TIDM68WN
RNS Number : 3706L
Rothschilds Continuation FinancePLC
29 July 2011
Rothschilds Continuation Finance PLC
Report of the Directors and Financial Statements
for the year ended 31 March 2011
Report of the Directors
The Directors present their Directors' report and the financial
statements for the year ended 31 March 2011.
Principal Activities and Business Review
The principal activity of the Company is the raising of finance
for the purpose of lending it to other Rothschild group companies.
Further issues of medium term notes or other debt issues may be
made from time to time, depending on the group's funding
requirements. During the year ended 31 March 2011, EUR70,000,000 of
Medium Term Notes with a maturity of 04 April 2012 were issued,
GBP65,000,000 of medium term notes were redeemed, and EUR4,520,000
of Medium Term Notes issued with a maturity of 19 September 2011
were repurchased at a price of 98.125.
The Company's exposure to interest rate movements on the medium
term and perpetual subordinated note issues has been passed to the
parent undertaking, N M Rothschild & Sons Limited, as the issue
proceeds have been on-lent to that company either at the same rate
of interest as the Company is paying on the notes or, in the case
of the perpetual subordinated notes, at a fixed margin of one basis
point above the rate being paid. Liquidity risk has similarly been
transferred to the parent undertaking as the funds on-lent have the
same maturity dates as the notes issued. The Company's principal
credit risk is with its parent undertaking.
The results for the year are set out in the statement of
comprehensive income on page 7.
Dividends
The Directors do not recommend the payment of a dividend
(2010:GBPnil)
Directors
The Directors who held office during the year were as
follows:
Christopher Coleman
Paul Copsey
Andrew Didham
Adam Greenbury
Andrew Tovell
Auditors
KPMG Audit Plc are the appointed auditors of the Company and
pursuant to Section 487 of the Companies Act 2006, the auditors
will be deemed to be reappointed. KPMG Audit Plc 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 auditors are 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.
Responsibility Statement
The Directors who held office at the date of approval of this
Report of the Directors confirm that to the best of their
knowledge:
(a) the financial statements, prepared in accordance with
the applicable set of accounting standards, give a
true and fair view of the assets, liabilities, financial
position and profit or loss of the Company; and
(b) this Report of the Directors includes a fair review
of the development and performance of the business
and the position of the Company, together with a description
of the principal risks and uncertainties that it faces.
By Order of the Board
Jonathan Westcott, Secretary
New Court, St. Swithin's Lane, London EC4P 4DU
25 July 2011
Statement of Directors' Responsibilities in Relation to 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
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 Act 2006. 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.
Independent Auditors' Report to the Members of Rothschilds
Continuation Finance PLC
We have audited the financial statements of Rothschilds
Continuation Finance PLC for the year ended 31 March 2011 set out
on pages 7 to 17. The financial reporting framework that has been
applied in their preparation is applicable law and International
Financial Reporting Standards (IFRSs) as adopted by the EU.
This report is made solely to the company's members, as a body,
in accordance with Chapter 3 of Part 16 of the Companies Act 2006.
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 Auditors
As explained more fully in the Directors' Responsibilities
Statement 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 (APB's) Ethical Standards for
Auditors.
Scope of the audit of the financial statements
A description of the scope of an audit of financial statements
is provided on the APB's website at
www.frc.org.uk/apb/scope/private.cfm
Opinion on financial statements
In our opinion the financial statements:
- give a true and fair view of the company's affairs
as at 31 March 2011 and of its profit for the year
then ended;
- have been properly prepared in accordance with IFRSs
as adopted by the EU; and
- have been prepared in accordance with the requirements
of the Companies Act 2006.
Opinion on other matter prescribed by the Companies Act 2006
In our opinion the information given in the Directors' Report
for the financial year for which the financial statements are
prepared is consistent with the financial statements.
Independent Auditors' Report to the Members of Rothschilds
Continuation Finance PLC
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters
where the Companies Act 2006 requires us to report to you if, in
our opinion:
- adequate accounting records have not been kept, or
returns adequate for our audit have not been received
from branches not visited by us; or
- the financial statements are not in agreement with
the accounting records and returns; or
- certain disclosures of directors' remuneration specified
by law are not made; or
- we have not received all the information and explanations
we require for our audit
Karim K Haji (Senior Statutory Auditor)
for and on behalf of KPMG Audit Plc, Statutory Auditor
Chartered Accountants
One Canada Square
Canary Wharf
London E14 5AG
25 July 2011
Statement of Comprehensive Income
For the year ended 31 March 2011
2011 2010
Note GBP GBP
------------------------------ ----- ------------ -------------
Interest receivable 8,326,621 13,716,567
------------------------------ ----- ------------ -------------
Interest payable (8,315,957) (13,700,968)
------------------------------ ----- ------------ -------------
Operating profit 10,664 15,599
------------------------------ ----- ------------ -------------
Profit on repurchase of
loan notes issued 65,192 -
------------------------------ ----- ------------ -------------
Administrative expenses (680) -
------------------------------ ----- ------------ -------------
Foreign exchange translation
differences 4,194 (2,076)
------------------------------ ----- ------------ -------------
Profit before tax 2 79,370 13,523
------------------------------ ----- ------------ -------------
Taxation 5 (22,864) (3,786)
------------------------------ ----- ------------ -------------
Profit for the financial
year 56,506 9,737
------------------------------ ----- ------------ -------------
Other comprehensive income - -
------------------------------ ----- ------------ -------------
Total comprehensive income
for the financial year 56,506 9,737
------------------------------ ----- ------------ -------------
Balance Sheet
At 31 March 2011
2011 2011 2010 2010
Note GBP GBP GBP GBP
--------------- ----- -------------- -------------- ------------- --------------
Non-current
assets
Loan to parent
undertaking 6 194,508,600 445,455,000
--------------- ----- -------------- -------------- ------------- --------------
Current assets
Loan to parent
undertaking 7 306,564,972 65,969,855
--------------- ----- -------------- -------------- ------------- --------------
Cash and cash
equivalents 8 258,558 182,127
--------------- ----- -------------- -------------- ------------- --------------
306,823,530 66,151,982
--------------- ----- -------------- -------------- ------------- --------------
Current
liabilities
Current tax
payable (22,493) (3,786)
--------------- ----- -------------- -------------- ------------- --------------
Debt
securities in
issue 9 (306,562,507) (65,966,172)
--------------- ----- -------------- -------------- ------------- --------------
Net current
assets 238,530 182,024
--------------- ----- -------------- -------------- ------------- --------------
Total assets
less current
liabilities 194,747,130 445,637,024
--------------- ----- -------------- -------------- ------------- --------------
Non-current
liabilities
Debt
securities in
issue 10 (194,508,600) (445,455,000)
--------------- ----- -------------- -------------- ------------- --------------
Net assets 238,530 182,024
--------------- ----- -------------- -------------- ------------- --------------
Shareholders'
equity
Share capital 12 100,000 100,000
--------------- ----- -------------- -------------- ------------- --------------
Retained
earnings 138,530 82,024
--------------- ----- -------------- -------------- ------------- --------------
Total
shareholders'
equity 238,530 182,024
--------------- ----- -------------- -------------- ------------- --------------
Approved by the Board of Directors on 25 June 2011 and signed on
its behalf by:
Andrew Tovell, Director
Statement of Changes in Equity
For the year ended 31 March 2011
Retained Total
Share Capital Earnings Equity
GBP GBP GBP
---------------------------- -------------- ---------- --------
At 1 April 2010 100,000 82,024 182,024
---------------------------- -------------- ---------- --------
Total comprehensive income
for the financial year - 56,506 56,506
---------------------------- -------------- ---------- --------
At 31 March 2011 100,000 138,530 238,530
---------------------------- -------------- ---------- --------
At 1 April 2009 100,000 72,287 172,287
---------------------------- -------------- ---------- --------
Total comprehensive income
for the financial year - 9,737 9,737
---------------------------- -------------- ---------- --------
At 31 March 2010 100,000 82,024 182,024
---------------------------- -------------- ---------- --------
Cash Flow Statement
For the year ended 31 March 2011
2011 2010
Note GBP GBP
--------------------------------- ----- ------------- --------------
Cash flow from operating
activities
Net profit for the financial
period 56,506 9,737
--------------------------------- ----- ------------- --------------
Taxation 22,864 3,786
--------------------------------- ----- ------------- --------------
Operating profit before
changes in working capital
and provisions 79,370 13,523
--------------------------------- ----- ------------- --------------
Net decrease in other financial
assets 10,351,283 342,886,037
--------------------------------- ----- ------------- --------------
Net decrease in other financial
liabilities (10,350,065) (342,886,841)
--------------------------------- ----- ------------- --------------
Cash generated from operations 80,588 12,719
--------------------------------- ----- ------------- --------------
Taxation paid (4,157) (7,383)
--------------------------------- ----- ------------- --------------
Net cash from operating
activities 76,431 5,336
--------------------------------- ----- ------------- --------------
Net increase in cash and
cash equivalents 76,431 5,336
--------------------------------- ----- ------------- --------------
Cash and cash equivalents
at 1 April 182,127 176,791
--------------------------------- ----- ------------- --------------
Cash and cash equivalents
at 31 March 8 258,558 182,127
--------------------------------- ----- ------------- --------------
Interest receipts and payments during the year were as
follows:
2011 2010
GBP GBP
------------------------------- ---------- -----------
Interest received from parent
undertaking 8,180,736 14,260,604
------------------------------- ---------- -----------
Interest paid to noteholders 8,168,854 14,245,809
------------------------------- ---------- -----------
The notes to the financial statements form an integral part of
these financial statements
Notes to the Financial Statements
(forming part of the Financial Statements)
For the year 31 March 2011
1. Accounting Policies
Rothschilds Continuation Finance PLC ("the Company") is a
company incorporated in the United Kingdom. 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 Act
2006 applicable to companies reporting under IFRS.
The financial statements are prepared under the historical
cost accounting rules.
Standards affecting the financial statements
In the current year, there have been no new or revised
Standards or Interpretations that have been adopted
that have affected the amounts reported in these
financial statements.
b. Interest receivable and payable
Interest receivable and payable is recognised in
the statement of comprehensive income using the effective
interest rate method.
c. Foreign currencies
Transactions in foreign currencies are accounted
for at the exchange rates prevailing at the time
of the transaction. Gains and losses resulting from
the settlement of such transactions, and from the
translation at period end exchange rates of monetary
items that are denominated in foreign currencies,
are recognised in the statement of comprehensive
income. All material foreign currency cash flows
are matched.
d. Cash and cash equivalents
For the purposes of the cash flow statement, cash
and cash equivalents comprise cash in hand and balances
with banks.
e. Taxation
Tax payable on profits is recognised in the statement
of comprehensive income.
f. Capital management
The capital of the Company is managed at the group
level by the parent undertaking, N M Rothschild &
Sons Limited.
2. Profit Before Tax
2011 2010
GBP GBP
----------------------------------------- ---------- -----------
Is stated after
i. Income
Income from loans to group undertakings
Parent undertaking 8,326,621 13,716,567
----------------------------------------- ---------- -----------
ii. Charges
Interest payable on Medium Term
Notes 3,836,335 8,485,517
----------------------------------------- ---------- -----------
Interest payable on Perpetual
Subordinated Notes 4,479,622 5,215,451
----------------------------------------- ---------- -----------
The amounts receivable by the auditors and their associates in
respect of the audit of these financial statements is GBP10,500
(2010: GBP10,500). The audit fee is paid on a group basis by N M
Rothschild & Sons Limited.
3. Financial Risk Management
The Company follows the financial risk management
policies of the parent undertaking, N M Rothschild
& Sons 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
13 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
the 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
matched. The maturity of contractual cash
flows payable by the Company is disclosed
in note 11 Maturity of Financial
Liabilities.
4. Directors' Emoluments
None of the directors received any remuneration from the Company
during the year (2010: GBPnil).
5. Taxation
Tax charged to the income statement:
2011 2010
GBP GBP
----------------------------------- ------- ------
Current tax
- Current period 22,224 3,786
- Prior year adjustment 640 -
---- ------------------------------ ------- ------
Total tax charged to the income
statement 22,864 3,786
------------------------------------ ------- ------
The tax charge may be explained as follows:
2011 2010
GBP GBP
-------------------------------- ------- -------
Profit before tax 79,370 13,523
-------------------------------- ------- -------
United Kingdom corporation tax
credit/(charge) at 28% (2010:
28%) 22,224 3,786
Prior year adjustment 640 -
-------------------------------- ------- -------
Total tax charge for the year 22,864 3,786
-------------------------------- ------- -------
The UK Corporation tax rate has been changed from 28 per cent to
26 per cent with an effective date of 1 April 2011. This rate has
been substantively enacted at the balance sheet date but has not
affected the amounts reported in these financial statements.
6. Non-current Assets: Loan to Parent undertaking
2011 2010
GBP GBP
------------------------------------ ------------ ------------
Amounts owed by parent undertaking
EUR350,000,000 due 19 September
2011 - 311,818,500
EUR70,000,000 due 04 April 2012 61,889,100 -
EUR150,000,000 Perpetual floating
rate subordinated loan 132,619,500 133,636,500
------------------------------------ ------------ ------------
194,508,600 445,455,000
------------------------------------ ------------ ------------
Due
In less than 5 years 61,889,100 311,818,500
------------------------------------ ------------ ------------
In 5 years or more 132,619,500 133,636,500
------------------------------------ ------------ ------------
The interest rate charged on the EUR70 million loan due 04 April
2012 is 3-month Euribor plus 40 basis points, fixed on 04 January,
04 April, 04 June and 04 October each year. 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 weighted average effective interest rate on the above loans
was 3.161% and their fair value was GBP144,548,893 as at 31 March
2011. The fair values were estimated using discounted cashflow
techniques and inputs based on market conditions existing at the
balance sheet dates.
7. Current Assets: Loan to Parent undertaking
2011 2010
GBP GBP
------------------------------------ ------------ -----------
Amounts owed by parent undertaking
GBP65,000,000 due 04 May 2010 - 65,000,000
EUR345,980,000 due 19 September
2011 305,449,232 -
Interest receivable 1,115,740 969,855
------------------------------------ ------------ -----------
306,564,972 65,969,855
------------------------------------ ------------ -----------
The interest rate charged on the EUR346 million loan due 19
September 2011 is 3-month Euribor plus 20 basis points, fixed on 19
March, 19 June, 19 September and 19 December each year.
The weighted effective interest rate on the above loans was
1.370% and its fair value was GBP304,319,070 as at 31 March 2011.
The fair values were estimated using discounted cashflow techniques
and inputs based on market conditions existing at the balance sheet
dates.
8. Cash and Cash Equivalents
At the year end the Company held cash of GBP258,558 (2010:
GBP182,127) at the parent undertaking. Of this balance, GBP111,683
was held in a sterling account on which the effective interest rate
at 31 March 2011 was 0.5%. The equivalent of GBP146,875 was held in
a euro account on which the effective interest rate at 31 March
2011 was 1.0%. The sterling and euro interest rates both re-price
within one month.
9. Current Liabilities: Debt securities in issue
2011 2010
GBP GBP
--------------------------------- ------------ -----------
Medium Term Notes
GBP65,000,000 due 04 May 2010 - 65,000,000
EUR350,000,000 due 19 September
2011 305,449,232 -
Interest payable 1,113,275 966,172
--------------------------------- ------------ -----------
306,562,507 65,966,172
--------------------------------- ------------ -----------
The interest rate payable on the EUR346 million Medium Term
Notes due 19 September 2011 is 3-month Euribor plus 20 basis
points, fixed on 19 March, 19 June, 19 September and 19 December
each year.
The weighted average effective interest rate on the above notes
was 1.370% and their fair value was GBP304,319,070 as at 31 March
2011. The fair values were estimated using discounted cashflow
techniques and inputs based on market conditions existing at the
balance sheet dates.
10. Non-current Liabilities: Debt securities in issue
2011 2010
GBP GBP
-------------------------------- ------------ ------------
Medium Term Notes
EUR350,000,000 due 19 September
2011 - 311,818,500
EUR70,000,000 due 04 April 2012 61,889,100 -
Perpetual Subordinated Notes
EUR150,000,000 132,619,500 133,636,500
-------------------------------- ------------ ------------
194,508,600 445,455,000
-------------------------------- ------------ ------------
Repayable
In less than 5 years 61,889,100 311,818,500
-------------------------------- ------------ ------------
In 5 years or more 132,619,500 133,636,500
-------------------------------- ------------ ------------
The interest rate payable on the EUR70 million loan due 04 April
2011 is 3-month Euribor plus 40 basis points, fixed on 04 January,
04 April, 04 June and 04 October each year. 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 2014 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 weighted average effective interest rate on the above notes
was 3.154% and their fair value was GBP144,342,622 as at 31 March
2011. The fair values were estimated using discounted cashflow
techniques and inputs based on market conditions existing at the
balance sheet dates.
11. Maturity of Financial Liabilities
The following table shows contractual cash flows payable by the
Company on the medium term notes and 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
on but over but over
Demand demand 3 months 1 year Perpetual Total
GBP GBP GBP GBP GBP GBP
-------------- -------- ---------- ------------ ----------- ------------ ------------
Medium term
notes - 1,277,745 307,050,652 61,898,768 - 370,227,165
-------------- -------- ---------- ------------ ----------- ------------ ------------
Perpetual
subordinated
notes - 1,330,874 3,992,621 21,293,976 132,619,500 159,236,971
-------------- -------- ---------- ------------ ----------- ------------ ------------
- 2,608,619 311,043,273 83,192,744 132,619,500 529,464,136
----------------------- ---------- ------------ ----------- ------------ ------------
12. Share Capital
2011 2010
GBP GBP
--------------------------------- -------- --------
Authorised, allotted, called
up and fully paid
100,000 Ordinary shares of GBP1
each 100,000 100,000
--------------------------------- -------- --------
13. 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 the parent company,
subsidiaries and fellow subsidiaries.
Amounts receivable from related parties at the period end were
as follows:
2011 2010
GBP GBP
----------------------------- ------------ ------------
Cash at parent undertaking 258,558 182,127
----------------------------- ------------ ------------
Accrued interest receivable
from parent undertaking 1,115,740 969,855
----------------------------- ------------ ------------
Loans to parent undertaking 499,957,832 510,455,000
----------------------------- ------------ ------------
The Company receives interest at base rate on the cash at parent
undertaking. Interest is received on the loans to parent
undertaking at rates specified in notes 6 and 7.
Amounts recognised in the statement of comprehensive income in
respect of related party transactions were as follows:
2011 2009
GBP GBP
-------------------------------- --------- ----------
Interest receivable from parent
undertaking 8,326,621 13,716,567
-------------------------------- --------- ----------
14. 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 N M Rothschild & Sons Limited,
registered in England and Wales. The consolidated financial
statements of this group are available to the public and may be
obtained from Companies House.
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, EC4P 4DU.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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