Reserve Bank of Australia Annual Report – 2006 Financial Statements Note 7

Note 7 LOANS, ADVANCES AND OTHER ASSETS

The Reserve Bank of Australia has a 50 per cent share in Securency Pty Ltd, which is incorporated in Victoria, Australia, and whose principal activity is the marketing and manufacture of polymer substrate. The capital of Securency as at 30 June 2006 was $36.5 million. The carrying value of the RBA's investment in Securency as at 30 June 2006 was $21.2 million ($13.6 million at 30 June 2005). Securency has a 31 December balance date. The RBA's share of Securency's profit before income tax in 2005/06 was $8.3 million ($2.4 million in 2004/05); its share of Securency's income tax expense in 2005/06 was $0.7 million (nil in 2004/05). Securency's current and non-current assets as at 30 June 2006 were $27.0 million and $29.7 million respectively ($29.0 million and $19.4 million as at 30 June 2005). Current and non-current liabilities on 30 June 2006 were $13.6 million and $0.7 million ($10.7 million and $10.6 million on 30 June 2005). Securency's revenue and expenses for 2005/06 were $77.3 million and $60.7 million ($55.6 million and $50.7 million in 2004/05). The RBA provides facilities to Securency under operating leases. In 2005/06, the RBA also provided a finance lease to Securency for $5.6 million in relation to the construction of a new building on the Bank's land at Craigieburn. The finance lease was partly drawn down in July 2006. The lease was provided on commercial terms and at arm's length; it has a term of 10 years.

During 2005/06, the RBA acquired $1.4 million of computer software ($2.1 million in 2004/05) and amortised $1.4 million ($1.0 million in 2004/05). At 30 June 2006 the gross book value of the RBA's computer software amounted to $9.9 million and accumulated amortisation on this software was $4.1 million ($8.6 million and $2.8 million respectively at 30 June 2005). The RBA had contractual commitments of $0.4 million as at 30 June 2006 for the acquisition of computer software ($0.1 million at 30 June 2005).

As at 30 June 2006, other assets included receivables of $21.9 million, of which $18.0 million is current (at 30 June 2005 other assets included receivables of $15.8 million, of which $12.2 million was current).