TIDM68WN
RNS Number : 1396H
Rothschilds Continuation FinancePLC
26 November 2015
Rothschilds Continuation Finance PLC
Half-yearly Report for the six-month period ended 30 September
2015
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
2015, 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.
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
26 November 2015
Condensed Interim Statement of Comprehensive Income
For the six months ended 30 September 2015
6 months 6 months to
to
30 September 30 September
2015 2014
Note GBP GBP
----------------------------------- ----- ------------- -------------
Interest income 583,692 1,355,501
----------------------------------- ----- ------------- -------------
Interest expense (575,884) (1,349,328)
----------------------------------- ----- ------------- -------------
Foreign exchange translation
(losses) (322) (10,438)
----------------------------------- ----- ------------- -------------
Operating expenses - -
----------------------------------- ----- ------------- -------------
Profit/(loss) before tax 7,486 (4,265)
----------------------------------- ----- ------------- -------------
Taxation 3 (1,497) 896
----------------------------------- ----- ------------- -------------
Profit/(loss) for the financial
period 5,989 (3,369)
----------------------------------- ----- ------------- -------------
Other comprehensive income - -
----------------------------------- ----- ------------- -------------
Total comprehensive income/(loss)
for the financial period 5,989 (3,369)
----------------------------------- ----- ------------- -------------
Condensed Interim Statement of Changes in Equity
For the six months ended 30 September 2015
Retained
Share Capital Earnings Total
GBP GBP GBP
------------------------------ ---------------- ---------- --------
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
------------------------------ ---------------- ---------- --------
At 1 April 2014 100,000 159,758 259,758
------------------------------ ---------------- ---------- --------
Total comprehensive loss for
the period - (3,369) (3,369)
------------------------------ ---------------- ---------- --------
At 30 September 2014 100,000 156,389 256,389
------------------------------ ---------------- ---------- --------
Condensed Interim Balance Sheet
At 30 September 2015
At 30 September At 31 March
2015 2015 2015 2015
Note GBP GBP GBP GBP
--------------------------- ----- ---------- -------------- ---------- --------------
Non-current assets
Loan to parent
undertaking 4 110,774,684 109,095,000
--------------------------- ----- ---------- -------------- ---------- --------------
Current assets
Cash and cash equivalents 6 255,045 247,646
--------------------------- ----- ---------- -------------- ---------- --------------
Other financial
assets 5 224,011 150,551
--------------------------- ----- ---------- -------------- ---------- --------------
Current tax asset 703 2,200
--------------------------- ----- ---------- -------------- ---------- --------------
481,256 400,397
--------------------------- ----- ---------- -------------- ---------- --------------
Current liabilities
Other financial
liabilities 7 (222,288) (148,915)
--------------------------- ----- ---------- -------------- ---------- --------------
Net current assets 257,471 251,482
--------------------------- ----- ---------- -------------- ---------- --------------
Total assets less
current liabilities 111,032,155 109,346,482
--------------------------- ----- ---------- -------------- ---------- --------------
Non-current liabilities
Debt securities
in issue 8 (110,774,684) (109,095,000)
--------------------------- ----- ---------- -------------- ---------- --------------
Net assets 257,471 251,482
--------------------------- ----- ---------- -------------- ---------- --------------
Shareholders' equity
Share capital 10 100,000 100,000
--------------------------- ----- ---------- -------------- ---------- --------------
Retained earnings 157,471 151,482
--------------------------- ----- ---------- -------------- ---------- --------------
Total shareholders'
equity 257,471 251,482
--------------------------- ----- ---------- -------------- ---------- --------------
Condensed Interim Cash Flow Statement
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For the six months ended 30 September 2015
6 months to 6 months to
30 September 30 September
2015 2014
Note GBP GBP
------------------------------- ----- ------------- -------------
Cash flow from operating
activities
Net profit/(loss) for
the financial period 5,989 (3,369)
------------------------------- ----- ------------- -------------
Taxation 1,497 (896)
------------------------------- ----- ------------- -------------
Operating profit/(loss)
before changes in working
capital and provisions 7,486 (4,265)
------------------------------- ----- ------------- -------------
Cash generated/(used in)
operations 7,486 (4,265)
------------------------------- ----- ------------- -------------
Net cash from/(used in)
operating activities 7,486 (4,265)
------------------------------- ----- ------------- -------------
Net (increase)/decrease
in loans (1,753,144) 7,381,532
------------------------------- ----- ------------- -------------
Net increase/(decrease)
in debt securities in
issue 1,753,057 (7,381,488)
------------------------------- ----- ------------- -------------
Net cash flow (used in)/from
financing activities (87) 44
------------------------------- ----- ------------- -------------
Net increase/(decrease)
in cash and cash equivalents 7,399 (4,221)
------------------------------- ----- ------------- -------------
Cash and cash equivalents
at 1 April 247,646 259,650
------------------------------- ----- ------------- -------------
Cash and cash equivalents
at 30 September 6 255,045 255,429
------------------------------- ----- ------------- -------------
Interest receipts and payments during the period were as
follows:
6 months to 6 months to
30 September 30 September
2015 2014
GBP GBP
------------------------------- ------------- -------------
Interest received from parent
undertaking 510,232 1,484,533
------------------------------- ------------- -------------
Interest paid to note holders 502,511 1,478,316
------------------------------- ------------- -------------
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 2015
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 2015, 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 2015. New accounting
statements that are effective for the year ending
31 March 2015 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 (2014: GBPnil).
3. Taxation
6 months to 6 months to
30 September 30 September
2015 2014
GBP GBP
-------------------------------- ------------- -------------
Profit/(loss) before tax 7,486 (4,265)
-------------------------------- ------------- -------------
United Kingdom corporation tax
at 20% (2014: 21%) 1,497 (896)
-------------------------------- ------------- -------------
4. Non-current Assets: Loan to Parent Undertaking
At 30 September At 31 March
2015 2015
GBP GBP
------------------------------------ ---------------- ------------
Amounts owed by parent undertaking
EUR150,000,000 Perpetual floating
rate subordinated loan 110,774,684 109,095,000
------------------------------------ ---------------- ------------
Due
In 5 years or more 110,774,684 109,095,000
------------------------------------ ---------------- ------------
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 1.30% (31
March 2015: 0.92%) and the fair value was GBP61,646,112 as at 30
September 2015 (31 March 2015: GBP60,711,299). 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
2015 2015
GBP GBP
------------------------------------ ---------------- ------------
Amounts owed by parent undertaking
Interest receivable 224,011 150,551
------------------------------------ ---------------- ------------
6. Cash and Cash Equivalents
At 30 September 2015 the Company held cash of GBP255,045 (31
March 2015: GBP247,646) at the parent undertaking. Of this balance,
GBP84,505 (31 March 2015: GBP84,398) was held in a sterling account
on which the effective interest rate at 30 September 2015 was 0.25%
(31 March 2015: 0.5%). The equivalent of GBP170,540 (31 March 2015:
GBP163,248) was held in a euro account on which the effective
interest rate at 30 September 2015 was 0.25% (31 March 2015:
0.25%).
7. Current Liabilities: Other Financial Liabilities
At 30 September At 31 March
2015 2015
GBP GBP
------------------ ---------------- ------------
Interest payable 222,288 148,915
------------------ ---------------- ------------
8. Non-current Liabilities: Debt Securities in Issue
At 30 September At 31 March
2015 2015
GBP GBP
----------------------------- ---------------- ------------
Medium Term Notes
Perpetual Subordinated Notes
EUR150,000,000 110,774,684 109,095,000
----------------------------- ---------------- ------------
Repayable
In 5 years or more 110,774,684 109,095,000
----------------------------- ---------------- ------------
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 2015 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
2015 was 1.29% (31 March 2015: 0.91%) and their fair value was
GBP61,479,950 (31 March 2015: GBP60,547,656). 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
Demand on demand 3 months 1 year Perpetual Total
GBP GBP GBP GBP GBP GBP
----------------------- --------- ---------- ----------- ----------- ------------- -------------
Perpetual subordinated
notes - 357,248 1,071,745 5,715,974 110,771,684 117,919,651
----------------------- --------- ---------- ----------- ----------- ------------- -------------
10. Share Capital
At 30 September At 31 March
2015 2015
GBP GBP
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