Annual Financial Report

RNS Number : 4077A

Symphony International Holdings Ltd

30 March 2012

SYMPHONY INTERNATIONAL HOLDINGS

FINAL RESULTS FOR THE YEAR ENDED 31 DECEMBER 2011

AND

PUBLICATION OF ANNUAL REPORT

30 March 2012

Symphony International Holdings (LSE:SIHL or "Symphony"), the London listed investor in fast growing Asian consumer businesses, today announces its final results for the year ended 31 December 2011 and publication of its 2011 annual report.

Key operational and financial highlights:

· Symphony's investee companies all reported strong performance during 2011 and increased deal activity resulted in the completion of several new transactions in early 2012

· Symphony participated in the buyout of Acibadem Saglik Yatirimlari Holding A.S., one of the leading healthcare companies in Turkey. Symphony has an option to swap its investment for shares in Integrated Healthcare Holdings Sdn Bhd ("IHH"), the healthcare subsidiary of Khazanah Nasional Berhad, the investment holding arm of the government of Malaysia. IHH is the largest pan-Asian healthcare platform

· Hospitality company Minor International Pcl ("MINT") in Thailand reported growth in revenue and EBITDA of 48% and 71%, respectively. Excluding one-off gains, revenue and EBITDA grew by 43% and 42% respectively. Total reported net profit was up 133% (55% excluding one-off gains) in 2011 over 2010

· The valuation for land held by Minuet Ltd, a joint venture between SIHL and an established Thai partner for the development of a branded life-style residential and recreational development in Bangkok, increased during the year because the company was able to sell approximately 11 hectares of land at a price in excess of 20% above cost

· Following the sale of land in Minuet, SIHL received US$12.1 million from Minuet by way of a partial return of a shareholder loan

· Parkway Life Real Estate Investment Trust ("PREIT") continued to deliver stable growth and dividend income, with net property income and distribution per unit increasing by 9.1% and 9.2%, respectively, in 2011 year-over-year

· Subsequent to the financial year, PREIT announced three additional nursing home acquisitions in Japan and the purchase of medical units in Malaysia

· C Larsen achieved an EBITDA 20% above target whereas AFC doubled its revenues and achieved an EBITDA over twice what was forecast

· Symphony completed its investment in January 2012 to invest in Maison Takuya to enable the luxury leather goods brand to expand production to meet strong demand for it products

· NAV per share decreased by 2.7% from US$1.1618 at 31 December 2010 to US$1.1239 at 31 December 2011; although the underlying value of many investments increased in 2011, weaker Asian currencies such as the Thai Baht and Singapore dollar had a negative impact

· Continued investment momentum in 2012; completion of three further investments post year end, together with additional investments in existing portfolio companies

· Symphony is now invested in 13 (ten at 31 December 2011) portfolio companies

· Symphony's portfolio companies are well positioned to continue their growth trajectory. Its focus of high-end consumer related businesses in Asia have proven to be resilient, even defensive, while being supported by a growing and aspirational middle and upper class

For further information:

Neil Doyle/ Tom Willetts +44 (0)20 7269 / 7175

FTI Consulting

About Symphony International Holdings

Symphony International Holdings (LSE:SIHL) is a London listed strategic investment company that invests in hospitality, healthcare and lifestyle businesses and develops luxury branded real estate in Asia. It offers a way for investors to gain exposure to rising disposable incomes and wealth in fast growing economies. Symphony's objective is to provide superior capital growth by investing in high quality companies and form long-term business partnerships with talented entrepreneurs and management teams. Symphony's investment team has a broad range of expertise - many of its professionals have been working in Asia for more than 25 years. For more information please visit our website at www.symphonyasia.com

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.

SYMPHONY INTERNATIONAL HOLDINGS LIMITED

Financial Results for the year ended 31 December 2011

Symphony International Holdings Limited ("SIHL" or the "Company") announces the financial results for the year ended 31 December 2011. The consolidated financial statements of the Company and its subsidiaries have been prepared in accordance with International Financial Reporting Standards (IFRS). The consolidated 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 on 5 January 2004. The Company's investment objective is to achieve superior investment returns by applying private equity style processes and disciplines to investing in consumer-related businesses, primarily in the healthcare, hospitality, lifestyle, and branded real estate sectors in the Asia-Pacific region.

The Company was admitted to the Official List of the London Stock Exchange on 3 August 2007 under Chapter 14 of the Listing Manual.

Chairmen's Statement

Our biggest challenge remains one of getting the market to better understand our business and to narrow the gap between our actual Net Asset Value ("NAV") per share and the price at which our stock trades. We had made some progress in narrowing this gap during the first half of 2011, but this unexpectedly widened in the second half. At 31 December 2011, our share price traded at a 47.1% discount to our NAV per share, from 33.1% at 30 June 2011. We continue to work with our brokers and advisors to improve liquidity and awareness and, in this regard we have appointed a financial public relations consultant in the UK to enhance our communication to investors.

The underlying performance of our listed portfolio companies was strong in 2011 despite the volatility in the financial markets and slowing global growth. Minor International Pcl ("MINT") in Thailand reported growth in revenue and EBITDA of 48% and 71%, respectively. Excluding one-off gains, revenue and EBITDA grew by 43% and 42% respectively. Total reported net profit was up 133% (55% excluding one-off gains) in 2011 over 2010. We added to our position in MINT during the year by purchasing 26.2 million shares, which increased our shareholding to approximately 8.7% from 7.9% previously.

Parkway Life Real Estate Investment Trust ("PREIT") continued to deliver stable growth and dividend income, with net property income and distribution per unit increasing by 9.1% and 9.2%, respectively, in 2011 year-over-year. Subsequent to the financial year, PREIT announced three additional nursing home acquisitions in Japan and the purchase of medical units in Malaysia. The investments will be yield accretive for investors. In addition we purchased 2.7 million units in PREIT in early 2012, which increased our unit holding in PREIT from approximately 5.9% to 6.4%.

Our unlisted non-property related investments that include C Larsen and AFC Network Private Limited ("AFC"), which operates the Asian Food Channel, both exceeded their budgets. C Larsen achieved an EBITDA 20% above target whereas AFC doubled its revenues and achieved an EBITDA over twice what was forecast. We are extremely pleased with the performance of these businesses.

We entered into an agreement in December 2011 to invest in Maison Takuya, a luxury leather goods brand. This investment will allow Maison Takuya to expand production to keep up with the strong demand for its products, which are already distributed at over 60 points of sale globally.

Early this year, we participated in the buyout of Acibadem Saglik Yatirimlari Holding A.S., one of the leading healthcare companies in Turkey. Our partner in this transaction was Khazanah, the sovereign wealth fund of Malaysia, which provided the bulk of the investment for the acquisition. Our agreement gives us an option to swap our shares in the Turkish acquisition for shares in Khazanah's healthcare subsidiary, IHH, which is the largest pan-Asian healthcare platform. This investment will give us an exposure to healthcare assets, most of which we know well, in several countries from Turkey to China. IHH also owns a medical university which represents our first investment in Education, another sector of great interest to us. It is fair to say that this investment in Healthcare is a good example of our management team's ability to source quality deals on a proprietary basis without having to participate in auctions and other competitive processes which have become so common in the private equity sector in Asia.

In regards to our real estate holdings, our investment in SG Land continued to provide a very attractive yield from rental revenues and the valuation for land held by Minuet increased during the year because the company was able to sell approximately 11 hectares of land, not required for the proposed development, at a price in excess of 20% above cost. This sale represented one of the largest land plots recently sold in the area.

The residential market continues to be buoyant in Macau and our outlook remains unchanged. We are monitoring price developments closely and we intend to sell our four units when our target price is reached.

During the year we invested in a joint venture that acquired a hotel in Niseko, Hokkaido, Japan. Niseko is a popular and increasingly premium ski destination in Asia that has consistently good powder snowfall and is known for its long ski seasons. We are excited about the re-development of this property into an upmarket hotel and residential development. In January 2012, we increased our stake in the venture by 7.5% to 37.5%.

In October 2011, we announced a joint venture property development to create an Amanresorts branded country club and several private villas for sale on the east coast of Malaysia and about an hour's drive from Singapore. Our partner in this development is again Khazanah, the country's sovereign wealth fund. Site preparation work has already started for this project and the projected completion date is the second quarter of 2013. We believe there will be good demand for these villas in the Singapore market, which is starved for quality weekend destination alternatives.

Looking at the market in general, although volatility persisted in 2011, we started to see some positive momentum towards the end of the year. As discussed above, our investee companies all reported strong performance and our deal activity increased and continued into the new year, which resulted in the completion of several new transactions.

Despite the improved performance, NAV per share decreased by 2.7% from US$1.1618 at 31 December 2010 to US$1.1239 at 31 December 2011. Although the underlying value of many investments increased in 2011, weaker Asian currencies such as the Thai Baht and Singapore dollar had a negative impact on our NAV, which is reported in US dollars. These currency movements were primarily the result of a flight to safety by investors as concerns over sovereign debt in Europe continued throughout the year. Some of these currency movements had begun to reverse at the time of this statement.

As mentioned in our most recent quarterly update, there are elevated economic risks for Asia as global growth slows. However, we remain confident our portfolio companies are well positioned to continue their growth trajectory. The high-end consumer related businesses in Asia, that we focus on, have proven to be relatively resilient, even defensive, while being supported by a growing and aspirational middle and upper class.

We are grateful to our shareholders for their continued belief and support in our investment approach and strategy. Equally, we want to express our appreciation to our business partners, who have very adeptly led their businesses through a challenging and volatile environment and delivered excellent results.

Pierangelo Bottinelli

Anil Thadani

Chairman, Symphony International Holdings Limited

26 March 2012

Chairman, Symphony Investment Managers Limited

26 March 2012

Financial Highlights

Key Financial Highlights

	Group
As at 31 December	2009	2010	2011
	US$'000	US$'000	US$'000

Revenue	3,494	3,727	4,000
Other operating income	13,261	18,823	14,357
Gain on disposal of financial assets at fair value through profit and loss	20,666⁽³⁾	23,065⁽⁴⁾	-

Profit (Loss) after tax⁽¹⁾	68,488	42,812	(10,519)

Total assets	342,605	408,557	399,061
Total Liabilities	5,757	8,170	10.065
Total shareholders' equity	336,848	400,387	388,996

NAV⁽²⁾	336,680	400,172	389,429
Number of shares outstanding ('000)	338,260	344,439	346,499
NAV per share (US$)	1.00	1.16	1.12

Notes:

(1) Profit (Loss) after tax in 2009, 2010 and 2011 includes expenses for management shares (2009: US$0.9 million, 2010: US$0.9 million, 2011: US$0.6 million) and share options not yet exercised (2009: US$10.2 million, 2010: US$5.8 million, 2011: US$4.2 million). Share options have an exercise price of US$1.00.

(2) Net asset value 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 any other liabilities.

(3) Relates to the profit on sales of listed investment of US$20.7 million, which relates to an accounting gain from the exchange of Minor shares for MINT shares that was completed on 12 June 2009 as part of a merger/restructuring.

(4) Includes Profit on sales of listed investment of US$23.1 million, which relates mainly to an accounting gain from the sale of shares in Parkway Holdings Limited.

Quarterly NAV

	12/31/2010	3/31/2011	06/30/2011	09/30/2011	12/31/2011
NAV (US$mn)	400.2	403.7	401.6	384.5	389.4

Value of portfolio investments ⁽¹⁾

	12/31/2010	3/31/2011	06/30/2011	09/30/2011	12/31/2011
Cost (US$mn)	193.2	196.9	197.0	201.4	205.3
Unrealised gain (US$mn)	91.8	96.1	93.3	79.0	90.0

NAV by Segment at 31 December 2011

Sector	Value US$mn	% of NAV
Healthcare	49.33	12.7%
Hospitality	101.97	26.2%
Lifestyle	15.47	4.0%
Lifestyle / Real estate	128.48	33.0%
Temporary Investments ⁽²⁾	94.17	24.2%
NAV	389.43	100.0%

(1) Portfolio investments exclude temporary investments

(2) Temporary investments are net of borrowings and net working capital

INVESTMENT MANAGER'S REPORT

This "Investment Manager's Report" should be read in conjunction with the consolidated financial statements and related notes of the SIHL Group. The consolidated financial statements of the SIHL Group were prepared in accordance with the International Financial Reporting Standards ("IFRS") and are presented in U.S. dollars. SIHL reports on each financial year that ends on 31 December. In addition to SIHL'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. SIHL'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 subsidiaries and associates) and any other assets, less any other liabilities. The financial results presented herein include activity for the period from 1 January 2011 through 31 December 2011, referred to as "the year ended 31 December 2011".

OUR BUSINESS

SIHL is an investment company incorporated under the laws of the British Virgin Islands. The Company's Ordinary shares were listed on the London Stock Exchange on 3 August 2007. SIHL's investment objective is to create value for stakeholders through long term strategic private equity type investments in high growth innovative consumer businesses, primarily in the Healthcare, Hospitality, Lifestyle and Branded Real Estate sectors, which are expected to be among the fastest growing sectors in Asia and the South-East Asian region including India, as well as through investments in special situations and structured transactions. SIHL's Investment Manager is Symphony Investment Managers Limited and the Investment Advisor is Symphony Asia Holdings Pte. Ltd. Symphony Asia Limited is the investment consultant to the Investment Manager.

Composition of portfolio investments by cost

	12/31/2009	12/31/2010	12/31/2011

Healthcare	33.1%	15.7%	14.8%
Hospitality	24.0%	30.3%	32.6%
Lifestyle	4.0%	5.3%	5.4%
Lifestyle / real estate	38.9%	48.7%	47.2%

Cost and fair value of investments

	Group at 31 December 2011
	Cost US$	Fair value US$	% of NAV


Hospitality	66,954,402	101,973,020	26.2%
Healthcare	30,321,155	49,331,800	12.7%
Lifestyle	11,024,167	15,472,710	4.0%
Lifestyle / Real estate	96,975,805	128,480,806	33.0%
Subtotal	205,275,528	295,258,336	75.8%

Temporary investments⁽¹⁾		94,171,008	24.2%
Net asset value⁽²⁾		389,429,345	100.0%

Notes:

(1) Temporary investments are net of US$1.4 million in borrowings that are associated with our investment in SG Land.

(2) 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 any other liabilities.

INVESTMENTS

During the 2011 fiscal year, SIHL invested US$12.1 million, net of shareholder loan repayments from portfolio companies. The total cost of investments increased from US$193.2 million at 31 December 2010 to US$205.3 million at 31 December 2011. As at 31 December 2011, the hospitality, healthcare, lifestyle and branded real estate sectors accounted for 32.6%, 14.8%, 5.4% and 47.2% of total cost of investments, respectively.

The fair value of investments, excluding temporary investments, held by SIHL increased to US$295.3 million at 31 December 2011 from US$284.9 million a year earlier. This increase comprised investments made during the year that amounted to US$12.1 million and a decline in the value of investments by US$1.7 million during 2011.

As at 31 December 2011, we had the following investments:

MINUET LIMITED

Minuet Limited ("Minuet") is a joint venture between SIHL and an established Thai partner for the development of a branded lifestyle residential and recreational development in Bangkok, Thailand. SIHL invested US$77.8 million in the venture for a direct 49% interest.

Minuet announced the sale of 11.1 hectares of land to SC Asset Corporation Pcl ("SC Asset") that involved a series of transactions, which completed on 12 January 2012. The land sold represented 14.1% of Minuet's total land holding at the time of completion. The sale to SC Asset was one of the largest land plots recently sold in the area. Following the sale, Minuet will continue to hold 67.6 hectares of land in Bangkok, Thailand. The sale price was used as the basis by an independent third party to value Minuet's residual land at 31 December 2011. Following the sale, SIHL received US$12.1 million from Minuet by way of a partial return of a shareholder loan.

There is no debt associated with this investment and at 31 December 2011, Minuet was valued at US$98.5 million, which compared to a valuation of US$99.8 million a year earlier. The higher land value was primarily the reason for the increase, which was partially offset by a weaker Thai baht.

Minor International Public Company Limited

Minor International Pcl ("MINT") is one of the largest hospitality and restaurant companies in the Asia Pacific region. MINT owns 28 hotels and manages 47 other hotels and serviced suites with over 9,800 rooms under prominent brands such as the Four Seasons, St. Regis, Marriott, Anantara, Oaks and others in Australia, New Zealand, Thailand, Vietnam, Maldives, South Africa, Sri Lanka and the Middle East. MINT also owns and operates over 1,250 restaurants under The Pizza Company, Swensen's, Sizzler, Dairy Queen, Burger King, Thai Express and The Coffee Club.

MINT's operations also include contract manufacturing and an international lifestyle consumer brand distribution business in Thailand focusing on fashion and cosmetics through retail (247 outlets), wholesale and direct marketing channels under brands that include GAP, Esprit, Bossini, Red Earth, Bloom, and Zwilling Henckels amongst others.

MINT's revenue and EBITDA increased by 43% and 42% before non-recurring items, respectively, in 2011 year-over-year. Aside from the improved performance of all business units, growth was significantly driven by the seven months of consolidation of the Oaks business and sales from real estate developments.

EBITDA before non-recurring items increased by 91% and 10% in the hotel & mixed use and restaurant businesses, respectively in 2011. Although revenue increased by 9%, retail and contract manufacturing EBITDA declined by 97% during the same period due to write-offs related to the flooding in Thailand during the year. A significant part of the exposure from the flooding is expected to be covered by several insurance policies.

At the end of 2011, MINT's total number of restaurants reached 1,257, comprising 711 equity-owned outlets and 546 franchised outlets. Approximately 66% were in Thailand with the remaining number in other Asian countries and the Middle East. Overall same-store-sales increased by 9% in 2011 while total system sales increased by 14.1% during the same period. EBITDA margins remained fairly constant at around 16%.

Following the consolidation of Oaks, MINT owned 28 hotels and manages another 47 hotels and serviced suites in 10 countries. Out of the total 9,800 rooms (5,277 from Oaks) owned or managed by MINT, 33% were in Thailand with the remaining 67% in other Asian countries and the Middle East. Overall revenue per average room increased in 2011 to THB3,479 from THB2,976 or by 17% during the year and average occupancy increased to 65% from 52% during the same period. Overall, revenue from hotel operations increased by 88% before mixed use business. Income from property development in 2011 increased to THB2.8 billion from THB236 million a year earlier on sales predominantly from the St Regis Residences and Anantara time share business.

We added to our position in MINT during the year by purchasing 26.2 million shares, which increased our shareholding to approximately 8.7% from 7.9%. As at 31 December 2011, the fair value of SIHL's investment in MINT was US$102.0 million.

Parkway Life Real Estate Investment Trust

Parkway Life Real Estate Investment Trust ("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 (including Singapore and Japan) that are used primarily for healthcare and / or healthcare-related purposes. PREIT is the largest listed healthcare REIT in Asia by asset size and generates an inflation linked yield of around 5% based on current valuations and historic distributions. SIHL invested US$30.2 million in PREIT in 2007. As at 31 December 2011, the fair value of the PREIT investment was US$49.1 million.

PREIT reported gross revenue and net property income growth of 9.6% and 9.1% in 2011 year-over-year to S$87.8 million and S$80.3 million, respectively. The growth was attributable to contributions from properties acquired in 2010 and 2011.

PREIT has 30 properties in Japan and three in Singapore. In 2012, the manager of PREIT announced it has entered into an agreement to acquire three additional nursing homes in Japan as well as an investment in medical suites in Malaysia. These acquisitions are expected to be yield accretive.

At 31 December 2011, PREIT had gearing of 34.8%, representing further debt headroom of S$266.4 million before reaching 45% gearing target. This allows for further yield accretive acquisitions in the region.

OTHER INVESTMENTS

In addition to the investments above, SIHL has seven additional investments, each of which constitute less than 5% of SIHL's NAV. Pending investment in suitable opportunities, SIHL has placed funds in certain temporary investments. As at 31 December 2011, cash and equivalents that predominantly comprised bank deposits amounted to US$100.1 million.

CAPITALISATION AND NAV

As at 31 December 2011, the Company had US$307.0 million in issued share capital and its NAV was approximately US$389.4 million. SIHL's NAV is the sum of its cash and cash equivalents, temporary investments, the fair value of unrealized investments (including investments in subsidiaries and associates) 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 and furthermore, may consolidate the assets and liabilities of certain investments. Accordingly, SIHL'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 SIHL's NAV per share resulting from changes in the fair value of investments.

The NAV and NAV per share for the 2009, 2010 and 2011 fiscal years and for the quarterly periods ended on March 31, June 30, September 30 and December 31, 2011 are as follows:

NAV, SHARES OUTSTANDING AND NAV PER SHARE ON ANNUAL AND QUARTERELY BASIS

		Group
As at	12/31/09	12/31/10	12/31/11

NAV (US$ 000')	336,680	400,172	389,429
Number of shares (000')	338,260	344,439	346,499
NAV per share (US$)	1.00	1.16	1.12

		Group
As at	03/31/11	06/30/11	09/30/11

NAV (US$ 000')	403,650	401,619	384,467
Number of shares (000')	344,439	344,439	346,499
NAV per share (US$)	1.17	1.17	1.11

SIHL 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 ordinary shares were issued in the IPO. In addition to these 190.0 million ordinary shares and 94.9 million ordinary shares pre-IPO, a further 53.4 million ordinary shares were issued comprising of the subscription of 13.2 million ordinary shares by investors and SIHL's investment manager, the issue of 33.1 million bonus ordinary shares, and the issue of 7.1 million ordinary 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 ordinary shares, 2,059,745 ordinary shares and 2,059,745 ordinary shares on 6 August 2010, 21 October 2010 and 4 August 2011, respectively, credited as fully paid, to the Investment Manager, Symphony Investment Managers Limited, increasing the Company's fully paid issued share capital to 346.5 million ordinary shares. The shares were issued as part of the contractual arrangements with the Investment Manager.

REVENUE AND OTHER OPERATING INCOME

REVENUE

During the 2011 fiscal year, SIHL received dividend income amounting to US$4.0 million from quoted equity investments. This represents an increase of 7.3% from dividends received during the 2010 fiscal year. The change is predominantly due to an increase in the dividends per unit from PREIT.

OTHER OPERATING INCOME

Other operating income includes interest income from temporary investments and loans outstanding to portfolio companies, in addition to foreign exchange gains. Temporary investments predominantly consisted of bank deposits and contributed to US$0.2 million in interest income during the 2011 financial year. Interest earned on loans outstanding to portfolio companies amounted to US$14.2 million. Foreign exchange loss amounted to US$0.6 million during 2011.

EXPENSES

MANAGEMENT FEE

The management fee amounted to US$8.9 million for the year ended 31 December 2011. 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) during 2011.

OTHER OPERATING EXPENSES

Other operating expenses include fees for professional services, insurance, communication, travel, Directors' fees and other miscellaneous expenses and costs incurred for analysis of proposed deals.

MANAGEMENT SHARE EXPENSE

As part of the Investment Management and Advisory Agreement with SIHL, the Investment Manager is entitled to management shares of up to an aggregate amount equal to 5% of newly issued capital representing part of the remuneration for investment advice and services rendered. Up to 20% of the management shares are eligible for issue at the first quarter end following each anniversary of the admission of SIHL to the Official List of the London Stock Exchange provided that the maximum number of management shares issued does not decrease the NAV per share below US$1.00. Those management shares which are eligible to be issued may be issued on any NAV approval date. An expense was recognised for 10,298,726 management shares apportioned for the 2011 financial year. The expenses for these management shares amounted to US$0.5 million.

SHARE OPTION EXPENSE

Under terms of the Investment Management and Advisory Agreement, the Investment Manager was granted Share Options on the date of admission to the Official List of the London Stock Exchange. A total of 82,782,691 options were granted with an exercise price of US$1.00 each and will vest and become exercisable by the Investment Manager in five equal tranches over a period of five years from date of grant. Four tranches of the options have vested. An expense was recognised based on the fair value of the Share Options calculated using the Black-Scholes option pricing model. Based on a fair value of US$0.57, US$0.62, US$0.56 and US$0.44 per option at 31 March, 30 June, 30 September and 31 December, respectively, an expense of US$4.2 million was recognised in the income statement with a corresponding increase in equity in 2011.

Taxes

Substantially all the taxes paid by the Group in the year ended 31 December 2011 were withholding taxes on dividends received and interest earned from loans outstanding to portfolio companies, in addition to real estate-related taxation.

LIQUIDITY AND CAPITAL RESOURCES

At 31 December 2011, SIHL's cash balance was US$100.1 million. SIHL's primary uses of cash are to fund private equity type investments and investments in special situations and structured transactions and to make distributions to shareholders, if and when declared by our board of directors, and to pay operating expenses. Taking into account current market conditions, it is expected that SIHL's sources of liquidity described below will be sufficient to fund working capital requirements. The initial sources of liquidity were the capital contributions received in connection with the initial public offering of shares and related transactions. (See a description of the initial offering under "Capitalisation and NAV" above).

SIHL receives cash from time to time from its investments. This cash 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 SIHL's cash management activities provide a more regular source of cash than less liquid private equity 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 SIHL's investment policies and procedures.

SIHL 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 SIHL has available for working capital or for making opportunistic or temporary investments. At 31 December 2011, the Group had total interest-bearing borrowings of US$1.4 million associated with our investment in SG Land, which constitutes less than 5% of NAV.

PRINCIPAL RISKS

Described below are some of the risks that the Company is exposed to:

The Company is an investment company with a different structure and a different investment strategy to that of a typical private equity vehicle. As an "evergreen" vehicle, the Company is not constrained by limited time frames of traditional private equity vehicles and it is more likely that the Company will invest as a long-term strategic partner in investments that may be less liquid and which are less likely to increase in value in the short-term.

The Company may also make investments in special situations and structured transactions, which have different risks compared to traditional private equity investments. Such investments are typically in companies which have shorter operating histories, narrower product lines and smaller market shares than larger businesses, which tend to render them more vulnerable to competitors' actions and market conditions, as well as general economic downturns. Investments that fall into this category tend to have relatively short holding periods and entail little or no participation in the board of the company in which such investments are made. The Company may invest up to 30 percent of its total assets (as determined at the time of each investment) in special situations and structured transactions.

Pending the making of private equity type investments and investments in special situations and structured transactions, SIHL's capital will be temporarily invested in liquid investments and managed by a third party investment manager of international repute, held on deposit with commercial banks and/or invested in temporary investments which are expected to generate returns that are substantially lower than the returns SIHL would expect from private equity type investments or special situations and structured transactions.

The market value of the Company's shares and warrants, as well as being affected by their net asset value, also takes into account their supply and demand. As such, the market value of a share or warrant can fluctuate and may not always reflect its underlying net asset value.

Changes in economic conditions of the countries in which the Company may have investments (for example, interest rates, inflation, industry conditions, competition, tax laws, changes in the law, political and diplomatic events and other factors) could substantially affect the value and adversely or positively affect the Company's prospects, in addition to the value of shares and warrants.

The Company expects to make investments in companies in emerging markets which will expose the Company to additional risks not typically associated with investments in companies that are based in developed markets. Investments denominated in foreign currencies will be subject to foreign currency risks.

The Company's investment policies and procedures do not contain any fixed requirement for investment diversification. The Company will focus on investing not less than 70 percent. of its total assets (as determined at the time of each investment) in long-term private equity type investments in businesses in the Hospitality, Healthcare and Lifestyle and Branded Real Estate in the Asia-Pacific region and not more than 30 percent. of its total assets (as determined at the time of each investment) in special situations and structured transactions. The Company's investments could therefore be concentrated in a relatively small number of companies in the abovementioned sectors within Asia-Pacific and could also be focused on a few specific types of investment.

The Company operates in a highly competitive market for investments. The Company's performance is affected by pricing when making and exiting an investment. The ability of the Company to achieve financial returns on investments could be hampered by disclosure of certain sensitive information.

As such, the Company may choose not to disclose pricing and valuation information in order to prevent (a) sellers of potential investments in private companies from determining how much the Company has paid for certain investments in comparable private companies which are similar to their potential investment, as this could lead to unfair price comparisons and (b) buyers of the Company's existing investments from determining how much the Company initially paid for its investments, as this will affect the Company's competitive advantage during the exit price negotiation process and may prevent the Company from maximizing value for its shareholders.

Anil Thadani

Chairman, Symphony Investment Managers Limited

26 March 2012

BOARD OF DIRECTORS

PIERANGELO BOTTINELLI

Pierre, who is based in Geneva, Switzerland, was appointed Chairman on 31 December 2005. He began his career as a merchant banker at AG Becker in 1970. He joined Wertheim Schroder in 1985, became Managing Director of Schroder Securities in 1991, then joined Quaker Securities as Managing Director in 2000. He is a board member of a number of companies in Singapore and Switzerland, is a director of Audemars Piguet Group Holding, and is Chairman of Lansdowne Partners International Limited.

GEORGES GAGNEBIN

Georges was appointed to the Board on 8 July 2007. Between 1969 and 1998, he held a number of positions at the Swiss Bank Corporation between 1969 and 1998, including as a member of the management committee. He subsequently held executive positions at UBS AG, including as Head of International Clients EMEA in the private banking division; a member of the Group Managing Board; a member of the Group Executive Board; Chief Executive of Private Banking; Chairman of Wealth Management and Business Banking; and Vice-Chairman of SBC Wealth Management AG. In 2005, he joined the Julius Baer Group where he was Vice-Chairman of Julius Baer Holding Ltd and Bank Julius Baer & Co Ltd and more recently Chairman of Infidar

Investment Advisory Ltd, a member of Julius Baer Group. He is presently Chairman of the Board of the Banque Pâris Bertrand Sturdza S.A., Geneva.

RAJIV K. LUTHRA

Rajiv was appointed to the Board on 8 July 2007. He is founder and Managing Partner of Luthra & Luthra Law Offices, in New Delhi, India. Luthra & Luthra has been recognised with many awards including the 'National Law Firm of the Year 2011' by International Financial Law Review. He has been advising on capital markets and corporate finance; securitisation and structure finance; construction and property; and IT, telecommunications and media; for more than 30 years. He serves on a number of committees, including the Advisory Board to the Competition Commission of India; is Convener of the committee that advises the Indian government on the liberalisation of legal services between India and the UK; and is a member of the Round Table on Legal Education for the Ministry of Human Resource Development. He is also a member of HSBC's Corporate Governance and Audit committees in India.

ANIL THADANI

Anil was appointed to the Board on 16 February 2004. He began his career as a research engineer with Chevron Chemical Company, in California. He subsequently completed his MBA before joining the Bank of America in San Francisco. He has worked in the Asia-Pacific region since 1975: he was with the Bank of America, in Japan, the Philippines and Hong Kong until 1981 when he founded one of the first private equity investment companies in Asia. He has sat on the boards of a number of companies in Asia, Europe and North America, and continues to represent Symphony on the boards of portfolio companies. Based in Singapore, he is also a member of the Board of Trustees of Singapore Management University and is Chairman of the university's Institute for Innovation and Entrepreneurship. Anil has a BTech in Chemical Engineering, from the Indian Institute of Technology, Madras, an MS in Chemical Engineering from the University of Wisconsin, Madison, and an MBA from the University of California at Berkeley.

SUNIL CHANDIRAMANI

Sunil was appointed to the Board on 16 February 2004. He has more than 24 years' private equity and related investment experience across a wide range of industry sectors in Asia and the United States. He has a BCom (Hons) degree from the Shri Ram College of Commerce, Delhi University, and an MBA from The Wharton School of the University of Pennsylvania.

DIRECTORS' REPORT

The Directors submit their Report together with the Company's Statement of Financial Position, Statement of Comprehensive Income, Statement of Changes in Equity, Statement of Cash Flows, and the related notes for the year ended 31 December 2011, which have been prepared in accordance with International Financial Reporting Standards ("IFRS") adopted by the International Accounting Standards Board ("IASB") and are in agreement with the accounting records, which have been properly kept in accordance with the BVI Business Companies Act 2004.

CORPORATE GOVERNANCE

The Company is incorporated under the laws of the British Virgin Islands. On 3 August 2007, the Company was admitted to the Official List of the London Stock Exchange pursuant to a Secondary Listing under Chapter 14 of the Listing Rules and its securities were admitted for trading on the London Stock Exchange's Main Market. In April 2010, the UK listing regime was restructured into Premium and Standard Listing categories. The Company is now a Standard Listing Category constituent. Details of the share capital of the Company is disclosed in note 8 to the financial statements.

As the Company is incorporated in the British Virgin Islands, and being a Standard Listing Category constituent, it is not required to comply with the requirements of the UK Combined Code on Corporate Governance published by the Financial Reporting Council (the "Code"), however the Company is required to prepare a corporate governance statement. There is no published corporate governance regime equivalent to the Code in the British Virgin Islands. However, the Board is committed to ensuring that proper standards of corporate governance and has established governance procedures and policies that it believes and considers appropriate having regard to the nature, size and resources of the Company. The following explains how the relevant principles of governance are applied to the Company.

The Board currently has five members, of which a majority, including the Board Chairman, are independent directors. The Board members will have regard to their obligations to act in the best interests of the Company should potential conflicts of interest arise.

The Board Chairman, Mr. Pierangelo Battista Bottinelli, has more than 40 years' experience in merchant banking, securities and investment management, and is currently a director and the Chairman of Lansdowne Partners International Limited. The other two independent directors are Mr. Rajiv K. Luthra and Mr. Georges Gagnebin. Mr. Luthra is the managing partner and founder of Luthra and Luthra Law Offices in India and serves on several high level committees, such as Chairman and Member on the Board of Corporate Governance and Audit Committee of HSBC (India). Mr. Gagnebin is currently Chairman of the Board of the Banque Pâris Bertrand Sturdza S.A., Geneva. The other members of the Board are Mr. Anil Thadani and Mr. Sunil Chandiramani who have over 30 years and 24 years of experience in private equity, respectively.

More detailed biographies of the Directors can be found preceding this section. The Board has extensive experience relevant to the Company and any change in the Board composition can be managed without undue interruption.

The Directors currently do not have a fixed term of office and there are specific provisions regarding the procedures for their appointment. The Directors may be removed and replaced at any time subject to the following procedure:

i. any proposal for the replacement or removal of one or more Directors shall be considered by the Nominations Committee who shall assess the suitability of the candidates proposed (and any Director who is the subject of the removal proposal shall not participate in such assessment); and

ii. if the Nominations Committee approves the candidate(s) proposed they shall convene a special meeting of the Board to vote on the removal and replacement of the relevant Director(s).

Further, pursuant to the terms of the Investment Management Agreement and the Articles of Association, if a Director who is also a Key Person is to be replaced, a new Director to replace such Key Person Director shall be nominated by the Investment Manager and the Board may reject such nomination by the Investment Manager only if it would be illegal to accept such nominee of the Investment Manager under any applicable law. The Board is responsible for reviewing the financial performance and internal controls and monitoring the overall strategy of the Company. In addition, the Board is responsible for approving this annual financial report and the quarterly NAV reports during the year.

The Board has two committees: (i) the Nominations Committee and (ii) the Audit Committee.

The Nominations Committee has the duty of assessing the suitability of candidates nominated by our Shareholders as replacement Directors.

The Nominations Committee comprises a majority of independent Directors. The Chairman of the Nominations Committee is Mr. Georges Gagnebin. The other Nominations Committee members are Mr. Anil Thadani, Mr. Pierangelo Battista Bottinelli and Mr. Rajiv K. Luthra. If a member of the Nominations Committee has an interest in a matter being deliberated upon by the Nominations Committee, he shall be required to abstain from participating in the review and approval process of the Nominations Committee in relation to that matter. If more than one member of the Nominations Committee has an interest in a matter being deliberated, then the non-interested Directors who are not members of the Nominations Committee will participate in the review and approval process in relation to that matter.

The Audit Committee assists the Board in overseeing the risk management framework by reviewing any matters of significance affecting financial reporting and internal controls of the Company, and has the duty of, among other things:

i. assisting the Board in its oversight of the integrity of the financial statements, the qualifications, independence and performance of the independent auditors and compliance with relevant legal and regulatory requirements;

ii. reviewing and approving with the external auditors their audit plan, the evaluation of the internal accounting controls, audit reports and any matters which the external auditors wish to discuss without the presence of board members and ensuring compliance with relevant legal and regulatory requirements;

iii. reviewing and approving with the internal auditors the scope and results of internal audit procedures and their evaluation of the internal control system;

iv. making recommendations to the Board on the appointment or reappointment of external auditors, the audit fee and resignation or dismissal of the external auditors; and

v. pre-approving any non-audit services provided by the external auditors.

The Audit Committee comprises a majority of independent Directors. The Chairman of the Audit Committee is Mr. Rajiv K. Luthra. The other Audit Committee members are Mr. Georges Gagnebin, Mr. Pierangelo Battista Bottinelli and Mr. Sunil Chandiramani. If a member of the Audit Committee has an interest in a matter being deliberated upon by the Audit Committee, he shall abstain from participating in the review and approval process of the Audit Committee in relation to that matter. If more than one member of the Audit Committee has an interest in a matter being deliberated, then the non-interested Directors who are not members of the Audit Committee will participate in the review and approval process in relation to that matter.

Each Committee and each Director has the authority to seek independent professional advice where necessary to discharge their respective duties in each case at the Company's expense.

The Company also has a policy on Directors' dealings in shares, which is based on the Model

Code for Directors' dealings contained in the London Stock Exchange's Listing Rules. The Board understands its responsibility for ensuring that there are sufficient, appropriate and effective systems, procedures, policies and processes for internal control of financial, operational, compliance and risk management matters. The Board meets regularly during the year to receive from the Investment Manager an update on the Company's investment activities and performance, together with reports on markets and other relevant matters. In carrying out their responsibilities, the directors have put in place a framework of controls to ensure ongoing financial performance is monitored in a timely and corrective manner and risk is identified and mitigated to the extent practicably possible.

The Board periodically meets and had a total of four meetings during the year. Mr. Pierangelo

Battista Bottinelli, Mr. Georges Gagnebin, Mr. Rajiv K. Luthra, Mr. Anil Thadani and Mr. Sunil

Chandiramani attended all the Board meetings held during the year. In addition, the Audit and Nominations Committees each met three times during the year and were attended by all respective members. The Company has entered into an agreement with the Investment Manager, Symphony Investment Managers Limited. The key responsibilities of the Investment Manager are to implement the investment objectives of the Company. The Company's investment objective is to create value for stakeholders through long term strategic private equity type investments in high growth innovative consumer businesses, primarily in the Healthcare, Hospitality and Lifestyle and Branded Real Estate sectors in Asia.

DIRECTORS RESPONSIBILITY STATEMENT

We, the Directors of Symphony International Holdings Limited (the "Company"), confirm that to the best of our knowledge:

a) the consolidated financial statements of the Company and its subsidiaries (the "Group"), 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 Group taken as a whole as at and for the year ended 31 December 2011; 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 2011 and the position of the Group taken as a whole as at 31 December 2011, together with a description of the risks and uncertainties that the Group faces.

On behalf of the Board of Directors

Pierangelo Bottinelli

Anil Thadani

Chairman, Symphony International Holdings Limited

26 March 2012

Chairman, Symphony Investment Managers Limited

Director, Symphony International Holdings Limited

26 March 2012

Independent auditors' report

Members of the Company
Symphony International Holdings Limited

Report on the financial statements

We have audited the accompanying consolidated financial statements of Symphony International Holdings Limited (the Company) and its subsidiaries (the Group), which comprise the consolidated statement of financial position of the Group as at 31 December 2011, and the consolidated statements of comprehensive income, statement of changes in equity and statement of cash flows for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management's responsibility for the financial statements

Management is responsible for the preparation and fair presentation of these consolidated 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 consolidated 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 consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on our judgement, including the assessment of the risks of material misstatement of the consolidated 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 consolidated 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 consolidated 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 Group as at 31 December 2011, and of its financial performance and its consolidated cash flows for the year then ended in accordance with International Financial Reporting Standards.

KPMG LLP

Public Accountants and

Certified Public Accountants

Singapore

26 March 2012

Consolidated statement of financial position As at 31 December 2011
	Note	2011	2010
		US$'000	US$'000

Non-current assets
Interests in joint ventures	3	132,267	126,011
Investment properties	5	9,512	9,103
Financial assets at fair value through profit or loss	4	151,120	148,199
Other receivables and prepayments	6	1,732	1,090
		294,631	284,403
Current assets
Other receivables and prepayments	6	1,618	1,515
Financial assets at fair value through profit or loss	4	2,694	-
Cash and cash equivalents	7	100,118	122,639
		104,430	124,154

Total assets		399,061	408,557

Equity attributable to equity holders of the Company
Share capital	8	306,975	306,498
Reserves	9	59,924	61,273
Accumulated profits		21,859	32,403
		388,758	400,174

Non-controlling interest		238	213
Total equity carried forward		388,996	400,387

Consolidated statement of financial position (cont'd) As at 31 December 2011
	Note	2011	2010
		US$'000	US$'000

Total equity brought forward		388,996	400,387

Non-current liabilities
Interest-bearing borrowings (secured)	10	981	1,408
Deferred tax liabilities	11	671	-
		1,652	1,408

Current liabilities
Amounts due to non-controlling interest (non-trade)	12	504	503
Interest-bearing borrowings (secured)	10	372	385
Other payables	13	7,446	5,730
Current tax payable		91	144
		8,413	6,762
Total liabilities		10,065	8,170

Total equity and liabilities		399,061	408,557

The financial statements were approved by the Board of Directors on 26 March 2012.

............................................................... ...............................................................

Anil Thadani Sunil Chandiramani

Director Director

26 March 2012 26 March 2012

Consolidated statement of comprehensive income Year ended 31 December 2011
	Note	2011	2010
		US$'000	US$'000

Revenue	14	4,000	3,727
Other operating income	15	14,357	18,823
Other operating expenses		(2,443)	(1,510)
Management fees		(8,920)	(8,134)
		6,994	12,906
Management Shares expense		(552)	(902)
Share options expense		(4,175)	(5,809)
Profit before investment results and income tax		2,267	6,195
Gain on disposal of financial asset at fair value through profit or loss		-	23,065
Fair value changes in financial assets at fair value through profit or loss		(5,112)	26,283
Fair value changes in investment properties	5	373	617
Fair value changes in investments in joint ventures		(4,997)	(10,907)
(Loss)/Profit before income tax	15	(7,469)	45,253
Income tax expense	16	(3,050)	(2,441)
(Loss)/Profit for the year		(10,519)	42,812
Other comprehensive (loss)/income:
Foreign currency translation differences in relation to financial statements of foreign operations		(5,599)	14,016
Other comprehensive (loss)/income for the year, net of tax		(5,599)	14,016
Total comprehensive (loss)/income for the year		(16,118)	56,828

(Loss)/Profit attributable to:
Equity holders of the Company		(10,544)	42,767
Non-controlling interest		25	45
(Loss)/Profit for the year		(10,519)	42,812

Total comprehensive (loss)/ income attributable to:
Equity holders of the Company		(16,143)	56,783
Non-controlling interest		25	45
Total comprehensive (loss)/income for the year		(16,118)	56,828

(Losses)/Earnings per share:		US Cents	US Cents

Basic	17	(3.05)	12.57
Diluted	17	(3.05)	12.42

Consolidated statement of changes in equity Year ended 31 December 2011
	Share capital	Equity compensation reserve	Foreign currency translation reserve	Accumulated profits/ (losses)	Total attributable to equity holders of the Company	Non-controlling interest	Total equity
	US$'000	US$'000	US$'000	US$'000	US$'000	US$'000	US$'000

At 1 January 2010	302,408	44,277	359	(10,364)	336,680	168	336,848
Total comprehensive income for the year
Profit for the year	-	-	-	42,767	42,767	45	42,812
Other comprehensive income
Foreign currency translation differences	-	-	14,016	-	14,016	-	14,016
Total other comprehensive income	-	-	14,016	-	14,016	-	14,016
Total comprehensive income	-	-	14,016	42,767	56,783	45	56,828

Transactions with owners of the Company, recognised directly in equity
Issue of ordinary shares	4,090	(4,090)	-	-	-	-	-
Value of services received for issue of Management Shares	-	902	-	-	902	-	902
Value of services received for issue of share options	-	5,809	-	-	5,809	-	5,809
Total transaction with owners of the Company	4,090	2,621	-	-	6,711	-	6,711
At 31 December 2010	306,498	46,898	14,375	32,403	400,174	213	400,387

At 1 January 2011	306,498	46,898	14,375	32,403	400,174	213	400,387
Total comprehensive income/(loss) for the year
(Loss)/Profit for the year	-	-	-	(10,544)	(10,544)	25	(10,519)
Other comprehensive income/(loss)
Foreign currency translation differences	-	-	(5,599)	-	(5,599)	-	(5,599)
Total other comprehensive income/(loss)	-	-	(5,599)	-	(5,599)	-	(5,599)
Total comprehensive income/(loss)	-	-	(5,599)	(10,544)	(16,143)	25	(16,118)

Transactions with owners of the Company, recognised directly in equity
Issue of ordinary shares	477	(477)	-	-	-	-	-
Value of services received for issue of Management Shares	-	552	-	-	552	-	552
Value of services received for issue of share options	-	4,175	-	-	4,175	-	4,175
Total transaction with owners of the Company	477	4,250	-	-	4,727	-	4,727
At 31 December 2011	306,975	51,148	8,776	21,859	388,758	238	388,996

Consolidated statement of cash flows Year ended 31 December 2011
	2011	2010
	US$'000	US$'000
Cash flows from operating activities
(Loss)/Profit before income tax	(7,469)	45,253

Adjustments for:
Exchange differences	8	(32)
Dividend income	(4,000)	(3,726)
Interest income	(14,357)	(14,611)
Interest expense	93	98
Fair value changes in investments in joint ventures	4,997	10,907
Fair value changes in investment properties	(373)	(618)
Fair value changes in financial assets at fair value through profit or loss	5,112	(26,283)
Profit on sales of listed investments	-	(23,065)
Management Shares expense	552	902
Share options expense	4,175	5,809
	(11,262)	(5,366)
Changes in working capital:
Increase in other receivables and prepayments	(8)	(39)
Increase in other payables and accrued operating expenses	105	59
Increase in amount due to investment manager	8	2
Cash used in operations	(11,157)	(5,344)
Dividend received (net of withholding tax)	3,871	3,607
Interest received (net of withholding tax)	402	449
Income taxes paid	(191)	(160)
Net cash used in operating activities	(7,075)	(1,448)

Cash flows from investing activities
Purchase of financial assets at fair value through profit or loss	(11,310)	(3,682)
Proceeds from sales of listed investments	-	80,624
Payment for the purchase of investment properties	(191)	-
Loans to an investee company	-	(160)
Advance payment to an investee company	(608)	-
Investments in joint ventures	(680)	(555)
Repayment of loans by joint ventures	1,022	736
Loan to joint venture partners	(3,094)	-
Net cash (used in)/from investing activities	(14,861)	76,963

Balance carried forward	(21,936)	75,515

Consolidated statement of cash flows (cont'd) Year ended 31 December 2011
	Note	2011	2010
		US$'000	US$'000

Balance brought forward		(21,936)	75,515

Cash flows from financing activities
Interest paid		(93)	(98)
Repayment of borrowings		(368)	(352)
Net cash used in financing activities		(461)	(450)

Net (decrease)/increase in cash and cash equivalents		(22,397)	75,065
Cash and cash equivalents at 1 January		122,639	47,412
Effect of exchange rate fluctuations		(124)	162
Cash and cash equivalents at 31 December	7	100,118	122,639

Notes to the financial statements

These notes form an integral part of the consolidated financial statements.

The consolidated financial statements were authorised for issue by the Board of Directors on 26 March 2012.

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, under the name of Success Future Investments Limited. On 16 February 2004, the Company changed its name to Symphony International Holdings Limited. The Company voluntarily re-registered as a BVI Business Company under the BVI Companies Act on 17 November 2006. 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 subsidiaries consist primarily of making strategic investments with the objective of increasing the consolidated net asset value through long-term strategic private equity investments in consumer-related businesses, primarily in the hospitality, healthcare and lifestyle sectors including related distinctive real estate, as well as investments in special situations and structured transactions which have the potential of generating attractive returns.

The consolidated financial statements relate to the Company and its subsidiaries (together referred to as the Group).

2 Summary of significant accounting policies

2.1 Basis of preparation

The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs).

The financial statements have been prepared on a fair value basis, except for certain items which are measured on a historical cost basis less impairment as appropriate. 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 significant areas of estimation uncertainty and critical judgements in applying policies that have the most significant effect on the amount recognised in the financial statements are described in the following notes:

· Note 2.3 -Determination of functional currencies of Group entities

· Note 5 - Valuation of investment properties

· Note 9 - Valuation of Management Shares and share options

· Note 22 - Fair value of unquoted investments in joint ventures

Except as disclosed above, there are no other significant areas of estimation uncertainty or critical judgements in the application of accounting policies that have significant effect on the amount recognised in the financial statements.

The accounting policies set out below have been applied consistently by the Group to all periods presented in these financial statements.

2.2 Consolidation

Business combinations

Business combinations are accounted for using the acquisition method as at the acquisition date, which is the date on which control is transferred to the Group. Control is the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, the Group takes into consideration potential voting rights that currently are exercisable.

The Group measures goodwill at the acquisition date as:

· the fair value of the consolidation transferred; plus

· the recognised amount of any non-controlling interests in the acquiree; plus

· if the business combination is achieved in stages, the fair value of the pre-existing equity interest in the acquiree; less

· the net recognised amount (generally fair value) of the identifiable assets acquired and liabilities assumed.

When the excess is negative, a bargain purchase gain is recognised immediately in profit or loss.

The consideration transferred does not include amounts related to the settlement of pre-existing relationships. Such amounts generally are recognised in profit or loss.

Transactions costs, other than those associated with the issue of debt or equity securities, that the Group incurs in connection with a business combination are expensed as incurred.

Any contingent consideration payable is measured at fair value at the acquisition date. If the contingent consideration is classified as equity, then it is not remeasured and settlement is accounted for within equity. Otherwise, subsequent changes in the fair value of the contingent consideration are recognised in profit or loss.

When share-based payment awards (replacement awards) are required to be exchanged for awards held by the acquiree's employees (acquiree's awards) and relate to past services, then all or a portion of the amount of the acquirer's replacement awards is included in measuring the consideration transferred in the business combination. This determination is based on the market-based value of the replacement awards compared with the market-based value of the acquiree's awards and the extent to which the replacement awards relate to past and/or future service.

Acquisitions of non-controlling interests

Acquisitions of non-controlling interests are accounted for as transactions with owners in their capacity as owners and therefore no goodwill is recognised as a result. Adjustments to non-controlling interests arising from transactions that do not involve the loss of control are based on a proportionate amount of the net assets of the subsidiary.

Subsidiaries

Subsidiaries are entities controlled by the Group. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases.

Loss of control

On the loss of control, the Group derecognises the assets and liabilities of the subsidiary, any non-controlling interests and the other components of equity related to the subsidiary. Any surplus or deficit arising on the loss of control is recognised in profit or loss. If the Group retains any interest in the previous subsidiary, then such interest is measured at fair value at the date that control is lost. Subsequently it is accounted for as an equity-accounted investee or as an investment at fair value through profit or loss depending on the level of influence retained.

Associates and joint ventures

Associates are those entities in which the Group has significant influence, but not control, over their financial and operating policies. Significant influence is presumed to exist when the Group holds between 20% and 50% of the voting power of another entity. Joint ventures are those entities over whose activities the Group has joint control, established by contractual agreement and requiring unanimous consent for strategic financial and operating decisions.

Investments in associates and joint ventures that are held as part of the Group's investment portfolio are carried in the statement of financial position at fair value through profit or loss even though the Group may have significant influence or joint control over those companies. This treatment is permitted by IAS 28 Investments in Associates and IAS 31 Interests in Joint Ventures which requires investments held by venture capital organisations to be excluded from their scope where those investments are measured at fair value through profit or loss, and accounted for in accordance with IFRS 9 Financial Instruments and IAS 39 Financial Instruments: Recognition and Measurement with changes in fair value recognised in the profit or loss, or in the statement of comprehensive income, in the period in which they occur.

Transactions eliminated on consolidation

Intra-group balances and transactions, and any unrealised income and expenses arising from intra-group transactions, are eliminated in preparing the consolidated financial statements.

2.3 Functional currencies

Items included in the financial statements of each entity in the Group are measured using the currency that best reflects the economic substance of the underlying events and circumstances relevant to that entity (the functional currency).

For the purposes of determining the functional currencies of Group entities, management has considered the following factors:

· The principal activities of the Company are those relating to an investment holding company. Funding is obtained in US dollars through the issuance of ordinary shares and loans are advanced to subsidiaries for their investment purposes.

· The principal activities of the subsidiaries are those relating to making strategic investments. Functional currencies of the subsidiaries are determined based on the currency in which the obligations arising from the acquisition of investments are settled and of the market in which they operate as these economic forces influence the carrying value of the investments.

2.4 Foreign currencies

Foreign currency transactions

Transactions in foreign currencies are translated to the respective functional currencies of Group entities 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 ruling 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 in the statement of comprehensive income except for the differences arising on the retranslation of monetary items that in substance form part of the Group's net investment in a foreign operation (see below).

Net investment in a foreign operation

Exchange differences arising from monetary items that in substance form part of the Company's net investment in a foreign operation are recognised in the profit or loss in the subsidiary or jointly controlled entity's statement of comprehensive income. Such exchange differences are reclassified to other comprehensive income in the consolidated financial statements. When the foreign operation is disposed of, the cumulative amount in equity is transferred to the statement of comprehensive income as an adjustment to the profit or loss arising on disposal.

Foreign operations

The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on acquisition, are translated into US dollars for consolidation at the exchange rates prevailing at the financial reporting date. The income and expenses of foreign operations are translated at exchange rates ruling at the dates of the transactions.

Exchange differences arising on translation are recognised directly in other comprehensive income. When a foreign operation is disposed of such that control, significant influence or joint control is lost, the cumulative amount in the foreign currency translation reserve related to that foreign operation is reclassified to profit or loss as part of the gain or loss on disposal. When the Group disposes of only part of its interest in a subsidiary that includes a foreign operation while retaining control, the relevant proportion of the cumulative amount is reattributed to non-controlling interests. When the Group disposes of only part of its investment in an associate or joint venture that includes a foreign operation while retaining significant influence or joint control, the relevant proportion of the cumulative amount is reclassified to profit or loss.

2.5 Financial instruments

The Group 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 Group 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 Group'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, IFRS 9 was updated to include classification and measurements relating to financial liabilities.

Financial assets at amortised cost and the effective interest rate method

A financial asset is measured at amortised cost if the following conditions are met:

· the objective of the Group's business model is to hold the financial asset to collect contractual cash flows; and

· the contractual cash flows give rise, on specified dates, to cash flows that are solely payments of principal and interest on the principal outstanding; and

· the group does not irrevocably elect at initial recognition to measure the instrument at fair value through profit or loss to minimise an accounting mismatch.

Amortised cost instruments are recognised initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition the carrying amount of amortised cost instruments is determined using the effective interest method, less any impairment losses.

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, accrued operating expenses 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 Group becomes a party to the contractual provisions of the instrument. Financial assets are derecognised if the Group's contractual rights to the cash flows from the financial assets expire or if the Group 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 Group. Financial liabilities are derecognised if the Group'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 Group'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 other than equity instruments that do not meet the above amortised cost criteria are measured at fair value through profit or loss. This includes financial assets that are held for trading and investments that the Group manages based on their fair value in accordance with the Group's documented risk management and/or investment strategy, including investments in joint ventures.

Equity instruments are measured at fair value through profit or loss unless the Group 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 are recognised in profit or loss.

Financial assets at fair value through other comprehensive income

At initial recognition the Group may make an irrevocable election (on an instrument-by-instrument basis) to recognise the change in fair value of investments in equity instruments in other comprehensive income. This election is only permitted for equity instruments that are not held for trading purposes.

These instruments are initially recognised at fair value plus transaction costs. Subsequent to initial recognition, they are measured at fair value and changes therein are recognised in other comprehensive income and presented within equity in the fair value reserve. When an investment is derecognised, the cumulative gain or loss is transferred directly to retained earnings and is not recognised in profit or loss.

Dividends or other distributions received from these investments are still recognised in profit or loss as part of finance income.

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 Investment properties

Investment properties are properties held either to earn rental income or capital appreciation or both. They do not include properties for sale in the ordinary course of business, used in the production or supply of goods or services, or for administrative purposes.

Investment properties are measured at fair value with any change therein recognised in profit or loss in the statement of comprehensive income. When the use of a property changes such that it is reclassified as property, plant and equipment, its fair value at the date of reclassification becomes its cost for subsequent accounting.

2.7 Impairment

Financial assets

A financial asset 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 Group'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.

2.8 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.

2.9 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.

Interest income

Interest income from deposits with financial institutions and placements in money market funds and loans to 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;

· 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; and

· temporary differences related to investments in subsidiaries and jointly controlled entities to the extent that it is probable that they will not reverse in the foreseeable future.

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.

2.12 Earnings per share

The Group 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, warrants and share options granted to Investment Manager.

2.13 Segment reporting

An operating segment is a component of the Group 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 Group'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 Investment Managers Limited that makes strategic investment decisions.

3 Interests in joint ventures

	2011	2010
	US$'000	US$'000

Investments in joint ventures
Unquoted equity securities at cost	5,999	5,402
Unquoted redeemable convertible preference shares at cost	5,540	5,540
	11,539	10,942

Balances with joint ventures
Loans to joint ventures	93,137	95,259
Interest receivable	48,427	35,426
Disbursements	173	172
	141,737	130,857

Fair value adjustments	(21,009)	(15,788)

	132,267	126,011

Details of joint ventures are set out in note 24.

The Group has effective equity interests of between 0.1% and 49.98% in these investee companies. Pursuant to various shareholders' agreements, the Group has joint control over the financial and operating policies of these companies. Accordingly, these companies are considered to be joint ventures in accordance with IAS 31 Interests in Joint Ventures, and measured at fair value in accordance with the accounting policy set out in note 2.2.

Key terms of the loans to joint ventures are summarised below:

· First and second loans to SG Land Co. Limited with the principal amounts of THB 225,000,000. The loans are unsecured, bear interest at 15% per annum and are repayable within 9 years starting from the drawdown date;

· Third loan to SG Land Co. Limited with the principal amount of THB 120,000,000. The loan is unsecured, bears interest at 15% per annum and is repayable by monthly instalments based on the repayment schedule determined by the Group at its sole discretion;

· Loan to Minuet Limited with the principal amount of THB2,625,000,000. The loan is unsecured, bears interest at 15% per annum and is repayable in tenth year starting from the drawdown date;

· Loan to Well Round Holdings Limited with the principal amount of JPY258,900,000. The loan is unsecured, interest free and has no fixed terms of repayment.

As the settlement of these loans to joint ventures is neither planned nor likely to occur in the foreseeable future, they are in substance a part of the Group's net investments in these joint ventures.

Included in the loans to the joint ventures are balances totalling US$82,696,000 (2010: US$86,795,000) which are/or will be subordinated to bank loans obtained/or to be obtained by certain joint ventures.

Loans to joint ventures and accrued interest thereon are denominated in the following currencies:

	2011	2010
	US$'000	US$'000
Loans to joint ventures
Thai Baht	89,770	95,259
Japanese Yen	3,367	-

Interest receivable
Thai Baht	48,427	35,426

The valuation of the Group's investment in joint ventures is largely dependent on the underlying trading performance of the companies within the portfolio but the valuation and other items in the financial statements can also be affected by interest rate and currency fluctuations. The Group may have indirect exposure to interest rates through changes to the financial performance of portfolio companies caused by interest rate fluctuations. The Group's sensitivity to currency fluctuations is disclosed in note 22.

4 Financial assets at fair value through profit or loss

	2011	2010
	US$'000	US$'000

Non-current
Quoted equity securities	101,973	102,452
Quoted units in real estate investment trust	49,147	45,747
	151,120	148,199

Current
SGD interest rate certificates	2,694	-
	2,694	-

Financial assets at fair value through profit or loss represent investments in quoted equity securities and units in a real estate investment trust listed on The Stock Exchange of Thailand, Singapore Exchange Securities Trading Limited and SGD interest rate certificates with UBS Bank comprising US$101,973,020 (2010: US$102,451,372) and US$51,840,362 (2010: US$45,747,234) denominated in Thai Baht and Singapore Dollars, respectively.

Interests in joint ventures (note 3) are also financial assets at fair value through profit or loss but are presented separately in the statement of financial position.

The Group's exposure to currency interest rate and price risks and fair value information related to other investments are disclosed in Note 22.

5 Investment properties

	2011	2010
	US$'000	US$'000

At 1 January	9,103	8,506
Effect of movements in exchange rates	7	(20)
Balance payment for the purchase of investment properties	29	-
Change in fair value	373	617
At 31 December	9,512	9,103

a) All of the investment properties are situated in Macau.

b) All investment properties of the Group were revalued as at 31 December 2011 on an open market value basis assuming sales with vacant possession. The valuations were carried out by an independent firm of surveyors, Midland Surveyors, who have among their staff Fellows of the Hong Kong Institute of Surveyors with recent experience in the location and category of property being valued.

6 Other receivables and prepayments

	2011	2010
	US$'000	US$'000

Non-current
Loan to joint venture partner	1,000	1,000
Interest receivable	64	43
Loans and other receivables	1,064	1,043
Prepayments	668	47
	1,732	1,090

Current
Interest receivable	228	163
Other receivables	121	97
Deposit for purchase of investment property	1,000	1,000
Other assets	191	174
Loans and other receivables	1,540	1,434
Other prepayments	78	81
	1,618	1,515

The loan to a joint venture partner is unsecured, bears interest at 2% per annum and is repayable by October 22, 2013.

Other receivables are unsecured, interest free and repayable within the next 12 months.

The deposit for purchase of investment property relates to a fully refundable deposit paid for the first right to purchase an apartment of choice in a new real estate development for investment purposes. Interest receivable is recognised at 6% per annum.

7 Cash and cash equivalents

	2011	2010
	US$'000	US$'000

Fixed deposits with financial institutions	93,361	119,684
Cash at bank	6,757	2,955
	100,118	122,639
Cash and cash equivalents in the consolidated statement of cash flows	100,118	122,639

The effective interest rate on fixed deposits with financial institutions as at 31 December 2011 was 0.05% to 0.25% (2010: 0.05% to 0.25%) per annum. Interest rates reprice at intervals of one to four weeks.

8 Share capital

	2011	2010
Company	Number of shares	Number of shares

Fully paid ordinary shares, with no par value:
At 1 January	344,439,211	338,259,976
Shares issued during the year	2,059,745	6,179,235
At 31 December	346,498,956	344,439,211

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.

During the year, 2,059,745 ordinary shares were issued at a value of US$1,240,000 at US$0.6022 per share (2010: 6,179,235 ordinary shares at a value of US$3,328,000 at US$0.539 per share) were issued pursuant to the issue of management shares under the investment management and advisory agreement with Symphony Investment Managers Limited.

As at 31 December 2011, the issued share capital of the Company included 16,625,451 (2010: 14,565,706) ordinary shares credited as fully paid in consideration for share placement and investment management and advisory services rendered to the Company. At the financial reporting date, 108,565,365 (2010: 108,565,365) warrants and 82,782,691 (2010: 82,782,691) share options were outstanding in the share capital of the Company (refer to note 17).

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 18 for more details).

9 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 18).

The value of investment management and advisory services received is determined with reference to the fair value of Management Shares and share options issued or to be issued by the Company.

Management Shares

In the absence of quoted market prices for the ordinary shares of the Company prior to their listing on the London Stock Exchange, management is of the view that the consolidated net asset value per share of the Company represented an estimate of the fair value of Management Shares based on the following:

· Financial assets at fair value through profit or loss are stated at fair value and the carrying amounts of other financial assets and liabilities approximate their fair values.

· There are no significant unrecorded contingent liabilities which may potentially affect the valuation of the Group.

Subsequent to the listing on 3 August 2007, the fair value of the Management Shares for each quarter is determined based on the market price of the shares at each measurement date, being the relevant quarter-end for each quarter, adjusted to take into account the terms and conditions (other than vesting conditions) upon which the Management Shares are granted.

The fair value of Management Shares as at each reporting date is as follows:

	2011	2010
	US$	US$

31 March	0.70	0.65
30 June	0.78	0.62
30 September	0.73	0.68
31 December	0.59	0.67

During 2011, 2,059,745 (2010: 6,179,235) Management Shares were allotted to the Investment Manager in the form of ordinary shares.

Share options

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 Black-Scholes 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 is as follows:

	Exercise price 2011	Number of options 2011	Exercise price 2010	Number of options 2010

Outstanding at 1 January and 31 December	US$1.00	82,782,691	US$1.00	82,782,691
Exercisable at 31 December	US$1.00	73,030,209	US$1.00	56,473,671

Fair value of share options and assumptions

	31 December 2010	31 March 2011	30 June 2011	30 September 2011	31 December 2011

Fair value	US$0.55	US$0.57	US$0.62	US$0.56	US$0.44

Share price	US$0.67	US$0.70	US$0.78	US$0.73	US$0.59
Exercise price	US$1.00	US$1.00	US$1.00	US$1.00	US$1.00
Expected volatility	102.9%	99.8%	97.1%	97.2%	96.4%
Expected option life	7.6 years*	7.3 years*	7.1 years*	6.9 years*	6.6 years*
Expected dividends	Nil	Nil	Nil	Nil	Nil
Risk-free interest rate	3.59%	3.73%	3.5%	2.15%	2.06%

* On 3 August 2008, the Company granted 82,782,691 share options to the Investment Manager, which had been previously deferred (refer to note 18 to the financial statements). These share options will expire on the tenth anniversary of the actual grant date, which has been similarly deferred by 1 year as a result of the deferment of the grant.

The expected volatility is based on the historic volatility, adjusted for any expected changes to future volatility due to 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.

10 Financial liabilities

	2011	2010
	US$'000	US$'000

Non-current
Interest-bearing term loans (secured)	981	1,408

Current
Current portion of interest-bearing term loans (secured)	372	385

Interest-bearing term loans are denominated in Thai Baht and are secured on the Group's interests in the equity securities of a joint venture, without recourse to Symphony International Holdings Limited. Interest is charged at the bank's minimum lending rate less 1% per annum and reprices on a monthly basis. The effective interest rate as at 31 December 2011 is 6.25% (2010: 6.12%) per annum. The borrowings are repayable in equal monthly instalments within a period of 9 years from the date of drawdown.

11 Deferred tax liabilities

Movements in deferred tax liabilities during the year are as follows:

	At 1 January 2010	Recognised in profit or loss (note 16)	At 31 December 2010	Recognised in profit or loss (note 16)	At 31 December 2011
	US$'000	US$'000	US$'000	US$'000	US$'000
Deferred tax liabilities
Interest receivables	-	-	-	671	671

12 Amounts due to non-controlling interest (non-trade)

The non-trade amounts due to non-controlling interest are unsecured, interest-free and have no fixed term of repayment. The settlement of the amounts is neither planned nor likely to occur in the foreseeable future. As the amounts are in substance, a part of the non-controlling interest's net investment in a subsidiary, they are stated at cost less impairment.

13 Other payables

	2011	2010
	US$'000	US$'000

Accrued operating expenses	206	214
Other payables	4	163
Amount due to directors	108	-
Amount due to Investment Manager (non-trade)	10	2
Interest payable	2	2
Withholding tax payable	7,116	5,349
	7,446	5,730

14 Revenue

Revenue of the Group comprises dividend income received and receivable from its financial assets at fair value through profit or loss.

15 (Loss)/Profit before income tax

(Loss)/Profit before income tax includes the following:

	2011	2010
	US$'000	US$'000
Other operating income
Interest income from:
- fixed deposits and placements in money market fund	196	197
- loans to joint ventures	14,085	14,325
- loans to investee companies	76	89
Foreign exchange gain	-	4,212
	14,357	18,823

Other operating expenses
Interest expense	(93)	(98)
Foreign exchange loss	(617)	-

16 Income tax expense

	2011	2010
	US$'000	US$'000

Current tax expense
Current year	100	351
Foreign withholding tax	2,242	2,231
Under/(Over) provision in prior year	37	(141)
	2,379	2,441

	2011	2010
	US$'000	US$'000

Deferred tax expense
Origination and reversal of temporary differences	186	-
Under provision in prior year	485	-
	671	-

Income tax expense	3,050	2,441

Reconciliation of effective tax rate

	2011	2010
	US$'000	US$'000

(Loss)/Profit before income tax	(7,469)	45,253

Tax at applicable rates to profits in relevant jurisdiction	435	6,975
Tax exempt revenue	(460)	(394)
Income not subject to tax	(1,475)	(6,222)
Expenses not deductible for tax purposes	4,177	2,370
Tax credit	(2,391)	(2,418)
Foreign withholding tax	2,242	2,271
Under/ (Over) provision in prior years	522	(141)
	3,050	2,441

Foreign withholding tax relates to tax withheld or payable on foreign-sourced income.

Deferred tax liabilities have not been recognised on temporary differences in respect of fair value gains on certain financial assets at fair value through profit or loss. Under the double taxation treaty between Thailand, the country in which the financial assets are located, and Mauritius, the country of incorporation of the subsidiary which holds these financial assets, capital gains on the disposal of such assets are subject to capital gains tax in the country in which the investor is a tax resident. The subsidiary is a tax resident in Mauritius and is not subject to capital gains tax in Mauritius as it meets the conditions necessary to maintain such tax residency status.

17 Earnings per share


	2011	2010
	US$'000	US$'000

Basic and diluted earnings per share are based on:
Net (loss)/profit for the year attributable to ordinary shareholders	(10,544)	42,767

Basic earnings per share

	Number of shares
	2011	2010

- Issued ordinary shares at 1 January	344,439,211	338,259,976
- Effect of management shares issued	846,471	2,076,674
Weighted average number of shares at 31 December	345,285,682	340,336,650

Diluted earnings per share

	Number of shares
	2011	2010

Weighted average number of shares (basic)	345,285,682	340,336,650
Effect of contingently issuable shares (Management Shares)	-	4,119,491
Weighted average number of shares (diluted) at 31 December	345,285,682	344,456,141

As at 31 December 2011, contingently issuable Management Shares of 2,059,746 shares, 108,565,365 warrants (2010: 108,565,365), 82,782,691 share options (2010: 82,782,691) were excluded from diluted weighted average number of shares calculation as their effect would have been anti-dilutive.

At at 31 December 2010, 108,565,365 warrants and 82,782,691 share options were excluded from diluted weighted average number of shares calculation as their effect would have been anti-dilutive.

18 Significant related party transactions

For the purposes of these financial statements, parties are considered to be related to the Group if the Group has the ability, directly or indirectly, to control the party or exercise significant influence over the party in making financial and operating decisions, or vice versa, or where the Group and the party are subject to common control or common significant influence. Related parties may be individuals or other entities.

Key management personnel compensation

Key management personnel of the Group are those persons having the authority and responsibility for planning, directing and controlling the activities of the Group. The directors of the Company are considered as key management personnel of the Group.

During the financial year, directors' fees amounting to US$300,000 (2010: US$300,000) were declared as payable to certain directors of the Company. The remaining directors of the Company are also directors of the Investment Manager who provides management and administrative services to the Group 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

Management fees amounting to US$8,920,776 (2010: US$8,133,991) paid to a company in which certain directors have substantial financial interests and the Investment Manager, respectively, have been recognised in the consolidated financial statements.

On 10 July 2007, the Company entered into an Investment Management and Advisory Agreement with Symphony Investment Managers Limited (the Investment Manager) pursuant to which the Investment Manager will provide investment management and advisory services exclusively to the Group. The key persons of the management team of the Investment Manager comprise certain key management personnel of the Company who will be engaged by the Investment Manager pursuant to long-term exclusive employment arrangements agreed between the parties. Pursuant to the Investment Management and Advisory Agreement, the Investment Manager is entitled to the following forms of remuneration for the investment management and advisory services rendered:

· Management fees of 2.25% per annum of the consolidated net asset value, payable quarterly in advance on the first day of each quarter, based on the consolidated 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;

· Management Shares of up to an aggregate amount equal to 5% of the share capital immediately following the issue of such shares (excluding 7,129,209 Management Shares issued prior to the admission to the official list on the London Stock Exchange (the Pre-admission Management Shares)), of which up to 20% of the Management Shares will become eligible for issue at the first quarter end following each anniversary of the admission of the shares. In addition, the Investment Manager will also be granted Management Shares upon issuance of ordinary shares from the exercise of warrants, such that the total number of Management Shares to be issued will not exceed 5% of the increase in share capital, which includes (a) the increase in the number of shares issued pursuant to the exercise of warrants, and (b) the number of Management Shares issued excluding the Pre-admission Management Shares.

In determining the maximum number of Management Shares which may be issued, consideration will be made for the consolidated net asset value after the proposed issue of Management Shares such that the consolidated net asset value per share does not decrease below the offering price of US$1.00 per share; and

· Share options to subscribe for ordinary shares of the Company. On 3 August 2007, the date of admission to the official list of the London Stock Exchange, the Investment Manager was to be granted options to subscribe for ordinary shares at an exercise price equal to the offering price of the shares, and after the date of admission, the Investment Manager will be granted options to subscribe for ordinary shares at an exercise price of US$1.25 per share upon issuance of ordinary shares from the exercise of warrants. The total number of share options that may be granted will be such that the number of shares issued upon their exercise cannot exceed 20% of the share capital of the Company immediately following the issue of such shares (assuming full exercise of all share options granted but disregarding issued Management Shares). In addition, the Investment Manager will be granted share options upon issuance of ordinary shares from the exercise of warrants, such that the maximum number of shares to be issued upon the exercise of these options will not exceed 20% of the increase in share capital, which includes (a) the increase in the number of shares issued pursuant to the exercise of warrants, and (b) the number of shares to be issued assuming all the share options thus granted have been exercised.

The share options vest in 5 equal tranches over a period of 5 years beginning from the first anniversary of the date of grant, and will expire on the tenth anniversary of the date of grant. In the event that dividend is declared prior to the exercise of the share options, the Investment Manager will be paid an amount equivalent to the amount which would have been paid as if all outstanding share options held by the Investment Manager, whether vested or otherwise, have been exercised. The Investment Manager is required to apply at least 50% of such amounts 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 amounts.

Pursuant to the Investment Management and Advisory Agreement, the Investment Manager was granted 82,782,691 share options to subscribe for ordinary shares at US$1 each on 3 August 2008. The options vest in five equal tranches with the first through fourth tranches having vested on 3 August 2008, 2009, 2010 and 2011, respectively. The remaining fifth tranche will vest on 3 August 2012. The share options will expire on the tenth anniversary of the date of grant. In addition, Management Shares 8,238,980 ordinary shares in the Company have been issued to the Investment Manager since admission. A further 2,059,746 ordinary shares in the Company become eligible for issue on 4 August 2012, provided certain conditions are met.

Other than as disclosed elsewhere in the financial statements, there were no other significant related party transactions during the financial year.

19 Commitments

In September 2008, the Group entered into a loan agreement with a joint venture to grant loans totalling THB140 million (US$4.4 million equivalent at 31 December 2011) to the latter in accordance with the terms as set out therein. As at 31 December 2011, THB120 million (US$3.8 million equivalent at 31 December 2011) has been drawn down by the joint venture. The Group is committed to grant the remaining loan amounting to THB20 million (US$0.6 million equivalent at 31 December 2011) to the joint venture, subject to terms set out in the agreement.

Pursuant to an agreement entered into in January 2011, the Group along with certain partners placed a deposit in relation to the purchase of a second property in Niseko, Japan. On 21 March 2012, the Group advanced an additional amount to the joint venture company in order to fund its share of the balance consideration that is payable on 30 March 2012. The Group's investment in this property (deposit placed and advance made to the joint venture company) amount to less than 2% of NAV.

In October 2011, the Group entered into a joint venture agreement to subscribe for redeemable convertible preference shares and ordinary shares in a company engaged in resort property development in Malaysia. Subsequent to year end, the Group invested MYR90.0 million and is subject to certain contingent conditions (Further details are set out in Note 25).

In December 2011, the Group entered into an agreement to subscribe for convertible preference shares in a company, which has businesses that produce and market luxury leather accessories under the Maison Takuya brand name. The investment amount is less than 2% of NAV and was made on 3 January 2012 (Further details are set out in Note 25). In addition, the Group may make further investments in Maison Takuya, and the aggregate investment is expected to be less than 2% of NAV.

20 Contingent liability

A subsidiary of the Company and a joint venture partner have entered into a banking facility under which both parties are jointly and severally liable for all amounts owing by the borrowers to a bank. The borrowings have been drawn down and advanced to a joint venture as part of the shareholders' loans. As at 31 December 2011, total outstanding loans amounted to THB85,359,380.12 (equivalent to US$2,705,527) (2010: THB107,809,931, equivalent to US$3,586,491), of which THB42,679,690 (equivalent to US$1,352,764) (2010: THB53,904,965, equivalent to US$1,793,246) has been recognised as financial liabilities by the Group.

21 Operating segments

The Group 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 Group'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) in addition to capitalised expenses associated with a new healthcare project in Asia

Hospitality	Includes investment in Minor International Public Company Limited (MINT)

Lifestyle	Includes investments in C Larsen (Singapore) Pte Ltd and AFC Network Private Limited

Lifestyle/Real Estate	Includes investments in Minuet Ltd, SG Land Co. Ltd and a property joint venture in Niseko, Hokkaido, Japan, in addition to investment properties in Macau

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

Information regarding the results of each reportable segment is included below:

	Healthcare		Hospitality	Lifestyle	Lifestyle/ real estate	Cash and temporary investments	Consolidated
	US$'000		US$'000	US$'000	US$'000	US$'000	US$'000
2011
Investment income:
- Dividend income	2,705		1,295	-	-	-	4,000
- Interest income	16		-	21	14,064	256	14,357
- Unrealised gain in profit or loss	3,983		-	3,502	1,201	-	8,686
	6,704		1,295	3,523	15,265	256	27,043

Investment loss:
- Unrealised loss in profit or loss		-	(8,962)	-	(9,327)	(133)	(18,422)
- Exchange loss		-	-	-	-	(617)	(617)

Other operating results
- Income tax expense		-	(129)	(3)	(2,781)	(137)	(3,050)

Net investment results		6,704	(7,796)	3,520	3,157	(631)	4,954


2010
Investment income:
- Dividend income		2,536	1,191	-	-	-	3,727
- Exchange gain		-	-	-	-	4,212	4,212
- Interest income		9	-	20	14,325	257	14,611
- Realised gain		22,266	799	-	-	-	23,065
- Unrealised gain in profit or loss		11,515	14,768	882	640	-	27,805
		36,326	16,758	902	14,965	4,469	73,420

Investment loss:
- Unrealised loss in other comprehensive income		-	-	-	(11,812)	-	(11,812)

Other operating results:
- Income tax expense		-	(119)	-	(2,112)	(210)	(2,441)

Net investment results		36,326	16,639	902	1,041	4,259	59,167

	Healthcare	Hospitality	Lifestyle	Lifestyle/ real estate	Cash and temporary investments	Consolidated
	US$'000	US$'000	US$'000	US$'000	US$'000	US$'000

2011
Segment assets	49,332	101,973	14,463	129,237	103,875	398,880

2011
Segment liabilities	-	-	-	2,534	7,531	10,065

2010
Segment assets	45,916	102,451	11,312	126,029	122,640	408,348

2010
Segment liabilities	-	-	-	2,461	5,709	8,170

Reconciliations of reportable segment profit or loss, assets and liabilities

	2011	2010

	US$'000	US$'000

Profit or loss
Net investments results	4,954	59,167
Unallocated amounts:
- Other corporate expenses	(15,473)	(16,355)
Consolidated profit/(loss) for the year	(10,519)	42,812

Assets
Total assets for reportable segments	398,880	408,348
Other assets	181	209
Consolidated total assets	399,061	408,557

Liabilities
Total liabilities for reportable segments	10,065	8,170
Other liabilities	-	-
Consolidated total liabilities	10,065	8,170

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	Hong Kong	Macau	Thailand	Others	Consolidated
	US$'000	US$'000	US$'000	US$'000	US$'000	US$'000

2011

Total revenue	2,705	-	-	1,295	-	4,000

Assets	153,378	337	9,523	230,234	5,589	399,061

Capital expenditure	-	-	-	-	-	-

2010

Total revenue	2,536	-	-	1,191	-	3,727

Assets	169,351	316	9,113	227,718	2,059	408,557

Capital expenditure	-	-	-	-	-	-

22 Financial risk management

The Group's financial assets comprise mainly financial assets at fair value through profit or loss, other receivables, and cash and cash equivalents. The Group's financial liabilities comprise bank overdrafts, accrued operating expenses, and other payables. Exposure to credit, price, interest rate, foreign currency and liquidity risks arises in the normal course of the Group's business.

The Company's Board of Directors has overall responsibility for the establishment and oversight of the Group's risk management framework. The Group's risk management policies are established to identify and analyse the risks faced by the Group and to set appropriate controls. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Group's activities.

Credit risk

Credit risk is the risk of financial loss to the Group 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 2010, bank deposits of US$119,993,100 were guaranteed by the government of the respective countries in which the deposits are placed. At 31 December 2011, a body funded by the government of the country in which the bank deposit of US$ 245,192 is placed provided a guarantee for a nominal amount.

At 31 December 2011, the Group has credit risk exposure relating to fixed deposits placed with certain financial institutions and placements in money market funds totalling US$93,361,574 (2010: US$119,683,908). Other than this balance, 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 ageing of loan and receivables that were not impaired at the reporting date was:-

	2011	2010
	US$'000	US$'000

Not past due	144,341	133,334

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 Group'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 Group's exposure to changes in interest rates relates primarily to its interest-earning fixed deposits placed with financial institutions and placements in money market funds. The Group'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 Group does not enter into derivative financial instruments to hedge against its exposure to interest rate risk.

Sensitivity analysis

	Profit or loss		Profit or loss
	100 bp increase	5 bp decrease	100 bp increase	5 bp decrease
	2011	2011	2010	2010
	US$	US$	US$	US$

Deposits with financial institutions	9,386	(469)	80,956	(4,048)
Variable rate interest-bearing term loans	(15,951)	798	(19,827)	991
	(6,565)	329	61,129	(3,057)

Foreign exchange risk

The Group is exposed to transactional foreign exchange risk when transactions are denominated in currencies other than the functional currency of the operation. The Group is exposed to translational foreign exchange risk from its subsidiaries and jointly controlled entities with non USD functional currencies. The Group does not enter into derivative financial instruments to hedge its exposure to Thai Baht, Singapore dollars, Hong Kong dollars and Japanese Yen 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 Group's investment decision and returns.

Foreign exchange risk (continued)

The Group's exposure, in US dollar equivalent, to foreign currency risk on other financial instruments is as follows:

			2011					2010
	Japanese Yen	Hong Kong Dollars	Singapore Dollars	Thai Baht	Others	Japanese Yen	Hong Kong Dollars	Singapore Dollars	Thai Baht	Others
	2011	2011	2011	2011	2011	2010	2010	2010	2010	2010
	US$'000	US$'000	US$'000	US$'000	US$'000	US$'000	US$'000	US$'000	US$'000	US$'000

Investment properties	-	9,512	-	-	-	-	9,103	-	-	-
Interests in joint ventures	3,359	-	-*	114,500	-	-	-	-	115,785	-
Financial assets a fair value through profit or loss	-	-	51,840	101,973	-	-	-	45,747	102,451	4
Other receivables	14	16	59	-	7	-	25	42	-	-
Cash and cash equivalents	50	31,801	65,425	26	1	-	33,790	85,684	62	-
Long term loans	-	-	-	(1,353)	-	-	-	-	(1,793)	-
Accrued operating expenses	-	(6)	(151)	(4)	(13)	-	(7)	(154)	(2)	-
Other payables	-	-	-	(4)	-	-	-	-	(2)	(7)
Amounts due to non-controlling interest	-	(504)	-	-	-	-	(503)	-	-	-
Deferred tax payable	-	-	(671)	-	-	-	-	-	-	-
Withholding tax payable	-	-	-	(7,106)	-	-	-	-	(5,349)	-
*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) equity and profit or loss by the amounts shown below. The analysis assumes that all other variables, in particular interest rates, remain constant.

	Profit or loss
	2011	2010
	US$'000	US$'000

Singapore Dollars	(11,650)	(13,132)
Thai Baht	(20,803)	(21,115)
Hong Kong Dollars	(4,082)	(4,241)
Japanese Yen	(342)	Nil

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 Group's investment portfolio is dependent on prevailing market conditions and the performance of the underlying assets. The Group does not hedge the market risk inherent in the portfolio but manages asset performance risk on an asset-specific basis.

The Group's investment policies provide that the Group invests a majority of capital in long-term private equity 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 Group's quoted equity investments are listed on either The Stock Exchange of Thailand or Singapore Exchange Securities Trading Limited. 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
	2011	2010
	US$'000	US$'000

Quoted equity securities at fair value through profit or loss	15,112	14,820

A 10% decrease in the price of the equity securities 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.

Liquidity risk

Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due.

The Group'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 Group's reputation. The Group monitors its liquidity risk and maintains a level of cash and cash equivalents deemed adequate by the Investment Manager to finance the Group's operations and to mitigate the effects of fluctuations in cash flows. Funds not invested in private equity 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 cash flows	Within 1 year	After 1 year but within 5 years	After 5 years
	US$'000	US$'000	US$'000	US$'000	US$'000

2011

Non-derivative financial liabilities
Variable interest rate term loans	1,353	2,378	446	1,784	148
Amount due to non-controlling interest	504	504	-	-	504
Accrued operating expenses and other payables	330	330	330	-	-
	2,187	3,212	776	1,784	652

2010

Non-derivative financial liabilities
Variable interest rate term loans	1,793	2,964	468	1,872	624
Amount due to non-controlling interest	503	503	-	-	503
Accrued operating expenses and other payables	381	381	381	-	-
	2,677	3,848	849	1,872	1,127

Capital management

The Group'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. The Group 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 Group's approach to capital management during the year.

Neither the Company nor any of its subsidiaries are subject to externally imposed capital requirements.

Fair value

Accounting classification and fair value

The fair values of financial assets and liabilities, together with the carrying amounts shown in the statement of financial position, are as follows:

Group	Note	Fair value through profit or loss	Loans and receivables	Other financial liabilities	Total carrying amount	Fair value
		US$'000	US$'000	US$'000	US$'000	US$'000
2011
Interests in joint ventures	3	132,267	-	-	132,267	132,267
Financial assets at fair value through profit or loss	4	153,814	-	-	153,814	153,814
Other receivables and prepayments	6	-	2,604	-	2,604	2,604
Cash and cash equivalents	7	-	100,118	-	100,118	100,118
		286,081	102,722	-	388,803	388,803

Amounts due to non-controlling interest (non-trade)	12	-	-	504	504	504
Amount due to joint venture companies		-	-	-*	-*	-*
Other payables	13	-	-	7,446	7,446	7,446
Interest-bearing borrowings (secured)	10	-	-	1,353	1,353	1,353
		-	-	9,303	9,303	9,303

* Less than US$1,000

Group	Note	Fair value through profit or loss	Loans and receivables	Other financial liabilities	Total carrying amount	Fair value
		US$'000	US$'000	US$'000	US$'000	US$'000
2010
Interests in joint ventures	3	126,011	-	-	126,011	126,011
Financial assets at fair value through profit or loss	4	148,199	-	-	148,199	148,199
Other receivables and prepayments	6	-	2,477	-	2,477	2,477
Cash and cash equivalents	7	-	122,639	-	122,639	122,639
		274,210	125,116	-	399,326	399,326

Amounts due to non-controlling interest (non-trade)	12	-	-	503	503	503
Amount due to joint venture companies		-	-	-	-	-
Other payables	13	-	-	5,730	5,730	5,730
Interest-bearing borrowings (secured)	10	-	-	1,793	1,793	1,793
		-	-	8,026	8,026	8,026

Quoted investments

Fair value is based on quoted market bid prices at the financial reporting date without any deduction for transaction costs.

Unquoted investments

The fair value of unquoted equity investments including jointly controlled entities are measured 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, (e) discounted cash flows analysis, and (f) others.

Other financial assets and liabilities

The notional amounts of 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) approximate their fair values because of the short period to maturity/repricing.

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: quoted prices (unadjusted) in active markets for identical assets or liabilities;

· Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices);

· Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).

	Level 1	Level 2	Level 3	Total
	US$'000	US$'000	US$'000	US$'000

2011
Financial assets at fair value through profit or loss (non-current)	151,120	-	-	151,120
Financial assets at fair value through profit or loss (current)	2,694	-	-	2,694
Investments in joint ventures	-	4,484	127,783	132,267
	153,814	4,484	127,783	286,081

2010
Financial assets at fair value through profit or loss	148,367	-	-	148,367
Investments in joint ventures	-	3,804	122,207	126,011
	148,367	3,804	122,207	274,378

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.

	‹------------ 2011 ------------›		‹------------ 2010 ------------›
	Investments in joint ventures	Total	Investments in joint ventures	Total
	US$'000	US$'000	US$'000	US$'000

Balance at 1 January	122,207	122,207	108,500	108,500
Total gains or losses in profit or loss	(4,997)	(4,997)	(10,907)	(10,907)
Additions	6,177	6,177	14,943	14,943
Disbursements	173	173	173	173
Effect of movements in exchange rate	4,223	4,223	9,498	9,498
Balance at 31 December	127,783	127,783	122,207	122,207

Although the Group 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:

	‹------------ 2011 ------------›		‹--------------- 2010 -----------›
	Effect on profit or loss		Effect on profit or loss
	Favourable	(Unfavourable)	Favourable	(Unfavourable)
	US$'000	US$'000	US$'000	US$'000

Real estate related joint ventures	21,656	(17,536)	18,987	(18,964)

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 the future cash flow 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. Based on market comparables and in consultation with third party valuation consultants, the sale price for land held was increased by 15% in the favourable scenario and reduced by 15% in the unfavourable scenario.

23 Subsidiaries

Details of the subsidiaries of the Company are as follows:

		Place of
		incorporation	Equity interest
Name of subsidiary	Principal activities	and business	2011	2010
			%	%

Symphony Capital Partners Limited	Investment holding	Republic of Mauritius	100	100

Rank High Limited	Investment holding	Hong Kong S.A.R.	92.1	92.1

Symphony International Limited	Investment holding	Republic of Mauritius	100	100

Symphony Investment Management Limited and its subsidiary:	Investment holding	British Virgin Islands	100	100

Daphon Holdings Pte. Ltd.	Investment holding	Republic of Singapore	100	100

Lennon Holdings Limited and its subsidiary:	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 and its subsidiaries:	Investment holding	British Virgin Islands	100	100

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 and its subsidiary:	Investment holding	British Virgin Islands	100	100

Groupe CL Pte. Ltd.	Investment holding	Republic of Singapore	100	100

McCartney International Limited	Investment holding	Republic of Mauritius	100	100

Pavaroitti International Limited	Investment holding	Republic of Mauritius	100	100

True United Limited	Investment holding	British Virgin Islands	100	100

True Wisdom Limited	Investment holding	British Virgin Islands	100	100

Adema Holdings Limited	Investment holding	British Virgin Islands	100	-

Anshil Limited	Investment holding	British Virgin Islands	100	-

Buble Holdings Limited	Investment holding	British Virgin Islands	100	-

O'Sullivan Holdings Limited and its subsidiary:	Investment holding	British Virgin Islands	100	-

Bacharach Holdings Limited	Investment holding	British Virgin Islands	100	-

24 Joint ventures

Details of the joint ventures of the Group are as follows:

		Place of	Ordinary shares		Preference shares
	Principal	incorporation	Equity interest		Equity interest
Name of joint venture	activities	and business	2011	2010	2011	2010
			%	%	%	%

La Finta Limited	Investment holding	Thailand	49	49	-	-

Minuet Limited	Property development	Thailand	49.98	49.98	-	-

SG Land Co. Limited	Real estate	Thailand	49.89	49.89	-	-

AFC Network Private Limited	Television broadcasting	Republic of Singapore	-	-	18.69	17.48

C Larsen (Singapore) Pte Ltd	Investment holding	Republic of Singapore	0.1	0.1	100	100

Chanintr Living Limited	Distribution of furniture	Thailand	0.1	0.1	-	-

Well Round Holdings Limited	Investment holding	Hong Kong	30	-	-	-

Silver Prance Limited	Investment holding	Hong Kong	30	-	-	-

25 Subsequent events

On 3 January 2012, the Group completed its investment in Maison Takuya, a boutique luxury leather goods brand. The investment was less than 2% of NAV and the Group has a contingent commitment to invest additional amounts in the future whereby the total investment will be less than 2% of NAV.

On 20 January 2012, the Group entered into an agreement to increase its shareholding by 7.5% in a joint venture company developing a property in Niseko, Hokkaido, Japan.

On 31 January 2012, the Group completed its investment in a joint venture company (alongside an affiliate of Destination Resorts and Hotels Sdn Bhd, a hotel and destination resort investment subsidiary of Khazanah Nasional Berhad), to develop an Amanresorts club and villa property in Malaysia, which was previously announced on 5 October 2011. The cost of the investment was US$29.0 million.

On 8 February 2012, the Group completed its investment in Integrated Healthcare Hastaneler Turkey Sdn Bhd ("IHT") for US$50 million. IHT is the controlling shareholder of Acibadem Saglik Yatirimlari Holding A.S. and is owned by Integrated Healthcare Holdings Sdn Bhd, the healthcare subsidiary of Khazanah Nasional Berhad, the investment holding arm of the government of Malaysia.

On 10 February 2012, the Group increased its shareholding in PREIT by 2,685,000 shares, representing a further investment of approximately US$3.7 million. As a result, the Group's shareholding in PREIT increased from 5.92% to 6.36%.

On 21 March 2012, the Group advanced an amount of less than 2% of NAV to a joint venture company to fund its share of an acquisition of a second property in Niseko, Japan. The completion of the acquisition is expected on 30 March 2012.

26 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 2011, and have not been applied in preparing these consolidated financial statements. None of these is expected to have a significant effect on the consolidated financial statements of the Group.

ANNUAL GENERAL MEETING

The Company advises that its Annual General Meeting ("AGM") of the Company will be held at 8 Place Bel-Air, CH-1260 Nyon, Switzerland (Telephone: (41-22) 365-8111) on Monday, 30 April 2012 at 11.30 a.m. The notice, the form of proxy and the form of direction for the AGM has been posted to each shareholder today, with a copy of the Company's annual report for the financial year ended 31 December 2011, and they have also been submitted to the National Storage Mechanism and will shortly be available for inspection at www.hemscott.com/nsm.do

Neither the contents of the Company's website nor the contents of any website accessible from hyperlinks on this announcement (or any other website) is incorporated into, or forms part of, this announcement.

A more detailed report is available upon request from the Company or maybe accessed via www.symphonyasia.com.

For further information, please contact:

Sunil Chandiramani - Symphony Asia Limited (+852 2801 6199)

The foregoing may contain certain forward looking or forward sounding statements with respect to the investments, prospects and/or liquidity of the Company. Forward looking statements, by their very nature, involve risk and uncertainty, because they relate to circumstances and events that may or may not take place in the future due to the numerous factors that could cause actual events to differ materially from those implied by any forward looking statements. Neither the Company nor its Investment Manager undertake to update any such forward looking statements.

No representation or warranty is made by the Company or its Investment Manager as to the accuracy or completeness of the information contained in this document and its attachments and no liability will be accepted for any loss whatsoever arising in connection with such information. The press releases attached to this document were obtained from publicly available sources as at the latest practicable time for the preparation of this document.

This document 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. Shareholders and prospective investors are advised to seek expert legal, financial, tax and other professional advice before making any investment decisions.

This document is not for distribution, directly or indirectly, in or into the United States or any jurisdiction in which such distribution would be unlawful.

This information is provided by RNS

The company news service from the London Stock Exchange

END

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