ORIX Australia (Securities) Pty Ltd
27 July 2006
ORIX Australia (Securities) Pty Limited
ABN 15 003 968 401
Annual report
for the year ended 31 March 2006
Page
Directors' report 1
Financial report 3
Directors' declaration 14
This financial report covers ORIX Australia (Securities) Pty Limited as an
individual entity. The financial report is presented in the Australian
currency.
ORIX Australia (Securities) Pty Limited is a company limited by shares,
incorporated and domiciled in Australia. Its registered office and principal
place of business is:
ORIX Australia (Securities) Pty Limited
1 Eden Park Drive
Macquarie Park NSW 2113.
A description of the nature of the company's operations and its principal
activities is included in the directors' report on page 1.
The financial report was authorised for issue by the directors on 25 July 2006.
ORIX Australia (Securities) Pty Limited
Directors' report
31 March 2006
Directors' report
The directors present their report together with the financial report of ORIX
Australia (Securities) Pty Limited (referred to hereafter as the company) for
the financial ear ended 31 March 2006.
Directors
The following persons were directors of ORIX Australia (Securities) Pty Limited
during the whole of the financial year and up to the date of this report:
John J Carter
Minoru Osawa
Principal activities
The Company was formed for the purpose of acting as a financing company to
assist ORIX Corporation and its subsidiaries and affiliates in raising finance.
ORIX Corporation is the ultimate controlling entity, and is incorporated in
Japan.
Matters subsequent to the end of the financial year
As at the date of this report no matter or circumstance has arisen since 31
March 2006 that has significantly affected, or may significantly affect:
(a) the company's operations in future financial years, or
(b) the results of those operations in future financial years, or
(c) the company's state of affairs in future financial years.
Likely developments and expected results of operations
The Directors intend that the company will continue in subsequent financial
years to act as a financing company to assist ORIX Corporation and its
subsidiaries and affiliates in raising finance.
Auditors' independence declaration
The lead auditors' independence declaration is set out on page 2 and forms part
of the directors' report for the year ended 31 March 2006.
Rounding of amounts
The company is of a kind referred to in Class Order 98/100, issued by the
Australian Securities and Investments Commission, relating to the ''rounding
off'' of amounts in the directors' report. Amounts in the directors' report
have been rounded off in accordance with that Class Order to the nearest
thousand dollars, or in certain cases, to the nearest dollar.
This report is made in accordance with a resolution of directors.
John J Carter
Director
Minoru Osawa
Director
Sydney
25 July 2006
Lead Auditor's Independence Declaration under Section 307C of the Corporations
Act 2001 to the directors of ORIX Australia (Securities) Pty Limited
I declare that, to the best of my knowledge and belief, in relation to the audit
for the financial year ended 31 March 2006 there have been:
(i) no contraventions of the auditor independence requirements as set out in
the Corporations Act 2001 in relation to the audit; and
(ii) no contraventions of any applicable code of professional conduct
in relation to the audit.
KPMG
Andrew J Yates
Partner
Sydney, 25 July 2006
Page
Financial report
Income statement 4
Balance sheet 5
Statement of changes in equity 6
Cash flow statement 7
Notes to the financial statements 8
Directors' declaration 14
This financial report covers ORIX Australia (Securities) Pty Limited as an
individual entity. The financial report is presented in the Australian
currency.
ORIX Australia (Securities) Pty Limited is a company limited by shares,
incorporated and domiciled in Australia. Its registered office and principal
place of business is:
ORIX Australia (Securities) Pty Limited 1 Eden Park Drive Macquarie Park NSW
2113.
A description of the nature of the company's operations and its principal
activities is included in the directors' report on page 1.
The financial report was authorised for issue by the directors on 25 July 2006.
ORIX Australia (Securities) Pty Limited
Income statement
31 March 2006
2006 2005
Notes $'000 $'000
Revenue from continuing operations 2 35,413 30,436
Foreign exchange loss (1) -
Finance costs (35,413) (30,436)
Net Profit before income tax (1) -
Income tax expense - 2
Net Profit after income tax expense (1) 2
The above income statement should be read in conjunction with the accompanying
notes.
ORIX Australia (Securities) Pty Limited
Balance sheet
31 March 2006
2006 2005
Notes $'000 $'000
ASSETS
Current assets
Cash and cash equivalents 3 46 47
Trade and other receivables 4 497,902 286,263
Derivative assets 5 5,757 -
Total current assets 503,705 286,310
Non-current assets
Receivables 6 47,152 240,942
Total non-current assets 47,152 240,942
Total assets 550,857 527,252
LIABILITIES
Current liabilities
Trade and other payables 7 4,825 3,722
Borrowings 8 493,082 282,547
Derivative liabilities 9 12,231 -
Total current liabilities 510,138 286,269
Non-current liabilities
Borrowings 10 40,679 240,942
Total non-current liabilities 40,679 240,942
Total liabilities 550,817 527,211
Net assets 40 41
EQUITY
Contributed equity 11 35 35
Retained profits 12 5 6
Total equity 40 41
The above balance sheet should be read in conjunction with the accompanying
notes.
ORIX Australia (Securities) Pty Limited
Statement of changes in equity
31 March 2006
2006 2005
Notes $'000 $'000
Total equity at the beginning of the financial year 41 39
Profit for the year (1) 2
Total equity at the end of the financial year 40 41
The above statement of changes in equity should be read in conjunction with the
accompanying notes.
ORIX Australia (Securities) Pty Limited
Cash flow statement
31 March 2006
2006 2005
Notes $'000 $'000
Cash flows from operating activities
Net cash (outflow) inflow from operating activities - -
Cash flows from investing activities
Net cash (outflow) inflow from investing activities - -
Cash flows from financing activities
Borrowing costs paid (38,994) (30,264)
Interest income received 38,993 30,265
Proceeds from borrowings - 5,867
Repayment of borrowings - (5,867)
Net cash inflow (outflow) from financing activities (1) 1
Net increase (decrease) in cash and cash equivalents (1) 1
Cash and cash equivalents at the beginning of the financial year 47 46
Cash and cash equivalents at end of year 3 46 47
The above cash flow statement should be read in conjunction with the
accompanying notes.
Contents of the notes to the financial statements
Page
1 Summary of significant accounting policies 9
2 Revenue 10
3 Current assets - Cash and cash equivalents 10
4 Current assets - Trade and other receivables 11
5 Derivative assets 11
6 Non-current assets - Receivables 11
7 Current liabilities - Trade and other payables 11
8 Current liabilities - Borrowings 11
9 Derivative liabilities 11
10 Non-current liabilities - Borrowings 12
11 Contributed equity 12
12 Retained profits 12
13 Remuneration of auditors 12
14 Explanation of transition to Australian equivalents to IFRSs 13
1 Summary of significant accounting policies
The principal accounting policies adopted in the preparation of the financial
report are set out below. These policies have been consistently applied to all
the years presented, unless otherwise stated.
(a) Basis of preparation
In the opinion of the directors, the Company is not a reporting entity because
there are no users dependent on general purpose financial reports. The
financial report of the Company has been drawn up as a special purpose financial
report for distribution to the members and for the purpose of fulfilling the
requirements of the Corporations Act 2001. The special purpose financial report
has been prepared in accordance with the requirements of the Corporations Act
2001, the recognition and measurement aspects of all applicable Australian
Accounting Standards ('AASBs') and Urgent Issue Group Interpretations ('UIGs')
adopted by the Australian Accounting Standards Board ('AASB'). International
Financial Reporting Standards ('IFRS') form the basis of Australian Accounting
Standards adopted by the AASB, and for the purpose of this report are called
Australian equivalents to IFRS ('AIFRS') to distinguish from previous Australian
GAAP.
The financial report does not include the disclosure requirements of the
following pronouncements:
AASB 112-Income Taxes
AASB 114-Segment Reporting
AASB 124-Related Party Disclosures
AASB 128-Investments in Associates
AASB 136-Impairment of Assets
AASB 132-Financial Instruments: Disclosure and Presentation
AASB 139-Financial Instruments: Recognition and Measurement
This is the Company's first financial report prepared in accordance with AIFRS
and AASB 1 'First-time Adoption of Australian Equivalents to International
Financial Reporting Standards' has been applied. An explanation of how the
transition to AIFRS has affected the reported financial position, financial
performance and cash flows of the Company is provided in note 14.
Statement of Compliance
Financial statements of ORIX Australia (Securities) Pty Limited until 31 March
2005 had been prepared in accordance with previous Australian Generally Accepted
Accounting Principles (AGAAP). AGAAP differs in certain respects from AIFRS.
When preparing ORIX Australia (Securities) Pty Limited 2006 financial
statements, management has amended certain accounting and valuation methods
applied in the AGAAP financial statements to comply with AIFRS. With the
exception of financial instruments, the comparative figures in respect of 2005
were restated to reflect these adjustments. The company has taken the exemption
available under AASB 1 to only apply AASB 132 and AASB 139 from 1 April 2005.
(b) Income tax
The income tax expense or revenue for the period is the tax payable on the
current period's taxable income based on the national income tax rate adjusted
by changes in deferred tax assets and liabilities attributable to temporary
differences between the tax bases of assets and liabilities and their carrying
amounts in the financial statements, and to unused tax losses.
Deferred tax assets and liabilities are recognised for temporary differences at
the tax rates expected to apply when the assets are recovered or liabilities are
settled, based on those tax rates which are enacted or substantively enacted for
each jurisdiction. The relevant tax rates are applied to the cumulative amounts
of deductible and taxable temporary differences to measure the deferred tax
asset or liability. An exception is made for certain temporary differences
arising from the initial recognition of an asset or a liability. No deferred
tax asset or liability is recognised in relation to these temporary differences
if they arose in a transaction, other than a business combination, that at the
time of the transaction did not affect either accounting profit or taxable
profit or loss. Deferred tax assets are recognised for deductible temporary
differences and unused tax losses only if it is probable that future taxable
amounts will be available to utilise those temporary differences and losses.
Current and deferred tax balances attributable to amounts recognised directly in
equity are also recognised directly in equity.
(c) Derivatives
Derivatives are initially recognised at fair value on the date a derivative
contract is entered into and are subsequently remeasured to their fair value.
The method of recognising the resulting gain or loss depends on whether the
derivative is designated as a hedging instrument, and if so, the nature of the
item being hedged. The fair value of interest rate swaps is the estimated amount
that the company would receive or pay to terminate the swap at the balance sheet
date, taking into account current interest rates and the current credit
worthiness of the swap counterparties. The fair value of the forward exchange
contracts is their quoted market price at the balance sheet date, being the
present value of the quoted forward price.
The company designates certain derivatives as fair value of recognised assets or
liabilities or a firm commitment (fair value hedge)
The company documents at the inception of the transaction the relationship
between hedging instruments (primarily derivatives) and hedged items, as well as
its risk management objective and strategy for undertaking various hedge
transactions. The company also documents its assessment, both at hedge
inception and on an ongoing basis, of whether the hedging instruments that are
used in hedging transactions have been and will continue to be highly effective
in offsetting changes in fair values or cash flows of hedged items.
Fair value hedges
Changes in the fair value of derivatives that are designated and qualify as fair
value hedges are recorded in the income statement, together with any changes in
the fair value of the hedged asset or liability that are attributable to the
hedged risk. If the fair value hedge relationship is terminated for reasons
other than the derecognition of the hedged item, fair value hedge accounting
ceases and the fair value of the hedged item is amortised to profit and loss
over the remaining term of the original hedge. If the hedged item is
derecognised the unamortised fair value adjustment on the balance sheet is
recognised immediately in the profit and loss.
Comparative period policy
The company is exposed to changes in interest rates and foreign exchange rates
from its activities. The company uses the following derivative financial
instruments to hedge these risks: interest rate swaps and forward foreign
exchange contracts. Derivative financial instruments are not held for
speculative purposes and were treated as off balance sheet items in the
comparative period.
The adjustment in the company at 1 April 2005 to apply AASB132 and AASB139 was
to recognise a derivative liability of $19.69 million and a decrease in non-
current interest bearing liabilities of $19.69 million.
2 Revenue
2006 2005
$'000 $'000
From continuing operations
Interest revenue 35,413 30,436
3 Current assets - Cash and cash equivalents
2006 2005
$'000 $'000
Cash at bank and in hand 11 12
Deposits at call 35 35
46 47
4 Current assets - Trade and other receivables
2006 2005
$'000 $'000
Net related party receivables
Interest bearing asset 493,082 246,998
Receivables 4,820 39,265
497,902 286,263
5 Derivative assets
2006 2005
$'000 $'000
Current assets
Derivative receivable 5,757 -
(a) Transition to AASB 132 and AASB 139
The company has taken the exemption available under AASB 1 First-time Adoption of Australian Equivalents to
International Financial Reporting Standards to apply AASB 132 Financial Instruments: Disclosure and
Presentation and AASB 139 Financial Instruments: Recognition and Measurement from 1 April 2005.
6 Non-current assets - receivables
2006 2005
$'000 $'000
Net related party receivables
Interest bearing receivables 47,152 240,942
47,152 240,942
7 Current liabilities - Trade and other payables
2006 2005
$'000 $'000
Other payables 4,825 3,722
4,825 3,722
8 Current liabilities - Borrowings
2006 2005
$'000 $'000
Unsecured
Notes issued under MTN programme 493,082 282,547
Total current borrowings 493,082 282,547
9 Derivative liabilities
2006 2005
$'000 $'000
Derivative liabilities 12,231 -
12,231 -
10 Non-current liabilities - Borrowings
2006 2005
$'000 $'000
Bank loans - 172,000
Notes issued under MTN programme 47,152 68,942
Revaluation of hedged liabilities (6,473) -
Total non-current borrowings 40,679 240,942
(a) Financing arrangements
As at 31 March 2006 the Company was a party to a USD 5,000,000,000 Euro Medium
Term Note Programme and had drawn down Notes amounting to 45,000,000,000
Japanese Yen . Additionally as at 31 March 2006, the Company was a party to a
USD 500,000,000 364 day credit agreement which was unutilised at year end.
11 Contributed equity
2006 2005 2006 2005
Shares Shares $'000 $'000
Share capital
Ordinary shares
Fully paid 35,002 35,002 35 35
35,002 35,002 35 35
Holders of ordinary shares are entitled to receive dividends as declared from
time to time and are entitled to one vote per share at shareholders meetings.
12 Retained profits
Movements in retained profits were as follows:
2006 2005
$'000 $'000
Opening retained earnings 6 4
(Loss) / Profit for the year (1) 2
Closing balance 5 6
13 Remuneration of auditors
Fees for services rendered by the Company's auditor in relation to the statutory
audit are borne by the parent entity.
14 Explanation of transition to Australian equivalents to IFRSs
(1) Reconciliation of equity reported under previous Australian Generally
Accepted Accounting Principles (AGAAP) to equity under Australian equivalents to
IFRSs (AIFRS)
As stated in significant accounting policies note 1(a), these are the Company's
first financial statements prepared in accordance with AIFRS.
The policies set out in the significant accounting policies section of this
report have been applied in preparing the financial statements for the year
ended 31 March 2006, the comparative information presented in these financial
statements for the year ended 31 March 2005 and in the preparation of an opening
AIFRS balance sheet at 1 April 2004 (the Company's date of transition).
In preparing its opening AIFRS income statement, the Company found that there
are no adjusting amounts in relation to the previously reported income statement
under previous GAAP.
There are no material adjustments between the cash flow statement under AIFRS
and the cash flow statement presented under previous GAAP.
ORIX Australia (Securities) Pty Limited
Directors' declaration
31 March 2006
In the directors' opinion:
(a) The financial statements and notes set out on pages 3 - 13 are in
accordance with the Corporations Act 2001, including:
(i) complying with Accounting Standards, the Corporations Regulations 2001
and other mandatory professional reporting requirements; and
(ii) giving a true and fair view of the consolidated entity's financial
position as at 31 March 2006 and of its performance, as represented by
the results of its operations, changes in equity and its cash flows,
for the financial year ended on that date; and
(b) there are reasonable grounds to believe that the company will be able to
pay its debts as and when they become due and payable;
This declaration is made in accordance with a resolution of the directors.
John J Carter
Director
Minoru Osawa
Director
Sydney
25 July 2006
Independent audit report to the members of ORIX Australia (Securities) Pty
Limited
Scope
We have audited the financial report of ORIX Australia (Securities) Pty Limited
('the Company') for the financial year ended 31 March 2006, being a special
purpose financial report consisting of the income statement, statement of
changes in equity, balance sheet, statement of cash flows, accompanying notes 1
to 14, and the directors' declaration. The Company's directors are responsible
for the financial report including the relevant reconciling information
regarding the adjustments required under Australian Accounting Standard AASB 1
First-time Adoption of Australian equivalents to International Financial
Reporting Standards. The directors have determined that the accounting policies
used and described in Note 1 to the financial statements are appropriate to meet
the requirements of the Corporations Act 2001 and the needs of the members. We
have conducted an independent audit of the financial report in order to express
an opinion on it to the members of the Company. No opinion is expressed whether
the accounting policies used, and described in Note 1, are appropriate to the
needs of the members.
The financial report has been prepared for distribution to members for the
purpose of fulfilling the requirements of the Corporations Act 2001. We
disclaim any assumption of responsibility for any reliance on this report, or on
the financial report to which it relates, to any person other than the members,
or for any purpose other than that for which it was prepared.
Our audit has been conducted in accordance with Australian Auditing Standards to
provide reasonable assurance whether the financial report is free of material
misstatement. Our procedures included examination, on a test basis, of evidence
supporting the amounts and other disclosures in the financial report, and the
evaluation of accounting policies and significant accounting estimates. These
procedures have been undertaken to form an opinion whether, in all material
respects, the financial report is presented fairly in accordance with Australian
Accounting Standards and other mandatory professional reporting requirements in
Australia and statutory requirements so as to present a view which is consistent
with our understanding of the Company's financial position, and performance as
represented by the results of its operations and its cash flows. These policies
do not require the application of all Australian Accounting Standards nor other
mandatory professional reporting requirements in Australia.
The audit opinion expressed in this report has been formed on the above basis.
Audit opinion
In our opinion, the financial report of ORIX Australia (Securities) Pty Limited
is in accordance with:
a) the Corporations Act 2001, including:
i. giving a true and fair view of the Company's financial position as at
31 March 2006 and of its performance for the financial year ended on
that date in accordance with the accounting policies described in Note
1 to the financial statements; and
ii. complying with Australian Accounting Standards to the extent described
in Note 1, and the Corporations Regulations 2001; and
b) other mandatory financial reporting requirements in Australia, to the
extent described in Note 1 to the financial statements.
KPMG
Andrew J Yates
Partner
Sydney, 25 July 2006
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