TIDMRCHA
RNS Number : 3399N
Rothschild & Co Contin Fin CI Ltd
23 September 2019
Rothschild & Co Continuation Finance CI Limited
Half-yearly Report for the six-month period ended 30 June
2019
Interim Management Report
Summary of Important Events
Rothschild & Co Continuation Finance CI Limited (the
"Company") is a wholly-owned subsidiary of Rothschild & Co
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 2019, GBP125,000,000 perpetual subordinated
guaranteed notes were in issue by the Company.
Comparative numbers in the six months to 30 June 2018 have been
amended to reflect the impact of IFRS 9 on accounting for financial
instruments.
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
Rothschild & Co Continuation Limited ("R&CoCL"), as the
issue proceeds have been on-lent to NMR and R&CoCL 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
R&CoCL as the funds on-lent have the same maturity dates as the
notes issued.
The Company's principal credit risk is with NMR and R&CoCL.
Since notes issued by the Company have been guaranteed by
R&CoCL, and funds have been on-lent to NMR and R&CoCL, the
Company's ability to meet its obligations in respect of notes
issued by it is affected by NMR's and R&CoCL 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 2019
6 months 6 months
to to
30 June 30 June
2019 2018
Note GBP GBP
----------------------------------- ----- ------------ ------------
Interest income 5,557,577 5,557,577
----------------------------------- ----- ------------ ------------
Interest expense (5,547,945) (5,547,945)
----------------------------------- ----- ------------ ------------
Operating profit 9,632 9,632
----------------------------------- ----- ------------ ------------
Revaluation of loans 4 (525,000) (3,750,000)
----------------------------------- ----- ------------ ------------
Revaluations of debt securities 9 525,000 3,750,000
----------------------------------- ----- ------------ ------------
Administrative expenses (650) (651)
----------------------------------- ----- ------------ ------------
Profit before tax 8,982 8,981
----------------------------------- ----- ------------ ------------
Income tax expense 3 (1,707) (1,706)
----------------------------------- ----- ------------ ------------
Profit for the financial period 7,275 7,275
----------------------------------- ----- ------------ ------------
Other comprehensive income - -
----------------------------------- ----- ------------ ------------
Total comprehensive income for
the financial period 7,275 7,275
----------------------------------- ----- ------------ ------------
Condensed Interim Statement of Changes in Equity
For the six months ended 30 June 2019
Share Capital Retained Total
Earnings
GBP GBP GBP
-------------------------------- --------------- ---------- --------
At 1 January 2019 100,000 145,269 245,269
-------------------------------- --------------- ---------- --------
Total comprehensive income for
the period - 7,275 7,275
-------------------------------- --------------- ---------- --------
At 30 June 2019 100,000 152,544 252,544
-------------------------------- --------------- ---------- --------
At 31 December 2017 100,000 26,268 126,268
-------------------------------- --------------- ---------- --------
Transition to IFRS 9 - 103,750 103,750
-------------------------------- --------------- ---------- --------
At 1 January 2018 100,000 130,018 230,018
-------------------------------- --------------- ---------- --------
Total comprehensive income for
the period - 7,275 7,275
-------------------------------- --------------- ---------- --------
At 30 June 2018 100,000 137,293 237,293
-------------------------------- --------------- ---------- --------
Condensed Interim Balance Sheet
At 30 June 2019
At 30 June At 31 December
2019 2019 2018 2018
Note GBP GBP GBP GBP
----------------------------- ----- ------------ -------------- ------------- --------------
Non-current assets
Loans to group undertakings 4 153,662,500 154,187,500
----------------------------- ----- ------------ -------------- ------------- --------------
Current assets
Other financial assets 5 4,137,254 6,496,137
----------------------------- ----- ------------ -------------- ------------- --------------
Cash and cash equivalents 6 146,961 3,481,151
----------------------------- ----- ------------ -------------- ------------- --------------
4,284,215 9,977,288
----------------------------- ----- ------------ -------------- ------------- --------------
Current liabilities
Current tax payable (5,284) (3,577)
----------------------------- ----- ------------ -------------- ------------- --------------
Deferred tax 7 (21,250) (21,250)
----------------------------- ----- ------------ -------------- ------------- --------------
Other financial liabilities 8 (4,130,137) (9,832,192)
----------------------------- ----- ------------ -------------- ------------- --------------
Net current assets 127,544 120,269
----------------------------- ----- ------------ -------------- ------------- --------------
Total assets less
current liabilities 153,790,044 154,307,769
----------------------------- ----- ------------ -------------- ------------- --------------
Non-current liabilities
Subordinated guaranteed
notes 9 (153,537,500) (154,062,500)
----------------------------- ----- ------------ -------------- ------------- --------------
Net assets 252,544 245,269
----------------------------- ----- ------------ -------------- ------------- --------------
Shareholders' equity
Share capital 11 100,000 100,000
----------------------------- ----- ------------ -------------- ------------- --------------
Retained earnings 152,544 145,269
----------------------------- ----- ------------ -------------- ------------- --------------
Total shareholders'
equity 252,544 245,269
----------------------------- ----- ------------ -------------- ------------- --------------
Condensed Interim Cash Flow Statement
For the six months ended 30 June 2019
6 months to 6 months to
30 June 2019 30 June 2018
Note GBP GBP
------------------------------------- ----- ------------- -------------
Cash flow from operating activities
Profit for the financial period 7,275 7,275
------------------------------------- ----- ------------- -------------
Income tax expenses 1,707 1,706
------------------------------------- ----- ------------- -------------
Operating profit before changes
in working capital and provisions 8,982 8,981
------------------------------------- ----- ------------- -------------
Fair value movements of loans 525,000 3,750,000
------------------------------------- ----- ------------- -------------
Fair value movements of debt
securities (525,000) (3,750,000)
------------------------------------- ----- ------------- -------------
Net decrease in other financial
assets 2,358,883 2,358,885
------------------------------------- ----- ------------- -------------
Net decrease in other financial
liabilities (5,702,055) (5,702,055)
------------------------------------- ----- ------------- -------------
Cash (utilised)/generated
from operations (3,334,190) (3,334,189)
------------------------------------- ----- ------------- -------------
Net cash (used in)/from operating
activities (3,334,190) (3,334,189)
------------------------------------- ----- ------------- -------------
Net (decrease)/increase in
cash and cash equivalents (3,334,190) (3,334,189)
------------------------------------- ----- ------------- -------------
Cash and cash equivalents
at beginning of period 3,481,151 3,465,064
------------------------------------- ----- ------------- -------------
Cash and cash equivalents
at end of period 6 146,961 130,875
------------------------------------- ----- ------------- -------------
Interest paid and received during the period were as
follows:
6 months to 6 months to
30 June 2019 30 June 2018
GBP GBP
------------------- ------------- -------------
Interest paid 11,250,000 11,250,000
------------------- ------------- -------------
Interest received 7,916,460 7,916,462
------------------- ------------- -------------
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 2019
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 December 2018, 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
December 2018.
2. Directors' Emoluments
None of the Directors received any remuneration in respect of
their services to the Company during the period (2018: GBPnil).
3. Taxation
6 months to 6 months to
30 June 2019 30 June 2018
GBP GBP
-------------------------------- ------------- -------------
Profit before tax 8,982 8,981
-------------------------------- ------------- -------------
United Kingdom corporation tax
at 19% 1,707 1,706
-------------------------------- ------------- -------------
Tax charged for the period 1,707 1,706
-------------------------------- ------------- -------------
4. Loans to Group Undertakings
At 30 June At 31 December
2019 2018
GBP GBP
---------------------------------- ------------ ---------------
At beginning of period 154,187,500 125,000,000
---------------------------------- ------------ ---------------
Revaluation due to transition to
IFRS 9 - 35,125,000
---------------------------------- ------------ ---------------
154,187,500 160,125,000
---------------------------------- ------------ ---------------
Fair value movements (525,000) (5,937,500)
---------------------------------- ------------ ---------------
At end of period 153,662,500 154,187,500
---------------------------------- ------------ ---------------
Due
In 5 years or more 153,662,500 154,187,500
---------------------------------- ------------ ---------------
IFRS 9 requires the GBP125,000,000 loans to be carried at fair
value which as at 30 June 2019 was GBP153,662,500 (at 31 December
2018: GBP154,187,500). On an amortised cost basis, the value of the
loan at 30 June 2019 would be GBP125,000,000 (at 31 December 2018:
GBP125,000,000). The fair values are based on the market value of
the external debt securities (level 2).
The interest rate charged on the subordinated perpetual loans to
group undertakings is 9 1/64 per cent.
5. Other Financial Assets
At 30 June At 31 December
2019 2018
GBP GBP
------------------------------------ ----------- ---------------
Amounts owed by parent undertaking 2,482,352 2,556,432
------------------------------------ ----------- ---------------
Amounts owed by fellow subsidiary
undertaking 1,654,902 3,939,705
------------------------------------ ----------- ---------------
4,137,254 6,496,137
------------------------------------ ----------- ---------------
6. Cash and Cash Equivalents
At 30 June 2019 the Company held cash of GBP146,961 (31 December
2018: GBP3,481,151) to a fellow subsidiary undertaking.
7. Deferred Income Taxes
At 30 June At 31 December
2019 2018
GBP GBP
------------------------ ----------- ---------------
At beginning of period (21,250) -
------------------------ ----------- ---------------
Transition to IFRS 9 - (21,250)
------------------------ ----------- ---------------
At end of period (21,250) (21,250)
------------------------ ----------- ---------------
Deferred tax assets less liabilities are attributable to the
following items:
At 30 June At 31 December
2019 2018
GBP GBP
--------------------------------------------- ------------ ---------------
Fair value of intra group loans (4,872,625) (4,961,875)
--------------------------------------------- ------------ ---------------
Fair value of debt securities in issue 4,851,375 4,940,625
--------------------------------------------- ------------ ---------------
(21,250) (21,250)
--------------------------------------------- ------------ ---------------
Both the intra-group loans and debt securities in issue are
taxed on an amortised cost basis of accounting and accordingly
taxable/deductible temporary differences arise following the
adoption of IFRS 9.
8. Other Financial Liabilities
At 30 June At 31 December
2019 2018
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 30 December
2019 2018
GBP GBP
---------------------------------- ------------ ---------------
At beginning of period 154,062,500 125,000,000
---------------------------------- ------------ ---------------
Revaluation due to transition to
IFRS 9 - 35,000,000
---------------------------------- ------------ ---------------
154,062,500 160,000,000
---------------------------------- ------------ ---------------
Fair value movements (525,000) (5,937,500)
---------------------------------- ------------ ---------------
At end of period 153,537,500 154,062,500
---------------------------------- ------------ ---------------
Due
In 5 years or more 153,537,500 154,062,500
---------------------------------- ------------ ---------------
Given the IFRS 9 requirement to fair value the related loans,
the Company has elected to fair value the subordinated guaranteed
notes, which as at 30 June 2019 was GBP153,537,500 (at 31 December
2018: GBP154,062,500). On an amortised cost basis, the value of the
subordinated guaranteed notes at 30 June 2019 would be
GBP125,000,000 (at 31 December 2018: GBP125,000,000). 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
2019 2018
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 recognised in respect of related parties at the period
end were as follows:
At 30 June At 31 December
2019 2018
GBP GBP
-------------------------------------------------- ----------- ---------------
Subordinated perpetual loan to parent undertaking
- fair value 61,465,000 61,675,000
-------------------------------------------------- ----------- ---------------
Subordinated perpetual loan to fellow subsidiary
undertaking - fair value 92,197,500 92,512,500
-------------------------------------------------- ----------- ---------------
Amounts owed by parent undertaking 2,482,352 2,556,432
-------------------------------------------------- ----------- ---------------
Amounts owed by fellow subsidiary undertaking 1,654,902 3,939,705
-------------------------------------------------- ----------- ---------------
Cash at fellow subsidiary undertaking 146,961 3,481,151
-------------------------------------------------- ----------- ---------------
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
2019 30 June
2018
GBP GBP
-------------------------------------------- ----------- ----------
Interest receivable from parent undertaking 3,334,546 3,334,546
-------------------------------------------- ----------- ----------
Interest receivable from fellow subsidiary
undertaking 2,223,031 2,223,031
-------------------------------------------- ----------- ----------
There were no loans made to Directors during the period (6
months to 30 June 2018: none) and no balances outstanding at the
period end (at 31 December 2018: GBPnil). There were no employees
of the Company during the period (6 months to 30 June 2018:
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 & Co 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 Rothschild & Co
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 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
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