REG - Symphony Int Hdgs - Annual Financial Report
04/04/2022 07:00
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RNS Number : 9572G Symphony International Holdings Ltd 04 April 2022
SYMPHONY INTERNATIONAL HOLDINGS PUBLICATION OF ANNUAL REPORT FOR THE YEAR
ENDED 31 DECEMBER 2021
4 April 2022
Symphony International Holdings Limited (LSE: SIHL) is pleased to announce the
publication of its 2021 annual report, which is available on its website at
www.symphonyasia.com (http://www.symphonyasia.com) .
For further information, please contact:
Symphony Asia Holdings Pte. Ltd.: +65 6536 6177
Anil
Thadani
Rajgopal Rajkumar
Dealing codes
The ISIN number of the Ordinary Shares is VGG548121059, the SEDOL code is
B231M63 and the TIDM is SIHL.
The LEI number of the Company is 254900MQE84GV5DS6F03.
IMPORTANT INFORMATION
This announcement is not for release, publication or distribution, in whole or
in part, directly or indirectly, in or into the United States or any other
jurisdiction into which the publication or distribution would be unlawful.
These materials do not constitute an offer to sell or issue or the
solicitation of an offer to buy or acquire securities in the United
States or any other jurisdiction in which such offer or solicitation would be
unlawful. The securities referred to in this document have not been and will
not be registered under the securities laws of such jurisdictions and may not
be sold, resold, taken up, transferred, delivered or distributed, directly or
indirectly, within such jurisdictions.
No representation or warranty is made by the Company as to the accuracy or
completeness of the information contained in this announcement and no
liability will be accepted for any loss arising from its use.
This announcement is for information purposes only and does not constitute an
invitation or offer to underwrite, subscribe for or otherwise acquire or
dispose of any securities of the Company in any jurisdiction. All investments
are subject to risk. Past performance is no guarantee of future returns.
Prospective investors are advised to seek expert legal, financial, tax and
other professional advice before making any investment decisions.
This announcement is not an offer of securities for sale into the United
States. The Company's securities have not been, and will not be, registered
under the United States Securities Act of 1933 and may not be offered or sold
in the United States absent registration or an exemption from registration.
There will be no public offer of securities in the United States.
Statements contained in this announcement regarding past trends or activities
should not be taken as a representation that such trends or activities will
continue in the future. The information contained in this document is subject
to change without notice and, except as required by applicable law, neither
the Company nor the Investment Manager assumes any responsibility or
obligation to update publicly or review any of the forward-looking statements
contained herein. You should not place undue reliance on forward-looking
statements, which speak only as of the date of this announcement.
Independent auditors' report
Members of the Company
Symphony International Holdings Limited
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 2021, the statement of comprehensive income,
statement of changes in equity and statement of cash flows of the Company for
the year then ended, and notes to the financial statements, including a
summary of significant accounting policies, as set out on pages FS1 to FS42.
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 2021 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.
Valuation of financial assets at fair value through profit or loss (Level 3)
(Refer to Note 16 to the financial statements, page FS27 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$481 As part of our audit procedures, we have:
million (2020: US$382 million) at 31 December 2021. The Company holds its
investments directly or through its unconsolidated subsidiaries. The
underlying investments comprise both quoted and unquoted securities.
· Evaluated the design and implementation of controls over the
preparation, review and approval of the valuations.
The Company's unquoted investments amounting to US$431 million (2020: US$293
million) require significant judgement in the determination of the fair values
as significant unobservable inputs are used in their estimation. Changes in · Involved our valuation specialist in assessing the appropriateness of
these unobservable inputs could have a material impact on the valuation of the internal models used to value the operating businesses.
these investments.
· For land related investments and rental properties, evaluated the
The economic uncertainty from the COVID-19 pandemic has caused significant valuers' independence and qualification; and compared the assumptions and
estimation uncertainty over the valuation of investments and as a result, parameters used to externally derived data, considering the implications of
there is increased judgement in forecasting cash flows and assumptions used in COVID-19 and market uncertainty in the valuations.
the discounted cash flow models, and future maintainable earnings and market
multiples used in its fair value calculations. These conditions and the
uncertainty of their continuation results in a risk of inaccurate forecasts or
a significantly wider range of possible outcomes to be considered. · For operating businesses valued using the comparable enterprise
model, checked consistency of earnings before interest, tax, depreciation and
amortisation ('EBITDA') multiples and share prices to publicly available
information.
The Company used external valuers to measure the fair value of the land
related investments and rental properties.
· For operating businesses valued using the option pricing model,
involved our valuation specialist in assessing the liquidation preference of
The Company used internal models to value the investments in operating each instrument by agreeing to underlying agreements and term sheets.
businesses.
· For the operating business valued using the discounted cash flow
· For land related investments in Thailand, Japan and Malaysia, the method, challenged the Company's assessment of the impact of COVID-19 on cash
external valuers applied the comparable valuation method with the price per flows and the reasonableness of key assumptions used including projected
square metre as the most determinative parameter. revenue and expenses by corroborating to past performance and market data.
Valuation of financial assets at fair value through profit or loss (Level 3)
(Refer to Note 16 to the financial statements, page FS27 et seq.)
The key audit matter How the matter was addressed in our audit
· For rental properties in Thailand, an income approach was used to · In assessing the reliability of using unaudited financial information
determine the fair value, by using the rental growth rate, occupancy rate and provided by the investee companies, we performed a retrospective review by
discount rate as the key input parameters. comparing the unaudited financial information provided during the previous
year (if any) to the audited financial information, or assessed the
· For investments in operating businesses in Thailand, France, India, reasonableness of the financial information presented in the unaudited
Vietnam and the United Arab Emirates, the Company measured the investments financial information.
using either:
(i) the enterprise values by applying comparable traded multiples and a
discount for the lack of marketability; · In respect of the different valuation methodologies adopted by the
Company, we have involved our valuation specialist where applicable in
(ii) the option pricing method, using Black Scholes model at different assessing the appropriateness of comparable enterprises and challenging key
breakpoints (strikes) using market volatility and risk-free rate parameters. assumptions such as the discount used for the lack of marketability, WACC,
volatility and risk-free rate, taking into consideration the impact of
· For a greenfield operating business in Thailand, the Company used a COVID-19, and corroborated the reasons for any unexpected movements from prior
discounted cash flow method to determine the fair value, using projected valuations.
revenue and expenses and weighted average cost of capital ('WACC') as key
input parameters.
· Reviewed the adequacy of the disclosures in the financial
statements on the key assumptions applied in the valuations.
Other information
Management is responsible for the other information contained in the annual
report. Other information is defined as all information in the annual report
other than the financial statements and our auditors' report thereon.
We have obtained all other information prior to the date of this auditors'
report.
Our opinion on the financial statements does not cover the other information
and we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility
is to read the other information and, in doing so, consider whether the other
information is materially inconsistent with the financial statements or our
knowledge obtained in the audit or otherwise appears to be materially
misstated. If, based on the work we have performed, we conclude that there
is a material misstatement of this other information, we are required to
report that fact. We have nothing to report in this regard.
Responsibilities of management and directors for the financial statements
Management is responsible for the preparation of financial statements that
give a true and fair view in accordance with IFRS, and for devising and
maintaining a system of internal accounting controls sufficient to provide a
reasonable assurance that assets are safeguarded against loss from
unauthorised use or disposition; and transactions are properly authorised and
that they are recorded as necessary to permit the preparation of true and fair
financial statements and to maintain accountability of assets.
In preparing the financial statements, management is responsible for assessing
the Company's ability to continue as a going concern, disclosing, as
applicable, matters related to going concern and using the going concern basis
of accounting unless management either intends to liquidate the Company or to
cease operations, or has no realistic alternative but to do so.
The directors' responsibilities include overseeing the Company's financial
reporting process.
Auditors' responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial
statements as a whole are free from material misstatement, whether due to
fraud or error, and to issue an auditors' report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that
an audit conducted in accordance with ISAs will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and
are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on
the basis of these financial statements.
As part of an audit in accordance with ISAs, we exercise professional
judgement and maintain professional scepticism throughout the audit. We
also:
· Identify and assess the risks of material misstatement of the
financial statements, whether due to fraud or error, design and perform audit
procedures responsive to those risks, and obtain audit evidence that is
sufficient and appropriate to provide a basis for our opinion. The risk of
not detecting a material misstatement resulting from fraud is higher than for
one resulting from error, as fraud may involve collusion, forgery, intentional
omissions, misrepresentations, or the override of internal controls.
· Obtain an understanding of internal controls relevant to the
audit in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Company's internal controls.
· Evaluate the appropriateness of accounting policies used and the
reasonableness of accounting estimates and related disclosures made by
management.
· Conclude on the appropriateness of management's use of the going
concern basis of accounting and, based on the audit evidence obtained, whether
a material uncertainty exists related to events or conditions that may cast
significant doubt on the Company's ability to continue as a going concern.
If we conclude that a material uncertainty exists, we are required to draw
attention in our auditors' report to the related disclosures in the financial
statements or, if such disclosures are inadequate, to modify our opinion.
Our conclusions are based on the audit evidence obtained up to the date of our
auditors' report. However, future events or conditions may cause the Company
to cease to continue as a going concern.
· Evaluate the overall presentation, structure and content of the
financial statements, including the disclosures, and whether the financial
statements represent the underlying transactions and events in a manner that
achieves fair presentation.
We communicate with the directors regarding, among other matters, the planned
scope and timing of the audit and significant audit findings, including any
significant deficiencies in internal controls that we identify during our
audit.
We also provide the directors with a statement that we have complied with
relevant ethical requirements regarding independence, and to communicate with
them all relationships and other matters that may reasonably be thought to
bear on our independence, and where applicable, related safeguards.
From the matters communicated with the directors, we determine those matters
that were of most significance in the audit of the financial statements of the
current period and are therefore the key audit matters. We describe these
matters in our auditors' report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we
determine that a matter should not be communicated in our report because the
adverse consequences of doing so would reasonably be expected to outweigh the
public interest benefits of such communication.
The engagement partner on the audit resulting in this independent auditors'
report is Shelley Chan Hoi Yi.
KPMG LLP
Public Accountants and
Chartered Accountants
Singapore
25 March 2022
Statement of financial position
As at 31 December 2021
Note 2021 2020
US$'000 US$'000
Non-current assets
Financial assets at fair value through profit or loss 4 480,755 381,949
Prepayment * *
480,755 381,949
Current assets
Other receivables and prepayments 5 70 73
Cash and cash equivalents 6 8,357 257
8,427 330
Total assets 489,182 382,279
Equity attributable to equity holders
of the Company
Share capital 7 409,704 409,704
Accumulated profits/(losses) 79,151 (30,645)
Total equity carried forward 488,855 379,059
Current liabilities
Interest-bearing borrowings 8 - 2,730
Other payables 9 327 490
Total liabilities 327 3,220
Total equity and liabilities 489,182 382,279
* Less than US$1,000
The financial statements were approved by the Board of Directors on 25 March
2022.
────────────────────
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Anil
Thadani
Sunil Chandiramani
Director
Director
The accompanying notes form an integral part of these financial statements.
Statement of comprehensive income
Year ended 31 December 2021
Note 2021 2020
US$'000 US$'000
Other operating income 182,234 5,156
Other operating expenses (5,609) (1,923)
Management fees (9,057) (8,712)
Profit/(Loss) before investment results and income tax 167,568 (5,479)
Loss on disposal of financial assets at fair value through profit or loss (4) -
Fair value changes in financial assets at fair value (45,094) (119,111)
through profit or loss
Profit/(Loss) before income tax 10 122,470 (124,590)
Income tax expense 11 - -
Profit/(Loss) for the year 122,470 (124,590)
Other comprehensive income for the year, net of tax - -
Total comprehensive income for the year 122,470 (124,590)
Earnings per share:
US Cents US Cents
Basic 12 23.86 (24.27)
Diluted 12 23.86 (24.27)
The accompanying notes form an integral part of these financial
statements.
Statement of changes in equity
Year ended 31 December 2021
Share Accumulated profits/(losses) Total
capital
equity
US$'000 US$'000 US$'000
At 1 January 2020 409,704 93,945 503,649
Total comprehensive income for the year - (124,590) (124,590)
At 31 December 2020 409,704 (30,645) 379,059
At 1 January 2021 409,704 (30,645) 379,059
Total comprehensive income for the year - 122,470 122,470
Transaction with owners, recognised directly in equity
Contributions by and distributions to owners
Forfeiture of dividend paid in prior years - 160 160
Dividends declared and paid of US$0.025 per share - (12,834) (12,834)
Total transactions with owners - (12,674) (12,674)
At 31 December 2021 409,704 79,151 488,855
The accompanying notes form an integral part of these financial statements.
Statement of cash flows
Year ended 31 December 2021
Note 2021 2020
US$'000 US$'000
Cash flows from operating activities
Profit/(Loss) before income tax 122,470 (124,590)
Adjustments for:
Dividend income (182,232) -
Exchange loss/(gain), net 4,181 (5,126)
Interest income (2) (28)
Interest expense 18 647
Loss on disposal of financial assets at fair value through profit or loss 4 -
Fair value changes in financial assets at fair value through profit or loss 45,094 119,111
(10,467) (9,986)
Changes in:
- Other receivables and prepayments 3 (15)
- Other payables (160) 72
(10,624) (9,929)
Dividend received from unconsolidated subsidiaries 4,007 -
Interest received (net of withholding tax) 2 40
Net cash used in operating activities (6,615) (9,889)
Cash flows from investing activities
Net proceeds received from unconsolidated subsidiaries 30,108 73,670
Refund of purchase consideration/(Purchases) of investments 27 (260)
Net cash from investing activities 30,135 73,410
Cash flows from financing activities
Interest paid (18) (770)
Dividend paid (12,834) -
Receipts from forfeiture of dividends paid in prior years 160 -
Repayment of borrowings (2,730) (70,146)
Net cash used in financing activities (15,422) (70,916)
Net increase/(decrease) in cash and cash equivalents 8,098 (7,395)
Cash and cash equivalents at 1 January 257 7,671
Effect of exchange rate fluctuations 2 (19)
Cash and cash equivalents at 31 December 6 8,357 257
Significant non-cash transactions
During the financial year ended 31 December 2021, the Company received
dividends of US$182,232,000 (2020: US$Nil) from its unconsolidated
subsidiaries of which US$173,986,000 (2020: US$Nil) was set off against the
non-trade amounts due to the unconsolidated subsidiaries.
Notes to the financial statements
These notes form an integral part of the financial statements.
The financial statements were authorised for issue by the Board of Directors
on 25 March 2022.
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, education and new economy
sectors predominantly in Asia and through investments in special situations
and structured transactions, which have the potential of generating attractive
returns.
2 Basis of preparation
2.1 Statement of compliance
The financial statements have been prepared in accordance with International
Financial Reporting Standards (IFRS).
2.2 Basis of measurement
The financial statements have been prepared on a fair value basis, except for
certain items which are measured on a historical cost basis.
2.3 Functional and presentation currency
These financial statements are presented in United States dollars (US$'000),
which is the Company's functional currency. All financial information
presented in United States dollars have been rounded to the nearest thousand,
unless otherwise stated.
2.4 Use of estimates and judgements
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 the 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 prospectively.
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.
Coronavirus (COVID-19) pandemic
The COVID-19 pandemic has increased the estimation uncertainty in developing
significant accounting estimates, predominantly related to the valuation of
financial assets at fair value through profit of loss ('FVTPL').
The estimation uncertainty is associated with:
· the extent and duration of the expected economic downturn and
subsequent recovery. This includes the impacts on liquidity, increasing
unemployment, declines in consumer spending and forecasts for key economic
factors;
· the extent and duration of the disruption to business arising from
the containment measures by governments, businesses and consumers to contain
the spread of the virus; and
· the effectiveness of government and central bank measures that have
and will be put in place to support businesses and consumers through this
disruption and economic downturn.
The Company has developed accounting estimates based on forecasts of economic
conditions which reflect expectations and assumptions as at 31 December 2021
about future events that management believes are reasonable in the
circumstances.
There is a considerable degree of judgement involved in preparing forecasts.
The underlying assumptions are also subject to uncertainties which are often
outside the control of the Company. Accordingly, actual economic conditions
are likely to be different from those forecast since anticipated events
frequently do not occur as expected, and the effect of those differences may
significantly impact accounting estimates included in these financial
statements.
The impact of the COVID-19 pandemic on financial assets at fair value through
profit or loss is discussed further in Note 16.
2.5 Changes in accounting policies
New standards and amendments
The Company has applied the following IFRSs, amendments to and interpretations
of IFRS for the first time for the annual period beginning on 1 January 2021:
· COVID-19-Related Rent Concessions (Amendments to IFRS 16)
· Interest Rate Benchmark Reform - Phase 2 (Amendments to IFRS 9, IAS
39, IFRS 7, IFRS 4 and IFRS 16)
The application of these amendments to standards and interpretations did not
have a material effect on the financial statements.
3 Significant accounting policies
The accounting policies set out below have been applied consistently to all
periods presented in these financial statements, except as explained in Note
2.5, which addresses changes in accounting policies.
3.1 Subsidiaries
Subsidiaries are investees controlled by the Company. The Company controls
an investee when 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.
3.2 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.
3.3 Foreign currency
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 generally recognised
in profit or loss.
3.4 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 or minus, for an item not at 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.
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).
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 either:
- substantially all of the risks and rewards of ownership of the
financial asset are transferred; or
- 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.
Transferred assets are not derecognised when 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.
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.
3.5 Impairment
(i) Non-derivative financial assets
The Company recognises loss allowances for expected credit losses ('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.
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 debtor 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.
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 debtor;
- 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 debtor 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, the 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 of disposal. 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.
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.
3.6 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.
3.7 Dividend income
Dividend income is recognised in profit on loss on the date on which the
Company's right to receive payment is established. For quoted equity
securities, this is usually the ex-dividend date. For unquoted equity
securities, this is usually the date on which the shareholders approve the
payment of a dividend.
3.8 Finance income and finance expense
The Company's finance income and finance expense include 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.
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.
3.9 Income tax
Tax expense comprises current and deferred tax. Current tax and deferred tax
are recognised in profit or loss except to the extent that it relates to items
recognised directly in equity or in other comprehensive income.
The Company has determined that interest and penalties related to income
taxes, including uncertain tax treatments, do not meet the definition of
income taxes, and therefore accounted for them under IAS 37 Provisions,
Contingent Liabilities and Contingent Assets.
Current tax is the expected tax payable or receivable on the taxable income or
loss 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, and reflect
uncertainty related to income taxes, if any.
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.
3.10 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, which
comprise share options granted to the Investment Manager.
3.11 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 payables.
3.12 New standards and interpretations not adopted
A number of new standards, interpretations and amendments to standards are
effective for annual periods beginning after 1 January 2021 and earlier
application is permitted; however, the Company has not early adopted the new
or amended standards and interpretations in preparing these financial
statements.
The following new IFRSs, interpretations and amendments to IFRSs are not
expected to have a significant impact on the Company's financial statements.
· IFRS 17 Insurance Contracts and amendments to IFRS 17 Insurance
Contracts
· Covid-19-Related Rent Concessions beyond 30 June 2021 (Amendment to
IFRS 16)
· Reference to the Conceptual Framework (Amendments to IFRS 3)
· Property, Plant and Equipment - Proceeds before Intended Use
(Amendments to IAS 16)
· Onerous Contracts - Costs of Fulfilling a Contract (Amendments to IAS
37)
· Classification of Liabilities as Current or Non-current (Amendments
to IAS 1)
· Annual Improvements to IFRSs 2018 - 2020
· Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS
Practice Statement 2)
· Definition of Accounting Estimates (Amendments to IAS 8)
· Deferred Tax related to Assets and Liabilities arising from a Single
Transaction (Amendments to IAS 12)
4 Financial assets at fair value through profit or loss
2021 2020
Note US$'000 US$'000
Investments 18 480,755 381,949
5 Other receivables and prepayments
2021 2020
US$'000 US$'000
Interest and other receivables 1 1
Prepayments 69 72
70 73
6 Cash and cash equivalents
2021 2020
US$'000 US$'000
Fixed deposits with financial institutions and placements in money market 7 8
funds
Cash at bank 8,350 249
8,357 257
The effective interest rate on fixed deposits with financial institutions as
at 31 December 2021 was 0% to 0.14% (2020: 0% to 1.80%) per annum. Interest
rates reprice at intervals of seven days to one month.
7 Share capital
Company
2021 2020
Number of shares Number of shares
Fully paid ordinary shares, with no par value:
At 1 January and 31 December 513,366,198 513,366,198
Share capital in the statement of financial position represents subscription
proceeds received from, and the amount of liabilities capitalised through, the
issuance of ordinary shares of no par value in the Company, less transaction
costs directly attributable to equity transactions.
The Company does not have an authorised share capital and is authorised to
issue an unlimited number of no par value shares.
The holders of ordinary shares are entitled to receive dividends as declared
from time to time and are entitled to one vote per share at shareholder
meetings of the Company. All shares rank equally with regard to the
Company's residual assets.
8 Interest-bearing borrowings
The interest-bearing borrowings comprise a term loan from a bank amounting to
US$Nil (2020: US$2,730,000 denominated in United States Dollar. Interest is
charged at 1.58% to 1.62% (2020: 1.56% to 3.26%) per annum and reprices on
maturity. The loan principal was repaid during the year. The
interest-bearing term loan was secured by the listed securities held through
the Company's wholly owned subsidiary.
9 Other payables
2021 2020
US$'000 US$'000
Accrued operating expenses 327 377
Amount due to shareholders - 113
Interest payable - *
327 490
* Less than US$1,000
Reconciliation of movements of liabilities to cash flows arising from
financing activities
Liabilities Equity
Interest-bearing borrowings Interest Share Accumulated profits/(losses) Total
payable
capital
US$'000 US$'000 US$'000 US$'000 US$'000
As at 1 January 2020 72,879 123 409,704 93,945 576,651
Changes from financing cash flows
Interest paid - (770) - - (770)
Repayment of borrowings (70,146) - - - (70,146)
Total changes from financing cash flows (70,146) (770) - - (70,916)
The effect of changes in foreign exchange rates (3) - - - (3)
Other changes
Liability-related
Interest expense - 647 - - 647
Total liability-related other changes - 647 - - 647
Total equity-related other changes - - - (124,590) (124,590)
Balance as at 31 December 2020 2,730 * 409,704 (30,645) 381,789
* Less than US$1,000
Liabilities Equity
Interest-bearing borrowings Interest Share Accumulated profits/(losses) Total
payable
capital
US$'000 US$'000 US$'000 US$'000 US$'000
As at 1 January 2021 2,730 * 409,704 (30,645) 381,789
Changes from financing cash flows
Interest paid - (18) - - (18)
Dividend paid - - - (12,834) (12,834)
Receipt from forfeiture of dividend paid in prior years - - - 160 160
Repayment of borrowings (2,730) - - - (2,730)
Total changes from financing cash flows (2,730) (18) - (12,674) (15,422)
The effect of changes in foreign exchange rates - - - - -
Other changes
Liability-related
Interest expense - 18 - - 18
Total liability-related other changes - 18 - - 18
Total equity-related other changes - - - 122,470 122,470
Balance as at 31 December 2021 - - 409,704 79,151 488,855
* Less than US$1,000
10 Profit/(Loss) before income tax
Profit/(Loss) before income tax includes the following:
2021 2020
US$'000 US$'000
Other operating income
Dividend income 182,232 -
Interest income from:
- fixed deposits and placements in money market fund 2 23
- loans to unconsolidated subsidiaries - 5
Other income - 2
Exchange gain, net - 5,126
182,234 5,156
Other operating expenses
Exchange loss, net 4,181 -
Non-executive director remuneration 400 400
Interest expense 18 647
11 Income tax expense
The Company is incorporated in a tax-free jurisdiction, thus, it is not
subject to income tax.
12 Earnings per share
2021 2020
US$'000 US$'000
Basic and diluted earnings per share are based on:
Profit/(Loss) for the year attributable to ordinary shareholders 122,470 (124,590)
Basic and diluted earnings per share
Number of shares Number of shares
2021 2020
Issued ordinary shares at 1 January and 31 December 513,366,198 513,366,198
Weighted average number of shares (basic and diluted) 513,366,198 513,366,198
At 31 December 2021 and 31 December 2020, there were no outstanding share
options to subscribe for ordinary shares of no par value.
13 Significant related party transactions
Dividend income
During the financial year ended 31 December 2021, the Company recognised
dividend income from its unconsolidated subsidiaries amounting to
US$182,232,000 (2020: US$Nil).
Key management personnel compensation
Key management personnel of the Company are those persons having the authority
and responsibility for planning, directing and controlling the activities of
the Company.
During the financial year, directors' fees amounting to US$400,000 (2020:
US$400,000) were declared as payable to four directors (2020: four directors)
of the Company. The remaining two directors of the Company are also
directors of the Investment Manager who provides management and administrative
services to the Company on an exclusive and discretionary basis. No
remuneration has been paid to these directors as the cost of their services
form part of the Investment Manager's remuneration.
Other related party transactions
During the financial year ended 31 December 2021, the Company recognised
interest income from its unconsolidated subsidiaries totalling US$Nil (31
December 2020: US$5,000).
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$6,000,000 (2020: US$6,000,000) per annum and a maximum
amount of US$15,000,000 (2020: US$15,000,000) per annum. The Investment
Manager announced a voluntary reduction in management fees effective from the
fee payable on 1 October 2020 whereby the minimum fee was reduced from
US$8,000,000 to US$6,000,000.
In 2021, Management fees amounting to US$9,057,000 (2020: US$8,712,000) 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 (2020: 10,298,725) management
shares had been issued, credited as fully paid to the Investment Manager.
c. Share options
There were no share options outstanding as at 31 December 2021 and at 31
December 2020.
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.
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$4,215,000 (THB140,000,000). As at 31 December 2021, US$3,613,000
(THB120,000,000) (2020: US$4,005,000 (THB120,000,000)) has been drawn down.
The Company is committed to grant the remaining loan amounting to US$602,000
(THB20,000,000) (2020: US$668,000 (THB20,000,000)), subject to terms set out
in the agreement.
In July 2019, the Company committed to subscribe to Good Capital Fund I for an
amount less than 1% of the net asset value as at 31 December 2021.
Approximately 48% of this commitment had been funded at 31 December 2021 with
52% of the commitment subject to be called over the next two 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 Symphony Asia Holdings Pte. Ltd.,
the Investment Manager, who review this information on a regular basis.
For the year ending 31 December 2021, the Company has renamed its 'Other'
segment as 'New Economy'.
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.
The following summary describes the investments in each of the Company's
reportable segments.
Healthcare Includes an investment in ASG Hospital Private Limited (ASG) and Soothe
Healthcare Private Limited (Soothe)
Hospitality Minor International Public Company Limited (MINT)
Lifestyle 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, Desaru Peace Holdings Sdn Bhd and a villa in
Phuket, Thailand
Education Includes WCIB International Co. Ltd. (WCIB) and Creative Technology Solutions
DMCC (CTS)
Logistics In Do Trans Logistics Corporation
New Economy Includes Smarten Spaces Pte. Ltd. (Smarten), Good Capital Partners and Good
Capital Fund I (collectively, Good Capital), August Jewellery Pvt Ltd
(Melorra), Kieraya Furnishing Solutions Private Limited (Furlenco), Catbus
Infolabs Pvt. Ltd (Blowhorn), Meesho Inc. (Meesho), SolarSquare Energy Pvt
Limited (Solar Square) and Epic Games
Cash and temporary investments Includes government securities or other investment grade securities, liquid
investments which are managed by third party investment managers of
international repute, and deposits placed with commercial banks
Information regarding the results of each reportable segment is included
below:
Healthcare Hospitality Education Lifestyle Lifestyle/ Real Estate Logistics Cash and temporary investments New Economy Total
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
31 December 2021
Investment income
- Dividend income 37,458 140,000 - - - - 4,774 - 182,232
- Interest income - - - - - - 2 - 2
37,458 140,000 - - - - 4,776 - 182,234
Fair value changes of financial assets at fair value through profit or loss (17,550) (130,998) 1,890 23,348 (5,081) 89,814 (4,790) (1,727) (45,094)
Loss on disposal of financial assets at fair value through profit or loss - - - - - - (4) - (4)
Exchange loss, net (2) - (2) (3,114) (1,076) (1) 16 (2) (4,181)
(17,552) (130,998) 1,888 20,234 (6,157) 89,813 (4,778) (1,729) (49,279)
Net investment results 19,906 9,002 1,888 20,234 (6,157) 89,813 (2) (1,729) 132,955
31 December 2020
Investment income
- Interest income - - - - 5 - 23 - 28
- Other income - - - - - - 2 - 2
- Exchange gain, net 2 * 2 3,685 1,362 1 72 2 5,126
2 * 2 3,685 1,367 1 97 2 5,156
Fair value changes of financial assets at fair value through profit or loss 2,775 (103,501) (16,446) (3,969) (13,685) 11,487 2 4,226 (119,111)
Net investment results 2,777 (103,501) (16,444) (284) (12,318) 11,488 99 4,228 (113,955)
31 December 2021
Segment assets 52,830 68,487 16,765 53,415 105,029 143,989 8,366 40,231 489,112
Segment liabilities - - - - - - - - -
31 December 2020
Segment assets 30,258 109,239 12,466 33,166 119,283 54,155 268 23,371 382,206
Segment liabilities - - - - - - (2,730) - (2,730)
* Less than US$1,000
The reportable operating segments derive their revenue primarily by achieving
returns, consisting of dividend income, interest income and appreciation of
fair value. The Company does not monitor the performance of the investments by
measure of profit or loss.
Reconciliations of reportable segment profit or loss and assets
2021 2020
US$'000 US$'000
Profit or loss
Net investments results 132,955 (113,955)
Unallocated amounts:
- Management fees (9,057) (8,712)
- Non-executive director remuneration (400) (400)
- General operating expenses (1,028) (1,523)
Profit/(Loss) for the year 122,470 (124,590)
Assets
Total assets for reportable segments 489,112 382,206
Other assets 70 73
Total assets 489,182 382,279
Liabilities
Total liabilities for reportable segments - 2,730
Other payables 327 490
Total liabilities 327 3,220
Geographical information
In presenting information on the basis of geographical information, fair value
changes of financial assets at fair value through profit or loss is based on
the geographical location of the underlying investments. Assets are based on
the principal geographical location of the assets or the operations of the
underlying investments.
Singapore Malaysia Thailand Japan Mauritius Vietnam Others Total
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
2021
Investment income:
- Dividend income - - - - 140,000 - 42,232 182,232
- Interest income 2 - - - - - * 2
2 - - - 140,000 - 42,232 182,234
Fair value changes of financial assets at fair value through profit or loss - (41,926) (125,478) (3,232) - 35,728 (45,094)
89,814
Loss on disposal of financial assets at fair value through profit or loss - - - - - (4) (4)
-
Exchange loss, net (30) - - - * - (4,151) (4,181)
(30) (41,926) (125,478) (3,232) * 89,814 31,573 (49,279)
Net investment results (28) (41,926) (125,478) (3,232) 140,000 89,814 73,805 132,955
* Less than US$1,000
Singapore Malaysia Thailand Japan Mauritius Vietnam Others Total
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
2020
Investment income:
- Interest income 23 - - - - - 5 28
- Other income - - 2 - - - - 2
- Exchange gain, net 167 - - - * - 4,959 5,126
190 - 2 - * - 4,964 5,156
Fair value changes of financial assets at fair value through profit or loss - (11,052) (117,744) (4,335) - 2,520 (119,111)
11,500
Net investment results 190 (11,052) (117,742) (4,335) - 11,500 7,484 (113,955)
2021
Segment assets 7,684 28,958 152,959 19,489 607 144,000 135,415 489,112
Segment liabilities - - - - - - - -
2020
Segment assets 252 35,296 193,777 21,887 301 54,174 76,519 382,206
Segment liabilities (2,730) - - - - - - (2,730)
* Less than US$1,000
16 Financial risk management
The Company's financial assets comprise mainly financial assets at fair value
through profit or loss, other receivables, and cash and cash equivalents.
The Company's financial liabilities comprise interest-bearing borrowings and
other payables. Exposure to credit, price, interest rate, foreign currency
and liquidity risks arises in the normal course of the Company's business.
The Company's Board of Directors has overall responsibility for the
establishment and oversight of the Company's risk management framework. The
Company's risk management policies are established to identify and analyse the
risks faced by the Company and to set appropriate controls. Risk management
policies and systems are reviewed regularly to reflect changes in market
conditions and the Company's activities.
Credit risk
Credit risk is the risk of financial loss to the Company if a customer or
counterparty to a financial instrument fails to meet its contractual
obligations.
Investments in the form of advances are made to investee companies which are
of acceptable credit risk. Credit risk exposure on the investment portfolio is
managed on an asset-specific basis by the Investment Manager.
The Company held cash and cash equivalents of US$8,357,000 as at 31 December
2021 (2020: US$257,000). The cash and cash equivalents are held with bank and
financial institution counterparties, which are rated Aa1 to A2, based on
Moody's/TRIS/Standard & Poor's ratings.
Loss allowance 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.
At the reporting date, there was no significant concentration 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, in particular foreign currency exchange
rates, remain constant.
Impact on Impact on
Profit or loss Profit or loss
100 bp 100 bp 100 bp 100 bp
increase
decrease
increase
decrease
2021 2021 2020 2020
US$'000 US$'000 US$'000 US$'000
Deposits with financial institutions * (*) * (*)
Interest-bearing borrowings - - (27) 27
* (*) (27) 27
* Less than US$1,000
Foreign exchange risk
The Company is exposed to transactional foreign exchange risk when
transactions are denominated in currencies other than the functional currency
of the operation. The Company does not enter into derivative financial
instruments to hedge its exposure to Euro, Japanese Yen, Thailand Baht and
Singapore Dollar as the currency position in these currencies is considered to
be long-term in nature and foreign exchange risk is an integral part of the
Company's investment decision and returns.
The Company's exposure, in US dollar equivalent, to foreign currency risk on
other financial instruments was as follows:
Euro Japanese Thailand Baht Singapore Dollar Others
Yen
US$'000 US$'000 US$'000 US$'000 US$'000
2021
Financial assets at fair value through profit or loss 37,445 19,489 69,005 21,893 16,478
Other receivables - - - 1 -
Cash and cash equivalents - - * 52 17
Accrued operating expenses - - - (316) (11)
Net exposure 37,445 19,489 69,005 21,630 16,484
2020
Financial assets at fair value through profit or loss 22,267 21,898 68,225 2,504 5,391
Other receivables - - - 1 -
Cash and cash equivalents 34 - * 16 13
Accrued operating expenses - - - (311) (10)
Net exposure 22,301 21,898 68,225 2,210 5,394
* Less than US$1,000
Sensitivity analysis
A 10% strengthening of the US dollar against the following currencies at the
reporting date would have increased/(decreased) profit or loss by the amounts
shown below. This analysis assumes that all other variables, in particular
interest rates, remain constant.
Profit or loss
2021 2020
US$'000 US$'000
Euro (3,745) (2,230)
Japanese Yen (1,949) (2,190)
Thailand Baht (6,901) (6,823)
Singapore Dollar (2,163) (221)
Others (1,648) (539)
A 10% weakening of the US dollar against the above currencies would have had
the equal but opposite effect on the above currencies to the amounts shown
above, on the basis that all other variables remain constant.
Price risk
The valuation of the Company's investment portfolio is dependent on prevailing
market conditions and the performance of the underlying assets. The Company
does not hedge the market risk inherent in the portfolio but manages asset
performance risk on an asset-specific basis.
The Company's investment policies provide that the Company invests a majority
of capital in longer-term strategic investments and a portion in special
situations and structured transactions. Investment decisions are made by
management on the advice of the Investment Manager.
Sensitivity analysis
All of the Company's underlying investments that are quoted equity investments
are listed on The Stock Exchange of Thailand. A 10% increase in the price
of the equity securities at the reporting date would increase profit or loss
after tax by the amounts shown below. This analysis assumes that all other
variables remain constant.
Profit or loss
2021 2020
US$'000 US$'000
Underlying investments in quoted equity securities at fair value through 6,797 10,903
profit or loss
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 encounter difficulty in
meeting the obligations associated with its financial liabilities that are
settled by delivering cash or another financial asset.
The Company's objective when managing liquidity is to ensure, as far as
possible, that it will have sufficient liquidity to meet its liabilities when
they are 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$67,972,000 (2020:
US$109,027,000). These listed securities are liquid and can therefore be sold
from time-to-time to generate additional cash to settle any existing and
ongoing liabilities of the Company.
The following are the contractual maturities of financial liabilities,
including estimated interest payments and excluding the impact of netting
agreements:
Cash flows
Carrying amount Contractual Within
cash flows
1 year
US$'000 US$'000 US$'000
2021
Non-derivative financial liabilities
Other payables 327 (327) (327)
Cash flows
Carrying amount Contractual Within
cash flows
1 year
US$'000 US$'000 US$'000
2020
Non-derivative financial liabilities
Interest-bearing borrowings 2,730 (2,730) (2,730)
Other payables 490 (490) (490)
3,220 (3,220) (3,220)
Capital management
The Company's policy is to maintain a strong capital base so as to maintain
investor, creditor and market confidence and to sustain future development of
the business. Capital consists of total equity. The Company seeks to
maintain a balance between higher returns that might be possible with higher
levels of borrowings and the advantages and security afforded by a sound
capital position.
The Company is not subject to externally imposed capital requirements. There
were no changes in the Company's approach to capital management during the
year.
Accounting classification and fair values
The carrying amounts and fair values of financial assets and financial
liabilities are as follows. It does not include fair value information for
financial assets and financial liabilities not measured at fair value if the
carrying amount is a reasonable approximation of fair value.
Carrying amount
Note Fair value through Amortised cost Other financial liabilities Total Fair value
profit or loss
US$'000 US$'000 US$'000 US$'000 US$'000
2021
Financial assets measured at fair value
Financial assets at fair value through profit or loss 4 480,755 - - 480,755 480,755
Financial assets not measured at fair value
Other receivables(1) 5 - 1 - 1
Cash and cash equivalents 6 - 8,357 - 8,357
480,755 8,358 - 489,113
Financial liabilities not measured at fair value
Other payables 9 - - (327) (327)
(1) Excludes prepayment
Carrying amount
Note Fair value through Amortised cost Other financial liabilities Total Fair value
profit or loss
US$'000 US$'000 US$'000 US$'000 US$'000
2020
Financial assets measured at fair value
Financial assets at fair value through profit or loss 4 381,949 - - 381,949 381,949
Financial assets not measured at fair value
Other receivables(1) 5 - 1 - 1
Cash and cash equivalents 6 - 257 - 257
381,949 258 - 382,207
Financial liabilities not measured at fair value
Interest-bearing borrowings 8 - - (2,730) (2,730)
Other payables 9 - - (490) (490)
- - (3,220) (3,220)
(1) Excludes prepayment
Fair value
The financial assets at fair value through profit or loss are measured using
the adjusted net asset value method, which is based on the fair value of the
underlying investments. The fair values of the underlying investments are
determined based on the following methods:
i) for quoted equity investments, based on quoted market bid prices at
the financial reporting date without any deduction for transaction costs;
ii) for unquoted investments, with reference to the enterprise value at
which the portfolio company could be sold in an orderly disposition over a
reasonable period of time between willing parties other than in a forced or
liquidation sale, and is determined by using valuation techniques such as (a)
market multiple approach that uses a specific financial or operational measure
that is believed to be customary in the relevant industry, (b) price of recent
investment, or offers for investment, for the portfolio company's securities,
(c) current value of publicly traded comparable companies, (d) comparable
recent arms' length transactions between knowledgeable parties, and (e)
discounted cash flows analysis; and
iii) for financial assets and liabilities with a maturity of less than one
year or which reprice frequently (including other receivables, cash and cash
equivalents, interest-bearing borrowings and other payables) the notional
amounts are assumed to approximate their fair values because of the short
period to maturity/repricing.
The objective of valuation techniques is to arrive at a fair value measurement
that reflects the price that would be received to sell the asset or paid to
transfer the liability in an orderly transaction between market participants
at the measurement date.
Fair value hierarchy for financial instruments
The table below analyses financial instruments carried at fair value, by
valuation method. The different levels have been defined as follows:
· Level 1: Inputs that are quoted market prices (unadjusted) in
active markets for identical instruments.
· Level 2: Inputs other than quoted prices included within
Level 1 that are observable, either directly (i.e. as prices) or indirectly
(i.e. derived from prices). This category includes instruments valued
using: quoted market prices in active markets for similar instruments;
quoted prices for identical or similar instruments in markets that not
considered 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 inputs 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 the instruments.
Level 1 Level 2 Level 3 Total
US$'000 US$'000 US$'000 US$'000
2021
Financial assets at fair value through profit or loss - - 480,755 480,755
2020
Financial assets at fair value through profit or loss - - 381,949 381,949
As explained in Note 3.1, the Company qualifies as an investment entity and
therefore does not consolidate its subsidiaries. Accordingly, the fair value
levelling reflects the fair value of the unconsolidated subsidiaries and not
the underlying quoted equity investments. There were no transfers from Level
1 to Level 2 or Level 3 and vice versa during the years ended 31 December 2021
and 2020.
The fair value hierarchy table excludes financial assets and financial
liabilities such as cash and cash equivalents, other receivables and payables
and interest-bearing borrowings because their carrying amounts approximate
their fair values due to their short-term period to maturity/repricing.
Level 3 valuations
The following table shows a reconciliation from the beginning balances to the
ending balances for fair value measurements in Level 3 of the fair value
hierarchy.
2021 2020
Financial assets at fair value through profit or loss
US$'000 US$'000
Balance at 1 January 381,949 569,339
Fair value changes in profit or loss (45,094) (119,111)
Net payment to/(repayment from) unconsolidated subsidiaries 138,691 (74,808)
Net additions 5,209 6,529
Balance at 31 December 480,755 381,949
Significant unobservable inputs used in measuring fair value
This table below sets out information about significant unobservable inputs
used at 31 December 2021 in measuring the underlying investments of the
financial assets categorised as Level 3 in the fair value hierarchy excluding
investments purchased during the year that are valued at transaction prices as
they are reasonable approximation of fair values and ultimate investments in
listed entities.
Description Fair value Fair value Valuation technique Unobservable input Range (Weighted average) Sensitivity
at 31 December 2021
at 31 December 2020
to changes in significant unobservable inputs
US$'000 US$'000
Rental properties 6,191 8,093 Income Rental growth rate 0% - 3% The estimated fair value would increase if the rental growth rate and
(2020: occupancy rate were higher and the discount rate was lower.
approach
0% - 9%)
80% - 90%
Occupancy rate
(2020:
80% - 90%)
13% - 13.5%
(2020: 13% - 13.5%)
Discount rate
Land related investments 98,838 111,189 Comparable valuation Price per square meter for comparable land US$27 -US$3,910 per square meter (2020: US$28 - US$4,358 per square meter) The estimated fair value would increase if the price per square meter was
higher.
method
Description Fair value Fair value Valuation technique Unobservable input Range (Weighted average) Sensitivity
at 31 December 2021
at 31 December 2020
to changes in significant unobservable inputs
US$'000 US$'000
Operating business 276,793 133,908 Enterprise EBITDA 2.4x - 155.8x, median 14.4x (2020: 3.2x - 71.4x, median 12.6x) The estimated fair value would increase if the EBITDA multiple was higher.
value using comparable traded multiples, adjusted net asset value multiple (times)
or option pricing
model
Revenue multiple (times) 2.9x - 23.3x, median 10.5x The estimated fair value would increase if the Revenue multiple was higher.
(2020: 0.6x - 44.6x, median 6.8x)
Discount for 25% The estimated fair value would increase if the discount for lack of
(2020: 25%) marketability was lower.
lack of marketability
Discount to tangible assets for lack of liquidity N/A The estimated fair value would increase if the discount was lower.
(2020: 25% - 100%)
Volatility 40% - 63% The estimated fair value would increase if volatility was higher.
(2020: 40% - 43%)
Risk-free rate 1.3% - 6.5% The estimated fair value would increase if risk free rate was lower
(2020: 3% - 5.9%)
Greenfield business held for more than 12-months 12,200 11,851 Discounted cashflow Revenue growth 4.9% - 40% The estimated fair value would increase if the revenue growth increases,
expenses ratio decreases, and WACC was lower.
method (2020: 3.5% - 61.5%)
72.7% - 107%
Expense ratio (2020: 74.7% - 102.4%)
12.5%
(2020: 12.0%)
WACC
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 investee companies' 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 median EBITDA multiple from the comparable companies
and applies the multiple to the EBITDA of the underlying investment. In some
instances, Management obtains the lower quartile multiple from 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 revenue multiple represents the amount that market participants would use
when pricing investments. The revenue multiple is selected from comparable
public companies with similar business as the underlying investment.
Management obtains the median revenue multiple from the comparable companies
and applies the multiple to the revenue 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.
During the year ended 31 December 2021, two investments that were respectively
valued using the revenue multiple and adjusted net assets techniques in the
prior year were both valued using the EBITDA multiple in the current year due
to changes in the profitability of the underlying investee companies.
The option pricing model uses distribution allocation for each equity
instrument at different valuation breakpoints, taking into consideration the
different rights / terms of each instrument. An option pricing computation is
done using a Black Scholes Model at different valuation breakpoints (strikes)
using market volatility and risk-free rate parameters.
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 WACC to derive the enterprise value of the
greenfield business. Net debt is then deducted to arrive at an equity value
for the business. WACC 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$67,972,000 (2020: US$109,027,000) are held through
intermediate holding companies; the value of these companies are mainly
determined by the fair values of the ultimate investments.
Sensitivity analysis
Although the Company believes that its estimates of fair value are
appropriate, the use of different methodologies or assumptions could lead to
different measurements of fair value. For fair value measurements in Level 3
assets, changing one or more of the assumptions used to reasonably possible
alternative assumptions would have effects on the profit or loss by the
amounts shown below. The effect of the COVID-19 pandemic has meant that the
range of reasonably possible changes is wider than in pre-pandemic periods.
‹------------- 2021 ------------› ‹------------- 2020 -------------›
Effect on profit or loss Effect on profit or loss
Favourable (Unfavourable) Favourable (Unfavourable)
US$'000 US$'000 US$'000 US$'000
Level 3 assets 95,720 (84,669) 72,267 (56,134)
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 10% (2020: 10%) for the favourable scenario and reduced by 10%
(2020: 10%) for the unfavourable scenario. The discount rate used to
calculate the present value of future cash flows was also decreased by 2%
(2020: 2%) for the favourable case and increased by 2% (2020: 2%) 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 represents the most reliable estimate of fair value in the absence of
significant developments since the transaction), which are valued on
comparable transaction basis by third party valuation consultants, the fair
value of the land is increased by 20% (2020: 20%) in the favourable scenario
and reduced by 20% (2020: 20%) 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 EBITDA or
revenue, EBITDA is increased by 20% (2020: 20%) and decreased by 20 % (2020:
20%) and revenue is increased by 20% (2020: 20%) and decreased by 20% (2020:
20%) in the favourable and unfavourable scenarios respectively. Similarly,
where adjusted net tangible assets are used, the value is increased by N/A
(2020: 20%) and decreased by N/A (2020: 20%) in the favourable and
unfavourable scenarios.
For operating business that are valued using an option pricing model, the
volatility is increased by 10% (2020: 10%) and the risk-free rate is reduced
by 2% (2020: 2%) in the favourable scenario. The volatility is reduced by 10%
(2020: 10%) and the risk-free rate is increased by 10% (2020: 2%) in the
unfavourable scenario.
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 2% (2020: 2%), the expense ratio rate is
decreased by 10% (2020: 10%) and the WACC is reduced by 2% (2020: 2%) in the
favourable scenario. Conversely, in the unfavourable scenario, the revenue
growth rate is reduced by 2% (2020: 2%), the expense ratio rate is increased
by 10% (2020: 10%) and the WACC is increased by 2% (2020: 2%).
17 Unconsolidated subsidiaries
Details of the unconsolidated subsidiaries of the Company are as follows:
Place of
incorporation Equity interest
Name of subsidiary Principal activities and business 2021 2020
% %
Symphony (Mint) Investment Limited (Formerly Symphony Capital Partners Investment holding Mauritius 100 100
Limited)
Lennon Holdings Limited Investment holding Mauritius 100 100
and its subsidiary:
Britten Holdings Pte. Ltd. Investment holding Singapore 100 100
Gabrieli Holdings Limited Investment holding British Virgin Islands 100 100
and its subsidiaries:
Ravel Holdings Pte. Ltd. and its subsidiaries: Investment holding Singapore 100 100
Schubert Holdings Pte. Ltd. Investment holding Singapore 100 100
Haydn Holdings Pte. Ltd. Investment holding Singapore 100 100
Thai Education Holdings Pte. Ltd. Investment holding Singapore 100 100
Teurina Limited Investment holding British Virgin Islands 100 100
Place of
incorporation Equity interest
Name of subsidiary Principal activities and business 2021 2020
% %
Lloyd Webber Holdings Limited Investment holding British Virgin Islands - 100
Maurizio Holdings Limited Investment holding British Virgin Islands 100 100
and its subsidiary:
Groupe CL Pte. Ltd. Investment holding Singapore 100 100
True United Limited Investment holding British Virgin Islands 100 100
True Wisdom Limited Investment holding British Virgin Islands 100 100
Segovia Holdings Limited Investment holding British Virgin Islands 100 100
Anshil Limited Investment holding British Virgin Islands 100 100
Buble Holdings Limited Investment holding British Virgin Islands 100 100
O'Sullivan Holdings Limited and its subsidiary: Investment holding British Virgin Islands 100 100
Bacharach Holdings Limited Investment holding British Virgin Islands 100 100
Brahms Holdings Limited Investment holding British Virgin Islands - 100
Schumann Holdings Limited Investment holding British Virgin Islands 100 100
Symphony Healthcare Holdings Limited Investment holding British Virgin Islands - 100
Dynamic Idea Investments Limited Investment holding British Virgin Islands 100 100
Ideal Dream Limited Investment holding British Virgin Islands - 100
Eternal Star Ventures Limited Investment holding British Virgin Islands - 100
Symphony Logistics Pte. Ltd. Investment holding Singapore 100 100
Eagles Holdings Pte. Ltd. Investment holding Singapore 74.07 100
Stravinsky Holdings Pte. Ltd. Investment holding Singapore 100 100
Alhambra Holdings Limited Investment holding United Arab Emirates 100 100
Shadows Holdings Pte. Ltd. Investment holding Singapore 66.65 70.97
Symphonic Spaces Pte. Ltd. Investment holding Singapore 100 100
Wynton Holdings Pte. Ltd. Investment holding Singapore 100 -
Shomee Holdings Pte. Ltd. Investment holding Singapore 100 -
18 Underlying investments
Details of the underlying investments in unquoted equities of the Company are
as follows:
Place of Ordinary shares Preference shares
incorporation Equity interest Equity interest
Name Principal activities and business 2021 2020 2021 2020
% % % %
La Finta Limited(1) Property development and land holding Thailand 49 49 - -
Minuet Limited(1) Property development and land holding Thailand 49.98 49.98 - -
SG Land Co. Limited(1) Commercial Real Estate Thailand 49.94 49.91 - -
Chanintr Living Distribution of furniture Thailand 49.90 49.90 - -
Limited(2)
Chanintr Living (Thailand) Limited Distribution and retail of furniture and home decorations Thailand 24.45 24.45 - -
Chanintr Living Pte Ltd Distribution and retail of furniture and home Singapore 49.90 49.90 - -
decorations
Well Round Holdings Limited(2) Property development and land holding Hong Kong 37.50 37.50 - -
Allied Hill Corporation Limited(2) Luxury property development Hong Kong 37.50 37.50 - -
Silver Prance Limited(2) Property development and land holding Hong Kong 37.50 37.50 - -
Desaru Peace Holdings Branded luxury developments Malaysia 49 49 49 49
Sdn Bhd(2)
Oak SPV Limited Wine retail and F&B operations Cayman Islands 13.40 13.40 - -
Macassar Holdings SARL Luxury interior architecture and furniture retail group Luxembourg 33.33 33.33 33.33 33.33
Liaigre Hospitality Ventures Pte. Ltd Branded luxury developments Singapore 33.33 - - -
WCIB International Company Limited(1) K12 education institution Thailand 39.10 39.10 - -
ASG Hospital Private Limited Healthcare India - - 19.80 19.24
Creative Technology Solutions DMCC Education IT solutions provider United Arab Emirates 12.82 12.82 - -
Good Capital Partners Venture Capital Mauritius 10 10 - -
(1) Joint venture
(2) Associate
Place of Ordinary shares Preference shares
incorporation Equity interest Equity interest
Name Principal activities and business 2021 2020 2021 2020
% % % %
In Do Trans Logistics Corporation(2) Logistics Group Vietnam 27.70 25.12 - -
Smarten Spaces Pte. Ltd. Software company for space management Singapore 17.91 17.84 6.75 6.75
Soothe Healthcare Pvt. Ltd(2) Consumer healthcare products India - - 25.01 25.93
Telong Limited Real estate holding British Virgin Islands - 33.33 - -
Catbus Infolabs Pvt. Ltd. Logistics services India - - 6.73 -
SolarSquare Energy Pvt. Ltd. Solar power solutions provider India - - 4.98 -
Kieraya Furnishing Solutions Pvt. Ltd. Online furniture rental and sales India - - 1.82 -
Place of
Ordinary shares
Preference shares
incorporation
Equity interest
Equity interest
Name
Principal activities
and business
2021
2020
2021
2020
%
%
%
%
La Finta Limited(1)
Property development and land holding
Thailand
49
49
-
-
Minuet Limited(1)
Property development and land holding
Thailand
49.98
49.98
-
-
SG Land Co. Limited(1)
Commercial Real Estate
Thailand
49.94
49.91
-
-
Chanintr Living
Limited(2)
Distribution of furniture
Thailand
49.90
49.90
-
-
Chanintr Living (Thailand) Limited
Distribution and retail of furniture and home decorations
Thailand
24.45
24.45
-
-
Chanintr Living Pte Ltd
Distribution and retail of furniture and home
decorations
Singapore
49.90
49.90
-
-
Well Round Holdings Limited(2)
Property development and land holding
Hong Kong
37.50
37.50
-
-
Allied Hill Corporation Limited(2)
Luxury property development
Hong Kong
37.50
37.50
-
-
Silver Prance Limited(2)
Property development and land holding
Hong Kong
37.50
37.50
-
-
Desaru Peace Holdings
Sdn Bhd(2)
Branded luxury developments
Malaysia
49
49
49
49
Oak SPV Limited
Wine retail and F&B operations
Cayman Islands
13.40
13.40
-
-
Macassar Holdings SARL
Luxury interior architecture and furniture retail group
Luxembourg
33.33
33.33
33.33
33.33
Liaigre Hospitality Ventures Pte. Ltd
Branded luxury developments
Singapore
33.33
-
-
-
WCIB International Company Limited(1)
K12 education institution
Thailand
39.10
39.10
-
-
ASG Hospital Private Limited
Healthcare
India
-
-
19.80
19.24
Creative Technology Solutions DMCC
Education IT solutions provider
United Arab Emirates
12.82
12.82
-
-
Good Capital Partners
Venture Capital
Mauritius
10
10
-
-
(1) Joint venture
(2) Associate
Place of
Ordinary shares
Preference shares
incorporation
Equity interest
Equity interest
Name
Principal activities
and business
2021
2020
2021
2020
%
%
%
%
In Do Trans Logistics Corporation(2)
Logistics Group
Vietnam
27.70
25.12
-
-
Smarten Spaces Pte. Ltd.
Software company for space management
Singapore
17.91
17.84
6.75
6.75
Soothe Healthcare Pvt. Ltd(2)
Consumer healthcare products
India
-
-
25.01
25.93
Telong Limited
Real estate holding
British Virgin Islands
-
33.33
-
-
Catbus Infolabs Pvt. Ltd.
Logistics services
India
-
-
6.73
-
SolarSquare Energy Pvt. Ltd.
Solar power solutions provider
India
-
-
4.98
-
Kieraya Furnishing Solutions Pvt. Ltd.
Online furniture rental and sales
India
-
-
1.82
-
(1) Joint venture
(2) Associate
19 Subsequent events
Subsequent to 31 December 2021,
· the Company completed a follow-on investment in WCIB International
Co. Ltd. for the ongoing phased development of the school. The investment
amounted to less than 1% of the Company's NAV.
· the Company completed a follow-on investment in Kieraya Furnishing
Solutions Pvt. Ltd. The investment amounted to less than 1% of the Company's
NAV.
· On 24 February 2022, Russian troops invaded Ukraine and commenced
military operations in multiple locations. These ongoing operations have led
to casualties, damage to infrastructure and disruption to economic activity in
Ukraine. In response, multiple jurisdictions have announced initial tranches
of economic sanctions on Russia and large public and private companies have
announced voluntary actions to curtail business activities with Russia.
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 year ending 31 December 2021, the conflict in Ukraine and the related
impacts are considered non-adjusting events. Consequently, there is minimal
impact on the recognition and measurement of asset and liabilities. Due to the
uncertainty of the outcome of the current events, Management cannot reasonably
estimate the impact these events will have on the Company's financial
position, results of operations or cash flows in the future.
20 COVID-19
On 11 March 2020, the World Health Organisation declared the COVID-19 outbreak
a pandemic in recognition of its rapid spread across the globe. The outbreak
and the response of governments in dealing with the pandemic has seen a
corresponding significant increase in financial market volatility and
corresponding fluctuations in the fair value of the Company's investment
portfolio.
Management of the Company has performed an assessment of the impact of
COVID-19 outbreak on its investment portfolio and believes that the fair value
of its investment portfolio reflects the conditions known as at 31 December
2021.
The COVID-19 crisis is still unfolding, and the full impact of the pandemic is
not capable of being qualitatively or quantitatively assessed on the
businesses of the investee companies and on the value of the Company's
investment portfolio. Accordingly, Management has considered a wider range of
reasonably possible changes in the fair value of Level 3 assets in their
sensitivity analysis in the current year as compared to pre-pandemic
years. Management will continue to assess the situation and take
precautionary measures to deal with the implications of COVID-19 in accordance
with guidelines provided by the different authorities and will take the
necessary actions to ensure the long-term sustainability of the Company.
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