Preliminary Results

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

18 March 2022

Symphony International Holdings Limited

Financial Results for the year ended 31 December 2021

Symphony International Holdings Limited ("Symphony" or the "Company" or "SIHL") announces results for the year ended 31 December 2021.  The condensed financial statements of the Company has not been audited or reviewed by the auditors of the Company.

Introduction

The Company is an investment company initially incorporated as a limited liability company under the laws of the British Virgin Islands on 5 January 2004.  The Company voluntarily re-registered itself as a BVI Business Company on 17 November 2006. The Company's investment objectives are to increase the aggregate net asset value of the Company ("NAV") calculated in accordance with the Company's policies through strategic longer-term investments primarily in Asian businesses, across a variety of sectors including healthcare, hospitality, lifestyle (including branded real estate developments), logistics and education and through investments in special situations and structured transactions, which have the potential to generate attractive returns and to enhance the NAV.

The Company was admitted to the Official List of the UK Listing Authority on 3 August 2007 under Chapter 14 of the UK Listing Rules and its securities were admitted to trading on the London Stock Exchange's main market for listed securities on the same date.

As at 31 December 2021, the issued share capital of the Company was US$409.70 million (31 December 2020: US$409.70 million) consisting of 513,366,198 (31 December 2020: 513,366,198) ordinary shares.

Symphony's Investment Manager is Symphony Asia Holdings Pte. Ltd. ("SAHPL" or the "Investment Manager"). The Company has an Investment Management Agreement with SAHPL as the Investment Manager.

Net Asset Value

Symphony's NAV is the sum of its cash and cash equivalents, temporary investments, the fair value of unrealised investments (including investments in subsidiaries, associates and joint ventures) and any other assets, less any other liabilities. Symphony's NAV may not be comparable to the net asset value in the unaudited financial statements.  The primary measure of SIHL's financial performance and the performance of its subsidiaries will be the change in Symphony's NAV per share resulting from changes in the fair value of investments.

The NAV attributable to the ordinary shares on 31 December 2021 was US$0.9521 per share. This represents a 28.94% increase over the NAV per share of US$0.7384 at 31 December 2020.

Chairmen's Statement

Despite a difficult operating environment for most sectors throughout 2021, we are happy to report that our company performed well with our investment portfolio showing a 28.94% increase in Net Asset Value ("NAV") over the year.

Economic recovery across most sectors and geographies was mixed, with some continuing to gain traction during the past year whilst others lost ground. Governments around the region had varied degrees of success with initiatives to stimulate economies and reduce Covid-19 related restrictions as they tried to shift from a pandemic to an endemic response. Individuals and companies also became more resilient and better equipped to manage the disruptions due to more technology enablement than at the start of the pandemic.

Rather than focusing on protecting our companies and assets, as we did in 2020, we worked closely with our management teams on recovery and growth. The improved operating environment particularly benefited our investments in the hospitality, healthcare, and lifestyle sectors while ongoing disruptions to supply chains facilitated stronger margins in the logistics sector. These market dynamics and focus contributed to Symphony's NAV and NAV per share growing by 28.94% in 2021 to US$488.75 million (2020: US$379.05 million) and US$0.95 (2020: US$0.74) per share, respectively.

Aside from working with our existing portfolio companies, we have also been busy on the investment front. During 2021, we made four new and six follow-on investments at a cost of US$23.47 million and completed a full and two partial exits that generated US$56.90 million of proceeds in addition to other income of US$1.43 million. One of our joint venture companies also entered into an agreement during 2021 related to a partial exit of land that will generate total gross proceeds of US$23.25 million once completed later in 2022.  

The improved outlook for the hospitality and F&B sector allowed us to monetise part of our interest in Minor International Pcl ("MINT"). With pent-up demand for travel and leisure and the more recent gradual opening-up of more geographies to tourism, MINT's hospitality business reported a 49.29% increase in revenue in 2021 and positive earnings in the fourth quarter of 2021 for the first time in seven quarters. MINT's F&B operations continued to be profitable and expanded total outlets by 19 during the year to reach 2,389 outlets. The improvement in business, which is expected to continue in 2022, has driven a recovery in MINT's share price close to pre-pandemic levels. We took advantage of this share price strength to reduce our exposure and lock in some gains by selling 49.25 million shares and 12.34 million warrants of MINT that generated proceeds of US$50.03 million. Symphony realized a return of 15.44 per cent per annum over a 15-year period and proceeds of 5.75 times our investment cost on the sale of these MINT shares.

During 2021, we completed a small follow-on investment in ASG Hospital Private Limited ("ASG"). Despite the successive waves of Covid-19 and related government lockdowns, ASG and our other investment in the healthcare sector, Soothe Healthcare Private Limited ("Soothe"), reported strong growth. ASG continued to expand organically and inorganically, following two acquisitions, which increased the number of its clinics from 33 to 43 over the past year. Average recurring revenue for ASG in December 2021 was 107.29% higher than the same period a year earlier. Similarly, Soothe also reported spectacular growth in revenue of 86.01% on the same basis despite the challenging environment. During the past year Soothe also completed a fresh round of funding and facilitated a material secondary sale in its shares. These two transactions were completed at 1.88 times and 2.41 times Symphony's blended average investment cost, respectively.

The pandemic driven trend of consumers upgrading their homes and spending more on home improvement projects continues to benefit our lifestyle investments. The Liaigre Group, a luxury furniture brand and design studio, has expanded its interior architecture business to cope with new projects. Orders at Liaigre's showrooms increased by 43.38% in 2021. Our original rationale for buying Liaigre to expand its footprint in Asia has been an increasingly transformative and exciting development for this business. Asia accounted for 23.89% of showroom orders in 2021, up significantly from 17.78% and 5.63% in 2020 and 2019, respectively. We have also been working on expanding the Liaigre brand to luxury managed residences. This will allow us to further showcase the brand, cater to existing clientele and realise more of the brand's potential. We will be announcing more on this new business as projects mature. 

We have seen a similar consumer trend benefiting CHANINTR ("Chanintr"), our company focused on design services and the distribution of high-end US and European furniture brands and compatible kitchen and bathroom systems in Thailand. Sales for Chanintr increased by over 20.88% in 2021 and management continues to launch new concepts to grow this business further. For example, Chanintr launched its Pergo office furniture rental business, which has been met with some preliminary success and more recently, Spruce, a subscription-based brand concept for staging and remodelling apartments by real estate developers. 

The Wine Connection Group ("WCG"), a wine-themed F&B chain included in our lifestyle segment, continued to see operations improve with reduced movement restrictions toward the end of 2021. While the wine retail has remained strong in core markets throughout the year, F&B has been more challenged particularly in Thailand. With reduced restrictions from December 2021 in Thailand there has been sharp improvement with positive same-store-sales growth and revenues reaching pre-pandemic levels despite fewer outlets. Management expects this momentum to continue in 2022.

Educational institutions were materially disrupted during 2021 as many schools intermittently closed as part of Covid-19 control measures. Similarly, WCIB International Co. Ltd, the developer and operator of Wellington College International Bangkok, was closed for periods of time since April 2021. Following the schools reopening in October 2021, inquiries and admissions have begun to recover. Barring any other disruptions management expect the school to achieve profitability in the next academic year. Our other education related business, Creative Technology Solutions DMC, benefited as a customised IT solutions provider for schools with remote learning and mobile solutions becoming a necessity for education institutions. 

Our investment in Indo Trans Logistics Corporation ("ITL"), Vietnam's largest independent integrated logistics company, contributed the largest part of Symphony's gain in NAV in 2021. Overall, ITL's revenue and earnings before interest, tax depreciation and amortization ("EBITDA") increased by 104.08% and 209.32% in 2021, respectively. The growth was driven by the full consolidation of the Port owner and operator, South Logistics Joint Stock Company ("SoTrans"), which was acquired in June 2020, aviation GSA and freight forwarding services. The management team is focused on enhancing its technology infrastructure and making new investments in port assets, logistics parks, delivery fleets and new verticals, such as cold chain, that will continue to add value over the medium to long-term.

Over the past year, we continued to monetise our real estate portfolio with the sale of a luxury villa in Phuket and partial sale of land held by Minuet. The villa formed part of the settlement (together with cash) for a structured loan transaction made by Symphony in 2014. The net proceeds received by Symphony related to the villa sale amounted to US$5.40 million. The overall annualised return and times money from the structured loan transaction (including the villa sale) is 14.44% over a period of approximately eight years and 1.94 times our cost, respectively. In addition to the villa sale, Minuet Limited, a JV company that holds approximately 28.92 hectares of land in Bangkok, completed the sale of a small parcel of land that generated proceeds of US$4.77 million and entered into agreements to sell two additional parcels for US$23.25 million. The sale price of the two additional parcels will be completed in 2022 at 3.67 times Minuet's average cost of land, which is indicative of the increasing land values in the area. Our other real estate investment in Thailand includes SG Land Co. Ltd ("SG Land"), which holds the leasehold rights to two office buildings in downtown Bangkok that provide an attractive yield and regular distributions.

We also continue to hold real estate investments in Desaru, Malaysia and Niseko, Hokkaido, Japan. The investment in Malaysia is through a joint venture that has developed a luxury resort and villas managed by One&Only, and which has won several accolades including one of Time Magazine's World's Greatest Places in 2021. However, operations have been subdued due to movement control orders that remained in place through much of the year. Restrictions were loosened in October 2021 to allow interstate travel that raised occupancy to EBITDA break-even levels. At the time of writing this, there is a strong expectation of Malaysia's border reopening, which will only benefit this property. Some infrastructure works are being completed in preparation for the marketing launch for private luxury villas sales this year. There has already been strong interest from local and international buyers for the villas on this property, which will provide incremental value to Symphony in the coming years. 

The co-development of the site held by our Niseko joint venture and Hanwha Hotels & Resorts ("HHR") is in the planning and approval process. Another part of the development site that is wholly owned by HHR is under construction and we understand that the pre-sale prices have been the highest achieved in the Hirafu area despite a virtual halt of international travel to Niseko, Japan. We believe this is a positive indication for the co-development project and remaining land bank held by the Niseko joint venture.

We continue to see digital savvy populations across Asia growing rapidly, resulting in a strong digital ecosystem which is driving economic growth. In India for example, internet adoption jumped from 21% of households in 2017 to 61% of households in 2021 with over 624 million active internet users and the highest mobile data usage per capita in the world. Aside from muting the impact of Covid-19 restrictions, we see this digital transformation creating a new breed of entrepreneurs and attractive investment opportunities. In line with this theme, we evaluated a number of new economy businesses and made four new investments in 2021. The additions to our portfolio include Meesho Inc., a social e-commerce platform for micro-entrepreneurs and medium and small enterprises, Kieraya Furnishing Solutions Pvt. Ltd, a residential furniture rental services business, Catbus Infolabs Pvt. Ltd ("Blowhorn"), a same-day intra-city last-mile logistics provider and Solar Square, a rooftop solar panel solutions provider. 

Our earlier new economy investments have continued to perform well. Smarten Spaces ("Smarten"), a Singapore based software-as-a-service company that provides software solutions for space management in commercial and industrial properties grew its annualised run-rate revenue by 58.76% in 2021 year-over-year and now has deployments in over 100 cities across more than 20 countries. Smarten's customer base has grown by over 2.6 times in the past year and includes 15 Fortune 500 companies. We completed a follow-on investment in August Jewellery Pvt. Ltd. ("Melorra"), an omni-channel fast fashion Indian jewellery company. Melorra grew its run-rate gross revenue by over 149.59% in 2021 on the back of strong designs and effective marketing campaigns. Our investments in Good Capital Fund 1 ("GCF1") and its general partner have also shown good progress this past year. GCF1 exited its investment in SimSim, a social commerce start-up, at 3.7 times its cost via a sale to Google during the past year. 

Despite a promising result last year, we are now facing new uncertainties about the effects on the world economy of the war in Ukraine and related concerns. While it may be premature to accurately gauge the effects of these events on specific sectors and regions, we have chosen to adopt a cautious approach to new investments while we try to better understand how recent events may affect markets, valuations and investor behaviour. We see several dark clouds over the global economy with potential risks on the horizon, including inflation, geopolitical tensions and the possibility of new Covid-19 variants that may again upend economies. There has already been some re-rating of valuations in private and public markets due to interest rate expectations as central banks respond to inflationary pressures. However, we expect most Asian countries to continue to benefit from the post-pandemic reopening. For the time being we are comforted by the fact that our portfolio companies appear to be well positioned to take advantage of any economic resurgence coming out of either policy shifts or other macroeconomic developments in the foreseeable future. As always in the past, we remain ever grateful to our portfolio company's management teams for their ability to navigate difficult and volatile markets over the past year, and to our shareholders for their continued support.

Georges Gagnebin

Chairman, Symphony International Holdings Limited

Anil Thadani

Chairman, Symphony Asia Holdings Pte. Ltd.

15 March 2022

Investment Manager's Report

This "Investment Manager's Report" should be read in conjunction with the financial statements and related notes of the Company.  The financial statements of the Company were prepared in accordance with the International Financial Reporting Standards ("IFRS") and are presented in U.S. dollars. The Company reports on each financial year that ends on 31 December. In addition to the Company's annual reporting, NAV and NAV per share are reported on a quarterly basis being the periods ended 31 March, 30 June, 30 September and 31 December. The Company's NAV reported quarterly is based on the sum of cash and cash equivalents, temporary investments, the fair value of unrealised investments (including investments in unconsolidated subsidiaries, associates and joint ventures) and any other assets, less any other liabilities.  The financial results presented herein include activity for the period from 1 January 2021 through 31 December 2021, referred to as "the year ended 31 December 2021".

Our Business

Symphony is an investment company incorporated under the laws of the British Virgin Islands.  The Company's shares were listed on the London Stock Exchange on 3 August 2007.  Symphony's investment objective is to create value for shareholders through longer term strategic investments in high growth innovative consumer businesses, primarily in the healthcare, hospitality and lifestyle sectors (including education and branded real estate developments), which are expected to be fast growing sectors in Asia, as well as through investments in special situations and structured transactions.

Symphony's Investment Manager is Symphony Asia Holdings Pte. Ltd. ("SAHPL"). The Company entered into an Investment Management Agreement with SAHPL as the Investment Manager.  Symphony Capital Partners Limited ("SCPL") is a service provider to the Investment Manager.

SAHPL's licence for carrying on fund management in Singapore is restricted to serving only accredited investors and/or institutional investors. Symphony is an accredited investor.

Investments

At 31 December 2021, the total amount invested by Symphony since admission to the Official List of the London Stock Exchange in August 2007 was US$605.03 million (2020: US$581.56 million). SIHL's total cost of its unrealised investment portfolio after taking into account shareholder loan repayments, redemptions, partial realisations, dividends and interest income was US$60.97 million at 31 December 2021, down from US$93.15 million a year earlier.

The change is due to (i) the partial realisation of MINT shares generating net proceeds of US$50.03 million, which cumulatively increased proceeds (including partial realisations and dividend income) in excess of total cost for this investment to US$225.49 million at 31 December 2021, (ii) the sale of a luxury villa, which formed part of the settlement for a structured transaction, which resulted in the reversal of the residual cost for this investment (before taking into account interest income) of US$2.76 million (iii) distributions from land related realisations amounting to US$1.45 million, (iv) new and follow-on investments in unlisted investments amounting to US$23.47 million and (v) other unlisted investment realisations, dividends, interest income and minor items of US$1.42 million.

As at 31 December 2021, the healthcare, hospitality, lifestyle, lifestyle/real estate, logistics, education and the new economy sector unrealised investments accounted for 48.72%, -369.81%, 141.03%, 106.38%, 69.11%, 40.76% and 63.81% of total cost of investments after taking into account shareholder loan repayments, redemptions, partial realisations, dividends and interest income, respectively. The negative net cost in the hospitality sector is due to partial realisations related to MINT that have generated proceeds in excess of cost.

The fair value of investments, excluding temporary investments, held by Symphony was US$499.15 million at 31 December 2021, which compares to US$402.51 million a year earlier. This change comprised an increase in the value of listed and unlisted securities by US$130.07 million, new and follow-on investments of US$23.47 million less realisations (including divestments, shareholder loan repayments and return of capital) amounting to US$56.90 million.

As at 31 December 2021, we had the following investments:

Indo Trans Logistics Corporation

Indo Trans Logistics Corporation ("ITL") was founded in 2000 as a freight-forwarding company and has since grown to become Vietnam's largest independent integrated logistics company with a network that is spread across Vietnam, Cambodia, Laos, Myanmar, and Thailand. ITL has grown to national champion status in Vietnam.

ITL has seen strong momentum across its key business lines that has facilitated growth in revenue and EBITDA by 104.08% and 209.32% in 2021, respectively. Aviation GSA and contract forwarding business almost doubled during the same period, which provided ITL with more operating leverage. The strong growth was driven by full consolidation of South Logistics Joint Stock Company ("SoTrans"), a strong domestic economy that has a growing local manufacturing base.  The long-term outlook for the logistics sector in Vietnam is attractive and ITL's management is focused on further upgrading its technology infrastructure, making new investments to grow the business and developing its real estate assets.

The Company acquired a significant minority interest in Indo Trans Logistics Corporation ("ITL") in June 2019 for US$42.64 million and has a net cost of US$42.14 million (2020: US$42.14 million). The fair value for Symphony's interest in ITL at 31 December 2021 was US$143.99 million (2020: US$54.16 million).

Minuet Limited

Minuet Ltd ("Minuet") is a joint venture between the Company and an established Thai partner.  The Company has a direct 49% interest in the venture and is considering several development and/or sale options for the land owned by Minuet, which is located in close proximity to central Bangkok, Thailand.  As at 31 December 2021 Minuet held approximately 180.75 rai (28.92 hectares) of land in Bangkok, Thailand.

The Company initially invested approximately US$78.30 million by way of an equity investment and interest-bearing shareholder loans. Since the initial investment by the Company, Minuet has received proceeds from rental income and partial land sales.  As at 31 December 2021 the Company's investment cost (net of shareholder loan repayments) was approximately US$17.81 million (31 December 2020: US$19.26 million). The fair value of the Company's interest in Minuet on the same date was US$69.81 million (31 December 2020: US$69.02 million) based on an independent third party valuation of the land plus the net value of the other assets and liabilities of Minuet. The marginal change in value of Symphony's interest is due an increase in the valuation of Minuet's land by 14.49%, which was partially offset by a depreciation in the Thai baht by 10.85% and the repayment of US$1.45 million in shareholder loans related to the sale of land during the year. Minuet entered into agreements for the sale of two parcels land that will complete in 2022 and generate gross proceeds of US$23.25 million.

Minor International Public Company Limited

Minor International Public Company Limited ("MINT") is a diversified consumer business and is one of the largest hospitality and restaurant companies in the Asia-Pacific region.  Anil Thadani (a Director of the Company) currently serves on MINT's board of directors.  Sunil Chandiramani (a Director of the Company) currently serves as an advisor to MINT's board of directors.  MINT is a company that is incorporated under the laws of Thailand and is listed on the Stock Exchange of Thailand.

MINT owns 372 hotels and manages 155 other hotels and serviced suites with 75,621 rooms. MINT owns and manages hotels in 56 countries predominantly under its own brand names that include Anantara, Oaks, NH Collection, NH Hotels, nhow, Elewana, AVANI, Per AQUUM and Tivoli.

As at 31 December 2021, MINT also owned and operated 2,389 restaurants under the brands The Pizza Company, Swensen's, Sizzler, Dairy Queen, Burger King, Beijing Riverside, Thai Express, Bonchon, Benihana and The Coffee Club amongst others. Approximately two-thirds of these outlets are in Thailand with the remaining number in other Asian countries, the Middle East and the United Kingdom. MINT's operations also include contract manufacturing and an international consumer brand distribution business in Thailand focusing on fashion and lifestyle retail (386 outlets), wholesale and direct marketing channels under brands that include Anello, Bossini, Esprit, Charles & Keith and Radley amongst others.

MINT reported a strong rebound in core revenue and earnings before interest, tax, depreciation and amortisation ("EBITDA") of 28.12% and 538.58%, in 2021 year-over-year, respectively. The performance was driven by reduced movement and travel restrictions that benefited MINT's hospitality and F&B businesses. The higher sales together with a cost minimization program facilitated a larger increase in EBITDA during the same period.

Pent-up demand and opening of countries to travellers fuelled a strong rebound in MINT's hotel operations. Revenue from hotel and related services increased by 46.77% and EBITDA turned positive in 2021. Management are optimistic that the recovery will continue to gain strength with the further relaxing of border restrictions and higher vaccination rates.

At the end of 2021, MINT's total number of equity-owned and managed restaurants were 1,205 and 1,184, respectively. Minor's food business continued to perform well and has remained profitable since Q3 2020. Despite the challenging operating environment in Thailand, 2021 group-wide total-system-sales increased by 3.1%, supported by business growth in China and Australia. Core EBITDA increased by 16.41% during the same period due to operational efficiencies and cost management initiatives. The operating environment continued to improve during the latter half of the year due to more dine-in traffic following the relaxation of restrictions in Thailand.

Revenue from MINT's retail trading and contract manufacturing businesses declined by 23.08% during 2021. The contraction was due to the challenging environment, including government mandated intermittent shop closures in Thailand to contain Covid-19 transmission. The situation continues to improve with the sustained opening of retail outlets and reduced disruptions to operations during the last quarter of 2021. 

Symphony's gross investment cost in MINT was US$82.82 million (2020: US$82.82 million) at 31 December 2021. The net cost on the same date, after deducting partial realisations and dividends received, was (US$225.49 million) (2020: (US$175.46 million)). The negative net cost is due to the proceeds from partial realisations and dividends being in excess of cost for this investment. The fair value of Symphony's investment in MINT at 31 December 2021 was US$67.97 million (2020: US$109.03 million). The change in value of approximately (US$41.06 million) is due to the sale of 49.25 million shares and 12.34 million warrants during the year that generated net proceeds of US$50.03 million and a depreciation in the onshore Thai baht rate by 11.54%, which were partially offset by an increase in MINT's share price by 11.76%.

Liaigre Group

The Liaigre Group ("Liaigre") was founded in 1985 in Paris and is a brand synonymous with discreet luxury, and has become one of the most sought-after luxury furniture brands, renowned for its minimalistic design style. Liaigre has a strong intellectual property portfolio and provides a range of bespoke furniture, lighting, fabric & leather, and accessories.  In addition to operating a network of 27 showrooms in 12 countries across Europe, the US and Asia, Liaigre undertakes exclusive interior architecture projects for select yachts, hotels, and restaurants and private residences.

Liaigre's retail operations rebounded in 2021, partly driven by consumers upgrading and spending more on homes during the pandemic. Showroom orders and total orders grew by 43.38% and 25.70% in 2021, respectively. Asia continued to grow more quickly with orders increasing by 92.70% during the same period to account for 23.89% of total showroom sales, up from 17.78% the year before. The interior architecture business is performing well and the pipeline of projects continues to grow. Overall, the orders on hand at Liaigre at 31 December 2021 amounted to 43.70% of the group's budgeted sales for 2022, providing strong momentum for the new year.

Symphony's gross investment cost in Liaigre was US$79.68 million (2020: US$79.68 million) at 31 December 2021. The net cost on the same date, after deducting partial realisations, was US$67.63 million (2020: US$67.63 million). The fair value of Symphony's investment at 31 December 2021 was US$37.36 million (2020: US$22.27 million). The change in value since 2020, is due to a strong improvement in the business.

Property Joint Venture in Malaysia

The Company has a 49% interest in a property joint venture in Malaysia with an affiliate of Destination Resorts and Hotels Sdn Bhd, a hotel and destination resort investment subsidiary of Khazanah Nasional Berhad, the investment arm of the Government of Malaysia. The joint venture has developed a beachfront resort with private villas for sale on the south-eastern coast of Malaysia and that are branded and managed by One&Only Resorts ("O&O"). The hotel operations were officially launched in September 2020.

The One&Only Desaru Coast Resort saw a pickup in occupancies in the last quarter of 2021 following the lifting of interstate movement controls for vaccinated travellers in October. The domestic demand alone for luxury leisure trips raised the resorts occupancy to EBITDA break-even levels. The gradual opening-up to international travel with vaccinated travel lanes with Singapore in January 2022 and potentially Thailand is positive news for the domestic tourism market that should benefit this property. The management team is preparing to launch the marketing for the luxury villa sales on the property that will provide incremental value to Symphony in the coming years.

Symphony invested approximately US$58.78 million (2020: US$58.78 million) in the joint venture at 31 December 2021. The fair value for this investment based on an independent third-party valuation on the same date was US$28.96 million (2020: US$35.30 million). The change in value from a year earlier is due to a decline in the value of the land by US$1.37 million, a depreciation in the Malaysian ringgit by 3.63% and an increase in liabilities related to the financing structure for the development.

Soothe

Soothe Healthcare Pvt. Ltd. ("Soothe") was founded in 2012 and operates within the fast-growing consumer healthcare products market segment in India. With growing disposable income, the demand for consumer healthcare products is expected to grow rapidly over the coming decades. Soothe's core product portfolio includes feminine hygiene and diaper products. Symphony completed its equity investment in Soothe in August 2019 and became a significant minority shareholder in the company. Symphony subsequently made investments through convertible notes in 2020 and 2021. The total investment cost is less than 5% of NAV.

Soothe has seen sales increase by 86.01% during 2021 compared to a year earlier. The strong growth has been driven by an expanding distribution network, successful market initiatives and launch of new products. In June 2021 Soothe complete a Series-C capital raise at a valuation equal 1.88 times Symphony's cost. Later in the year, a material secondary transaction was completed by a third-party institutional investor at 2.41 times Symphony's cost. The higher valuation for Soothe is reflective of the strong growth profile, prospects, and quality of this business. Management continues to focus on growing the business while improving margins by bringing the manufacturing of some new products in-house.

Symphony's gross and net investment cost in Soothe was US$8.88 million (2020: US$6.88 million) at 31 December 2021. The fair value of Symphony's investment at 31 December 2021 was US$27.86 million (2020: US$11.09 million). The change in value is due to an increase in investment by US$2.0 million during 2021, a material secondary transaction in the shares of Soothe by a third party at a higher valuation and strong growth in the business.

ASG

ASG Hospital Private Limited ("ASG") is a full-service eye-healthcare provider with operations in India, Africa, and Nepal. ASG was co-founded in Rajasthan, India in 2005 by Dr. Arun Singhvi and Dr. Shashank Gang. ASG's operations have since grown to 43 clinics, which offer a full range of eye-healthcare services, including outpatient consultation and a full suite of inpatient procedures (cataract, retina surgeries, Lasik, glaucoma, cornea and other complicated eye surgeries). ASG also operates an optical and pharmacy business, which is located within clinics.

The management team of ASG has been successful in scaling the business organically and inorganically. Sales grew by 107.29% in 2021 while normalised EBITDA grew over four-fold during the same period as clinics continued to ramp-up operations and gained efficiencies from newly acquired operations. In February 2022, ASG was approved by creditors to acquire Vasan Health Care Private Limited, which has around 90 clinics mainly in southern India. The acquisition is subject to regulatory approval and if successful, will add considerable scale to ASG's operations.

Symphony's gross and net investment cost in ASG was US$20.67 million (2020: US$20.13 million) at 31 December 2021. The fair value of Symphony's investment at 31 December 2021 was US$24.72 million (2020: US$18.98 million). The change in value is due to the purchase of additional shares of ASG for US$0.54 million during 2021 and a strong improvement in the business. 

Other Investments

In addition to the investments above, Symphony has 14 additional non-material investments, at 31 December 2021. Pending investment in suitable opportunities, Symphony has placed funds in certain temporary investments. 

Capitalisation and NAV

As at 31 December 2021, the Company had US$409.70 million (31 December 2020: US$409.70 million) in issued share capital and its NAV was approximately US$488.75 million (31 December 2020: US$379.05 million). Symphony's NAV is the sum of its cash and cash equivalents, temporary investments, the fair value of unrealised investments (including investments in subsidiaries, associates and joint ventures) and any other assets, less any other liabilities.  The unaudited financial statements contained herein may not account for the fair value of certain unrealised investments.  Accordingly, Symphony's NAV may not be comparable to the net asset value in the unaudited financial statements.  The primary measure of SIHL's financial performance and the performance of its subsidiaries will be the change in Symphony's NAV per share resulting from changes in the fair value of investments.

Symphony was admitted to the Official List of the London Stock Exchange ("LSE") on 3 August 2007 under Chapter 14 of the Listing Manual of the LSE.  The proceeds from the IPO amounted to US$190 million before issue expenses pursuant to which 190.0 million new shares were issued in the IPO.  In addition to these 190.0 million shares and 94.9 million shares pre-IPO, a further 53.4 million shares were issued comprising of the subscription of 13.2 million shares by investors and SIHL's investment manager, the issue of 33.1 million bonus shares, and the issue of 7.1 million shares to SIHL's investment manager credited as fully paid raising the total number of issued shares to 338.3 million.

The Company issued 4,119,490 shares, 2,059,745 shares, 2,059,745 shares and 2,059,745 shares on 6 August 2010, 21 October 2010, 4 August 2011 and 23 October 2012, respectively, credited as fully paid, to the Investment Manager, Symphony Investment Managers Limited.  The shares were issued as part of the contractual arrangements with the Investment Manager.

On 4 October 2012, SIHL announced a fully underwritten 0.481 for 1 rights issue at US$0.60 per new share to raise proceeds of approximately US$100 million (US$93 million net of expenses) through the issue of 166,665,997 million new shares, fully paid, that commenced trading on the London Stock Exchange on 22 October 2012.

As part of the contractual arrangements with the Investment Manager in the Investment Management Agreement, as amended, the Investment Manager was granted 82,782,691 and 41,666,500 share options to subscribe for ordinary shares at an exercise price of US$1.00 and US$0.60 on 3 August 2008 and 22 October 2012, respectively. The share options vest in equal tranches over a five-year period from the date of grant. As at 31 December 2018, 41,666,500 share options with an exercise price of US$0.60 had been exercised and all the 82,782,691 options had lapsed and expired. There were no share options outstanding at 31 December 2021.

During 2017, 43,525,000 shares were bought back and cancelled, as part of a share buyback programme announced on 16 January 2017. Together with the shares issued to the Investment Manager, the shares issued pursuant to the rights issue, shares issued pursuant to the exercise of options and shares cancelled pursuant to the share buyback programme, the Company's fully paid issued share capital was 513.4  million shares at 31 December 2021 (2020: 513.4 million shares).

Revenue and Other Operating Income

Management concluded during 2014 that the Company meets the definition of an investment entity and adopted IFRS 10, IFRS 12 and IAS 27 standards where subsidiaries are de-consolidated and their fair value is measured through profit or loss. As a result, revenue, such as dividend income, from underlying investments in subsidiaries is no longer consolidated.

During 2021, Symphony recognised other operating income of US$182.23 million that mainly comprised intercompany dividend transactions. This compares to other operating income of US$5.16 million in 2020 which comprised foreign exchange gains from intercompany loans and reflects the weaker US dollar during the year.

Expenses

Other Operating Expenses

Other operating expenses include fees for professional services, interest expense, insurance, communication, foreign exchange losses, travel, Directors' fees and other miscellaneous expenses and costs incurred for analysis of proposed deals.  For the year ended 31 December 2021, other operating expenses amounted to US$5.61 million (2020: US$1.92 million), which includes US$4.18 million in foreign exchange losses. Excluding foreign exchange losses and interest expense, other operating expenses in 2020 and 2021 would be US$1.28 million and US$1.41 million, respectively. The increase in expenses of US$134,000 in 2021 is predominantly due to higher legal expenses.

Management Fee

The management fee amounted to US$9.06 million for the year ended 31 December 2021 (2020: US$8.71 million).  The management fee was calculated on the basis of 2.25% of NAV (with a floor and cap of US$8 million and US$15 million per annum, respectively) pursuant to the Investment Management Agreement for fees payable from 1 January to 30 September 2020. The Investment Manager announced a voluntary reduction in management fees effective with the fee payable on 1 October 2020 whereby the minimum fee or the floor was reduced from US$8 million to US$6 million. There is no other change to the fee calculation.

Liquidity and Capital Resources

At 31 December 2021, Symphony's cash balance was US$8.36 million (31 December 2020: US$257,000). Symphony's primary uses of cash are to fund investments, pay expenses and to make distributions to shareholders, as declared by our board of directors. Symphony can generate additional cash from time-to-time from the sale of listed securities that are liquid and amount to US$67,972,000 (31 December 2020: US$109,027,000) and which are held through intermediate holding companies. Taking into account current market conditions, it is expected that Symphony has sufficient liquidity and capital resources for its operations.  The primary sources of liquidity are capital contributions received in connection with the initial public offering of shares, related transactions and a rights issue (See description under "Capitalisation and NAV"), in addition to cash from investments that it receives from time to time and bank facilities.

This cash from investments is in the form of dividends on equity investments, payments of interest and principal on fixed income investments and cash consideration received in connection with the disposal of investments.  Temporary investments made in connection with Symphony's cash management activities provide a more regular source of cash than less liquid longer-term and opportunistic investments, but generate lower expected returns. Other than amounts that are used to pay expenses, or used to make distributions to our shareholders, any returns generated by investments are reinvested in accordance with Symphony's investment policies and procedures.  Symphony may enter into one or more credit facilities and/or utilise other financial instruments from time to time with the objective of increasing the amount of cash that Symphony has available for working capital or for making opportunistic or temporary investments.  At 31 December 2021, the Company had total interest-bearing borrowings of $Nil (31 December 2020: US$2.73 million).

Principal Risks

The Company's and the Company's investment management team's past performance is not necessarily indicative of the Company's future performance and any unrealised values of investments presented in this document may not be realised in the future.

The Company is not structured as a typical private equity vehicle (it is structured as a permanent capital vehicle), and thus may not have a comparable investment strategy. The investment opportunities for the Company are more likely to be as a long-term strategic partner in investments, which may be less liquid and which are less likely to increase in value in the short term.

The Company's organisational, ownership and investment structure may create certain conflicts of interests (for example in respect of the directorships, shareholdings or interests, including in portfolio companies that some of the Directors and members of the Company's investment management team may have). In addition, neither the Investment Manager nor any of its affiliates owes the Company's shareholders any fiduciary duties under the Investment Management Agreement between, inter alia, the Company and the Investment Manager. The Company cannot assume that any of the foregoing will not result in a conflict of interest that will have a material adverse effect on the business, financial condition and results of operations.

The Company is highly dependent on the Investment Manager, the Key Persons (as defined in the Investment Management Agreement) and the other members of the Company's investment management team and the Company cannot assure shareholders that it will have continued access to them or their undivided attention, which could affect the Company's ability to achieve its investment objectives.

The Investment Manager's remuneration is based on the Company's NAV (subject to minimum and maximum amounts) and is payable even if the NAV does not increase, which could create an incentive for the Investment Manager to increase or maintain the NAV in the short term (rather than the long-term) to the potential detriment of Shareholders.

The Company's investment policies contain no requirements for investment diversification and its investments could therefore be concentrated in a relatively small number of portfolio companies in the Healthcare, Hospitality, Lifestyle (including branded real estate developments), logistics and education sectors predominantly in Asia.

The Company has made, and may continue to make, investments in companies in emerging markets, which exposes it to additional risks (including, but not limited to, the possibility of exchange control regulations, political and social instability, nationalisation or expropriation of assets, the imposition of taxes, higher rates of inflation, difficulty in enforcing contractual obligations, fewer investor protections and greater price volatility) not typically associated with investing in companies that are based in developed markets.

Furthermore, the Company has made, and may continue to make, investments in portfolio companies that are susceptible to economic recessions or downturns. Such economic recessions or downturns may also affect the Company's ability to obtain funding for additional investments.

The Company's investments include investments in companies that it does not control and/or made with other co-investors for financial or strategic reasons. Such investments may involve risks not present in investments where the Company has full control or where a third party is not involved. For example, there may be a possibility that a co-investor may have financial difficulties or become bankrupt or may at any time have economic or business interests or goals which are inconsistent with those of the Company or may be in a position to take or prevent actions in a manner inconsistent with the Company's objectives. The Company may also be liable in certain circumstances for the actions of a co-investor with which it is associated. In addition, the Company holds a non-controlling interest in certain investments, and therefore, may have a limited ability to protect its position in such investments. 

A number of the Company's investments are currently, and likely to continue to be, illiquid and/ or may require a long-term commitment of capital. The Company's investments may also be subject to legal and other restrictions on resale. The illiquidity of these investments may make it difficult to sell investments if the need arises.

The Company's real estate related investments may be subject to the risks inherent in the ownership and operation of real estate businesses and assets. A downturn in the real estate sector or a materialization of any of the risks inherent in the real estate business and assets could materially adversely affect the Company's real estate investments. The Company's portfolio companies also anticipate selling a significant proportion of development properties prior to completion. Any delay in the completion of these projects may result in purchasers terminating off-plan sale agreements and claiming refunds, damages and/or compensation.

The Company is exposed to foreign exchange risk when investments and/ or transactions are denominated in currencies other than the U.S. dollar, which could lead to significant changes in the net asset value that the Company reports from one quarter to another.

The Company's investment policies and procedures (which incorporate the Company's investment strategy) provide that the Investment Manager should review the Company's investment policies and procedures on a regular basis and, if necessary, propose changes to the Board when it believes that those changes would further assist the Company in achieving its objective of building a strong investment base and creating long term value for its Shareholders. The den to make any changes to the Company's investment policy and strategy, material or otherwise, rests with the Board in conjunction with the Investment Manager and Shareholders have no prior right of approval for material changes to the Company's investment policy.

Investments in connection with special situations and structured transactions typically 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 may be made. Special situations and structured transactions in the form of fixed debt investments also carry an additional risk that an increase in interest rates could decrease their value.

The Company's current investment policies and procedures provide that it may invest an amount of no more than 30% of its total assets in special situations and structured transactions which, although they are not typical longer-term investments, have the potential to generate attractive returns and enhance the Company's net asset value. Following the Company's investment, it may be that the proportion of its total assets invested in longer-term investments falls below 70% and the proportion of its total assets invested in special situations and structured transactions exceeds 30% due to changes in the valuations of the assets, over which the Company has no control.

Pending the making of investments, the Company's capital will need to be temporarily invested in liquid investments and managed by a third-party investment manager of international repute or held on deposit with commercial banks before they are invested. The returns that temporary investments are expected to generate and the interest that the Company will earn on deposits with commercial banks will be substantially lower than the returns that it anticipates receiving from its longer-term investments or special situations and structured transactions.

In addition, while the Company's temporary investments will be relatively conservative compared to its longer- term investments or special situations and structured transactions, they are nevertheless subject to the risks associated with any investment, which could result in the loss of all or a portion of the capital invested.

The Investment Manager has identified but has not yet contracted to make further potential investments. The Company cannot guarantee shareholders that any or all of these prospective investments will take place in the future.

The market price of the Company's shares may fluctuate significantly, and shareholders may not be able to resell their shares at or above the price at which they purchased them.

The Company's shares are currently trading, and have in the past traded, and could in the future trade, at a discount to NAV for a variety of reasons, including due to market conditions. The only way for shareholders to realise their investment is to sell their shares for cash. Accordingly, in the event that a shareholder requires immediate liquidity, or otherwise seeks to realise the value of his investment through a sale, the amount received by the shareholder upon such sale may be less than the underlying NAV of the shares sold.

The Company could be materially adversely affected by the widespread outbreak of infectious disease or other public health crises (or by the fear or imminent threat thereof), including the current COVID-19 pandemic. Public health crises such as SARS, H1N1/09 flu, avian flu, Ebola, and the current COVID-19 pandemic, together with any related containment or other remedial measures undertaken or imposed, could have a material and adverse effect on the Company including by (i) disrupting or otherwise materially adversely affecting the human capital, business operations or financial resources of the Company, the Company's portfolio companies, the Investment Manager or service providers and (ii) adversely affect the ability, or the willingness, of a party to perform its obligations under its contracts and lead to uncertainty over whether such failure to perform (or delay in performing) might be excused under so-called "material adverse change," force majeure and similar provisions in such contracts that could cause a material impact to the Company, the Company's portfolio companies, the Investment Manager or service providers and (iii) severely disrupting global, national and/or regional economies and financial markets and precipitating an economic downturn or recession that could materially adversely affect the value and performance of the Company's shares.

Our business could be materially affected by conditions in the global capital markets and the economy generally. Geopolitical issues, including the recent Russian invasion of Ukraine and related international response measures may have a negative impact on regional and global economic conditions, as a result of disruptions in foreign currency markets and increased energy and commodity prices. This could in turn have a spill-over effect on our portfolio companies, such as reducing demand for products or services offered by our portfolio companies and/or cause for example, higher operating and financing costs.

ANIL THADANI

Chairman, Symphony Asia Holdings Pte. Ltd.

15 March 2022

Directors' Responsibility Statement

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

(a)     the condensed financial statements give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company as required by DTR 4.2.4R; and

(b)     the condensed 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 the financial year and their impact on the financial statements, and a description of the principal risks and uncertainties; and

(ii)     DTR 4.2.8R of the Disclosure and Transparency Rules, being related party transactions that have taken place in the current financial year and that have materially affected the financial position or performance of the Company 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 of Directors

Georges Gagnebin

Chairman, Symphony International Holdings Limited

Anil Thadani

Chairman, Symphony Asia Holdings Pte. Ltd.

Director, Symphony International Holdings Limited