TIDMRCHA
RNS Number : 2143E
Rothschilds Continuation Finance CI
14 July 2016
Rothschilds Continuation Finance (C.I.) Limited
Report of the Directors and Financial Statements for the year
ended
31 March 2016
Report of the Directors
The Directors present their Directors' report and financial
statements for the year ended 31 March 2016.
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 2016, GBP125,000,000 perpetual subordinated notes
were in issue by the Company.
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 NM 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.
On 23 June 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.
Directors
The Directors who held office during the year were as
follows:
Peter Barbour appointed 21 July 2015
Anthony Chapman resigned 21 July 2015
Anthony Coghlan
Mark Crump
Andrew Didham resigned 21 July 2015
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 (2015:
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
13 July 2016
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.
Under Company law the directors must not approve the financial
statements unless they are satisfied that they 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 they have been prepared in accordance with IFRS
as adopted by the EU; 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 adequate accounting
records that are sufficient to show and explain the Company's
transactions and disclose with reasonable accuracy at any time the
financial position of the Company and 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.
The Directors confirm that to the best of their knowledge:
- the financial statements, prepared in accordance with IFRS
as adopted by the EU, give a true and fair view of the assets,
liabilities, financial position and profit and loss of the
Company; and
- the Report of the Directors includes a fair view of the development
and performance of the business and the position of the Company,
together with a description of the principal risks and uncertainties
it faces.
By Order of the Board
Anthony Coghlan Peter Barbour
Director Director
13 July 2016
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.) Ltd (the
"Company") for the year ended 31st March 2016 which comprise the
Statement of Comprehensive Income, the Balance Sheet, the 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 EU.
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 pages 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 amount 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. 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 2016 and of its profit for
the year then ended;
- are in accordance with International Financial Reporting
Standards as adopted by the EU; and
- comply with The Companies (Guernsey) Law 2008.
Ravi Lamba (Senior Statutory Auditor)
for and on behalf of KPMG LLP, Statutory Auditor
Chartered Accountants
15 Canada Square
London E14 5GL
14 July 2016
Statement of Comprehensive Income
For the year ended 31 March 2016
2016 2015
Notes GBP GBP
------------------------------- ------ ------------- -------------
Interest income 11,305,245 11,274,306
------------------------------- ------ ------------- -------------
Interest expense (11,280,822) (11,250,000)
------------------------------- ------ ------------- -------------
Operating profit 24,423 24,306
------------------------------- ------ ------------- -------------
Administrative expenses (650) -
------------------------------- ------ ------------- -------------
Profit before tax 4 23,773 24,306
------------------------------- ------ ------------- -------------
Income tax expense 5 (4,755) (5,104)
------------------------------- ------ ------------- -------------
Profit for the financial year 19,018 19,202
------------------------------- ------ ------------- -------------
Other comprehensive income - -
------------------------------- ------ ------------- -------------
Total comprehensive income for
the financial year 19,018 19,202
------------------------------- ------ ------------- -------------
Balance Sheet
At 31 March 2016
2016 2016 2015 2015
Notes GBP GBP GBP GBP
---------------------------- ------ ------------ -------------- ------------ --------------
Non-current assets
Loans to group undertakings 6 125,000,000 125,000,000
---------------------------- ------ ------------ -------------- ------------ --------------
Current assets
Debtors 7 1,389,395 1,339,994
---------------------------- ------ ------------ -------------- ------------ --------------
Cash and cash equivalents 8 252,024 251,935
---------------------------- ------ ------------ -------------- ------------ --------------
1,641,419 1,591,929
---------------------------- ------ ------------ -------------- ------------ --------------
Current liabilities
Current tax payable (4,755) (5,104)
---------------------------- ------ ------------ -------------- ------------ --------------
Other financial liabilities 9 (1,386,986) (1,356,165)
---------------------------- ------ ------------ -------------- ------------ --------------
Net current assets 249,678 230,660
---------------------------- ------ ------------ -------------- ------------ --------------
Total assets less
current liabilities 125,249,678 125,230,660
---------------------------- ------ ------------ -------------- ------------ --------------
Non-current liabilities
Subordinated guaranteed
notes 10 (125,000,000) (125,000,000)
---------------------------- ------ ------------ -------------- ------------ --------------
Net assets 249,678 230,660
---------------------------- ------ ------------ -------------- ------------ --------------
Shareholders' equity
Share capital 11 100,000 100,000
---------------------------- ------ ------------ -------------- ------------ --------------
Retained earnings 149,678 130,660
---------------------------- ------ ------------ -------------- ------------ --------------
Total shareholders'
equity 249,678 230,660
---------------------------- ------ ------------ -------------- ------------ --------------
Approved by the Board of Directors and signed on its behalf on
13 July 2016 by:
Anthony Coghlan Peter Barbour
Director Director
Statement of Changes in Equity
For the year ended 31 March 2016
Share Capital Retained Earnings Total Equity
GBP GBP GBP
--------------------------- ------------- ----------------- ------------
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
--------------------------- ------------- ----------------- ------------
At 1 April 2014 100,000 111,458 211,458
--------------------------- ------------- ----------------- ------------
Total comprehensive income
for the financial year - 19,202 19,202
=========================== ============= ================= ============
At 31 March 2015 100,000 130,660 230,660
--------------------------- ------------- ----------------- ------------
Cash Flow Statement
For the year ended 31 March 2016
2016 2015
Notes GBP GBP
-------------------------------------------- ----- -------- ---------
Cash flow from operating activities
Profit for the financial year 19,018 19,202
-------------------------------------------- ----- -------- ---------
Income tax expense 4,755 5,104
-------------------------------------------- ----- -------- ---------
Operating profit before changes in
working capital and provisions 23,773 24,306
-------- ---------
Net increase in debtors (49,401) (18,525)
-------------------------------------------- ----- -------- ---------
Net increase in other financial liabilities 30,821 -
-------------------------------------------- ----- -------- ---------
Cash generated from operations 5,193 5,781
-------------------------------------------- ----- -------- ---------
Income taxes paid (5,104) (5,460)
-------------------------------------------- ----- -------- ---------
Net cash flow from operating activities 89 321
-------------------------------------------- ----- -------- ---------
Net increase in cash and cash equivalents 89 321
-------------------------------------------- ----- -------- ---------
Cash and cash equivalents at 1 April 251,935 251,614
-------------------------------------------- ----- -------- ---------
Cash and cash equivalents at 31 March 8 252,024 251,935
-------------------------------------------- ----- -------- ---------
Interest paid and received during the year were as follows :
2016 2015
GBP GBP
------------------ ---------- -----------
Interest paid 11,250,000 11,250,000
------------------ ---------- -----------
Interest received 11,255,844 11,255,781
------------------ ---------- -----------
Notes to the Financial Statements
(forming part of the Financial Statements)
For the year ended 31 March 2016
1. Accounting Policies
Rothschilds Continuation Finance (C.I.) Limited ("the Company")
is a 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 2016 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 banks with original maturities
of three months or less.
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. Financial liabilities
All financial liabilities are carried at amortised cost using
the effective interest rate method.
i. 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 (2015: GBPnil).
4. Profit Before Tax
2016 2015
GBP GBP
---------------------------------------------- ------------ ------------
Is stated after
i. Income
Interest from loans to Group undertakings
Parent undertaking 4,520,163 4,507,813
---------------------------------------------- ------------ ------------
Fellow subsidiary undertaking 6,780,244 6,761,718
---------------------------------------------- ------------ ------------
11,300,407 11,269,531
---------------------------------------------- ------------ ------------
Other interest receivable from fellow
subsidiary undertaking 4,838 4,775
---------------------------------------------- ------------ ------------
11,305,245 11,274,306
---------------------------------------------- ------------ ------------
ii. Charges
Interest payable on subordinated guaranteed
notes 11,280,282 11,250,000
---------------------------------------------- ------------ ------------
The amount receivable by the auditors and their associates in
respect of the audit of these financial statements is GBP3,902
(2015: GBP3,825). The audit fee is paid on a group basis by N M
Rothschild & Sons Limited.
5. Taxation
2016 2015
GBP GBP
----------------------------------------------- -------- --------
Profit before tax 23,773 24,306
----------------------------------------------- -------- --------
United Kingdom corporation tax at 20% (2015:
21%) 4,755 5,104
----------------------------------------------- -------- --------
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 GBP148,668,750 as at 31 March 2016 (2015: GBP154,968,750). The
fair value was estimated using market price at the balance sheet
date for similar instruments (level 2) .
7. Debtors
2016 2015
GBP GBP
----------------------------------- --------- ----------
Amounts owed by parent undertaking 555,758 543,408
----------------------------------- --------- ----------
Amounts owed by fellow subsidiary
undertaking 833,637 796,586
----------------------------------- --------- ----------
1,389,395 1,339,994
----------------------------------- --------- ----------
8. Cash and Cash Equivalents
At the year end the Company held cash of GBP252,024 (2015:
GBP251,935) at a fellow subsidiary undertaking. The Company
receives interest at 0.25%.
9. Other Financial Liabilities
2016 2015
GBP GBP
----------------- --------- ----------
Interest payable 1,386,986 1,356,165
----------------- --------- ----------
Interest payable on the subordinated guaranteed notes is fixed
at 9 per cent.
10. Subordinated Guaranteed Notes
2016 2015
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
GBP148,543,750 as at 31 March 2016 (2015: GBP154,843,750). 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 1yr - 5yr > 5yr Total
GBP GBP GBP GBP GBP GBP
-------------- ------ ---------- ---------- ---------- ----------- -----------
Loan notes in
issue - - 11,300,407 45,000,000 125,000,000 181,300,407
-------------- ------ ---------- ---------- ---------- ----------- -----------
11. Share Capital
2016 2015
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:
2016 2015
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 555,758 543,408
---------------------------------------------- ---------- -----------
Amounts owed by fellow subsidiary undertaking 833,637 796,586
---------------------------------------------- ---------- -----------
Cash at fellow subsidiary undertaking 252,024 251,935
---------------------------------------------- ---------- -----------
Amounts recognised in the statement of comprehensive income in
respect of related party transactions were as follows:
2016 2015
GBP GBP
-------------------------------------------- --------- ----------
Interest receivable from parent undertaking 4,520,163 4,507,813
-------------------------------------------- --------- ----------
Interest receivable from fellow subsidiary
undertaking 6,780,244 6,766,493
-------------------------------------------- --------- ----------
There were no loans made to Directors during the year (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
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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