SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 20-F
(MARK ONE)
|_| REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES
EXCHANGE ACT OF 1934
OR
|X| ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
OR
|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the period from February 27, 2003 to June 30, 2003.
Commission file number 333-102569
INTERSTAR SECURITISATION MANAGEMENT PTY LIMITED
In its capacity as Manager of the Interstar Millennium Series 2003-1G Trust
Australian Company Number 100 346 898
(Exact name of Registrant as specified in its charter)
New South Wales, Australia
(Jurisdiction of incorporation or organization)
Level 28, 367 Collins Street, Melbourne, Victoria 3000 Australia
(Address of principal executive offices)
SECURITIES REGISTERED OR TO BE REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
None
SECURITIES REQUIRED TO BE REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT
None
SECURITIES FOR WHICH THERE IS A REPORTING OBLIGATION PURSUANT TO SECTION 15(d)
OF THE ACT
US$750,000,000 Class A2 Mortgage Backed Floating Rate Notes due 2035
US$15,500,000 Class B1 Mortgage Backed Floating Rate Notes due 2035
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the last 90 days.
Yes [X] No [_]
Indicate by check mark which financial statement item the registrant has elected
to follow
Item 17 [_] Item 18 [_] Incorporated by Reference to filings on Form 6K [X]
CROSS-REFERENCE SHEET
20-F ITEM NUMBERS AND CAPTION LOCATION
PART I
1. Identity of Directors, Senior Management Not applicable and Advisers
2. Other Statistics and Expected Timetable Not applicable
3. Key Information Selected Financial Information
4. Information on the Trust Property
5. Operation and Financial Review and Prospects Not applicable
6. Directors, Senior Management and Employees Not applicable
7. Major Shareholders and Related Party Transactions Major Shareholders and Interest of
Transactions Management and
Related Parties in Transactions
8. Financial Information Not applicable
9. The Offer and Listing Markets
10. Additional Information Exchange Controls, Taxation, Legal
Proceedings, Holders of Notes
11. Quantitative and Qualitative Disclosures Market Risk
About Market Risk
12. Description of Securities Other Than Equity Not applicable
Securities
i
PART II
13. Defaults, Dividend Arrearages and Delinquencies Defaults and Delinquencies
14. Material Modifications to Rights of Security Material Modifications to Rights of
Holders and Use of Proceeds Security Holders
15. Controls and Procedures Not applicable
16. [RESERVED] Not applicable
PART III
17. Financial Statements Not applicable
18. Financial Statements Not applicable
19. Exhibits Exhibits
ii
TABLE OF CONTENTS
PART I
Incorporation of Certain Documents by Reference..........................................................................1
Item 1: Identity of Directors, Senior Management and Advisors...........................................................1
Item 2: Offers Statistics and Expected Timetable........................................................................1
Item 3: Selected Financial Information..................................................................................1
Item 4: Information on the Trust........................................................................................2
Item 5: Operation and Financial Review and Prospectus...................................................................3
Item 6: Directors, Senior Management and Employees......................................................................3
Item 7: Major Shareholders and Interest of Management and Related Parties in Transactions...............................3
Item 8: Financial Information...........................................................................................3
Item 9: Markets.........................................................................................................3
Item 10: Exchange Controls, Taxation, Legal Proceedings, Holders of Notes................................................3
Item 11: Quantitative and Qualitative Disclosures about Market Risk......................................................8
Item 12: Description of Securities other than Equity Securities..........................................................9
PART II
Item 13: Defaults and Delinquencies......................................................................................9
Item 14: Material Modification to Rights of Security Holders and Use of Proceeds.........................................9
PART III
Item 15: Controls and Procedures.........................................................................................9
Item 16: [Reserved].....................................................................................................10
Item 17: Financial Statements...........................................................................................10
Item 18: Financial Statements...........................................................................................10
Item 19: Exhibits.......................................................................................................10
EXHIBITS
Exhibit 13.1: Noteholders Report for the May 27, 2003 Payment Date
Exhibit 13.2: Aggregate Totals for Fiscal Year
Exhibit 31.1: Section 302 Certification
Exhibit 99.1: The Manager Officer's Certificate of Compliance
Exhibit 99.2: The Servicer Officer's Certificate of Compliance
Exhibit 99.3: Independent Auditors Annual Servicer's Compliance Certificate
iii
INTERSTAR MILLENNIUM SERIES 2003-1G TRUST
PART 1
This Annual Report on Form 20-F relates to the Interstar Millennium Series
2003-1G Trust (the "Trust") and the Class A2 and Class B1 Mortgage Backed
Floating Rate Notes (the "Notes") issued pursuant to the Note Trust Deed dated
as of February 26, 2003 (the "Note Trust Deed"), between Perpetual Trustees
Victoria Limited, the issuer trustee (the "Issuer Trustee"); Interstar
Securitisation Management Pty Ltd (the "Manager"), as Manager; and The Bank of
New York, as note trustee (the "Note Trustee"). Capitalised terms used in this
Form 20-F and not defined have the same meanings given to them in the Prospectus
and Series Notice relating to the Notes.
The information required for some items in Form 20-F is "not applicable" to the
Trust or the Manager. As used in this Annual Report filed on Form 20-F, "not
applicable" or the "Not Applicable" means that the response to the referenced
item is omitted in reliance on the procedures outlined in numerous no-action
letters issued by the Commission's Staff with respect to substantially similar
securities and trusts that file annual reports on Form 10-K.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Manager incorporates by reference its Noteholders Reports, filed as periodic
filings on Form 6-K, which contain all financial information related to the
Trust relevant to the holders of the Notes (the "Noteholders"), pursuant to rule
12b-23 promulgated under the Securities Exchange Act of 1934.
ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS.
Not Applicable.
ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE.
Not Applicable.
ITEM 3. SELECTED FINANCIAL INFORMATION
The Manager globally incorporates by reference and attaches hereto as Exhibit
13.1, pursuant to Rules 12b-23 promulgated under the Securities Exchange Act of
1934, the following quarterly Noteholders Report (the "Noteholder Report"),
filed on Form 6-K, which include all financial information relating to the Trust
that is relevant to Noteholders.
o Noteholders Report for the May 27, 2003 Payment Date
The Manager also attaches hereto, as Exhibit 13.2 the following document:
o Aggregate Totals for Fiscal Year,
1
CURRENCY EXCHANGE
A portion of the financial information provided in the exhibits listed above
contain information in Australian Dollars. The noon buying rate in New York City
for cable transfers in Australian dollars as certified for customs purposes by
the Federal Reserve Bank of New York on June 30, 2003 was US$0.6713=A$1.00.
Payments to Noteholders are generally not effected by fluctuations in the
exchange rate between Australian and U.S. dollars because of the existence of
currency swap.
ITEM 4. INFORMATION ON THE TRUST
The legal name of the Trust is the Interstar Millennium Series 2003-1G Trust.
The Trust was established by execution of a notice of creation of trust by
Interstar Securities (Australia) Pty Limited, the Manager and the Issuer
Trustee.
The Interstar Millennium Trusts securitization program was established pursuant
to a master trust deed for the purpose of enabling Perpetual Trustees Victoria
Limited, as trustee of each trust established pursuant to the Interstar
Millennium Trusts securitization program, to invest in pools of housing loans
originated from time to time by the servicer. The Master Trust Deed provides for
the creation of an unlimited number of trusts. The Master Trust Deed establishes
the general framework under which trusts may be established from time to time.
It does not actually establish any trusts. The Interstar Millennium Series
2003-1G Trust is a separate and distinct trust from any other trust established
under the master trust deed. The assets of the Interstar Millennium Series
2003-1G Trust are not available to meet the liabilities of any other trust and
the assets of any other trust are not available to meet the liabilities of the
Interstar Millennium Series 2003-1G Trust.
The property of the Trust primarily consists of residential mortgage loans (the
"Loans"). Information concerning such property can be found in the quarterly
Noteholders Reports, attached as Exhibit 13.1, and the Aggregate Totals for the
Fiscal Year, attached as Exhibit 13.2.
Additionally, an Officer's Certificate of Compliance, executed by a director of
the Manager is filed herewith as Exhibit 99.1. Such statement certifies that the
Manager and the Issuer Trustee, in such capacities, have complied with all
conditions and covenants under the transaction documents for the issuance of the
Notes by the Trust.
Arcturus Management Pty Limited, the previous / original parent company of
Interstar Securities Holdings Pty Limited ("Interstar"), entered into a call
option arrangement with ZCM Australia Asset Holdings Limited to acquire all of
the issued shares of Interstar, the parent company of Interstar Securitisation
Management Pty Limited (the "Trust Manager") and Interstar Securities
(Australia) Pty Limited (the "Servicer").
On 1 September 2003, the Challenger Financial Services Group Limited entered
into a share sale and purchase agreement (the "Agreement") with ZCM Asia
Holdings Pty Limited ("ZCM") to acquire the assets of ZCM's Australian Principal
Finance business. In connection with the sale of its Australian principal
finance business, ZCM sold 100% of the shares in ZCM Australia Asset Holdings
Limited to Challenger Financial Services Group Limited. As of 29 September 2003,
Challenger Financial Services Group Limited directed ZCM Australia Asset
Holdings Limited to exercised its option to acquire all of the shares of
2
Interstar under the call option arrangement. As a result, the Trust Manager and
the Servicer are wholly-owned subsidiaries of Challenger Financial Services
Group Limited.
ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS
Not Applicable.
ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
Not Applicable.
ITEM 7. MAJOR SHAREHOLDERS AND INTEREST OF MANAGEMENT AND
RELATED PARTIES IN TRANSACTIONS
Interstar Securitisation Management Pty Ltd is a wholly owned subsidiary of
Interstar Securities (Australia) Pty Ltd. Its principal business activity is the
management of securitisation trusts established under the Interstar Millennium
Trust Programmes.
Interstar Securities (Australia) Pty Ltd acts as servicer (the "Servicer") to
the trust. The servicer receives a servicer fee from the trust.
The servicer is a wholly owned direct subsidiary of the Interstar Securities
Holdings Pty Limited ("Interstar Holdings"). All shares in Interstar Holdings
are ultimately owned (effective September 29, 2003) by CPH Management Ltd, in
its capacity as responsible entity of Challenger Financial Services Group.
The Manager has entered into an arrangement agreement with the Servicer, whereby
the Servicer provides services and various facilities to the Manager on
commercial terms, in order for the Manager to carry out its functions as manager
under the securitization trusts. Interstar Securitisation Management Pty Ltd
pays management fees to the servicer.
ITEM 8. FINANCIAL INFORMATION
Not Applicable
ITEM 9. MARKETS
The notes are not traded on any nationally recognized exchange in the United
States.
ITEM 10. EXCHANGE CONTROLS, TAXATION, LEGAL PROCEEDINGS, HOLDERS OF NOTES
EXCHANGE CONTROLS
ANTI-TERRORISM RESTRICTIONS
The written approval of the Australian Minister of Foreign Affairs is required
for transactions involving the control or ownership of assets by persons or
entities linked to terrorist activities and identified by the United Nations and
the Commonwealth of Australia under the Charter of the United Nations
(Anti-terrorism Persons and Entities) List, as published from time to time in
the Commonwealth Government Gazette. This includes individuals or entities
linked with the Taliban, Osama bin Laden, Al Qa'ida, Jemaah Islamiyah and other
terrorist organizations (which may be known by different names). Transactions
involving persons published in the Commonwealth Government Gazette without the
permission of the Australian Minister for Foreign Affairs are a criminal
offence.
3
PROHIBITED TRANSACTIONS
Transactions involving the regime of former President of Yugoslavia Slobodan
Milosevic and certain ministers and senior officials of the Government of
Zimbabwe are prohibited under the Banking (Foreign Exchange)Regulations 1959
(Cth).The Reserve Bank of Australia publishes changes to prohibited parties and
variations in the restrictions on those parties from time to time in the
Commonwealth Government Gazette.
TRANSACTIONS WHICH MAY BE APPROVED BY THE RESERVE BANK OF AUSTRALIA
o Transactions over A$100,000 involving the Embassy of the Federal Republic
of Yugoslavia, the Consulate-General of the Federal Republic of Yugoslavia
and Narodna Banka Jugoslavije (including Banque Nationale de Yugoslavie)
require prior approval from the Reserve Bank of Australia.
TAXATION CERTAIN AUSTRALIAN TAX MATTERS
The following statements with respect to Australian taxation are only general
summaries and are based on advice received by the Manager. Purchasers of Notes
should consult their own tax advisers concerning the consequences, in their
particular circumstances, under Australian tax laws, and the laws of any other
taxing jurisdiction, of the ownership of or any dealing in the Notes.
PAYMENTS OF PRINCIPAL, PREMIUMS AND INTEREST
Under current Australian tax law, non-resident holders of Notes are not subject
to Australian income tax on payments of interest or amounts in the nature of
interest unless the Notes are held as part of a business carried on, at or
through a permanent establishment in Australia. However, interest or amounts in
the nature of interest paid to such non-residents may be subject to interest
withholding tax, which is currently imposed at the rate of 10%. A premium on
redemption, if any, would generally be treated as an amount in the nature of
interest for this purpose. Pursuant to section 128F of the Income Tax Assessment
Act 1936 of the Commonwealth of Australia (the "1936 Act"), an exemption from
Australian interest withholding tax is available where the following prescribed
conditions are met. These conditions are:
o the Issuer Trustee is a company that is a resident of Australia, or a
non-resident carrying on business at or through a permanent establishment
in Australia, when it issues the Notes and when interest, as defined in
section 128A(1AB) of the 1936 Act, is paid; and
o the Notes were issued in a manner which satisfied the public offer test as
prescribed under section 128F of the 1936 Act or which satisfied the
definition of a global bond under subsection 128F(10) of the 1936 Act.
The Notes were issued in a way that satisfied the public offer test and
otherwise met the requirements of section 128F of the 1936 Act. Accordingly,
payments of principal and interest, and any premium upon redemption made to a
non-resident Noteholder, who does not carry on business through a permanent
establishment in Australia, will not be subject to Australian income or
withholding tax.
The exemption from Australian withholding tax will not apply to interest paid by
the Issuer Trustee to an associate of the Issuer Trustee within the meaning of
section 128F of the 1936 Act if, at the time of the payment, the Issuer Trustee
knows, or has reasonable grounds to suspect, that the person is an associate
unless the associate receives payment of the interest (or amount in the nature
of interest):
o if the associate is not an Australian resident, in carrying on business
in Australia at or through a permanent establishment; or
o if the associate is an Australian resident, other than through a
business carried on by the associate at or through a permanent
establishment outside Australia; or in the capacity of a clearing
house, paying agent, custodian, funds manager, or responsible entity of
an Australian registered scheme.
4
PROFIT ON SALE
Under existing Australian law, non-resident holders of Notes will not be subject
to Australian income tax on profits derived from the sale or disposal of those
Notes provided that:
o the Notes are not held as part of a business carried on, at or through
a permanent establishment in Australia; and
o the profits do not have an Australian source. The source of any profit
on the disposal of Notes will depend on the factual circumstances of
the actual disposal. Where the Notes are acquired and disposed of
pursuant to contractual arrangements entered into and concluded outside
Australia, and the seller and the purchaser are non-residents of
Australia and do not have a business carried on, at or through a
permanent establishment in Australia, the profit should not have an
Australian source.
TAXATION OF FINANCIAL ARRANGEMENTS
The Australian Federal Government enacted The New Business (Taxation of
Financial Arrangements) Act (No. 1) 2003 ("the TOFA Act"). The TOFA Act includes
measures in relation to the treatment of foreign currency gains and losses on
transactions entered into on or after the first income year commencing on or
after July 1, 2003. In addition, the new rules will also apply, at the option of
the taxpayer, to foreign currency gains and losses on transactions entered into
prior to the first income year commencing after July 1, 2003 but realised after
that time.
The TOFA Act also contains measures in relation to the removal of the taxing
point on conversion or exchange of certain traditional securities. These
measures apply to traditional securities issued after May 14, 2002.
The specific taxation implications of these measures will vary as between
Noteholders. Broadly, the taxation consequences will depend on whether
Noteholders own the Notes on revenue or capital account.
The measures should not impact non-resident Noteholders who do not have a
permanent establishment in Australia.
GOODS AND SERVICES TAX
Australia has a goods and services tax under which an entity is required to pay
goods and services tax on any taxable supplies it makes. The amount of goods and
services tax payable will be equal to 1/11th of the total consideration received
for the supply.
The GST is a transactions based tax and accordingly may impact various
transactions in which the Issuer Trustee is involved. Broadly, the impact of the
GST regime will depend on the type of supply made by the Issuer Trustee.
Where the supply by the Issuer Trustee is a "taxable supply", the Issuer Trustee
will have to remit GST equal to 1/11th of the total consideration received for
the supply to the ATO. The Issuer Trustee can obtain full input tax credits for
GST paid on goods and / or services acquired to make the taxable supply.
Where the supply by the Issuer Trustee is a "GST free supply", the Issuer
Trustee does not remit GST on the supply to the ATO. The Issuer Trustee can
obtain full input tax credits for GST paid on things acquired to make the GST
free supply.
Where the supply by the Issuer Trustee is an "input taxed supply", which
includes financial supplies, the Issuer Trustee is not required to remit GST on
the supply. The Issuer Trustee is generally not entitled to input tax credits
for GST paid on goods and / or services acquired to make input taxed supplies.
In some circumstances, however, "reduced input tax credits" may be available.
5
On the basis of the current GST legislation, the issue of the Notes would
constitute either a financial supply or a GST-free supply depending on the
status and location of the Noteholders (note that the issue of Notes to
non-resident Noteholders is likely to constitute a GST-free supply). In either
case GST is not charged in respect of the supply. Payments of interest or
principal made on the Notes would not constitute a separate supply for GST
purposes nor consideration for a supply by Noteholders.
OTHER TAXES
Under current Australian law, there are no gift, estate or other inheritance
taxes or duties. A transfer of, or agreement to transfer, Notes executed outside
of Australia should not be subject to Australian stamp duty.
TAX CONSOLIDATION
The "head company" of a consolidatable tax group may elect for the group to
consolidate under the new regime from July 1, 2002 and be taxed as a single
entity so that transactions between members of the consolidated group are
ignored for tax purposes. Making an election to consolidate is optional, however
the choice by a head company to consolidate brings all of its wholly-owned
members, which includes companies, partnerships and trusts, into the regime. An
entity is wholly-owned for these purposes, if all of the membership interests in
it are held directly or indirectly by the head company.
The head company of a tax consolidated group will be liable for income tax in
respect of itself and all of its wholly-owned group members. The legislation
provides that where, however, the head company fails to meet its income tax
liabilities, each wholly-owned group member is jointly and severally liable to
pay the consolidated group's income tax liabilities. Thus, there is a contingent
risk that the members of a consolidated group may be liable to contribute to a
consolidated group's income tax liabilities.
The Trust, as currently structured, is not a wholly-owned member of a
consolidated tax group. As a result, the Trust will not, as currently
structured, be liable to contribute to any consolidated group's income tax
liabilities.
THIN CAPITALISATION
Australia has thin capitalisation measures that operate to deny or reduce a
portion of interest deductions. These rules apply where an entity is either an
"Outward Investing Entity" or an "Inward Investing Entity". Whilst the Trust is
neither an Outward Investing Entity nor an Inward Investing Entity, the rules
may still apply to the Trust if the Manager, as the beneficiary of the Trust, is
itself an Inward Investing Entity or an Outward Investing Entity. The Manager is
currently not an Inward Investing Entity. In addition, it is expected that the
Manager will satisfy a de minimus exemption provided by the law so that it will
not be subject to the thin capitalisation rules as an Outward Investing Entity.
In any case, the Australian Federal Government has recently enacted legislation
which provides that securitisation vehicles which meet the structured finance
criteria for special purpose entities in Australia of an internationally
recognized ratings agency and fund their activities by the issue of debt
interests, will not be subject to the thin capitalisation regime. The Trust
should meet these criteria and thus the rules should not apply to the Trust.
Even if the rules do apply to the Trust, on the basis that the beneficiary of
the Trust is presently entitled to the income of the Trust, any resultant tax
liability will be met by the beneficiary and, therefore, should not adversely
affect the ability of the Issuer Trustee to pay principal and interest on the
Notes.
DEBT/EQUITY RULES
The Debt/Equity rules, applicable generally from July 1, 2001, under which debt
can be recharacterised as equity for tax purposes should not affect the tax
deductibility of interest on the Notes.
6
TAXATION OF THE TRUST
The net income of the Trust for a given year of income will be determined after
deducting from the assessable income of the Trust any allowable deductions
incurred by the Trust. The assessable income will primarily be the interest
income that is derived by the Trust from the provision of mortgage finance.
Subject to certain exceptions, the allowable deductions of the Trust will
primarily be the expenses which are incurred for the purpose of deriving
assessable income or necessarily incurred in carrying on a business for the
purpose of gaining or producing assessable income. Expenses which are capital in
nature will not be allowable as deductions.
Under the current taxation law, the net income of the Trust is to be included in
the assessable income of the beneficiaries of the Trust who are presently
entitled to the income. This will be so whether or not the income is actually
paid to the unitholder, where the unitholder is presently entitled to the net
income of the Trust. Where the net income is paid to a unitholder, it will be
assessable to the unitholder in the year to which the distribution relates
notwithstanding that it may be paid in the following year of income.
In the case of the Trust, the residual income unit is held by the unitholder who
will be presently entitled to the net income of the Trust. The Trust itself will
not currently be liable to income tax on the net income derived by the Trust.
TAX REFORM PROPOSALS - TAXATION OF TRUSTS AS COMPANIES
Under the Review of Business Taxation recommendations it was proposed that some
Trusts be taxed as if they were companies as from July 1, 2001. The Australian
federal government released draft legislation to implement these
recommendations. The draft legislation provided that non-fixed Trusts would be
taxed as if they were companies. Fixed Trusts, however, would not be subject to
the proposed measures and would therefore retain their current taxation
treatment and accordingly will continue to receive flow-through treatment. The
Exposure Draft Legislation was subject to an extensive consultation process. As
a result of this process, the Australian federal government resolved that the
Exposure Draft Legislation involved numerous complications, therefore it has
since been withdrawn.
The Australian Federal Government may issue new draft rules in relation to the
taxation of Trusts in the future, however the form and proposed start date of
these measures remain uncertain.
In any case, the measures should in no way impact the payment to Noteholders who
will continue to receive their interest payments in respect of the Notes issued
by the Issuer Trust.
LEGAL PROCEEDINGS
The Manager knows of no material legal proceedings involving any of the Trust,
the Manager, the Servicer or the Issuer Trustee.
HOLDERS OF NOTES
The Notes are currently represented by certificates registered in the name of
Cede & Co., the nominee of The Depository Trust Company. Accordingly, Cede & Co.
is the sole holder of record of the Notes, which it holds on behalf of brokers,
dealers, banks and other direct participants in the DTC system.
7
ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK MARKET RISKS
CURRENCY EXCHANGE CONTROL RISK
Interest and principal payments to holders of the Notes are paid in United
States dollars ("U.S. dollars"). However payments on the Loans (the
"Collections") are received by the Issuer Trustee, in Australian dollars, in
Australia. Pursuant to certain swap agreements ("Currency Swaps") the Issuer
Trustee is required to pay a portion of the Collections to certain swap
counterparties (the "Currency Swap Providers") who in turn pays ("Swap Currency
Exchange"), at the direction of the Issuer Trustee, U.S. dollars to the holders
of the Notes. It is possible that in the future, Australia may impose exchange
controls that affect the availability of Australian dollar payments for making
payments under the Currency Swaps. The holders of the Notes will bear the risk
of the imposition of foreign exchange controls by the Australian government that
impact upon the Issuer Trustee's ability to exchange the Collections for U.S.
dollars.
The Issuer Trustee has no control over such risk, which will generally be
affected by economic and political events in Australia. If the Issuer Trustee
does not pay some or all of the amount in Australian dollars which it is
required to pay the Currency Swap Providers under the Currency Swaps, the
Currency Swap Providers are only required to pay the U.S. dollar equivalent of
the amounts it actually receives. In such event, it is unlikely that the Trust
would have sufficient U.S. dollars to make the payments due on the Notes.
Under temporary Australian foreign exchange controls, which may change in the
future, buying, borrowing,selling, lending or exchanging foreign currency (where
the transaction relates to property, securities or funds) by an Australian
resident to, or on behalf of the following payees is subject to restrictions:
o the Government of Iraq or its agencies or nationals;
o certain Yugoslav entities or individuals;
o Jemiah Islamiah;
o UNITA (the Union for the Total Independence of Angola), its senior
officials and their immediate families;
o the Government of Zimbabwe, any public authority or controlled entity
of the Government of Zimbabwe and certain other individuals identified
by the Reserve Bank of Australia;
o the Taliban (also known as the Islamic Emirate of Afghanistan) or any
undertaking owned or controlled, directly or indirectly, by the
Taliban;
o Osama bin Laden, the Al-Qaeda organisation and certain other
individuals identified by the Reserve Bank of Australia as being
linked to terrorism; and
o the persons whose names are published in the Commonwealth Government
Gazette Gn42 as amended by Commonwealth Government Gazette Gn37 and
Commonwealth Government Gn49, and the persons whose names are listed
under Suppression of the Financing of Terrorism Act 2002
(Commonwealth). Any funds transferred from Australia or to
non-Australian residents may be subject to withholding taxes in
relation to remittances of dividends, to the extent they are
unfranked, and interest payments.
8
Approval of the Reserve Bank of Australia is required for certain large
transactions (i.e greater than A$100,000) by or on behalf of:
o the Embassy of the Federal Republic of Yugoslavia;
o the consulate-General of the Federal Republic of Yugoslavia; and
o the National Bank of Yugoslavia;
Under the Charter of the United Nations (Anti-terrorism Measures) Regulations
2001 (the "UN Regulations") (as administered by the Department of Foreign
Affairs and Trade in Australia), restrictions exist in relation to dealings with
the assets of persons or entities mentioned in paragraph 1(c) of United Nations
Security Council Resolution 1373 (2001), as proscribed by the Minister for
Foreign Affairs in Australia pursuant to Regulation 7 of the UN Regulations.
CURRENCY EXCHANGE RISK
Interest and principal on the Notes is payable in U.S. dollars and the Trust's
primary source for funding its payments on the Notes is its Collections on the
Loans, which will be sourced in Australian dollars. If the Currency Swap
Providers were to fail to perform under the Currency Swaps or were to be
discharged from such performance because of a default thereunder by the Trust,
the Trust might have to exchange its Australian dollars for U.S. dollars at an
exchange rate that is less favorable to the Trust than when the Currency Swap
were entered into and might therefore not have sufficient U.S. dollars to make
timely payments on the Notes, even though the delinquency and loss experience on
the Loans may be acceptable.
ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
Not Applicable
PART II
ITEM 13. DEFAULTS AND DELINQUENCIES
There has been no material default or delinquency in the payment of principal or
interest on the Notes. Delinquency and loss information on the mortgage loans
has been provided in the Noteholder Reports.
ITEM 14. MATERIAL MODIFICATIONS TO RIGHTS OF SECURITY HOLDERS AND USE
OF PROCEEDS
None.
PART III
ITEM 15. CONTROLS AND PROCEDURES
Not Applicable
9
ITEM 16. [Reserved]
Not Applicable
ITEM 17. FINANCIAL STATEMENTS
Not Applicable
ITEM 18. FINANCIAL STATEMENTS
Not Applicable
ITEM 19. EXHIBITS
The following documents are filed as part of this Annual Report:
1. Exhibit 13.1: Noteholders Report for the May 27, 2003 Payment Date,
2. Exhibit 13.2: Aggregate Totals for the Fiscal Year
3. Exhibit 31.1: Section 302 Certification
4. Exhibit 99.1: The Manager Officer's Certificate of Compliance
5. Exhibit 99.2: The Servicer Officer's Certificate of Compliance
6. Exhibit 99.3: Independent Auditor's Annual Servicer Compliance Certificate
10
SIGNATURES
The registrant hereby certifies that it meets all of the requirements for filing
on Form 20-F and that it has duly caused and authorized the undersigned to sign
this annual report on its behalf.
INTERSTAR SECURITISATION MANAGEMENT PTY LIMITED
/S/ SAM KYRIACOU
- ----------------------
Name: Sam Kyriacou
Title: Director
Date: January 12, 2004
11
INDEX TO EXHIBITS
Exhibit No. Document Description
13.1 Noteholders Report for the May 27, 2003 Payment Date
13.2 Aggregate Totals for the Fiscal Year
31.1 Section 302 Certification
99.1 The Manager Officer's Certificate of Compliance
99.2 The Servicer Officer's Certificate of Compliance
99.3 Independent Auditors Annual Servicer's Compliance Certificate
12