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OrixAustraliaSecPty (64QQ)

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Thursday 27 July, 2006

OrixAustraliaSecPty

Annual Report and Accounts

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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