Half Yearly Report

RNS Number : 0271M

Symphony International Holdings Ltd

10 August 2011

 



10 August 2011

Symphony International Holdings Limited

Interim Financial Results for the six months period ended 30 June 2011

Symphony International Holdings Limited ("SIHL" or the "Company") announces the interim results for the six months ended 30 June 2011. The condensed consolidated interim financial statements of the Company and its subsidiaries have been prepared in accordance with IAS 34 Interim Financial Reporting and have not been audited or reviewed by the auditors of the Company.

Introduction

SIHL is an investment company incorporated as a limited liability company under the laws of the British Virgin Islands on 5 January 2004. The Company's investment objective is to achieve superior investment returns by applying private equity style processes and disciplines to investing in consumer-related businesses, primarily in the healthcare, hospitality, lifestyle, and lifestyle/real estate sectors, in the Asia-Pacific region.

At 30 June 2011, the issued share capital of the Company was US$306.50 million (30 June 2010: US$302.41 million) consisting of 344,439,211 (30 June 2010: 338,259,976) ordinary shares.

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

Net Asset Value

The net asset value ("NAV") attributable to the ordinary shares on 30 June 2011 was US$1.1660 (30 June 2010: US$1.0278) per share.  This represented a 0.36 percent increase over the NAV per share of US$1.1618 at 31 December 2010.

Portfolio Overview

The following is an overview of our portfolio as of 30 June 2011:

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

The value of Minuet Ltd at 30 June 2011 was US$98.3 million (30 June 2010: US$91.7 million) based on an independent third party valuation.

Minor International Public Company Limited ("MINT") - SIHL has invested approximately US$80.0 million at 30 June 2011 in MINT, a diversified consumer business listed on the Stock Exchange of Thailand.  Anil Thadani, a director of SIHL, serves on the board of directors for MINT. The fair value of the investment was approximately US$96.5 million as at 30 June 2011 (30 June 2010: US$82.3 million).

The accounting cost for MINT is US$80.0 million, comprising cost of acquisition of US$58.5 million, scrip dividend received of US$0.8 million, and realised gain of US$20.7 million arising from the exchange of MINOR shares for MINT shares upon the completion of the restructuring / merger of these companies.  The actual cash cost of SIHL's investment in MINT is US$58.5 million and fair value gain of approximately US$38 million as at 30 June 2011.

MINT is one of the largest hospitality and restaurant companies in the Asia Pacific region with 35 hotels and resorts totalling over 4,100 rooms under prominent brands such as Marriott, Four Seasons and Anantara and others in Thailand, Vietnam, Maldives and South Africa.  MINT  also owns and operates over 1,150 outlets under the Pizza Company, Swensen's, Sizzler, Dairy Queen, Burger King, Thai Express and the Coffee Club.

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

Parkway Life Real Estate Investment Trust ("P-REIT") - SIHL has invested approximately US$30.2 million (30 June 2010: US$30.2 million) in P-REIT units whose fair value as at 30 June 2011 was US$53.6 million (30 June 2010: US$34.5 million).  P-REIT invests in income generating healthcare-related properties in the Asia-Pacific region including the buildings of Parkway's three Singapore hospitals, which are leased back to Parkway on long leases.  P-REIT is established and managed by Parkway and generates an inflation-linked yield of approximately 5 percent based on current valuations and historic distributions.

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

Based on an independent third party valuation carried out on the underlying office buildings held by SG Land,  the fair value of SG Land was approximately US$16.1 million at 30 June 2011 (30 June 2010: US$14.7 million).

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

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

AFC completed a rights issue in June 2011 that was subscribed to by existing investors, including SIHL, to fund working capital requirements through 2012.

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

Property Joint Venture in Japan - SIHL invested in a property development venture in March 2011 that has acquired a hotel in Niseko, Hokkaido, Japan. SIHL has a 30% interest in the property development venture.

Subsequent Events

Subsequent  to 30 June 2011, the Company issued further shares which affects SIHL's NAV and NAV per share:

SIHL issued 2,059,745 ordinary shares on 4 August 2011, credited as fully paid, to the Investment Manager, Symphony Investment Managers Limited, increasing the Company's fully paid issued share capital from 344,439,211 ordinary shares to 346,498,956 ordinary shares.  The shares were issued as part of the contractual arrangements with the Investment Manager.  If these shares had been in issue as at 30 June 2011, SIHL's NAV per share would decrease by US$0.0069 per share from US$1.1660 to US$1.1591 per share on that date.

Principal Risks

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

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

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

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

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

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

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

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

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

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

Outlook

There was increased volatility in the financial markets during the first half of 2011, predominantly driven by concern over sovereign risk in the Euro area, persistent weakness in the US housing market and economy and inflation in developing countries. Downside risks to the global economic recovery have heightened however, the fundamentals for growth remain intact.

The International Monetary Fund ("IMF") kept its global output growth estimates for 2011 largely unchanged (revised down by 0.1% to 4.3%) in its June update to the April 2011 World Economic Outlook. The IMF expects growth to slow in 2Q11 and accelerate during the second half of 2011.

Global economic activity will remain unbalanced going forward. Reduced government spending and austerity measures in the US and Europe will further subdue already weak growth in both regions in the medium to long-term. Most emerging Asian economies on the other hand continue to see robust growth. The IMF forecast real GDP growth of 8.4% for developing Asia compared to 2.2% for advanced economies for 2011.

Inflation in Asia continues to remain a primary concern. Strong domestic demand and capital inflows are causing food, fuel and asset price inflation. Government's in the region continue to tighten monetary policies and are generally allowing some currency appreciation to combat rising prices.

We continue to remain positive on the outlook for Asia and believe SIHL will continue to benefit from strengthening currencies and assets prices in the region over the long-term. We are seeing increased deal flow and are in advanced stages of evaluating a number of opportunities.

Symphony International Holdings Limited and its subsidiaries

Condensed consolidated statement of financial position

as at 30 June 2011

	Note	30 June 2011	31 December 2010
		US$'000	US$'000
Non-current assets
Interests in joint ventures	6	128,684	126,011
Investment properties		9,265	9,103
Financial assets at fair value through profit or loss	7	150,140	148,199
Other receivables and prepayments		2,877	1,090
		290,966	284,403
Current assets
Other receivables and prepayments		371	1,515
Financial assets at fair value through profit or loss	7	2,848	-
Cash and cash equivalents		116,609	122,639
		119,828	124,154
Total assets		410,794	408,557
Equity attributable to equity holders of the Company
Share capital		306,498	306,498
Reserves		64,398	61,273
Accumulated profits		30,728	32,403
		401,624	400,174
Non-controlling interest		225	213
Total equity		401,849	400,387
Non-current liabilities
Amounts due to non-controlling interest (non-trade)		503	503
Interest-bearing borrowings (secured)		1,196	1,408
		1,699	1,911
Current liabilities
Interest-bearing borrowings (secured)		375	385
Accrued operating expenses		200	214
Other payables		167	165
Amount due to directors		149	-
Interest payable		2	2
Withholding tax payable		6,263	5,349
Current tax payable		90	144
		7,246	6,259
Total liabilities		8,945	8,170
Total equity and liabilities		410,794	408,557

Symphony International Holdings Limited and its subsidiaries

Condensed consolidated statement of comprehensive income

for the financial period from 1 January 2011 to 30 June 2011

	Note	6 months ended 30 June 2011	6 months ended 30 June 2010
		US$'000	US$'000
Revenue		2,630	2,461
Other operating income		10,712	7,008
Other operating expenses		(981)	(1,027)
Management fees		(4,484)	(3,967)
		7,877	4,475
Management shares expense		(328)	(487)
Share options expense		(2,844)	(3,740)
Profit before investment results and income tax		4,705	248
Fair value changes in financial assets at fair value through profit or loss	7	(274)	10,212
Fair value changes in investment properties		172	449
Fair value changes in investments in joint ventures		(5,018)	(5,811)
(Loss)/Profit before income tax		(415)	5,098
Income tax expense	8	(1,248)	(1,203)
(Loss)/Profit for the period		(1,663)	3,895
Other comprehensive income:
Foreign currency translation differences in relation to financial statements of foreign operations		(47)	2,910
Other comprehensive income for the period, net of tax		(47)	2,910
Total comprehensive income for the period		(1,710)	6,805
(Loss)/Profit attributable to:
Equity holders of the Company		(1,675)	3,861
Non-controlling interest		12	34
(Loss)/Profit for the period		(1,663)	3,895
Total comprehensive income attributable to:
Equity holders of the Company		(1,722)	6,771
Non-controlling interest		12	34
Total comprehensive income for the period		(1,710)	6,805
Earnings per share:		US Cents	US Cents
Basic	9	(0.49)	1.15
Diluted		(0.49)	1.14

Symphony International Holdings Limited and its subsidiaries

Condensed consolidated statement of changes in equity

for the financial period from 1 January 2011 to 30 June 2011

	Share capital	Equity compensation reserve	Foreign currency translation reserve	Accumulated profits/(losses)	Total attributable to owners of the Company	Non-controlling interests	Total equity
	US$'000	US$'000	US$'000	US$'000	US$'000	US$'000	US$'000
At 1 January 2010	302,408	44,277	359	(10,364)	336,680	168	336,848
Value of services received for issue of management shares	-	487	-	-	487	-	487
Value of services received for issue of share options	-	3,740	-	-	3,740	-	3,740
Total comprehensive income for the period	-	-	2,910	3,861	6,771	34	6,805
At 30 June 2010	302,408	48,504	3,269	(6,503)	347,678	202	347,880
At 1 January 2011	306,498	46,898	14,375	32,403	400,174	213	400,387
Value of services received for issue of management shares	-	328	-	-	328	-	328
Value of services received for issue of share options	-	2,844	-	-	2,844	-	2,844
Total comprehensive income for the period	-	-	(47)	(1,675)	(1,722)	12	(1,710)
At 30 June 2011	306,498	50,070	14,328	30,728	401,624	225	401,849

Symphony International Holdings Limited and its subsidiaries

Condensed consolidated statement of cash flows

for the financial period from 1 January 2011 to 30 June 2011

		6 months ended 30 June 2011	6 months ended 30 June 2010
		US$'000	US$'000
Cash flows from operating activities
(Loss)/Profit before income tax		(415)	5,098
Adjustments for:
Exchange differences		14	3
Dividend income		(2,631)	(2,461)
Interest income		(7,164)	(6,689)
Interest expense		47	46
Fair value changes in money market instruments		(22)	-
Fair value changes in investments in joint ventures		5,018	5,812
Fair value changes in investment properties		(172)	(449)
Fair value changes in financial assets at fair value through profit or loss		296	(10,212)
Profit on sales of listed investments		-	(319)
Management shares expense		328	486
Share options expense		2,844	3,740
		(1,857)	(4,945)
Changes in working capital:
Decrease in other receivables and prepayments		18	27
Increase in other payables and accrued operating expenses		138	142
Cash used in operations		(1,701)	(4,776)
Dividend received (net of withholding tax)		2,501	2,342
Interest received (net of withholding tax)		217	162
Income taxes paid		(120)	(109)
Net cash from/(used in) operating activities		897	(2,381)
Cash flows from investing activities
Purchase of financial assets at fair value through profit or loss		-	(1,362)
Profit on sales of listed investment		-	319
Loans to an investee company		-	(160)
Loans to joint venture		(3,094)	-
Deposit to potential deal		(608)	-
Investment in money market instruments		(2,826)	-
Investments in joint ventures		(630)	(527)
Repayment of loans by joint ventures		508	387
Net cash used in investing activities		(6,650)	(1,343)
Balance carried forward		(5,753)	(3,724)

Symphony International Holdings Limited and its subsidiaries

Condensed consolidated statement of cash flows

for the financial period from 1 January 2011 to 30 June 2011

Consolidated statement of cash flows (cont'd) Year ended 30 June  2011
		6 months ended 30 June 2011	6 months ended 30 June 2010
		US$'000	US$'000
Balance brought forward		(5,753)	(3,724)
Cash flows from financing activities
Interest paid		(47)	(47)
Repayment of borrowings		(182)	(169)
Net cash used in financing activities		(229)	(216)
Net (decrease) in cash and cash equivalents		(5,982)	(3,940)
Cash and cash equivalents at beginning of period		122,639	47,412
Effect of exchange rate fluctuations		(48)	41
Cash and cash equivalents at end of the period		116,609	43,513

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

Symphony International Holdings Limited and its subsidiaries

Notes to the condensed consolidated interim financial statements

for the financial period from 1 January 2011 to 30 June 2011

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

1       REPORTING ENTITY

Symphony International Holdings Limited (the "Company") is a company domiciled in the British Virgin Islands.  The condensed consolidated interim financial statements of the Company as at and for the 6 months ended 30 June 2011 comprise the Company and its subsidiaries (together referred to as the "Group").

The consolidated financial statements of the Group as at and for the year ended 31 December 2010 are available upon request from the Company's registered office at P.O. Box 957, Offshore Incorporations Centre, Road Town, Tortola, British Virgin Islands.

2       STATEMENT OF COMPLIANCE

These condensed consolidated interim financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting.  They do not include all of the information required for full annual financial statements, and should be read in conjunction with the consolidated financial statements of the Group as at and for the year ended 31 December 2010.

These condensed consolidated interim financial statements were approved by the Board of Directors on 9 August 2011.

3       SIGNIFICANT ACCOUNTING POLICIES

The accounting policies applied by the Group in these condensed consolidated interim financial statements are the same as those applied by the Group in its consolidated financial statements as at and for the year ended 31 December 2010. 

4       Estimates

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

In preparing these condensed consolidated interim financial statements, the significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements as at and for the year ended 31 December 2010.

5       FINANCIAL RISK MANAGEMENT

The Group's financial risk management objectives and policies are consistent with those disclosed in the consolidated financial statements as at and for the year ended 31 December 2010.

6       interests in joint ventures

During the financial period ended 30 June 2011, the Group subscribed to a rights issue in a joint venture, AFC Network Private Limited.

7       Financial assets at fair value through profit or loss

During the financial period ended 30 June 2011, the Group recognised a loss in financial assets at fair value through profit or loss of US$274,208.  The fair value loss comprised an impairment loss during the period related to shares held in Minor International Public Company Limited ("MINT") of US$5,637,549, a fair value loss related to warrants held in MINT of US$293,875, and a fair value gain in units related to Parkway Life Real Estate Investment Trust of US$5,635,665 and a fair value gain in units related to money market instruments of US$21,551.

8       INCOME TAX EXPENSE

		6 months ended 30 June 2011	6 months ended 30 June 2010
Current period		US$'000	US$'000
Foreign withholding tax		1,182	1,110
Income tax expense		66	93
		1,248	1,203

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

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

The Group also has not recognised deferred tax assets amounting to US$13,428
(31 December 2010: US$74,772) on taxable losses of US$426,995 (31 December 2010: US$413,567) as it is not probable that future taxable profits will be available against which the losses can be utilised. The tax losses do not expire under current legislation.

9       earnings PER SHARE

		6 months ended 30 June 2011	6 months ended 30 June 2010
		US$'000	US$'000
Basic and diluted earnings per share are based on:
Net (loss)/profit for the period attributable to equity holders of the Company		(1,675)	3,861
		Number of shares	Number of shares
Weighted average number of shares (basic)
-  Outstanding during the period		344,439,211	338,259,976

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

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

		Number of shares	Number of shares
Weighted average number of shares (diluted)
-  Weighted average number of shares (basic)		344,439,211	338,259,976
-  Effect of contingently issuable management shares		4,119,490	4,119,490
		348,558,701	342,379,976

As at 30 June 2011 and 30 June 2010, outstanding warrants to subscribe for 108,565,365 new ordinary shares of no par value at an exercise price of US$1.25 each and outstanding share options to subscribe for 82,782,691 ordinary shares of no par value at an exercise price of US$1 have not been included in the computation of diluted earnings per share because these warrants and share options were anti-dilutive.  Dilutive issuable shares of 4,119,490 ordinary shares of no par value have been included in the weighted average number of shares as they would be issuable as at 30 June 2011 based on the status as at that date.

10     Operating segments

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

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

Hospitality                                    Includes investment in MINT

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

Lifestyle/Real Estate                    Includes investments in Minuet Ltd, SG Land Co. Ltd and a property joint venture in Japan as well as investment properties in Macau

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

Information on reportable segments

	Healthcare	Hospitality	Lifestyle	Lifestyle/  real estate	Cash and temporary investments	Consolidated
	US$'000	US$'000	US$'000	US$'000	US$'000	US$'000
6 months ended 30 June 2011
Investment income
-  Dividend income	1,335	1,295	-	-	-	2,630
-  Interest income	8	-	10	7,008	138	7,164
-  Realised gain	-	-	-	-	-	-
-  Reclassification adjustment for gains included in profit or loss	-	-	-	-	-	-
-  Unrealised gain in profit or loss	5,635	-	220	172	22	6,049
-  Unrealised gain in other comprehensive income
	6,978	1,295	230	7,180	160	15,843
Investment loss
-  Unrealised loss in profit or loss	-	(5,931)	-	(5,238)	-	(11,169)
-  Unrealised loss in other comprehensive income	-	-	-	-	-	-
	-	(5,931)	-	(5,238)	-	(11,169)
Net investment results	6,978	(4,636)	230	1,942	160	4,674

	Healthcare	Hospitality	Lifestyle	Lifestyle/  real estate	Cash and temporary investments	Consolidated
	US$'000	US$'000	US$'000	US$'000	US$'000	US$'000
6 months ended 30 June 2010
Investment income
-  Dividend income	1,270	1,191	-	-	-	2,461
-  Interest income	-	-	10	6,632	47	6,689
-  Realised gain	-	319	-	-	-	319
-  Reclassification adjustment for gains included in profit or loss	-	-	-	-	-	-
-  Unrealised gain in profit or loss	15,606	1,621	-	493	-	17,720
-  Unrealised gain in other comprehensive income	-	-	-	-	-	-
	16,876	3,131	10	7,125	47	27,189
Investment loss
-  Unrealised loss in profit or loss	-	(7,015)	(271)	(5,584)	-	(12,870)
-  Unrealised loss in other comprehensive income	-	-	-	-	-	-
	-	(7,015)	(271)	(5,584)	-	(12,870)
Net investment results	16,876	(3,884)	(261)	1,541	47	14,319

	Healthcare	Hospitality	Lifestyle	Lifestyle/ real estate	Cash and temporary investments	Consolidated
	US$'000	US$'000	US$'000	US$'000	US$'000	US$'000
30 June 2011
Segment assets	53,796	96,520	11,127	128,044	119,457	408,944
31 Dec 2010
Segment assets	45,916	102,451	11,312	126,029	122,640	408,348

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

Reconciliations of reportable segment profit or loss and assets

		30 June 2011	30 June 2010
		US$'000	US$'000
Profit or loss
Net investments results		4,674	14,319
Unallocated amounts:
-   Other corporate income		-	-
-   Other corporate expenses		(6,384)	(7,514)
Consolidated (loss)/profit for the period		(1,710)	6,805
		30 June 2011	31 December 2010
		US$'000	US$'000
Assets
Total assets for reportable segments		408,944	408,348
Other assets		1,850	209
Consolidated total assets		410,794	408,557

11  Significant Related Party Transactions

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

Key management personnel compensation

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

During the financial period ended 30 June 2011, directors' fees amounting to US$148,767 (30 June 2010: US$148,767) were declared as payable to certain directors of the Company.  The remaining directors of the Company are also directors of the Investment Manager who provides management and administrative services to the Group on an exclusive and discretionary basis.  No remuneration has been paid to these directors as the cost of their services form part of the Investment Manager's remuneration.

Other related party transactions

During the financial period ended 30 June 2011, the Group recognised interest income received/receivable from joint ventures totalling US$7,018,354 (2010: US$6,611,789).

Pursuant to the Investment Management and Advisory Agreement, the Investment Manager will provide investment management and advisory services exclusively to the Group.  Details of the remuneration of the Investment Manager are disclosed in the consolidated financial statements as at and for the year ended 31 December 2010.  During the financial period ended 30 June 2011, management fee amounting to US$4,484,440 (30 June 2010: US$3,967,123) paid/payable to the Investment Manager has been recognised in the condensed consolidated interim financial statements.

Pursuant to Schedule 2 of the Investment Management and Advisory Agreement, as amended, the Investment Manager was to be granted 82,782,691 (30 June 2010: 82,782,691) share options to subscribe for ordinary shares at US$1 each on the first anniversary of the date of admission.  The share options vest and became exercisable by the Investment Manager in five equal tranches over a period of five years beginning from the date of grant and expire on the tenth anniversary of the date of grant. 

In addition, the Investment Manager will become eligible to be issued with management shares of up to 10,298,726 (30 June 2010: 10,298,726) ordinary shares in the Company.  Up to 20% of the management shares will become eligible to be issued at the first quarter end date following each anniversary of the admission, provided certain conditions are met.

Other than as disclosed elsewhere in the condensed consolidated interim financial statements, there were no other significant related party transactions during the 6 months periods ended
30 June 2011 and 30 June 2010.

12  commitments

In July 2008, the Group entered into a shareholders' agreement and invested THB2,627.5 million (US$78.7 million equivalent at July 2008) in a joint venture to part finance the acquisition of a plot of land in Bangkok, Thailand.  The joint venture has an option to acquire an adjoining plot of land for a consideration of THB 580.9 million (US$18.9 million equivalent at 30 June 2011).  The Group has committed to contribute to such capital increase pro rata in proportion to its shareholding at such time when the decision is made to fund additional project financing by means of capital increase in respect of the development of the adjoining plot of land.

In September 2008, the Group entered into a loan agreement with a joint venture to grant loans totalling THB140 million (US$4.6 million equivalent at 30 June 2011) to the latter in accordance with the terms as set out therein.  As at 30 June 2011, THB120 million (US$3.9 million equivalent at 30 June 2011) has been drawdown by the joint venture. The Group is committed to grant the remaining loan amounting to THB20 million (US$0.65 million equivalent at 30 June 2011) to the joint venture, subject to terms set out in the agreement.

In January 2011, the Group entered into an agreement with joint venture partners to acquire a property in Niseko Japan. This is in addition to the property acquired and then announced on 7 March 2011. The Group placed a deposit equal to less than 0.5% of NAV in January 2011 in relation to this acquisition and will pay a balance equal to less than 2% of NAV in March 2012 on completion. 

Directors' Responsibility Statement

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

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

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

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

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

For and on behalf of the Board

Pierangelo Bottinelli

Chairman

For further information, please contact:

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

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

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

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

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

End of Announcement

 

END

 

 

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