SYM PHO NY IN TE RNATIO NAL
HOLDIN GS LIM IT E D
A N NUAL REPOR T 2019
CONTENTS
01
CORPORATE
PROFILE
05
HOSPITALITY
08
02
THE ASIAN
ECONOMIC ENGINE
06
LIFESTYLE
09
04
HEALTHCARE
07
REAL ESTATE
10
EDUCATION
LOGISTICS
OTHER OPPORTUNITIES
11
CHAIRMEN’S
STATEMENT
30
DIRECTORS’
REPORT
14
FINANCIAL
HIGHLIGHTS
32
DIRECTORS’
RESPONSIBILITY
STATEMENT
16
INVESTMENT
MANAGER’S REPORT
33
CORPORATE
INFORMATION
28
BOARD OF
DIRECTORS
36
FINANCIAL
STATEMENTS
CORPORATE PROFILE
1
As a consequence, and in contrast to traditional
private equity firms, our decisions on investing
and divesting are not influenced by restricted
time frames. We believe that comprehensive
analysis and a conservative investment
approach will benefit investors seeking
exposure to Asia.
Typically, we invest in businesses that require
growth capital for later- stage development
and expansion, management buy-outs/buy-
ins, leveraged buy-outs, restructurings and
special situations. Where we see a special
opportunity, we may also invest a smaller
portion of our investment capital in earlier-
stage businesses. In addition, and unlike
most private equity businesses, we invest in
real estate development: we develop projects
designed to appeal to the evolving lifestyles
of Asia’s increasingly wealthy demographic.
Our shares are traded on the London Stock
Exchange’s standard listing category.
Symphony International Holdings Limited
(the “Company”, “SIHL” or “Symphony”) is a
strategic investment company that specialises
in long-term investments that benefit from
rapidly expanding consumer-driven markets
in Asia. The Company is managed by one
of the most experienced and established
investment teams.
We primarily invest in high-growth sectors that
include healthcare, hospitality and lifestyle
(including branded real estate developments),
logistics and education. We believe these
sectors will benefit from comparatively faster
rising incomes and changing demographics
across Asia. Within these sectors, we seek
investment opportunities that have strong
potential to increase in value, and that are
less susceptible to economic cycles. These
may be due to sector-based competitive
advantages through a focus on a particular
demographic. Our focus is to create enduring
business partnerships with strong management
teams and talented entrepreneurs to generate
value for shareholders over the long term.
Our business is structured as a permanent
capital vehicle to provide flexibility and where
necessary, to take a long-term view of our
investments.
81
83
NOTICE OF ANNUAL
GENERAL MEETING
ANNUAL GENERAL
MEETING | FORM OF
DIRECTION
85
PROXY FORM
ANNUAL REPORT 2019 2
THE ASIAN
ECONOMIC ENGINE
“ASIA IS ON TRACK
TO TOP 50 PERCENT
OF GLOBAL GDP
OUTPUT AND DRIVE
40% OF THE WORLD’S
CONSUMPTION
BY 2040”
Taking a long-term view of our investments,
Symphony focuses on strategically
investing in high-growth businesses that
benefit from the rising disposable incomes
of Asia’s growing population. This hinges
on our view that Asia is the future.
Despite an uncertain near-term macro-
outlook, with concerns over Brexit, US-
China trade relations, and the evolving
Covid-19 situation, Asia is continuing its
trajectory as the world’s fastest growing
region, accounting for more than two-
thirds of global growth in 2019 alone.1
While economists, political scientists, and
politicians continue to debate the impact
of ongoing US-China trade relations and
growth scenarios across Asia’s diverse
economies – it is without doubt that
accumulated wealth within the region
continues to drive new innovation and
industries, fuelling incremental growth in
discretionary consumer spending.
As of 2000, Asia made up for just under
one-third of global GDP value in terms of
purchasing power parity, and by 2040 it
is expected to not only top 50% of GDP
but also be responsible for 40% of the
world’s consumption.2
This boost comes predominantly as a
result of the rapidly rising middle-class
– a segment that has quickly forged an
engine of growth, driving both regional
demand as well as consumption. According
to OECD forecasts, Asia will represent
66% of the global middle-class population
and 59% of middle-class consumption
by 2030, compared to 28% and 23%
respectively in 2009.3
By 2030, middle class spending in China
and India alone are anticipated to account
for US$14.1 trillion and US$12.3 trillion,
with more people being able to afford to live
and spend comfortably.4 It is notable that
this class seeks to spend their money on
goods and services which were previously
not available to them – including, but not
limited to better education, healthcare, and
lifestyle elements such as more diverse
food and beverage options.
IMF Country Focus, “Prolonged Uncertainty Weighs on Asia’s Economy”, 22 October 2019
1
2 Oliver Tonby, Jonathan Woetzel, Wonsik Choi, Jeongmin Seong, Patti Wang, “McKinsey Global Institute: Asia’s future is now”, McKinsey & Company, July 2019 (p2)
3 Mario Pezzini, “An emerging middle class”, OECD Observer, 2012
4 Homi Kharas and Kristofer Hamel, “A global tipping point: Half the world is now middle class or wealthier”, Brookings Institution, 27 September 2018
SYMPHONY INTERNATIONAL HOLDINGS LIMITED
3
WORLD ECONOMIC OUTLOOK UPDATE
GROWTH PROJECTIONS
3.3
3.4
2.9
1.7
1.6
1.6
4.4
4.6
3.7
2019
2020
2021
2019
2020
2021
2019
2020
2021
Global Economy
Advanced Economies
Emerging Markets &
Developing Economies
International Monetary Fund, World Economic Outlook Update, January 2020
Regional consumer spend increased
through 2019, creating some of the
world’s largest startups in the region – as
of late 2019, Asia hosted over one-third
of global unicorn companies, which
are valued at over US$1 billion. At the
end of 2018 there were 115 unicorns
in Asia and this number grew to 140 by
September 2019.5 10 of the 23 global
unicorn companies valued over US$10
billion, are spread across China, India,
Indonesia, and Singapore.6
Many of these Asian unicorns focus on
providing services for which there is rising
demand. According to McKinsey, 71% of
investment going into these startups comes
from within the region – as intraregional
flows expand and the larger regional tech
companies such as Alibaba, Tencent,
Baidu and Softbank increasingly grow
into corporate venture capital behemoths.
With this rising demand, 60% of goods
traded within the region are between
intraregional economies, while 74%
of air travellers are also those moving
within the region.7 These cash flows are
creating powerful new hubs, increasing
opportunities for inter-Asia mobility and
new opportunities for investment.
However, it is important to note that more
recent, unanticipated global events, such
as the Covid-19 pandemic, may impact
the economic and investment outlooks as
the tangible impact of the virus remains
to be fully understood.
Symphony is primarily engaged in
investing in businesses that benefit from
rising incomes, increasing trade and
changing demographics across Asia.
As at 31 December 2019, our portfolio
companies collectively managed, operated
or partnered in the following:
• 15,000 licensed hospital beds in 80
tertiary hospitals
• 33 secondary healthcare facilities
• 78,360 rooms in 535 hotels
• 2,377 food & beverage outlets
• 522 retail outlets
• 27,500 square meters of prime
commercial and office space
• 850,000 square meters of developable
land
Shintya Felicitas, “Asia unicorns: A list to watch”. Asia Fund Managers, 9 October 2019
5
6 Data from The Global Unicorn Club, CB Insights
7 Oliver Tonby, Jonathan Woetzel, Wonsik Choi, Karel Eloot, Rajat Dhawan, Jeongmin Seong, Patti Wang, “McKinsey Global Institute: The future of Asia”, September 2019 (p2)
ANNUAL REPORT 2019
4
HEALTHCARE
“GLOBAL HEALTH SPENDING CONTINUES
TO GROW FASTER THAN THE ECONOMY”
Asia is currently undergoing a healthcare
transformation – spurred by demographic
changes and demands, along with a higher
per capita income and government ambitions to
create more accessibility. Global health spending
continues to grow faster than the economy; between
2000 and 2017, this spending saw a 3.9% annual
rise versus 3.0% economic growth in most fast-growing
economies.8 While the region’s healthcare markets remain
diverse and complex in terms of infrastructure and regulatory
environment, higher incomes are creating new demand for
health products and services previously inaccessible to most.
Symphony’s investment management team has been investing
in the Asian healthcare business for over 24 years and has
deep knowledge of the sector across the region. In 2019,
Symphony’s investment portfolio included three investments
within the health sector: IHH Healthcare Berhad (“IHH”),
one of the region’s largest healthcare providers; Soothe
Healthcare Private Limited (“Soothe”), a feminine hygiene
products manufacturer and distributor in India; and ASG
Hospital Private Limited (“ASG”), a full-service eye-healthcare
provider with operations in India, and with a presence in
Africa and Nepal.
Symphony invested approximately US$50 million in Integrated
Healthcare Hastaneler Turkey Sdn Bhd (“IHT”) in February
2012, that was converted into shares in IHH at the time of
IHH’s initial public offering later the same year. IHH’s broad
footprint of healthcare assets included Parkway Holdings
Limited, Pantai Holdings Berhad, International Medical
University, Acibadem Saglik Yatrimlari Holding A.S. and Fortis
Healthcare Limited, operating across Asia, as well as Turkey,
Abu Dhabi, Central and Eastern Europe; employing 55,000
people and operating 15,000 licensed beds in 80 hospitals
globally. Subsequent to the 2019 financial year, Symphony
exited its holdings in IHH through a series of partial sales
initiated in 2015. Symphony generated an annualized return
over approximately eight years of 11.2%, or 1.8 times the
cost of investment.
Operating within the rapidly growing fast-moving consumer
goods (“FMCG”) segment in India, Soothe is an investment
made in June 2019. Manufacturing and distributing under
the ‘Paree’ and ‘Pariz’ brand names, Soothe caters to the
growing promotion of, and demand for, women’s hygiene
products in India. The business has been growing rapidly
with sales for the year ending 31 March, 2020 increasing
approximately three times over the prior year.
Symphony invested in ASG in the third quarter of 2019. ASG
provides a full range of eye-healthcare services, including
outpatient consultation and a full suite of inpatient procedures
(cataract, retina surgeries, Lasik, glaucoma, cornea and
other complicated eye surgeries), as well as an optical and
pharmacy business internal to the clinics.
Healthcare in Asia remains an attractive sector that will
continue to benefit from rising disposable incomes, and a
sector in which Symphony will continue to explore opportunities
to add to its portfolio.
8 Global spending on health: a world in transition. Geneva: World Health Organization; 2019 (WHO/HIS/HGF/HFWorkingPaper/19.4). Licence: CC BY-NC-SA 3.0 IGO; p ix
SYMPHONY INTERNATIONAL HOLDINGS LIMITED HOSPITALITY
5
“SYMPHONY’S INVESTMENT MANAGEMENT TEAM HAS BEEN
ASSOCIATED WITH MINT FOR OVER 30 YEARS”
With more disposable income to spend, Asia’s travel market,
both regional and international, has quickly risen to become
one of the world’s largest. In the first eight months of 2019,
trips abroad from Asia rose 6% following a full-year increase
of 7% in 2018.9 The direct contribution of Asian tourism to
overall GDP in the region is expected to hit US$1.8 trillion by 2030,
more than 11.5% of Asia’s GDP.10 This growing trend towards
increasing business and luxury travel has prompted increased
demand for higher quality hospitality assets and services.
Symphony’s primary investment in the hospitality sector is
through Minor International Public Company (“MINT”), one
of Asia’s largest hospitality and retail businesses. As at 31
December 2019, MINT had 78,360 rooms in 535 hotels, with
2,377 food and beverage outlets across the region. In 2019,
Symphony made some partial exits in Minor, generating net
proceeds of US$19.3 million. The annualised return and
times the cost of investment from these sales were 16.75%
and 5.4 times, respectively.
However, despite the impressive growth of the hospitality
sector in recent years, the impact of Covid-19 is likely to be
significant in the near term. Low occupancy rates as people
refrain from travel, and the mandated closure of businesses
during the outbreak, will inevitably affect this sector.
IPK World Travel Monitor®, Asia remains the largest tourism growth market, 17 October 2019
9
10 DBS Group Research, Asia 2030 Insight SparX Travel and Consumption, 25 July 2018, p1
ANNUAL REPORT 2019
6
LIFESTYLE
“ASIA’S RISING NET WEALTH IS DRIVING
SPENDING TO ACHIEVE AN INCREASINGLY
HIGHER QUALITY OF LIFESTYLE”
Higher disposable incomes have
empowered the growing Asian
middle-class consumer to spend,
for example, on discretionary goods
and services, such as cars, luxury
goods, dining out, and travel. The
Asia Pacific region alone is said to
be responsible for 90% of the 2.4
billion new members of the middle
class entering the global economy,
as it shifts toward contributing 60%
of global growth by 2030.11
Between 2000 and 2019, emerging
economies saw their share of global
wealth grow from 9% to 29%, and it is
expected these economies will account
for 31% of global wealth by 2024.12 As of
mid-2019, the Asia Pacific region accounted
for almost 39.1% of an estimated total global
wealth of US$360.6 trillion – driven by China’s
287% rise in high net worth individuals,
accounting for 46.7% of Asia’s wealthiest.13
This increasing net worth is spurring spending,
as this segment chooses to achieve a higher
quality of lifestyle than before.
Symphony’s three investments in the lifestyle
sector include the Wine Connection Group
(“WCG”), Liaigre Group (”Liaigre”) and CHANINTR
(“Chanintr”).
WCG is the largest owner and operator of wine
related food and beverage outlets in Southeast
Asia. As of the end of 2019, WCG had 82 outlets
in four markets across the region.
Established in 1985, French luxury interior
architecture and furniture brand, Liaigre is known
for discreet luxury. The brand has 26 showrooms
around the world and is focusing on Asia expansion.
Liagre’s ateliers in Asia now extend to Singapore,
Shanghai, Bangkok and Seoul.
Chanintr focuses on the import and distribution
of high-end US and European furniture brands
through retail outlets – the portfolio of products
currently includes Liaigre, Herman Miller and
Minotti, among others. Additionally, the firm has
a food and beverage franchise, operating New
York’s Clinton Street Baking Company in select
Asian markets.
11 Praneeth Yendamuri and Zara Inglizian, “In 2020 Asia will have the world’s largest GDP. Here’s what that means”, 20 December 2019
12 Credit Suisse. “Why wealth matters. The Global wealth report”, 2019. p.37
13 The Asian Banker, Chris Georgiou. “China increases number of HNWIs in Asia Pacific”, 4 December 2019
SYMPHONY INTERNATIONAL HOLDINGS LIMITED REAL ESTATE
7
“REAL ESTATE IS INCREASINGLY LINKED
TO GROWING FORTUNES ACROSS ASIA”
Historically viewed as a key asset class for
wealth preservation, and among high net worth
individuals, real estate is increasingly linked to
growing fortunes across the region. During 2019,
intraregional flows reached a record US$34.3
billion, almost triple the amount for the same
period a decade ago.14
This joint venture development is with the
Malaysian affiliate of Themed Attractions Resorts
& Hotels Sdn Bhd, a hotel and destination resort
investment subsidiary of the Malaysian sovereign
wealth fund Khazanah Nasional Berhad. The One
& Only development will include a clubhouse,
46 suites, and 52 villas when fully complete.
Symphony’s real estate portfolio investments
include interests in SG Land Co. Ltd. (“SG
Land”), Minuet Limited (“Minuet”), Desaru Peace
Holdings Sdn. Bhd. (“DPH”), and a Niseko
Property Joint Venture (“NPJV”).
SG Land and Minuet are joint-venture holdings
with real estate holdings in Bangkok, Thailand.
SG Land owns the leasehold rights for two
commercial buildings in central Bangkok, with
over 27,500 square metres of lettable space.
Minuet holds a land bank of approximately
400,000 square metres that is currently being
held for development and/or sale.
In the second quarter of 2020, DPH is preparing
to launch a new luxury real estate development
in southeastern Malaysia, to be operated by One
& Only Resorts – their first in Southeast Asia.
At the end of 2019, NPJV entered into transaction
agreements that involve a partial sale of
land and a new joint venture to co-develop
another part of the land with Hanwha Hotels
& Resorts. NPJV will retain approximately
a third of the land site for future sale
and/or development. As a result of the
partial sale of land, the fair value of
Symphony’s interest in NPJV increased
at 31 December 2019, implying an
annualized return and times the original
cost of investment of 27.2% and 3.7
times, respectively.
Symphony continues to explore the
exciting new opportunities in the
real estate sector across the region
while continuing to monetize mature
investments.
14 PwC and the Urban Land Institute, Emerging Trends in Real Estate® Asia Pacific 2019. Washington, D.C.: PwC and
the Urban Land Institute, 2018. p.23
ANNUAL REPORT 2019 8
EDUCATION
“WITH
REGIONAL
DISPOSABLE
INCOME OF
US$300 BILLION,
ASIA’S GROWING
MIDDLE CLASS
IS DEMANDING
BETTER QUALITY
EDUCATION”
The middle class segment across Indonesia, Malaysia, the Philippines, Thailand, and
Vietnam, is expected to grow to around 350 million people by 2022, with estimates
putting the region’s disposable income at roughly US$300 billion.15 The trend is causing
increasing strain on existing education infrastructure with rapidly rising numbers of school-
age children in the region. While figures indicate certain countries are increasing their
public spend – for example, India ranks high on the list with an expected government
spending on education amounting to 0.75% of overall GDP between 2015 and 203016,
this is still not enough. Asia’s middle class is demanding better quality education and
are ready to pay.
Symphony’s portfolio currently includes Creative Technology Solutions DMCC (“CTS”),
an edu-tech firm that provides customized IT solutions within the education sector in
the United Arab Emirates and across other countries in the Gulf Cooperation Council
region (“GCC”), and WCIB, the developer and operator of Wellington College Bangkok.
CTS, Symphony’s first investment in the GCC region, was founded by two Lebanese
entrepreneurs in 2013, to provide turnkey solutions for schools, that include
hardware, software, maintenance, and training support, all catering
to the growing demand for state-of-the-art technology-
driven classrooms for primary and secondary
schools in the GCC region.
WCIB is the developer and operator of Wellington College Bangkok, the fifth international
addition to the UK-headquartered Wellington College schools. Built to cater to 1,500
students aged 2-18 at full capacity, the school opened in August 2018. The school is
expected to have 405 students enrolled for the school-year commencing August 2020.
WCIB also has the option of developing further schools under the Wellington name in
Myanmar, Cambodia, Laos, and Vietnam.
With more students across regional Asia wanting to follow secondary education with
higher education abroad, the value proposition within the Asian private education sector
is increasingly attractive.
15 Florian Hoppe and Aadarsh Baijal,
“ Understanding Southeast Asia’s
Emerging M iddle Class”, Bain &
Company, 18 March 2019
16 The Economist Intelligence Unit, “Yidan
Prize Forecast: Education to 2030”,
2016, p6-7
SYMPHONY INTERNATIONAL HOLDINGS LIMITED LOGISTICS
9
“INDO TRANS LOGISTICS CORPORATION HAS GROWN TO
BECOME ONE OF VIETNAM’S ‘NATIONAL CHAMPIONS’”
The trade tension and gradual decoupling of the US and China has increased economic activity in
southeast Asia. While China exports fell by 12% in the early half of the year, exports to the United
States from developing Asia rose over 10% from the previous year’s first half – with exports from
Vietnam growing by 33%.17 Additionally, the logistics sector has benefited from growing middle
class incomes and the resulting rise of omnichannel retail. The market for logistics in Asia Pacific is
forecast to grow at a compound annual rate by 5.5% between 2019 and 2024.18
Symphony acquired a significant minority stake in
Vietnam-based Indo Trans Logistics Corporation
(“ITL”) in July 2019. ITL, founded in 2000 as a
freight-forwarding company, has since grown to
become one of Vietnam’s ‘National Champions’,
and is the largest independent integrated logistics
company with a network across Vietnam,
Cambodia, Laos, Myanmar, and Thailand. The
company’s strong presence in air, rail, road, and
sea logistics services make it an attractive local
partner for both domestic and multinational firms
operating in Vietnam.
ITL’s mandate to support small and medium
local enterprises, in our view also benefits the
rise of the regional middle-class population and
disposable income in Vietnam and across the
Indochina region.
17 Robin Harding, “Asia’s emerging economies are winning US-
China trade war”, Financial Times, 25 September 2019
18 Mordor Intelligence, “Asia Pacific (APAC) Contract Logistics
Market – Growth, Trends, and Forecast (2020-2025)”, 2019
ANNUAL REPORT 2019 10
OTHER OPPORTUNITIES
“SYMPHONY’S OTHER OPPORTUNITIES SEGMENT
INCLUDES INVESTMENTS IN EARLY STAGE
BUSINESSES, SPECIAL SITUATIONS AND
STRUCTURED OPPORTUNITIES”
Acquisitions made by technology startups privately valued at US$1 billion or more,
reached US$4.9 billion in the first half of 2019, compared with US$2.2 billion
during the same period in 201819. This exponential growth indicates interesting
opportunities lie within the technology sector.
Symphony’s portfolio includes a minority
interest in India-focused venture firm,
Good Capital Partners and Good
Capital Fund I (collectively “Good
Capital”), and in Smarten Spaces
Pte. Ltd. (“SSPL”).
GCP is focused on investing
capital primarily into emerging
businesses that are inventing new
ways of doing business by taking
advantage of the rollout of low-cost
mobile broadband services across India.
Technology spending in India is estimated to
rise to US$94 billion in 2020, up from US$88.5
billion in 2019 – an increase of 6.6%20, indicating
an opportunity to drive value for Symphony’s portfolio
through this investment.
In November 2019, Symphony invested in a Singapore based Software-as-a-service
(“SaaS”) company, SSPL. Established in 2017, the company provides software
solutions for space management in commercial and industrial properties – enabling
clients to select from a menu of microservices to manage a variety of functions
including conference room reservation, room temperature, and lighting, among other
things. With over 650,000 signed users across 85 sites in 6 countries, clients include global
snack producer Mondelēz International, Inc., APAC leading logistics real estate platform ESR, and
Indian financial services firm HDFC Bank. The added value benefits corporate tenants looking to manage
security and logistics operations, which makes it an interesting investment as companies are increasingly
taking their workspace operations digital.
Symphony’s portfolio also includes a structured loan transaction, completed in February 2014, which generates
a high annual return.
19 Mercedes Ruehl, “Foreign investment drives surge in south-east Asia tech takeovers”, The Financial Times, 12 September 2019.
20 Gartner, Inc. “Gartner Forecasts IT Spending in India to Total US$94 Billion in 2020, Up 6.6% From 2019”, 11 November 2019.
SYMPHONY INTERNATIONAL HOLDINGS LIMITED CHAIRMEN’S STATEMENT
11
in
the
service (“SaaS”) company providing
solutions for space management in
commercial and industrial properties,
Soothe Healthcare Private Limited
(“Soothe”), a manufacturer and
distributor operating
fast
feminine hygiene market
growing
segment in India under the Pariz and
Paree brands, Good Capital Partners
and Good Capital Fund I (collectively
“Good Capital”), the general partner
and
technology start-
up
fund and Creative Technology
Solutions DMCC (“CTS”), a company
that provides technology solutions to
K12 schools and universities in the
UAE and the Kingdom of Saudi Arabia.
With
investments,
Symphony offers its shareholders a
strong diversified portfolio of attractive
businesses with exposure
fast
growing markets.
these additional
related
its
to
In addition to new investments, we
also made some partial and
full
exits. During the first quarter of 2019,
Symphony sold part of its interest in
the Liaigre Group to facilitate a new
strategic investor. The sale of shares
was completed at a premium to our
cost of
investment. We also
generated liquidity through the sale of
MINT shares during the 2019 financial
year that provided net proceeds of
US$19.31 million and was completed
the original cost of
at 5.4
times
the
2019 turned out to be a busy year for
us in terms of new investments. We
saw several attractive opportunities
and made six new investments, as
described below.
time
last year, we were
This
beginning to see the effects of less
accommodative monetary policy and
weaker investor sentiment that had
impacted market valuations. The
expected continued unwinding of
the unprecedented monetary easing
that has lasted more than a decade
surprisingly did not happen. Instead,
we saw central banks across the
world cut interest rates aggressively
in 2019 to counter weaker growth and
escalating trade tensions. Financial
markets have been buoyed as a result.
Interest rates are at historical lows
and governments recently announced
to
aggressive stimulus measures
combat Covid-19. With the current
level of global supply chain integration
and interdependencies, the full impact
impossible
of Covid-19
to determine across industries, as
something like this has no precedent.
We expect some of our investments,
particularly those with exposure to
hospitality, food and beverage and
trade, to be significantly impacted in
the short to medium term.
is almost
risks
We also see certain other
to
including
the global economy,
but not limited to further US-China
decoupling despite the recent trade
accords, the ongoing negotiations of
the UK-EU trading relationship, the
potential escalation of tensions in the
Middle East and the emergence of
inflationary pressures that could hinder
accommodative policies. Although
these
impact financial
markets, we believe, nevertheless, that
the continued long-term strengthening
of Asian economies and
related
integration will continue to provide
relatively more longer-term investment
risks may
opportunities and better risk adjusted
returns than other regions.
Despite the uncertain global outlook
and market volatility during 2019, we
are pleased to report that Symphony’s
key measure of performance, Net
Asset Value (“NAV”) and NAV per
share, improved. NAV and NAV per
share increased by 2.2% to US$503.37
million and US$0.98 per share at 31
December 2019
from US$492.71
million and US$0.96 per share a
year earlier, respectively. Symphony
paid a dividend of US$17.97 million
or 3.5 cents per share during 2019,
which brings cumulative dividend
paid since 2014 to 43.85 cents or
approximately US$266.69 million.
Excluding dividends during 2019,
NAV and NAV per share would have
increased by 5.8%. The growth in
NAV during 2019 was predominantly
due to an increase in value of Minor
International Pcl (“MINT”) and an
interest in a property joint venture in
Japan, which were partially offset by a
cumulative net decline in the value of
other investments.
During 2019,
through proprietary
relationships, we expanded and
diversified our portfolio with
the
addition of six new
investments.
Together with follow-on investments,
Symphony deployed US$90.67 million
during the year.
Symphony’s
investments
new
include interests in two established
Indo Trans Logistics
businesses;
largest
(“ITL”),
Corporation
the
independent
logistics
integrated
company
in Vietnam and ASG
Hospital Private Limited (“ASG”), a
full-service eye-healthcare provider
with 33 clinics predominantly
in
four
investments include interests in
more early stage businesses;
Smarten Spaces Pte. Ltd.
(“Smarten”), a software-as-a-
India. The
remaining
ANNUAL REPORT 2019 12
CHAIRMEN’S STATEMENT
investment and a net annualised
return of 16.7% over a period of
approximately 14-years. In December
2019, we announced an agreement for
the partial sale of land in Hirafu Village,
Niseko, Hokkaido, Japan through a
joint venture in which Symphony holds
a 37.5% interest. As a result and based
on a third party valuation, the fair value
of Symphony’s interest in the joint
venture increased at 31 December
2019, which implies an annualised
return of 27.2% and 3.7 times the
original cost of the investment. In
January 2020, we announced our
full exit from our investment in IHH
Healthcare Berhad
(“IHH”). We
originally made the investment in IHH
in 2012 and exited our interest through
a series of partial sales that began in
2015. Our investment in IHH generated
an annualised return of 11.2% over
a period of eight years and 1.8
times the original cost of investment.
Although our investment horizon is
longer than typical private equity style
investments,
the continuous ability
to generate attractive risk adjusted
investments mature
returns
as
reaffirms Symphony’s
investment
thesis and strategy.
investment
During FY2019, we made a decision
to reclassify our reporting segments
to better reflect the composition of our
portfolio. In the hospitality segment,
our primary
is MINT,
which continued to grow its business
following the acquisition of the NH
Hotel Group SA (“NH Group”) in 2018.
The number of hotel and restaurants
in MINT’s portfolio that are owned and
managed grew to 535 and 2,377 at 31
December 2019 from 513 and 2,270 a
year earlier, respectively. Most notably
during the year, MINT initiated an
asset rotation program that involved
the sale and lease back of three
properties in Portugal, which were
part of the 14-property Tivoli portfolio
acquired in 2016, that generated gross
sale proceeds of €313 million. Aside
from strengthening MINT’s balance
sheet, the proceeds from the sale
approximately amount to the capital
deployed by MINT in 2016 to acquire
all 14 Tivoli properties. MINT has
stated it will continue to explore asset
enhancement and rotation initiatives,
which will unlock further value.
The lifestyle and real estate segment
grew as a percentage of Symphony’s
to 33.0% at 31 December
NAV
2019 from 27.4% a year earlier. The
relative increase in this segment as a
percentage of NAV is predominantly
due to the revaluation of Symphony’s
interest in the joint venture in Niseko
following an agreement for the partial
sale of land. The transaction for the
sale is scheduled to close in April
2020. In addition to the sale of land,
in Niseko will,
through a separate participation
structure, co-develop another
part of the land with Hanwha
Hotels and Resorts, which will
allow us to unlock further value
in the years to come.
joint venture
the
the
other
investments
Our
in
real
estate segment benefited
local
from strengthening
lifestyle and
two
currencies, particularly in Thailand.
investments
Symphony’s
in
include Minuet
Bangkok, Thailand
Limited
owns
(“Minuet”), which
approximately 40 hectares of land for
sale and / or development, and SG Land
Limited, which owns the lease rights
for two centrally located commercial
buildings. Both investments benefited
from an appreciation of the Thai baht
against the US dollar, Symphony’s
reporting currency, by 8.1% during
2019. In Malaysia, Symphony made
follow-on
joint
venture developing the One & Only
branded hotel and private villa
development
in Desaru, Malaysia.
The hotel is scheduled to open in the
second quarter of 2020 and Villa sales
will commence shortly thereafter.
investments
the
in
Our new logistics investment, ITL, is
focused on long-term growth through
organic and inorganic expansion in
order to diversify its business mix
and increase scale. US-China trade
tensions have however
created
headwinds for ITL due to considerable
aviation capacity moving from China
to Vietnam. Although ITL is gaining
market share, the business is seeing
some pressure on yields. While we
expect some
to
volumes due to Covid-19, the long-
term prospects
in
for
Vietnam remain extremely attractive.
further disruption
this sector
The composition of the lifestyle segment
includes our investments in the Liaigre
Group, CHANINTR (“Chanintr”) and
the Wine Connection Group (“WCG”).
The performance in this segment has
been mixed over the course of 2019.
The Liaigre Group, a luxury furniture
brand that is synonymous with discreet
luxury, has been impacted by ongoing
underperformance of showrooms in
Europe. However, we continue to see
strength in the interior architecture
business and demand
from Asia.
In November 2019, Liaigre opened
a well-received flagship showroom
in Shanghai, China, which will help
SYMPHONY INTERNATIONAL HOLDINGS LIMITED 13
more innovative companies emerging
in Asia.
for
the extraordinary market
Despite
feel our portfolio
environment, we
is well positioned
long-term
growth, offering our shareholders
broad exposure to attractive markets,
particularly in Asia. We continue to
explore new opportunities that can
further enhance Symphony’s portfolio
and provide incremental returns in
the years ahead. We would like to
thank our shareholders and business
partners for their continued support.
GEORGES GAGNEBIN
Chairman,
Symphony International Holdings
Limited
ANIL THADANI
Chairman,
Symphony Asia Holdings Pte. Ltd.
11 March 2020
improve brand exposure in the region.
Chanintr, a business that predominantly
distributes high-end US and European
furniture through retail showrooms and
interior design projects for residential
and hotel developments, continues
to benefit from growing demand in
Thailand. In addition to working closely
with developers on providing turnkey
solutions
for end-buyers, Chanintr
is also seeing growth from the office
market segment as corporate clients
upgrade their workplaces.
WCG operates 82 wine shops and
wine themed restaurants in Thailand,
Singapore, Malaysia and South
Korea. We continue to see weakness
in the casual dining restaurant space
in WCG’s core markets, which
include Thailand and Singapore. We
mentioned in our past shareholder
updates that the founder of WCG
returned as group CEO in Q3 2019
to
through
a number of new initiatives. We are
seeing some positive signs, but we
expect the impact of Covid-19 to
dampen any immediate recovery.
reinvigorate operations
The healthcare segment
includes
our investments in IHH, ASG and
Soothe. As mentioned earlier, we
exited the remaining shares held in
IHH in January 2020, which generated
attractive risk-adjusted returns. We
are working with our co-investors in
the ASG investment, completed in
November 2019, to assist management
with
realising administrative and
operational efficiencies as well as
exploring
expansion
brownfield
opportunities. These
initiatives will
gradually add value and support
the business.
additional scale
The investment in Soothe was fully
completed in August and has been
growing sales rapidly through targeted
marketing campaigns and expanded
distribution.
for
WCIB International Co. Ltd (“WCIB”),
which operates Wellington College
I n t e r n a t i o n a l
B a n g k o k
CTS
and
comprise the
e d u c a t i o n
s e g m e n t .
is
WCIB
currently in its
second year of
operations and we
are pleased that it
has achieved its target
student intake. We expect
the school to continue to
ramp-up operations in tandem
with the construction of facilities
for higher academic years. The
investment in CTS was completed
in June 2019 and its business is to
provide technology solutions to K-12
schools and more recently, through
an
offering,
universities.
expanded
product
rarely
We have grouped our
special
situations and other investments in
a separate category
for reporting
purposes. Aside from a structured
loan
that generates an attractive
yield, this segment includes two new
investments; Smarten and Good
invests
Capital. Symphony
in early stage businesses unless
is strong conviction among
there
the
team
investment management
to do so. Smarten is one of those
businesses. Smarten continues
to
attract large corporate clients that
typically choose to extend roll-out of
its SaaS offering across organisations.
We continue to support management
to help scale its client base. Similarly,
we have a strong conviction regarding
the investment in Good Capital, which
was made to gain a small exposure to
the burgeoning technology sector in
India. The promotors of Good Capital
have developed an extensive network
in the technology start-up ecosystem
in India and have a strong track record
for generating attractive returns. Our
special situations investments broaden
our portfolio to include exposure to
ANNUAL REPORT 2019 14
FI NAN CI AL HIGHLIG HTS
KEY FINANCIAL HIGHLIGHTS
As at 31 December
Other income
Fair value changes in financial assets at
fair value though profit or loss
(Loss) Profit after tax1
Total assets
Total liabilities
Total shareholders' equity
NAV2
Number of shares outstanding
NAV per share (US$)
Diluted NAV per share (US$)3
Dividend per share (US cents)4
Group
2017
US$’000
2018
US$’000
2019
US$’000
118,769
(12,154)
26,142
(79,234)
90,179
(69,516)
624,223
5,551
618,672
618,672
488,222
1.27
1.23
13.50
498,400
5,695
492,705
492,705
513,366
0.96
0.96
12.00
784
43,533
28,912
577,079
73,430
503,649
503,369
513,366
0.98
0.98
3.50
Profit (Loss) after tax in 2017, 2018 and 2019 include expenses for management share options (2017: US$0.5 million, 2018: nil and 2019: nil).
1
2 Net asset value is based on the sum of our cash and cash equivalents, temporary investments, the fair value of unrealised investments (including investments
in subsidiaries and associates) and any other assets, less any other liabilities.
3
Adjusting for the impact of in the money vested but unexercised options.
4 Dividend (ordinary and extraordinary) to shareholders and option holders
5
6
Portfolio investments exclude temporary investments
Temporary investments include cash and equivalents and is net of accounts receivable and payable
SYMPHONY INTERNATIONAL HOLDINGS LIMITED 15
VALUE OF PORTFOLIO INVESTMENTS5
QUARTERLY NAV
541.8
560.4
492.7
509.3
503.4
n
o
i
l
l
i
m
$
S
U
,
e
u
a
v
l
d
n
a
t
s
o
C
600
500
400
300
384.1
436.8
474.9
427.8
427.1
200
100
0
118.6
135.9
135.8
136.5
161.6
n
o
i
l
l
i
m
$
S
U
,
V
A
N
600
500
400
300
200
100
0
12/31/18
3/31/19
6/30/19
9/30/19
12/31/19
12/31/18
3/31/19
6/30/19
9/30/19
12/31/19
Cost US$ mn
Unrealised gain (loss) US$ mn
NAV BY SEGMENT
At 31 December 2019
Healthcare
Hospitality
Lifestyle
Education
Logistics
5.5%
55.2%
6.6%
5.0%
8.5%
Lifestyle / real estate
33.0%
Other
3.2%
Temporary investments6 -17.0%
ANNUAL REPORT 2019
16
INVESTMEN T
MANAGER’S REPOR T
Standing, from left to right:
Laxman Vaidya, Hariharan
Vaidyalingam, Anupum Khaitan,
Raj Rajkumar, Anil Thadani,
Patrik Brusheim, Peter Lee,
Ambika Behal
Sitting, from left to right:
Sun Yi, Daphne Beh, Jenny
Ng, Saerah Yusof, Michelle Tan,
Jasmine Phua
This “Investment Manager’s Report”
should be read in conjunction with the
financial statements and related notes
of the Company. The financial state-
ments of the Company were prepared
in accordance with the International Fi-
nancial Reporting Standards (“IFRS”)
and are presented in U.S. dollars. The
Company reports on each financial year
that ends on 31 December. In addition
to the Company’s annual reporting, NAV
and NAV per share are reported on a
quarterly basis being the periods ended
31 March, 30 June, 30 September and
31 December. The Company’s NAV re-
ported quarterly is based on the sum of
cash and cash equivalents, temporary
investments, the fair value of unrealised
investments (including investments in
unconsolidated subsidiaries, associates
and joint ventures) and any other as-
sets, less any other liabilities. The finan-
cial results presented herein include ac-
tivity for the period from 1 January 2019
through 31 December 2019, referred to
as “the year ended 31 December 2019”.
SYMPHONY INTERNATIONAL HOLDINGS LIMITED 17
Standing, from left to right:
Kennis Yeung, Synnia Hui, Betty Chan,
Alice Wong, Jay Parmanand,
Ming Wong, Wendy Pang, Annisa Li
Sitting, from left to right:
Alice Ng, Sunil Chandiramani,
Ramon Lo
Our Business
Symphony is an investment company
incorporated under the laws of the
British Virgin Islands. The Company’s
the London
listed on
shares were
Stock Exchange on 3 August 2007.
Symphony’s investment objective is to
create value for shareholders through
longer term strategic investments in high
growth innovative consumer businesses,
primarily in the healthcare, hospitality
and lifestyle sectors (including education
and branded real estate developments),
which are expected to be fast growing
sectors in Asia, as well as through
investments in special situations and
structured transactions.
Investment Manager
Symphony’s
is
Symphony Asia Holdings Pte. Ltd.
(“SAHPL”). The Company entered into
an Investment Management Agreement
with SAHPL as the Investment Manager.
Symphony Capital Partners Limited
(“SCPL”) is a service provider to the
Investment Manager.
SAHPL’s licence for carrying on fund
management in Singapore is restricted
to serving only accredited investors and/
or institutional investors. Symphony is
an accredited investor.
ANNUAL REPORT 2019 18
INVESTMEN T
MANAGER’S REPOR T
the Official List of
Investments
At 31 December 2019, the total amount
invested by Symphony since admission
to
the London
Stock Exchange in August 2007 was
US$544.17 million (2018: US$453.50
million). SIHL’s total cost of investments
after taking into account shareholder
loan repayments, redemptions, partial
realisations and the cost of fully realised
investments was US$161.61 million at
31 December 2019, up from US$118.55
million a year earlier. The change
is due to (i) the partial realisation
of MINT shares that generated net
proceeds for US$19.31 million, which
increased cumulative proceeds
in
excess of total cost for this investment
to US$83.86 million at 31 December
2019, (ii) the partial realisation of IHH
shares that generated net proceeds
of US$6.65 million, which brought
cumulative proceeds
to US$31.87
million in excess of total cost at 31
December 2019, (iii) partial realisations,
redemptions and shareholder principal
loan repayments related to unlisted
investment of US$21.75 million and (iv)
new investments of US$90.67 million
and other minor movements of US$0.10
million that increased cost.
The fair value of investments, excluding
temporary investments (but including
other investments), held by Symphony
was approximately US$588.70 million at
31 December 2019 up from US$502.69
million a year earlier. This change is
comprised of an increase in the value of
investments by US$43.05 million, new
investments of US$90.67 million and
realisations (including redemptions and
shareholder loan principal repayments)
of US$47.72 million.
Cost and Fair Value of Investments
Group at 31 December 2019
Fair Value US$
US$’000
Cost US$
US$’000
% of NAV
Healthcare
Hospitality
Lifestyle
Education
Logistics
(8,818,081)
27,561,553
(83,857,321)
277,829,504
85,993,780
33,438,954
18,722,025
25,126,196
42,644,984
42,644,984
Lifestyle / real estate
1,657,062
166,174,427
Other
Subtotal
15,263,187
15,923,631
161,605,636
588,699,249
5.5%
55.2%
6.6%
5.0%
8.5%
33.0%
3.2%
117.0%
Temporary investments
(85,330,594)
-17.0%
NAV1
503,368,655
100.0%
Notes:
1 NAV is based on the sum of our cash and cash equivalents, temporary investments, the fair value of unrealised
investments (including investments in subsidiaries and associates) and any other assets, less all liabilities.
As at 31 December 2019, we had the
following investments:
Minor International Public Company
Limited
Minor
International Public Company
Limited (“MINT”) is a diversified consumer
business and is one of the largest
hospitality and restaurant companies
in the Asia-Pacific region. Anil Thadani
(a Director of the Company) currently
serves on MINT’s board of directors.
Sunil Chandiramani (a Director of the
Company) currently serves as an advisor
to MINT’s board of directors. MINT is
a company that is incorporated under
the laws of Thailand and is listed on the
Stock Exchange of Thailand.
MINT owns 379 hotels and manages
156 other hotels and serviced suites
with 78,360 rooms. MINT owns
and manages hotels in 57 countries
predominantly under its own brand
names that include Anantara, Oaks, NH
Collection, NH Hotels, nhow, Elewana,
AVANI, Per AQUUM and Tivoli.
As at 31 December 2019, MINT also
owned and operated 2,377 restaurants
(comprising 1,198 equity-owned outlets
and 1,179 franchised outlets) under the
brands The Pizza Company, Swensen’s,
Sizzler, Dairy Queen, Burger King,
Beijing Riverside, Thai Express,
Bonchon, Benihana and The Coffee
Club amongst others. Approximately
in
two-thirds of
Thailand with the remaining number
in other Asian countries,
the Middle East
the
and
these outlets are
SYMPHONY INTERNATIONAL HOLDINGS LIMITED
19
million, which was more than offset by
an increase in the share price by 5.1%
and an appreciation in the onshore Thai
baht by 7.9% during the same period.
The annualised return and times the
original cost of investment on the partial
sale of shares in 2019 was 16.7% and
5.4 times, respectively.
Minuet Limited
Minuet Ltd (“Minuet”) is a joint venture
between
the Company and an
established Thai partner. The Company
has a direct 49% interest in the venture
and is considering several development
and/or sale options for the land owned
by Minuet, which is located in close
proximity to central Bangkok, Thailand.
As at 31 December 2019, Minuet held
approximately 252 rai (40 hectares) of
land in Bangkok, Thailand.
initially
investment by
The Company
invested
approximately US$78.30 million by
way of an equity investment and interest-
bearing shareholder loans. Since the
the Company,
initial
Minuet has received proceeds
from
rental income and partial land sales. As
at 31 December 2019, the Company’s
investment cost (net of shareholder
loan repayments) was approximately
US$32.12 million (31 December 2018:
US$32.12 million). The fair value of the
Company’s interest in Minuet on the same
date was US$80.29 million (31 December
2018: US$73.55 million) based on an
independent third party valuation of the
United Kingdom. MINT’s operations
include contract manufacturing
also
and an international lifestyle consumer
brand distribution business in Thailand
focusing on fashion, cosmetics through
retail (485 outlets), wholesale and direct
marketing channels under brands that
include Anello, Bossini, Brooks Brothers,
Esprit, Charles & Keith, Zwilling J.A.
Henckels and Bodum amongst others.
MINT reported core revenue, earnings
before interest, tax, depreciation and
amortisation (“EBITDA”) and net profit
growth (before non-recurring
items)
of 57%, 42% and 23% in 2019 year-
over-year, respectively. The growth in
revenue was predominantly driven by
the full year consolidation of the NH
Hotel Group S.A. (“NH Group”) and
improved revenue from all business
groups. The slower growth in EBITDA is
a result of structurally lower profitability
margins
the consolidated NH
Group and margin pressure on the
restaurant and lifestyle businesses due
to weaker domestic consumption.
from
MINT’s hotel and mixed-use business
had core revenues (excluding non-
items) of THB94.2 billion
recurring
during 2019, which is 86% higher than
the same period a year earlier. The
growth is primarily from the full year
consolidation of the NH Group and to
a lesser extent, organic growth and
income from mixed-use businesses,
which includes real estate sales and
Anantara Vacation Club.
At the end of 2019, MINT’s total number
of restaurants reached 2,377 comprising
1,198 equity-owned outlets and 1,179
franchised outlets. Approximately 66%
were in Thailand with the remaining
number in 25 other countries in Asia,
Oceania, Middle East, Europe, Canada
and Mexico. Approximately
107
restaurants were added during 2019.
Due to a challenging market, average
same-store-sales growth declined by
3% (in a local currency basis) however
total revenue (including share of profit
and other income) grew by 3% during
the same period.
retail
The
trading and contract
manufacturing businesses grew
revenue (including share of profit
and other
income) by 12% with
revenues of THB5.0 billion during 2019.
Symphony’s gross and net investment
in MINT was approximately
cost
US$74.02 million and
(US$83.86
million) (2018: US$74.02 million and
(US$64.55 million)), respectively, at
31 December 2019. The negative net
cost is due to the proceeds from partial
realisations being in excess of cost for
this investment. On the same date, the
fair value of Symphony’s investment in
MINT was US$277.83 million, which is
up from US$257.79 million a year earlier.
The change in value of approximately
US$20.04 million was due to the sale
of 15.0 million shares during the year
that generated proceeds of US$19.31
ANNUAL REPORT 2019
20
INVESTMEN T
MANAGER’S REPOR T
land plus the net value of the other assets
and liabilities of Minuet. The change in
value of Symphony’s interest by US$6.73
million is predominantly due to an 8.1%
appreciation in the Thai baht and other
minor movements in the net assets of
Minuet.
IHH Healthcare Berhad
IHH Healthcare Berhad (“IHH”) is one
of the largest healthcare providers in
the world by market capitalisation. Its
portfolio of healthcare assets includes
Parkway Holdings Limited, Pantai
Holdings Berhad, International Medical
University (“IMU”), Acibadem Saglik
Yatirimlari Holding A.S. (“Acibadem”) and
Fortis Healthcare Limited (“Fortis”). IHH
has a broad footprint of assets in Asia as
well as Turkey, Abu Dhabi, Central and
Eastern Europe that employs 55,000
people and operates over 15,000
licensed beds in 80 hospitals in ten
countries worldwide.
IHH reported revenue and EBITDA
growth of 29% and 34%, respectively,
in 2019 year-over-year. On a constant
currency basis and excluding the impact
from MFRS 16 Leases, revenue and
EBITDA increased by 22% and 13%
during the same period, respectively.
The growth is due to the continuous
ramp up of Gleneagles Hong Kong
Hospital and Acibadem Altunizade
Hospital
in March
2017), as well as contribution from the
increased capacity at Acibadem Maslak
Hospital (expansion completed in Oct
2018). The acquisition of Amanjaya
(acquired in October 2018), and Fortis
(acquired in November 2018) also
contributed to the increase in revenue
and EBITDA.
(both opened
saw
in-patient
Parkway Pantai
admissions
increase by 2.1% and
7.2% in Singapore and Malaysia in
2019, respectively, compared to a year
earlier. Average revenue per inpatient
admission also increased by 4.5%
in Singapore and 6.6% in Malaysia
during the same period. On a constant
currency basis and excluding
the
effects of adopting MFRS 16 Leases,
Parkway Pantai’s revenue and EBITDA
increased by 43% and 29% in 2019
year-over-year, respectively.
constant
Acibadem saw admissions decrease
by 3.5% due to fewer local patients at
non-Istanbul hospitals however,
revenue per inpatient grew by
17.9% in 2019 compared
to a year earlier. On a
currency
basis and excluding
the effects of
adopting MFRS
Leases,
Acibadem’s
revenue and
E B I T D A
increased
18%
by
and 30% in
2019 year-
o v e r - y e a r,
16
respectively.
The Company’s gross and net
investment cost in IHH was US$50.11
million and (US$31.87 million) (31
December 2018: US$50.11 million
and (US$25.22 million), respectively at
31 December 2019. The negative net
cost at 31 December 2019 is due to
proceeds from partial realisations being
in excess of cost for this investment.
The fair value on the same date was
US$4.66 million (31 December 2018:
US$11.04 million). The change in value
is predominantly due to the sale of
5.0 million shares that generated net
proceeds of US$6.65 million, which was
marginally offset by a strengthening in
the share price of IHH by 1.9% and an
appreciation of the Malaysian ringgit
by 1.0%. Subsequent to 31 December
2019, Symphony
its
residual interest in IHH of 3.49 million
shares that generated net proceeds of
US$4.65 million. Over a holding period
of approximately 8-years, Symphony
generated an annual compounded
return rate of 11.2% and 1.8 times the
cost of investment.
fully exited
Liaigre Group
The Liaigre Group (“Liaigre”) was
founded in 1985 in Paris and is a
brand synonymous with discreet luxury,
and has become one of the most
sought-after luxury furniture brands,
renowned for its minimalistic design
style. Liaigre has a strong intellectual
property portfolio and provides a range
of bespoke furniture, lighting, fabric &
leather, and accessories. In addition to
operating a network of 26 showrooms
in 11 countries across Europe, the US
and Asia, Liaigre undertakes exclusive
interior architecture projects for select
yachts, hotels, and restaurants and
private residences.
to expand
its
Liaigre continued
operations in Asia with the opening of
a new flagship showroom in Shanghai,
total number of
which brings
four.
showrooms
the region
the
to
in
SYMPHONY INTERNATIONAL HOLDINGS LIMITED 21
integrated
grown to become Vietnam’s largest
independent
logistics
company with a network that is spread
across Vietnam, Cambodia, Laos,
Myanmar, and Thailand. ITL has grown
to national champion status in Vietnam
with over 2,000 employees across its
business units and joint ventures.
The Company acquired a significant
minority interest in ITL in June 2019 for
US$42.64 million. In accordance with
the Company’s
investment policies,
investments held less than 12-months
are valued at cost.
Subsequent to the 2019 financial year,
South Logistics Joint Stock Company
(“SoTrans”), a listed operator of ports
and other logistics infrastructure in which
ITL owns a 42% interest announced that
ITL has indicated its intent to acquire
the majority of the remaining shares in
SoTrans. This acquisition is expected to
enable ITL to grow its freight forwarding
and contract logistics businesses, and
reduce its reliance on the air cargo
business. The investment manager is
working with ITL’s management to secure
debt funding related to this transaction.
Other Investments
In addition to the investments above,
Symphony has 11 additional non-
material investments, at 31 December
2019. Pending investment in suitable
opportunities, Symphony has placed
funds in certain temporary investments.
Capitalisation and NAV
As at 31 December 2019, the Company
had US$409.70 million (31 December
2018: US$409.70 million) in issued share
capital and its NAV was approximately
(31 December
US$503.37 million
Despite group sales in 2019 being
at the same level as 2018 due to the
underperformance of showrooms in
Europe, Asia continues to see strength
in demand, particularly in the interior
architecture business. Sales in Asia
rose by 166% in 2019 and is becoming
a more material part of the overall
group. However, the overall business
continues to underperform, and we
are working with our partners and
management to address operational
shortcomings.
During
the first quarter of 2019,
Symphony sold part of its interest in
the Liaigre Group to a new strategic
investor. The sale of shares was
completed at a premium to the cost
of the investment. The new strategic
investor also provided new capital to
facilitate expanding Liaigre into new
complementary businesses
fully
realise the brand’s potential. Due to
the underperformance of the business
to date, the fair value of Symphony’s
investment as at 31 December 2019 is
below the initial cost.
to
Symphony, together with Navis Capital
Partners and management, acquired
Liaigre in June 2016 for an undisclosed
investment cost
sum. Symphony’s
is more than 5% of NAV and due to
strategic concerns, specific valuation
information has not been disclosed
publicly.
Property Joint Venture in Malaysia
The Company has a 49% interest in a
property joint venture in Malaysia with
an affiliate of Destination Resorts and
Hotels Sdn Bhd, a hotel and destination
of
resort
subsidiary
the
Khazanah Nasional Berhad,
investment
investment arm of the Government
of Malaysia. The
is
developing a beachfront country club
and private villas on the south-eastern
coast of Malaysia.
joint venture
The development is scheduled to be
launched in the second quarter of
2020 with the opening of the hotel
that has 46 club suites. The private
villa sales will commence shortly
thereafter and will comprise 52 villas
when fully developed. As mentioned
in earlier investor communications, the
project has experienced delays and
required additional investment due to
rectification costs. During 2019, an
arbitration proceeding initiated by the
previous hotel management company
their management
for
contract resulted in the joint venture
being liable to pay a material sum.
However, the arbitrator rejected the
previous manager’s claim for the loss
of future royalties. As a result, the
joint venture expects to achieve cost
savings from the effective buyout of the
previous management contract due to
significantly reduced royalties payable
to the new hotel management company.
loss of
the
The Company invested approximately
US$29.05 million in January 2012 for
its interest in Desaru and since made
follow-on
amounting
investments
to US$18.55 million. Based on an
independent third party valuation, the
investment was valued at US$33.53
million at 31 December 2019 (31
December 2018: US$33.58 million).
Indo Trans Logistics Corporation
Indo Trans Logistics Corporation (“ITL”)
was founded in 2000 as a freight-
forwarding company and has since
ANNUAL REPORT 2019 22
INVESTMEN T
MANAGER’S REPOR T
NAV, Shares Outstanding and NAV Per Share on Quarterly Basis1
As at
NAV (US$ ’000)
Number of shares (’000)
NAV per share (US$)
Diluted NAV per share (US$)2
As at
NAV (US$ ’000)
Number of shares (’000)
NAV per share (US$)
Diluted NAV per share (US$)2
Group
12/31/17
12/31/18
12/31/19
618,672
488,222
1.27
1.23
492,705
513,366
0.96
0.96
503,369
513,366
0.98
0.98
Group
03/31/19
06/30/19
09/30/19
541,785
513,366
1.06
1.06
560,365
513,366
1.09
1.09
509,298
513,366
0.99
0.99
1 Unaudited
2
Adjusting for the impact of in the money vested but unexercised options
proceeds of approximately US$100
million (US$93 million net of expenses)
through the issue of 166,665,997 million
new shares, fully paid, that commenced
trading on the London Stock Exchange
on 22 October 2012.
The Company issued 4,119,490 shares,
2,059,745 shares, 2,059,745 shares
and 2,059,745 shares on 6 August 2010,
21 October 2010, 4 August 2011 and 23
October 2012, respectively, credited as
fully paid, to the Investment Manager,
Investment Managers
Symphony
Limited. The shares were issued as
part of the contractual arrangements
with the Investment Manager.
On 4 October 2012, SIHL announced
a fully underwritten 0.481 for 1 rights
issue at US$0.60 per new share to raise
financial
2018: US$492.71 million). Symphony’s
NAV is the sum of its cash and cash
equivalents,
investments,
temporary
the fair value of unrealised investments
(including investments in subsidiaries,
associates and joint ventures) and any
other assets, less any other liabilities.
The audited
statements
contained herein may not account
for the fair value of certain unrealised
investments. Accordingly, Symphony’s
NAV may not be comparable to the
net asset value in the audited financial
statements. The primary measure of
SIHL’s financial performance and the
performance of its subsidiaries will be
the change in Symphony’s NAV per
share resulting from changes in the fair
value of investments.
Symphony was admitted to the Official
List of the London Stock Exchange
(“LSE”) on 3 August 2007 under Chapter
14 of the Listing Manual of the LSE. The
proceeds from the IPO amounted to
US$190 million before issue expenses
pursuant to which 190.0 million new
shares were issued in the IPO. In
addition to these 190.0 million shares
and 94.9 million shares pre-IPO, a
further 53.4 million shares were issued
comprising of the subscription of 13.2
million shares by investors and SIHL’s
investment manager, the issue of 33.1
million bonus shares, and the issue of
7.1 million shares to SIHL’s investment
manager credited as fully paid raising
the total number of issued shares to
338.3 million.
SYMPHONY INTERNATIONAL HOLDINGS LIMITED
23
Revenue and Other Operating
Income
Management concluded during 2014
that the Company meets the definition
of an investment entity and adopted
IFRS 10, IFRS 12 and IAS 27 standards
where subsidiaries are de-consolidated
and their fair value is measured through
profit or loss. As a result, revenue, such
as dividend income, from underlying
investments in subsidiaries is no longer
consolidated.
to US$1.17 million of operating
expenses on the same basis in 2018.
Management Fee
The management fee amounted to
US$11.84 million for the year ended
31 December 2019 (2018: US$12.25
million). The management fee was
calculated on the basis of 2.25% of
NAV (with a floor and cap of US$8
million and US$15 million per annum,
respectively) pursuant to the Investment
Management Agreement.
Share-based Payment Transactions
Under the terms of the Investment
Management and Advisory Agreement,
the Investment Manager was granted
share options to subscribe for shares
of the Company. On 3 August 2008,
the Investment Manager was granted
82,782,691 share options to subscribe
for shares at US$1.00 each and on 22
October 2012, the Investment Manager
was granted 41,666,500
options to subscribe for shares at
US$0.60 each. The share options
vest in five equal tranches over
a period of five years. All the
share options were
vested and expensed at
31 December 2017.
share
fully
During 2019, Symphony recognised
other operating income of US$784,000,
which mainly comprised interest income
interest
from bank deposits,
loan
from unconsolidated
and dividends
subsidiaries
relating
to
transactions). This
compares to other operating income of
US$26.14 million in 2018 that comprised
the same items.
(predominantly
intercompany
Expenses
Other Operating Expenses
Other operating expenses
include
fees for professional services, interest
expense,
insurance, communication,
fees and other
travel, Directors’
miscellaneous expenses and costs
incurred for analysis of proposed deals.
For the year ended 31 December 2019,
other operating expenses amounted
to US$3.16 million which
included
non-cash foreign exchange losses of
US$0.53 million. Excluding the foreign
exchange losses and interest expense
related
to bank borrowings, other
operating expenses were US$1.23
million in 2019, which compares
As part of the contractual arrangements
with the Investment Manager in the
Investment Management Agreement,
as amended, the Investment Manager
was granted 82,782,691 and 41,666,500
share options to subscribe for ordinary
shares at an exercise price of US$1.00
and US$0.60 on 3 August 2008 and 22
October 2012, respectively. The share
options vest in equal tranches over a
five-year period from the date of grant.
As at 31 December 2018, 41,666,500
share options with an exercise price of
US$0.60 had been exercised and all
the 82,782,691 options had lapsed and
expired. There were no share options
outstanding at 31 December 2019.
During 2017, 43,525,000 shares were
bought back and cancelled, as part of a
share buyback programme announced
on 16 January 2017. Together with
the shares issued to the Investment
Manager, the shares issued pursuant to
the rights issue, shares issued pursuant
to the exercise of options and shares
cancelled pursuant to the share buyback
programme, the Company’s fully paid
issued share capital was 513.4 million
shares at 31 December 2019 (2018:
513.4 million shares).
ANNUAL REPORT 2019 24
INVESTMEN T
MANAGER’S REPOR T
During the year ended 31 December
2018, the 82,782,691 share options
granted on 3 August 2008 that were
exercisable on or before 2 August 2018
have lapsed unexercised. These lapsed
the
options cannot be reissued
Investment Manager.
to
Liquidity and Capital Resources
At 31 December 2019, Symphony’s cash
balance was US$7.67 million (2018:
US$11.54 million). Symphony’s primary
uses of cash are to fund investments, pay
expenses and to make distributions to
shareholders, as declared by our board
of directors. Symphony can generate
additional cash from time-to-time from
the sale of listed securities that are
liquid and amount to US$282,494,000
(2018: US$268,832,000) and which
are held
through wholly owned
subsidiaries. Taking into account current
market conditions, it is expected that
Symphony has sufficient liquidity and
capital resources for its operations. The
primary sources of liquidity are capital
contributions received
in connection
with the initial public offering of shares,
related transactions and a rights issue
(See description under “Capitalisation
and NAV”), in addition to cash from
investments that it receives from time to
time and bank facilities.
but
generate
the disposal of
investments made
This cash from investments is in the
form of dividends on equity investments,
payments of interest and principal on
fixed income investments and cash
consideration received in connection
investments.
with
Temporary
in
connection with Symphony’s cash
management activities provide a
more regular source of cash than less
longer-term and opportunistic
liquid
investments,
lower
expected returns. Other than amounts
that are used to pay expenses, or used to
make distributions to our shareholders,
any returns generated by investments
are
in accordance with
Symphony’s investment policies and
procedures. Symphony may enter into
one or more credit facilities and/or utilise
other financial instruments from time
to time with the objective of increasing
the amount of cash that Symphony
has available for working capital or
for making opportunistic or temporary
investments. At 31 December 2019,
the Company had total interest-bearing
borrowings of US$72.88 million (2018:
US$5.33 million), which consists of
US$5.43 million (2018: US$5.33 million)
associated with a property related
reinvested
SYMPHONY INTERNATIONAL HOLDINGS LIMITED 25
investment in Niseko, Hokkaido, Japan
and bank debt of US$67.45 million
(2018: Nil). The bank debt is secured by
listed securities held by the Company.
Principal Risks
The Company’s and the Company’s
investment management team’s past
performance is not necessarily indicative
of the Company’s future performance
and any unrealised values of investments
presented in this document may not be
realised in the future.
(it
The Company is not structured as a
typical private equity vehicle
is
structured as a permanent capital vehicle),
and thus may not have a comparable
investment strategy. The investment
opportunities for the Company are more
likely to be as a long-term strategic partner
in investments, which may be less liquid
and which are less likely to increase in
value in the short term.
The Company’s
organisational,
ownership and investment structure may
create certain conflicts of interests (for
example in respect of the directorships,
shareholdings or
including
in portfolio companies that some of
the Directors and members of the
Company’s
investment management
team may have). In addition, neither
the Investment Manager nor any of
interests,
its affiliates owes
the Company’s
shareholders any fiduciary duties under
the Investment Management Agreement
between, inter alia, the Company and
the Investment Manager. The Company
cannot assume that any of the foregoing
will not result in a conflict of interest that
will have a material adverse effect on the
business, financial condition and results
of operations.
The Company
is highly dependent
on the Investment Manager, the Key
Persons (as defined in the Investment
Management Agreement) and the other
members of the Company’s investment
management team and the Company
cannot assure shareholders that it will
have continued access to them or their
undivided attention, which could affect
the Company’s ability to achieve its
investment objectives.
The Investment Manager’s remuneration
is based on the Company’s NAV (subject
to minimum and maximum amounts)
and is payable even if the NAV does
not increase, which could create an
incentive for the Investment Manager
to increase or maintain the NAV in the
short term (rather than the long-term) to
the potential detriment of Shareholders.
diversification and its investments could
therefore be concentrated in a relatively
small number of portfolio companies
in the Healthcare, Hospitality, Lifestyle
(including
estate
developments), logistics and education
sectors predominantly in Asia.
branded
real
to make,
investments
The Company has made, and may
in
continue
companies in emerging markets, which
exposes it to additional risks (including,
but not limited to, the possibility of
exchange control regulations, political
and social instability, nationalisation or
expropriation of assets, the imposition of
taxes, higher rates of inflation, difficulty
in enforcing contractual obligations,
fewer investor protections and greater
price volatility) not typically associated
with investing in companies that are
based in developed markets.
companies
Furthermore, the Company has made,
and may continue to make, investments
in portfolio
that are
susceptible to economic recessions or
downturns. Such economic recessions
or downturns may also affect
the
Company’s ability to obtain funding for
additional investments.
The Company’s
investment policies
contain no requirements for investment
The Company’s investments include
investments in companies that it does
not control and/or made with other
ANNUAL REPORT 2019
26
INVESTMEN T
MANAGER’S REPOR T
co-investors for financial or strategic
reasons. Such investments may involve
risks not present in investments where
the Company has full control or where a
third party is not involved. For example,
there may be a possibility that a co-
investor may have financial difficulties
or become bankrupt or may at any time
have economic or business interests or
goals which are inconsistent with those
of the Company or may be in a position
to take or prevent actions in a manner
inconsistent with
the Company’s
objectives. The Company may also be
liable in certain circumstances for the
actions of a co-investor with which it is
associated. In addition, the Company
holds a non-controlling interest in certain
investments, and therefore, may have a
limited ability to protect its position in
such investments.
A number of the Company’s investments
are currently, and likely to continue to be,
illiquid and/ or may require a long-term
commitment of capital. The Company’s
investments may also be subject to
legal and other restrictions on resale.
The illiquidity of these investments may
make it difficult to sell investments if the
need arises.
The Company’s real estate related
investments may be subject to the risks
inherent in the ownership and operation
of real estate businesses and assets.
A downturn in the real estate sector
or a materialization of any of the risks
inherent in the real estate business and
assets could materially adversely affect
the Company’s real estate investments.
The Company’s portfolio companies
also anticipate selling a significant
proportion of development properties
prior to completion. Any delay in the
completion of these projects may result
in purchasers terminating off-plan sale
refunds,
agreements and claiming
damages and/or compensation.
The Company is exposed to foreign
exchange risk when investments and/
or transactions are denominated in
currencies other than the U.S. dollar,
which could lead to significant changes
in the net asset value that the Company
reports from one quarter to another.
the Company’s
those changes would
The Company’s
investment policies
and procedures (which incorporate the
Company’s investment strategy) provide
that the Investment Manager should
review
investment
policies and procedures on a regular
if necessary, propose
basis and,
changes to the Board when it believes
that
further
assist the Company in achieving its
objective of building a strong investment
base and creating long term value
for its Shareholders. The decision to
make any changes to the Company’s
investment policy and strategy, material
or otherwise, rests with the Board in
conjunction with the Investment Manager
and Shareholders have no prior right of
approval for material changes to the
Company’s investment policy.
to
tend
render
Investments in connection with special
situations and structured transactions
typically have shorter operating histories,
narrower product
lines and smaller
market shares than larger businesses,
them more
which
vulnerable to competitors’ actions and
market conditions, as well as general
economic
Investments
that fall into this category tend to have
relatively short holding periods and entail
little or no participation in the board of
the company in which such investments
may be made.
downturns.
situations and
Special
structured
transactions in the form of fixed debt
investments also carry an additional risk
that an increase in interest rates could
decrease their value.
investment
The Company’s current
policies and procedures provide that
it may invest an amount of no more
than 30% of its total assets in special
situations and structured transactions
which, although they are not typical
longer-term
the
potential to generate attractive returns
and enhance
the Company’s net
asset value. Following the Company’s
investment, it may be that the proportion
of its total assets invested in longer-term
investments, have
SYMPHONY INTERNATIONAL HOLDINGS LIMITED 27
liquidity, or otherwise seeks to realise
the value of his investment through
a sale, the amount received by the
shareholder upon such sale may be
less than the underlying NAV of the
shares sold.
ANIL THADANI
Chairman,
Symphony Asia Holdings Pte. Ltd.
11 March 2020
In addition, while the Company’s
temporary investments will be relatively
conservative compared to its longer-
term investments or special situations
and structured
they
are nevertheless subject to the risks
associated with any investment, which
could result in the loss of all or a portion
of the capital invested.
transactions,
The Investment Manager has identified
but has not yet contracted to make further
potential investments. The Company
cannot guarantee shareholders that any
or all of these prospective investments
will take place in the future.
The market price of the Company’s
shares may fluctuate significantly and
shareholders may not be able to resell
their shares at or above the price at
which they purchased them.
The Company’s shares are currently
trading, and have in the past traded,
and could in the future trade, at a
discount to NAV for a variety of reasons,
including due to market conditions. The
only way for shareholders to realise
their investment is to sell their shares
for cash. Accordingly, in the event
that a shareholder requires immediate
investments falls below 70% and the
proportion of its total assets invested
in special situations and structured
transactions exceeds 30% due
to
changes in the valuations of the assets,
over which the Company has no control.
in
invested
temporarily
Pending the making of investments,
the Company’s capital will need to
be
liquid
investments and managed by a
third-party
investment manager of
international repute or held on deposit
with commercial banks before they are
invested. The returns that temporary
investments are expected to generate
and the interest that the Company
will earn on deposits with commercial
banks will be substantially lower than
the returns that it anticipates receiving
from its longer-term investments or
special
structured
transactions.
situations and
ANNUAL REPORT 2019 28
BOARD OF DIRECTORS
GEORGES GAGNEBIN
RAJIV K. LUTHRA
SAMER Z. ALSAIFI
Mr. Alsaifi is based in Dubai and was
appointed to the Board of the Company
on 1 March 2019. He is currently the Vice-
Chairman and a Partner of Alcazar Capital
Limited, a private equity and advisory
platform regulated by the Dubai Financial
Services Authority. Mr. Alsaifi brings
extensive capital markets experience
to the Company’s board having previously
held roles in corporate finance, private
banking, asset management and private
equity in the United States, the United
Arab Emirates and Singapore. Prior to
Alcazar Capital Limited, Mr. Alsaifi was
an Executive Director and Advisor at
Morgan Stanley Wealth Management
in Dubai. Before that, Mr. Alsaifi was
the CEO of DIC Asset Management,
the wholly-owned subsidiary of Dubai
International Capital LLC, the Dubai
Sovereign Wealth Fund. Mr. Alsaifi has
also held roles at the Arab Bank Plc in
Jordan and Singapore and Manufacturers
Hanover Trust in New York. Mr. Alsaifi has
a BA in Management and Finance from
Southeastern Louisiana University and
has completed an Executive Management
Program at Harvard University.
Mr. Gagnebin is based in Echandens,
Switzerland and was appointed to the
Board of the Company on 8 July 2007
and to the position of Chairman of the
Company on 27 November 2019. He
is the Chairman of the Board of Pâris
Bertrand (Europe) S.A., Luxembourg
since 2016 as well as the Chairman of
the Board of Banque Pâris Bertrand S.A.,
Geneva since 2012. In 2005, he joined
the Julius Baer Group Ltd. where he was
a Vice- Chairman of Julius Baer Holding
Ltd and Bank Julius Baer & Co Ltd and,
more recently, Chairman of the board of
directors of Infidar Investment Advisory
Ltd., a member company of Julius Baer
Group Ltd. Prior to joining the Julius Baer
Group in 2005, Mr. Gagnebin held several
executive positions at UBS AG, including
Head of International Clients Europe,
Middle East and Africa in the private
banking division, a member of the Group
Managing Board, a member of the Group
Executive Board, Chief Executive Officer
of Private Banking, Chairman of Wealth
Management and Business Banking,
and the Vice- Chairman of SBC Wealth
Management AG. From 1969 to 1998,
Mr. Gagnebin held various positions at
the Swiss Bank Corporation, including
serving as member of the management
committee. He was awarded an official
diploma as a Swiss certified Banking
Expert in 1972.
Mr. Luthra is based in New Delhi and was
appointed to the Board of the Company
on 8 July 2007. He is the Founder and
Managing Partner of L&L Partners
(formerly Luthra & Luthra Law Offices),
a full-service top-tier Indian law firm,
which has been ranked across various
practice areas in all leading international
publications and has won a number of
accolades, including ‘Best Corporate
and M&A Law Firm 2020 – India’ by
Acquisition International; ‘Energy and
Resources Law Firm of the Year’ by ALB
India, ‘Best Overall Law Firm’ by India
Business Law Journal; ‘global leader
in Project Finance and Public-Private-
Partnership’ and has been recognized
as the ‘No. 1 law firm in the world’ by
Dealogic.
Mr. Luthra serves on a number of high-
level committees, including the High Level
Advisory Group, appointed by Commerce
Ministry to formulate India’s trade policies;
High Level Committee on Corporate Social
Responsibility; Securities Exchange
Board of India high level committees for
(i) Reviewing Insider Trading Regulations
and (iii) Rationalization of Investment
Routes and Monitoring of Foreign
Portfolio Investments; Advisory Board
of the Competition Commission of India
amongst others. He is also the Convener
of the Joint Economic & Trade Committee,
formed to advise the Government of India
on the liberalisation of legal services
between India and the UK.
He is a recipient of the ‘National Law Day
Award’ bestowed upon him by the Prime
Minister of India and the Chief justice of
India and the ‘Managing Partner of the
Year 2020’ Award by ALB India, among
several others.
SYMPHONY INTERNATIONAL HOLDINGS LIMITED
29
OLIVIERO BOTTINELLI
ANIL THADANI
SUNIL CHANDIRAMANI
Mr. Bottinelli is based in Singapore
and was appointed to the Board of the
Company on 27 November 2019. Mr.
Bottinelli currently oversees Imagine
Capital Limited, a private family office
which is involved in asset, property and
corporate management. He also serves
on the Board of Audemars Piguet. Prior
roles include the Chief Executive Officer
of Audemars Piguet Asia Pacific and an
Executive at BP de Silva. Mr. Bottinelli
graduated (magna cum laude) from the
Business School of Lausanne Switzerland
with a degree in Business Administration.
Mr. Chandiramani is based in Hong
Kong and was appointed to the Board of
the Company on 16 February 2004. He
is Chief Executive Officer of Symphony
Capital Partners Limited and a Non-
Executive Director of the Investment
Manager. Mr. Chandiramani has over 32
years’ experience in private equity and
related investment experience across
multiple industry sectors in Asia and
the United States. Mr. Chandiramani’s
experience in Asian private equity was
initially as a partner with Arral & Partners
and subsequently with Schroder Capital
Partners. Prior to that, he worked on
leveraged buy-outs and acquisitions
for the Structured Finance Group at
Bankers Trust Company in New York.
Mr. Chandiramani has a BCom (Hons)
from the Shri Ram College of Commerce,
Delhi University, and an MBA from
the Wharton School of the University
Pennsylvania.
Mr. Thadani is based in Singapore
and was appointed to the Board of the
Company on 16 February 2004. He is
also the Chairman of the Investment
Manager. Mr. Thadani has worked in the
Asia-Pacific region since 1975 and has
been involved in Asian private equity since
1981 when he cofounded one of the first
private equity investment companies in
Asia. In 1992 he founded Schroder Capital
Partners, which became the Asian arm of
the Schroder Ventures Group until 2004,
when he formed the Symphony group of
companies. Before entering private equity
in 1981, Mr. Thadani began his career
as a research engineer with Chevron
Chemical Company in California. Mr.
Thadani subsequently worked for Bank
of America in the United States, Japan,
the Philippines and Hong Kong. He has
served on the boards of several private
and public companies in Asia, Europe
and North America and continues to
represent the Company on the boards
of its portfolio companies. Mr. Thadani
was appointed non-executive Chairman
of Alcazar Capital Limited, a private equity
firm regulated by the Dubai Financial
Services Authority in March 2018. He is
also an Advisor to SMU’s Committee for
Institutional Advancement. Mr. Thadani
has a B Tech in Chemical Engineering
from the Indian Institute of Technology,
Madras, an MS in Chemical Engineering
from the University of Wisconsin,
Madison, and an MBA from the University
of California at Berkeley.
ANNUAL REPORT 2019 30
DIRECTORS’ REPORT
their Report
The Directors submit
together with the Company’s Statement
of Financial Position, Statement of
Comprehensive Income, Statement of
Changes in Equity, Statement of Cash
Flows, and the related notes for the
year ended 31 December 2019, which
have been prepared in accordance
with International Financial Reporting
Standards (“IFRS”) adopted by the
International Accounting Standards
Board (“IASB”) and are in agreement
with the accounting records of the
Company, which have been properly
kept
the BVI
Business Companies Act 2004.
in accordance with
Corporate Governance
The Company is incorporated under
the laws of the British Virgin Islands.
On 3 August 2007,
the Company
was admitted to the official list of the
London Stock Exchange pursuant to a
Secondary Listing under Chapter 14 of
the Listing Rules and its securities were
admitted for trading on the London Stock
Exchange’s Main Market. In April 2010,
the UK listing regime was restructured
into Premium and Standard Listing
categories. The Company is in the
Standard Listing Category constituent.
Details of the share capital of the
Company are disclosed in note 6 to the
financial statements
As the Company is incorporated in
the British Virgin Islands, and being a
Standard Listing Category constituent,
it is not required to comply with the
requirements of the UK Combined
Code on Corporate Governance
published by the Financial Reporting
Council (the “Code”). However, the
the Board
Company is required to prepare a
corporate
statement.
governance
There
is no published corporate
governance regime equivalent to the
Code in the British Virgin Islands.
However,
is committed
to ensuring
that proper standards
of corporate governance and has
established governance procedures
and policies
it believes and
considers appropriate having regard to
the nature, size and resources of the
Company. The following explains how
the relevant principles of governance
are applied to the Company.
that
The Board currently has six members,
of which a majority, including the Board
Chairman, are independent directors.
The Board members will have regard
to their obligations to act in the best
interests of the Company should
potential conflicts of interest arise.
The Board Chairman at the start of
the 2019 financial year, Mr. Pierangelo
Bottinelli, retired from his position as
Chairman and as an
Independent
Director of
the Company effective
27 November 2019. Mr. Pierangelo
Bottinelli has been an Independent
Director of
the Company since
December 2005. During his tenure,
Mr Bottinelli has provided invaluable
advice and direction. Mr. Pierangelo
Bottinelli will continue to support the
Company in a new appointment as
Chairman Emeritus.
Mr. Georges Gagnebin,
joined
Symphony as an Independent Director
in July 2007 and was appointed to the
position of Chairman of the Company
is currently
on 27 November 2019. Mr. Gagnebin
has more than 50 years of experience
in banking and private wealth
management and
the
Chairman of the Board of Banque Pâris
Bertrand S.A., Geneva and Chairman
of the Board of Pâris Bertrand (Europe)
S.A., Luxembourg. Mr. Gagnebin is an
extremely capable successor who will
provide strong leadership to Symphony.
The other three independent directors
are Mr. Rajiv K. Luthra, Mr. Samer Z.
Alsaifi and Mr. Oliviero Roger Bottinelli.
Mr. Luthra is the managing partner
and founder of Luthra and Luthra Law
Offices in India and serves on several
high
level committees. Mr. Alsaifi
is Vice-Chairman and a Partner of
Alcazar Capital Limited, a private equity
and advisory platform regulated by the
Dubai Financial Services Authority.
Mr. Oliviero Bottinelli oversees Imagine
Capital Limited, a private family office
which is involved in asset, property
and corporate management. He also
serves on the Board of Audemars
Piguet. The other members of the
Board are Mr. Anil Thadani and
Mr. Sunil Chandiramani who have over
39 years and 32 years of experience in
private equity, respectively.
During the 2019 financial year, the
Company had directorate changes.
Mr. Alsaifi was appointed to the Board
as an Independent Director effective
1 March 2019. Mr. Pierangelo Bottinelli,
retired from his position as Chairman
and an Independent Director of the
Company on 27 November 2019.
SYMPHONY INTERNATIONAL HOLDINGS LIMITED 31
interest
Mr. Oliviero Bottinelli and Mr. Rajiv K.
Luthra. If a member of the Nominations
Committee has an
in a
matter being deliberated upon by the
Nominations Committee, he shall be
required to abstain from participating in
the review and approval process of the
Nominations Committee in relation to
that matter. If more than one member
of the Nominations Committee has an
interest in a matter being deliberated,
then the non-interested Directors who
are not members of the Nominations
Committee will participate in the review
and approval process in relation to that
matter. The Nominations Committee
met three times during the year.
The Audit Committee assists the Board
in overseeing the risk management
framework by reviewing any matters of
significance affecting financial reporting
and internal controls of the Company,
and has the duty of, among other things:
i. assisting the Board in its oversight
of the integrity of the financial
statements,
qualifications,
the
independence and performance
of the independent auditors and
compliance with relevant legal and
regulatory requirements;
ii. reviewing and approving with
the external auditors their audit
plan, the evaluation of the internal
accounting controls, audit reports
and any matters which the external
auditors wish to discuss without the
presence of board members and
ensuring compliance with relevant
legal and regulatory requirements;
the Board may
Further, pursuant to the terms of the
Investment Management Agreement
and the Articles of Association, if a
Director who is also a Key Person is to
be replaced, a new Director to replace
such Key Person Director shall be
nominated by the Investment Manager
and
reject such
nomination by the Investment Manager
only if it would be illegal to accept such
nominee of the Investment Manager
under any applicable law. The Board is
responsible for reviewing the financial
performance and internal controls and
monitoring the overall strategy of the
Company. In addition, the Board is
responsible for approving this annual
financial report and the quarterly NAV
reports during the year.
The Board has two committees:
i.
the Nominations Committee; and
ii.
the Audit Committee.
The Nominations Committee has
the duty of assessing the suitability
of candidates nominated by our
Shareholders as replacement Directors.
The Nominations Committee comprises
a majority of independent Directors.
The Chairman of
the Nominations
Committee is Mr. Georges Gagnebin.
The other Nominations Committee
members are Mr. Anil Thadani,
Mr. Georges Gagnebin was appointed
to
the position of Chairman and
Mr. Oliviero Bottinelli was appointed
as an Independent Director at the
same time.
More detailed biographies of
the
Directors can be found preceding
this section. The Board has extensive
experience relevant to the Company
and any change
the Board
composition can be managed without
undue interruption.
in
The Directors currently do not have a
fixed term of office and there are specific
provisions regarding the procedures for
their appointment. The Directors may
be removed and replaced at any time
subject to the following procedure:
i. any proposal for the replacement or
removal of one or more Directors shall
be considered by the Nominations
Committee who shall assess the
suitability of the candidates proposed
(and any Director who is the subject
of the removal proposal shall not
participate in such assessment); and
ii. if the Nominations Committee
approves the candidate(s) proposed
they shall convene a special meeting
of the Board to vote on the removal
and replacement of the relevant
Director(s).
ANNUAL REPORT 2019
32
DIRECTORS’ REPORT
iii. reviewing and approving with
the internal auditors the scope
internal audit
and
procedures and their evaluation
internal control system;
of
results of
the
iv. making recommendations to the
Board on
the appointment or
reappointment of external auditors,
the audit fee and resignation or
dismissal of the external auditors;
and
v. pre-approving any non-audit
services provided by the external
auditors.
The Audit Committee comprises a
majority of independent Directors. The
Chairman of the Audit Committee is
Mr. Rajiv K. Luthra. The other Audit
Committee members are Mr. Georges
Gagnebin, Mr. Samer Alsaifi and Mr.
Sunil Chandiramani. If a member of
the Audit Committee has an interest in
a matter being deliberated upon by the
Audit Committee, he shall abstain from
participating in the review and approval
process of the Audit Committee in
relation to that matter. If more than one
member of the Audit Committee has an
interest in a matter being deliberated,
the non-interested Directors
then
who are not members of the Audit
Committee will participate in the review
and approval process in relation to that
matter. The Audit Committee met two
times during the year.
Each Committee and each Director
has the authority to seek independent
professional advice where necessary
to discharge their respective duties in
each case at the Company’s expense.
The Board understands its responsibility
for ensuring that there are sufficient,
appropriate and effective systems,
procedures, policies and processes for
internal control of financial operational
risk management
compliance and
matters. The Board meets regularly
during the year to receive from the
Investment Manager an update on the
Company’s investment activities and
performance, together with reports on
markets and other relevant matters. In
carrying out their responsibilities, the
Directors have put in place a framework
of controls to ensure ongoing financial
performance is monitored in a timely
and corrective manner and risk is
identified and mitigated to the extent
practicably possible.
The Board periodically meets and
had a total of five meetings during the
year. The Company has entered into
an agreement with the Investment
Manager. The key
responsibilities
of the Investment Manager are to
implement the investment objectives
the Company. The Company’s
of
investment objective is to create value
for stakeholders through long term
strategic investments.
DIRECTORS’ RESPONSIBILITY STATEMENT
the Directors of Symphony
We
International Holdings Limited the
Company confirm that to the best of
our knowledge:
ii.
i.
the Financial statements of
the Company prepared
in
accordance with
International
Financial Reporting Standards
(IFRS), give a true and fair view
of the assets, liabilities, financial
position and profit or loss of the
Company taken as a whole as
at and for the year ended 31
December 2019;
the Investment Manager’s Report
includes a fair review of the
development and performance of
the business for the year ended
the
31 December 2019 and
position of the Company taken
as a whole as at 31 December
2019, together with a description
of the risks and uncertainties that
the Group faces; and
iii. the accounting records have
been properly kept.
On behalf of the Board of Directors
GEORGES GAGNEBIN
Chairman
Symphony International Holdings
Limited
ANIL THADANI
Chairman
Symphony Asia Holdings Pte. Ltd.
Director
Symphony International Holdings
Limited
6 April 2020
SYMPHONY INTERNATIONAL HOLDINGS LIMITED CORPORATE INFORMATION
33
INVESTMENT MANAGER
Symphony Asia Holdings Pte. Ltd.
9 Raffles Place
#52-02 Republic Plaza Tower 1
Singapore 048619
AUDITORS
KPMG LLP
Public Accountants and
Chartered Accountants
16 Raffles Quay
#22-00 Hong Leong Building
Singapore 048581
COMPANY
Symphony International
Holdings Limited
DIRECTORS
Georges Gagnebin
Chairman and Independent Director
Rajiv K. Luthra
Independent Director
Samer Z. Alsaifi
Independent Director
Oliviero Roger Bottinelli
Independent Director
Anil Thadani
Sunil Chandiramani
REGISTERED OFFICE IN THE
BRITISH VIRGIN ISLANDS
Vistra Corporate Services Centre
Wickhams Cay II
Road Town Tortola VG1110
British Virgin Islands
REGISTERED AGENT
Vistra (BVI) Limited
Vistra Corporate Services Centre
Wickhams Cay II
Road Town Tortola VG1110
British Virgin Islands
CORRESPONDENCE ADDRESS
Care of: Symphony Asia Holdings
Pte. Ltd.
9 Raffles Place
#52-02 Republic Plaza Tower 1
Singapore 048619
SHARE REGISTRAR AND
SHARE TRANSFER AGENT
Link Market Services
(Guernsey) Ltd.
Mont Crevett House
Bulwer Avenue
St. Sampson, Guernsey
GY2 4LH
ANNUAL REPORT 2019 FINANCIAL STATEMENTS
36
41
INDEPENDENT
AUDITORS’ REPORT
STATEMENT OF
FINANCIAL POSITION
43
44
42
STATEMENT OF
COMPREHENSIVE
INCOME
45
STATEMENT OF
CHANGES IN EQUITY
STATEMENT OF
CASH FLOWS
NOTES TO THE
FINANCIAL STATEMENTS
81
NOTICE OF ANNUAL
GENERAL MEETING
83
ANNUAL GENERAL
MEETING | FORM OF
DIRECTION
85
PROXY FORM
36
REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS
Opinion
We have audited the financial statements of Symphony International Holdings Limited (‘the Company’), which comprise the
statement of financial position of the Company as at 31 December 2019, 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 41 to 80.
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 2019 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 International Ethics Standards Board for Accountants Code of Ethics
for Professional Accountants (IESBA Code) and the Accounting and Corporate Regulatory Authority Code of Professional
Conduct and Ethics for Public Accountants and Accounting Entities (ACRA Code) together with the ethical requirements that
are relevant to our audit of the financial statements in Singapore, and we have fulfilled our other ethical responsibilities in
accordance with these requirements and the ACRA Code, and 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.
SYMPHONY INTERNATIONAL HOLDINGS LIMITEDINDEPENDENT AUDITORS’ REPORTMembers of the CompanySymphony International Holdings Limited 37
Valuation of financial assets at fair value through profit or loss (Level 3)
(Refer to Note 16 to the financial statements, page 66 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$569 million (2018: US$487 million) at
31 December 2019. The Company holds its investments directly
or through its unconsolidated subsidiaries. The underlying
investments comprise both quoted and unquoted securities.
The Company has underlying unquoted investments amounting
to US$300 million (2018: US$220 million) which require
significant judgement in the determination of the fair values as
significant unobservable inputs are used in their estimation.
Changes in these unobservable inputs could have a material
impact on the valuation of these investments.
As part of our audit procedures, we have:
• Evaluated the design and implementation of controls over
the preparation, review and approval of the valuations.
• Our in-house valuation specialist has assessed the
appropriateness of the internal models used to value the
operating businesses.
• For land related investments and rental properties,
evaluated the valuers’ independence and qualification;
and compared the assumptions and parameters used to
externally derived data.
The Company used external valuers to measure the fair
value of the land related investments and rental properties.
The Company used internal models to value the operating
businesses.
• For operating businesses valued using the comparable
enterprise model, checked consistency of EBITDA multiples
and share prices to publicly available information.
• For land related investments in Thailand, Japan and
Malaysia, the external valuers applied the comparable
valuation method with the price per square metre as the
most determinative parameter.
• For the operating business valued using the adjusted net
asset value method, assessed that the items deducted from
assets to be consistent with market practices.
• For rental properties in Thailand, an income approach
was used to determine the fair value, by using the rental
growth rate, occupancy rate and discount rate as the key
input parameters.
• For operating businesses in Thailand, the Company
measured the investments using the enterprise values by
applying comparable traded multiples and a discount for
the lack of marketability.
• For an operating business in France, the Company measured
the investment using the adjusted net asset value method
and applied a discount to tangible assets for lack of liquidity
to certain classes of assets.
• For a greenfield operating business in Thailand, the Company
used a discounted cash flow method to determine the fair
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 operating business valued using the discounted
cash flow method, assessed the reasonableness of key
assumptions used including projected revenue and expenses
by corroborating to past performance.
•
Involved our in-house valuation specialist in assessing the
appropriateness of comparable enterprises and reviewing
key assumptions such as the discount rate used for
the lack of marketability and the lack of liquidity, small
capitalisation premium, WACC and the terminal growth
rate and corroborated the reasons for any unexpected
movements from prior valuations.
• Reviewed the adequacy of the disclosures in the financial
statements on the key assumptions in the estimates applied
in the valuations.
ANNUAL REPORT 2019INDEPENDENT AUDITORS’ REPORTMembers of the CompanySymphony International Holdings Limited 38
Valuation of financial assets at fair value through profit or loss (Level 3)
(Refer to Note 16 to the financial statements, page 66 et seq.)
Our findings
We found the design and the controls over the preparation, review and approval of valuations to be effective. The valuation
methodologies used are in line with generally accepted market practices. We found no matters of concern regarding the
independence and qualification of the external valuers.
Overall, the valuation estimates and assumptions made by management were within a reasonable range of estimates
used in our evaluation. We also noted that the Company’s disclosures were adequate.
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, but does not include 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.
SYMPHONY INTERNATIONAL HOLDINGS LIMITEDINDEPENDENT AUDITORS’ REPORTMembers of the CompanySymphony International Holdings Limited 39
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.
ANNUAL REPORT 2019INDEPENDENT AUDITORS’ REPORTMembers of the CompanySymphony International Holdings Limited 40
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 Shelley Chan Hoi Yi.
KPMG LLP
Public Accountants and
Chartered Accountants
Singapore
6 April 2020
SYMPHONY INTERNATIONAL HOLDINGS LIMITEDINDEPENDENT AUDITORS’ REPORTMembers of the CompanySymphony International Holdings Limited 41
Note
2019
US$’000
2018
US$’000
3
4
5
6
8
9
569,339
569,339
486,790
486,790
69
7,671
7,740
577,079
72
11,538
11,610
498,400
409,704
93,945
503,649
409,704
83,001
492,705
72,879
551
–
73,430
577,079
5,327
368
*
5,695
498,400
Non-current assets
Financial assets at fair value through profit or loss
Current assets
Other receivables and prepayments
Cash and cash equivalents
Total assets
Equity attributable to equity holders of the Company
Share capital
Accumulated profits
Total equity carried forward
Current liabilities
Interest-bearing borrowings
Other payables
Bank overdraft
Total liabilities
Total equity and liabilities
*
Less than US$1,000
The financial statements were approved by the Board of Directors on 6 April 2020.
Anil Thadani
Director
6 April 2020
Sunil Chandiramani
Director
The accompanying notes form an integral part of these financial statements.ANNUAL REPORT 2019STATEMENT OF FINANCIAL POSITIONAs at 31 December 2019 42
Other operating income
Other operating expenses
Management fees
(Loss)/Profit before investment results and income tax
Loss on disposal of financial assets at fair value through profit or loss
Fair value changes in financial assets at fair value through profit or loss
Profit/(Loss) before income tax
Income tax expense
Profit/(Loss) for the year
Other comprehensive income for the year, net of tax
Total comprehensive income for the year
Earnings per share:
Basic
Diluted
*
Less than US$1,000
Note
2019
US$’000
2018
US$’000
784
(3,156)
(11,839)
(14,211)
(410)
43,533
28,912
*
28,912
–
28,912
26,142
(4,157)
(12,248)
9,737
(19)
(79,234)
(69,516)
–
(69,516)
–
(69,516)
US Cents
US Cents
5.63
5.63
(13.99)
(13.99)
10
11
12
12
The accompanying notes form an integral part of these financial statements.SYMPHONY INTERNATIONAL HOLDINGS LIMITEDSTATEMENT OF COMPREHENSIVE INCOMEYear ended 31 December 2019 43
Share
capital
US$’000
Reserves
US$’000
Accumulated
profits
US$’000
Total equity
US$’000
At 1 January 2018
382,797
62,298
173,577
618,672
Total comprehensive income for the year
–
–
(69,516)
(69,516)
Transactions with owners of the Company,
recognised directly in equity
Contributions by and distributions to owners
Issuance of shares
Share options lapsed during the year
Exercise of share options
Dividend paid of US$0.12 per share
Total transaction with owners of the Company
At 31 December 2018
At 1 January 2019
Total comprehensive income for the year
Transactions with owners of the Company,
recognised directly in equity
Contributions by and distributions to owners
Dividend paid of US$0.035 per share
Total transaction with owners of the Company
At 31 December 2019
15,087
–
11,820
–
26,907
409,704
409,704
–
–
–
409,704
–
(50,478)
(11,820)
–
(62,298)
–
–
–
–
–
–
–
50,478
–
(71,538)
(21,060)
83,001
15,087
–
–
(71,538)
(56,451)
492,705
83,001
492,705
28,912
28,912
(17,968)
(17,968)
93,945
(17,968)
(17,968)
503,649
The accompanying notes form an integral part of these financial statements.ANNUAL REPORT 2019STATEMENT OF CHANGES IN EQUITYYear ended 31 December 2019 44
Cash flows from operating activities
Profit/(Loss) before income tax
Adjustments for:
Dividend income
Exchange loss, net
Interest income
Interest expense
Loss on disposal of financial assets at fair value through profit or loss
Fair value changes in financial assets at fair value through profit or loss
Changes in:
- Other receivables and prepayments
- Other payables
Interest received (net of withholding tax)
Net cash used in operating activities
Cash flows from investing activities
Net proceeds (provided to)/received from unconsolidated subsidiaries
Net proceeds received from financial assets at fair value through profit or loss
Net cash (used in)/from investing activities
Cash flows from financing activities
Proceeds from issue of share capital
Interest paid
Dividend paid
Proceeds from borrowings
Net cash from/(used in) financing activities
Net decrease in cash and cash equivalents
Cash and cash equivalents at 1 January
Effect of exchange rate fluctuations
Cash and cash equivalents at 31 December
*
Less than US$1,000
Significant non-cash transactions
Note
2019
US$’000
2018
US$’000
28,912
(69,516)
(231)
534
(553)
1,389
410
(43,533)
(13,072)
*
60
(13,012)
556
(12,456)
(48,334)
8,654
(39,680)
–
(1,268)
(17,968)
67,483
48,247
(3,889)
11,538
22
7,671
(25,841)
2,785
(301)
199
19
79,234
(13,421)
16
(20)
(13,425)
290
(13,135)
65,602
–
65,602
13,578
(199)
(70,029)
34
(56,616)
(4,149)
15,689
(2)
11,538
5
During the financial year ended 31 December 2019, the Company received dividends of $231,000 (2018: $25,841,000) from
its unconsolidated subsidiaries of which $231,000 (2018: $25,841,000) was set off against the non-trade amounts due to the
unconsolidated subsidiaries.
During the financial year ended 31 December 2018, the Company declared dividends of $71,538,000 of which $1,509,000
was offset against the amount due from the Investment Manager from the exercise of share options.
The accompanying notes form an integral part of these financial statements.SYMPHONY INTERNATIONAL HOLDINGS LIMITEDSTATEMENT OF CASH FLOWSYear ended 31 December 2019 45
These notes form an integral part of the financial statements.
The financial statements were authorised for issue by the Board of Directors on 6 April 2020.
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 strategic long-term investments in consumer-related businesses, primarily in the healthcare,
hospitality, lifestyle (including branded real estate developments), logistics and education sectors predominantly in
Asia and through investments in special situations and structured transactions, which have the potential of generating
attractive returns.
2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
2.1 Going concern
As at 31 December 2019, the Company’s current liabilities exceeded its current assets by US$65,690,000. The Company,
through its wholly owned subsidiaries, holds listed securities amounting to US$282,494,000 (2018: US$268,832,000).
These listed securities are liquid and can therefore be sold from time-to-time to generate additional cash to settle any
existing and ongoing liabilities of the Company. The directors are therefore confident that the use of the going concern
assumption for the year ended 31 December 2019 remains appropriate.
2.2 Basis of preparation
The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS).
The financial statements have been prepared on a fair value basis, except for certain items which are measured on a
historical cost basis. The financial statements are presented in thousands of United States dollars (US$’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 to the carrying amounts of assets within the next financial year are included in the following note:
•
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.
ANNUAL REPORT 2019NOTES TO THE FINANCIAL STATEMENTSYear ended 31 December 2019 46
2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
2.3 Changes in accounting policies
The Company has applied the following IFRSs, amendments to and interpretations of FRSs for the first time for the
annual period beginning on 1 January 2019:
•
•
•
•
•
•
•
•
IFRS 16 Leases
IFRIC 23 Uncertainty over Income Tax Treatment
Amendments to IAS 28 Long-term Interests in Associates and Joint Ventures
Amendments to IFRS 9 Prepayment Features with Negative Compensation
Amendments to IFRS 3 and 11 Previously Held Interest in a Joint Operation
Amendments to IAS 12 Income Tax Consequences of Payments on Financial Instruments Classified as Equity
Amendments to IAS 23 Borrowing Costs Eligible for Capitalisation
Amendments to IAS 19 Plan Amendment, Curtailment or Settlement
The adoption of these IFRSs, amendments to standards and interpretations did not have a material effect on the
Company’s financial statements.
2.4
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.
2.5
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.
2.6
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.
SYMPHONY INTERNATIONAL HOLDINGS LIMITEDNOTES TO THE FINANCIAL STATEMENTSYear ended 31 December 2019 47
2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
2.7
Financial instruments
(i)
Recognition and initial measurement
Non-derivative financial assets and financial liabilities
Trade receivables and debt investments issued are initially recognised when they are originated. All other financial
assets and financial liabilities are initially recognised when the Company becomes a party to the contractual
provisions of the instrument.
A financial asset (unless it is a trade receivable without a significant financing component) or financial liability
is initially measured at fair value plus, for an item not at fair value through profit or loss (FVTPL), transaction
costs that are directly attributable to its acquisition or issue. A trade receivable without a significant financing
component is initially measured at the transaction price.
(ii)
Classification and subsequent measurement
Non-derivative financial assets
On initial recognition, a financial asset is classified as measured at: amortised cost; or FVTPL.
Financial assets are not reclassified subsequent to their initial recognition unless the Company changes its
business model for managing financial assets, in which case all affected financial assets are reclassified on
the first day of the first reporting period following the change in the business model.
Financial assets at amortised cost
A financial asset is measured at amortised cost if it meets both of the following conditions and is not designated
as at FVTPL:
•
•
it is held within a business model whose objective is to hold assets to collect contractual cash flows; and
its contractual terms give rise on specified dates to cash flows that are solely payments of principal and
interest on the principal amount outstanding.
Financial assets at FVTPL
All financial assets not classified as measured at amortised cost as described above are measured at FVTPL.
On initial recognition, the Company may irrevocably designate a financial asset that otherwise meets the
requirements to be measured at amortised cost as at FVTPL if doing so eliminates or significantly reduces an
accounting mismatch that would otherwise arise.
ANNUAL REPORT 2019NOTES TO THE FINANCIAL STATEMENTSYear ended 31 December 2019 48
2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
2.7
Financial instruments (Cont’d)
(ii)
Classification and subsequent measurement (Cont’d)
Financial assets: Business model assessment
The Company makes an assessment of the objective of the business model in which a financial asset is held
at a portfolio level because this best reflects the way the business is managed and information is provided to
management. The information considered includes:
•
•
•
•
•
the stated policies and objectives for the portfolio and the operation of those policies in practice. These
include whether management’s strategy focuses on earning contractual interest income, maintaining a
particular interest rate profile, matching the duration of the financial assets to the duration of any related
liabilities or expected cash outflows or realising cash flows through the sale of the assets;
how the performance of the portfolio is evaluated and reported to the Company’s management;
the risks that affect the performance of the business model (and the financial assets held within that
business model) and how those risks are managed;
how managers of the business are compensated – e.g. whether compensation is based on the fair value
of the assets managed or the contractual cash flows collected; and
the frequency, volume and timing of sales of financial assets in prior periods, the reasons for such sales
and expectations about future sales activity.
Transfers of financial assets to third parties in transactions that do not qualify for derecognition are not considered
sales for this purpose, consistent with the Company’s continuing recognition of the assets.
Financial assets that are held-for-trading or are managed and whose performance is evaluated on a fair value
basis are measured at FVTPL.
Non-derivative financial assets: Assessment whether contractual cash flows are solely payments of
principal and interest
For the purposes of this assessment, ‘principal’ is defined as the fair value of the financial asset on initial
recognition. ‘Interest’ is defined as consideration for the time value of money and for the credit risk associated
with the principal amount outstanding during a particular period of time and for other basic lending risks and
costs (e.g. liquidity risk and administrative costs), as well as a profit margin.
In assessing whether the contractual cash flows are solely payments of principal and interest, the Company
considers the contractual terms of the instrument. This includes assessing whether the financial asset contains
a contractual term that could change the timing or amount of contractual cash flows such that it would not meet
this condition. In making this assessment, the Company considers:
•
•
•
•
contingent events that would change the amount or timing of cash flows;
terms that may adjust the contractual coupon rate, including variable rate features;
prepayment and extension features; and
terms that limit the Company’s claim to cash flows from specified assets (e.g. non-recourse features).
SYMPHONY INTERNATIONAL HOLDINGS LIMITEDNOTES TO THE FINANCIAL STATEMENTSYear ended 31 December 2019 49
2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
2.7
Financial instruments (Cont’d)
(ii)
Classification and subsequent measurement (Cont’d)
Non-derivative financial assets: Assessment whether contractual cash flows are solely payments of
principal and interest (Cont’d)
A prepayment feature is consistent with the solely payments of principal and interest criterion if the prepayment
amount substantially represents unpaid amounts of principal and interest on the principal amount outstanding,
which may include reasonable compensation for early termination of the contract. Additionally, for a financial
asset acquired at a significant discount or premium to its contractual par amount, a feature that permits or requires
prepayment at an amount that substantially represents the contractual par amount plus accrued (but unpaid)
contractual interest (which may also include reasonable additional compensation for early termination) is treated
as consistent with this criterion if the fair value of the prepayment feature is insignificant at initial recognition.
Non-derivative financial assets: Subsequent measurement and gains and losses
Financial assets at amortised cost
These assets are subsequently measured at amortised cost using the effective interest method. The amortised
cost is reduced by impairment losses. Interest income, foreign exchange gains and losses and impairment are
recognised in profit or loss. Any gain or loss on derecognition is recognised in profit or loss.
Financial assets at FVTPL
These assets are subsequently measured at fair value. Net gains and losses, including any interest or dividend
income, are recognised in profit or loss.
Non-derivative financial liabilities: Classification, subsequent measurement and gains and losses
Other financial liabilities are initially measured at fair value less directly attributable transaction costs. They are
subsequently measured at amortised cost using the effective interest method. Interest expense and foreign
exchange gains and losses are recognised in profit or loss.
(iii) Derecognition
Financial assets
The Company derecognises a financial asset when the contractual rights to the cash flows from the financial
asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially
all of the risks and rewards of ownership of the financial asset are transferred or in which the Company neither
transfers nor retains substantially all of the risks and rewards of ownership and it does not retain control of the
financial asset.
The Company enters into transactions whereby it transfers assets recognised in its statement of financial position,
but retains either all or substantially all of the risks and rewards of the transferred assets. In these cases, the
transferred assets are not derecognised.
ANNUAL REPORT 2019NOTES TO THE FINANCIAL STATEMENTSYear ended 31 December 2019 50
2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
2.7
Financial instruments (Cont’d)
(iii) Derecognition (Cont’d)
Financial liabilities
The Company derecognises a financial liability when its contractual obligations are discharged or cancelled,
or expire. The Company also derecognises a financial liability when its terms are modified and the cash flows
of the modified liability are substantially different, in which case a new financial liability based on the modified
terms is recognised at fair value.
On derecognition of a financial liability, the difference between the carrying amount extinguished and the
consideration paid (including any non-cash assets transferred or liabilities assumed) is recognised in profit or loss.
(iv) Offsetting
Financial assets and financial liabilities are offset and the net amount presented in the statement of financial
position when, and only when, the Company currently has a legally enforceable right to set off the amounts
and it intends either to settle them on a net basis or to realise the asset and settle the liability simultaneously.
(v)
Cash and cash equivalents
Cash and cash equivalents comprise cash balances and short-term deposits with maturities of three months
or less from the date of acquisition that are subject to an insignificant risk of changes in their fair value, and are
used by the Company in the management of its short-term commitments.
(vi)
Share capital
Ordinary shares
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares
are recognised as a deduction from equity, net of any tax effects.
2.8
Impairment
(i)
Non-derivative financial assets
The Company recognises loss allowances for ECLs on financial assets measured at amortised cost.
Loss allowances of the Company are measured on either of the following bases:
•
•
12-month ECLs: these are ECLs that result from default events that are possible within the 12 months after
the reporting date (or for a shorter period if the expected life of the instrument is less than 12 months); or
Lifetime ECLs: these are ECLs that result from all possible default events over the expected life of a
financial instrument.
SYMPHONY INTERNATIONAL HOLDINGS LIMITEDNOTES TO THE FINANCIAL STATEMENTSYear ended 31 December 2019 51
2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
2.8
Impairment (Cont’d)
(i)
Non-derivative financial assets (Cont’d)
General approach
The Company applies the general approach to provide for ECLs on all financial instruments. Under the general
approach, the loss allowance is measured at an amount equal to 12-month ECLs at initial recognition.
At each reporting date, the Company assesses whether the credit risk of a financial instrument has increased
significantly since initial recognition. When credit risk has increased significantly since initial recognition, loss
allowance is measured at an amount equal to lifetime ECLs.
When determining whether the credit risk of a financial asset has increased significantly since initial recognition
and when estimating ECLs, the Company considers reasonable and supportable information that is relevant and
available without undue cost or effort. This includes both quantitative and qualitative information and analysis,
based on the Company’s historical experience and informed credit assessment and includes forward-looking
information.
If credit risk has not increased significantly since initial recognition or if the credit quality of the financial instruments
improves such that there is no longer a significant increase in credit risk since initial recognition, loss allowance
is measured at an amount equal to 12-month ECLs.
The Company considers a financial asset to be in default when:
•
•
the borrower is unlikely to pay its credit obligations to the Company in full, without recourse by the
Company to actions such as realising security (if any is held); or
the financial asset is more than 90 days past due.
The maximum period considered when estimating ECLs is the maximum contractual period over which the
Company is exposed to credit risk.
Measurement of ECLs
ECLs are probability-weighted estimates of credit losses. Credit losses are measured at the present value of
all cash shortfalls (i.e. the difference between the cash flows due to the entity in accordance with the contract
and the cash flows that the Company expects to receive). ECLs are discounted at the effective interest rate of
the financial asset.
ANNUAL REPORT 2019NOTES TO THE FINANCIAL STATEMENTSYear ended 31 December 2019 52
2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
2.8
Impairment (Cont’d)
(i)
Non-derivative financial assets (Cont’d)
Credit-impaired financial assets
At each reporting date, the Company assesses whether financial assets carried at amortised cost are
credit-impaired. A financial asset is ‘credit-impaired’ when one or more events that have a detrimental impact
on the estimated future cash flows of the financial asset have occurred.
Evidence that a financial asset is credit-impaired includes the following observable data:
•
•
•
•
•
significant financial difficulty of the borrower;
a breach of contract such as a default or being more than 90 days past due;
the restructuring of a loan or advance by the Company on terms that the Company would not consider
otherwise;
it is probable that the borrower will enter bankruptcy or other financial reorganisation; or
the disappearance of an active market for a security because of financial difficulties.
Presentation of allowance for ECLs in the statement of financial position
Loss allowances for financial assets measured at amortised cost is deducted from the gross carrying amount
of these assets.
Write-off
The gross carrying amount of a financial asset is written off (either partially or in full) to the extent that there is
no realistic prospect of recovery. This is generally the case when the Company determines that the debtor does
not have assets or sources of income that could generate sufficient cash flows to repay the amounts subject
to the write-off. However, financial assets that are written off could still be subject to enforcement activities in
order to comply with the Company’s procedures for recovery of amounts due.
(ii)
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 each year at the same time. An impairment loss is
recognised if the carrying amount of an asset or its related cash-generating unit (CGU) exceeds its estimated
recoverable amount.
The recoverable amount of an asset or CGU 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 CGU. For the purpose of impairment testing, assets that cannot be tested individually are grouped
together into the smallest group of assets that generates cash inflows from continuing use that are largely
independent of the cash inflows of other assets or CGUs.
SYMPHONY INTERNATIONAL HOLDINGS LIMITEDNOTES TO THE FINANCIAL STATEMENTSYear ended 31 December 2019 53
2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
2.8
Impairment (Cont’d)
(ii)
Non-financial assets (Cont’d)
The Company’s corporate assets do not generate separate cash inflows and are utilised by more than one
CGU. Corporate assets are allocated to CGUs on a reasonable and consistent basis and tested for impairment
as part of the testing of the CGU to which the corporate asset is allocated.
Impairment losses are recognised in profit or loss. Impairment losses recognised in respect of CGUs are allocated
first to reduce the carrying amount of any goodwill allocated to the CGU (group of CGUs), and then to reduce
the carrying amounts of the other assets in the CGU (group of CGUs) on a pro rata basis.
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.
2.9
Share-based payment transactions
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.
2.10 Revenue recognition
Dividends
Dividend income is recognised in profit on loss 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.
2.11 Finance income and finance expense
The Company’s finance income and finance expense includes interest income, interest expense and foreign currency
gain or loss on financial assets and financial liabilities.
Interest income or expense is recognised using the effective interest method. The ‘effective interest rate’ is the rate that
exactly discounts estimated future cash payments or receipts through the expected life of the financial instrument to:
•
•
the gross carrying amount of the financial asset; or
the amortised cost of the financial liability.
ANNUAL REPORT 2019NOTES TO THE FINANCIAL STATEMENTSYear ended 31 December 2019 54
2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
2.11 Finance income and finance expense (Cont’d)
In calculating interest income and expense, the effective interest rate is applied to the gross carrying amount of the
asset (when the asset is not credit-impaired) or to the amortised cost of the liability. However, for financial assets that
have become credit-impaired subsequent to initial recognition, interest income is calculated by applying the effective
interest rate to the amortised cost of the financial asset. If the asset is no longer credit-impaired, then the calculation
of interest income reverts to the gross basis.
2.12 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.
Current tax is the expected tax payable or receivable on the taxable income for the year, measured using tax rates
enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years.
The amount of current tax payable or receivable is the best estimate of the tax amount expected to be paid or received
that reflects uncertainty related to income taxes, if any. Current tax also includes any tax arising from dividends.
Current tax assets and liabilities are offset only if certain criteria are met.
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:
•
•
taxable temporary differences arising on 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 tax
rates and tax 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.
Deferred tax assets are recognised for unused tax losses, unused tax credits and deductible temporary differences to
the extent that it is probable that future taxable profits will be available against which they can be used. Future taxable
profits are determined based on the reversal of relevant taxable temporary differences. If the amount of taxable temporary
differences is insufficient to recognise a deferred tax asset in full, then future taxable profits, adjusted for reversals of
existing temporary differences, are considered, based on the business plans for the Company. 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; such reductions are reversed when the probability of future taxable profits improves.
Unrecognised deferred tax assets are reassessed at each reporting date and recognised to the extent that it has
become probable that future taxable profits will be available against which they can be used.
SYMPHONY INTERNATIONAL HOLDINGS LIMITEDNOTES TO THE FINANCIAL STATEMENTSYear ended 31 December 2019 55
2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
2.13 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.
2.14 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.
Segment results that are reported to the chief operating decision-maker include items directly attributable to a segment
as well as those that can be allocated on a reasonable basis. Unallocated items comprise mainly corporate expenses
and other assets and payable.
2.15 New standards and interpretations not adopted
A number of new standards and interpretations and amendments to standards are effective for annual periods beginning
after 1 January 2019 and earlier application is permitted; however, the Company has not early adopted the new or
amended standards and interpretations 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
Investments
4
OTHER RECEIVABLES AND PREPAYMENTS
Interest and other receivables
Other prepayments
2019
US$’000
2018
US$’000
569,339
486,790
2019
US$’000
2018
US$’000
11
58
69
12
60
72
ANNUAL REPORT 2019NOTES TO THE FINANCIAL STATEMENTSYear ended 31 December 2019 56
5
CASH AND CASH EQUIVALENTS
Fixed deposits with financial institutions and placements in money market funds
Cash at bank
Cash and cash equivalents in the statement of financial position
Bank overdraft
Cash and cash equivalents in the statement of cash flows
2019
US$’000
2018
US$’000
6,406
1,265
7,671
–
7,671
6,244
5,294
11,538
*
11,538
The effective interest rate on fixed deposits with financial institutions as at 31 December 2019 was 0.05% to 2.60%
(2018: 0.05% to 2.60%) per annum. Interest rates reprice at intervals of one week to three months.
*
Less than US$1,000
6
SHARE CAPITAL
Fully paid ordinary shares, with no par value:
At 1 January
Exercise of share options
At 31 December
Company
2019
Number of
shares
2018
Number of
shares
513,366,198
–
513,366,198
488,221,592
25,144,606
513,366,198
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 ended 31 December 2018, 25,144,606 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 per share.
SYMPHONY INTERNATIONAL HOLDINGS LIMITEDNOTES TO THE FINANCIAL STATEMENTSYear ended 31 December 2019 57
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 borrowings comprises:
•
•
term loan amounting to US$5,428,000 (2018: US$5,327,000) denominated in Japanese Yen. Interest is charged
at 0.45% (2018: 0.45%) per annum and reprices on a quarterly basis. The loan principal is repayable quarterly
unless the loan is rolled-over.
term loan amounting to US$67,451,000 (2018: US$Nil) denominated in United States Dollar. Interest is charged
at 3.11% to 3.98% (2018: US$Nil) per annum and reprices on maturity. The loan principal is repayable on maturity
unless the loan is rolled-over. The interest-bearing term loan is secured by the listed securities held through the
Company’s wholly owned subsidiaries.
Reconciliation of movements of liabilities to cash flows arising from financing activities
Liabilities
Interest-
bearing
borrowings
Interest
payable
US$’000 US$’000
Bank
overdraft
US$’000
Equity
Share
capital Reserves
US$’000 US$’000
Accumulated
profits
Total
US$’000 US$’000
5,166
2
382,797
62,298
173,577
623,840
As at 1 January 2018
Changes from financing
cash flows
Proceeds from issuance of
shares
Interest paid
Dividend paid
Proceeds from borrowings
Total changes from
financing cash flows
The effect of changes in
foreign exchange rates
Other changes
Liability-related
Change in bank overdraft
Interest expense
Total liability-related
other changes
Total equity-related
other changes
Balance as at
31 December 2018
*
Less than US$1,000
–
–
–
–
–
–
–
*
–
*
–
*
–
–
–
34
34
–
(199)
–
–
13,578
–
1,509
–
(199)
15,087
–
–
–
–
127
–
–
–
–
–
5,327
–
199
199
–
2
–
–
–
–
–
–
–
–
–
–
–
(71,538)
–
13,578
(199)
(70,029)
34
(71,538)
(56,616)
–
–
–
–
127
*
199
199
11,820
(62,298)
(19,038)
(69,516)
409,704
–
83,001
498,034
ANNUAL REPORT 2019NOTES TO THE FINANCIAL STATEMENTSYear ended 31 December 2019 58
8
INTEREST-BEARING BORROWINGS (CONT’D)
Reconciliation of movements of liabilities to cash flows arising from financing activities (Cont’d)
Liabilities
Interest-
bearing
borrowings
US$’000
Bank
overdraft
US$’000
Equity
Interest
payable
US$’000
Share
capital
US$’000
Accumulated
profits
US$’000
Total
US$’000
*
–
–
–
–
–
*
–
*
–
–
5,327
2
409,704
83,001
498,034
–
–
67,483
(1,268)
–
–
67,483
(1,268)
69
–
–
–
–
–
–
1,389
1,389
–
–
–
–
–
–
–
–
–
–
–
(17,968)
–
(1,268)
(17,968)
67,483
(17,968)
48,247
–
–
–
–
69
*
1,389
1,389
28,912
28,912
72,879
123
409,704
93,945
576,651
As at 1 January 2019
Changes from financing
cash flows
Interest paid
Dividend paid
Proceeds from borrowings
Total changes from
financing cash flows
The effect of changes in
foreign exchange rates
Other changes
Liability-related
Change in bank overdraft
Interest expense
Total liability-related
other changes
Total equity-related
other changes
Balance as at
31 December 2019
*
Less than US$1,000
9
OTHER PAYABLES
Accrued operating expenses
Amounts due to a director and shareholders
Interest payable
The amount due to a director is unsecured, interest free and repayable on demand.
2019
US$’000
2018
US$’000
276
152
123
551
266
100
2
368
SYMPHONY INTERNATIONAL HOLDINGS LIMITEDNOTES TO THE FINANCIAL STATEMENTSYear ended 31 December 2019 59
2019
US$’000
2018
US$’000
231
151
402
*
784
534
384
1,389
25,841
277
24
–
26,142
2,785
386
199
10
PROFIT/(LOSS) BEFORE INCOME TAX
Profit/(Loss) before income tax includes the following:
Other operating income
Dividend income
Interest income from:
- fixed deposits and placements in money market fund
- loans to unconsolidated subsidiaries
Other income
Other operating expenses
Exchange loss, net
Non-executive director remuneration
Interest expense
*
Less than US$1,000
11
INCOME TAX EXPENSE
The Company is incorporated in a tax-free jurisdiction, thus, it is not subject to income tax. However, interest income
of US$36 (2018: US$Nil) is subject to withholding tax imposed in the country of origin. During the year ended
31 December 2019, the average statutory withholding tax rate was 30% (2018: Nil).
12
EARNINGS PER SHARE
Basic and diluted earnings per share are based on:
Profit/(Loss) for the year attributable to ordinary shareholders
Basic and diluted earnings per share
Issued ordinary shares at 1 January
Shares issued
Issued ordinary shares at 31 December
2019
US$’000
2018
US$’000
28,912
(69,516)
Number of
shares
2019
Number of
shares
2018
513,366,198
–
513,366,198
488,221,592
25,144,606
513,366,198
Weighted average number of shares (basic and diluted)
513,366,198
496,728,851
At 31 December 2019 and 31 December 2018, there were no outstanding share options to subscribe for ordinary
shares of no par value.
ANNUAL REPORT 2019NOTES TO THE FINANCIAL STATEMENTSYear ended 31 December 2019 60
13
SIGNIFICANT RELATED PARTY TRANSACTIONS
Dividend income
During the financial year ended 31 December 2019, the Company recognised dividend income from its unconsolidated
subsidiaries amounting to US$231,000 (2018: US$25,841,000).
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$384,000 (2018: US$386,000) were declared as payable to
five directors (2018: 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 may be, 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 (2018: US$8,000,000) per annum and a maximum amount of
US$15,000,000 (2018: US$15,000,000) per annum.
In 2019, Management fees amounting to US$11,839,000 (2018: US$12,248,000) 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 (2018: 10,298,725) management shares had been issued, credited as fully paid to the Investment
Manager.
SYMPHONY INTERNATIONAL HOLDINGS LIMITEDNOTES TO THE FINANCIAL STATEMENTSYear ended 31 December 2019 61
13
SIGNIFICANT RELATED PARTY TRANSACTIONS (CONT’D)
Other related party transactions (Cont’d)
c.
Share options
Share options can be used to subscribe for ordinary shares of the Company.
In the structuring of the compensation payable under the Investment Management and Advisory Agreement,
the value of the share options was considered to be measurable using the Binomial Tree option pricing model.
Measurement inputs include share price on measurement date, exercise price, expected volatility, expected
option life, expected dividends and risk-free interest rate.
The number and exercise price of share options granted to the Investment Manager are as follows:
Grant date
Options granted to
Investment Manager
Number of options
2018
2019
Vesting conditions
Exercise price
On 3 August 2008
82,782,691
82,782,691 Fully vested in five tranches over a period
US$1.00
of five years and expired on the tenth
anniversary of the date of grant.
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
Lapsed during the year
Exercised during the year
Total share options
outstanding at
31 December
– 107,927,297
–
–
–
82,782,691
25,144,606
–
US$1.00
US$0.60
There were no share options outstanding as at 31 December 2019 and at 31 December 2018.
The share options granted on 3 August 2008 expired on 3 August 2018. The share options granted on 22 October 2012
have been fully exercised. These share options 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.
ANNUAL REPORT 2019NOTES TO THE FINANCIAL STATEMENTSYear ended 31 December 2019 62
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$4,700,000 (THB140,000,000). As at 31 December 2019, US$4,000,000 (THB120,000,000)
(2018: US$3,700,000 (THB120,000,000)) has been drawn down. The Company is committed to grant the remaining
loan amounting to US$673,000 (THB20,000,000) (2018: US$619,000 (THB20,000,000)), subject to terms set out in
the agreement.
During the financial year ended 31 December 2019, the Company entered into the following transactions:
•
•
•
in September 2019, the Company entered into agreements for an investment in ASG Hospital Private Limited
(“ASG”). As part of the agreements, the Company will subscribe to a second tranche of shares in ASG during
the 2020 financial year at a cost of less than 1% of the net asset value as at 31 December 2019;
in November 2019, the Company entered to agreements to subscribe for shares in Smarten Spaces Pte. Ltd.
(“Smarten”). As part of the agreements, the Company will subscribe to a second tranche of shares in Smarten
during the 2020 financial year at a cost of less than 1% of the net asset value as at 31 December 2019; and
the Company has committed to subscribe to Good Capital Fund I for an amount less than 1% of the net asset
value as at 31 December 2019. Approximately 40% of this commitment had been funded at 31 December 2019
with 60% of the commitment subject to be called over the next four years.
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.
For the year ending 31 December 2019, the Company has revised its reportable segments. The following summarises
the changes made to the reporting business segments:
a.
b.
c.
The segment formerly described as ‘Lifestyle/education’ has been split into separate segments as ‘Lifestyle’
and ‘Education’.
Following a review by management, certain investments that were previously included under the ‘Cash and
temporary investments’ have been separated into a new ‘Other’ category, which now also includes special
situations type investments.
A new segment, ‘Logistics’ has been created which includes the Company’s new investment in Indo Trans
Logistics Corporation (ITL).
The change in segment reporting has no impact on the net profit or loss of the Company. To enable comparisons with
prior period performance and position, segment information for the year ended 31 December 2018 has been restated.
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.
SYMPHONY INTERNATIONAL HOLDINGS LIMITEDNOTES TO THE FINANCIAL STATEMENTSYear ended 31 December 2019 63
15
OPERATING SEGMENTS (CONT’D)
The following summary describes the investments in each of the Company’s reportable segments.
Healthcare
Hospitality
Lifestyle
Includes an investment in IHH Healthcare Bhd (IHH), ASG Hospital Private
Limited (ASG) and Soothe Healthcare Private Limited (Soothe)
Includes investment in Minor International Public Company Limited (MINT)
Includes investments in Chanintr Living Ltd. (Chanintr), the Wine Connection
Group (WCG) and Liaigre Group (Liaigre)
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
Education
Logistics
Other
Cash and temporary investments
Includes WCIB International Co. Ltd. (WCIB) and Creative Technology
Solutions DMCC (CTS)
Indo Trans Logistics Corporation
Includes Smarten Spaces Pte. Ltd. (Smarten), Good Capital Partners and
Good Capital Fund I (collectively, Good Capital), structured investments
and a global listed portfolio
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
ANNUAL REPORT 2019NOTES TO THE FINANCIAL STATEMENTSYear ended 31 December 2019 64
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SYMPHONY INTERNATIONAL HOLDINGS LIMITEDNOTES TO THE FINANCIAL STATEMENTSYear ended 31 December 2019
65
2019
US$’000
2018
US$’000
Re-presented
42,756
617
(11,839)
(384)
(2,238)
28,912
560,991
16,019
69
577,079
72,879
551
–
73,430
(55,644)
(252)
(12,248)
(386)
(986)
(69,516)
483,886
14,442
72
498,400
5,327
368
*
5,695
15
OPERATING SEGMENTS (CONT’D)
Reconciliations of reportable segment profit or loss and assets
Profit or loss
Net investments results
Net investment results for other segment
Unallocated amounts:
- Management fees
- Non-executive director remuneration
- General operating expenses
Profit/(Loss) for the year
Assets
Total assets for reportable segments
Assets for other segments
Other assets
Total assets
Liabilities
Total liabilities for reportable segments
Other payables
Bank overdraft
Total liabilities
*
Less than US$1,000
Geographical information
In presenting information on the basis of geographical information, revenue, comprising dividend income from
investments, is based on the geographical location of the underlying investment. Assets are based on the principal
geographical location of the assets or the operations of the investee companies. None of the underlying investments
which generate revenue or assets are located in the Company’s country of incorporation, BVI.
Singapore Malaysia Thailand
US$’000
US$’000 US$’000 US$’000
Japan Mauritius
Total
Other
US$’000 US$’000 US$’000
2019
Investment income:
- Dividend income
- Interest income
Investment expense:
- Exchange loss
- Loss on disposal of financial
assets at fair value through
profit or loss
Fair value changes of financial
assets at fair value through
profit or loss
–
528
528
(33)
(231)
(264)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
231
25
256
231
553
784
94
(595)
(534)
–
94
(179)
(774)
(410)
(944)
(7)
(12,539)
48,526
24,946
–
(17,393)
43,533
Net investment results
257
(12,539)
48,526
24,946
94
(17,911)
43,373
ANNUAL REPORT 2019NOTES TO THE FINANCIAL STATEMENTSYear ended 31 December 2019 66
15
OPERATING SEGMENTS (CONT’D)
Singapore Malaysia Thailand
US$’000
US$’000 US$’000 US$’000
Japan Mauritius
Total
Other
US$’000 US$’000 US$’000
2018
Investment income:
- Dividend income
- Interest income
Investment expense:
- Exchange loss
- Loss on disposal of financial
assets at fair value through
profit or loss
Fair value changes of financial
assets at fair value through
profit or loss
–
277
277
(178)
–
(178)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
25,841
–
25,841
–
24
24
25,841
301
26,142
185
(2,792)
(2,785)
(19)
166
–
(2,792)
(19)
(2,804)
Net investment results
(1,294)
3,034
(95,631)
(1,393)
3,034
(95,631)
202
202
–
14,554
(79,234)
26,007
11,786
(55,896)
2019
Segment assets
7,885
38,190
381,738
43,358
317
105,522
577,010
Segment liabilities
72,879
–
–
–
–
–
72,879
2018
Segment assets
11,231
44,621
356,283
18,229
257
67,707
498,328
Segment liabilities
5,327
–
–
–
–
–
5,327
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.
The company held cash and cash equivalents of US$7,671,000 as at 31 December 2019 (2018: US$11,538,000). The
cash and cash equivalents are held with bank and financial institution counterparties, which are rated AA to Baa3,
based on Moody’s/TRIS/Standard & Poor’s ratings.
SYMPHONY INTERNATIONAL HOLDINGS LIMITEDNOTES TO THE FINANCIAL STATEMENTSYear ended 31 December 2019 67
16
FINANCIAL RISK MANAGEMENT (CONT’D)
Credit risk (Cont’d)
Impairment on cash and cash equivalents has been measured on the 12-month expected loss basis and reflects the
short maturities of the exposures. The Company considers that its cash and cash equivalents to have low credit risk
based on external credit ratings of the counterparties. The amount of the allowance on cash and cash equivalents
was negligible.
As at 31 December 2019, the Company has credit risk exposure relating to fixed deposits placed with financial institutions
and placements in money market funds totalling US$7,671,000 (2018: US$11,538,000). Other than these balances,
there were no significant concentrations of credit risk. The maximum exposure to credit risk is represented by the
carrying amount of each financial asset in the statement of financial position.
Market risk
Market risk is the risk that changes in market prices, such as interest rates, foreign exchange rates and equity prices
will affect the Company’s income or the value of its holdings of financial instruments. The objective of market risk
management is to manage and control market risk exposures within acceptable parameters, while optimising the
return on risk.
Interest rate risk
The Company’s exposure to changes in interest rates relates primarily to its interest-earning fixed deposits placed
with financial institutions and interest-bearing borrowings. The Company’s fixed rate financial assets and liabilities are
exposed to a risk of change in their fair value due to changes in interest rates while the variable-rate financial assets
and liabilities are exposed to a risk of change in cash flows due to changes in interest rates. The Company does not
enter into derivative financial instruments to hedge against its exposure to interest rate risk.
Sensitivity analysis
A 100 basis point (“bp”) move in interest rate against the following financial assets and financial liabilities at the
reporting date would increase/(decrease) profit or loss by the amounts shown below. The analysis assumes that all
other variables remain constant.
Deposits with financial institutions
Interest-bearing borrowings
Impact on
Profit or loss
Impact on
Profit or loss
100 bp
increase
2019
US$’000
100 bp
decrease
2019
US$’000
100 bp
increase
2018
US$’000
100 bp
decrease
2018
US$’000
64
(729)
(665)
(64)
729
665
62
(53)
9
(62)
53
(9)
ANNUAL REPORT 2019NOTES TO THE FINANCIAL STATEMENTSYear ended 31 December 2019 68
16
FINANCIAL RISK MANAGEMENT (CONT’D)
Foreign exchange risk
The Company is exposed to transactional foreign exchange risk when transactions are denominated in currencies
other than the functional currency of the operation. The Company does not enter into derivative financial instruments
to hedge its exposure to Singapore dollars, Japanese Yen, Thailand Baht, Malaysian Ringgit, Hong Kong dollars and
Euro as the currency position in these currencies is considered to be long-term in nature and foreign exchange risk is
an integral part of the Company’s investment decision and returns.
The Company’s exposure, in US dollar equivalent, to foreign currency risk on other financial instruments is as follows:
Euro
US$’000
Japanese
Yen
US$’000
Thailand
Baht
US$’000
Malaysian
Ringgit
US$’000
Others
US$’000
21,970
–
31
–
–
22,001
52,546
–
32
–
–
52,578
43,357
–
–
(5,428)
–
37,929
18,228
–
–
(5,327)
–
12,901
92,455
–
*
–
(2)
92,453
82,428
–
*
–
(2)
82,426
(2,738)
–
–
–
–
(2,738)
16,552
–
–
–
–
16,552
1,710
4
2,357
–
(273)
3,798
331
3
2,359
–
(264)
2,429
2019
Financial assets at fair value through
profit or loss
Other receivables
Cash and cash equivalents
Interest-bearing borrowings
Accrued operating expenses
Net exposure
2018
Financial assets at fair value through
profit or loss
Other receivables
Cash and cash equivalents
Interest-bearing borrowings
Accrued operating expenses
Net exposure
*
Less than US$1,000
Sensitivity analysis
A 10% strengthening of the US dollar against the following currencies at the reporting date would increase/(decrease)
profit or loss by the amounts shown below. The analysis assumes that all other variables, in particular interest rates,
remain constant.
Euro
Japanese Yen
Thailand Baht
Malaysian Ringgit
Others
Profit or loss
2019
US$’000
2018
US$’000
(2,200)
(3,793)
(9,245)
274
(380)
(5,258)
(1,290)
(8,243)
(1,655)
(243)
A 10% weakening of the US dollar against the above currencies would have had the equal but opposite effect on the
above currencies to the amounts shown above, on the basis that all other variables remain constant.
SYMPHONY INTERNATIONAL HOLDINGS LIMITEDNOTES TO THE FINANCIAL STATEMENTSYear ended 31 December 2019 69
16
FINANCIAL RISK MANAGEMENT (CONT’D)
Price risk
The valuation of the Company’s investment portfolio is dependent on prevailing market conditions and the performance
of the underlying assets. The Company does not hedge the market risk inherent in the portfolio but manages asset
performance risk on an asset-specific basis.
The Company’s investment policies provide that the Company invests a majority of capital in longer-term strategic
investments and a portion in special situations and structured transactions. Investment decisions are made by
management on the advice of the Investment Manager.
Sensitivity analysis
All of the Company’s underlying investments that are quoted equity investments are listed on either The Stock Exchange
of Thailand or Bursa Malaysia. A 10% increase in the price of the equity securities at the reporting date would increase
profit or loss after tax by the amounts shown below. The analysis assumes that all other variables remain constant.
Underlying investments in quoted equity securities at fair value
through profit or loss
Profit or loss
2019
US$’000
2018
US$’000
28,249
26,883
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 Company, through its wholly
owned subsidiaries, also holds listed securities amounting to US$282,494,000 (2018: US$268,832,000). These listed
securities are liquid and can therefore be sold from time-to-time to generate additional cash to settle any existing and
ongoing liabilities of the Company.
ANNUAL REPORT 2019NOTES TO THE FINANCIAL STATEMENTSYear ended 31 December 2019 70
16
FINANCIAL RISK MANAGEMENT (CONT’D)
Liquidity risk (Cont’d)
The following are the contractual maturities of financial liabilities, including estimated interest payments and excluding
the impact of netting agreements:
Cash flows
Carrying
amount
US$’000
Contractual
cash flows
US$’000
Within
1 year
US$’000
72,879
551
73,430
72,879
551
73,430
72,879
551
73,430
Cash flows
Carrying
amount
US$’000
Contractual
cash flows
US$’000
Within
1 year
US$’000
5,327
368
*
5,695
5,327
368
*
5,695
5,327
368
*
5,695
2019
Non-derivative financial liabilities
Interest-bearing borrowings
Other payables
2018
Non-derivative financial liabilities
Interest-bearing borrowings
Other payables
Bank overdraft
*
Less than US$1,000
Capital management
The Company’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence
and to sustain future development of the business. Capital consists of total equity. The Company seeks to maintain
a balance between higher returns that might be possible with higher levels of borrowings and the advantages and
security afforded by a sound capital position.
The Company is not subject to externally imposed capital requirements.
SYMPHONY INTERNATIONAL HOLDINGS LIMITEDNOTES TO THE FINANCIAL STATEMENTSYear ended 31 December 2019 71
16
FINANCIAL RISK MANAGEMENT (CONT’D)
Accounting classification and fair values
The carrying amounts and fair values of financial assets and financial liabilities are as follows. It does not include
fair value information for financial assets and financial liabilities not measured at fair value if the carrying amount is a
reasonable approximation of fair value.
Carrying amount
Fair value
through
profit or loss
US$’000
Note
Amortised
cost
US$’000
Other
financial
liabilities
US$’000
Total
US$’000
Fair value
US$’000
2019
Financial assets measured
at fair value
Financial assets at fair value
through profit or loss
Financial assets not
measured at fair value
Other receivables1
Cash and cash equivalents
Financial liabilities not
measured at fair value
Interest-bearing borrowings
Other payables
1 Excludes prepayment
3
4
5
8
9
569,339
–
–
–
569,339
11
7,671
7,682
–
–
–
–
569,339
569,339
11
7,671
577,021
–
–
–
–
–
–
(72,879)
(551)
(73,430)
(72,879)
(551)
(73,430)
ANNUAL REPORT 2019NOTES TO THE FINANCIAL STATEMENTSYear ended 31 December 2019 72
16
FINANCIAL RISK MANAGEMENT (CONT’D)
Accounting classification and fair values (Cont’d)
Carrying amount
Fair value
through
profit or loss
US$’000
Note
Amortised
cost
US$’000
Other
financial
liabilities
US$’000
Total
US$’000
Fair value
US$’000
2018
Financial assets measured
at fair value
Financial assets at fair value
through profit or loss
Financial assets not
measured at fair value
Other receivables1
Cash and cash equivalents
Financial liabilities not
measured at fair value
Interest-bearing borrowings
Other payables
Bank overdraft
3
4
5
8
9
1 Excludes prepayment
*
Less than US$1,000
Fair value
486,790
–
–
–
486,790
12
11,538
11,550
–
–
–
–
486,790
486,790
12
11,538
498,340
–
–
–
–
–
–
–
–
(5,327)
(368)
*
(5,695)
(5,327)
(368)
*
(5,695)
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)
ii)
for quoted equity investments, based on quoted market bid prices at the financial reporting date without any
deduction for transaction costs;
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, interest-bearing borrowings, other payables and bank overdraft) the
notional amounts are assumed to approximate their fair values because of the short period to maturity/repricing.
SYMPHONY INTERNATIONAL HOLDINGS LIMITEDNOTES TO THE FINANCIAL STATEMENTSYear ended 31 December 2019 73
16
FINANCIAL RISK MANAGEMENT (CONT’D)
Fair value (Cont’d)
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
US$’000
Level 2
US$’000
Level 3
US$’000
Total
US$’000
2019
Financial assets at fair value through profit or loss
2018
Financial assets at fair value through profit or loss
–
–
–
–
569,339
569,339
486,790
486,790
As explained in Note 2.4, the Company qualifies as an investment entity and therefore does not consolidate its
subsidiaries. Accordingly, the fair value levelling reflects the fair value of the unconsolidated subsidiaries and not the
underlying quoted equity investments. There were no transfers from Level 1 to Level 2 or Level 3 and vice versa during
the years ended 31 December 2019 and 2018.
The fair value hierarchy table excludes financial assets and financial liabilities such as cash and cash equivalents, other
receivables and payables, interest-bearing borrowings and bank overdraft because their carrying amounts approximate
their fair values due to their short-term period to maturity/repricing.
ANNUAL REPORT 2019NOTES TO THE FINANCIAL STATEMENTSYear ended 31 December 2019 74
16
FINANCIAL RISK MANAGEMENT (CONT’D)
Fair value hierarchy for financial instruments (Cont’d)
Level 3 valuations
The following table shows a reconciliation from the beginning balances to the ending balances for fair value measurements
in Level 3 of the fair value hierarchy.
2019
2018
Financial assets at fair
value through profit or loss
US$’000
US$’000
Balance at 1 January
Fair value changes in profit or loss
Net payment to/(repayment from) unconsolidated subsidiaries
Disposal
Balance at 31 December
Significant unobservable inputs used in measuring fair value
486,790
43,533
48,080
(9,064)
569,339
608,456
(79,234)
(42,443)
11
486,790
This table below sets out information about significant unobservable inputs used at 31 December 2019 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.
SYMPHONY INTERNATIONAL HOLDINGS LIMITEDNOTES TO THE FINANCIAL STATEMENTSYear ended 31 December 2019 75
Range
(Weighted
average)
Sensitivity to
changes in significant
unobservable inputs
0% - 6%
(2018:
0% - 6%)
80% - 90%
(2018:
80% - 87%)
13% - 13.5%
(2018:
13% - 13.5%)
US$76 to
US$4,143 per
square meter
(2018: US$73
to US$4,102
per square
meter)
3.0x to 19.4x,
median 9.1x
(2018: 4.1x to
19.7x, median
10.7x)
25% to 100%
(2018: Nil)
The estimated fair value
would increase if the
rental growth rate and
occupancy rate were
higher and the discount
rate was lower.
The estimated fair value
would increase if the
price per square meter
was higher.
The estimated fair value
would increase if the
EBITDA multiple was
higher.
The estimated fair value
would increase if the
discount for lack of
marketability was lower.
The estimated fair value
would increase if the
discount was lower.
Nil (2018: N/A) N/A
The estimated fair
value would increase
if the revenue growth
increases, expenses
ratio decreases, and
WACC was lower.
3.8% - 56.0%
(2018: 3.8% -
172.2%)
73.7% - 102.5%
(2018: 73.7% -
193.5%)
10.7%
(2018: 11.5%)
16
FINANCIAL RISK MANAGEMENT (CONT’D)
Fair value hierarchy for financial instruments (Cont’d)
Fair value
at 31
December
2019
US$’000
Fair value
at 31
December
2018
US$’000
Description
Rental properties
8,804
10,531
Valuation
technique
Unobservable
input
Income
approach
Rental growth rate
Occupancy rate
Discount rate
Price per
square meter for
comparable land
EBITDA multiple
(times)
Land related
investments
137,044
107,659 Comparable
valuation
method
Operating
business
33,415
68,609
Enterprise
value using
comparable
traded
multiples or
adjusted net
asset value
Discount to
tangible assets for
lack of liquidity
Price of recent
transaction
Greenfield
23,484
16,042 Discounted
Revenue growth
business held
for more than
12-months
cashflow
method
Expense ratio
Weighted average
cost of capital
(“WACC”)
Discount for lack of
marketability
25%
(2018: 20%)
ANNUAL REPORT 2019NOTES TO THE FINANCIAL STATEMENTSYear ended 31 December 2019 76
16
FINANCIAL RISK MANAGEMENT (CONT’D)
Fair value hierarchy for financial instruments (Cont’d)
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.
Where an EBITDA multiple is not available, the net assets may be used as a proxy for fair value of an underlying
investment. In such instances, a discount to certain tangible assets, including inventory, trade receivables and fixed
assets are taken for lack of liquidity to arrive at an adjusted net asset value.
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$282,494,000 (2018: US$268,832,000) are held through intermediate holding companies; the value of these
companies are mainly determined by the fair values of the ultimate investments.
SYMPHONY INTERNATIONAL HOLDINGS LIMITEDNOTES TO THE FINANCIAL STATEMENTSYear ended 31 December 2019 77
16
FINANCIAL RISK MANAGEMENT (CONT’D)
Fair value hierarchy for financial instruments (Cont’d)
Sensitivity analysis
Although the Company believes that its estimates of fair value are appropriate, the use of different methodologies or
assumptions could lead to different measurements of fair value. For fair value measurements in Level 3 assets, changing
one or more of the assumptions used to reasonably possible alternative assumptions would have the following effects
on the profit or loss:
‹---------------- 2019 ----------------› ‹---------------- 2018 ----------------›
Effect on profit or loss
Effect on profit or loss
Favourable
US$’000
(Unfavourable)
US$’000
Favourable
US$’000
(Unfavourable)
US$’000
Level 3 assets
38,607
(41,458)
36,341
(32,752)
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. Similarly, where adjusted net assets are used, the value 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%.
ANNUAL REPORT 2019NOTES TO THE FINANCIAL STATEMENTSYear ended 31 December 2019 78
17
UNCONSOLIDATED SUBSIDIARIES
Details of the unconsolidated subsidiaries of the Company are as follows:
Name of subsidiary
Principal activities
Place of incorporation
and business
Equity interest
2018
2019
%
%
Investment holding
Republic of Mauritius
100
100
Britten Holdings Pte. Ltd.
Investment holding
Republic of Singapore
Investment holding
Republic of Mauritius
Investment holding
British Virgin Islands
100
100
Symphony (Mint) Investment Limited
(Formerly Symphony Capital
Partners Limited)
Lennon Holdings Limited
and its subsidiary:
Gabrieli Holdings Limited
and its subsidiaries:
Ravel Holdings Pte. Ltd.
and its subsidiaries:
Investment holding
Republic of Singapore
Schubert Holdings Pte. Ltd.
Investment holding
Republic of Singapore
Haydn Holdings Pte. Ltd.
Investment holding
Republic of Singapore
Thai Education Holdings Pte. Ltd.
Investment holding
Republic of Singapore
Teurina Limited
Investment holding
British Virgin Islands
Lloyd Webber Holdings Limited
Investment holding
British Virgin Islands
Maurizio Holdings Limited
and its subsidiary:
Investment holding
British Virgin Islands
Groupe CL Pte. Ltd.
Investment holding
Republic of Singapore
True United Limited
True Wisdom Limited
Investment holding
British Virgin Islands
Investment holding
British Virgin Islands
Segovia Holdings Limited
Investment holding
British Virgin Islands
Anshil Limited
Investment holding
British Virgin Islands
Buble Holdings Limited
Investment holding
British Virgin Islands
O’Sullivan Holdings Limited
and its subsidiary:
Investment holding
British Virgin Islands
Bacharach Holdings Limited
Investment holding
British Virgin Islands
Brahms Holdings Limited
Investment holding
British Virgin Islands
Schumann Holdings Limited
Investment holding
British Virgin Islands
Symphony Healthcare Holdings Limited
Investment holding
British Virgin Islands
Dynamic Idea Investments Limited
Investment holding
British Virgin Islands
Ideal Dream Limited
Investment holding
British Virgin Islands
Eternal Star Ventures Limited
Investment holding
British Virgin Islands
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
–
SYMPHONY INTERNATIONAL HOLDINGS LIMITEDNOTES TO THE FINANCIAL STATEMENTSYear ended 31 December 2019 79
17
UNCONSOLIDATED SUBSIDIARIES (CONT’D)
Name of subsidiary
Principal activities
Place of incorporation
and business
Equity interest
2018
2019
%
%
Symphony Logistics Pte. Ltd.
and its subsidiary:
Investment holding
Republic of Singapore
Eagles Holdings Pte. Ltd.
Lending company
Republic of Singapore
Stravinsky Holdings Pte. Ltd.
Investment holding
Republic of Singapore
Alhambra Holdings Limited
Investment holding
United Arab Emirates
Shadows Holdings Pte. Ltd.
Investment holding
Republic of Singapore
Symphonic Spaces Pte. Ltd.
Investment holding
Republic of Singapore
100
100
100
100
100
100
–
–
–
–
–
–
18
UNDERLYING INVESTMENTS
Details of the underlying investments in unquoted equities of the Company are as follows:
Name
Principal activities
Place of
incorporation
and business
Ordinary shares Preference shares
Equity interest
2018
2019
%
%
Equity interest
2018
2019
%
%
La Finta Limited1
Minuet Limited1
Property development
Thailand
49
49
Property development
Thailand
49.98
49.98
SG Land Co. Limited1
Real estate
Thailand
49.91
49.91
Chanintr Living Limited2
Distribution of furniture
Thailand
49.90
49.90
Chanintr Living (Thailand)
Limited
Chanintr Living Pte Ltd
Distribution and retail
of furniture and home
decorations
Distribution and retail
of furniture and home
decorations
Thailand
24.45
24.45
Republic of
Singapore
49.90
49.90
Well Round Holdings
Property development
Hong Kong
37.50
37.50
Limited2
Silver Prance Limited2
Property development
Hong Kong
37.50
37.50
Desaru Peace Holdings
Property development
Malaysia
49
49
Sdn Bhd2
Oak SPV Limited
Hospitality and lifestyle Cayman Islands
13.40
13.40
–
–
–
–
–
–
–
–
49
–
–
–
–
–
–
–
–
–
49
–
Macassar Holdings SARL
Lifestyle
Luxembourg
32.78
49.90
32.78
49.90
WCIB International
Company Limited
Education
Thailand
39.10
39.10
–
ASG Hospital Private
Healthcare
India
–
–
17.79
–
–
Limited
ANNUAL REPORT 2019NOTES TO THE FINANCIAL STATEMENTSYear ended 31 December 2019 80
18
UNDERLYING INVESTMENTS (CONT’D)
Name
Principal activities
Place of
incorporation
and business
Ordinary shares Preference shares
Equity interest
2018
2019
%
%
Equity interest
2018
2019
%
%
Creative Technology
Solutions DMCC
Education
United Arab
Emirates
12.82
Good Capital Partners
Other
Mauritius
10
In Do Trans Logistics
Logistics
Vietnam
28.57
Corporation
Smarten Spaces Pte. Ltd.
Other
Singapore
10.79
Soothe Healthcare Pvt. Ltd
Healthcare
India
–
–
–
–
–
–
–
–
–
4.02
27.96
–
–
–
–
–
1 Joint venture
2 Associate
19
SUBSEQUENT EVENTS
Subsequent to 31 December 2019,
•
•
•
•
•
•
the Company fully exited its investment in IHH Healthcare Berhad with the sale of 3.5 million shares that
generated net proceeds of US$4.6 million.
the Company sold approximately 67.0 million shares of MINT at an average price of THB18.7 per share that
generated proceeds of approximately US$38.5 million.
the Company received distributions of approximately US$7.9 million from a joint venture company relating to
interim payments for land sold in Niseko, Hokkaido, Japan. The same joint venture company completed the
sale of a parcel of the land on 19 March 2020 and another parcel of land on 3 April 2020.
the Company has fully repaid the term loan denominated in Japanese Yen amounting to US$5,428,000 equivalent
as at 31 December 2019 respectively.
in March 2020, the lender of the term loan denominated in United States Dollar with a carrying amount of
US$67,451,000 as at 31 December 2019 (see note 8), determined in their sole and absolute discretion that
the aggregate collateral value pledged by the Company in March 2020 fell below the facility outstanding due
to market movements which caused the price of MINT shares pledged as collateral to fall. Consequently, the
Company reduced the facility outstanding to US$30,242,000 by way of cash repayments.
On 11 March 2020, the World Health Organisation declared the Coronavirus (COVID-19) outbreak to be a
pandemic in recognition of its rapid spread across the globe, with over 150 countries now affected. Many
governments are taking increasingly stringent steps to help contain or delay the spread of the virus. Currently,
there is a significant increase in economic uncertainty which is, for example, evidenced by more volatile asset
prices and currency exchange rates.
For the Company’s 31 December 2019 financial statements, the COVID-19 outbreak and the related impacts
are considered non-adjusting events. Consequently, there is no impact on the recognition and measurement
of assets and liabilities. Due to the uncertainty of the outcome of the current events, the Company cannot
reasonably estimate the impact these events will have on the Company’s financial position, results of operations
or cash flows in the future.
SYMPHONY INTERNATIONAL HOLDINGS LIMITEDNOTES TO THE FINANCIAL STATEMENTSYear ended 31 December 2019 81
NOTICE IS HEREBY GIVEN that the ANNUAL GENERAL MEETING of the Company will be held at 9 Raffles Place, #52-02
Republic Plaza Tower 1, Singapore 048619, Tel +65 6536 6177 on Thursday, 30 April 2020 at 3.00 p.m. (GMT+8) for the purpose
of the following matters:
Ordinary Business
To receive the annual report which includes the financial statements for the year ended 31 December 2019.
Ordinary Resolution
To consider and, if thought fit, passing the following ordinary resolution:
THAT the Company be and is hereby generally and unconditionally authorised in accordance with section 59 of the BVI
Business Companies Act 2004 (as amended) to make market purchases of its own Shares at the discretion of the Directors
and on such terms and in such manner as the Directors may from time to time determine provided that:
(a)
the maximum number of Shares hereby authorised to be purchased shall be 14.99 per cent. of the Shares in issue at
the date of this notice;
(b)
the maximum price which may be paid for any such Share shall not exceed the higher of:
(i)
(ii)
5 per cent. above the average market value of the Company’s Shares for the five business days prior to the day
the purchase is made; and
the higher of the price of the last independent trade and the highest current independent bid at the time of the
purchase on the trading venues where the purchase is carried out; and
(c)
the authority hereby confirmed shall expire at the conclusion of the Company’s next annual general meeting.
By order of the Board,
Anil Thadani
Director
Dated this 15th day of April 2020
ANNUAL REPORT 2019NOTICE OF ANNUAL GENERAL MEETING 82
1.
2.
3.
4.
5.
6.
7.
A shareholder entitled to attend and vote at the Annual General Meeting may appoint a proxy (who need not be a
member of the Company) to attend and to vote in his place. The instrument appointing a proxy should be deposited at
Link Asset Services, PXS, 34 Beckenham Road, Beckenham, Kent, BR3 4TU, United Kingdom no later than 48 hours
before the Annual General Meeting (excluding non-business days). If the appointee is a corporation, this form must be
executed under its seal or under the hand of an officer, attorney or other person authorised to sign the same.
In order to qualify for attending the above Meeting, all instruments of transfers must be lodged with Link Asset Services,
PXS, 34 Beckenham Road, Beckenham, Kent, BR3 4TU, United Kingdom not less than 48 hours before the time
appointed for holding the Meeting or the adjourned Meeting (as the case may be) (excluding non-business days).
In the case of joint holders of a share, the vote of the senior who tenders a vote, whether in person or by proxy, shall
be accepted to the exclusion of the votes of the other joint holders, and for this purpose seniority shall be determined
by the order in which the names stand in the Register of Members in respect of the joint holding.
The ordinary resolution of the Annual General Meeting will be passed by a simple majority of the votes validly cast,
whatever be the number of shareholders present or represented at the Annual General Meeting. Each share is entitled
to one vote.
Holders of Depository Interests should complete the Form of Direction enclosed with their Notice of Annual General
Meeting.
Holders of Depository Interests can instruct Link Market Services Trustees Limited, the Depository, or amend an
instruction to a previously submitted direction, via the CREST system. The CREST message must be received by the
issuer’s agent RA10 by 10.30 a.m. (BST) on Monday 27 April 2020. For this purpose, the time of receipt will be taken
to be the time (as determined by the timestamp applied to the message by the CREST Applications Host) from which
the issuer’s agent is able to retrieve the message. CREST Personal Members or other CREST sponsored members,
and those CREST Members who have appointed voting service provider(s) should contact their CREST sponsor or
voting service provider(s) for assistance with instructing Link Market Services Trustees Limited via CREST. For further
information on CREST procedures, limitations and system timings please refer to the CREST Manual. We may treat as
invalid a direction appointment sent by CREST in the circumstances set out in Regulation 35(5)(a) of the Uncertificated
Securities Regulations 2001. In any case your Form of Direction must be received by the Company’s Registrars no
later than 10.30 a.m. (BST) on Monday 27 April 2020.
At the time of writing the Notice of Annual General Meeting it is impossible to predict what impact COVID-19 might have
on our Annual General Meeting. We are working towards holding the Annual General Meeting as planned, however, we
suggest that you consider public health advice when deciding whether to travel and attend on the day. If public health
advice causes any changes to the Annual General Meeting, we will update shareholders through announcements to
the London Stock Exchange and the information page on our website www.symphonyasia.com. We also encourage
you to exercise your right to appoint a proxy in advance of the meeting by returning a completed proxy card.
SYMPHONY INTERNATIONAL HOLDINGS LIMITEDNOTICE OF ANNUAL GENERAL MEETING SYMPHONY INTERNATIONAL HOLDINGS LIMITED
(Incorporated in the British Virgin Islands)
Form of Direction for completion by holders of Depository Interests representing shares, on a 1 for 1 basis, in the
share capital of Symphony International Holdings Limited (the “Company”) in respect the Annual General Meeting
to be held at 9 Raffles Place, #52-02 Republic Plaza Tower 1, Singapore 048619, Tel +65 6536 6177 on Thursday,
30 April 2020 at 3.00 p.m. (GMT+8)
ANNUAL GENERAL MEETING
FORM OF DIRECTION
I/We
(Depository Interests holder’s name) being
a holder of Depository Interests representing shares in the share capital of the Company hereby appoint Link Market
Services Trustees Limited (the “Depository”) as my/our proxy to vote for me/us and on my/our behalf at the Annual
General Meeting (the “Meeting”) of the Company to be held on the above date (and at any adjournment thereof) as
directed by an X in the spaces below. The complete wording of the resolution may be found in the notice convening
the Annual General Meeting.
ORDINARY RESOLUTION
To authorise the Company to make market purchases of its own Shares.
FOR
AGAINST
VOTE
WITHHELD
Dated this
day of
2020
Address
Signature
Notes
1.
2.
3.
4.
5.
6.
7.
8.
To be effective, this Form of Direction and the power of attorney or other authority (if any) under which it is signed, or
a notarially or otherwise certified copy of such power or authority, must be deposited at Link Asset Services, PXS,
34 Beckenham Road, Beckenham, Kent, BR3 4TU, United Kingdom no later than 10.30 a.m. (BST) on Monday
27 April, 2020.
Any alteration made to this Form of Direction must be initialled by the person who signs it.
If the appointee is a corporation, this form must be given under its common seal or under the hand of an officer or
attorney duly authorised in writing.
In the case of joint holders of Depository Interests, the person whose name appears first in the Register of Depository
Interests has the right to attend and vote at the Meeting to the exclusion of all others.
The ‘Vote Withheld’ option is provided to enable you to abstain from voting on the resolution. However, it should be
noted that a ‘Vote Withheld’ is not a vote in law and will not be counted in the calculation of the proportion of the votes
‘For’ and ‘Against’ the resolution.
The Depository will appoint the Chairman of the meeting as its proxy to cast your votes. The Chairman may also vote
or abstain from voting as he or she thinks fit on any other resolution (including amendments to resolutions) which may
properly come before the meeting.
Please indicate how you wish your votes to be cast by placing an “X” in the box provided. On receipt of this form duly
signed, you will be deemed to have authorised the Depository to vote, or to abstain from voting, as per your instructions
on your behalf. If no voting instruction is indicated, the Depository will abstain from voting on the specified
resolution.
Depository Interests may be voted through the CREST Proxy Voting Service in accordance with the procedures set
out in the CREST manual.
Depository Interest holders wishing to attend the Meeting should contact the Depository at Link Market Services
Trustees Limited, The Registry, 34 Beckenham Road, Beckenham, Kent, BR3 4TU, United Kingdom or by email to
CAGtrustees@linkgroup.co.uk in order to request a Letter of Representation by no later than 10.30 a.m. (BST) on Monday
27 April, 2020.
This page has been intentionally left blank.
SYMPHONY INTERNATIONAL HOLDINGS LIMITED
(Incorporated in the British Virgin Islands)
Form of Proxy for use at the Annual General Meeting
to be held at 9 Raffles Place, #52-02 Republic Plaza Tower 1, Singapore 048619
Tel +65 6536 6177 on Thursday, 30 April 2020 at 3.00 p.m. (GMT+8)
I/We1
of
being the registered holder(s) of
Ordinary shares2 in the share capital of Symphony International Holdings Limited (the “Company”), HEREBY APPOINT THE
CHAIRMAN OF THE MEETING3 or
of
as my/our proxy to attend and act for me/us and on my/our behalf at the Annual General Meeting (the “Meeting”) of the Company
to be held at 9 Raffles Place, Republic Plaza Tower 1, Singapore 048619, on Thursday, 30 April 2020 at 3.00 p.m. (GMT+8)
for the purpose of receiving the annual report, which includes the financial statements, for the year ended 31 December 2019,
and considering and, if thought fit, passing the ordinary resolution as set out in the notice convening the Meeting and at the
Meeting (and at any adjournment thereof) to vote for me/us and in my/our name(s) in respect of the resolution as indicated
below. The complete wording of the resolution may be found in the notice convening the Annual General Meeting.
ORDINARY RESOLUTION
To authorise the Company to make market purchases of its own Shares.
FOR4
4
AGAINST
VOTE
WITHHELD4
Dated this
day of
2020
Signed6:
Notes:
1.
2.
3.
4.
5.
6.
7.
8.
9.
Full name(s) and address(es) to be inserted in BLOCK CAPITALS. The names of all joint registered holders should be
stated.
Please insert the number of shares registered in your name(s) to which this proxy relates. If no number is inserted, this
Form of Proxy will be deemed to relate to all the shares of the Company registered in your name(s).
If any proxy other than the Chairman of the Meeting is preferred, strike out “THE CHAIRMAN OF THE MEETING” and
insert the name and address of the proxy desired in the space provided. If no name is inserted, THE CHAIRMAN OF
THE MEETING will act as proxy. Any alteration made to this Form of Proxy must be initialled by the person who signs it.
IMPORTANT: IF YOU WISH TO VOTE FOR THE RESOLUTION, PLACE AN ‘X’ IN THE BOX MARKED “FOR”. IF YOU
WISH TO VOTE AGAINST THE RESOLUTION, PLACE AN ‘X’ IN THE BOX MARKED “AGAINST”. IF YOU WISH
TO WITHHOLD YOUR VOTE ON THE RESOLUTION, PLACE AN ‘X’ IN THE BOX MARKED “VOTE WITHHELD”.
If no direction is given, your proxy may vote or abstain as he/she thinks fit. Your proxy will also be entitled to vote at
his/her discretion on any resolution properly put to the Meeting other than those referred to in the Notice convening
the Meeting. The ‘Vote Withheld’ option is provided to enable you to abstain from voting on the resolution. However, it
should be noted that a ‘Vote Withheld’ is not a vote in law and will not be counted in the calculation of the proportion
of the votes ‘For’ and ‘Against’ the resolution.
This Form of Proxy must be signed by you or your attorney duly authorized in writing or, in the case of a corporation, must
be either executed under its common seal or under the hand of an officer or attorney duly authorised to sign the same.
In the case of joint registered holders of any shares, any one of such persons may vote at the Meeting, either personally
or by proxy, in respect of such shares as if he/she was solely entitled thereto; but if more than one of such joint registered
holders be present at the Meeting, either personally or by proxy, that one of the said persons so present whose name
stands first on the Register of Members in respect of such shares shall alone be entitled to vote in respect thereof to
the exclusion of the votes of the other joint registered holders.
In order to be valid, this Form of Proxy together with the power of attorney (if any) or other authority (if any) under which
it is signed or a notarially certified copy thereof, must be deposited at Link Asset Services, PXS, 34 Beckenham Road,
Beckenham, Kent, BR3 4TU, United Kingdom no later than 10.30 a.m. (BST) on Tuesday 28 April 2020.
The proxy need not be a member of the Company but must attend the Meeting in person to represent you.
Completion and delivery of the Form of Proxy will not preclude you from attending and voting at the Meeting if you so
wish. If you attend and vote at the Meeting, the authority of your proxy will be revoked.
S
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