
|
Cash and cash equivalents at 31 December |
5 |
73,142 |
80,376 |
¶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 18 March 2016.
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 Company has its registered office at P.O. Box 957, Offshore Incorporations Centre, Road Town, Tortola, British Virgin Islands. 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 3 and 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, which comprise Management 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 2015 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
|
|
|
2015 |
2014 |
|
|
|
US$'000 |
US$'000 |
|
|
|
|
|
|
Investments |
|
627,292 |
630,053 |
4 Other receivables and prepayments
|
|
|
2015 |
2014 |
|
|
|
US$'000 |
US$'000 |
|
|
|
|
|
|
Interest receivables |
|
10 |
4 |
|
Other receivables |
|
171 |
- |
|
Other prepayments |
|
39 |
39 |
|
|
|
220 |
43 |
5 Cash and cash equivalents
|
|
2015 |
2014 |
|
|
US$'000 |
US$'000 |
|
|
|
|
|
Fixed deposits with financial institutions |
49,606 |
79,895 |
|
Cash at bank |
23,536 |
481 |
|
Cash and cash equivalents in the statement of cash flows |
73,142 |
80,376 |
The effective interest rate on fixed deposits with financial institutions as at 31 December 2015 was 0.09% to 0.80% (2014: 0.08% to 0.80%) per annum. Interest rates reprice at intervals of one to four weeks.
6 Share capital
|
|
Company |
|
|
|
2015 |
2014 |
|
|
Number of shares |
Number of shares |
|
Fully paid ordinary shares, with no par value: |
|
|
|
At 1 January |
523,557,998 |
515,224,698 |
|
Exercise of share options |
4,538,197 |
8,333,300 |
|
At 31 December |
528,096,195 |
523,557,998 |
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).
108,565,365 warrants were issued on 3 August 2007 and 3,289,845 additional warrants were issued on 22 October 2012 due to the rights issue announced on 4 October 2012. The warrants had an exercise price of US$1.22 each and expired on 3 August 2015. None of the warrants had been exercised.
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$4,772,000 (2014: US$4,748,000) is denominated in Japanese Yen. Interest is charged at 0.43% to 0.55% (2014: 0.55% to 0.64%) per annum and reprices on a quarterly basis. The loan principals are repayable quarterly unless the loan is rolled-over.
9 Other payables
|
|
|
2015 |
2014 |
|
|
|
US$'000 |
US$'000 |
|
|
|
|
|
|
Accrued operating expenses |
|
194 |
207 |
|
Amount due to directors |
|
100 |
100 |
|
Amount due to Investment Manager (non-trade) |
|
- |
3 |
|
Interest payable |
|
2 |
3 |
|
|
|
296 |
313 |
The amount due to directors is unsecured, interest free and repayable on demand.
10 Profit before income tax
Profit before income tax includes the following:
|
|
|
2015 |
2014 |
|
|
|
US$'000 |
US$'000 |
|
Other operating income |
|
|
|
|
Interest income from: |
|
|
|
|
- fixed deposits and placements in money market fund |
|
386 |
559 |
|
- loans to unconsolidated subsidiaries |
|
1,049 |
1,288 |
|
|
|
1,435 |
1,847 |
|
|
|
|
|
|
Other operating expenses |
|
|
|
|
Interest expense |
|
23 |
34 |
|
Foreign exchange loss |
|
6,341 |
3,895 |
11 Income tax expense
The Company is incorporated in a tax-free jurisdiction, thus, it is not subject to income tax.
12 Earnings per share
|
|
|
2015 |
2014 |
|
|
|
US$'000 |
US$'000 |
|
Basic and diluted earnings per share are based on: |
|
|
|
|
Net profit for the year attributable to |
|
15,467 |
115,681 |
Basic earnings per share
|
|
|
Number of shares 2015 |
Number of shares 2014 |
|
|
|
|
|
|
Issued ordinary shares at 1 January |
|
523,557,998 |
515,224,698 |
|
Effect of shares issued |
|
4,538,197 |
8,333,300 |
|
Issued ordinary shares at 31 December |
|
528,096,195 |
523,557,998 |
|
|
|
|
|
|
Weighted average number of shares (basic) |
|
526,772,554 |
520,423,704 |
Diluted earnings per share
|
|
|
2015 |
2014 |
|
|
|
|
|
|
Weighted average number of shares (basic) |
|
526,772,554 |
520,423,704 |
|
Effect of share options |
|
5,713,299 |
3,474,907 |
|
Weighted average number of shares (diluted) |
|
532,485,853 |
523,898,611 |
As at 31 December 2015, there were nil outstanding warrants to subscribe for new ordinary shares of no par value. As at 31 December 2014, there were 111,855,210 outstanding warrants to subscribe to new ordinary shares of no par value at an exercise price of US$1.22, which have not been included in the computation of diluted earnings per share that year, as the effect would have been anti-dilutive.
|
|
|
2015 |
2014 |
|
|
|
|
|
|
Number of outstanding options |
|
|
|
|
Exercise price of US$1.00 |
|
82,782,691 |
82,782,691 |
|
Exercise price of US$0.60 |
|
28,795,003 |
33,333,200 |
|
|
|
111,577,694 |
116,115,891 |
Only options to subscribe for ordinary shares of no par value that are dilutive have been included in the computation of diluted earnings per share. At 31 December 2015, 28,795,003 (2014: 16,666,600) share options that have an exercise price of US$0.60 (2014: US$0.60) have been included in the diluted per share computation.
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 (2014: US$400,000) were declared as payable to four directors (2014: 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 the 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 million per annum and a maximum amount of US$15 million per annum;
In 2015, Management fees amounting to US$15,000,000 (2014: 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 (2014: 10,298,725) management shares have 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:
|
Grant date |
Number of options |
Vesting Conditions |
Exercise |
|
Options granted to Investment Manager |
|
|
|
|
|
|
|
|
|
On 3 August 2008 |
82,782,691 |
Fully vested in five tranches over a period of five years and will expire on the tenth anniversary of the actual grant date |
US$1.00 |
|
|
|
|
|
|
On 22 October 2012 |
41,666,500 |
Vest in five equal tranches over a period of five years and will expire on the tenth anniversary of the date of grant |
US$0.60 |
|
|
|
|
|
|
Total share options outstanding at 1 January 2015 |
116,115,891 |
|
|
|
|
|
|
|
|
Exercised during the year |
4,538,197 |
|
US$0.60 |
|
|
|
|
|
|
Total share options outstanding at 31 December 2015 |
111,577,694 |
|
|
|
|
|
|
|
|
Exercisable at 31 December 2015 |
|
|
|
|
|
82,782,691 |
|
US$1.00 |
|
|
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 |
|
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% |
|
|
|
|
|
|
|
2014 |
|
|
|
|
|
Fair value |
US$0.40 |
US$0.37 |
US$0.40 |
US$0.41 |
|
|
|
|
|
|
|
Share price |
US$0.71 |
US$0.73 |
US$0.78 |
US$0.81 |
|
Exercise price |
US$0.60 |
US$0.60 |
US$0.60 |
US$0.60 |
|
Expected volatility |
40.80% |
32.61% |
32.49% |
31.41% |
|
Expected option life |
8.6 years |
8.3 years |
8.0 years |
7.8 years |
|
Expected dividends |
Nil |
Nil |
Nil |
Nil |
|
Risk-free interest rate |
2.9% |
2.7% |
2.7% |
2.4% |
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$1,986,000 (2014: US$3,871,000) 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 will have to 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.
During the year, the Investment Manager exercised 4,538,197 share options at 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 totalling THB140 million (US$3.9 million equivalent at 31 December 2015) to the latter in accordance with the terms as set out therein. As at 31 December 2015, THB120 million (U$3.3 million equivalent at 31 December 2015) has been drawn down. The Company is committed to grant the remaining loan amounting to THB20 million (US$0.6 million equivalent at 31 December 2015), 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 Investment Managers Limited, 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) |
|
|
|
|
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)* |
|
|
|
|
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 investments |
Includes government securities or other investment grade securities, liquid investments which are managed by third party investment managers of international repute, and deposits placed with commercial banks |
*Prior to 30 June 2015, management categorised WGC in the hospitality operating segment.
Information regarding the results of each reportable segment is included below:
|
|
Healthcare |
Hospitality |
Lifestyle |
Lifestyle/ |
Cash and temporary investments |
Total |
|
|
US$'000 |
US$'000 |
US$'000 |
US$'000 |
US$'000 |
US$'000 |
|
|
|
|
|
|
|
|
|
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 |
|
|
|
|
|
|
|
|
|
2014 |
|
|
|
|
|
|
|
Investment income: |
|
|
|
|
|
|
|
- Interest income |
1,254 |
- |
- |
34 |
559 |
1,847 |
|
- Fair value changes of financial assets at fair value through profit or loss |
11,288 |
121,878 |
4,473 |
(730) |
987 |
137,896 |
|
|
12,542 |
121,878 |
4,473 |
(696) |
1,546 |
139,743 |
|
Investment expense: |
|
|
|
|
|
|
|
- Exchange loss |
(956) |
(2) |
(138) |
(2,181) |
(618) |
(3,895) |
|
Net investment results |
11,586 |
121,876 |
4,335 |
(2,877) |
928 |
135,848 |
|
|
|
|
|
|
|
|
|
2015 |
|
|
|
|
|
|
|
Segment assets |
128,269 |
361,895 |
14,972 |
111,421 |
83,877 |
700,434 |
|
|
|
|
|
|
|
|
|
2015 |
|
|
|
|
|
|
|
Segment liabilities |
- |
- |
- |
4,774 |
- |
4,774 |
|
|
|
|
|
|
|
|
|
2014 |
|
|
|
|
|
|
|
Segment assets |
145,815 |
337,692 |
9,113 |
128,078 |
89,731 |
710,429 |
|
|
|
|
|
|
|
|
|
2014 |
|
|
|
|
|
|
|
Segment liabilities |
- |
- |
- |
4,751 |
- |
4,751 |
* Less than US$1,000
Reconciliations of reportable segment profit or loss and assets
|
|
|
2015 |
2014 |
|
|
|
US$'000 |
US$'000 |
|
|
|
|
|
|
Profit or loss |
|
|
|
|
Net investments results |
|
33,519 |
135,848 |
|
Unallocated amounts: |
|
|
|
|
- Other corporate expenses |
|
(18,052) |
(20,167) |
|
Profit for the year |
|
15,467 |
115,681 |
|
|
|
2015 |
2014 |
|
|
|
US$'000 |
US$'000 |
|
Assets |
|
|
|
|
Total assets for reportable segments |
|
700,434 |
710,429 |
|
Other assets |
|
220 |
43 |
|
Total assets |
|
700,654 |
710,472 |
|
|
|
|
|
|
Liabilities |
|
|
|
|
Total liabilities for reportable segments |
|
4,774 |
4,751 |
|
Other payables |
|
294 |
310 |
|
Total liabilities |
|
5,068 |
5,061 |
Geographical information
In presenting information on the basis of geographical information, revenue, comprising dividend income from investments, is based on the geographical location of the underlying investment. Assets are based on the principal geographical location of the assets or the operations of the investee companies. None of the underlying investments which generate revenue or assets are located in the Company's country of incorporation, BVI.
|
|
Singapore |
Malaysia |
Thailand |
Japan |
Mauritius |
Other |
Total |
|
|
US$'000 |
US$'000 |
US$'000 |
US$'000 |
US$'000 |
US$'000 |
US$'000 |
|
|
|
|
|
|
|
|
|
|
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 |
|
|
Singapore |
Malaysia |
Thailand |
Japan |
Mauritius |
Other |
Total |
|
|
US$'000 |
US$'000 |
US$'000 |
US$'000 |
US$'000 |
US$'000 |
US$'000 |
|
|
|
|
|
|
|
|
|
|
2014 |
|
|
|
|
|
|
|
|
Investment income: |
|
|
|
|
|
|
|
|
- Interest income |
559 |
- |
- |
- |
1,288 |
- |
1,847 |
|
- Fair value changes of financial assets at fair value through profit or loss |
(13) |
11,176 |
125,920 |
(182) |
- |
995 |
137,896 |
|
|
546 |
11,176 |
125,920 |
(182) |
1,288 |
995 |
139,743 |
|
Investment expense: |
|
|
|
|
|
|
|
|
- Exchange loss |
11 |
- |
- |
- |
(935) |
(2,971) |
(3,895) |
|
Net investment results |
557 |
11,176 |
125,920 |
(182) |
353 |
(1,976) |
135,848 |
|
|
|
|
|
|
|
|
|
|
2015 |
|
|
|
|
|
|
|
|
Segment assets |
137,116 |
86,602 |
456,645 |
9,014 |
61 |
10,996 |
700,434 |
|
|
|
|
|
|
|
|
|
|
2015 |
|
|
|
|
|
|
|
|
Segment liabilities |
4,774 |
- |
- |
- |
- |
- |
4,774 |
|
|
|
|
|
|
|
|
|
|
2014 |
|
|
|
|
|
|
|
|
Segment assets |
148,786 |
104,665 |
432,854 |
9,043 |
4,773 |
10,308 |
710,429 |
|
|
|
|
|
|
|
|
|
|
2014 |
|
|
|
|
|
|
|
|
Segment liabilities |
4,751 |
- |
- |
- |
- |
- |
4,751 |
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, 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 2015, the Company has credit risk exposure relating to fixed deposits placed with several financial institutions and placements in money market funds totalling US$73,142,000 (2014: US$80,376,000). Other than these balances, there were no significant concentrations of credit risk. The maximum exposure to credit risk is represented by the carrying amount of each financial asset in the statement of financial position.
The balances with unconsolidated subsidiaries and other receivables were not past due nor impaired at the reporting date.
Market risk
Market risk is the risk that changes in market prices, such as interest rates, foreign exchange rates and equity prices will affect the Company's income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return on risk.
Interest rate risk
The Company's exposure to changes in interest rates relates primarily to its interest-earning fixed deposits placed with financial institutions and interest-bearing term loans. The Company's fixed rate financial assets and liabilities are exposed to a risk of change in their fair value due to changes in interest rates while the variable-rate financial assets and liabilities are exposed to a risk of change in cash flows due to changes in interest rates. The Company does not enter into derivative financial instruments to hedge against its exposure to interest rate risk.
Sensitivity analysis
A 100 basis point ("bp") and 5 bp move in interest rate against the following financial assets and financial liabilities at the reporting date would increase/(decrease) profit or loss by the amounts shown below. The analysis assumes that all other variables remain constant.
|
|
Impact on Profit or loss |
Impact on Profit or loss |
||
|
|
100 bp |
5 bp |
100 bp |
5 bp |
|
|
2015 |
2015 |
2014 |
2014 |
|
|
US$'000 |
US$'000 |
US$'000 |
US$'000 |
|
|
|
|
|
|
|
Deposits with financial institutions |
496 |
(25) |
799 |
(40) |
|
Interest-bearing borrowings |
(48) |
2 |
(47) |
2 |
|
|
448 |
(23) |
752 |
(38) |
Foreign exchange risk
The Company is exposed to transactional foreign exchange risk when transactions are denominated in currencies other than the functional currency of the operation. The Company does not enter into derivative financial instruments to hedge its exposure to Thai Baht, Singapore dollars, Hong Kong dollars, Japanese Yen and Malaysian Ringgit as the currency position in these currencies is considered to be long-term in nature and foreign exchange risk is an integral part of the Company's investment decision and returns.
The Company's exposure, in US dollar equivalent, to foreign currency risk on other financial instruments is as follows:
|
|
Hong Kong Dollars |
Singapore |
Japanese |
Thailand Baht |
Malaysian Ringgit |
Others |
|
|
US$'000 |
US$'000 |
US$'000 |
US$'000 |
US$'000 |
US$'000 |
|
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 |
125 |
1,354 |
- |
-* |
- |
- |
|
Interest-bearing borrowings |
- |
- |
(4,772) |
- |
- |
- |
|
Accrued operating expenses |
- |
(172) |
- |
(2) |
- |
(20) |
|
Net exposure |
125 |
31,380 |
4,243 |
79,884 |
65,493 |
151 |
|
|
|
|
|
|
|
|
|
2014 |
|
|
|
|
|
|
|
Financial assets at fair value through profit or loss |
- |
32,742 |
9,043 |
91,513 |
78,787 |
-* |
|
Other receivables |
1 |
2 |
- |
- |
- |
- |
|
Cash and cash equivalents |
5,539 |
13,585 |
- |
-* |
- |
- |
|
Interest-bearing borrowings |
- |
- |
(4,748) |
- |
- |
- |
|
Accrued operating expenses |
- |
(196) |
- |
(2) |
- |
(9) |
|
Net exposure |
5,540 |
46,133 |
4,295 |
91,511 |
78,787 |
(9) |
* Less than US$1,000
Sensitivity analysis
A 10% strengthening of the US dollar against the following currencies at the reporting date would increase/(decrease) profit or loss by the amounts shown below. The analysis assumes that all other variables, in particular interest rates, remain constant.
|
|
|
Profit or loss |
|
|
|
|
2015 |
2014 |
|
|
|
US$'000 |
US$'000 |
|
|
|
|
|
|
Hong Kong Dollars |
|
(13) |
(554) |
|
Singapore Dollars |
|
(3,138) |
(4,613) |
|
Japanese Yen |
|
(424) |
(430) |
|
Thailand Baht |
|
(7,988) |
(9,151) |
|
Malaysian Ringgit |
|
(6,549) |
(7,879) |
|
Others |
|
(15) |
1 |
A 10% weakening of the US dollar against the above currencies would have had the equal but opposite effect on the above currencies to the amounts shown above, on the basis that all other variables remain constant.
Price risk
The valuation of the Company's investment portfolio is dependent on prevailing market conditions and the performance of the underlying assets. The Company does not hedge the market risk inherent in the portfolio but manages asset performance risk on an asset-specific basis.
The Company's investment policies provide that the Company invests a majority of capital in longer-term strategic investments and a portion in special situations and structured transactions. Investment decisions are made by management on the advice of the Investment Manager.
Sensitivity analysis
All of the Company's underlying investments that are quoted equity investments are listed on either The Stock Exchange of Thailand, Singapore Exchange Securities Trading Limited or Bursa Malaysia. A 10% increase in the price of the equity securities at the reporting date would increase profit or loss after tax by the amounts shown below. The analysis assumes that all other variables remain constant.
|
|
|
Profit or loss |
|
|
|
|
2015 |
2014 |
|
|
|
US$'000 |
US$'000 |
|
|
|
|
|
|
Underlying investments in quoted equity securities at fair value through profit or loss |
|
48,922 |
46,885 |
A 10% decrease in the price of the equity securities would have had the equal but opposite effect on the above quoted equity investments to the amounts shown above, on the basis that all other variables remain constant.
Liquidity risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due.
The Company's approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company's reputation. The Company monitors its liquidity risk and maintains a level of cash and cash equivalents deemed adequate by the Investment Manager to finance the Company's operations and to mitigate the effects of fluctuations in cash flows. Funds not invested in longer-term strategic investments or investments in special situations and structured transactions are temporarily invested in liquid investments and managed by a third party manager of international repute, or held on deposit with commercial banks.
The following are the contractual maturities of financial liabilities, including estimated interest payments and excluding the impact of netting agreements:
|
|
|
|
Cash flows |
|||
|
|
Carrying amount |
|
Contractual |
Within |
After 1 year but within |
After |
|
|
US$'000 |
|
US$'000 |
US$'000 |
US$'000 |
US$'000 |
|
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 |
- |
- |
|
|
|
|
|
|
|
|
|
2014 |
|
|
|
|
|
|
|
Non-derivative financial liabilities |
|
|
|
|
|
|
|
Interest-bearing borrowings |
4,748 |
|
4,748 |
4,748 |
- |
- |
|
Other payables |
313 |
|
313 |
313 |
- |
- |
|
|
5,061 |
|
5,061 |
5,061 |
- |
- |
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:
|
|
Note |
Fair value through |
At amortised cost |
Total |
|
Group |
|
US$'000 |
US$'000 |
US$'000 |
|
|
|
|
|
|
|
2015 |
|
|
|
|
|
Financial assets at fair value through profit or loss |
3 |
627,292 |
- |
627,292 |
|
Other receivables and prepayments |
4 |
- |
220 |
220 |
|
Cash and cash equivalents |
5 |
- |
73,142 |
73,142 |
|
|
|
627,292 |
73,362 |
700,654 |
|
|
|
|
|
|
|
Interest-bearing borrowings |
8 |
- |
4,772 |
4,772 |
|
Other payables |
9 |
- |
296 |
296 |
|
|
|
- |
5,068 |
5,068 |
|
|
Note |
Fair value through |
At amortised cost |
Total |
|
Group |
|
US$'000 |
US$'000 |
US$'000 |
|
|
|
|
|
|
|
2014 |
|
|
|
|
|
Financial assets at fair value through profit or loss |
3 |
630,053 |
- |
630,053 |
|
Other receivables and prepayments |
4 |
- |
43 |
43 |
|
Cash and cash equivalents |
5 |
- |
80,376 |
80,376 |
|
|
|
630,053 |
80,419 |
710,472 |
|
|
|
|
|
|
|
Interest-bearing borrowings |
8 |
- |
4,748 |
4,748 |
|
Other payables |
9 |
- |
313 |
313 |
|
|
|
- |
5,061 |
5,061 |
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;
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, and other payables) 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 |
|
2015 |
|
|
|
|
|
Financial assets at fair value through profit or loss |
- |
- |
627,292 |
627,292 |
|
|
|
|
|
|
|
2014 |
|
|
|
|
|
Financial assets at fair value through profit or loss |
- |
- |
630,053 |
630,053 |
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 2015 and 2014.
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 because their carrying amounts approximate their fair values due to their short-term period to maturity/repricing.
Significant unobservable inputs used in measuring fair value
This table below sets out information about significant unobservable inputs used at 31 December 2015 in measuring the underlying investments of the financial assets categorised as Level 3 in the fair value hierarchy.
|
Description |
Fair value US$'000 |
Fair value US$'000 |
Valuation technique |
Unobservable input |
Range (Weighted average) |
Sensitivity to changes in significant unobservable inputs |
|
|
|
|
|
|
|
|
|
Rental properties |
12,265 |
15,979 |
Income approach |
Rental growth rate
Occupancy rate
Discount rate |
6%-10% 8%-10%)
80%-95% (2014: 80-95%)
13% |
The estimated fair value would increase if the rental growth rate and occupancy rate were higher and the discount rate was lower. |
|
|
|
|
|
|
|
|
|
Land related investments |
99,161 |
112,106 |
Comparable valuation method |
Price per square meter for comparable land |
US$53 to US$1,484 per square meter (2014: US$60 to US$1,101 per square meter) |
The estimated fair value would increase if the price per square meter were higher. |
|
|
|
|
|
|
|
|
|
Operating business |
14,831 |
18,154 |
Enterprise value using comparable traded multiples |
EBITDA multiple (times) |
5.4x to 17.2x, average 11.1x (2014: 6.9x to 13.6x, average 9.8x) |
The estimated fair value would increase if the EBITDA multiple was higher. |
|
|
|
|
|
Discount for lack of marketability |
20% |
The estimated fair value would increase if the discount for lack of marketability were lower. |
|
|
|
|
|
|
|
|
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 average 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$489,220,722 (2014: US$468,846,356) are held through intermediate holding companies; the value of these companies are mainly determined by the fair values of the ultimate investments.
Level 3 valuations
The following table shows a reconciliation from the beginning balances to the ending balances for fair value measurements in Level 3 of the fair value hierarchy.
|
|
2015 |
2014 |
|
|
Financial assets at fair value through profit or loss |
|
|
|
US$'000 |
|
|
|
|
|
|
Balance at 1 January |
630,053 |
485,222 |
|
Total gains or losses in profit or loss |
38,425 |
137,896 |
|
(Deductions)/Additions |
(41,186) |
6,935 |
|
Balance at 31 December |
627,292 |
630,053 |
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:
|
|
‹------------- 2015 ------------› |
‹------------- 2014 -------------› |
||
|
|
Effect on profit or loss |
Effect on profit or loss |
||
|
|
Favourable |
(Unfavourable) |
Favourable |
(Unfavourable) |
|
|
US$'000 |
US$'000 |
US$'000 |
US$'000 |
|
|
|
|
|
|
|
Level 3 assets |
16,517 |
(17,083) |
15,795 |
(16,128) |
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 |
|
|
Name of subsidiary |
Principal activities |
and business |
2015 |
2014 |
|
|
|
|
% |
% |
|
|
|
|
|
|
|
Symphony (Mint) Investment Limited (Formerly Symphony Capital Partners Limited) |
Investment holding |
Republic of Mauritius |
100 |
100 |
|
|
|
|
|
|
|
Symphony International Limited |
Investment holding |
Republic of Mauritius |
100 |
100 |
|
|
|
|
|
|
|
Symphony Investment |
Investment holding |
British Virgin Islands |
100 |
100 |
|
|
|
|
|
|
|
Daphon Holdings Pte. Ltd. |
Investment holding |
Republic of Singapore |
100 |
100 |
|
|
|
|
|
|
|
Lennon Holdings Limited |
Investment holding |
Republic of Mauritius |
100 |
100 |
|
|
|
|
|
|
|
Britten Holdings Pte. Ltd. |
Investment holding |
Republic of Singapore |
100 |
100 |
|
|
|
|
|
|
|
Teurina Limited |
Investment holding |
British Virgin Islands |
100 |
100 |
|
|
|
|
|
|
|
Gabrieli Holdings Limited |
Investment holding |
British Virgin Islands |
100 |
100 |
|
|
|
|
|
|
|
|
|
Place of |
|
|
|
|
|
incorporation |
Equity interest |
|
|
Name of subsidiary |
Principal activities |
and business |
2015 |
2014 |
|
|
|
|
% |
% |
|
|
|
|
|
|
|
Ravel Holdings Pte. Ltd. and its subsidiaries: |
Investment holding |
Republic of Singapore |
100 |
100 |
|
|
|
|
|
|
|
Schubert Holdings Pte. Ltd. |
Investment holding |
Republic of Singapore |
100 |
100 |
|
|
|
|
|
|
|
Haydn Holdings Pte. Ltd. |
Investment holding |
Republic of Singapore |
100 |
100 |
|
|
|
|
|
|
|
Lloyd Webber Holdings Limited |
Investment holding |
British Virgin Islands |
100 |
100 |
|
|
|
|
|
|
|
Maurizio Holdings Limited |
Investment holding |
British Virgin Islands |
100 |
100 |
|
|
|
|
|
|
|
Groupe CL Pte. Ltd. |
Investment holding |
Republic of Singapore |
100 |
100 |
|
|
|
|
|
|
|
True United Limited |
Investment holding |
British Virgin Islands |
100 |
100 |
|
|
|
|
|
|
|
True Wisdom Limited |
Investment holding |
British Virgin Islands |
100 |
100 |
|
|
|
|
|
|
|
Segovia Holdings Limited |
Investment holding |
British Virgin Islands |
100 |
100 |
|
|
|
|
|
|
|
Anshil Limited |
Investment holding |
British Virgin Islands |
100 |
100 |
|
|
|
|
|
|
|
Buble Holdings Limited |
Investment holding |
British Virgin Islands |
100 |
100 |
|
|
|
|
|
|
|
O'Sullivan Holdings Limited and its subsidiary: |
Investment holding |
British Virgin Islands |
100 |
100 |
|
|
|
|
|
|
|
Bacharach Holdings Limited |
Investment holding |
British Virgin Islands |
100 |
100 |
|
|
|
|
|
|
|
Brahms Holdings Limited |
Investment holding |
British Virgin Islands |
100 |
100 |
|
|
|
|
|
|
|
Schumann Holdings Limited |
Investment holding |
British Virgin Islands |
100 |
100 |
|
|
|
|
|
|
|
Symphony Healthcare Holdings Limited |
Investment holding |
British Virgin Islands |
100 |
100 |
18 Underlying investments
Details of the underlying investments in unquoted equities of the Company are as follows:
|
|
|
Place of |
Ordinary shares |
Preference shares |
||
|
|
|
incorporation |
Equity interest |
Equity interest |
||
|
Name |
Principal activities |
and business |
2015 |
2014 |
2015 |
2014 |
|
|
|
|
% |
% |
% |
% |
|
|
|
|
|
|
|
|
|
La Finta Limited1 |
Property development |
Thailand |
49 |
49 |
- |
- |
|
|
|
|
|
|
|
|
|
Minuet Limited1 |
Property development |
Thailand |
49.98 |
49.98 |
- |
- |
|
|
|
|
|
|
|
|
|
SG Land Co. Limited1 |
Real estate |
Thailand |
49.91 |
49.91 |
- |
- |
|
|
|
|
|
|
|
|
|
C Larsen (Singapore) |
Distribution of furniture |
Republic of Singapore |
0.1 |
0.1 |
100 |
100 |
|
|
|
|
|
|
|
|
|
Chanintr Living Limited2 |
Distribution of furniture |
Thailand |
0.1 |
0.1 |
- |
- |
|
|
|
|
|
|
|
|
|
Well Round Holdings Limited2 |
Property development |
Hong Kong |
37.5 |
37.5 |
- |
- |
|
|
|
|
|
|
|
|
|
Silver Prance Limited2 |
Property development |
Hong Kong |
37.5 |
37.5 |
- |
- |
|
|
|
|
|
|
|
|
|
Desaru Peace Holdings Sdn Bhd2 |
Property development |
Malaysia |
- |
- |
49 |
49 |
|
|
|
|
|
|
|
|
|
Oak SPV Limited |
Hospitality and lifestyle |
Cayman Islands |
13.4 |
13.4 |
- |
- |
|
|
|
|
|
|
|
|
1 Joint venture
2 Associate
19 Subsequent Events
During the first quarter of 2016, the Company sold approximately 15.8 million shares held in MINT in the market through a series of transactions. The sale generated proceeds of approximately US$16.0 million.
On 22 March 2016, the Board of the Company announced a dividend payment of approximately US$40,000,000 to shareholders and option holders. The dividend, payable to shareholders and option holders, will be 6.25 cents (2015: 4.69 cents) per Share comprised of an ordinary dividend of 2.50 cents (2015: 1.56 cents) per Share and an extraordinary dividend of 3.75 cents (2015: 3.13 cents) per Share, which amounts to approximately US$16 million (2015: $10 million) and US$24 million (2015: $20 million), respectively. The dividend is payable on 22 April 2016. This dividend has not been provided for.
This information is provided by RNS
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