TIDM68WN
RNS Number : 6112R
Rothschilds Continuation FinancePLC
12 December 2016
Rothschilds Continuation Finance PLC
Half-yearly Report for the six-month period ended 30 September
2016
Interim Management Report
Summary of Important Events
Rothschilds Continuation Finance PLC (the Company) is a
wholly-owned subsidiary of N M Rothschild & Sons Limited (NMR)
and was incorporated on 30 August 2000 to operate as a finance
vehicle for the benefit of NMR and its subsidiaries.
The principal activity of the Company is the raising of finance
for the purpose of lending it to NMR and other companies in NMR's
group (the Group). The Company raises finance typically by the
issue of notes guaranteed by NMR, both under the terms of its
GBP2,000,000,000 Euro Medium Term Note Programme, which was
established on 20 February 2001, and separately as perpetual
subordinated notes. Note issues are made from time to time,
depending on the Group's funding requirements. As at 30th September
2016, only perpetual subordinated 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 the parent undertaking, NMR.
The Company's market risk exposure is limited to interest rate
risk and currency exchange rate movements. Exposure to interest
rate movements on the perpetual subordinated note issues has been
passed to NMR, as the issue proceeds have been lent onwards to NMR
at a fixed margin of one basis point 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 as the
funds on-lent have the same maturity dates as the notes issued. The
Company's principal credit risk is with NMR. Since notes issued by
the Company have been guaranteed by, and funds have been on-lent
to, NMR, the Company's ability to meet its obligations in respect
of notes issued by it is affected by NMR'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 511,946 583,692
------------------------------ ----- ------------- -------------
Interest expense (506,659) (575,884)
------------------------------ ----- ------------- -------------
Foreign exchange translation
gains/(losses) 16,805 (322)
------------------------------ ----- ------------- -------------
Profit before tax 22,092 7,486
------------------------------ ----- ------------- -------------
Taxation 3 (4,416) (1,497)
------------------------------ ----- ------------- -------------
Profit for the financial
period 17,676 5,989
------------------------------ ----- ------------- -------------
Other comprehensive income - -
------------------------------ ----- ------------- -------------
Total comprehensive income
for the financial period 17,676 5,989
------------------------------ ----- ------------- -------------
Condensed Interim Statement of Changes in Equity
For the six months ended 30 September 2016
Retained
Share Capital Earnings Total
GBP GBP GBP
---------------------------- ---------------- ---------- --------
At 1 April 2016 100,000 171,009 271,009
---------------------------- ---------------- ---------- --------
Total comprehensive income
for the period - 17,676 17,676
---------------------------- ---------------- ---------- --------
At 30 September 2016 100,000 188,685 288,685
---------------------------- ---------------- ---------- --------
At 1 April 2015 100,000 151,482 251,482
---------------------------- ---------------- ---------- --------
Total comprehensive income
for the period - 5,989 5,989
---------------------------- ---------------- ---------- --------
At 30 September 2015 100,000 157,471 257,471
---------------------------- ---------------- ---------- --------
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
Loan to parent
undertaking 4 129,154,469 118,732,883
--------------------------- ----- ---------- -------------- ---------- --------------
Current assets
Cash and cash equivalents 6 295,974 274,077
--------------------------- ----- ---------- -------------- ---------- --------------
Other financial
assets 5 110,499 183,211
--------------------------- ----- ---------- -------------- ---------- --------------
406,473 457,288
--------------------------- ----- ---------- -------------- ---------- --------------
Current liabilities
Current tax liability (9,298) (4,882)
--------------------------- ----- ---------- -------------- ---------- --------------
Other financial
liabilities 7 (108,490) (181,397)
--------------------------- ----- ---------- -------------- ---------- --------------
Net current assets 288,685 271,009
--------------------------- ----- ---------- -------------- ---------- --------------
Total assets less
current liabilities 129,443,154 119,003,892
--------------------------- ----- ---------- -------------- ---------- --------------
Non-current liabilities
Debt securities
in issue 8 (129,154,469) (118,732,883)
--------------------------- ----- ---------- -------------- ---------- --------------
Net assets 288,685 271,009
--------------------------- ----- ---------- -------------- ---------- --------------
Shareholders' equity
Share capital 10 100,000 100,000
--------------------------- ----- ---------- -------------- ---------- --------------
Retained earnings 188,685 171,009
--------------------------- ----- ---------- -------------- ---------- --------------
Total shareholders'
equity 288,685 271,009
--------------------------- ----- ---------- -------------- ---------- --------------
Condensed Interim Cash Flow Statement
For the six months ended 30 September 2016
6 months to 6 months to
30 September 30 September
2016 2015
Note GBP GBP
--------------------------------- ----- ------------- -------------
Cash flow from operating
activities
Net profit for the financial
period 17,676 5,989
--------------------------------- ----- ------------- -------------
Taxation 4,416 1,497
--------------------------------- ----- ------------- -------------
Operating profit before
changes in working capital
and provisions 22,092 7,486
--------------------------------- ----- ------------- -------------
Cash generated from operations 22,092 7,486
--------------------------------- ----- ------------- -------------
Net cash from operating
activities 22,092 7,486
--------------------------------- ----- ------------- -------------
Net (increase) in loans (10,348,874) (1,753,144)
--------------------------------- ----- ------------- -------------
Net increase in debt securities
in issue 10,348,679 1,753,057
--------------------------------- ----- ------------- -------------
Net cash flow (used in)
financing activities (195) (87)
--------------------------------- ----- ------------- -------------
Net increase in cash and
cash equivalents 21,897 7,399
--------------------------------- ----- ------------- -------------
Cash and cash equivalents
at 1 April 274,077 247,646
--------------------------------- ----- ------------- -------------
Cash and cash equivalents
at 30 September 6 295,974 255,045
--------------------------------- ----- ------------- -------------
Interest receipts and payments during the period were as
follows:
6 months to 6 months to
30 September 30 September
2016 2015
GBP GBP
------------------------------- ------------- -------------
Interest received from parent
undertaking 584,658 510,232
------------------------------- ------------- -------------
Interest paid to note holders 579,566 502,511
------------------------------- ------------- -------------
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
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 equivalents policy. The Company's
immediate parent, 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 parent company are no longer
classified as being held with a bank, but rather
as a loan, repayable on demand with the parent. The
liquidity of these balances remains unaffected and
therefore still meet the definition of cash and cash
equivalent in accordance with IAS 7. New accounting
statements 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. Taxation
6 months to 6 months to
30 September 30 September
2016 2015
GBP GBP
-------------------------------- ------------- -------------
Profit before tax 22,092 7,486
-------------------------------- ------------- -------------
United Kingdom corporation tax
at 20% (2015: 20%) 4,418 1,497
-------------------------------- ------------- -------------
Prior year adjustment (2) -
-------------------------------- ------------- -------------
Tax charged for the period 4,416 1,497
-------------------------------- ------------- -------------
4. Non-current Assets: Loan to Parent Undertaking
At 30 September At 31 March
2016 2016
GBP GBP
------------------------------------ ---------------- ------------
Amounts owed by parent undertaking
EUR150,000,000 Perpetual floating
rate subordinated loan 129,154,469 118,732,883
------------------------------------ ---------------- ------------
Due
In 5 years or more 129,154,469 118,732,883
------------------------------------ ---------------- ------------
The interest rate charged on the EUR150 million loan is
EUR-TEC10-CNO plus 36 basis points, capped at 9.01 per cent, fixed
on 05 February, 05 May, 05 August and 05 November each year.
The effective interest rate on the above loan was 0.55% (31
March 2016: 1.01%) and the fair value was GBP63,683,485 as at 30
September 2016 (31 March 2016: GBP53,014,232). The above loans were
valued from quoted market prices of a similar intrument (level
2)
5. Current Assets: Other Financial Assets
At 30 September At 31 March
2016 2016
GBP GBP
------------------------------------ ---------------- ------------
Amounts owed by parent undertaking
Interest receivable 110,499 183,211
------------------------------------ ---------------- ------------
6. Cash and Cash Equivalents
At 30 September 2016 the Company had a loan, repayable on demand
of GBP295,974 (31 March 2016: GBP274,077) at the parent
undertaking. Of this balance, GBP86,865 (31 March 2016: GBP86,811)
was held in a sterling account on which the effective interest rate
at 30 September 2016 was 0.0% (31 March 2016: 0.25%). The
equivalent of GBP209,109 (31 March 2016: GBP187,266) was held in a
euro account on which the effective interest rate at 30 September
2016 was 0.0% (31 March 2016: 0.0%).
7. Current Liabilities: Other Financial Liabilities
At 30 September At 31 March
2016 2016
GBP GBP
------------------ ---------------- ------------
Interest payable 108,490 181,397
------------------ ---------------- ------------
8. Non-current Liabilities: Debt Securities in Issue
At 30 September At 31 March
2016 2016
GBP GBP
----------------------------- ---------------- ------------
Medium Term Notes
Perpetual Subordinated Notes
EUR150,000,000 129,154,469 118,732,883
----------------------------- ---------------- ------------
Repayable
In 5 years or more 129,154,469 118,732,883
----------------------------- ---------------- ------------
The interest rate payable on the EUR150 million Perpetual
Subordinated Notes is EUR-TEC10-CNO plus 35 basis points, capped at
9 per cent, fixed on 05 February, 05 May, 05 August and 05 November
each year. From and including the interest payment date falling in
August 2016 and every interest payment date thereafter, the Company
may redeem all (but not some only) of the Perpetual Subordinated
Notes at their principal amount.
The effective interest rate on the above notes at 30 September
2016 was 0.54% (31 March 2016: 1.00%) and their fair value was
GBP63,489,754 (31 March 2016: GBP52,836,133). The fair value was
derived from the quoted market price at the balance sheet date
(level 1).
9. Maturity of Financial Liabilities
The following table shows contractual cash flows payable by the
Company on the perpetual subordinated notes, analysed by remaining
contractual maturity at the balance sheet date. Interest cash flows
on perpetual subordinated notes are shown up to five years only,
with the principal balance being shown in the perpetual column.
3 months
or less 1 year 5 years
but not or less or less
payable but over but over
on
Demand demand 3 months 1 year Perpetual Total
GBP GBP GBP GBP GBP GBP
----------------------- ------- --------- --------- ----------- ------------- -------------
Perpetual subordinated
notes - 174,359 523,076 2,789,737 129,154,469 132,641,641
----------------------- ------- --------- --------- ----------- ------------- -------------
10. Share Capital
At 30 September At 31 March
2016 2016
GBP GBP
--------------------------------- ---------------- ------------
Authorised, allotted, called
up and fully paid
100,000 Ordinary shares of GBP1
each 100,000 100,000
--------------------------------- ---------------- ------------
11. 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, subsidiaries and fellow subsidiaries.
Amounts receivable from related parties at the period end were
as follows:
At 30 September At 31 March
2016 2016
GBP GBP
------------------------------ ---------------- ------------
Cash and cash equivalents at
parent undertaking 295,974 274,077
------------------------------ ---------------- ------------
Accrued interest receivable
from parent undertaking 110,499 183,211
------------------------------ ---------------- ------------
Loans to parent undertaking 129,154,469 118,732,883
------------------------------ ---------------- ------------
Amounts recognised in the condensed statement of comprehensive
income in respect of related party transactions were as
follows:
6 months to 6 months to
30 September 30 September
2016 2015
GBP GBP
----------------------------- ------------- -------------
Interest income from parent
undertaking 511,946 583,692
----------------------------- ------------- -------------
There were no loans made to Directors during the year (2015:
none) and no balances outstanding at the period end (2015: GBPnil).
The Directors did not receive any remuneration in respect of their
services to the Company. There were no employees of the Company
during the period (2015: none).
12. 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 N M Rothschild &
Sons Limited.
The Company's registered office is located at New Court, St
Swithin's Lane, London, EC4N 8AL.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR LLFSEFRLFLIR
(END) Dow Jones Newswires
December 12, 2016 10:48 ET (15:48 GMT)
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