TIDMRCHA

RNS Number : 0386Y

Rothschilds Continuation Finance CI

30 November 2017

Rothschilds Continuation Finance (C.I.) Limited

Half-yearly Report for the six-month period ended 30 September 2017

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 2017, GBP125,000,000 perpetual subordinated guaranteed notes were in issue by the Company.

Rothschild & Co SCA announced on 21 March 2017 that it will change its financial year end from 31 March to 31 December. There will therefore be a 9 month accounting period until 31 December 2017. Rothschilds Continuation Finance (C.I.) Limited will also change its year end in line with its ultimate parent.

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.

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

30 November 2017

Condensed Interim Statement of Comprehensive Income

For the six months ended 30 September 2017

 
                                         6 months       6 months 
                                               to             to 
                                     30 September   30 September 
                                             2017           2016 
                              Note            GBP            GBP 
---------------------------  -----  -------------  ------------- 
 Interest income                        5,650,203      5,650,362 
---------------------------  -----  -------------  ------------- 
 Interest expense                     (5,640,411)    (5,640,411) 
---------------------------  -----  -------------  ------------- 
 Administrative expenses                        -          (650) 
---------------------------  -----  -------------  ------------- 
 Profit before tax            3             9,792          9,301 
---------------------------  -----  -------------  ------------- 
 Income tax expense           4           (1,861)        (1,860) 
---------------------------  -----  -------------  ------------- 
 Profit for the financial 
  period                                    7,931          7,441 
---------------------------  -----  -------------  ------------- 
 Other comprehensive                            -              - 
  income 
---------------------------  -----  -------------  ------------- 
 Total comprehensive 
  income for the financial 
  period                                    7,931          7,441 
---------------------------  -----  -------------  ------------- 
 

Condensed Interim Statement of Changes in Equity

For the six months ended 30 September 2017

 
                                        Retained 
                               Share    Earnings       Total 
                             Capital 
                                 GBP         GBP         GBP 
------------------------  ----------  ----------  ---------- 
 At 1 April 2017             100,000     164,348     264,348 
------------------------  ----------  ----------  ---------- 
 Total comprehensive 
  income for the period            -       7,931       7,931 
------------------------  ----------  ----------  ---------- 
 Dividends paid                    -   (150,000)   (150,000) 
------------------------  ----------  ----------  ---------- 
 At 30 September 2017        100,000      22,279     122,279 
------------------------  ----------  ----------  ---------- 
 
 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 
------------------------  ----------  ----------  ---------- 
 

Condensed Interim Balance Sheet

At 30 September 2017

 
                                     At 30 September                 At 31 March 
                                  2017           2017           2017           2017 
                        Note       GBP            GBP            GBP            GBP 
---------------------  -----  ------------  --------------  ------------  -------------- 
 Non-current 
  assets 
 Loans to group 
  undertakings           5                     125,000,000                   125,000,000 
---------------------  -----  ------------  --------------  ------------  -------------- 
 Current assets 
 Debtors                 6       3,655,651                     1,358,519 
---------------------  -----  ------------  --------------  ------------  -------------- 
 Cash and cash 
  equivalents            7       3,468,731                       265,660 
---------------------  -----  ------------  --------------  ------------  -------------- 
                                 7,124,382                     1,624,179 
---------------------  -----  ------------  --------------  ------------  -------------- 
 Current liabilities 
 Current tax 
  payable                          (5,528)                       (3,667) 
---------------------  -----  ------------  --------------  ------------  -------------- 
 Other financial 
  liabilities            8     (6,996,575)                   (1,356,164) 
---------------------  -----  ------------  --------------  ------------  -------------- 
 Net current 
  assets                                           122,279                       264,348 
---------------------  -----  ------------  --------------  ------------  -------------- 
 Total assets 
  less current 
  liabilities                                  125,122,279                   125,264,348 
---------------------  -----  ------------  --------------  ------------  -------------- 
 Non-current 
  liabilities 
 Subordinated 
  guaranteed notes       9                   (125,000,000)                 (125,000,000) 
---------------------  -----  ------------  --------------  ------------  -------------- 
 Net assets                                        122,279                       264,348 
---------------------  -----  ------------  --------------  ------------  -------------- 
 Shareholders' 
  equity 
 Share capital           11                        100,000                       100,000 
---------------------  -----  ------------  --------------  ------------  -------------- 
 Retained earnings                                  22,279                       164,348 
---------------------  -----  ------------  --------------  ------------  -------------- 
 Total shareholders' 
  equity                                           122,279                       264,348 
---------------------  -----  ------------  --------------  ------------  -------------- 
 

Condensed Interim Cash Flow Statement

For the six months ended 30 September 2017

 
                                         6 months       6 months 
                                               to             to 
                                     30 September   30 September 
                                             2017           2016 
                              Note            GBP            GBP 
---------------------------  -----  -------------  ------------- 
 Cash flow from operating 
  activities 
 Profit for the financial 
  period                                    7,931          7,441 
---------------------------  -----  -------------  ------------- 
 Income tax expenses                        1,861          1,860 
---------------------------  -----  -------------  ------------- 
 Operating profit before 
  changes in working 
  capital and provisions                    9,792          9,301 
---------------------------  -----  -------------  ------------- 
 Net (increase) in debtors            (2,297,132)    (2,278,606) 
---------------------------  -----  -------------  ------------- 
 Net increase in other 
  financial liabilities                 5,640,411      5,641,061 
---------------------------  -----  -------------  ------------- 
 Cash generated from 
  operations                            3,353,071      3,371,756 
---------------------------  -----  -------------  ------------- 
 Net cash from operating 
  activities                            3,353,071      3,371,756 
---------------------------  -----  -------------  ------------- 
 Dividends paid                         (150,000)              - 
---------------------------  -----  -------------  ------------- 
 Net cash flow (used                    (150,000)              - 
  in) financing activities 
---------------------------  -----  -------------  ------------- 
 Net increase in cash 
  and cash equivalents                  3,203,071      3,371,756 
---------------------------  -----  -------------  ------------- 
 Cash and cash equivalents 
  at 1 April                              265,660        252,024 
---------------------------  -----  -------------  ------------- 
 Cash and cash equivalents 
  at 30 September             7         3,468,731      3,623,780 
---------------------------  -----  -------------  ------------- 
 

Interest paid and received during the period were as follows:

 
                            6 months       6 months 
                                  to             to 
                        30 September   30 September 
                                2017           2016 
                                 GBP            GBP 
---------------------  -------------  ------------- 
 Interest paid                     -              - 
---------------------  -------------  ------------- 
 Interested received       3,353,071      3,371,756 
---------------------  -------------  ------------- 
 

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 2017

   1.     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 2017, 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 2017. New accounting statements that are effective for the period ending 31 December 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 (2016: GBPnil).

   3.     Profit Before Tax 
 
                                         6 months       6 months 
                                               to             to 
                                     30 September   30 September 
                                             2017           2016 
                                              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 
----------------------------------  -------------  ------------- 
                                        5,560,203      5,650,203 
 Other interest receivable 
  from fellow subsidiary 
  undertaking                                   -            159 
----------------------------------  -------------  ------------- 
                                        5,560,203      5,650,362 
 ii. Charges 
 Interest payable on subordinated 
  guaranteed notes                      5,640,411      5,640,411 
----------------------------------  -------------  ------------- 
 
   4.     Taxation 
 
                                   6 months       6 months 
                                         to             to 
                               30 September   30 September 
                                       2017           2016 
                                        GBP            GBP 
----------------------------  -------------  ------------- 
 Profit before tax                    9,792          9,301 
----------------------------  -------------  ------------- 
 United Kingdom corporation 
  tax at 19% (2016: 20%)              1,861          1,860 
----------------------------  -------------  ------------- 
 
   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 GBP158,725,000 as at 30 September 2017 (31 March 2017: GBP157,312,500). The above loans were valued from quoted market prices of a similar instrument (level 2).

   6.     Debtors 
 
                            At 30 September   At 31 March 
                                       2017          2017 
                                        GBP           GBP 
-------------------------  ----------------  ------------ 
 Amounts owed by parent 
  undertaking                     2,803,489       543,408 
-------------------------  ----------------  ------------ 
 Amounts owed by fellow 
  subsidiary undertaking            852,162       815,111 
-------------------------  ----------------  ------------ 
                                  3,655,651     1,358,519 
-------------------------  ----------------  ------------ 
 
   7.     Cash and Cash Equivalents 

At 30 September 2017 the Company had a loan, repayable on demand of GBP3,468,731 (31 March 2017: GBP265,660) to a fellow subsidiary undertaking.

   8.     Other Financial Liabilities 
 
                     At 30 September   At 31 March 
                                2017          2017 
                                 GBP           GBP 
------------------  ----------------  ------------ 
 Interest payable          6,996,575     1,356,164 
------------------  ----------------  ------------ 
 

Interest is payable on the subordinated guaranteed notes at 9 per cent.

   9.     Subordinated Guaranteed Notes 
 
                                At 30 September   At 31 March 
                                           2017          2017 
                                            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 GBP158,600,000 as at 30 September 2017 (31 March 2017: GBP157,187,500). 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 
                                       2017          2017 
                                        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 
                                            2017          2017 
                                             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                          2,803,489       543,408 
-----------------------------------  -----------  ------------ 
 Amounts owed by fellow 
  subsidiary undertaking                 852,162       815,111 
-----------------------------------  -----------  ------------ 
 Cash and cash equivalents 
  at fellow subsidiary undertaking     3,468,731       265,660 
-----------------------------------  -----------  ------------ 
 

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 
                                           2017           2016 
                                            GBP            GBP 
--------------------------------  -------------  ------------- 
 Interest receivable from 
  parent undertaking                  2,260,081      2,260,081 
--------------------------------  -------------  ------------- 
 Interest receivable from 
  fellow subsidiary undertaking       3,390,122      3,390,281 
--------------------------------  -------------  ------------- 
 

There were no loans made to Directors during the period (2016: none) and no balances outstanding at the period-end (2016: GBPnil). There were no employees of the Company during the period (2016: 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, whose registered office is also at 23bis, Avenue de Messine, 75008 Paris. The accounts are available on the Rothschild & Co website at www.rothschildandco.com.

The Company's immediate parent company is Rothschilds Continuation Limited, incorporated in England and Wales and whose registered office is at New Court, St Swithins Lane, London EC4N 8AL.

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

IR QBLFXDFFBFBZ

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November 30, 2017 11:10 ET (16:10 GMT)

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