TIDMRCHA
RNS Number : 6047B
Rothschilds Continuation Finance CI
21 September 2018
21 September 2018
Rothschilds Continuation Finance (C.I.) Limited
Half-yearly Report for the six-month period ended 30 June
2018
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 June 2018,
GBP125,000,000 perpetual subordinated guaranteed notes were in
issue by the Company.
As reported last year, the Company decided to change its
financial year from 31 March to 31 December. The period being
reported on for this Interim Management Report is the six months to
June 2018. The comparatives are for the six months to 30 September
2017.
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
Condensed Interim Statement of Comprehensive Income
For the six months ended 30 June 2018
6 months 6 months to
to
30 June 2018 30 September
2017
Note GBP GBP
--------------------------------- ------- ------------- -------------
Interest income 5,557,577 5,650,203
--------------------------------- --- ----------------- -------------
Interest expense (5,547,945) (5,640,411)
--------------------------------- --- ----------------- -------------
Administrative expenses (651) -
--------------------------------- --- ----------------- -------------
Profit before tax 3 8,981 9,792
--------------------------------- --- ----------------- -------------
Income tax expense 4 (1,706) (1,861)
--------------------------------- --- ----------------- -------------
Profit for the financial period 7,275 7,931
--------------------------------- --- ----------------- -------------
Other comprehensive income - -
--------------------------------- --- ----------------- -------------
Total comprehensive income for
the financial period 7,275 7,931
--------------------------------- --- ----------------- -------------
Condensed Interim Statement of Changes in Equity
For the six months ended 30 June 2018
Share Capital Retained Total
Earnings
GBP GBP GBP
---------------------------- --------------- ---------- ----------
At 1 January 2018 100,000 26,268 126,268
---------------------------- --------------- ---------- ----------
Total comprehensive income
for the period - 7,275 7,275
---------------------------- --------------- ---------- ----------
At 30 June 2018 100,000 33,543 133,543
---------------------------- --------------- ---------- ----------
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
---------------------------- --------------- ---------- ----------
Condensed Interim Balance Sheet
At 30 June 2018
At 30 June At 31 December
2018 2018 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 4,137,307 6,496,192
----------------------------- ----- ------------ -------------- ------------- --------------
Cash and cash equivalents 7 130,875 3,465,064
----------------------------- ----- ------------ -------------- ------------- --------------
4,268,182 9,961,256
----------------------------- ----- ------------ -------------- ------------- --------------
Current liabilities
Current tax payable (4,502) (2,796)
----------------------------- ----- ------------ -------------- ------------- --------------
Other financial liabilities 8 (4,130,137) (9,832,192)
----------------------------- ----- ------------ -------------- ------------- --------------
Net current assets 133,543 126,268
----------------------------- ----- ------------ -------------- ------------- --------------
Total assets less
current liabilities 125,133,543 125,126,268
----------------------------- ----- ------------ -------------- ------------- --------------
Non-current liabilities
Subordinated guaranteed
notes 9 (125,000,000) (125,000,000)
----------------------------- ----- ------------ -------------- ------------- --------------
Net assets 133,543 126,268
----------------------------- ----- ------------ -------------- ------------- --------------
Shareholders' equity
Share capital 11 100,000 100,000
----------------------------- ----- ------------ -------------- ------------- --------------
Retained earnings 33,543 26,268
----------------------------- ----- ------------ -------------- ------------- --------------
Total shareholders'
equity 133,543 126,268
----------------------------- ----- ------------ -------------- ------------- --------------
Condensed Interim Cash Flow Statement
For the six months ended 30 June 2018
6 months to 6 months to
30 June 2018 30 September
2017
Note GBP GBP
------------------------------------- ----- ------------- -------------
Cash flow from operating activities
Profit for the financial period 7,275 7,931
------------------------------------- ----- ------------- -------------
Income tax expenses 1,706 1,861
------------------------------------- ----- ------------- -------------
Operating profit before changes
in working capital and provisions 8,981 9,792
------------------------------------- ----- ------------- -------------
Net decrease/(increase) in
debtors 2,358,885 (2,297,132)
------------------------------------- ----- ------------- -------------
Net (decrease)/increase in
other financial liabilities (5,702,055) 5,640,411
------------------------------------- ----- ------------- -------------
Cash (utilised)/generated
from operations (3,334,189) 3,353,071
------------------------------------- ----- ------------- -------------
Net cash (used in)/from operating
activities (3,334,189) 3,353,071
------------------------------------- ----- ------------- -------------
Dividends paid - (150,000)
------------------------------------- ----- ------------- -------------
Net cash flow (used in) financing
activities - (150,000)
------------------------------------- ----- ------------- -------------
Net (decrease)/increase in
cash and cash equivalents (3,334,189) 3,203,071
------------------------------------- ----- ------------- -------------
Cash and cash equivalents
at beginning of period 3,465,064 265,660
------------------------------------- ----- ------------- -------------
Cash and cash equivalents
at end of period 7 130,875 3,468,731
------------------------------------- ----- ------------- -------------
Interest paid and received during the period were as
follows:
6 months to 6 months to
30 June 2018 30 September
2017
GBP GBP
--------------------- ------------- -------------
Interest paid 11,250,000 -
--------------------- ------------- -------------
Interested received 7,916,462 3,353,071
--------------------- ------------- -------------
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 June 2018
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 9
months ended 31 December 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 9 months ended
31 December 2017.
2. Directors' Emoluments
None of the Directors received any remuneration in respect of
their services to the Company during the period (2017: GBPnil).
3. Profit before Tax
6 months to 6 months to
30 June 2018 30 September
2017
GBP GBP
----------------------------------------- ------------- -------------
Is stated after
i. Income
Income from loans to group undertakings
Parent undertaking 3,334,546 2,260,081
----------------------------------------- ------------- -------------
Fellow subsidiary undertaking 2,223,031 3,390,122
----------------------------------------- ------------- -------------
5,557,577 5,650,203
ii. Charges
Interest payable on subordinated
guaranteed notes 5,547,945 5,640,411
----------------------------------------- ------------- -------------
4. Taxation
6 months to 6 months to
30 June 2018 30 September
2017
GBP GBP
-------------------------------- ------------- -------------
Profit before tax 8,981 9,792
-------------------------------- ------------- -------------
United Kingdom corporation tax
at 19% 1,706 1,861
-------------------------------- ------------- -------------
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 GBP156,375,000 as at 30 June 2018 (31 December 2017:
GBP160,125,000). The above loans were valued from quoted market
prices of a similar instrument (level 2).
6. Debtors
At 30 June At 31 December
2018 2017
GBP GBP
------------------------------------ ----------- ---------------
Amounts owed by parent undertaking 2,482,384 2,556,486
------------------------------------ ----------- ---------------
Amounts owed by fellow subsidiary
undertaking 1,654,923 3,939,706
------------------------------------ ----------- ---------------
4,137,307 6,496,192
------------------------------------ ----------- ---------------
7. Cash and Cash Equivalents
At 30 June 2018 the Company had a loan, repayable on demand of
GBP130,875 (31 December 2017: GBP3,465,064) to a fellow subsidiary
undertaking.
8. Other Financial Liabilities
At 30 June At 31 December
2018 2017
GBP GBP
------------------ ----------- ---------------
Interest payable 4,130,137 9,832,192
------------------ ----------- ---------------
Interest is payable on the subordinated guaranteed notes at 9
per cent.
9. Subordinated Guaranteed Notes
At 30 June At 31 December
2018 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
GBP156,250,000 as at 30 June 2018 (31 December 2017:
GBP160,000,000). 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 1yr - 5yr >5 yr Total
- 3m
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 June At 31 December
2018 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.
Amounts receivable from related parties at the period end were
as follows:
At 30 June At 31 December
2018 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 2,482,384 2,556,486
---------------------------------------------- ----------- ---------------
Amounts owed by fellow subsidiary undertaking 1,654,923 3,939,706
---------------------------------------------- ----------- ---------------
Cash at fellow subsidiary undertaking 130,875 3,465,064
---------------------------------------------- ----------- ---------------
Amounts recognised in the statement of comprehensive income in
respect of related party transactions were as follows:
6 months to 6 months
30 June to
2018 30 September
2017
GBP GBP
-------------------------------------------- ----------- --------------
Interest receivable from parent undertaking 3,334,546 2,260,081
-------------------------------------------- ----------- --------------
Interest receivable from fellow subsidiary
undertaking 2,223,031 3,390,122
-------------------------------------------- ----------- --------------
Amounts recognised directly in equity in respect of related
party transactions were as follows:
6 months to 6 months to
30 June 30 September
2018 2017
GBP GBP
---------------------------------------- ----------- -------------
Dividend payable to parent undertaking - 150,000
---------------------------------------- ----------- -------------
There were no loans made to Directors during the period (6
months to 30 September 2017: none) and no balances outstanding at
the period end (6 months to 30 September 2017: GBPnil). There were
no employees of the Company during the period (6 months to 30
September 2017: 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 Swithin's 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 news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
IR ZFLFLVKFEBBX
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