TIDMRCHA
RNS Number : 7378J
Rothschilds Continuation Finance CI
30 June 2017
Rothschilds Continuation Finance (C.I.) Limited
Report of the Directors and Financial Statements for the year
ended
31 March 2017
Report of the Directors
The Directors present their Directors' report and financial
statements for the year ended 31 March 2017.
Principal Activities and Business Review
The principal activity of Rothschilds Continuation Finance
(C.I.) Limited (the Company) is the raising of finance for the
purpose of lending it to other companies, including members of the
Rothschild Concordia SAS group. The results for the year are set
out in the Statement of Comprehensive Income on page 7.
As at 31 March 2017, GBP125,000,000 perpetual subordinated 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.
Principal 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.
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.
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, 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.
Currency risk is not considered significant as all material
foreign currency balances and cash flows are matched.
Directors
The Directors who held office during the year were as
follows:
Anthony Coghlan
Mark Crump
David Oxburgh
Directors' Indemnity
The Company has provided qualifying third-party indemnities for
the benefit of its Directors. These were provided during the period
and remain in force at the date of this report
Dividends
The Directors do not recommend the payment of a dividend (2016:
GBPnil).
Auditor
Pursuant to Section 487 of the Companies Act 2006, the auditor
will be deemed to be reappointed and KPMG LLP will therefore
continue in office.
Audit Information
The Directors who held office at the date of approval of this
Report of the Directors confirm that, so far as they are each
aware, there is no relevant audit information of which the
Company's auditor is unaware, and each Director has taken all the
steps that he or she ought to have taken as a Director to make
himself or herself aware of any relevant audit information and to
establish that the Company's auditors are aware of that
information.
By Order of the Board
Anthony Coghlan Peter Barbour
Director Director
23 June 2017
Statement of Directors' Responsibilities
in Respect of the Directors' Report and the Financial
Statements
The Directors are responsible for preparing the Directors'
Report and the financial statements in accordance with applicable
law and regulations.
Company law requires the directors to prepare financial
statements for each financial year. Under that law they have
elected to prepare the financial statements in accordance with
International Financial Reporting Standards (IFRSs) as adopted by
the EU and applicable law.
The financial statements are required by law to give a true and
fair view of the state of affairs of the company and of the profit
or loss of the company for that period.
In preparing these financial statements, the Directors are
required to:
-- select suitable accounting policies and then
apply them consistently;
-- make judgements and estimates that are reasonable
and prudent;
-- state whether applicable International Financial
Reporting Standards as adopted by the European
Union have been followed, subject to any material
departures disclosed and explained in the financial
statements; and
-- prepare the financial statements on the going
concern basis unless it is inappropriate to
presume that the Company will continue in business.
The Directors are responsible for keeping proper accounting
records which disclose with reasonable accuracy at any time the
financial position of the company and to enable them to ensure that
the financial statements comply with The Companies (Guernsey) Law,
2008. They have general responsibility for taking such steps as are
reasonably open to them to safeguard the assets of the company and
to prevent and detect fraud and other irregularities.
By Order of the Board
Anthony Coghlan Peter Barbour
Director Director
23 June 2017
Independent Auditor's Report to the Members of Rothschilds
Continuation Finance (C.I.) Limited
We have audited the financial statements (the "financial
statements") of Rothschilds Continuation Finance (C.I.) Limited
(the "Company") for the year ended 31 March 2017 which comprise the
Statement of Comprehensive Income, the Balance Sheet, Statement of
Changes in Equity, the Cash Flow Statement and the related notes.
The financial reporting framework that has been applied in their
preparation is applicable law and International Financial Reporting
Standards as adopted by the European Union.
This report is made solely to the Company's members, as a body,
in accordance with section 262 of the Companies (Guernsey) Law,
2008. Our audit work has been undertaken so that we might state to
the Company's members those matters we are required to state to
them in an auditor's report and for no other purpose. To the
fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the Company and the Company's
members as a body, for our audit work, for this report, or for the
opinions we have formed.
Respective Responsibilities of Directors and Auditor
As explained more fully in the Statement of Directors'
Responsibilities set out on page 4 the directors are responsible
for the preparation of the financial statements and for being
satisfied that they give a true and fair view. Our responsibility
is to audit and express an opinion on the financial statements in
accordance with applicable law and International Standards on
Auditing (UK and Ireland). Those standards require us to comply
with the Auditing Practices Board's Ethical Standards for
Auditors.
Scope of the audit of the financial statements
An audit involves obtaining evidence about the amounts and
disclosures in the financial statements sufficient to give
reasonable assurance that the financial statements are free from
material misstatement, whether caused by fraud or error. This
includes an assessment of: whether the accounting policies are
appropriate to the Company's circumstances and have been
consistently applied and adequately disclosed; the reasonableness
of significant accounting estimates made by the Board of Directors;
and the overall presentation of the financial statements. In
addition we read all the financial and non-financial information in
the Report of the Directors to identify material inconsistencies
with the audited financial statements and to identify any
information that is apparently materially incorrect based on, or
materially inconsistent with, the knowledge acquired by us in the
course of performing the audit. If we become aware of any apparent
material misstatements or inconsistencies we consider the
implications for our report.
Opinion on financial statements
In our opinion the financial statements:
give a true and fair view of the state of
the Company's affairs as at 31 March 2017
and of its profit for the year then ended;
are in accordance with International Financial
Reporting Standards as adopted by the European
Union; and
comply with the Companies (Guernsey) Law
2008.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters
where the Companies (Guernsey) Law 2008 requires us to report to
you if, in our opinion:
the Company has not kept proper accounting
records, or
the financial statements are not in agreement
with the accounting records; or
we have not received all the information
and explanations, which to the best of our
knowledge and belief are necessary for the
purpose of our audit.
Pamela McIntyre (Senior Statutory Auditor)
for and on behalf of KPMG LLP, Statutory Auditor
Chartered Accountants
15 Canada Square
London E14 5GL
23 June 2017
Statement of Comprehensive Income
For the year ended 31 March 2017
2017 2016
Notes GBP GBP
--------------------------- ------ ------------- --------------------
Interest income 11,238,815 11,305,245
--------------------------- ------ ------------- --------------------
Interest expense (11,219,178) (11,280,822)
--------------------------- ------ ------------- --------------------
Operating profit 19,637 24,423
--------------------------- ------ ------------- --------------------
Administrative expenses (1,300) (650)
--------------------------- ------ ------------- --------------------
Profit before tax 4 18,337 23,773
--------------------------- ------ ------------- --------------------
Income tax expense 5 (3,667) (4,755)
--------------------------- ------ ------------- --------------------
Profit for the financial
year 14,670 19,018
--------------------------- ------ ------------- --------------------
Other comprehensive income - -
--------------------------- ------ ------------- --------------------
Total comprehensive income
for the financial year 14,670 19,018
--------------------------- ------ ------------- --------------------
All amounts are in respect of continuing activities.
Balance Sheet
At 31 March 2017
2017 2017 2016 2016
Notes GBP GBP GBP GBP
------------------------ ------ ------------ -------------- ------------ --------------
Non-current assets
Loans to group
undertakings 6 125,000,000 125,000,000
------------------------ ------ ------------ -------------- ------------ --------------
Current assets
Other financial
assets 7 1,358,519 1,389,395
------------------------ ------ ------------ -------------- ------------ --------------
Cash and cash
equivalents 8 265,660 252,024
------------------------ ------ ------------ -------------- ------------ --------------
1,624,179 1,641,419
------------------------ ------ ------------ -------------- ------------ --------------
Current liabilities
Current tax payable (3,667) (4,755)
------------------------ ------ ------------ -------------- ------------ --------------
Other financial
liabilities 9 (1,356,164) (1,386,986)
------------------------ ------ ------------ -------------- ------------ --------------
Net current assets 264,348 249,678
------------------------ ------ ------------ -------------- ------------ --------------
Total assets
less current
liabilities 125,264,348 125,249,678
------------------------ ------ ------------ -------------- ------------ --------------
Non-current liabilities
Subordinated
guaranteed notes 10 (125,000,000) (125,000,000)
------------------------ ------ ------------ -------------- ------------ --------------
Net assets 264,348 249,678
------------------------ ------ ------------ -------------- ------------ --------------
Shareholders'
equity
Share capital 11 100,000 100,000
------------------------ ------ ------------ -------------- ------------ --------------
Retained earnings 164,348 149,678
------------------------ ------ ------------ -------------- ------------ --------------
Total shareholders'
equity 264,348 249,678
------------------------ ------ ------------ -------------- ------------ --------------
Approved by the Board of Directors and signed on its behalf on
23 June 2017 by:
Anthony Coghlan Peter Barbour
Director Director
Statement of Changes in Equity
For the year ended 31 March 2017
Share Retained Total Equity
Capital Earnings
GBP GBP GBP
-------------------------- -------- --------- ------------
At 1 April 2016 100,000 149,678 249,678
-------------------------- -------- --------- ------------
Total comprehensive
income for the financial
year - 14,670 14,670
-------------------------- -------- --------- ------------
At 31 March 2017 100,000 164,348 264,348
-------------------------- -------- --------- ------------
At 1 April 2015 100,000 130,660 230,660
-------------------------- -------- --------- ------------
Total comprehensive
income for the financial
year - 19,018 19,018
========================== ======== ========= ============
At 31 March 2016 100,000 149,678 249,678
-------------------------- -------- --------- ------------
Cash Flow Statement
For the year ended 31 March 2017
2017 2016
Notes GBP GBP
----------------------------------- ----- -------- ---------
Cash flow from operating
activities
Profit for the financial
year 14,670 19,018
----------------------------------- ----- -------- ---------
Income tax expense 3,667 4,755
----------------------------------- ----- -------- ---------
Operating profit before changes
in working capital and provisions 18,337 23,773
-------- ---------
Net decrease/(increase) in
debtors 30,876 (49,401)
----------------------------------- ----- -------- ---------
Net (decrease)/increase in
other financial liabilities (30,822) 30,821
----------------------------------- ----- -------- ---------
Cash generated from operations 18,391 5,193
----------------------------------- ----- -------- ---------
Income taxes paid (4,755) (5,104)
----------------------------------- ----- -------- ---------
Net cash flow from operating
activities 13,636 89
----------------------------------- ----- -------- ---------
Net increase in cash and
cash equivalents 13,636 89
----------------------------------- ----- -------- ---------
Cash and cash equivalents
at 1 April 252,024 251,935
----------------------------------- ----- -------- ---------
Cash and cash equivalents
at 31 March 8 265,660 252,024
----------------------------------- ----- -------- ---------
Interest paid and received during the year were as follows :
2017 2016
GBP GBP
------------------ ---------- -----------
Interest paid 11,250,000 11,250,000
------------------ ---------- -----------
Interest received 11,269,691 11,255,844
------------------ ---------- -----------
Notes to the Financial Statements
(forming part of the Financial Statements)
For the year ended 31 March 2017
1. Accounting Policies
Rothschilds Continuation Finance (C.I.) Limited ("the Company")
is a private limited company incorporated in Guernsey. The
principal accounting policies which have been consistently adopted
in the presentation of the financial statements are as follows:
a. Basis of preparation
The financial statements are prepared and approved by the
Directors in accordance with International Financial Reporting
Standards ("IFRS") and International Financial Reporting
Interpretations Committee ("IFRIC") interpretations, endorsed by
the European Union ("EU") and with those requirements of the
Companies (Guernsey) Law 2008 applicable to companies reporting
under IFRS. The financial statements are prepared under the
historical cost accounting rules and presented in its sterling,
unless otherwise stated. The maturities of the Company's
liabilities are matched with the maturities of its assets. There
is, therefore a strong expectation that the Company has adequate
resources to continue in operational existence for the foreseeable
future and accordingly, the financial statements have been prepared
on a going concern basis.The financial statements are presented in
sterling, unless otherwise stated.
Standards affecting the financial statements
In the current year, there have been no new or revised Standards
and Interpretations that have been adopted that have materially
affected the amounts reported in these financial statements.
Future accounting developments
A number of new standards, amendments to standards and
interpretations are effective for accounting periods ending after
31 March 2017 and therefore have not been applied in preparing
these financial statements. None of these are expected to have a
significant effect on future financial statements.
b. Interest receivable and payable
Interest is recognised in the statement of comprehensive income
using the effective interest rate method.
c. Taxation
Tax payable on profits is recognised in the statement of
comprehensive income.
d. Cash and cash equivalents
For the purposes of the cash flow statement, cash and cash
equivalents comprise balances with other group companies that are
readily convertible to cash and are subject to an insignificant
risk of changes in value.
e. Capital management
The Company is not subject to any externally imposed capital
requirements. It is dependent on Rothschilds Continuation Limited
(the parent undertaking) to provide capital resources which are
therefore managed on a group basis.
f. Financial assets and liabilities
Financial assets and liabilities are recognised on trade date
and derecognised on either trade date, if applicable, or on
maturity or repayment.
On initial recognition, IAS 39 requires that financial assets be
classified into the following categories; at fair value through
profit or loss, loans and receivables, held-to-maturity
investments, or available for sale investments. The company does
not hold any assets that are classified as held-to-maturity or
available for sale.
g. Loans and advances
Loans and advances are non-derivative financial assets with
fixed or determinable payments that are not quoted in an active
market.
Loans and advances are intitially recorded at fair value,
including any transaction costs and are subsequently measured at
amortised cost using the effective interest rate method. Gains and
losses arising on derecognition of loans and advances are
recognised in other operating income.
h. Accounting Judgements and estimates
The preparation of financial statements in accordance with IFRS
requires the use of certain critical accounting estimates. It also
requires management to exercise judgement in applying the
accounting policies.
2. Financial Risk Management
The Company follows the financial risk management policies of
the parent undertaking, Rothschilds Continuation Limited. The key
risks arising from the Company's activities involving financial
instruments, which are monitored at the group level, are as
follows:
- Credit risk - the risk of loss arising from client or
counterparty default is not considered a significant risk to the
Company as all asset balances are with other group companies as
detailed in note 12 Related Party Transactions.
- Market risk - exposure to changes in market variables such as
interest rates, currency exchange rates, equity and debt prices is
not considered significant as the terms of financial assets
substantially match those of financial liabilities.
- Liquidity risk - the risk that the Company is unable to meet
its obligations as they fall due or that it is unable to fund its
commitments is not considered significant as material cash inflows
and outflows from financial assets and liabilities are
substantially matched.
3. Directors' Emoluments
None of the Directors received any remuneration in respect of
their services to the Company during the year (2016: GBPnil).
4. Profit Before Tax
2017 2016
GBP GBP
-------------------------------------- ------------ ------------
Is stated after
i. Income
Interest from loans to Group
undertakings
Parent undertaking 4,495,462 4,520,163
-------------------------------------- ------------ ------------
Fellow subsidiary undertaking 6,743,194 6,780,244
-------------------------------------- ------------ ------------
11,238,656 11,300,407
-------------------------------------- ------------ ------------
Other interest receivable
from fellow subsidiary undertaking 159 4,838
-------------------------------------- ------------ ------------
11,238,815 11,305,245
-------------------------------------- ------------ ------------
ii. Charges
Interest payable on subordinated
guaranteed notes 11,219,178 11,280,282
-------------------------------------- ------------ ------------
The amount receivable by the auditors and their associates in
respect of the audit of these financial statements is GBP3,511
(2016: GBP3,902). The audit fee is paid on a group basis by N M
Rothschild & Sons Limited.
5. Taxation
2017 2016
GBP GBP
----------------------------------------------- -------- --------
Profit before tax 18,337 23,773
----------------------------------------------- -------- --------
United Kingdom corporation tax at 20% (2016:
20%) 3,667 4,755
----------------------------------------------- -------- --------
6. Loans to Group Undertakings
Subordinated
Perpetual Loans
to Group Undertakings
GBP
------------------------- ---------------------
At the beginning and end
of the year 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 GBP157,312,500 as at 31 March 2017 (2016: GBP148,668,750). The
fair value was estimated using market price at the balance sheet
date for similar instruments (level 2) .
7. Other Financial Assets
2017 2016
GBP GBP
------------------------ --------- ----------
Amounts owed by parent
undertaking 543,408 555,758
------------------------ --------- ----------
Amounts owed by fellow
subsidiary undertaking 815,111 833,637
------------------------ --------- ----------
1,358,519 1,389,395
------------------------ --------- ----------
8. Cash and Cash Equivalents
At the year end the Company held cash of GBP265,660 (2016:
GBP252,024) at a fellow subsidiary undertaking. The Company
receives interest at 0%.
9. Other Financial Liabilities
2017 2016
GBP GBP
----------------- --------- ----------
Interest payable 1,356,164 1,386,986
----------------- --------- ----------
Interest payable on the subordinated guaranteed notes is fixed
at 9 per cent.
10. Subordinated Guaranteed Notes
2017 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
GBP157,187,500 as at 31 March 2017 (2016: GBP148,543,750). The fair
value was estimated using market price at the balance sheet date
(level 1).
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 are shown up to five years only, with the prinicipal
balance being shown in the > 5yr column.
Demand Demand-3m 3m - 1yr - > 5yr Total
1yr 5yr
GBP GBP GBP GBP GBP GBP
----------- ------ ---------- --------- ---------- ----------- -----------
Loan notes
in issue - 2,804,795 8,445,205 45,000,000 125,000,000 181,250,000
----------- ------ ---------- --------- ---------- ----------- -----------
11. Share Capital
2017 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 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 year end were as
follows:
2017 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 543,408 555,758
-------------------------------------- ---------- -----------
Amounts owed by fellow subsidiary
undertaking 815,111 833,637
-------------------------------------- ---------- -----------
Cash at fellow subsidiary undertaking 265,660 252,024
-------------------------------------- ---------- -----------
Amounts recognised in the statement of comprehensive income in
respect of related party transactions were as follows:
2017 2016
GBP GBP
-------------------------------- --------- ----------
Interest receivable from parent
undertaking 4,495,462 4,520,163
-------------------------------- --------- ----------
Interest receivable from fellow
subsidiary undertaking 6,743,353 6,780,244
-------------------------------- --------- ----------
There were no loans made to Directors during the year (2016:
none) and no balances outstanding at year-end (2016: GBPnil). There
were no employees of the Company during the year (2016: none).
13. Parent Undertaking and Ultimate Holding Company
The largest group in which the results of the Company are
consolidated is that headed by Rothschild Concordia SAS,
incorporated in France, and whose registered office is at 23bis,
Avenue de Messine, 75008 Paris. 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 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
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