TIDMRCHA
RNS Number : 6143R
Rothschilds Continuation Finance CI
12 December 2016
Rothschilds Continuation Finance (C.I.) Limited
Half-yearly Report for the six-month period ended 30 September
2016
Interim Management Report
Summary of Important Events
Rothschilds Continuation Finance (C.I.) Limited (the Company) is
a wholly-owned subsidiary of Rothschilds Continuation Limited. The
principal activity of the Company is the raising of finance for the
purpose of lending it to companies who are members of the
Rothschild Concordia SAS group. In the period ended 30 September
2016, GBP125,000,000 perpetual subordinated guaranteed notes were
in issue by the Company.
Risks and Uncertainties
The principal risks of the Company are credit risk, liquidity
risk, market risk and operational risk. The Company follows the
risk management policies of a fellow Group company, N M Rothschild
& Sons Limited.
The Company's market risk exposure is limited to interest rate
risk. Exposure to interest rate movements on the perpetual
subordinated note issues has been passed to a fellow subsidiary N M
Rothschild & Sons Limited (NMR) and parent undertaking
Rothschilds Continuation Limited (RCL), as the issue proceeds have
been on-lent to NMR and RCL at a fixed margin of 1/64 per cent
above the rate being paid. Currency risk is not considered
significant as all material foreign currency balances and cash
flows are matched.
Liquidity risk has similarly been transferred to NMR and RCL as
the funds on-lent have the same maturity dates as the notes
issued.
The Company's principal credit risk is with NMR and RCL. Since
notes issued by the Company have been guaranteed by RCL, and funds
have been on-lent to NMR and RCL. The Company's ability to meet its
obligations in respect of notes issued by it is affected by NMR's
and RCL's ability to make payments to the Company.
Operational risk arising from inadequate or failed internal
processes, people and systems or from external events is managed by
maintaining a strong framework of internal controls.
On 23 June 2016 the UK voted to leave the EU. At the date of
signing these financial statements the Directors do not foresee any
immediate impact on the Company but acknowledge the uncertainty
that exists. The Directors will continue to keep this under
review.
This half-yearly financial report has not been audited or
reviewed by the Company's auditors pursuant to the Auditing
Practices Board guidance on Review of Interim Financial
Information.
Responsibility Statement
The Directors confirm that to the best of their knowledge:
- the condensed set of financial statements has been prepared in accordance with IAS 34 Interim
Financial Reporting; and
- the interim management report includes a fair review of (i) the important events that have
occurred during the first six months of the financial year, and their impact on the condensed
set of financial statements, and (ii) the principal risks and uncertainties for the remaining
six months of the financial year.
By Order of the Board
Peter Barbour
Director
12 December 2016
Condensed Interim Statement of Comprehensive Income
For the six months ended 30 September 2016
6 months 6 months
to to
30 September 30 September
2016 2015
Note GBP GBP
--------------------------- ----- ------------- -------------
Interest income 5,650,362 5,651,535
--------------------------- ----- ------------- -------------
Interest expense (5,640,411) (5,640,410)
--------------------------- ----- ------------- -------------
Administrative expenses (650) -
--------------------------- ----- ------------- -------------
Profit before tax 3 9,301 11,125
--------------------------- ----- ------------- -------------
Income tax expense 4 (1,860) (2,225)
--------------------------- ----- ------------- -------------
Profit for the financial
period 7,441 8,900
--------------------------- ----- ------------- -------------
Other comprehensive - -
income
--------------------------- ----- ------------- -------------
Total comprehensive
income for the financial
period 7,441 8,900
--------------------------- ----- ------------- -------------
Condensed Interim Statement of Changes in Equity
For the six months ended 30 September 2016
Retained
Share Earnings Total
Capital
GBP GBP GBP
------------------------ ---------- ---------- --------
At 1 April 2016 100,000 149,678 249,678
------------------------ ---------- ---------- --------
Total comprehensive
income for the period - 7,441 7,441
------------------------ ---------- ---------- --------
At 30 September 2016 100,000 157,119 257,119
------------------------ ---------- ---------- --------
At 1 April 2015 100,000 130,660 230,660
------------------------ ---------- ---------- --------
Total comprehensive
income for the period - 8,900 8,900
------------------------ ---------- ---------- --------
At 30 September 2015 100,000 139,560 239,560
------------------------ ---------- ---------- --------
Condensed Interim Balance Sheet
At 30 September 2016
At 30 September At 31 March
2016 2016 2016 2016
Note GBP GBP GBP GBP
--------------------- ----- ------------ -------------- ------------ --------------
Non-current
assets
Loans to group
undertakings 5 125,000,000 125,000,000
--------------------- ----- ------------ -------------- ------------ --------------
Current assets
Debtors 6 3,668,001 1,389,395
--------------------- ----- ------------ -------------- ------------ --------------
Cash and cash
equivalents 7 3,623,780 252,024
--------------------- ----- ------------ -------------- ------------ --------------
7,291,781 1,641,419
--------------------- ----- ------------ -------------- ------------ --------------
Current liabilities
Current tax
payable (6,615) (4,755)
--------------------- ----- ------------ -------------- ------------ --------------
Other financial
liabilities 8 (7,028,047) (1,386,986)
--------------------- ----- ------------ -------------- ------------ --------------
Net current
assets 257,119 249,678
--------------------- ----- ------------ -------------- ------------ --------------
Total assets
less current
liabilities 125,257,119 125,249,678
--------------------- ----- ------------ -------------- ------------ --------------
Non-current
liabilities
Subordinated
guaranteed notes 9 (125,000,000) (125,000,000)
--------------------- ----- ------------ -------------- ------------ --------------
Net assets 257,119 249,678
--------------------- ----- ------------ -------------- ------------ --------------
Shareholders'
equity
Share capital 11 100,000 100,000
--------------------- ----- ------------ -------------- ------------ --------------
Retained earnings 157,119 149,678
--------------------- ----- ------------ -------------- ------------ --------------
Total shareholders'
equity 257,119 249,678
--------------------- ----- ------------ -------------- ------------ --------------
Condensed Interim Cash Flow Statement
For the six months ended 30 September 2016
6 months 6 months
to to
30 September 30 September
2016 2015
Note GBP GBP
--------------------------- ----- ------------- -------------
Cash flow from operating
activities
Profit for the financial
period 7,441 8,900
--------------------------- ----- ------------- -------------
Income tax expenses 1,860 2,225
--------------------------- ----- ------------- -------------
Operating profit before
changes in working
capital and provisions 9,301 11,125
--------------------------- ----- ------------- -------------
Net (increase) in debtors (2,278,606) (2,278,607)
--------------------------- ----- ------------- -------------
Net increase in other
financial liabilities 5,641,061 5,640,410
--------------------------- ----- ------------- -------------
Cash generated from
operations 3,371,756 3,372,928
--------------------------- ----- ------------- -------------
Net cash from operating
activities 3,371,756 3,372,928
--------------------------- ----- ------------- -------------
Net increase in cash
and cash equivalents 3,371,756 3,372,928
--------------------------- ----- ------------- -------------
Cash and cash equivalents
at 1 April 252,024 251,935
--------------------------- ----- ------------- -------------
Cash and cash equivalents
at 30 September 7 3,623,780 3,624,863
--------------------------- ----- ------------- -------------
Interest paid and received during the period were as
follows:
6 months 6 months
to to
30 September 30 September
2016 2015
GBP GBP
--------------------- ------------- -------------
Interest paid 0 0
--------------------- ------------- -------------
Interested received 3,371,756 3,372,928
--------------------- ------------- -------------
The notes to the condensed interim financial statements form an
integral part of the condensed interim financial statements.
Notes to the Condensed Interim
Financial Statements
(forming part of the Condensed Interim Financial Statements)
For the six months ended 30 September 2016
1. Basis of preparation
Basis of preparation
The condensed interim financial statements
are prepared and approved by the Directors
in accordance with IAS 34 Interim Financial
Reporting. The condensed interim financial
statements are prepared under the historical
cost accounting rules and should be read
in conjunction with the annual financial
statements for the year ended 31 March
2016, which have been prepared in accordance
with International Financial Reporting
Standards.
The accounting policies and methods of
valuation are identical to those applied
in the financial statements for the year
ended 31 March 2016 with the exception
of the cash and cash equivalent policy.
The Company's fellow subsidiary undertaking,
N M Rothschild & Sons Limited, relinquished
its UK deposit taking license on 19 September
2016. Therefore, the cash and cash equivalent
balances held with the fellow subsidiary
undertaking are no longer classified as
being held with a bank, but rather as a
loan, repayable on demand with the fellow
subsidiary undertaking. The liquidity of
these balances remains unaffected and therefore
still meet the definition of a cash and
cash equivalent in accordance with IAS
7. New accounting standards that are effective
for the year ending 31 March 2017 have
no impact on these condensed interim financial
statements.
2. Directors' Emoluments
None of the Directors received any remuneration in respect of
their services to the Company during the period (2015: GBPnil).
3. Profit Before Tax
6 months 6 months
to to
30 September 30 September
2016 2015
GBP GBP
---------------------------------- ------------- -------------
Is stated after
i. Income
Income from loans to group
undertakings
Parent undertaking 2,260,081 2,260,081
---------------------------------- ------------- -------------
Fellow subsidiary undertaking 3,390,122 3,390,122
---------------------------------- ------------- -------------
5,650,203 5,650,203
Other interest receivable
from fellow subsidiary
undertaking 159 1,332
---------------------------------- ------------- -------------
5,650,362 5,651,535
ii. Charges
Interest payable on subordinated
guaranteed notes 5,640,411 5,640,410
---------------------------------- ------------- -------------
4. Taxation
6 months 6 months
to to
30 September 30 September
2016 2015
GBP GBP
---------------------------- ------------- -------------
Profit before tax 9,301 11,125
---------------------------- ------------- -------------
United Kingdom corporation
tax at 20% (2015: 20%) 1,860 2,225
---------------------------- ------------- -------------
5. Loans to Group undertakings
Subordinated
Perpetual
Loans
to Group Undertakings
GBP
----------------------------- ----------------------
At the beginning and end of
the period 125,000,000
----------------------------- ----------------------
The interest rate charged on the subordinated perpetual loans to
group undertakings is 9 1/64 per cent. The fair value of the loans
was GBP153,249,875 as at 30 September 2016 (31 March 2016:
GBP148,688,750). The above loans were valued from quoted market
prices of a similar instrument (level 2).
6. Debtors
At 30 September At 31 March
2016 2016
GBP GBP
------------------------- ---------------- ------------
Amounts owed by parent
undertaking 2,815,839 555,758
------------------------- ---------------- ------------
Amounts owed by fellow
subsidiary undertaking 852,162 833,637
------------------------- ---------------- ------------
3,668,001 1,389,395
------------------------- ---------------- ------------
7. Cash and Cash Equivalents
At 30 September 2016 the Company had a loan, repayable on demand
of GBP3,623,780 (31 March 2016: GBP252,024) to a fellow subsidiary
undertaking. The Company receives interest at 0% (31 March 2016:
0.25%).
8. Other Financial Liabilities
At 30 September At 31 March
2016 2016
GBP GBP
------------------ ---------------- ------------
Interest payable 7,027,397 1,386,986
------------------ ---------------- ------------
Sundry Creditors 650 -
------------------ ---------------- ------------
7,028,047 1,386,986
------------------ ---------------- ------------
Interest is payable on the subordinated guaranteed notes at 9
per cent.
9. Subordinated Guaranteed Notes
At 30 September At 31 March
2016 2016
GBP GBP
----------------------------- ---------------- ------------
GBP125,000,000 9% Perpetual
Subordinated Guaranteed
Notes 125,000,000 125,000,000
----------------------------- ---------------- ------------
The fair value of the subordinated guaranteed notes was
GBP153,124,875 as at 30 September 2016 (31 March 2016:
GBP148,543,750). The fair value was derived from the quoted market
price at the balance sheet date (level 1).
10. Maturity of Financial Liabilities
The following table shows contractual cash flows payable by the
Company on the subordinated guaranteed notes, analysed by remaining
contractual maturity at the balance sheet date. Interest cash flows
on the loan notes are shown up to five years only, with the
principal balance being shown in the > 5yr column.
Demand Demand 3m - 1yr >5 yr Total
- 3m 1yr - 5yr
GBP GBP GBP GBP GBP GBP
------------ -------- -------- ----------- ----------- ------------ ------------
Loan notes
in issue - - 11,250,000 45,000,000 125,000,000 181,250,000
------------ -------- -------- ----------- ----------- ------------ ------------
11. Share Capital
At 30 September At 31 March
2016 2016
GBP GBP
------------------------- ---------------- ------------
Authorised
Ordinary shares of GBP1
each 100,000 100,000
------------------------- ---------------- ------------
Allotted, called up and
fully paid
Ordinary shares of GBP1
each 100,000 100,000
------------------------- ---------------- ------------
12. Related Party Transactions
Parties are considered to be related if one party controls, is
controlled by or has the ability to exercise significant influence
over the other party. This includes key management personnel, the
parent company and fellow subsidiaries.
At 30 At 31 March
September
2016 2016
GBP GBP
----------------------------------- ----------- ------------
Subordinated perpetual
loan to parent undertaking 50,000,000 50,000,000
----------------------------------- ----------- ------------
Subordinated perpetual
loan to fellow subsidiary
undertaking 75,000,000 75,000,000
----------------------------------- ----------- ------------
Amounts owed by parent
undertaking 2,815,839 555,758
----------------------------------- ----------- ------------
Amounts owed by fellow
subsidiary undertaking 852,162 833,637
----------------------------------- ----------- ------------
Cash and cash equivalents
at fellow subsidiary undertaking 3,623,780 252,024
----------------------------------- ----------- ------------
Amounts receivable from related parties at the period end were
as follows:
Amounts recognised in the condensed statement of comprehensive
income in respect of related party transactions were as
follows:
6 months 6 months
to to
30 September 30 September
2016 2015
GBP GBP
-------------------------------- ------------- -------------
Interest receivable from
parent undertaking 2,260,081 2,260,081
-------------------------------- ------------- -------------
Interest receivable from
fellow subsidiary undertaking 3,390,281 3,391,454
-------------------------------- ------------- -------------
There were no loans made to Directors during the period (2015:
none) and no balances outstanding at year-end (2015: GBPnil). There
were no employees of the Company during the year (2015: none).
13. Parent Undertaking and Ultimate Holding Company and Registered Office
The largest group in which the results of the Company are
consolidated is that headed by Rothschild Concordia SAS,
incorporated in France. The smallest group in which they are
consolidated is that headed by Rothschild & Co SCA, a French
public limited partnership.
The Company's immediate parent company is Rothschilds
Continuation Limited.
The Company's registered office is located at St Julian's Court,
St Peter Port, Guernsey, GY1 3BP.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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