Annual Financial Report

RNS Number : 6075J

Symphony International Holdings Ltd

03 April 2018

SYMPHONY INTERNATIONAL HOLDINGS

PUBLICATION OF ANNUAL REPORT FOR THE YEAR ENDED 31 DECEMBER 2017

3 April 2018

Symphony International Holdings Limited (the "Company", "SIHL" or "Symphony"), the London listed investor in fast growing Asian consumer businesses, today announces the publication of its 2017 annual report, which is available on its website at www.symphonyasia.com.

FOR FURTHER INFORMATION

For further information:

Anil Thadani +65 6536 6177

Symphony Asia Holdings Pte. Ltd.

IMPORTANT INFORMATION

This announcement is not for release, publication or distribution, in whole or in part, directly or indirectly, in or into the United States or any other jurisdiction into which the publication or distribution would be unlawful. These materials do not constitute an offer to sell or issue or the solicitation of an offer to buy or acquire securities in the United States or any other jurisdiction in which such offer or solicitation would be unlawful. The securities referred to in this document have not been and will not be registered under the securities laws of such jurisdictions and may not be sold, resold, taken up, transferred, delivered or distributed, directly or indirectly, within such jurisdictions.

No representation or warranty is made by the Company as to the accuracy or completeness of the information contained in this announcement and no liability will be accepted for any loss arising from its use.

This announcement is for information purposes only and does not constitute an invitation or offer to underwrite, subscribe for or otherwise acquire or dispose of any securities of the Company in any jurisdiction. All investments are subject to risk. Past performance is no guarantee of future returns. Prospective investors are advised to seek expert legal, financial, tax and other professional advice before making any investment decisions.

This announcement is not an offer of securities for sale into the United States. The Company's securities have not been, and will not be, registered under the United States Securities Act of 1933 and may not be offered or sold in the United States absent registration or an exemption from registration. There will be no public offer of securities in the United States.

Statements contained in this announcement regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future. The information contained in this document is subject to change without notice and, except as required by applicable law, neither the Company nor the Investment Manager assumes any responsibility or obligation to update publicly or review any of the forward-looking statements contained herein. You should not place undue reliance on forward-looking statements, which speak only as of the date of this announcement.

The Company and the Investment Manager are not associated or affiliated with any other fund managers whose names include "Symphony", including, without limitation, Symphony Financial Partners Co., Ltd.

SYMPHONY INTERNATIONAL HOLDINGS LIMITED

Financial Results for the year ended 31 December 2017

Symphony International Holdings Limited (the "Company", "SIHL" or "Symphony") announces the financial results for the year ended 31 December 2017. The financial statements of the Company have been prepared in accordance with International Financial Reporting Standards (IFRS). The financial statements are audited by KPMG LLP.

Independent auditors' report

Members of the Company

Symphony International Holdings Limited

Report on the audit of the financial statements

Opinion

We have audited the accompanying financial statements of Symphony International Holdings Limited ('the Company'), which comprise the statement of financial position of the Company as at 31 December 2017, the statement of comprehensive income, statement of changes in equity and statement of cash flows of the Company for the year then ended, including a summary of significant accounting policies and other explanatory information, as set out on pages FS1 to FS34.

In our opinion, the accompanying financial statements of the Company are properly drawn up in accordance with International Financial Reporting Standards (IFRS) so as to give a true and fair view of the financial position of the Company as at 31 December 2017 and of the financial performance and changes in equity and cash flows of the Company for the year ended on that date.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditors' responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the IESBA Code of Ethics for Professional Accountants (IESBA Code), and we have fulfilled our other ethical responsibilities in accordance with the IESBA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key audit matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Valuation of financial assets at fair value through profit or loss (Level 3)

(Refer to Note 16 to the financial statements, page FS23 et seq.)

The key audit matter

How the matter was addressed in our audit

The Company's investments are measured at fair value and amount to US$608 million at 31 December 2017. The Company holds its investments directly or through its unconsolidated subsidiaries. The underlying investments comprise both quoted and unquoted securities.

The Company has identified underlying investments amounting to US$196 million which require significant judgement in the determination of the fair values as significant unobservable inputs are used in the estimation. Changes in these unobservable inputs could have a material impact on the valuation of the investments.

· For land related investments in Thailand, Japan and Malaysia, the Company is using the comparable valuation method with the price per square metre as the most determinative parameter.

· For rental properties in Thailand, an income approach is used to determine the fair values, by using the rental growth rate, occupancy rate and discount rate as the key input parameters.

· For operating businesses in France and Thailand, the Company measures the investments using the enterprise values by applying comparable traded multiples and applies a discount for the lack of marketability.

· For an operating business in Thailand, the Company uses a discounted cash flow method to determine the value, using projected revenue and expenses, terminal growth rate, small capitalisation premium and weighted average cost of capital ('WACC') as key input parameters.

For the Level 3 financial assets at fair value through profit or loss, we evaluated the design and implementation of controls over the preparation, review and approval of the valuations. We noted that the design and implementation of controls over the valuation process was effective.

We also performed procedures for each type of investment and valuation methodology adopted by the Company.

For land related investments and rental properties, we have evaluated the valuers' independence, objectivity and competency. We compared the market values to recent transactions which are relatively comparable to the nature of the investments. We challenged the appropriateness of the assumptions used in the income approach and benchmarked them against the market rates.

Valuation of financial assets at fair value through profit or loss (Level 3) (Refer to Note 16 to the financial statements, page FS23 et seq.)
The key audit matter	How the matter was addressed in our audit
The Company uses external valuers to measure the fair value of the land related investments and rental properties. The Company uses an internal model to value the operating businesses.	For operating businesses, we reviewed the appropriateness of the valuation methodologies adopted and the reasonableness of assumptions and estimates made. For operating businesses valued using the comparable enterprise model, we assessed whether the comparable enterprises operate in similar businesses and whether the EBITDA multiples and share prices are consistent with publicly available information. For the operating business valued using the discounted cash flow method, we assessed whether the assumptions used in determining the projected revenue and expenses are reasonable and whether the WACC used is appropriate. We challenged the assumptions made for the discount rate used for the lack of marketability, WACC and the terminal growth rate by involving our valuation specialists and have corroborated the reasons for any unexpected movements from prior valuations. We also reviewed the adequacy of the disclosures in the financial statements of the key assumptions in the estimates applied in the valuations.
Valuation of financial assets at fair value through profit or loss (Level 3) (Refer to Note 16 to the financial statements, page FS23 et seq.)
Our findings
We found no matters of concern regarding the independence, objectivity and competency of the external valuers. Overall, the valuation estimates and assumptions made by management were within a reasonable range of outcomes. We also noted that the Company's disclosures were appropriate.

Other information

Management is responsible for the other information contained in the annual report. Other information is defined as all information in the annual report other than the financial statements and our auditors' report thereon.

We have obtained all other information prior to the date of this auditors' report.

Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of management and directors for the financial statements

Management is responsible for the preparation of financial statements that give a true and fair view in accordance with IFRS, and for devising and maintaining a system of internal accounting controls sufficient to provide a reasonable assurance that assets are safeguarded against loss from unauthorised use or disposition; and transactions are properly authorised and that they are recorded as necessary to permit the preparation of true and fair financial statements and to maintain accountability of assets.

In preparing the financial statements, management is responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

The directors' responsibilities include overseeing the Company's financial reporting process.

Auditors' responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors' report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with ISAs, we exercise professional judgement and maintain professional scepticism throughout the audit. We also:

· Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls.

· Obtain an understanding of internal controls relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal controls.

· Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

· Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors' report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors' report. However, future events or conditions may cause the Company to cease to continue as a going concern.

· Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal controls that we identify during our audit.

We also provide the directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with the directors, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors' report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partner on the audit resulting in this independent auditors' report is Hong Cho Hor Ian.

KPMG LLP

Public Accountants and

Chartered Accountants

Singapore

20 March 2018

Statement of financial position As at 31 December 2017
	Note	2017	2016
		US$'000	US$'000

Non-current assets
Financial assets at fair value through profit or loss	3	608,456	638,222
		608,456	638,222
Current assets
Other receivables and prepayments	4	78	67
Cash and cash equivalents	5	15,689	15,793
		15,767	15,860
Total assets		624,223	654,082

Equity attributable to equity holders of the Company
Share capital	6	382,797	414,080
Reserves	7	62,298	62,960
Accumulated profits		173,577	168,713
Total equity carried forward		618,672	645,753

Current liabilities
Interest-bearing borrowings	8	5,166	4,953
Other payables	9	385	3,362
Bank overdraft	5	-	14
Total liabilities		5,551	8,329
Total equity and liabilities		624,223	654,082

The financial statements were approved by the Board of Directors on 20 March 2018.

──────────────────── ────────────────────

Anil Thadani Sunil Chandiramani

Director Director

20 March 2018 20 March 2018

Statement of comprehensive income Year ended 31 December 2017
	Note	2017	2016
		US$'000	US$'000

Other operating income		118,769	1,020
Other operating expenses		(1,754)	(4,890)
Management fees		(14,176)	(15,000)
		102,839	(18,870)
Share options expense		(506)	(1,162)
Profit/(Loss) before investment results and income tax		102,333	(20,032)
Fair value changes in financial assets at fair value through profit or loss		(12,154)	8,571
Profit/(Loss) before income tax	10	90,179	(11,461)
Income tax expense	11	-	-
Profit/(Loss) for the year		90,179	(11,461)
Other comprehensive income for the year, net of tax		-	-
Total comprehensive income for the year		90,179	(11,461)

Earnings per share:
		US Cents	US Cents

Basic	12	17.79	(2.17)
Diluted	12	17.54	(2.17)

Statement of changes in equity Year ended 31 December 2017
	Share capital	Reserves	Accumulated profits	Total equity
	US$'000	US$'000	US$'000	US$'000

At 1 January 2016	413,358	62,074	220,154	695,586

Total comprehensive income for the year	-	-	(11,461)	(11,461)

Transactions with owners of the Company, recognised directly in equity
Contributions by and distributions to owners
Issuance of shares	446	-	-	446
Value of services received for issue of share options	-	1,162	-	1,162
Exercise of share options	276	(276)	-	-
Dividend paid of US$0.06 per share	-	-	(39,980)	(39,980)
Total transaction with owners of the Company	722	886	(39,980)	(38,372)
At 31 December 2016	414,080	62,960	168,713	645,753

At 1 January 2017	414,080	62,960	168,713	645,753

Total comprehensive income for the year	-	-	90,179	90,179

Transactions with owners of the Company, recognised directly in equity
Contributions by and distributions to owners
Issuance of shares	1,745	-	-	1,745
Value of services received for issue of share options	-	506	-	506
Exercise of share options	1,168	(1,168)	-	-
Own shares acquired	(34,196)	-	(3,064)	(37,260)
Dividend paid of US$0.135 per share	-	-	(82,251)	(82,251)
Total transaction with owners of the Company	(31,283)	(662)	(85,315)	(117,260)
At 31 December 2017	382,797	62,298	173,577	618,672

Statement of cash flows Year ended 31 December 2017
	Note	2017	2016
		US$'000	US$'000
Cash flows from operating activities
Profit/(Loss) before income tax		90,179	(11,461)
Adjustments for:
Dividend income		(110,250)	-
Exchange (gain)/loss		(8,217)	3,606
Interest income		(203)	(1,020)
Interest expense		505	24
Fair value changes in financial assets at fair value through profit or loss		12,154	(8,571)
Share options expense		506	1,162
		(15,326)	(16,260)
Changes in:
Other receivables and prepayments		(12)	155
Other payables		(8,691)	17
		(24,029)	(16,088)
Dividend received		53	-
Interest received (net of withholding tax)		232	1,306
Net cash used in operating activities		(23,744)	(14,782)

Cash flows from investing activity
Net proceeds received from/(provided to) unconsolidated subsidiaries		135,666	(6,025)
Net cash from/(used in) investing activity		135,666	(6,025)

Cash flows from financing activities
Net proceeds from issue of share capital		1,745	446
Repurchase of own shares		(37,260)	-
Interest paid		(505)	(24)
Dividend paid		(76,545)	(36,938)
(Repayment of)/Proceeds from borrowings		(55)	85
Net cash used in financing activities		(112,620)	(36,431)

Net decrease in cash and cash equivalents		(698)	(57,238)
Cash and cash equivalents at 1 January		15,779	73,142
Effect of exchange rate fluctuations		608	(125)
Cash and cash equivalents at 31 December	5	15,689	15,779

Significant non-cash transaction

During the year, the Company received dividends of $110,250,000 (2016: Nil) from its unconsolidated subsidiaries of which $110,197,000 was set off against the non-trade amounts due to the unconsolidated subsidiaries.

Notes to the financial statements

These notes form an integral part of the financial statements.

The financial statements were authorised for issue by the Board of Directors on 20 March 2018.

1 Domicile and activities

Symphony International Holdings Limited (the Company) was incorporated in the British Virgin Islands (BVI) on 5 January 2004 as a limited liability company under the International Business Companies Ordinance. The address of the Company's registered office is Vistra Corporate Services Centre, Wickhams Cay II, Road Town, Tortola VG1110 British Virgin Islands effective 13 February 2017. The Company does not have a principal place of business as the Company carries out its principal activities under the advice of its Investment Manager.

The principal activities of the Company are those relating to an investment holding company while those of its unconsolidated subsidiaries consist primarily of making strategic investments with the objective of increasing the net asset value through long-term strategic private equity investments in consumer-related businesses, predominantly in the hospitality, healthcare and lifestyle sectors (including education and branded real estate developments), as well as investments in special situations and structured transactions which have the potential of generating attractive returns.

2 Summary of significant accounting policies

2.1 Basis of preparation

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

The financial statements have been prepared on a fair value basis, except for certain items which are measured on a historical cost basis. The financial statements are presented in thousands of United States dollars (US$'000), which is the Company's functional currency, unless otherwise stated.

The preparation of financial statements in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the application of accounting policies and reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

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.

Information about assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment within the next financial year are included in the following notes:

· Note 13 - Valuation of share options

· Note 16 - Fair value of investments

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

2.2 Subsidiaries

Subsidiaries are investees controlled by the Company. The Company controls an investee if it is exposed to, or has rights to, variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee.

The Company is an investment entity and does not consolidate its subsidiaries and measures them at fair value through profit or loss. In determining whether the Company meets the definition of an investment entity, management considered the structure of the Company and its subsidiaries as a whole in making its assessment.

2.3 Functional currency

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

For the purposes of determining the functional currency of the Company, management has considered the activities of the Company, which are those relating to an investment holding company. Funding is obtained in US dollars through the issuance of ordinary shares.

2.4 Foreign currencies

Foreign currency transactions

Transactions in foreign currencies are translated to the functional currency of the Company at exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date are translated to the functional currency at the exchange rate at that date. The foreign currency gain or loss on monetary items is the difference between amortised cost in the functional currency at the beginning of the year, adjusted for effective interest and payments during the year, and the amortised cost in foreign currency translated at the exchange rate at the end of the year.

Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are translated to the functional currency at the exchange rate at the date that the fair value was determined. Non-monetary items in a foreign currency that are measured in terms of historical cost are translated using the exchange rate at the date of the transaction.

Foreign currency differences arising on translation are recognised in profit or loss.

2.5 Financial instruments

The Company early adopted IFRS 9 Financial Instruments ("IFRS 9") for the first time from
12 November 2009, being the earliest date it was available for adoption. The Company elected to apply IFRS 9 retrospectively as if it had always applied. IFRS 9 specifies the basis for classifying and measuring financial assets. Classification is determined based on the Company's business model measured at either amortised cost or fair value. IFRS 9 replaces the classification and measurement requirements relating to financial assets in IAS 39 Financial Instruments: Recognition and Measurement. In 2010, 2013 and 2014, IFRS 9 was updated to include revised guidance on the classification and measurement of financial instruments, a new expected credit loss model for calculating impairment on financial assets, and new general hedge accounting requirements. The final version of IFRS 9 (2014) is effective for periods beginning on or after
1 January 2018.

Non-derivative financial instruments

Non-derivative financial instruments comprise financial assets at fair value through profit or loss, other receivables and prepayments, cash and cash equivalents, interest-bearing borrowings and other payables.

Non-derivative financial instruments are recognised initially at fair value plus, for instruments not at fair value through profit or loss, any directly attributable transaction costs, except as described below. Subsequent to initial recognition, non-derivative financial instruments are measured as described below.

A financial instrument is recognised if the Company becomes a party to the contractual provisions of the instrument. Financial assets are derecognised if the Company's contractual rights to the cash flows from the financial assets expire or if the Company transfers the financial asset to another party without retaining control or transfers substantially all the risks and rewards of the asset. Regular way purchases and sales of financial assets are accounted for at settlement date, i.e., the date that an asset is delivered to or by the Company. Financial liabilities are derecognised if the Company's obligations specified in the contract expire or are discharged or cancelled.

Cash and cash equivalents

Cash and cash equivalents comprise cash and bank balances, deposits with financial institutions, and placements in money market funds. For the purpose of the statement of cash flows, bank overdrafts that are repayable on demand and that form an integral part of the Company's cash management are included in cash and cash equivalents.

Financial assets at fair value through profit or loss

Financial assets are measured at fair value through profit or loss. This includes financial assets that are held for trading and investments that the Company manages based on their fair value in accordance with the Company's documented risk management and/or investment strategy.

Equity instruments are measured at fair value through profit or loss unless the Company irrevocably elects at initial recognition to present the changes in fair value in other comprehensive income as described below.

Upon initial recognition, financial assets measured at fair value through profit or loss are recognised at fair value and any transaction costs are recognised in profit or loss when incurred. Subsequent to initial recognition, financial assets at fair value through profit or loss are measured at fair value, and changes therein, which takes into account any dividend income, are recognised in profit or loss.

Others

Other non-derivative financial instruments are measured at amortised cost using the effective interest method, less any impairment losses.

Share capital

Ordinary shares are classified as equity as there is no contractual obligation for the Company to deliver cash or another financial asset to another entity, or to exchange financial assets or financial liabilities with another entity under conditions that are potentially unfavourable to the Company. Incremental costs directly attributable to the issue of ordinary shares are recognised as a deduction from equity, net of any tax effects.

When share capital recognised as equity is repurchased, the amount of the consideration paid, which includes directly attributable costs, net of any tax effects, is recognised as a deduction from equity.

2.6 Impairment

Financial assets

A financial asset not carried at fair value through profit or loss is assessed at the end of each reporting period to determine whether there is any objective evidence that it is impaired. A financial asset is impaired if objective evidence indicates that a loss event(s) has occurred after the initial recognition of the asset, and that the loss event(s) has an impact on the estimated future cash flows of that asset that can be estimated reliably.

An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference between its carrying amount and the present value of the estimated future cash flows discounted at the asset's 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 with similar credit risk characteristics.

All impairment losses are recognised in profit or loss in the statement of comprehensive income. If the amount of impairment loss subsequently decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, then the previously recognised impairment loss is reversed through profit or loss in the statement of comprehensive income.

Non-financial assets

The carrying amounts of the Company's non-financial assets are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset's recoverable amount is estimated. For goodwill, recoverable amount is estimated at each year at the same time. An impairment loss is recognised if the carrying amount of an asset or its related cash-generating unit exceeds its estimated recoverable amount.

A cash-generating unit is the smallest identifiable asset group that generates cash flows that largely are independent from other assets and groups. Impairment losses are recognised in profit or loss in the statement of comprehensive income unless it reverses a previous revaluation, credited to other comprehensive income, in which case it is charged to other comprehensive income.

The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or cash-generating unit.

An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses recognised in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset's carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.

2.7 Share-based payments

The share option programme allows the option holders to acquire shares of the Company. The fair value of options granted to the Investment Manager is recognised as an expense in profit or loss in the statement of comprehensive income with a corresponding increase in equity. The fair value is measured when the services are received and spread over the period during which the Investment Manager becomes unconditionally entitled to the options.

The proceeds received net of any directly attributable transactions costs are credited to share capital when the options are exercised.

The fair value of Management Shares granted to the Investment Manager is recognised as an expense, with a corresponding increase in equity, over the vesting period, i.e. when the Investment Manager becomes unconditionally entitled to the Management Shares.

2.8 Revenue recognition

Dividends

Dividend income is recognised on the date that the shareholder's right to receive payment is established, which in the case of quoted securities is the ex-dividend date.

2.9 Finance income

Interest income from deposits with financial institutions and placements in money market funds and loans to associates, joint ventures and investee companies is recognised as it accrues in profit or loss, 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 Tax expense

Tax expense comprises current and deferred tax. Current tax and deferred tax 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 reporting date, and any adjustment to tax payable in respect of previous years.

Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for:

· temporary differences arising from the initial recognition of goodwill; and

· temporary differences on the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss.

The measurement of deferred taxes reflects the tax consequences that would follow the manner in which the Company expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities. Deferred tax is measured at the tax rates that are expected to be applied to 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 taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously.

A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against which the temporary differences can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised.

In determining the amount of current and deferred tax, the Company takes into account the impact of uncertain tax positions and whether additional taxes and interest may be due. The Company believes that its accruals for tax liabilities are adequate for all open tax years based on its assessment of many factors, including interpretations of tax law and prior experience. This assessment relies on estimates and assumptions and may involve a series of judgements about future events. New information may become available that causes the Company to change its judgement regarding the adequacy of existing tax liabilities. Such changes to tax liabilities will impact tax expense in the period that such a determination is made.

2.12 Earnings per share

The Company presents basic and diluted earnings per share data for its ordinary shares. Basic earnings per share is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the year, adjusted for own shares held. Diluted earnings per share is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding, adjusted for own shares held, for the effects of all dilutive potential ordinary shares and share options granted to the Investment Manager.

2.13 Segment reporting

An operating segment is a component of the Company that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Company's other components. Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker has been identified as the Board of Directors of the Investment Manager that makes strategic investment decisions.

2.14 New accounting standards and interpretations not yet adopted

A number of new standards, amendments to standards and interpretations are effective for annual periods beginning after 1 January 2017 and have not been applied in preparing these financial statements. None of these are expected to have a significant impact on the Company's financial statements.

3 Financial assets at fair value through profit or loss

	2017	2016
	US$'000	US$'000

Investments	608,456	638,222

4 Other receivables and prepayments

	2017	2016
	US$'000	US$'000

Amount due from Investment Manager	-	5
Interest receivables	1	3
Other receivables	-	1
Other prepayments	77	58
	78	67

5 Cash and cash equivalents

	2017	2016
	US$'000	US$'000

Fixed deposits with financial institutions and placements in money market funds	6,190	7,602
Cash at bank	9,499	8,191
Cash and cash equivalents in the statement of financial position	15,689	15,793
Bank overdraft	-	(14)
Cash and cash equivalents in the statement of cash flows	15,689	15,779

The effective interest rate on fixed deposits with financial institutions as at 31 December 2017 was 0.05% to 1.43% (2016: 0.094% to 0.9%) per annum. Interest rates reprice at intervals of one to four weeks.

6 Share capital

	Company
	2017	2016
	Number of shares	Number of shares
Fully paid ordinary shares, with no par value:
At 1 January	528,838,811	528,096,195
Exercise of share options	2,907,781	742,616
Repurchase of own shares	(43,525,000)	-
At 31 December	488,221,592	528,838,811

Share capital in the statement of financial position represents subscription proceeds received from, and the amount of liabilities capitalised through, the issuance of ordinary shares of no par value in the Company, less transaction costs directly attributable to equity transactions.

The Company does not have an authorised share capital and is authorised to issue an unlimited number of no par value shares.

The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at shareholder meetings of the Company. All shares rank equally with regard to the Company's residual assets. In the event that dividends are declared, the holders of the unexercised share options are entitled to receive the dividends (refer to note 13 for more details).

During the financial year, 2,907,781 (2016: 742,616) ordinary shares were issued as a result of the exercise of vested options arising from share options granted to the Investment Manager in 2012 (see note 13). Options were exercised at an average price of $0.60 (2016: $0.60) per share.

During the financial year, the Company had acquired and cancelled 43,525,000 (2016: Nil) shares as part of its Share Buyback Programme.

7 Reserves

Equity compensation reserve

The equity compensation reserve comprises the value of Management Shares and share options issued or to be issued for investment management and advisory services received by the Company (refer to note 13).

8 Interest-bearing borrowings

The interest-bearing term loan amounting to US$5,166,000 (JPY581,959,000) [2016: US$4,953,000 (JPY579,282,000)] is denominated in Japanese Yen. Interest is charged at 0.45% (2016: 0.43% to 0.45%) per annum and reprices on a quarterly basis. The loan principals are repayable quarterly unless the loan is rolled-over.

Reconciliation of movements of liabilities to cash flows arising from financing activities

	Liabilities			Equity
	Bank overdraft	Interest-bearing borrowings	Other payables	Share capital	Reserves	Accumulated profits	Total
	US$'000	US$'000	US$'000	US$'000	US$'000	US$'000	US$'000

As at 1 January 2017	14	4,953	3,362	414,080	62,960	168,713	654,082
Changes from financing cash flows
Proceeds from issuance of shares	-	-	-	1,745	-	-	1,745
Repurchase of own shares	-	-	-	(34,196)	-	(3,064)	(37,260)
Interest paid	-	-	(505)	-	-	-	(505)
Dividend paid	-	-	5,706	-	-	(82,251)	(76,545)
Repayment of borrowings	-	(55)	-	-	-	-	(55)
Total changes from financing cash flows	-	(55)	5,201	(32,451)	-	(85,315)	(112,620)
The effect of changes in foreign exchange rates	-	268	8	-	-	-	276

Other changes
Liability-related
Change in bank overdraft	(14)	-	-	-	-	-	(14)
Change in other payables	-	-	(8,691)	-	-	-	(8,691)
Interest expense	-	-	505	-	-	-	505
Total liability-related other changes	(14)	-	(8,186)	-	-	-	(8,200)
Total equity-related other changes	-	-	-	1,168	(662)	90,179	90,685
Balance as at 31 December 2017	-	5,166	385	382,797	62,298	173,577	624,223

9 Other payables

	2017	2016
	US$'000	US$'000

Accrued operating expenses	283	217
Amount due to a director	100	100
Amount due to a shareholder	-	3,043
Interest payable	2	2
	385	3,362

The amount due to a director is unsecured, interest free and repayable on demand.

10 Profit/(Loss) before income tax

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

	2017	2016
	US$'000	US$'000
Other operating income
Dividend income	110,250	-
Exchange gain, net	8,217	-
Interest income from:
- fixed deposits and placements in money market fund	121	180
- loans to unconsolidated subsidiaries	82	840
Other income	99	-
	118,769	1,020

Other operating expenses
Exchange loss, net	-	3,606
Non-executive director remuneration	400	400
Interest expense	505	24

11 Income tax expense

The Company is incorporated in a tax-free jurisdiction, thus, it is not subject to income tax.

12 Earnings per share

	2017	2016
	US$'000	US$'000
Basic and diluted earnings per share are based on:
Net profit/(loss) for the year attributable to ordinary shareholders	90,179	(11,461)

Basic earnings per share

	Number of shares 2017	Number of shares 2016

Issued ordinary shares at 1 January	528,838,811	528,096,195
Shares issued	2,907,781	742,616
Own shares acquired	(43,525,000)	-
Issued ordinary shares at 31 December	488,221,592	528,838,811

Weighted average number of shares (basic)	506,773,906	528,498,445

Diluted earnings per share

	2017	2016

Weighted average number of shares (basic)	506,773,906	528,498,445
Effect of share options	7,433,994	-
Weighted average number of shares (diluted)	514,207,900	528,498,445

Number of outstanding options
Exercise price of US$1.00	82,782,691	82,782,691
Exercise price of US$0.60	25,144,606	28,052,387
	107,927,297	110,835,078

At 31 December 2017, there were 107,927,297 (2016: 110,835,078) outstanding share options to subscribe for ordinary shares of no par value. At 31 December 2017, 107,927,297 (2016: 102,501,778) of the unexercised share options had fully vested.

At 31 December 2017, 82,782,691 (2016: 82,782,691) of the share options have an exercise price of US$1.00 and have not been included in the computation of diluted earnings per share as their effect would have been anti-dilutive.

At 31 December 2017, 25,144,606 of the share options have an exercise price of US$0.60 and have been included in the computation of diluted earnings per share. At 31 December 2017, all the share options had vested.

At 31 December 2016, 19,719,087 of the share options and 8,333,300 of the share options which had not yet vested have an exercise price of US$0.60 and have not been included in the computation of diluted earnings per share as their effects would have been anti-dilutive.

13 Significant related party transactions

Dividend income

During the financial year ended 31 December 2017, the Company recognised dividend income from its unconsolidated subsidiaries amounting to US$110,250,000 (2016: Nil).

Key management personnel compensation

Key management personnel of the Company are those persons having the authority and responsibility for planning, directing and controlling the activities of the Company.

During the financial year, directors' fees amounting to US$400,000 (2016: US$400,000) were declared as payable to four directors (2016: four directors) of the Company. The remaining two directors of the Company are also directors of the Investment Manager who provides management and administrative services to the Company on an exclusive and discretionary basis. No remuneration has been paid to these directors as the cost of their services form part of the Investment Manager's remuneration.

Other related party transactions

On 10 July 2007, the Company entered into an Investment Management and Advisory Agreement with Symphony Investment Managers Limited ("SIMgL") pursuant to which SIMgL would provide investment management and advisory services exclusively to the Company. On 15 October 2015, SIMgL was replaced by Symphony Asia Holdings Pte. Ltd. ("SAHPL") (with SAHPL and SIMgL, as the case maybe, hereinafter referred to as the "Investment Manager"). The Company entered into an Investment Management Agreement with SAHPL, which replaced the Investment Management and Advisory Agreement (as the case may be, hereinafter referred to as the "Investment Management Agreement"). The key persons of the management team of the Investment Manager comprise certain key management personnel engaged by the Investment Manager pursuant to arrangements agreed between the parties. They will (subject to certain existing commitments) devote substantially all of their business time as employees, and on behalf of the Investment Management Group, to assist the Investment Manager in its fulfilment of the investment objectives of the Company and be involved in the management of the business activities of the Investment Management Group. Pursuant to the Investment Management Agreement, the Investment Manager is entitled to the following forms of remuneration for the investment management and advisory services rendered.

a. Management fees

Management fees of 2.25% per annum of the net asset value, payable quarterly in advance on the first day of each quarter, based on the net asset value of the previous quarter end. The management fees payable will be subject to a minimum amount of US$8,000,000 per annum and a maximum amount of US$15,000,000 per annum;

In 2017, Management fees amounting to US$14,176,000 (2016: US$15,000,000) have been paid to the Investment Manager and recognised in the financial statements.

b. Management shares

The Company did not issue any management shares during the year. At the reporting date, an aggregate of 10,298,725 (2016: 10,298,725) management shares had been issued, credited as fully paid to the Investment Manager.

c. Share options

Share options can be used to subscribe for ordinary shares of the Company.

In the structuring of the compensation payable under the Investment Management and Advisory Agreement, the value of the share options was considered to be measurable using the Binomial Tree option pricing model. Measurement inputs include share price on measurement date, exercise price, expected volatility, expected option life, expected dividends and risk-free interest rate.

The number and exercise price of share options granted to the Investment Manager are as follows:

	Number of options
Grant date	2017	2016	Vesting conditions	Exercise price

Options granted to Investment Manager
On 3 August 2008	82,782,691	82,782,691	Fully vested in five tranches over a period of five years and will expire on the tenth anniversary of the date of grant	US$1.00

On 22 October 2012	41,666,500	41,666,500	Fully vested in five equal tranches over a period of five years and will expire on the tenth anniversary of the date of grant	US$0.60

Total share options outstanding at 1 January	110,835,078	111,577,694

Exercised during the year	2,907,781	742,616		US$0.60

Total share options outstanding at 31 December	107,927,297	110,835,078

Exercisable at 31 December
	82,782,691	82,782,691		US$1.00
	25,144,606	19,719,087		US$0.60

The share options expense arising from these options is recognised in accordance with the accounting policy set out in Note 2.7. In respect of these options, the assumptions used in determining the fair value are set out in the following table.

Fair value of share options and assumptions

	31 March	30 June	30 September	31 December
2017
Fair value	US$0.31	US$0.29	US$0.24	US$0.29

Share price	US$0.85	US$0.83	US$0.77	US$0.84
Exercise price	US$0.60	US$0.60	US$0.60	US$0.60
Expected volatility	30.14%	29.51%	29.42%	28.99%
Expected option life	5.6 years	5.3 years	5.1 years	4.8 years
Expected dividends	2.94%	3.00%	3.23%	2.98%
Risk-free interest rate	2.1%	1.9%	2.0%	2.2%

2016
Fair value	US$0.22	US$0.23	US$0.24	US$0.28

Share price	US$0.73	US$0.76	US$0.76	US$0.80
Exercise price	US$0.60	US$0.60	US$0.60	US$0.60
Expected volatility	29.80%	29.75%	30.25%	31.58%
Expected option life	6.6 years	6.3 years	6.1 years	5.8 years
Expected dividends	3.42%	3.29%	3.29%	3.13%
Risk-free interest rate	1.5%	1.2%	1.3%	2.2%

The expected volatility is based on the historic volatility, adjusted for any expected changes to future volatility driven by publicly available information.

There are no market conditions associated with the share options. Service conditions and non-market performance conditions are not taken into account in the measurement of the fair value of services to be received at the measurement date.

Share options expenses amounting to US$506,000 (2016: US$1,162,000) have been recognised in the financial statements.

In the event that a dividend is declared, the holders of outstanding share options will be paid an amount equivalent to the amount which would have been paid as if all share options that have been granted, whether vested or otherwise, have been exercised. At least 50% of such amount (the "Designated Amount") will be applied towards the exercise of the outstanding share options based on the lower of the total number of vested share options held at the date of the dividend declaration and the number of vested share options held at the date of the dividend declaration which can be exercised with such amount. Any balance of the Designated Amount remaining after the exercise price of all vested share options may be retained by the share option holder. If the market price of the Company's shares is less than the exercise price of the options at the dividend declaration date, the Designated Amount will be retained by the Company and applied by the Company on behalf of the share option holder to (a) exercise options when the market price of the shares exceed the exercise price any time prior to the expiration of the share options or (b) acquire shares on the market with the Designated Amount if the Company's share price remains less than the exercise price at the time of expiry of the options that will then be distributed to the share option holder (at no consideration). Any balance of the Designated Amount remaining after the application by the Company in the manner described above will be returned to the share options holder.

During the year, the Investment Manager exercised 2,907,781 (2016: 742,616) share options at US$0.60 (2016: US$0.60) each, which included the application of 50% of the dividends it received from the Company on all unexercised share options of the Company.

The share options granted on 3 August 2008 will expire on 3 August 2018. The share options granted on 22 October 2012 will expire on 22 October 2022. Once these options expire, they cannot be reissued to the Investment Manager.

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

14 Commitments

In September 2008, the Company entered into a loan agreement with a joint venture, held via its unconsolidated subsidiary, to grant loans totaling US$4,300,000 (THB140,000,000). As at
31 December 2017, US$3,700,000 (THB120,000,000) has been drawn down. The Company is committed to grant the remaining loan amounting to US$600,000 (THB20,000,000), subject to terms set out in the agreement.

In the general interests of the Company and its unconsolidated subsidiaries, it is the Company's current policy to provide such financial and other support to its group of companies to enable them to continue to trade and to meet liabilities as they fall due.

15 Operating segments

The Company has investment segments, as described below. Investment segments are reported to the Board of Directors of the Investment Manager, who review this information on a regular basis. The following summary describes the investments in each of the Company's reportable segments.

Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis.

Business activities which do not meet the definition of an operating segment have been reported in the reconciliations of total reportable segment amounts to the financial statements.

Healthcare	Includes investments in Parkway Life Real Estate Investment Trust (PREIT), IHH Healthcare Bhd (IHH) and SQR Global Healthcare Services Fund II

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

Lifestyle/Education	Includes investments in C Larsen (Singapore) Pte Ltd, the Wine Connection Group (WCG), the Liaigre Group (Liaigre) and WCIB International Co. Ltd. (WCIB)

Lifestyle/Real Estate	Includes investments in Minuet Ltd, SG Land Co. Ltd., a property joint venture in Niseko, Hokkaido, Japan and Desaru Peace Holdings Sdn Bhd

Cash and temporary investments	Includes government securities or other investment grade securities, liquid investments which are managed by third party investment managers of international repute, and deposits placed with commercial banks

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

	Healthcare	Hospitality	Lifestyle/ education	Lifestyle/ Real estate	Cash and temporary investments	Total
	US$'000	US$'000	US$'000	US$'000	US$'000	US$'000
2017
Investment income:
- Dividend income	49,250	61,000	-	-	-	110,250
- Exchange gain	(1,172)	*	6,469	2,462	458	8,217
- Interest income	58	-	-	24	121	203
- Other income	-	-	99	-	-	99
	48,136	61,000	6,568	2,486	579	118,769
Investment expense:
- Fair value changes of financial assets at fair value through profit or loss	(37,684)	42,632	(34,436)	16,130	1,204	(12,154)
	(37,684)	42,632	(34,436)	16,130	1,204	(12,154)

Net investment results	10,452	103,632	(27,868)	18,616	1,783	106,615

* Less than US$1,000

	Healthcare	Hospitality	Lifestyle/ education	Lifestyle/ Real estate	Cash and temporary investments	Total
	US$'000	US$'000	US$'000	US$'000	US$'000	US$'000
2016
Investment income:
- Interest income	816	-	-	24	180	1,020
- Fair value changes of financial assets at fair value through profit or loss	(1,558)	3,466	(2,376)	7,388	1,651	8,571
	(742)	3,466	(2,376)	7,412	1,831	9,591
Investment expense:
- Exchange loss	(30)	*	(2,719)	(835)	(22)	(3,606)
	(30)	*	(2,719)	(835)	(22)	(3,606)

Net investment results	(772)	3,466	(5,095)	6,577	1,809	5,985

2017
Segment assets	66,550	340,803	69,933	126,057	20,802	624,145

Segment liabilities	-	-	-	5,166	-	5,166

2016
Segment assets	125,145	325,895	70,496	104,198	28,281	654,015

Segment liabilities	-	-	-	4,953	-	4,953

* Less than US$1,000

Reconciliations of reportable segment profit or loss and assets

	2017	2016
	US$'000	US$'000
Profit or loss
Net investments results	106,615	5,985
Unallocated amounts:
- Management fees	(14,176)	(15,000)
- Share option expense	(506)	(1,162)
- Non-executive director remuneration	(400)	(400)
- General operating expenses	(1,354)	(884)
Profit/(Loss) for the year	90,179	(11,461)

Assets
Total assets for reportable segments	624,145	654,015
Other assets	78	67
Total assets	624,223	654,082

Liabilities
Total liabilities for reportable segments	5,166	4,953
Other payables	385	3,362
Bank overdraft	-	14
Total liabilities	5,551	8,329

Geographical information

In presenting information on the basis of geographical information, revenue, comprising dividend income from investments, is based on the geographical location of the underlying investment. Assets are based on the principal geographical location of the assets or the operations of the investee companies. None of the underlying investments which generate revenue or assets are located in the Company's country of incorporation, BVI.

	Singapore	Malaysia	Thailand	Japan	Mauritius	Other	Total
	US$'000	US$'000	US$'000	US$'000	US$'000	US$'000	US$'000
2017
Investment income:
- Dividend income	-	-	-	-	110,250	-	110,250
- Exchange gain	390	-	-	-	(1,205)	9,032	8,217
- Interest income	121	-	-	-	58	24	203
- Other income	99	-	-	-	-	-	99
	610	-	-	-	109,103	9,056	118,769
Investment expense:
- Fair value changes of financial assets at fair value through profit or loss	(39,226)	4,524	56,575	8,103	-	(42,130)	(12,154)
	(39,226)	4,524	56,575	8,103	-	(42,130)	(12,154)

Net investment results	(38,616)	4,524	56,575	8,103	109,103	(33,074)	106,615

2016
Investment income:
- Interest income	180	-	-	-	816	24	1,020
- Fair value changes of financial assets at fair value through profit or loss	2,126	(3,593)	8,816	25	-	1,197	8,571
	2,306	(3,593)	8,816	25	816	1,221	9,591
Investment expense:
- Exchange loss	(183)	-	-	-	(21)	(3,402)	(3,606)
	(183)	-	-	-	(21)	(3,402)	(3,606)

Net investment results	2,123	(3,593)	8,816	25	795	(2,181)	5,985

2017
Segment assets	14,805	87,843	451,210	17,745	709	51,833	624,145

Segment liabilities	5,166	-	-	-	-	-	5,166

2016
Segment assets	76,260	76,288	434,677	9,292	(9,896)	67,394	654,015

Segment liabilities	4,953	-	-	-	-	-	4,953

16 Financial risk management

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

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

Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations.

Investments in the form of advances are made to investee companies which are of acceptable credit risk. Credit risk exposure on the investment portfolio is managed on an asset-specific basis by the Investment Manager.

Cash and fixed deposits are placed with financial institutions which are regulated.

As at 31 December 2017, the Company has credit risk exposure relating to fixed deposits placed with financial institutions and placements in money market funds totalling US$15,689,000 (2016: US$15,779,000). Other than these balances, there were no significant concentrations of credit risk. The maximum exposure to credit risk is represented by the carrying amount of each financial asset in the statement of financial position.

The balances with unconsolidated subsidiaries and other receivables were not past due nor impaired at the reporting date.

Market risk

Market risk is the risk that changes in market prices, such as interest rates, foreign exchange rates and equity prices will affect the Company's income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return on risk.

Interest rate risk

The Company's exposure to changes in interest rates relates primarily to its interest-earning fixed deposits placed with financial institutions and interest-bearing term loans. The Company's fixed rate financial assets and liabilities are exposed to a risk of change in their fair value due to changes in interest rates while the variable-rate financial assets and liabilities are exposed to a risk of change in cash flows due to changes in interest rates. The Company does not enter into derivative financial instruments to hedge against its exposure to interest rate risk.

Sensitivity analysis

A 100 basis point ("bp") and 5 bp move in interest rate against the following financial assets and financial liabilities at the reporting date would increase/(decrease) profit or loss by the amounts shown below. The analysis assumes that all other variables remain constant.

	Impact on Profit or loss		Impact on Profit or loss
	100 bp increase	5 bp decrease	100 bp increase	5 bp decrease
	2017	2017	2016	2016
	US$'000	US$'000	US$'000	US$'000
Deposits with financial institutions	62	(3)	76	(4)
Interest-bearing borrowings	(52)	3	(50)	2
	10	-	26	(2)

Foreign exchange risk

The Company is exposed to transactional foreign exchange risk when transactions are denominated in currencies other than the functional currency of the operation. The Company does not enter into derivative financial instruments to hedge its exposure to Singapore dollars, Japanese Yen, Thai Baht, Malaysian Ringgit, Hong Kong dollars and Euro as the currency position in these currencies is considered to be long-term in nature and foreign exchange risk is an integral part of the Company's investment decision and returns.

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

	Singapore Dollars	Japanese Yen	Thailand Baht	Malaysian Ringgit	Others
	US$'000	US$'000	US$'000	US$'000	US$'000
2017
Financial assets at fair value through profit or loss	327	17,745	90,049	60,598	35,656
Other receivables	*	-	-	-	-
Cash and cash equivalents	2,454	-	*	-	48
Interest-bearing borrowings	-	(5,166)	-	-	-
Accrued operating expenses	(258)	-	(1)	-	(24)
Net exposure	2,523	12,579	90,048	60,598	35,680

2016
Financial assets at fair value through profit or loss	31,370	9,291	86,053	56,057	45,163
Other receivables	*	-	-	-	5
Cash and cash equivalents	2,161	-	*	-	201
Interest-bearing borrowings	-	(4,953)	-	-	-
Accrued operating expenses	(204)	-	(1)	-	(12)
Bank overdraft	-	-	-	-	(13)
Net exposure	33,327	4,338	86,052	56,057	45,344

* Less than US$1,000

Sensitivity analysis

A 10% strengthening of the US dollar against the following currencies at the reporting date would increase/(decrease) profit or loss by the amounts shown below. The analysis assumes that all other variables, in particular interest rates, remain constant.

	Profit or loss
	2017	2016
	US$'000	US$'000

Singapore Dollars	(252)	(3,332)
Japanese Yen	(1,258)	(434)
Thailand Baht	(9,005)	(8,605)
Malaysian Ringgit	(6,060)	(5,606)
Others	(3,568)	(4,534)

A 10% weakening of the US dollar against the above currencies would have had the equal but opposite effect on the above currencies to the amounts shown above, on the basis that all other variables remain constant.

Price risk

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

The Company's investment policies provide that the Company invests a majority of capital in longer-term strategic investments and a portion in special situations and structured transactions. Investment decisions are made by management on the advice of the Investment Manager.

Sensitivity analysis

All of the Company's underlying investments that are quoted equity investments are listed on either The Stock Exchange of Thailand, Singapore Stock Exchange or Bursa Malaysia. A 10% increase in the price of the equity securities at the reporting date would increase profit or loss after tax by the amounts shown below. The analysis assumes that all other variables remain constant.

	Profit or loss
	2017	2016
	US$'000	US$'000
Underlying investments in quoted equity securities at fair value through profit or loss	39,646	45,137

A 10% decrease in the price of the equity securities would have had the equal but opposite effect on the above quoted equity investments to the amounts shown above, on the basis that all other variables remain constant.

Liquidity risk

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

The Company's approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company's reputation. The Company monitors its liquidity risk and maintains a level of cash and cash equivalents deemed adequate by the Investment Manager to finance the Company's operations and to mitigate the effects of fluctuations in cash flows. Funds not invested in longer-term strategic investments or investments in special situations and structured transactions are temporarily invested in liquid investments and managed by a third party manager of international repute, or held on deposit with commercial banks.

The following are the contractual maturities of financial liabilities, including estimated interest payments and excluding the impact of netting agreements:

		Cash flows
	Carrying amount	Contractual 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
2017
Non-derivative financial liabilities
Interest-bearing borrowings	5,166	5,166	5,166	-	-
Other payables	385	385	385	-	-
	5,551	5,551	5,551	-	-

2016
Non-derivative financial liabilities
Interest-bearing borrowings	4,953	4,953	4,953	-	-
Other payables	3,362	3,362	3,362	-	-
Bank overdraft	14	14	14	-	-
	8,329	8,329	8,329	-	-

Capital management

The Company's policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. Capital consists of total equity. The Company seeks to maintain a balance between higher returns that might be possible with higher levels of borrowings and the advantages and security afforded by a sound capital position.

During the financial year, the Company announced the initiation of a Share Buyback Programme with the intention to target the acquisition of at least 10% of its shares in issue on an annual basis.

The Company is not subject to externally imposed capital requirements.

Accounting classification

The classification of financial assets and liabilities, are as follows:

	Note	Fair value through profit or loss	Loans and receivables	Other financial liabilities	Total
		US$'000	US$'000	US$'000	US$'000
2017
Financial assets at fair value through profit or loss	3	608,456	-	-	608,456
Other receivables	4	-	1	-	1
Cash and cash equivalents	5	-	15,689	-	15,689
		608,456	15,690	-	624,146

Interest-bearing borrowings	8	-	-	(5,166)	(5,166)
Other payables	9	-	-	(385)	(385)
		-	-	(5,551)	(5,551)

2016
Financial assets at fair value through profit or loss	3	638,222	-	-	638,222
Other receivables	4	-	9	-	9
Cash and cash equivalents	5	-	15,793	-	15,793
		638,222	15,802	-	654,024

Interest-bearing borrowings	8	-	-	(4,953)	(4,953)
Other payables	9	-	-	(3,362)	(3,362)
Bank overdraft	5	-	-	(14)	(14)
		-	-	(8,329)	(8,329)

Fair value

The financial assets at fair value through profit or loss are measured using the adjusted net asset value method, which is based on the fair value of the underlying investments. The fair values of the underlying investments are determined based on the following methods:

i) for quoted equity investments, based on quoted market bid prices at the financial reporting date without any deduction for transaction costs;

ii) for unquoted investments, with reference to the enterprise value at which the portfolio company could be sold in an orderly disposition over a reasonable period of time between willing parties other than in a forced or liquidation sale, and is determined by using valuation techniques such as (a) market multiple approach that uses a specific financial or operational measure that is believed to be customary in the relevant industry, (b) price of recent investment, or offers for investment, for the portfolio company's securities, (c) current value of publicly traded comparable companies, (d) comparable recent arms' length transactions between knowledgeable parties, and (e) discounted cash flows analysis; and

iii) for financial assets and liabilities with a maturity of less than one year or which reprice frequently (including other receivables, cash and cash equivalents, accrued operating expenses, other payables and bank overdraft) the notional amounts are assumed to approximate their fair values because of the short period to maturity/repricing.

The objective of valuation techniques is to arrive at a fair value measurement that reflects the price that would be received to sell the asset or paid to transfer the liability in an orderly transaction between market participants at the measurement date.

Fair value hierarchy for financial instruments

The table below analyses financial instruments carried at fair value, by valuation method. The different levels have been defined as follows:

· Level 1: Inputs that are quoted market prices (unadjusted) in active markets for identical instruments.

· Level 2: Inputs other than quoted prices included within Level 1 that are observable, either directly (i.e. as prices) or indirectly (i.e. derived from prices). This category includes instruments valued using: quoted market prices in active markets for similar instruments; quoted prices for identical or similar instruments in markets that are considered less than active; or other valuation techniques in which all significant inputs are directly or indirectly observable from market data.

· Level 3: Inputs that are unobservable. This category includes all instruments for which the valuation technique includes input not based on observable data and the unobservable inputs have a significant effect on the instruments' valuation. This category includes instruments that are valued based on quoted prices for similar instruments but for which significant unobservable adjustments or assumptions are required to reflect differences between instruments.

	Level 1	Level 2	Level 3	Total
	US$'000	US$'000	US$'000	US$'000
2017
Financial assets at fair value through profit or loss	-	-	608,456	608,456

2016
Financial assets at fair value through profit or loss	-	-	638,222	638,222

As explained in Note 2.2, the Company qualifies as an investment entity and therefore does not consolidate its subsidiaries. Accordingly, the fair value levelling reflects the fair value of the unconsolidated subsidiaries and not the underlying quoted equity investments. There were no other transfers from Level 1 to Level 2 or Level 3 and vice versa during the years ended December 2017 and 2016.

The fair value hierarchy table excludes financial assets and financial liabilities such as cash and cash equivalents, other receivables and payables and interest-bearing borrowings and bank overdraft because their carrying amounts approximate their fair values due to their short-term period to maturity/repricing.

Level 3 valuations

The following table shows a reconciliation from the beginning balances to the ending balances for fair value measurements in Level 3 of the fair value hierarchy.

	2017	2016
	Financial assets at fair value through profit or loss
	US$'000

Balance at 1 January	638,222	627,292
Fair value changes in profit or loss	(12,154)	8,571
(Deductions)/Additions	(17,612)	2,359
Balance at 31 December	608,456	638,222

Significant unobservable inputs used in measuring fair value

This table below sets out information about significant unobservable inputs used at 31 December 2017 in measuring the underlying investments of the financial assets categorised as Level 3 in the fair value hierarchy excluding investments purchased during the year that are valued at transaction prices as they are reasonable approximation of fair values and ultimate investments in listed entities.

Description	Fair value at 31 December 2017 US$'000	Fair value at 31 December 2016 US$'000	Valuation technique	Unobservable input	Range (Weighted average)	Sensitivity to changes in significant unobservable inputs

Rental properties	10,102	9,592	Income approach	Rental growth rate Occupancy rate Discount rate	0% - 6% (2016: 0% - 6%) 78% - 82% (2016: 77% - 82%) 13% (2016: 13%)	The estimated fair value would increase if the rental growth rate and occupancy rate were higher and the discount rate was lower.

Land related investments	115,955	94,606	Comparable valuation method	Price per square meter for comparable land	US$74 to US$4,005 per square meter (2016: US$51 to US$1,865 per square meter)	The estimated fair value would increase if the price per square meter were higher.

Operating business	56,490	12,637	Enterprise value using comparable traded multiples	EBITDA multiple (times)	5.5x to 82.3x, median 12.3x (2016: 4.7x to 116.9x, median 10.9x)	The estimated fair value would increase if the EBITDA multiple was higher.

				Discount for lack of marketability	20% (2016: 20%)	The estimated fair value would increase if the discount for lack of marketability were lower.

Description	Fair value at 31 December 2017 US$'000	Fair value at 31 December 2016 US$'000	Valuation technique	Unobservable input	Range (Weighted average)	Sensitivity to changes in significant unobservable inputs

Greenfield business held for more than 12-months	13,442	N/A	Discounted cashflow method	Revenue growth Expense ratio Weighted average cost of capital ("WACC")	3.9% - 83.4% (2016: N/A) 72.7% - 96.2% (2016: N/A) 11.6% (2016: N/A)	The estimated fair value would increase if the revenue growth increases, expenses ratio decreases, and WACC is lower.

The rental growth rate represents the growth in rental income during the leasehold period while the occupancy rates represent the percentage of the building that is expected to be occupied during the leasehold period. Management adopt a valuation report produced by an independent valuer that determines the rental growth rate and occupancy rate after considering the current market conditions and comparable occupancy rates for similar buildings in the same area.

The discount rate is related to the current yield on long-term government bonds plus a risk premium to reflect the additional risk of investing in the subject properties. Management adopt a valuation report produced by an independent valuer that determines the discount based on the independent valuers judgement after considering current market rates.

The comparable recent sales represent the recent sales prices of properties that are similar to the Group's properties, which are in the same area. Management adopt a valuation report produced by an independent valuer to determine the value per square meter based on the average recent sales prices.

The EBITDA multiple represents the amount that market participants would use when pricing investments. The EBITDA multiple is selected from comparable public companies with similar business as the underlying investment. Management obtains the average EBITDA multiple from the comparable companies and applies the multiple to the EBITDA of the underlying investment. The amount is further discounted for considerations such as lack of marketability.

The discount for lack of marketability represents the discount applied to the comparable market multiples to reflect the illiquidity of the investee relative to the comparable peer group. Management determines the discount for lack of marketability based on its judgement after considering market liquidity conditions and company-specific factors.

The revenue growth represents the growth in sales of the underlying business and is based on the operating management team's judgement on the change of various revenue drivers related to the business from year-to-year. The expense ratio is based on the judgement of the operating management team after evaluating the expense ratio of comparable businesses and is a key component in deriving EBITDA and free cash flow for the greenfield business. The free cashflow is discounted at the weighted average cost of capital to derive the enterprise value of the greenfield business. Net debt is then deducted to arrive at an equity value for the business. Weighted cost of capital is derived after adopting independent market quotes or reputable published research-based inputs for the risk-free rate, market risk premium, small cap premium and cost of debt.

The investment entity approach requires the presentation and fair value measurement of immediate investments; the shares of intermediate holding companies are not listed. However, ultimate investments in listed entities amounting to US$396,459,000 (2016: US$451,373,000) are held through intermediate holding companies; the value of these companies are mainly determined by the fair values of the ultimate investments.

Although the Company believes that its estimates of fair value are appropriate, the use of different methodologies or assumptions could lead to different measurements of fair value. For fair value measurements in Level 3 assets, changing one or more of the assumptions used to reasonably possible alternative assumptions would have the following effects on the profit or loss:

	‹------------- 2017 ------------›		‹------------- 2016 -------------›
	Effect on profit or loss		Effect on profit or loss
	Favourable	(Unfavourable)	Favourable	(Unfavourable)
	US$'000	US$'000	US$'000	US$'000

Level 3 assets	37,375	(34,266)	14,836	(15,915)

The favourable and unfavourable effects of using reasonably possible alternative assumptions have been calculated by recalibrating the valuation model using a range of different values.

For rental properties, the projected rental rates and occupancy levels were increased by 5% for the favourable scenario and reduced by 5% for the unfavourable scenario. The discount rate used to calculate the present value of future cash flows was also decreased by 1% for the favourable case and increased by 1% for the unfavourable case compared to the discount rate used in the year-end valuation.

For land related investments (except those held for less than 12-months where cost approximates fair value), which are valued on comparable transaction basis by third party valuation consultants, the fair value of the land is increased by 15% in the favourable scenario and reduced by 15% in the unfavourable scenario.

For operating businesses (except those where a last transacted price exists within the past
12-months that provides the basis for fair value) that are valued on a trading comparable basis using enterprise value to earnings before interest, tax, depreciation and amortisation ("EBITDA"), EBITDA is increased by 15% and decreased by 15% in the favourable and unfavourable scenarios.

For greenfield businesses (except those where a last transacted price exists within the past
12-months) that are valued using a discounted cashflow, the revenue growth rate is increased by 1%, the expense ratio rate is decreased by 5% and the WACC is reduced by 1% in the favourable scenario. Conversely, in the unfavourable scenario, the revenue growth rate is reduced by 1%, the expense ratio rate is increased by 5% and the WACC is increased by 1%.

17 Unconsolidated subsidiaries

Details of the unconsolidated subsidiaries of the Company are as follows:

			Place of
			incorporation	Equity interest
Name of subsidiary		Principal activities	and business	2017	2016
				%	%

Symphony (Mint) Investment Limited (Formerly Symphony Capital Partners Limited)		Investment holding	Republic of Mauritius	100	100

Symphony International Limited		Investment holding	Republic of Mauritius	100	100

Symphony Investment 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

Thai Education 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

True United Limited	Investment holding		British Virgin Islands	100	100

True Wisdom Limited	Investment holding		British Virgin Islands	100	100

Segovia Holdings Limited	Investment holding		British Virgin Islands	100	100

Anshil Limited	Investment holding		British Virgin Islands	100	100

Buble Holdings Limited	Investment holding		British Virgin Islands	100	100

		Place of
		incorporation	Equity interest
Name of subsidiary	Principal activities	and business	2017	2016
			%	%

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

Bacharach Holdings Limited	Investment holding	British Virgin Islands	100	100

Brahms Holdings Limited	Investment holding	British Virgin Islands	100	100

Schumann Holdings Limited	Investment holding	British Virgin Islands	100	100

Symphony Healthcare Holdings Limited	Investment holding	British Virgin Islands	100	100

Dynamic Idea Investments Limited	Investment holding	British Virgin Islands	100	100

18 Underlying investments

Details of the underlying investments in unquoted equities of the Company are as follows:

		Place of	Ordinary shares		Preference shares
		incorporation	Equity interest		Equity interest
Name	Principal activities	and business	2017	2016	2017	2016
			%	%	%	%

La Finta Limited¹	Property development	Thailand	49	49	-	-

Minuet Limited¹	Property development	Thailand	49.98	49.98	-	-

SG Land Co. Limited¹	Real estate	Thailand	49.91	49.91	-	-

C Larsen (Singapore) Pte Ltd²	Distribution of furniture	Republic of Singapore	49.90	0.1	-	100

Chanintr Living Limited²	Distribution of furniture	Thailand	49.90	0.1	-	-

Chanintr Living (Thailand) Limited	Distribution and retail of furniture and home decorations	Thailand	24.45	0.049	-	-

Chanintr Living Pte Ltd	Distribution and retail of furniture and home decorations	Republic of Singapore	49.90	0.10	-	-

Well Round Holdings Limited²	Property development	Hong Kong	37.5	37.5	-	-

Silver Prance Limited²	Property development	Hong Kong	37.5	37.5	-	-

Desaru Peace Holdings Sdn Bhd²	Property development	Malaysia	-	-	49	49

		Place of	Ordinary shares		Preference shares
		incorporation	Equity interest		Equity interest
Name	Principal activities	and business	2017	2016	2017	2016
			%	%	%	%

Oak SPV Limited	Hospitality and lifestyle	Cayman Islands	13.4	13.4	-	-

Macassar Holdings SARL	Lifestyle	France	49.90	49.90	49.90	49.90

Wellington College International Bangkok International Co. Ltd.	Education	Thailand	40	40	-	-