Half Yearly Report

RNS Number : 8564R

Symphony International Holdings Ltd

31 August 2010

 



31 August 2010

Symphony International Holdings Limited

Interim Financial Results for the six month period ended 30 June 2010

Symphony International Holdings Limited ("SIHL" or the "Company") announces the interim results for the six month period ended 30 June 2010. The condensed consolidated interim financial statements of the Company and its subsidiaries have been prepared in accordance with IAS 34 Interim Financial Reporting and have not been audited or reviewed by the auditors of the Company.

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 lifestyle/real estate sectors, in the Asia-Pacific region.

At 30 June 2010, the issued share capital of the Company was US$302.41 (30 June 2009: US$302.41) million consisting of 338,259,976 (30 June 2009: 338,259,976) ordinary shares.

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

Net Asset Value

The net asset value ("NAV") attributable to the ordinary shares on 30 June 2010 was US$1.0278 (30 June 2009: US$0.8196) per share.  This represented a 3.27 percent increase over the NAV per share of US$0.9953 at 31 December 2009.

Portfolio Overview

The following is an overview of our portfolio as of 30 June 2010:

Minuet Ltd - is a joint venture between SIHL and an established Thai partner for the development of a branded life-style residential and recreational development in Bangkok, Thailand.  SIHL has a direct 49% interest in the venture, the maximum allowable under current regulations, but will be responsible for the design, development and execution of the project.

The value of Minuet Ltd at 30 June 2010 was US$91.7 million (30 June 2009: US$86.9 million) based on an independent third party valuation

Minor International Public Company Limited ("MINT") - SIHL has invested approximately US$80.0 million at 30 June 2010 in MINT, a diversified consumer business listed on the Stock Exchange of Thailand.  Anil Thadani, a director of SIHL, serves on the board of directors for MINT. The fair value of the investment was approximately US$82.3 million as at 30 June 2010 (30 June 2009: US$60.4 million).

MINT is one of the largest hospitality and restaurant companies in the Asia Pacific region with 30 hotels and resorts totalling over 3,565 rooms under prominent brands such as Marriott, Four Seasons and Anantara and others in Thailand, Vietnam, Maldives and South Africa.  MINT  also owns and operates over 1,117 outlets under the Pizza Company, Swensen's, Sizzler, Dairy Queen, Burger King, Thai Express and the Coffee Club.

Following a restructuring /merger with Minor Corporation Public Company Limited ("MINOR") in June 2009, MINT's operations now include MINOR's contract manufacturing and international lifestyle consumer brand distribution business in Thailand focusing on fashion and cosmetics through retail, wholesale and direct marketing channels under brands that include Esprit, Bossini, Red Earth, Bloom, Gap, and Zwilling Henckels amongst others.

Parkway Holdings Limited ("Parkway") - SIHL invested a total of US$54.1 million as at 30 June 2010 (30 June 2009: US$50.1 million) in Parkway. Parkway is Asia's leading healthcare company and operates three hospitals in Singapore as well as radiology, laboratory and primary healthcare businesses. Parkway also has an extensive Asian footprint with operations in Malaysia, India, China and Brunei. Parkway also has a 35.7% interest in Parkway Life Real Estate Investment Trust.  As at 30 June 2010, the fair value of SIHL's investment in Parkway was US$69.8 million (30 June 2009: US$29.4 million).

On 26 July 2010, Khazanah Nasional Berhad ("Khazanah"), the investment holding arm of the Government of Malaysia, through its Singapore-based company, Integrated Healthcare Holdings Ltd, announced it would offer to purchase all the shares it does not own in Parkway at S$3.95 per share (the "Offer"). SIHL has accepted the Offer and the Offer became unconditional on 11 August 2010.  The gross proceeds from the sale is approximately US$77.3 million, based on 30 June 2010 closing exchange rate (see Subsequent Events below for more details).

Parkway Life Real Estate Investment Trust ("P-REIT") - SIHL has invested approximately US$30.2 million (30 June 2009: US$30.2 million) in P-REIT units whose fair value as at 30 June 2010 was US$34.5 million (30 June 2009: US$22.9 million).  P-REIT invests in income generating healthcare-related properties in the Asia-Pacific region including the buildings of Parkway's three Singapore hospitals, which are leased back to Parkway on long leases.  P-REIT is established and managed by Parkway and generates an inflation-linked yield of approximately 6 percent based on current valuations and historic distributions.

SG Land Co. Ltd ("SG Land") is a joint venture company  that owns the leasehold rights for two office buildings in downtown Bangkok - SG Tower and Millenia Tower.  The two buildings in SG Land's portfolio have high occupancy rates and offer attractive rental yields.  SIHL holds 49.9% interest in the venture.

Based on an independent third party valuation carried out on the underlying office buildings held by SG Land,  the fair value of SG Land was approximately US$14.7 million at 30 June 2010 (30 June 2009: US$13.8 million).

One Central Residences Macau - SIHL invested in four high-end residential apartments in a new development in Macau, which was completed in August 2009.

C Larsen Singapore Pte Limited ("C Larsen") - C Larsen is an importer and distributor of high-end U.S. and European furniture brands that include Christian Liaigre, Martha Stewart, Barbara Barry, Baker, Herman Miller, Minotti and Thomasville. The market served by this business is primarily Thailand, but the intent is to grow the business gradually into other parts of Asia.

AFC Network Private Limited ("AFC") - is a 24-hour TV channel broadcasting food and lifestyle programming tailored to audiences in the Asia-Pacific region. This channel began broadcasting in July 2005 and currently airs in Singapore, Hong Kong, Malaysia, Indonesia and the Philippines. 

AFC completed a rights issue in June 2010 that was subscribed to by existing investors to fund working capital requirements through 2011.

Subsequent Events

There are three events subsequent to the 30 June 2010 valuation date, which affect SIHL's NAV and NAV per share:

I.       SIHL accepted the Khazanah Offer as described above and related to Parkway, which became unconditional on 11 August 2010.  If the Offer price of S$3.95 per share is used instead of the 30 June 2010 closing price of Parkway of S$3.57 per share (keeping exchange rates constant), SIHL's 30 June 2010 NAV would increase from US$347,677,450 to US$355,110,450 and NAV per share from US$1.0278 to US$1.0498 or by US$0.0220 per share.

II.      SIHL issued 4,119,490 ordinary shares on 6 August 2010, credited as fully paid, to the Investment Manager, Symphony Investment Managers Limited, increasing the Company's fully paid issued share capital from 338,259,976 ordinary shares to 342,379,466 ordinary shares.  The shares were issued as part of the contractual arrangements with the Investment Manager.  If these shares had been in issue as at 30 June 2010, SIHL's NAV per share would decrease by US$0.0123 per share from US$1.0278 to US$1.0155 per share on that date.

III.    On 8 August 2010, the Group was allocated additional shares related to AFC's rights issue as part of an over allotment.

Outlook

Although we believe markets will continue to remain volatile into 2011, the outlook for our investments remain strong and provide investors with exposure to attractive market segments in Asia.  We continue to evaluate opportunities that we can add most value to and that have potential synergies with out existing investments.

Our portfolio companies experienced an improvement in operating performance during the first half of 2010, which we expect to continue, albeit at a slower pace. Programs initiated to cut costs and improve efficiency following the recent financial crisis have been successful and should benefit operations going forward.

Inflation will likely become an increasing concern in many Asian countries, which will result in incremental interest rate increases and potentially a strengthening of currencies.  Overall, we expect these factors to positively affect SIHL, given its exposure to Asian assets and limited leverage.

Symphony International Holdings Limited and its subsidiaries

Condensed consolidated statement of financial position

as at 30 June 2010

				Re-stated
	Note	30 June 2010	31 December 2009	31 December 2008
		US$'000	US$'000	US$'000
Non-current assets
Interests in joint ventures	6	115,470	111,749	99,560
Investment properties		8,918	8,506	-
Financial assets at fair value through profit or loss	7	186,657	172,649	94,167
Other receivables and prepayments		1,094	1,099	992
		312,139	294,003	194,719
Current assets
Other receivables and prepayments		1,366	1,190	2,593
Cash and cash equivalents		43,513	47,412	60,412
		44,879	48,602	63,005
Total assets		357,018	342,605	257,724
Equity attributable to equity holders of the Company
Share capital		302,408	302,408	302,408
Reserves		51,773	44,636	29,747
Accumulated losses		(6,503)	(10,364)	(78,684)
		347,678	336,680	253,471
Non-controlling interest		202	168	-
Total equity		347,880	336,848	253,471
Non-current liabilities
Amounts due to non-controlling interest (non-trade)		502	505	148
Interest-bearing borrowings (secured)		1,481	1,614	1,888
		1,983	2,119	2,036
Current liabilities
Interest-bearing borrowings (secured)		352	335	288
Financial derivatives		-	-	646
Accrued operating expenses		146	153	149
Other payables		162	163	195
Amount awaiting settlement for purchases of financial assets		2,312	-	-
Amount due to directors		149	-	-
Interest payable		2	2	3
Withholding tax payable		3,960	2,897	914
Current tax payable		72	88	22
		7,155	3,638	2,217
Total liabilities		9,138	5,757	4,253
Total equity and liabilities		357,018	342,605	257,724

Symphony International Holdings Limited and its subsidiaries

Condensed consolidated statement of comprehensive income

for the financial period from 1 January 2010 to 30 June 2010

			Re-stated
	Note	6 months ended 30 June 2010	6 months ended 30 June 2009
		US$'000	US$'000
Revenue		2,461	2,484
Other operating income		7,008	6,416
Other operating expenses		(1,027)	(1,414)
Management fees		(3,967)	(3,967)
		4,475	3,519
Management shares expense		(487)	(353)
Share options expense		(3,740)	(4,881)
Profit before investment results and income tax		248	(1,715)
Fair value changes in financial assets at fair value through profit or loss	7	10,212	(3,288)
Gain on disposal of financial assets at fair value through profit or loss		-	20,666
Reversal of impairment loss on downpayment for purchase of investment properties		-	581
Fair value changes in investment properties		449	-
Fair value changes in investments in joint ventures		(5,811)	1,246
Fair value changes in financial derivatives		-	624
Profit before income tax		5,098	18,114
Income tax expense	8	(1,203)	(1,117)
Profit for the period		3,895	16,997
Other comprehensive income:
Foreign currency translation differences in relation to financial statements of foreign operations		2,910	1,524
Other comprehensive income for the period, net of tax		2,910	1,524
Total comprehensive income for the period		6,805	18,521
Profit attributable to:
Equity holders of the Company		3,861	16,997
Non-controlling interest		34	-
Profit for the period		3,895	16,997
Total comprehensive income attributable to:
Equity holders of the Company		6,771	18,521
Non-controlling interest		34	-
Total comprehensive income for the period		6,805	18,521
Earnings per share:		US Cents	US Cents
Basic	9	1.15	5.02
Diluted		1.14	5.02

Symphony International Holdings Limited and its subsidiaries

Condensed consolidated statement of changes in equity

for the financial period from 1 January 2010 to 30 June 2010

	Share capital	Equity compensation reserve	Foreign currency translation reserve	Accumulated losses	Total attributable to owners of the Company	Non-controlling interests	Total equity
	US$'000	US$'000	US$'000	US$'000	US$'000	US$'000	US$'000
Re-stated
At 1 January 2009	302,408	33,141	(3,394)	(78,684)	253,471	-	253,471
Value of services received for issue of management shares	-	353	-	-	353	-	353
Value of services received for issue of share options	-	4,881	-	-	4,881	-	4,881
Total comprehensive income for the period	-	-	1,524	16,997	18,521	-	18,521
At 30 June 2009	302,408	38,375	(1,870)	(61,687)	277,226	-	277,226
At 1 January 2010	302,408	44,277	359	(10,364)	336,680	168	336,848
Value of services received for issue of management shares	-	487	-	-	487	-	487
Value of services received for issue of share options	-	3,740	-	-	3,740	-	3,740
Total comprehensive income for the period	-	-	2,910	3,861	6,771	34	6,805
At 30 June 2010	302,408	48,504	3,269	(6,503)	347,678	202	347,880

Symphony International Holdings Limited and its subsidiaries

Condensed consolidated statement of cash flows

for the financial period from 1 January 2010 to 30 June 2010

			Re-stated
	Note	6 months ended 30 June 2010	6 months ended 30 June 2009
		US$'000	US$'000
Cash flows (used)/from operating activities
Profit before income tax		5,098	18,114
Adjustments for:
Exchange differences		3	-
Dividend income		(2,461)	(2,484)
Interest income		(6,689)	(6,417)
Interest expense		46	56
Fair value changes in financial derivatives		-	(624)
Fair value changes in investments in joint ventures		5,812	(1,246)
Fair value changes in investment properties		(449)	-
Impairment loss on downpayment for investment properties		-	(581)
Fair value changes in financial assets at fair value through profit or loss		(10,212)	3,288
Profit on sales of listed investments		(319)	(20,666)
Non-recoverable debts		-	99
Proposed deals expenses		-	72
Management shares expense		486	353
Share options expense		3,740	4,881
		(4,945)	(5,155)
Changes in working capital:
Decrease/(Increase) in other receivables and prepayments		27	(375)
Increase in other payables and accrued operating expenses		142	383
Cash used in operations		(4,776)	(5,147)
Dividend received (net of withholding tax)		2,342	1,760
Interest received (net of withholding tax)		162	129
Income taxes paid		(109)	-
Net cash used in operating activities		(2,381)	(3,258)
Cash flows from investing activities
Purchase of financial assets at fair value through profit or loss		(1,362)	(1,361)
Profit on sales of listed investment		319	-
Loans to an investee company		(160)	-
Repayment of loans by investee company		-	406
Investments in joint ventures		(527)	(549)
Repayment of loans by joint ventures		387	-
Net cash used in investing activities		(1,343)	(1,504)
Balance carried forward		(3,724)	(4,762)

Symphony International Holdings Limited and its subsidiaries

Condensed consolidated statement of cash flows

for the financial period from 1 January 2010 to 30 June 2010

Consolidated statement of cash flows (cont'd) for the six months ended 30 June 2010
			Re-stated
		6 months ended 30 June 2010	6 months ended 30 June 2009
		US$'000	US$'000
Balance brought forward		(3,724)	(4,762)
Cash flows from financing activities
Interest paid		(47)	(57)
Repayment of borrowings		(169)	(146)
Net cash used in financing activities		(216)	(203)
Net decrease in cash and cash equivalents		(3,940)	(4,965)
Cash and cash equivalents at beginning of period		47,412	60,412
Effect of exchange rate fluctuations		41	(20)
Cash and cash equivalents at end of the period		43,513	55,427

Cash and cash equivalents for the purpose of the condensed consolidated statement of cash flows include bank overdraft.

Symphony International Holdings Limited and its subsidiaries

Notes to the condensed consolidated interim financial statements

for the financial period from 1 January 2010 to 30 June 2010

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

1       REPORTING ENTITY

Symphony International Holdings Limited (the "Company") is a company domiciled in the British Virgin Islands.  The condensed consolidated interim financial statements of the Company as at and for the 6 months ended 30 June 2010 comprise the Company and its subsidiaries (together referred to as the "Group").

The consolidated financial statements of the Group as at and for the year ended 31 December 2009 are available upon request from the Company's registered office at P.O. Box 957, Offshore Incorporations Centre, Road Town, Tortola, British Virgin Islands.

2       STATEMENT OF COMPLIANCE

These condensed consolidated interim financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting.  They do not include all of the information required for full annual financial statements, and should be read in conjunction with the consolidated financial statements of the Group as at and for the year ended 31 December 2009.

These condensed consolidated interim financial statements were approved by the Board of Directors on 31 August 2010.

3       SIGNIFICANT ACCOUNTING POLICIES

The accounting policies applied by the Group in these condensed consolidated interim financial statements are the same as those applied by the Group in its consolidated financial statements as at and for the year ended 31 December 2009.

The Group early adopted IFRS 9 Financial Instruments ("IFRS 9") for the first time from 12 November 2009 in its consolidated financial statements for the year ended 31 December 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 ("IAS 39").

Comparative information has been re-presented so that it is in conformity with the revised standard.

The impact on the condensed consolidated statement of comprehensive income for the six months ended 30 June 2009 as a result of applying IFRS 9 is as follows:

	30 June 2009	Adjustment	30 June 2009
	Pre IFRS 9
	US$'000	US$'000	US$'000
Fair value changes in financial assets at fair value through profit or loss	(2,335)	(953)	(3,288)
Profit before income tax	19,067	(953)	18,114
Profit for the period	17,950	(953)	16,997
Other comprehensive income/(expense)     for the period, net of tax	(953)	953	-
Profit attributable to equity holders of the     Company	17,950	(953)	16,997
Profit attributable to non-controlling interest	-	-	-
Profit for the period	17,950	(953)	16,997
Total comprehensive income for the period	18,521	-	18,521

The impact on the condensed consolidated statement of financial position at 31 December 2009 from reclassifying financial assets as a result of applying IFRS 9 is as follows:

	31 December 2009	Adjustment	31 December 2009
	Pre IFRS 9
	US$'000	US$'000	US$'000
Non-current assets
Available-for sale financial assets	172,649	(172,649)	-
Financial assets at fair value through profit or loss	-	172,649	172,649
Equity attributable to equity holders of the Company
Reserves	112,682	(68,046)	44,636
Accumulated losses	(78,410)	68,046	(10,364)
Total assets	342,605	-	342,605

The impact on the opening condensed consolidated statement of financial position at
31 December 2008 from reclassifying financial assets as a result of applying IFRS 9 is as follows:

	31 December 2008	Adjustment	31 December 2008
	Pre IFRS 9
	US$'000	US$'000	US$'000
Non-current assets
Available-for sale financial assets	94,167	(94,167)	-
Financial assets at fair value through profit or loss	-	94,167	94,167
Equity attributable to equity holders of the Company
Reserves	42,042	(12,295)	29,747
Accumulated losses	(90,979)	12,295	(78,684)
Total assets	257,724	-	257,724

The impact on the condensed consolidated statement of changes in equity at 30 June 2009 from reclassifying financial assets as a result of applying IFRS 9 is as follows:

	30 June 2009	Adjustment	30 June 2009
	Pre IFRS 9
	US$'000	US$'000	US$'000
Fair value reserve	11,342	(11,342)	-
Accumulated losses	(73,029)	11,342	(61,687)

The change in accounting policy has an impact on the basic earnings per share and diluted earnings per share for the six months ended 30 June 2009.

	30 June 2009	Adjustment	30 June 2009
	Pre IFRS 9
	US Cents	US Cents	US Cents
Basic earnings per share	5.31	(0.29)	5.02
Diluted earnings per share	5.31	(0.29)	5.02

In accordance with the transitional provisions of IFRS 9, the Group has elected to restate its prior year comparatives.

Reclassification of financial assets at the date of initial application of IFRS 9

The Group has applied IFRS 9 retrospectively as though it had always applied.

Available-for-sale financial assets as they were previously classified in accordance with IAS 39 are now classified as financial assets at fair value through profit or loss under IFRS 9. All changes in their fair value are recognised in profit or loss as fair value changes in financial assets at fair value through profit or loss under IFRS 9.

Previously in accordance with IAS 39, changes in fair value were recognised directly in the fair value reserve in equity, except for impairments that were recognised directly in profit or loss in the condensed consolidated statement of comprehensive income.

Interests in joint ventures were previously classified as designated as fair value through profit or loss in accordance with IAS 39 and are now classified as fair value through profit or loss in accordance with IFRS 9.  All changes in their fair value are recognised as fair value changes in financial assets at fair value through profit or loss in accordance with IFRS 9.

Previously in accordance with IAS 39, changes in fair value were recognised in profit or loss in the condensed consolidated statement of comprehensive income as fair value changes in joint ventures.

4       Estimates

The preparation of consolidated interim financial statements in conformity with International Financial Reporting Standards requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense.  Actual results may differ from these estimates.

In preparing these condensed consolidated interim financial statements, the significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements as at and for the year ended 31 December 2009.

5       FINANCIAL RISK MANAGEMENT

The Group's financial risk management objectives and policies are consistent with that disclosed in the consolidated financial statements as at and for the year ended 31 December 2009.

6       interests in joint ventures

During the financial period ended 30 June 2010, the Group subscribed to a rights issue in a joint venture, AFC Network Private Limited.

7       Financial assets at fair value through profit or loss

During the financial period ended 30 June 2010, the Group recognised a gain in financial assets at fair value through profit or loss of US$10,211,881. The fair value gain comprised an impairment loss during the period related to shares held in Minor International Public Company Limited ("MINT") of US$7,014,986, a fair value gain related to warrants held in MINT of US$1,621,063, a fair value gain in shares related to Parkway Holdings Limited of US$12,279,641 and a fair value gain in units related to Parkway Life Real Estate Investment Trust of US$3,326,163.

During the period, the Group received bonus warrants from MINT on the basis of one warrant for every 10 shares held in MINT. The total number of warrants allocated to the Group amounted to 25,893,753.

8       INCOME TAX EXPENSE

		6 months ended 30 June 2010	6 months ended 30 June 2009
Current period		US$'000	US$'000
Foreign withholding tax		1,110	1,110
Income tax expense		93	7
		1,203	1,117

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 at fair value through profit or loss are located, and Mauritius, the country of incorporation of the subsidiary which holds these financial assets at fair value through profit or loss, 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.

The Group also has not recognised deferred tax assets amounting to US$49,000
(31 December 2009: US$66,000) on taxable losses of US$288,000 (31 December 2009: US$338,000) as it is not probable that future taxable profits will be available against which the losses  can be utilised. The tax losses do not expire under current legislation.

9       earnings PER SHARE

			Re-stated
		6 months ended 30 June 2010	6 months ended 30 June 2009
		US$'000	US$'000
Basic and diluted earnings per share are based on:
Net profit for the period attributable to equity holders of the Company		3,895	16,997
		Number of shares	Number of shares
Weighted average number of shares (basic and diluted)
-  Outstanding during the period		338,259,976	338,259,976

For the purpose of calculation of the diluted earnings per share, the weighted average number of shares in issue is adjusted to take into account the dilutive effect arising from the dilutive warrants, share options and contingently issuable shares, with the potential shares weighted for the period outstanding.

The effect of the exercise of warrants and issue of contingently issuable shares on the weighted average number of shares in issue is as follows:

		Number of shares	Number of shares
Weighted average number of shares (diluted)
-  Weighted average number of shares (basic)		338,259,976	338,259,976
-  Effect of contingently issuable management shares		4,119,490	-
		342,379,466	338,259,976

As at 30 June 2010 and 30 June 2009, outstanding warrants to subscribe for 108,565,365 new ordinary shares of no par value at an exercise price of US$1.25 each and outstanding share options to subscribe for 82,782,691 ordinary shares of no par value at an exercise price of US$1 have not been included in the computation of diluted earnings per share because these warrants and share options were anti-dilutive.  In addition, dilutive contingently issuable shares of up to  6,179,236 ordinary shares of no par value have not been taken into consideration in the determination of diluted earnings per share because the conditions have not been satisfied as at 30 June 2010.  Dilutive issuable shares of 4,119,490 ordinary shares of no par value have been included in the weighted average number of shares as they would be issuable as at 30 June 2010 based on the status as at that date.

10     Operating segments

The Group has 5 operating segments as described below, which are identified based on the sectors in which the Group's investments are made.  The individual investments in each of these sectors are managed separately and internal management reports on these investments are reviewed by the Investment Manager on a regular basis.

Healthcare                                   Includes investments in Parkway Holdings Limited and Parkway Life Real Estate Investment Trust, in addition to capitalised expenses associated with a new healthcare project in Asia

Hospitality                                    Includes investment in 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 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 on reportable segments

	Healthcare	Hospitality	Lifestyle	Lifestyle/  real estate	Cash and temporary investments	Consolidated
	US$'000	US$'000	US$'000	US$'000	US$'000	US$'000
6 months ended 30 June 2010
Investment income
-  Dividend income	1,270	1,191	-	-	-	2,461
-  Interest income	-	-	10	6,632	47	6,689
-  Realised gain	-	319	-	-	-	319
-  Reclassification adjustment for gains included in profit or loss	-	-	-	-	-	-
-  Unrealised gain in profit or loss	15,606	1,621	-	493	-	17,720
-  Unrealised gain in other comprehensive income*	-	-	-	-	-	-
	16,876	3,131	10	7,125	47	27,189
Investment loss
-  Unrealised loss in profit or loss	-	(7,015)	(271)	(5,584)	-	(12,870)
-  Unrealised loss in other comprehensive income*	-	-	-	-	-	-
	-	(7,015)	(271)	(5,584)	-	(12,870)
Net investment results	16,876	(3,884)	(261)	1,541	47	14,319
Re-stated
6 months ended 30 June 2009
Investment income
-  Dividend income	919	1,565	-	-	-	2,484
-  Interest income	-	-	9	6,393	15	6,417
-  Realised gain	-	-	-	20,666	-	20,666
-  Reclassification adjustment for gains included in profit or loss	-	-	-	(10,319)	-	(10,319)
-  Unrealised gain in profit or loss	11,342	-	-	3,472	-	14,814
-  Unrealised gain in other comprehensive income*	-	-	-	-	-	-
	12,261	1,565	9	20,212	15	34,062
Investment loss
-  Unrealised loss in profit or loss	-	(2,335)	-	(3,621)	-	(5,956)
-  Unrealised loss in other comprehensive income*	-	-	-	-	-	-
	-	(2,335)	-	(3,621)	-	(5,956)
Net investment results	12,261	(770)	9	16,591	15	28,106

	Healthcare	Hospitality	Lifestyle	Lifestyle/ real estate	Cash and temporary investments	Consolidated
	US$'000	US$'000	US$'000	US$'000	US$'000	US$'000
30 June 2010
Segment assets	104,367	82,289	10,071	116,436	43,513	356,676
31 Dec 2009
Segment assets	84,965	87,683	9,811	112,528	47,412	342,399

* The unrealised gain/loss and fair value changes recognised in other comprehensive income in the management reporting above have been recognised in profit or loss in the financial statements upon early adoption of IFRS 9.

The reportable operating segments derive their revenue primarily by achieving returns, consisting of dividend income, interest income and appreciation in fair value.  The Group does not monitor the performance of the investments by measure of profit or loss.

Reconciliations of reportable segment profit or loss and assets

		30 June 2010	30 June 2009
		US$'000	US$'000
Profit or loss
Net investments results		14,319	28,106
Unallocated amounts:
-   Other corporate income		-	-
-   Other corporate expenses		(7,514)	(9,585)
Consolidated profit for the period		6,805	18,521
		30 June 2010	31 December 2009
		US$'000	US$'000
Assets
Total assets for reportable segments		356,676	342,399
Other assets		342	206
Consolidated total assets		357,018	342,605

11  Significant Related Party Transactions

For the purposes of these condensed consolidated interim 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 period ended 30 June 2010, directors' fees amounting to US$148,767 (30 June 2009: US$148,767) 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

During the financial period ended 30 June 2010, the Group recognised interest income received/receivable from joint ventures totalling US$6,611,789 (2009: US$6,363,038).

Pursuant to the Investment Management and Advisory Agreement, the Investment Manager will provide investment management and advisory services exclusively to the Group.  Details of the remuneration of the Investment Manager are disclosed in the consolidated financial statements as at and for the year ended 31 December 2009.  During the financial period ended 30 June 2010, management fee amounting to US$3,967,123 (30 June 2009: US$3,967,123) paid/payable to the Investment Manager has been recognised in the condensed consolidated interim financial statements.

Pursuant to Schedule 2 of the Investment Management and Advisory Agreement, as amended, the Investment Manager was to be granted 82,782,691 (30 June 2009: 82,782,691) share options to subscribe for ordinary shares at US$1 each on the first anniversary of the date of admission.  The share options vest and became exercisable by the Investment Manager in five equal tranches over a period of five years beginning from the date of grant and expire on the tenth anniversary of the date of grant. 

In addition, the Investment Manager will become eligible to be issued with management shares of up to 10,298,726 (30 June 2009: 10,298,726) ordinary shares in the Company.  Up to 20% of the management shares will become eligible to be issued at the first quarter end date following each anniversary of the admission, provided certain conditions are met.

Other than as disclosed elsewhere in the condensed consolidated interim financial statements, there were no other significant related party transactions during the 6 months periods ended
30 June 2010 and 30 June 2009.

12  commitments

In July 2008, the Group entered into a shareholders' agreement and invested THB2,627.5 million (US$78.7 million equivalent at July 2008) in a joint venture to part finance the acquisition of a plot of land in Bangkok, Thailand.  The joint venture has an option to acquire an adjoining plot of land for a consideration of THB580.9 million (US$17.9 million equivalent at 30 June 2010).  The Group has committed to contribute to such capital increase pro rata in proportion to its shareholding at such time when the decision is made to fund additional project financing by means of capital increase in respect of the development of the adjoining plot of land.

In September 2008, the Group entered into a loan agreement with a joint venture to grant loans totalling THB140 million (US$4.3 million equivalent at 30 June 2010) to the latter in accordance with the terms as set out therein.  As at 30 June 2010, THB120 million (US$3.7 million equivalent at 30 June 2010) has been drawdown by the joint venture. The Group is committed to grant the remaining loan amounting to THB20 million (US$0.6 million equivalent at 30 June 2010) to the joint venture, subject to terms set out in the agreement.

13  subsequent events

There are three events subsequent to the 30 June 2010 valuation date, which affect SIHL's NAV and NAV per share:

I.       SIHL accepted the Khazanah Offer as described above and related to Parkway, which became unconditional on 11 August 2010.  If the Offer price of S$3.95 per share is used instead of the 30 June 2010 closing price of Parkway of S$3.57 per share (keeping exchange rates constant), SIHL's 30 June 2010 NAV would increase from US$347,677,450 to US$355,110,450 and NAV per share from US$1.0278 to US$1.0498 or by US$0.0220 per share.

II.      SIHL issued 4,119,490 ordinary shares on 6 August 2010, credited as fully paid, to the Investment Manager, Symphony Investment Managers Limited, increasing the Company's fully paid issued share capital from 338,259,976 ordinary shares to 342,379,466 ordinary shares.  The shares were issued as part of the contractual arrangements with the Investment Manager.  If these shares had been in issue as at 30 June 2010, SIHL's NAV per share would decrease by US$0.0123 per share from US$1.0278 to US$1.0155 per share on that date.

III.    On 8 August 2010, the Group was allocated additional shares related to the AFC Network Private Limited's rights issue as part of an over allotment.

 Directors' Responsibility Statement

We the directors of Symphony International Holdings Limited confirm that to the best of our knowledge:

(a)   the condensed consolidated interim financial statements have been prepared in accordance with IAS 34 - Interim Financial Reporting; and

(b)   the interim financial results include a fair review of information required by:

        (i)    DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year and their impact on the financial statements, and a description of the principal risks and uncertainties for the remaining six months of the year; and

        (ii)    DTR 4.2.8R of the Disclosure and Transparency Rules, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the entity during that period, and any changes in the related party transactions described in the last annual report that could do so.

For and on behalf of the Board

Pierangelo Bottinelli

Chairman

For further information, please contact:

Sunil Chandiramani - Symphony Asia Limited (Tel: [phone])

Not for distribution, directly or indirectly, in or into the United States or any jurisdiction in which such distribution would be unlawful.

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.

End of Announcement

 

END

 

 

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