Annual Report 2017

Rothschild & Co | Annual Report 2017

185

1. Overview

4. Financial statements

Management report

2. Business review

Investments in Group and other companies and portfolio holdings are recognised at their acquisition cost. An impairment loss is recognised when fair value

is below acquisition cost.

The fair values of investments in Group and other companies and portfolio holdings are calculated in the following manner:

• unlisted securities: market value. This is obtained using either the Company’s share of book net assets, appraised net assets of the holding, or the price

used for a recent transaction in the security;

• treasury stock: average price in the final month of the financial period;

• listed securities: last quoted price of the financial period; and

• funds: an impairment is recognised when the acquisition cost or total investments in the fund exceed the Company’s share of the fund’s adjusted net

asset value as certified by the fund’s auditors, or the redemption value as determined by the issuer. The portion of unrealised capital losses linked to

currency effects is recognised separately from impairment, which relates solely to changes in the value of the underlying assets.

The value of the portfolio at 31 December 2017 was measured using the same methodology as applied in the preceding financial period. Dividends are

recorded in the month in which it is decided to distribute them.

Regarding FCPR-type venture capital funds, in accordance with market practice, only amounts actually called up are recorded, and the unfunded capital

commitment is recorded as an off-balance sheet item.

Sales of shareholdings, long-term portfolio holdings or investment securities are recognised using the first-in, first-out (FIFO) method, i.e. the longest-held

securities will be deemed to be the first sold.

Receivables are recognised at their nominal value. An impairment loss is recognised when the inventory value is lower than the carrying cost. Receivables

denominated in foreign currencies are translated at the closing rate for the financial period.

Marketable securities are recognised at their acquisition cost. When their overall inventory value is lower than their acquisition cost, an impairment loss is

recognised. The book value is equal to the closing price for the financial period.

Transactions denominated in foreign currencies are recognised at the rate on the transaction date. At the end of the financial period, all assets and

liabilities are converted at the closing rate.

IV Notes to the Company balance sheet

Note 1 – Property, plant and equipment

In thousands of euro

01/04/2017 Acquisitions

(Disposals)

31/12/2017

Gross value

8,524

–

(543)

7,981

(Increases)

Decreases

Impairment/amortisation

(405)

(189)

(560)

TOTAL

8,119

(189)

(509)

7,421

No acquisition/increase of property, plant and equipment has been done during the period concerned. Conversely, disposals have been done primarily with

the sales of a built-up land for a value of €157 thousand and a building for €363 thousand.

Note 2 – Investments in Group and other companies

In thousands of euro

01/04/2017 Acquisitions

(Disposals)

31/12/2017

Gross value

1,671,157

2,118

(936)

1,672,340

(Increases)

Decreases

Impairment

(443)

–

(443)

TOTAL

1,670,715

2,118

(936)

1,671,897

Acquisitions/increases in equity securities for the period concerned the French subsidiary Banque Martin Maurel SA, as detailed in F. 3 Off-balance sheet

commitments in connection with the acquisition of BMM shares from certain managers.

The reduction in gross values concerned firstly the disposal of 99.99% stake in Funds Selection for a value of €546 thousand, and secondly the total

transmission (

TUP

) of the assets of Grignan Participation in which R&Co had a 100% stake, for €390 thousand.