REG - Rothschild & Co - Annual Financial Report
25/04/2025 13:00
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RNS Number : 2592G Rothschild & Co Continuation Fin 25 April 2025
Rothschild & Co Continuation Finance PLC
Directors' Report and Financial Statements
for the year ended 31 December 2024
Strategic Report
Business Model and Strategic Objectives
Rothschild & Co 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 the Rothschild & Co
Group ("the R&Co Group"). The only current debt securities in issue are
the perpetual subordinated notes guaranteed by NMR.
Business Update and Key Performance Indicators
As mentioned above, the Company operates as a finance vehicle which issues
debt and lends it onto R&Co Group companies on substantially the same
terms. The only debt currently in issue is perpetual subordinated notes.
Given the nature of this debt and the related loans to its immediate parent,
the Directors consider that accrual accounting best reflects the purpose of
the Company as a pass through financing vehicle and to match the €150m loan
asset and subordinated guaranteed notes in issue. On this basis, the loan
asset and subordinated guaranteed notes would be matched on the balance sheet
at £124m to reflect the real asset and liability position of the Company.
However, IFRS 9 requires the Company to report the loan asset, and the Company
has elected to report the subordinated guaranteed notes in issue, at fair
value of c.£96m. Both the loans and subordinated guaranteed notes will
continue to be taxed on an amortised cost basis so a net deferred tax
liability of £46,513 (2023: £45,844) has been recognised on the difference
between this and the carrying values. Negative movements in the valuation of
the asset and liability resulted in a small accounting loss being reported for
the year. However, the Company remains well capitalised. No KPIs are monitored
on an on-going basis.
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 the immediate parent, NMR.
The Company's principal risk is credit exposure to NMR, as the notes issued by
the Company have been guaranteed by, and funds have been on-lent to NMR. The
Company is therefore reliant on the ability of NMR to meet its obligations
under these lending arrangements. NMR has sufficient liquidity to continue to
operate for at least the next 12 months even in the scenario where revenue is
significantly reduced. Management has considered the going concern basis of
preparation to be appropriate as outlined in note 1 to the financial
statements.
The Company's market risk exposure is limited to interest rate 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. 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.
Total shareholders' equity as at 31 December 2024 amounts to £410,475 (31
December 2023: £417,636) and the result for the year to 31 December 2024
amounts to a loss of £7,161 (2023: £6,554 loss).
The interest rate charged on the €150 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 maturity matches that of the subordinated
guaranteed notes. The interest rate on the above loan at 31 December 2024 was
3.52% (2023: 3.66%).
The interest rate payable on the €150 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 2016 and every interest payment
date thereafter, the Company may redeem all of the Perpetual Subordinated
Notes at their principal amount. There is no plan to redeem the notes over the
next 12-month period. The interest rate on the above notes at 31 December 2024
was 3.51% (2023: 3.65%).
S172 statement
The Board has a duty under s172 of the Companies Act 2006 to promote the
success of the Company for the benefit of its members as a whole, and in doing
so have regard (amongst other matters) to:
a) the likely consequences of any decision in the long term,
b) the interests of the Company's employees,
c) the need to foster the Company's business relationships with suppliers,
customers and others,
d) the impact of the Company's operations on the community and the environment,
e) the desirability of the Company maintaining a reputation for high standards of
business conduct, and
f) the need to act fairly as between members of the Company.
During the year the Board has considered its duties under s172 and how it
fulfils its obligations thereof. Given that the Company has no staff and
limited suppliers, the key stakeholders are thought to be shareholders,
investors, noteholders, regulators and tax authorities:
Shareholders
The Board is appointed by the shareholders to oversee, govern and make
decisions on their behalf and so is directly responsible for protecting and
managing their interests in the Company. It does this by setting the
strategies, policies and corporate governance structures described earlier. As
part of the wider R&Co Group, some of these responsibilities are managed
at a group level and described in greater detail in the R&Co Group
financial statements that are available on
https://www.rothschildandco.com/en/about-us/results-reports/.
Regulators and tax authorities
The Company insists on the highest standards of professionalism and integrity
from those that act on its behalf who are expected to refrain from any conduct
or behaviours that could be perceived unfavourably. This extends to dealing
honestly and openly with regulators and tax authorities and in compliance with
all the relevant laws and regulations in place.
By Order of the Board
Peter
Barbour
Director
24 April 2025
Directors' Report
The Directors present their Directors' report and the financial statements for
the year ended 31 December 2024.
Dividends
During the year, the Company did not pay any dividends (2023: £nil).
Directors
The Directors who held office during the year were as follows:
Peter Barbour
Christopher Coleman
Peter Whiteland
Mark Crump (resigned 3 May 2024)
Directors' Indemnity
The Company has provided qualifying third-party indemnities for the benefit of
its Directors. These were provided during the year and remain in force at
the date of this report.
Corporate Governance
The Directors have been charged with governance in accordance with the
perpetual subordinated notes transaction documents describing the structure
and operation of the transaction. The responsibilities of the Directors to
both noteholders and shareholders were established at the time of issuance.
Additionally, the Company is an integral part of the wider R&Co Group and,
as such, benefits from the Group's wider control frameworks and structures,
whilst also ensuring that the obligations and requirements of the Company are
fully met.
The Company follows the internal control policies of its immediate parent, NMR
in maintaining its financial records and preparing its financial reporting.
Moreover, the key risks arising from the Company's activities involving the
perpetual subordinated notes are monitored as part of the Group's control
structures. However, it is the Directors opinion that these risks are limited
in nature due to the low level of transactions occurring and the risk
management framework in place.
Due to the nature of the perpetual subordinated notes which have been issued,
the Company is largely exempt from the disclosure requirements of the
Financial Conduct Authority pertaining to the Disclosure and Transparency
Rules ("DTR") as detailed in the DTR 7.1 Audit committees and 7.2 Corporate
governance statements (save for DTR 7.2.5 requiring a description of the
features of the internal control and risk management systems), which would
otherwise require the Company respectively, to have an audit committee in
place and include a corporate governance statement in the Directors' Report.
The Directors are therefore satisfied that there is no requirement for an
audit committee, or a supervisory board entrusted to carry out the functions
of an audit committee or to publish a more extensive corporate governance
statement.
Auditor
Following a competitive tender process during the year, KPMG LLP resigned as
auditor and Forvis Mazars LLP was appointed in their place on 18(th) July
2024. Forvis Mazars LLP have indicated their willingness to continue in office
as auditor and will be proposed for re-appointment.
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.
Financial Instruments
Details of the Company's financial risk management objectives and policies,
and exposure to risk are described in the financial statements. For more
details refer to Note 2.
By Order of the Board
Peter
Barbour
Director
24 April 2025
Statement of Directors' responsibilities in respect of the strategic report,
Directors' report and the financial statements
The Directors are responsible for preparing the Strategic Report, 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 UK-adopted international accounting standards
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 its profit or loss for that period. In
preparing the financial statements, the Directors are required to:
● select suitable accounting policies and then apply them consistently;
● make judgements and estimates that are reasonable, relevant and reliable;
● state whether they have been prepared in accordance with UK-adopted
international accounting standards;
● state whether they have been prepared in accordance with UK-adopted
international accounting standards;
● assess the Company's ability to continue as a going concern, disclosing, as
applicable, matters related to going concern; and
● use the going concern basis of accounting unless they either intend to
liquidate the Company or to cease operations, or have no realistic alternative
but to do so.
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 its financial statements comply with the Companies
Act 2006. They are responsible for such internal control as they determine
is necessary to enable the preparation of financial statements that are free
from material misstatement, whether due to fraud or error, and 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.
Under applicable law and regulations, the Directors are also responsible for
preparing a Strategic Report and a Directors' Report that complies with that
law and those regulations.
The Directors are responsible for the maintenance and integrity of the
corporate and financial information included on the Company's website.
Legislation in the UK governing the preparation and dissemination of financial
statements may differ from legislation in other jurisdictions.
Responsibility statement of the directors in respect of the annual financial
report
The directors of Rothschild & Co Continuation Finance PLC, whose names are
set out on page 5, confirm that to the best of their knowledge;
● 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 taken as a whole; and
● The strategic report includes a fair review of the development and performance
of the business and the position of the company taken as a whole, together
with a description of the principal risks and uncertainties that it faces.
Independent Auditor's Report to the Members of Rothschild & Co Continuation Finance PLC
Opinion
We have audited the financial statements of Rothschild & Co Continuation
Finance PLC (the 'Company') for the year ended 31 December 2024 which comprise
the Statement of Comprehensive Income, the Balance Sheet, the Statement of
Changes in Equity, the Cash Flow Statement and notes to the financial
statements, including material accounting policy information.
The financial reporting framework that has been applied in their preparation
is applicable law and UK-adopted international accounting standards.
In our opinion, the financial statements:
● give a true and fair view of the state of the Company's affairs as at 31
December 2024 and of its loss for the year then ended;
● have been properly prepared in accordance with UK-adopted international
accounting standards; and
● have been prepared in accordance with the requirements of the Companies Act
2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing
(UK) (ISAs (UK)) and applicable law. Our responsibilities under those
standards are further described in the "Auditor's responsibilities for the
audit of the financial statements" section of our report. We are independent
of the Company in accordance with the ethical requirements that are relevant
to our audit of the financial statements in the UK, including the FRC's
Ethical Standard as applied to public interest entities, and we have fulfilled
our other ethical responsibilities in accordance with these requirements. We
believe that the audit evidence we have obtained is sufficient and appropriate
to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors'
use of the going concern basis of accounting in the preparation of the
financial statements is appropriate.
Our audit procedures to evaluate the directors' assessment of the Company's
ability to continue to adopt the going concern basis of accounting included
but were not limited to:
● Undertaking an initial assessment at the planning stage of the audit to
identify events or conditions that may cast significant doubt on the Company's
ability to continue as a going concern;
● Making enquiries of the management and assessing the management's going
concern assessment and challenging the appropriateness of the assumptions used
including the directors' consideration of severe but plausible scenarios; and
● Evaluating the appropriateness of the directors' disclosures in the financial
statements on going concern.
Based on the work we have performed, we have not identified any material
uncertainties relating to events or conditions that, individually or
collectively, may cast significant doubt on the Company's ability to continue
as a going concern for a period of at least twelve months from when the
financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to
going concern are described in the relevant sections of this report.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were
of most significance in our audit of the financial statements of the current
period and include the most significant assessed risks of material
misstatement (whether or not due to fraud) we identified, including those
which had the greatest effect on: the overall audit strategy; the allocation
of resources in the audit; and directing the efforts of the engagement team.
These matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters.
We summarise below the key audit matters in forming our opinion above,
together with an overview of the principal audit procedures performed to
address each matter and our key observations arising from those procedures.
These matters, together with our findings, were communicated to those charged
with governance through our Audit Completion Report.
Key Audit Matter How our scope addressed this matter
Valuation of subordinated guaranteed notes and loan to immediate parent Our audit procedures included, but were not limited to:
undertaking.
Subordinated guaranteed notes:
Refer to page 21 for the key accounting policy
· Performed a walkthrough of the valuation process;
· Obtained the issuance documents to confirm the underlying details
Subordinated Guaranteed Notes (£96.31 million; 31 December 2023: £89.08 of subordinated guaranteed notes;
million)- refer to Note 12.
· Determined the fair value of subordinated guaranteed notes using
an independent and reliable pricing source;
Loan to immediate parent undertaking (£96.5 million; 31 December 2023: · Reviewed the adequacy of the disclosure in the financial
£89.28 million)- refer to Note 6. statements.
Risk Loan to immediate parent undertaking:
The amount of the intercompany loan receivable and subordinated guaranteed · Obtained the loan agreement to confirm the loan terms.
notes represent 99% (December 2023: 99%) of the Company's total assets and
total liabilities respectively. · Agreed the principal (GBP) value to the immediate parent
undertaking's accounting records;
· Determined the fair value of the loan using the tested price for
The fair value of the loan to immediate parent undertaking and subordinated subordinated guaranteed notes;
guaranteed notes are based on an observable source of market data. As a
result, the valuation does not represent a significant audit risk as there is · Assessed the recoverability of the loan to the immediate parent
no significant judgement or estimation uncertainty involved. Due to the undertaking.
quantum of these balances, this is considered to be a key audit matter as this
is the area where the greatest audit effort is spent.
Our observations
Based on the work performed and evidence obtained, we consider the valuation
of subordinated guaranteed notes and loan to immediate parent undertaking to
be appropriate.
Our application of materiality and an overview of the scope of our audit
The scope of our audit was influenced by our application of materiality. We
set certain quantitative thresholds for materiality. These, together with
qualitative considerations, helped us to determine the scope of our audit and
the nature, timing and extent of our audit procedures on the individual
financial statement line items and disclosures and in evaluating the effect of
misstatements, both individually and on the financial statements as a whole.
Based on our professional judgement, we determined materiality for the
financial statements as a whole as follows:
Overall materiality £974,492
How we determined it The overall Company statutory materiality has been calculated with reference
to the Company's total assets, of which it represents approximately 1%.
Rationale for benchmark applied
Total assets have been identified as the principal benchmark within the
financial statements as it is considered to be the focus of the shareholders.
1% reflects the borrow-to-lend nature of the Company as changes in loan terms
or interest rates can impact financial performance and shareholder value.
Performance materiality Performance materiality is set to reduce to an appropriately low level the
probability that the aggregate of uncorrected and undetected misstatements in
the financial statements exceeds materiality for the financial statements as a
whole.
We set performance materiality at £584,695, which represents 60% of overall
materiality.
Reporting threshold We agreed with the directors that we would report to them misstatements
identified during our audit above £29,235 as well as misstatements below that
amount that, in our view, warranted reporting for qualitative reasons.
As part of designing our audit, we assessed the risk of material misstatement
in the financial statements, whether due to fraud or error, and then designed
and performed audit procedures responsive to those risks. In particular, we
looked at where the directors made subjective judgements, such as assumptions
on significant accounting estimates.
We tailored the scope of our audit to ensure that we performed sufficient work
to be able to give an opinion on the financial statements as a whole. We used
the outputs of our risk assessment, our understanding of the Company, its
environment, controls, and critical business processes, to consider
qualitative factors to ensure that we obtained sufficient coverage across all
financial statement line items.
Other information
The other information comprises the information included in the Annual Report
other than the financial statements and our auditor's report thereon. The
directors are responsible for the other information. Our opinion on the
financial statements does not cover the other information and, except to the
extent otherwise explicitly stated in our report, we do not express any form
of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the financial
statements or our knowledge obtained in the course of audit or otherwise
appears to be materially misstated. If we identify such material
inconsistencies or apparent material misstatements, we are required to
determine whether this gives rise to a material misstatement in the financial
statements themselves. If, based on the work we have performed, we conclude
that there is a material misstatement of this other information, we are
required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
● the information given in the strategic report and the directors' report for
the financial year for which the financial statements are prepared is
consistent with the financial statements; and
● the strategic report and the directors' report have been prepared in
accordance with applicable legal requirements.
Matters on which we are required to report by exception
In light of the knowledge and understanding of the Company and its environment
obtained in the course of the audit, we have not identified material
misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to
which the Companies Act 2006 requires us to report to you if, in our opinion:
● adequate accounting records have not been kept by the Company, or returns
adequate for our audit have not been received from branches not visited by us;
or
● the Company 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.
Responsibilities of Directors
As explained more fully in the directors' responsibilities statement set out
on page 5, the directors are responsible for the preparation of the financial
statements and for being satisfied that they give a true and fair view, and
for such internal control as the directors determine is necessary to enable
the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for
assessing the Company's ability to continue as a going concern, disclosing, as
applicable, matters related to going concern and using the going concern basis
of accounting unless the directors either intend to liquidate the Company or
to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial
statements as a whole are free from material misstatement, whether due to
fraud or error, and to issue an auditor's report that includes our opinion.
Reasonable assurance is a high level of assurance but is not a guarantee that
an audit conducted in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and
are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on
the basis of these financial statements.
The extent to which our procedures are capable of detecting irregularities,
including fraud is detailed below.
Irregularities, including fraud, are instances of non-compliance with laws and
regulations. We design procedures in line with our responsibilities, outlined
above, to detect material misstatements in respect of irregularities,
including fraud.
Based on our understanding of the Company and its industry, we considered that
non-compliance with the following laws and regulations might have a material
effect on the financial statements: bribery act, money laundering regulations
and certain aspects of Company legislation recognising the financial and
regulated nature of the Company's activities.
To help us identify instances of non-compliance with these laws and
regulations, and in identifying and assessing the risks of material
misstatement in respect to non-compliance, our procedures included, but were
not limited to:
● Gaining an understanding of the legal and regulatory framework applicable to
the Company and the industry in which it operates, and considering the risk of
acts by the Company which were contrary to the applicable laws and
regulations, including fraud;
● Inquiring of the directors, management and, where appropriate, those charged
with governance, as to whether the Company is in compliance with laws and
regulations, and discussing their policies and procedures regarding compliance
with laws and regulations;
● Inspecting correspondence with relevant licensing or regulatory authorities
● Reviewing minutes of directors' meetings in the year; and
● Discussing amongst the engagement team the laws and regulations listed above,
and remaining alert to any indications of non-compliance.
We also considered those laws and regulations that have a direct effect on the
preparation of the financial statements, such as tax legislation, the
Companies Act 2006.
In addition, we evaluated the directors' and management's incentives and
opportunities for fraudulent manipulation of the financial statements,
including the risk of management override of controls, and determined that the
principal risks related to posting manual journal entries to manipulate
financial performance and significant one-off or unusual transactions.
Our procedures in relation to fraud included but were not limited to:
● Making enquiries of the directors and management on whether they had knowledge
of any actual, suspected or alleged fraud;
● Gaining an understanding of the internal controls established to mitigate
risks related to fraud;
● Discussing amongst the engagement team the risks of fraud;
● Addressing the risks of fraud through management override of controls by
performing journal entry testing.
The primary responsibility for the prevention and detection of irregularities,
including fraud, rests with both those charged with governance and management.
As with any audit, there remained a risk of non-detection of irregularities,
as these may involve collusion, forgery, intentional omissions,
misrepresentations or the override of internal controls.
The risks of material misstatement that had the greatest effect on our audit
are discussed in the "Key audit matters" section of this report.
A further description of our responsibilities is available on the Financial
Reporting Council's website at www.frc.org.uk/auditorsresponsibilities
(http://www.frc.org.uk/auditorsresponsibilities) . This description forms part
of our auditor's report.
Other matters which we are required to address
Following the recommendation of the board of directors, we were appointed by
the board of directors on 18 July 2024, to audit the financial statements for
the year ending 31 December 2024 and subsequent financial periods. The period
of total uninterrupted engagement is 1 year, covering the year ending 31
December 2024.
The non-audit services prohibited by the FRC's Ethical Standard were not
provided to the Company and we remain independent of the Company in conducting
our audit.
Our audit opinion is consistent with our additional report to the Board of
Directors.
Use of the audit report
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.
As required by the Financial Conduct Authority Disclosure Guidance and
Transparency Rules, these financial statements will form part of the
electronic reporting format prepared annual financial report filed on the
National Storage Mechanism of the Financial Conduct Authority. This auditor's
report provides no assurance over whether the annual financial report has been
prepared using the correct electronic format.
Kamilla Racinska (Senior Statutory Auditor)
for and on behalf of Forvis Mazars LLP
Chartered Accountants and Statutory Auditor
30 Old Bailey
London
EC4M 7AU
24 April 2025
Statement of Comprehensive Income
For the year ended 31 December 2024
2024 2023
Note £ £
Interest income 4,264,569 4,290,569
Interest expense (4,264,119) (4,276,750)
Net interest income 450 13,819
Gain/(Loss) on revaluation of loan to immediate parent 6 7,220,920 (3,571,708)
(Loss)/Gain on revaluation of debt securities in issue 12 (7,229,939) 3,567,238
Foreign exchange translation losses (87) (7,551)
(Loss)/Profit before tax (8,656) 1,798
Tax Credit / (charge) 5 1,495 (8,352)
Loss for the financial year (7,161) (6,554)
Other comprehensive income - -
Total comprehensive loss for the financial year (7,161) (6,554)
All amounts are in respect of continuing activities.
The notes on pages 18 to 26 form an integral part of these financial
statements
Balance Sheet
At 31 December 2024
2024 2024 2023 2023
Note £ £ £ £
Non-current assets
Loan to immediate parent 6 96,498,120 89,277,200
Current assets
Other financial assets 7 679,153 713,960
Amounts due from group companies 9 16,887 -
Current tax asset 1,733 -
Cash and cash equivalents 8 250,385 268,360
948,158 982,320
Current liabilities
Current tax liability - (1,904)
Other financial liabilities 11 (677,222) (712,007)
Net current assets 270,936 268,409
Total assets less current liabilities 96,769,056 89,545,609
Non-current liabilities
Deferred tax liability 10 (46,513) (45,844)
Subordinated Guaranteed Notes 12 (96,312,068) (89,082,129)
Net assets 410,475 417,636
Shareholders' equity
Share capital 14 100,000 100,000
Retained earnings 310,475 317,636
Total shareholders' equity 410,475 417,636
Approved by the Board of Directors and signed on its behalf on 24 April 2025
by:
Peter Barbour, Director
The notes on pages 18 to 26 form an integral part of these financial
statements
Statement of Changes in Equity
For the year ended 31 December 2024
Share Retained Earnings Total
Capital Equity
£ £ £
At 31 December 2023 100,000 317,636 417,636
Total comprehensive loss for the financial year - (7,161) (7,161)
At 31 December 2024 100,000 310,475 410,475
At 31 December 2022 100,000 324,190 424,190
Total comprehensive loss for the financial year - (6,554) (6,554)
At 31 December 2023 100,000 317,636 417,636
The notes on pages 18 to 26 form an integral part of these financial
statements
Cash Flow Statement
For the year ended 31 December 2024
2024 2023
Note £ £
Cash flow from operating activities (7,161) (6,554)
Net (loss) for the financial
year
Tax (credit) / charge 5 (1,495) 8,352
Operating (loss)/profit before changes in working capital and provisions (8,656) 1,798
Fair value movements of loans 6 (7,220,920) 3,571,708
Fair value movements of debt securities 12 7,229,939 (3,567,238)
Cash from operations 363 6,268
Taxation paid (1,473) (3,009)
Net decrease/(increase) in other financial assets 34,807 (91,391)
Net (decrease)/increase in other financial liabilities (34,785) 91,435
Net increase in amounts due from group companies (16,887) -
Net cash from operating activities (17,975) 3,303
Net (decrease)/increase in cash and cash equivalents (17,975) 3,303
Cash and cash equivalents at beginning of year 268,360 265,057
Cash and cash equivalents at end of year 8 250,385 268,360
Interest receipts and payments during the year were as follows:
2024 2023
£ £
Interest received from immediate parent 4,299,376 4,199,178
Interest paid to note holders 4,298,904 4,185,315
The notes on pages 18 to 26 form an integral part of these financial
statements
Notes to the Financial Statements
(forming part of the Financial Statements)
For the year ended 31 December 2024
1. Accounting Policies
Rothschild & Co Continuation Finance PLC ("the Company") is a public
limited company incorporated in England and Wales, and whose registered office
is at New Court, St Swithin's Lane, London EC4N 8AL. The Company operates in
one segment, debt trading. Revenue from these debt instruments constitutes
most of the Company's income. During the reporting period, all interest income
earned, aside from minor bank account interest generated from Rothschild &
Co Bank International, is from the immediate parent, NMR, and is attributed to
the Company's country of domicile, 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 accounting standards as adopted in the UK, in
conformity with the requirements of the Companies Act 2006.
Functional and presentation currency
These financial statements are presented in sterling, which is the Company's
functional currency.
Going concern
Management has performed an assessment to determine whether there are any
material uncertainties that could cast significant doubt on the ability of the
Company to continue as a going concern. No significant issues have been noted.
In reaching this conclusion, management considered:
- The financial impact of any uncertainty on the Company's balance sheet;
- The Company's liquidity position based on current and projected cash
resources. The liquidity position has been assessed taking into account the
forecast liquidity of N. M. Rothschild & Sons Limited ("NMR") and its
ability to continue to pay the interest on the intercompany loan provided by
the Company. This included severe but plausible downside scenarios for NMR as
part of their assessment including scenarios with a significant reduction in
revenues;
Based on the above assessment of the Company's financial position, the
Directors have concluded that the Company has adequate resources to continue
in operational existence for the foreseeable future (for a period of at least
twelve months after the date that the financial statements are signed).
Accordingly, they continue to adopt the going concern basis of accounting in
preparing the annual financial statements.
Standards affecting the financial statements
There were no new standards or amendments to standards that have been applied
in the financial statements for the year ended 31 December 2024.
New standards, amendments and interpretations not yet adopted
The following new standards and amendments to standards and interpretations
are effective for future periods:
● IFRS 18 Presentation and Disclosure in Financial Statements (effective for
periods beginning on or after 1 January 2027)
● Amendments to the Classification and Measurement of Financial Instruments
(Amendments to IFRS 9 and IFRS 7) (effective for periods beginning on or after
1 January 2026).
● Lack of Exchangeability (Amendments to IAS 21) (effective for periods
beginning on or after 1 January 2025).
The Company does not intend to adopt the new or amended standards early. It is
not currently expected that these new and amended standards will have a
material impact on the Company's financial statements, although IFRS 18 will
change the structure of the Income Statement. IFRS 18 requires endorsement by
the UK Endorsement Board before it can be adopted by the Company.
b. Interest income and expense
Interest income and expense represents interest arising out of lending and
borrowing activities. Interest income and expense is recognised in the income
statement.
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.
d. Cash and cash equivalents
Cash for the purposes of the statement of cash flows, comprises money
deposited with financial institutions that can be withdrawn without notice.
e. Taxation
Tax payable on profits is recognised in the statement of comprehensive income.
Deferred tax is provided in full, using the balance sheet liability method, on
temporary differences arising between the tax bases of assets and liabilities
and their carrying amounts. Deferred tax is determined using tax rates and
laws that are expected to apply when a deferred tax asset is realised, or when
a deferred tax liability is settled.
The Company is relying on the exemption from disclosing deferred tax assets
and liabilities related to Pillar Two income taxes.
f. Capital management
The Company is not subject to any externally imposed capital requirements.
g. Financial assets and liabilities
Financial assets and liabilities are recognised on trade date and derecognised
on either trade date, or on maturity, repayment, or when liabilities are
extinguished.
i. Loans and advances
Loans and advances are non-equity financial assets with fixed and determinable
payments that do not meet the solely payments of principal and interest (SPPI)
requirements due to the two terms in the loan documentation that introduced
exposure to non-basic risks:
- There is dividend pusher clause which means that, in certain circumstances,
the interest is not contractually payable and, if this happens, interest does
not compound on any unpaid amount; and
- The interest rate is reset quarterly but by reference to an index rate
(EUR-TEC10-CNO) that is based on 10 year borrowing rates, which is viewed
similar to a constant maturity swap.
These have been classified at Fair Value Through Profit or Loss (FVTPL). The
fair values are based on the market value of the external debt securities.
ii. Financial liabilities
Subordinated Guaranteed Notes in issue are recorded at fair value with any
changes in fair value recognised in the income statement, per Note 12. All
other financial liabilities are recognised at amortised cost.
h. Accounting judgements and estimates
In the application of the Company's accounting policies, which are described
in note 1, the Directors are required to make judgements, estimates and
assumptions about the carrying amount of assets and liabilities that are not
readily apparent from other sources. The estimates and associated assumptions
are based on historical experience and other factors that are considered to be
relevant. Actual results may differ from these estimates. There are no
critical judgements or estimates to disclose at the year end.
1. Financial Risk Management
The Company follows the financial risk management policies of the immediate
parent, 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 material risk to the Company as all
asset balances are with other group companies as detailed in note 14 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 material as the terms of financial assets substantially match those
of financial liabilities. At the group level, limits on market risk exposure
are set by the R&Co Group Assets and Liabilities Committee and are
independently monitored.
- 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 material as the risk has been transferred to
NMR. As the funds on-lent to NMR have the same maturity dates as the notes
issued, 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.
Liquidity risk disclosures are detailed in note 13 Maturity of Financial
Liabilities. NMR, the immediate parent, regularly monitors its liquidity
position and forecasts cash flows to ensure it can meet its financial
obligations as they fall due.
Additionally, The R&Co Group Assets and Liabilities Committee is
responsible for monitoring and managing all balance sheet, market and
liquidity risks within the Group. Changes in market interest rates, currency
exchange rates, and debt prices can affect the fair value of the loan, leading
to revaluation gains or losses depending on their movement. The Company
mitigates these risks by ensuring that the terms of financial assets
substantially match those of financial liabilities, and by setting and
monitoring limits on market risk exposure through the R&Co Group Assets
and Liabilities Committee.
2. Audit Fee
The amount receivable by the auditors and their associates in respect of the
audit of these financial statements is £30,000 (2023: £25,000). The audit
fee is paid on a group basis by N M Rothschild & Sons Limited.
3. Directors' Emoluments
None of the Directors received any remuneration from the Company or any other
entity of the Rothschild & Co Group for their services during the year
(2023: £nil).
4. Taxation
2024 2023
£ £
Current tax (2,164) 423
Deferred tax 669 7,929
Total tax (1,495) 8,352
The tax charge can be explained as follows: 2024 2023
Note £ £
Profit/(Loss) before tax (8,656) 1,798
United Kingdom corporation tax calculated at standard rate of 25% (2023: 25%) (2,164) 450
Changes in tax rate - (27)
Deferred tax charge 669 7,929
Total tax (1,495) 8,352
The UK corporation tax rate at the balance sheet date was 25 per cent.
5. Loan to Immediate Parent
2024 2023
£ £
At beginning of period 89,277,200 92,848,908
Fair value movements 7,220,920 (3,571,708)
At end of period 96,498,120 89,277,200
Due 96,498,120 89,277,200
In 5 years or more
In accordance with the business model assessment under IFRS 9, the loan to
immediate parent is a non-equity financial asset that does not meet SPPI
requirements and has been classified at Fair Value Through Profit or Loss
(FVTPL). The fair value of the €150,000,000 loan as at 31 December 2024 was
£96,498,120 (2023: £89,277,200). On an amortised cost basis, the value of
the loan at 31 December 2024 would be £124,033,572 (2023: £130,046,904).
The fair values are based on the market value of the external debt securities
(level 2).
Consistent with the prior period, the fair value was derived from quoted
market prices at the balance sheet date. In accordance with IFRS 13 and due to
a reduction in the frequency and volume of transactions observed in the
immediate run up to the period end, the fair value is considered to be level 2
as at 31 December 2024 (2023: level 2).
The interest rate charged on the €150 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 maturity matches that of the subordinated
guaranteed notes.
The interest rate on the above loan at 31 December 2024 was 3.52% (2023:
3.66%).
6. Current Assets: Other Financial Assets
2024 2023
£ £
Amounts owed by immediate parent:
Interest receivable 679,153 713,960
Accrued interest on the loan is excluded from the fair value in Note 6 and is
presented above.
7. Cash and Cash Equivalents
2024 2023
£ £
250,385
Cash held at a fellow subsidiary Bank 268,360
At the year end the company held cash of £250,385 at a fellow subsidiary.
£268,360 was held at the immediate parent in the prior year.
8. Amounts due from group companies
2024 2023
£ £
16,887
Amounts due from immediate parent - N. M. Rothschild & Sons Limited -
Amounts due from the immediate parent are interest free and repayable on
demand.
9. Deferred Income Taxes
2024 2023
£ £
At beginning of period (45,844) (37,915)
Recognised in income
Tax charge (669) (7,929)
At end of period (46,513) (45,844)
Deferred tax assets less liabilities are attributable to the following items:
2024 2023
£ £
Fair value of intra group loans 6,883,863 9,580,879
Fair value of subordinated guaranteed notes in issue (6,930,376) (9,626,723)
(46,513) (45,844)
Both the intra-group loans and subordinated guaranteed notes in issue are
taxed on an amortised cost basis of accounting and accordingly
taxable/deductible temporary differences arise following the adoption of IFRS
9. Deferred tax is provided using rates that have been substantively enacted
at the balance sheet date and that are expected to apply when the temporary
difference is realised. The current UK corporation tax rate is 25 per cent.
10. Current Liabilities: Other Financial Liabilities
2024 2023
£ £
Interest payable 677,222 712,007
Accrued interest on the Subordinated Guaranteed Notes are excluded from the
fair value in Note 12 and is presented above.
11. Subordinated Guaranteed Notes
2024 2023
£ £
At beginning of period 89,082,129 92,649,367
Fair value movements 7,229,939 (3,567,238)
At end of period 96,312,068 89,082,129
Repayable 96,312,068 89,082,129
In 5 years or more
The Company has elected to fair value through P&L the subordinated
guaranteed notes, which as at 31 December 2024 was £96,312,068 (2023:
£89,082,129), to significantly reduce the accounting mismatch from the
corresponding loan to immediate parent which is classified as fair value
through P&L.
The change in fair value attributable to credit risk that should be presented
in Other Comprehensive Income is immaterial. On an amortised cost basis, the
value of the subordinated guaranteed notes in issue at 31 December 2024 would
be £124,033,572 (2023: £130,046,904).
Consistent with the prior period, the fair value was derived from quoted
market prices at the balance sheet date. In accordance with IFRS 13 and due to
a reduction in the frequency and volume of transactions observed in the
immediate run up to the period end, the fair value is considered to be level 2
as at 31 December 2024 (2023: level 2).
The interest rate payable on the €150 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 2016 and every interest payment
date thereafter, the Company may redeem all (but not some only) of the
Perpetual Subordinated Notes at their principal amount. There is no plan to
redeem the notes over the next 12 month period.
The interest rate on the above notes at 31 December 2024 was 3.51% (2023:
3.65%).
12. 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 cashflows on perpetual subordinated notes
are estimated and shown up to five years only, with the principal balance
being shown in the perpetual column. Interest will still apply on the
perpetual subordinated notes beyond the five year period.
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
At 31(st) December 2024 £ £ £ £ £ £
Perpetual subordinated notes - 1,088,395 3,265,184 17,414,313 124,033,572 145,801,464
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
At 31st December 2023 £ £ £ £ £ £
Perpetual subordinated notes - 1,186,678 3,560,034 18,986,848 130,046,904 153,780,464
13. Share Capital
2024 2023
£ £
Authorised, allotted, called up and fully paid
100,000 Ordinary shares of £1 each 100,000 100,000
14. 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, subsidiaries and
fellow subsidiaries.
Amounts receivable from related parties at the year-end were as follows:
2024 2023
£ £
Cash and cash equivalents - Rothschild & Co Bank International 250,385 -
Amounts due from immediate parent - N. M. Rothschild & Sons Limited 16,887 -
Cash and cash equivalents at immediate parent - N. M. Rothschild & Sons - 268,360
Limited
Accrued interest receivable from immediate parent 679,153 713,960
Loans to immediate parent - at fair value 96,498,120 89,277,200
Amounts recognised in the statement of comprehensive income in respect of
related party transactions were as follows:
2024 2023
£ £
Interest income from immediate parent 4,264,569 4,290,569
There were no loans made to Directors during the year (2023: none) and no
balances outstanding at the year-end (2023: £nil). The Directors did not
receive any remuneration in respect of their services to the Company. There
were no employees of the Company during the year (2023: none).
15. Immediate Parent, 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, and whose
registered office is at 23bis, Avenue de Messine, 75008 Paris. Rothschild
& Co Concordia SAS is the ultimate controlling party. The smallest group
in which they are consolidated is that headed by Rothschild & Co SCA, a
private partnership whose registered office is also at 23bis, Avenue de
Messine, 75008 Paris. The accounts are available on Rothschild & Co
website at https://www.rothschildandco.com/en/about-us/results-reports/.
The Company's immediate parent company is N. M. Rothschild & Sons Limited,
incorporated in England and Wales and whose registered office is at New Court,
St Swithin's Lane, London EC4N 8AL.
The Company's registered office is located at New Court, St Swithin's Lane,
London EC4N 8AL.
16. Subsequent Events
The Company has evaluated subsequent events and determined that there have
been no events that have occurred that would require adjustments to our
disclosures in the financial statements.
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