**SECURITIES AND EXCHANGECOMMISSION**

 

**Washington, D.C. 20549**

 

**FORM 20-F**

 
| **o**                                  |   | **Registration Statement pursuant to Section 12(b) or (g) of the  Securities Exchange Act of 1934**                                                                                                                                                                                                                               |
|----------------------------------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                   |   |                                                                                                                                                                                                                                                                                                                                   |
| **or**                                 |
|                                   |   |                                                                                                                                                                                                                                                                                                                                   |
| **ý**                             |   | **Annual Report pursuant to Section 13 or 15(d) of the Securities  Exchange Act of 1934**                                                                                                                                                                                                                                         |
|                                   |   |                                                                                                                                                                                                                                                                                                                                   |
|                                   |   | **For the fiscal year  ended June 30, 2003**                                                                                                                                                                                                                                                                                      |
| **or**                                 |
|                                   |   |                                                                                                                                                                                                                                                                                                                                   |
| **o**                                  |   | **Transition Report pursuant to Section 13 or 15(d) of the  Securities Exchange Act of 1934**                                                                                                                                                                                                                                     |
|                                   |   |                                                                                                                                                                                                                                                                                                                                   |
|                                   |   | **For the transition  period  from                        to                        ** |
|                                   |   |                                                                                                                                                                                                                                                                                                                                   |
| **Commission file number:  0 - 18893** |

 

**AMCOR LIMITED**

**ABN 62 000 017 372**

(Exactname of Registrant as specified in its charter)

 

**NEW SOUTH WALES, AUSTRALIA**

(Jurisdictionof incorporation of organisation)

 

**679 VICTORIA STREET, ABBOTSFORD, VICTORIA 3067 AUSTRALIA**

(Addressof principal executive offices)

 

Securitiesregistered or to be registered pursuant to Section 12(b) of the Act.

 

**None**

 

Securitiesregistered or to be registered pursuant to Section 12(g) of the Act.

 

OrdinaryShares

AmericanDepositary Shares

 

Securities for which there is a reporting obligationpursuant to Section 15(d) of the Act.

 

**None**

 

Indicatethe number of outstanding shares of each of the issuer’s classes of capital orcommon stock as of the close of the period covered by the annual report.

 

OrdinaryShares - 848,223,877

 

Indicateby check mark whether the registrant (1) has filed all reports required to befiled by section 13 or 15(d) of the Securities Exchange Act of 1934 duringthe preceding 12 months (or for such shorter period that the registrant wasrequired to file such reports), and (2) has been subject to such filingrequirements for the past 90 days.

 

Yes ý                                                             No o

 

Indicate bycheck mark which financial statement item the registrant elected to follow:

 

Item 17 o                                           Item 18 ý

 

 

----

 

**TABLE OF CONTENTS**

 
|        | Forward-Looking Statements                                                  |   |
|-------------|-----------------------------------------------------------------------------|--------|
|        |                                                                        |   |
| **ITEM 1**  | Identity of Directors, Senior Management  and Advisers                      |   |
|        |                                                                        |   |
| **ITEM 2**  | Offer Statistics and Expected Timetable                                     |   |
|        |                                                                        |   |
| **ITEM 3**  | Key Information                                                             |   |
|        | Selected  Financial Data                                                    |   |
|        | Risk Factors                                                                |   |
|        |                                                                        |   |
| **ITEM 4**  | Information on the Company                                                  |   |
|        | Recent  Developments                                                        |   |
|        | Amcor’s  Strategy                                                      |   |
|        | Businesses                                                                  |   |
|        | Capital  Expenditure                                                        |   |
|        | Environmental and  Other Regulations                                        |   |
|        | Labor Relations                                                             |   |
|        | Safety                                                                      |   |
|        | Research  and Technology                                                    |   |
|        | Competition                                                                 |   |
|        | Sales Revenue by Industry  and Geographic Segments                          |   |
|        | Property, Plant &  Equipment                                            |   |
|        |                                                                        |   |
| **ITEM 5**  | Operating and Financial Review and Prospects                                |   |
|        | Changes to Senior  Management                                               |   |
|        | Critical Accounting  Policies                                               |   |
|        | Results  of Operations                                                      |   |
|        | Year Ended  June 30, 2003 Compared with  Year Ended June 30, 2002 |   |
|        | Year Ended  June 30, 2002 Compared with  Year Ended June 30, 2001 |   |
|        | Liquidity and Capital Resources                                             |   |
|        |                                                                        |   |
| **ITEM 6**  | Directors, Senior Management and Employees                                  |   |
|        | Directors and Senior  Management                                            |   |
|        | Compensation                                                                |   |
|        | Board Practices                                                             |   |
|        | Employees                                                                   |   |
|        | Share Ownership                                                             |   |
|        |                                                                        |   |
| **ITEM 7**  | Major Shareholders and Related Party  Transactions                          |   |
|        |                                                                        |   |
| **ITEM 8**  | Financial Information                                                       |   |
|        | Legal  Proceedings                                                          |   |
|        | Dividend Policy                                                             |   |
|        |                                                                        |   |
| **ITEM 9**  | The Offer and Listing                                                       |   |
|        | Markets                                                                     |   |
|        |                                                                        |   |
| **ITEM 10** | Additional Information                                                      |   |
|        | Constitution                                                                |   |
|        | Exchange  Controls and Other Limitations  Affecting Security Holders        |   |
|        | Taxation                                                                    |   |
|        | Documents  on Display                                                       |   |

 

----

 
| **ITEM 11**           | Quantitative and Qualitative Disclosures About  Market Risk                  |   |
|-----------------------|------------------------------------------------------------------------------|--------|
|                  | Financial  Instruments                                                       |   |
|                  | Interest  Rate Risk                                                          |   |
|                  | Interest Rate Risk  Exposures                                                |   |
|                  | Foreign Currency  Exchange Rate Risk                                         |   |
|                  | Credit Risk                                                                  |   |
|                  | Net Fair Values                                                              |   |
|                  |                                                                         |   |
| **ITEM 12**           | Description of Securities Other Than  Equity Securities                      |   |
|                  |                                                                         |   |
| **ITEM 13**           | Defaults, Dividend Arrearages and Delinquencies                              |   |
|                  |                                                                         |   |
| **ITEM 14**           | Material Modifications to the Right of Security  Holders and Use of Proceeds |   |
|                  |                                                                         |   |
| **ITEM 15**           | Controls and Procedures                                                      |   |
|                  |                                                                         |   |
| **ITEM 17 &  18** | Financial Statements                                                         |   |
|                  |                                                                         |   |
| **ITEM 19**           | Exhibits                                                                     |   |
|                  |                                                                         |   |
|                  | Financial Statements                                                         |   |
|                  |                                                                         |   |
|                  |                                                                         |   |
| Note:                 | Item 16 has been reserved for future use.                                    |   |

 

----

 

**FORWARD-LOOKINGSTATEMENTS**

 

Certain statements contained in this annual reportconstitute forward-looking statements. Forward-looking statements can generallybe identified by the use of forward-looking words such as “may”, “will”,“expect”, “intend”, “plan”, “estimate”, “anticipate”, “believe”, “continue”, orsimilar words. These forward-looking statements, including economic predictionsand assumptions and business and financial projections and statementsconcerning Amcor’s business, involve known and unknown risks, uncertainties andother factors that may cause its actual results, performance or achievements todiffer materially from any future results, performance or achievementsexpressed or implied by these forward-looking statements. These factorsinclude, among others, risks to Amcor’s businesses, including changes in thelegal and regulatory regimes under which we operate, changes in the behaviourof our major customers and competitors and general changes in the economicconditions of the markets in which we operate.

 

Other factors are discussed under Item 3 - “RiskFactors” and elsewhere in this annual report. This list of important factors isnot exhaustive. Given these risks, uncertainties and other factors, potentialinvestors are cautioned not to place undue reliance on forward-lookingstatements.

 

These forward-looking statements speak only as of thedate of this annual report, and Amcor does not undertake any obligation toupdate or revise any of them, whether as a result of new information, futureevents or otherwise.

 

4

----

 

**ITEM 3****  KEY INFORMATION**

 

“Company” or “Amcor Limited” means Amcor Limited ABN62 000 017 372, the listed holding company of the Amcor Group. “Amcor” or “we”or “our” means Amcor Limited and all its subsidiary companies.

 

Our fiscal year ends on June 30.  The fiscal year ended June 30, 2003 isreferred to herein as “2002-03” and other fiscal years are referred to in acorresponding manner.  All otherreferences are to calendar years.

 

“A-GAAP” or “Australian GAAP” means Australiangenerally accepted accounting principles.

 

“US-GAAP” or “US GAAP” means United States generallyaccepted accounting principles.

 

“Significant items” means items of revenue and expenseincluded in the operating profit or loss which are disclosed as significantunder A-GAAP by reason of their size and effect on the operating profit orloss.  Significant items are notnecessarily non-recurring items.  SeeNote 4 to the consolidated financial statements.

 

“Consolidated financial statements” means the auditedconsolidated balance sheets of Amcor as of June 30, 2003 and 2002 and theaudited consolidated income statements and statements of cash flows for each ofthe one-year periods ended June 30 for the years 2003, 2002, and 2001together with accompanying notes, included and incorporated by referenceherein.

 

References here to “PBIT” refer to profit beforeinterest and income tax excluding significant items.

 

References here to “PBITA” refer to profit beforeinterest, income tax and amortization excluding significant items.

 

References to “PBITDA” refer to profit beforeinterest, income tax, depreciation and amortization excluding significantitems.

 

In this annual report, unless otherwise specified orthe context otherwise requires, Australian dollar amounts are denoted by “A$”and United States dollar amounts are denoted by “US$”. For convenience, certainA$ amounts have been translated into US$ amounts at the exchange ratespecified. These translations are indicative only and do not mean that the A$amounts could be converted to US$ at the rate indicated.

 

On December 12, 2003, the noon buying rate wasUS$0.7396 = A$1.00.

 

For each of the periods indicated, the relevant noonbuying rates in New York City for cable transfers payable in Australian dollarsas certified for customs purposes by the Federal Reserve Bank of New York,were:

 
| **Fiscal Year:** |   | **2002-03** |   | **2001-02** |   | **2000-01** |   | **1999-00** |   | **1998-99** |   |
|------------------|--------|-------------|--------|-------------|--------|-------------|--------|-------------|--------|-------------|--------|
|             |   |        |   |        |   |        |   |        |   |        |   |
| Average  (1)     |   | .5891       |   | .5242       |   | .5372       |   | .6238       |   | .6248       |   |
|             |   |        |   |        |   |        |   |        |   |        |   |
| Period-end       |   | .6714       |   | .5644       |   | .5100       |   | .5971       |   | .6611       |   |
|             |   |        |   |        |   |        |   |        |   |        |   |
| High             |   | .6738       |   | .5756       |   | .5996       |   | .6703       |   | .6712       |   |
|             |   |        |   |        |   |        |   |        |   |        |   |
| Low              |   | .5278       |   | .4842       |   | .4828       |   | .5685       |   | .5550       |   |

 

----

(1)                                                    The average of the noon buying rates on the last day of each monthduring the year.

 

The high and low exchange rates for the six monthspreceding the date of this report were:

 
| **Month:** |   | **June 2003** |   | **July 2003** |   | **Aug  2003** |   | **Sept  2003** |   | **Oct  2003** |   | **Nov  2003** |   |
|------------|--------|--------------------|--------|--------------------|--------|---------------|--------|----------------|--------|---------------|--------|---------------|--------|
|       |   |               |   |               |   |          |   |           |   |          |   |          |   |
| High       |   | .6738              |   | .6814              |   | .6607         |   | .6866          |   | .7107         |   | .7260         |   |
|       |   |               |   |               |   |          |   |           |   |          |   |          |   |
| Low        |   | .6561              |   | .6472              |   | .6394         |   | .6339          |   | .6759         |   | .6959         |   |

 

5

----

 

A majority of Amcor’s revenue and earnings are derivedfrom assets and operations outside of Australia, and those assets, revenue andearnings are denominated in foreign currencies. Most of these are denominatedeither in US dollars or Euros. Therefore, because Amcor presents its financialstatements in A$, appreciation of the A$ against the US$ or the Euro willadversely affect the A$ amount of those assets, revenue and earnings. Inaddition, fluctuations in the exchange rate between A$ and US$ or Euros willaffect the US$ or Euro equivalent of the A$ price of our shares on the ASX andthe US$ or Euro value of any cash distributions paid on the shares in A$.Following our acquisition of assets from Schmalbach-Lubeca AG (Schmalbach),these effects are more pronounced because we have a greater percentage of ourassets, revenue and earnings denominated in US$ and Euros following theacquisition than we had previously.

 

Fluctuations in the A$/US$ exchange rate will affectthe US$ equivalent of the A$ price of Ordinary Shares on the ASX and, as aresult, are likely to affect the market price of the our American DepositaryShares (“ADSs”) in the United States. Such fluctuations would also affect the US$ amounts received by holdersof ADSs on conversion by the depositary of cash dividends paid in A$ on theOrdinary Shares underlying the ADSs (see Item 3 – Risk Factors).

 

6

----

 

**SelectedFinancial Data**

 

The following table sets out our selected historicalfinancial data. The selected historical financial data at June 30, 2002and 2003, and for years ended June 30, 2001, 2002 and 2003, have beenderived from our audited consolidated financial statements included in thisannual report. The selected historical financial data at June 30, 1999,2000 and 2001 and for years ended June 30, 1999 and 2000 have been derivedfrom our audited consolidated financial statements not included in this annualreport. Amcor’s audited consolidated financial statements are prepared inaccordance with A-GAAP, which varies in certain respects from US-GAAP.  See Note 35 to the consolidated financialstatements for a discussion of the significant differences between A-GAAP andUS-GAAP as they apply to Amcor for the periods presented therein. Revenue andexpense items previously disclosed as abnormal are no longer identifiedseparately in the income statement data due to a change in Australianaccounting standards.

 
|                                                       |   | **Year  Ended June 30,**                               |    |      |
|------------------------------------------------------------|--------|-------------------------------------------------------------|---------|-----------|
|                                                       |   | **2003  (1)**                                               |    | **2003**  |   | **2002** |   | **2001** |   | **2000** |   | **1999** |   |   |
|                                                       |   | **(In  millions, except ratios and per share amounts****)** |    |      |
|                                                       |   |                                                        |    |      |   |   |   |   |   |   |   |   |   |   |
| ***Accounts prepared in accordance with A-GAAP***          |   |                                                        |    |      |   |   |   |   |   |   |   |   |   |
|                                                       |   |                                                        |    |      |   |   |   |   |   |   |   |   |   |
| **Income  Statement Data:**                                |   |                                                        |    |      |   |   |   |   |   |   |   |   |   |
|                                                       |   |                                                        |    |      |   |   |   |   |   |   |   |   |   |
| Sales revenue                                              |   | US$                                                         | 7,144.6 |      | A$ | 10,709.9 |   | A$ | 7,472.4 |   | A$ | 5,667.2 |   | A$ | 5,737.2 |   | A$ | 6,048.8 |   |   |
| Other revenue (2)                                          |   | 165.5                                                       |    | 248.1     |   | 1,107.8 |   | 224.5 |   | 1,623.4 |   | 655.2 |   |
| Total revenue                                              |   | 7,310.1                                                     |    | 10,958.0  |   | 8,580.2 |   | 5,891.7 |   | 7,360.6 |   | 6,704.0 |   |
|                                                       |   |                                                        |    |      |   |   |   |   |   |   |   |   |   |
| Cost and expenses                                          |   |                                                        |    |      |   |   |   |   |   |   |   |   |   |
| Costs of goods sold (3)                                    |   | (5,861.7                                                    | )       | (8,786.8  | ) | (6,053.4 | ) | (4,542.2 | ) | (4,578.5 | ) | (4,353.8 | ) |
| Selling, general and administrative (4)                    |   | (1,012.2                                                    | )       | (1,517.4  | ) | (1,407.7 | ) | (798.3 | ) | (2,261.5 | ) | (1,789.0 | ) |
| Total cost and expenses                                    |   | (6,873.9                                                    | )       | (10,304.2 | ) | (7,461.1 | ) | (5,340.5 | ) | (6,840.0 | ) | (6,142.8 | ) |
| Borrowing costs                                            |   | (110.2                                                      | )       | (165.2    | ) | (137.9 | ) | (147.2 | ) | (140.5 | ) | (127.2 | ) |
| Profit before items shown below                            |   | 326.0                                                       |    | 488.6     |   | 981.2 |   | 404.0 |   | 380.1 |   | 434.0 |   |
|                                                       |   |                                                        |    |      |   |   |   |   |   |   |   |   |   |
| Income tax                                                 |   | (73.7                                                       | )       | (110.5    | ) | (120.2 | ) | (118.2 | ) | (83.3 | ) | (143.9 | ) |
| Minority interests                                         |   | (11.2                                                       | )       | (16.8     | ) | (9.3 | ) | (3.4 | ) | (5.9 | ) | (6.2 | ) |
| Net profit                                                 |   | US$                                                         | 241.1   |      | A$ | 361.3 |   | A$ | 851.7 |   | A$ | 282.4 |   | A$ | 290.9 |   | A$ | 283.9 |   |
|                                                       |   |                                                        |    |      |   |   |   |   |   |   |   |   |   |
| **Other  Income Statement Data:**                          |   |                                                        |    |      |   |   |   |   |   |   |   |   |   |
|                                                       |   |                                                        |    |      |   |   |   |   |   |   |   |   |   |
| Profit before interest, tax depreciation and  amortization |   | US$                                                         | 834.6   |      | A$ | 1,251.0 |   | A$ | 1,443.8 |   | A$ | 785.3 |   | A$ | 753.3 |   | A$ | 803.2 |   |
| Depreciation                                               |   | (312.5                                                      | )       | (468.4    | ) | (286.6 | ) | (198.3 | ) | (206.0 | ) | (214.3 | ) |
| Profit before interest, tax and amortization               |   | 522.1                                                       |    | 782.6     |   | 1,157.2 |   | 587.0 |   | 547.3 |   | 588.9 |   |
| Amortization                                               |   | (92.6                                                       | )       | (138.8    | ) | (54.5 | ) | (42.0 | ) | (36.5 | ) | (37.7 | ) |
| Profit before interest and tax                             |   | 429.5                                                       |    | 643.8     |   | 1,102.7 |   | 545.0 |   | 510.8 |   | 551.2 |   |
|                                                       |   |                                                        |    |      |   |   |   |   |   |   |   |   |   |
| Net borrowing costs (5)                                    |   | (103.5                                                      | )       | (155.2    | ) | (121.5 | ) | (141.0 | ) | (130.7 | ) | (117.2 | ) |
| Profit before tax and minority interests                   |   | US$                                                         | 326.0   |      | A$ | 488.6 |   | A$ | 981.2 |   | A$ | 404.0 |   | A$ | 380.1 |   | A$ | 434.0 |   |
|                                                       |   |                                                        |    |      |   |   |   |   |   |   |   |   |   |
| Dividends paid and payable                                 |   | US$                                                         | 168.6   |      | A$ | 252.7 |   | A$ | 206.2 |   | A$ | 179.1 |   | A$ | 237.9 |   | A$ | 249.3 |   |
| Dividends per Ordinary Share (A$)                          |   | —                                                      |    | A$        | 0.30 |   | A$ | 0.28 |   | A$ | 0.28 |   | A$ | 0.38 |   | A$ | 0.39 |   |
|                                                       |   |                                                        |    |      |   |   |   |   |   |   |   |   |   |
| Dividends per Ordinary Share (US$) (6)                     |   | —                                                      |    | US$       | 0.18 |   | US$ | 0.15 |   | US$ | 0.14 |   | US$ | 0.23 |   | US$ | 0.26 |   |
|                                                       |   |                                                        |    |      |   |   |   |   |   |   |   |   |   |
| Earnings per Share (cents)                                 |   |                                                        |    |      |   |   |   |   |   |   |   |   |   |
| Basic                                                      |   | 24.7                                                        |    | 37.0      |   | 122.3 |   | 44.5 |   | 46.1 |   | 44.4 |   |
| Diluted                                                    |   | 24.5                                                        |    | 36.7      |   | 110.0 |   | 43.5 |   | 44.6 |   | 44.2 |   |
|                                                            |        |                                                             |         |           |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

 

7

----

 
|                                                                                          |   | **Year  Ended June 30,**                                       |       |
|-----------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------|------------|
|                                                                                          |   | **2003  (1)**                                                       |       | **2003** |   | **2002** |   | **2001** |   | **2000** |   | **1999** |   |
|                                                                                          |   | **(In  millions, except ratios, other data and per share amounts)** | ** ** |
|                                                                                          |   |                                                                | ** ** |   | ** ** |   | ** ** |   | ** ** |   | ** ** |   | ** ** |
| **Balance  Sheet Data (at period end):**                                                      |   |                                                                |       |   |   |   |   |   |   |   |   |   |   |
|                                                                                          |   |                                                                |       |   |   |   |   |   |   |   |   |   |   |
| Current assets                                                                                |   | US$                                                                 | 1,969      |   | A$ | 2,951 |   | A$ | 4,591 |   | A$ | 2,683 |   | A$ | 1,749 |   | A$ | 1,977 |   |
| Total assets                                                                                  |   | 6,379                                                               |       | 9,562 |   | 8,842 |   | 7,026 |   | 4,956 |   | 6,353 |   |
| Total long-term interest bearing liabilities  (including finance leases)                      |   | 670                                                                 |       | 1,004 |   | 1,145 |   | 1,559 |   | 990 |   | 1,191 |   |
| Other capital resources(7)                                                                    |   | 298                                                                 |       | 446 |   | 543 |   | 426 |   | 426 |   | 426 |   |
| Shareholders’ equity/net assets                                                          |   | 2,975                                                               |       | 4,440 |   | 4,395 |   | 2,361 |   | 1,773 |   | 2,680 |   |
|                                                                                          |   |                                                                |       |   |   |   |   |   |   |   |   |   |   |
| **Other  Data**                                                                               |   |                                                                |       |   |   |   |   |   |   |   |   |   |   |
|                                                                                          |   |                                                                |       |   |   |   |   |   |   |   |   |   |   |
| Full-time and full-time equivalent employees (at  period end)                                 |   | —                                                              |       | 28,610 |   | 23,630 |   | 23,252 |   | 17,517 |   | 19,452 |   |
| Gearing: net debt (including other capital  resources)/net debt and shareholders’ equity |   | —                                                              |       | 33 | % | (6 | )% | 46 | % | 43 | % | 40 | % |
| PBITA net interest cover (pre significant Items)  (8) (times)                                 |   | —                                                              |       | 4.2 |   | 3.9 |   | 3.9 |   | 4.5 |   | 5.2 |   |
|                                                                                          |   |                                                                |       |   |   |   |   |   |   |   |   |   |   |
| ***Accounts prepared in accordance with U.S. - GAAP***                                        |   |                                                                |       |   |   |   |   |   |   |   |   |   |   |
|                                                                                          |   |                                                                |       |   |   |   |   |   |   |   |   |   |   |
| **Income  Statement Data:**                                                                   |   |                                                                |       |   |   |   |   |   |   |   |   |   |   |
|                                                                                          |   |                                                                |       |   |   |   |   |   |   |   |   |   |   |
| Net income                                                                                    |   | US$                                                                 | 245        |   | A$ | 368 |   | A$ | 819 |   | A$ | 266 |   | A$ | 303 |   | A$ | 301 |   |
|                                                                                          |   |                                                                |       |   |   |   |   |   |   |   |   |   |   |
| Earnings per Share (cents) (9)                                                                |   |                                                                |       |   |   |   |   |   |   |   |   |   |   |
| Continuing Operations                                                                         |   |                                                                |       |   |   |   |   |   |   |   |   |   |   |
| Basic                                                                                         |   | 29.4                                                                |       | 44.0 |   | 123.2 |   | 42.4 |   | 33.9 |   | 31.6 |   |
| Diluted                                                                                       |   | 29.0                                                                |       | 43.5 |   | 111.4 |   | 41.6 |   | 33.7 |   | 31.6 |   |
| Net Income                                                                                    |   |                                                                |       |   |   |   |   |   |   |   |   |   |   |
| Basic                                                                                         |   | 29.4                                                                |       | 44.0 |   | 123.2 |   | 42.4 |   | 48.1 |   | 47.1 |   |
| Diluted                                                                                       |   |                                                                |       |   |   |   |   |   |   |   |   |   |   |
|                                                                                          |   | 29.0                                                                |       | 43.5 |   | 111.4 |   | 41.6 |   | 46.4 |   | 47.1 |   |
| **Balance  Sheet Data (at period end):**                                                      |   |                                                                |       |   |   |   |   |   |   |   |   |   |   |
|                                                                                          |   |                                                                |       |   |   |   |   |   |   |   |   |   |   |
| Current assets                                                                                |   | US$                                                                 | 1,969      |   | A$ | 2,951 |   | A$ | 4,591 |   | A$ | 2,683 |   | A$ | 1,749 |   | A$ | 1,977 |   |
| Total assets                                                                                  |   | 6,606                                                               |       | 9,902 |   | 8,952 |   | 6,990 |   | 4,933 |   | 6,169 |   |
| Total long-term debt (including finance leases)                                               |   | 1,179                                                               |       | 1,768 |   | 2,057 |   | 1,938 |   | 990 |   | 1,191 |   |
| Other capital resources (7)                                                                   |   | 298                                                                 |       | 446 |   | 543 |   | 426 |   | 426 |   | 426 |   |
| Shareholders’ equity/net assets                                                          |   | 2,658                                                               |       | 3,984 |   | 3,982 |   | 2,099 |   | 1,912 |   | 2,710 |   |
| Number of shares (millions)                                                                   |   | —                                                              |       | 848.2 |   | 822.6 |   | 633.2 |   | 624.1 |   | 638.1 |   |
|                                                                                               |        |                                                                     |            |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

 

8

----

 

----

(1)                                 Income statement data and balance sheet data have been translated atthe noon buying rate on June 30, 2003 of A$1.00 = US$0.6671.

 

(2)       Other revenue includes interestreceived, share of associates’ net profit, and proceeds on disposal ofnon-current assets, subsidiaries and businesses. See Note 2 to the consolidatedfinancial statements.

 

(3)                                 Costof goods incurred in generating sales revenue only (not other revenue).

 

(4)                                 Includescosts incurred in generating other revenue.

 

(5)                                 Borrowingcosts less interest received.

 

(6)                                 Dividends have been translated into U.S. dollars at the noon buyingrate on the date of payment, except for the 2002-03 final dividend of A$0.15per Ordinary Share, payable on October 1, 2003, which has been translatedat the June 30, 2003 noon buying rate of A$1.00 = US$0.6671.

 

(7)                                 Includes A$446 million of subordinated convertible unsecured noteswhich have no maturity dates.  Thesenotes are subordinated to all other obligations of Amcor save for issuedcapital.

 

(8)                                 PBITA excluding significant items divided by net interest (includinginterest on perpetual Amcor convertible reset securities (PACRS)).

 

(9)                                 Includes undated subordinated convertible securities, partly-paidordinary shares and PACRS.

 

**Risk Factors**

 

***General Economic Conditions***

 

Amcor’s business may be affected by general economicconditions within Australia and globally (including, for example, governmentfiscal, monetary and regulatory policies, interest rates, tax rates, foreignexchange rates, oil prices, inflation and the industrial relationsenvironment). Changes in the economic conditions in markets in which we operatemay result in customers changing spending patterns and their level of generalconsumption, which may have a material adverse effect on our operating andfinancial performance.

 

***Technology***

 

We operate in highly competitive business segments.Our industry continues to change in response to technological innovations andother factors. We cannot predict with certainty the changes that may affect ourcompetitiveness. In particular, Polyethylene Terephthalate (which we will referto as PET) product design and development may be subject to rapid technologicalchange. We cannot predict whether technological innovations will make some ofour products, production processes or distribution techniques wholly orpartially obsolete. If this were to occur, we may be required to investsignificant resources to further adapt to the changing competitive environment.In such a case the investments could negatively affect our profitability andresults of operations.

 

***Increased or New Competition***

 

While we have a strong position in each of our keymarket segments (both in Australia and internationally), new competitors mayemerge in the market and potential rivals may seek to increase market share.Price competition may have the effect of reducing margins and profitability.

 

***Laws and Regulations***

 

Our operations could be affected by government actionssuch as controls on prices, new forms of taxation and increased governmentregulation in the countries in which we operate. We also operate in somecountries that pose political risks including civil unrest, nationalisation andchanges in laws and policy. These political risks could have an adverse impacton the profitability of our operations.

 

Amcor is subject to environmental regulation inrelation to our manufacturing activities and we are subjected periodically tointernal, independent external and government agency audits and siteinspections.

 

9

----

 

***Exchange Rates***

 

We are exposed to movement in exchange rates offoreign currencies – mainly the US$ and the Euro. However, as we do notcurrently repatriate foreign profits, there is no currency gain or loss in realterms; it is a translated effect only. We estimate that if there is a one centchange in the US$ or the Euro over a full year, the impact on net profit wouldbe approximately A$1.5 million or A$2.5 million respectively.

 

***Environmental***

 

Amcor’s worldwide manufacturing operations are subjectto extensive environmental regulation. We believe that we are currentlysubstantially in compliance with these regulations. However, althoughcompliance costs in future years will depend on legislative and technologicaldevelopments which cannot be accurately predicted, Amcor believes the costs ofcompliance with environmental laws and regulations will increase as these lawsand regulations become more stringent. These laws and regulations may,therefore have an unpredictable and adverse effect on our operations andprofits.

 

10

----

 

**ITEM 4**** INFORMATION ON THE COMPANY**

 

The discussion below contains certain forward-lookingstatements. Amcor’s actual results could differ materially from thoseanticipated by those forward-looking statements due to a variety of factors,including those set forth under “Forward-Looking Statements”, “Risk Factors”and elsewhere in this annual report.

 

**General**

 

Amcor Limited is a public company with limitedliability incorporated in New South Wales, Australia under the AustralianCorporations Act (2001). We are a leading global packaging group with annualsales of approximately A$10.7 billion. We are headquartered in Australia andhave operations in Australia, New Zealand, Asia, Europe and the Americas. AtDecember 12, 2003, our market capitalization was approximately A$8.0billion, making us one of the 25 largest public companies in Australia, bycapitalization.

 

Amcor offers a broad range of plastic, fibre, metaland glass packaging products along with packaging-related services. Formanagement reporting purposes Amcor’s business is split either regionally toreflect the geographic areas in which it operates or along business lines whenthe business is strong in a number of geographical regions. In Australia andNew Zealand, Amcor has developed a business with a broad product offering andthe ability to provide a wide range of packaging and associated services.Internationally, Amcor has built a packaging business based on a smaller numberof packaging segments.

 

Approximately 23% of Amcor’s sales were derived fromAustralasia in 2002-03 compared with 32% in 2001-02.  Amcor continues to maintain a strong market position andcompetitive advantage for many of our products in Australia where, althoughcompetition is intense, our major markets can be largely characterized ashaving a limited number of major domestic participants, with competition fromimports in certain markets.  Over thepast ten years, Amcor has generated substantial growth in both our non-fiberbased packaging operations and our operations outside Australia.  For the year ended June 30, 2003, 77%of our sales were derived from North/Latin America, Europe and Asia.

 

Amcor’s acquisition of the Schmalbach businesses onJuly 1, 2002 was the most significant factor in the percentage of salesoutside Australasia increasing during the twelve months to June 2003.

 

**Recent Developments**

 

***Purchase of PET Assets in Mexico***

 

Amcor announced on November 5, 2003 that it hadentered into an agreement to purchase the PET injection and blow mouldingassets of Embotelladoras Arca S.A. de C.V. (Arca) and supply bottles to Arcawith an initial supply agreement of eight years. Amcor will purchase the PET onsite injection and blow moulding assets of Arca for around A$60 million whichwill be paid in yearly instalments throughout the life of the contract.

 

***Board Changes***

 

The Chairman of Amcor Limited, Mr Chris Roberts,announced on September 23, 2003 that Mr G J (John) Pizzey has accepted aninvitation to join the Amcor Board, effective September 23, 2003.

 

Mr Roberts also announced the resignation from theAmcor Board of Mr T C Bergman, effective October 23, 2003.

 

***Purchase of Amcor Flexibles Europe Minorities***

 

On August 21, 2003 Amcor announced that it hadpurchased the 28.1% minority stake in Amcor Flexibles Europe from Danisco andAhlstrom for €99.5 million (A$173 million), effective from July 1, 2003.The purchase price represented 6.4 times the 2002-03 PBITDA less debt and Amcorexpects the acquisition to be earnings per share positive in 2003-04.

 

***Acquisition of Rexam’s Healthcare Flexibles PackagingOperations***

 

Amcor also announced on August 21, 2003 that ithad entered into an agreement to purchase Rexam plc’s (Rexam) healthcareflexibles business for A$330 million. The business, which has annual sales ofapproximately A$390 million, has ten plants in six countries – five in theUnited States and one each in England, Ireland, France, Singapore and Brazil.

 

11

----

 

The acquisition is consistent with Amcor’s strategy oftargeting higher value added and higher growth market segments. The five plantsin the United States will increase Amcor’s presence in that country and areexpected to provide a solid base in a high value business from which to build.

 

The purchase price represents a multiple of 6.5 timesthe previous 12 months PBITDA.

 

***Refinancing of Global Multi-Currency Debt Facility***

 

In June 2003, Amcor refinanced its globalmulti-currency bank debt facility by increasing the overall facility limit toUS$1 billion (previously US$555 million) and extending the life of the termcomponent to five years.

 

The increase in the facility will be used to replaceborrowings under other debt facilities maturing in future months, to providerequired back-up for commercial paper programs and to provide additionalgeneral corporate debt facilities to the Amcor Group, which is nowsignificantly larger following the acquisition of Schmalbach-Lubeca’s PET andclosures businesses in July 2002.

 

***Purchase of Alcoa’s Latin American PET Packaging Business***

 

In June 2003 Amcor entered into a bindingagreement to purchase Alcoa’s Latin American PET packaging business for US$75million. The purchase price represents approximately 4.8 times the previous 12months’ PBITDA.

 

Alcoa’s Latin American PET business consisted of nineproduction facilities located across Brazil, Argentina, Columbia, Peru, Uruguayand Chile. Sales were approximately A$200 million in 2002.

 

***A$125 Million Wine Bottle Plant Expansion***

 

Amcor announced in March 2003 that it is buildinga second furnace on its existing wine bottle facility in Gawler, SouthAustralia. The new furnace, which will cost A$125 million and have a capacityof 200 million wine bottles per year, is expected to commence output bymid-2005.

 

The building of the second furnace will increaseproduction at the Gawler site to 400 million bottles per year. The strongcustomer demand for Amcor’s wine bottles has enabled new long term supplycontracts to be both extended and upgraded and has underpinned demand for thenew furnace.

 

***Sale of Joint Venture Stake in White Cap North AmericanClosure Operations***

 

In January 2003, Amcor entered into a definitiveagreement to sell its 65% stake in Amcor White Cap LLC to Silgan Holdings Inc,its 35% joint venture partner. The joint venture, which consisted of sevenplants, six in the United States and one in Mexico, was sold for A$66 million –equivalent to book value.

 

Amcor plans to continue developing its position in theplastic closures market in North America through its joint venture partner,Bericap and will also retain 100% of the European and Asian metal closuresoperations as well as small facilities in Brazil and Venezuela.

 

***US$500 Million Private Placement***

 

In December 2002, Amcor successfully completedarrangements for a US$500 million private placement of debt securities toUS-based institutional investors. The placement was done in tranches of seven,ten, 12 and 15 years (average duration – 11.5 years) at a weighted averageinterest rate of 5.8%.

 

The placement was made in two instalments with US$350million being used immediately to replace the bridge finance facilityestablished at the time of the Schmalbach-Lubeca acquisition and a furtherUS$150 million refinancing notes that matured in June 2003.

 

**Amcor’s Strategy**

 

Amcor’s aim is to be a global leader in the packagingindustry, targeting specific segments predominantly in the food and beverageindustries.

 

12

----

 

In Australia and New Zealand, Amcor has a leadingpresence with a broad product offering and is the number one or number twosupplier in most segments in which it participates (see Competition). Over thepast three years, Amcor’s Australian and New Zealand businesses have delivereda stable earnings stream.

 

Outside of Australia and New Zealand, Amcor’s strategyis to be a leader in specific segments. These segments are:

 

•                  flexible packaging for the food, beverage, healthcare and industrialmarkets;

•                  PET bottles and jars for beverage and food applications;

•                  specialty printed cartons for tobacco, confectionery and health andbeauty markets;

•                  distribution ofpackaging products and related goods; and 

•                  specialty plastic packaging for closures, tubes and thermoformedrigid plastics.

 

Amcor believes that all these segments are attractivebecause they exhibit three key characteristics:

 

•                  prospects of higher than industry average growth;

•                  the ability to create value-added products and services, which providesthe opportunity for Amcor to differentiate itself from its competitors; and

•                  the ability to obtain a leading presence, either regionally orglobally.

 

Amcor has implemented this strategy through a numberof transactions that have reshaped it over the last two years. The mostsignificant of these include:

 

•                  the creation in June 2001 of the leading European flexiblepackaging business through a three way joint venture between Amcor FlexiblesEurope, Danisco Flexible and Ahlstrom and the subsequent purchase of theminority stake in July 2003; and

•                  the acquisition in July 2002 of the PET Container and closuresoperations of Schmalbach-Lubeca.

 

The Schmalbach businesses represented an attractiveopportunity that was consistent with Amcor’s strategy. In acquiring thesebusinesses, Amcor has become the leading manufacturer of PET containersglobally. Additionally, the acquisition has allowed us to expand our activitiesin segments that exhibit higher than average industry growth and the ability tooffer a greater number of value-added products.

 

**Businesses**

 

The chart set out below describes our organizationalstructure as at June 30, 2003.

 

 

Amcor operates its business through six maindivisions:

 

*AmcorPET Packaging*manufactures PET containersand preforms and provides them to consumer goods companies worldwide.

 

*AmcorAustralasia* manufactures metal, plastic,fibre and glass packaging throughout Australia and New Zealand.

 

*AmcorFlexibles Europe* is a manufacturer offlexible packaging, servicing a range of food, beverage, healthcare andindustrial segments.

 

*AmcorSunclipse,*based in California, is amanufacturer and distributor of industrial packaging supplies and relatedproducts and services.

 

13

----

 

*AmcorRentsch & Closures*

•                  *Amcor Rentsch* is a producer of specialty folding cartons for the tobacco,cosmetics and confectionery industries.

•                  *Amcor Closures* manufactures plastic and metal closures as well as rigid tubs andplastic tubes.

 

*AmcorAsia*, headquartered in Singapore, is asupplier of corrugated and tobacco packaging, closures, flexible packaging andpaper sacks.

 

***Background***

 

Amcor’s history dates back to the 1860s andAustralia’s first paper making activities. Until 1980, Amcor was almost exclusively a forestry, pulp and papercompany in Australia.  Since that time,however, Amcor implemented a major program of expansion that resulted in ashift away from sole reliance on pulp and paper products in Australia and thedevelopment of a diversified and integrated international packaging and papercompany. Amcor has grown through a combination of acquisitions, “greenfield”developments where suitable acquisitions could not be obtained and expansion ofcapacity of existing businesses.

 

After a two year rationalisation and restructuringprogram in 1997-98 and 1998-99, when a number of non-core or under-performingbusinesses were disposed of, Amcor demerged its paper manufacturing and finepaper distribution businesses in April 2000 following shareholder and courtapproval. In May 2001, Amcor announced its intention to sell its 50%investment in Kimberly-Clark Australia Pty Ltd (KCA). The demerger and sale ofKCA were strategic initiatives intended to enable Amcor to realize its goal ofbecoming a leading global packaging company by enhancing Amcor’s ability topursue opportunities to further develop its businesses in new products,services and markets. The acquisition of Schmalbach-Lubeca assets inJuly 2002 was our latest step in implementing this strategy.

 

At June 30, 2003, Amcor had approximately 28,600employees at 212 manufacturing plants and 38 distribution facilities in 37countries and 121,600 shareholders, including more than 14,200 employeeshareholders.

 

The manufacturing plants by business are as follows:

 
| Amcor PET Packaging          |   | 48  plants in 18 countries                               |
|------------------------------|--------|----------------------------------------------------------|
| Amcor Australasia            |   | 74  plants in 2 countries                                |
| Amcor Flexibles Europe       |   | 41  plants in 15 countries                               |
| Amcor Sunclipse              |   | 14  plants and 38 distribution facilities in 2 countries |
| Amcor Rentsch & Closures |   | 20  plants in 17 countries                               |
| Amcor Asia                   |   | 15  plants in 5 countries                                |

 

Following the purchase of Alcoa’s Latin American PETpackaging business and the acquisition of Rexam’s healthcare flexible packagingoperations (see Recent Developments), Amcor has 238 manufacturing plants and 38distribution facilities in 42 countries.

 

Our principal office is located at 679 VictoriaStreet, Abbotsford, Victoria 3067, Australia, and our telephone number is(61-3) 9226-9000.

 

14

----

 

***Amcor’sSignificant Subsidiaries as at December 12, 2003***

 
|                                        |   | **Country  of  Incorporation** |   | **Percentage  Held by Direct  Parent Entity** |   |
|---------------------------------------------|--------|--------------------------------|--------|-----------------------------------------------|--------|
| Amcor  Investments Pty. Ltd.                |   | Australia                      |   | 100                                           | %      |
| Amcor  Packaging (New Zealand) Ltd.         |   | New  Zealand                   |   | 100                                           | %      |
| Amcor  Packaging (U.S.A.), Inc.             |   | U.S.A.                         |   | 100                                           | %      |
| Amcor  Sunclipse – North America, Inc. |   | U.S.A.                         |   | 100                                           | %      |
| Amcor  Europe                               |   | United  Kingdom                |   | 100                                           | %      |
| Amcor  Packaging Asia Pty. Ltd.             |   | Australia                      |   | 100                                           | %      |
| Amcor  Packaging (Australia) Pty. Ltd.      |   | Australia                      |   | 100                                           | %      |
| Amcor  European Holdings Pty. Ltd.          |   | Australia                      |   | 100                                           | %      |
| Amcor  Holding                              |   | United  Kingdom                |   | 100                                           | %      |
| Amcor  Flexibles Europe A/S                 |   | Denmark                        |   | 100                                           | %      |

 

15

----

 

***Amcor PET Packaging***

 

In July 2002 Amcor acquired the PET Containersbusiness of Schmalbach-Lubeca. The Amcor PET Packaging business was formedfollowing the integration of this PET business with Amcor Twinpak’s PEToperations.

 

Amcor PET Packaging has a broad product portfolioranging from preforms and containers for carbonated soft drinks and water applicationsand custom products – ie other beverage and food segments. Productsmanufactured include PET bottles for carbonated soft drinks, mineral water,juices, spirits and beer, milk and other dairy products, PET containers forhot-filled drinks and food products, PET containers for household chemicals,preforms (for moulding by customers) and recycled PET materials.

 

PET containers have been a growing packaging segmentfor over 20 years and future growth is expected to continue. The demand growthis driven by lifestyle changes, increasing bottled water requirements,substitution of PET for glass in food applications such as sauces and jelliesand continuing growth in carbonated soft drinks. Excluding the acquisition ofAlcoa’s PET operations in Latin America (see Recent Developments), US$120million expenditure was approved in 2002-03 by the Amcor Board to install anadditional 26 injection moulding machines and 29 blow moulding machines.

 

The business has 50 manufacturing locations on fivecontinents across 20 countries together with research and development andrecycling facilities in both the US and Europe.

 

***Amcor Australasia***

 

Amcor Australasia is based in Melbourne, Australia andoperates from 74 facilities and employs more than 7,100 people. Major manufacturingsites include 13 corrugated box plants, 13 metal packaging plants, 13 flexibleand plastic packaging plants, 13 carton and sack plants, four paper mills and aglass plant.

 

The business is a manufacturer of metal and flexiblepackaging in Australia and New Zealand. Products made in both countries includealuminium beverage and aerosol cans, steel cans for food and aerosols, flexibleand film packaging, PET plastic bottles and jars and plastic closures. InAustralia, the business also makes metal and plastic caps and closures andmulti-wall sacks.

 

Amcor also has a glass packaging business, whichcommenced operations in July 2002 and produces 600,000 wine bottles perday that it is supplying to a growing number of wine companies (including allthe major wine producers) in Australia.

 

Amcor Australasia’s fibre packaging businessmanufactures packaging for food, beverages, household products and a range ofindustrial uses. It also sells paper and board to other packaging companies aswell as plasterboard liner and functionally-coated packaging papers. The fourpaper mills supply the corrugated box and carton operations and satisfy themajority of their recycled paper requirements from within Australia.

 

***Amcor Flexibles Europe (AFE)***

 

AFE is a manufacturer of flexible packaging andservices a range of food and beverage segments including confectionery, coffee,fresh food and dairy as well as high value-added medical applications and othernon-food products. Headquartered in the UK, it has over 6,700 employees and 41plants in 15 European countries and is also responsible for Amcor’s USflexibles operation.

 

AFE, which was formed following the merger of Amcor’sflexible businesses in Europe with the flexible packaging operations of Daniscoand Ahlstrom. The acquisition of Rexam’s food flexible packaging business inJanuary 2002 and the purchase of Tobepal’s Spanish flexible packaging andextrusion operations in June 2002 significantly increased its marketposition in the bakery and produce sectors in the United Kingdom and thepharmaceutical and healthcare markets across Europe.

 

The announcements in August 2003 of Amcor’spurchase of the minority stake in AFE from Danisco and Ahlstrom and of theagreement to acquire Rexam’s medical and healthcare flexible business (seeRecent Developments) are expected to further consolidate AFE’s position inEurope’s flexible packaging sector.

 

16

----

 

***Amcor Sunclipse***

 

The Amcor Sunclipse business is made up of bothmanufacturing and distribution operations. The manufacturing business producescorrugated board and boxes and consists of three corrugated sheet operationsand 11 manufactured packaging product facilities.  The distribution group, known as the Kent H. Landsberg Company,operates 34 distribution centres in the US and four in Mexico and includes alltypes of industrial and janitorial supplies including flexible packaging.

 

***Amcor Rentsch and Closures***

 

Amcor Rentsch, headquartered in Switzerland, is aleading producer of specialty folding cartons for tobacco, cosmetics andconfectioneries. It has manufacturing plants in eight countries – Switzerland,France, Germany, Republic of Ireland, Poland, Portugal, Russia and Spain.

 

As previously disclosed (see Recent Developments) followingthe sale of the closures business in North America to Silgan Holdings Inc, KenMacKenzie was appointed to the new position of Managing Director, Amcor Rentschand Closures. The closures business, which is now headquartered in Switzerlandalso, consists of 10 metal and plastic closure plants in nine countries as wellas the specialty packaging businesses of rigid tubs and plastic tubes.

 

***Amcor Asia***

 

Amcor Asia, based in Singapore, has 15 manufacturingplants spanning five countries - Singapore, Malaysia, Indonesia, Thailand andChina. The business does not include the PET or closure operations (other thanthe joint venture in Thailand) that are in the Asian region as these aremanaged by and reported in the respective PET and Closures segments.

 

Amcor Asia’s plants are located as follows:

 

•                  Singapore – one corrugated box plant, one tobacco packaging plantand one multiwall sack plant.

•                  Malaysia – three corrugated box plants and one tobacco packagingplant.

•                  Indonesia – onecorrugated box plant (55% interest in a joint venture) and one multiwall sackplant.

•                  China – two tobacco packaging plants (83% and 60% interests in jointventures), two flexible packaging plants, and one corrugated box plant.

•                  Thailand – oneclosures plant (51% interest in a joint venture).

 

17

----

 

**CapitalExpenditure**

 

Capital expenditure refers to expenditure on property,plant and equipment and excludes acquisition of controlled entities andbusinesses. Net capital expenditure is arrived at after deducting proceeds ondisposal of property, plant and equipment and does not include proceeds ondisposal of controlled entities, businesses and investments.

 

***2002-03***

 

Capital expenditure on property, plant and equipmentin 2002-03 totalled A$890 million; net capital expenditure was A$832 millionafter deducting the A$58 million proceeds received on the disposal of property,plant and equipment.

 

Expenditure in 2002-03 included outlays on thefollowing major items:

 

•                  expansion of PET Packaging’s injection moulding and blow mouldingcapacity;

•                  upgrade of paper mill in Queensland, Australia to improve boardquality;

•                  expansion of plastic closure capacity in Poland

 

***2001-02***

 

Net capital expenditure was A$144 million in 2001-02.Acquisition of property, plant and equipment totalled A$351 million and theproceeds on disposal of property, plant and equipment was A$207 million for theyear to June 2002.

 

Major items of capital expenditure included:

 

•                  expansion of the PET business in Canada;

•                  purchase and installation of a flexo press for Amcor Australasia atScoresby Preprint, Victoria, Australia; and

•                  purchase of blowmould machines for CNC Containers at Arizona andWashington, USA.

 

***2000-01***

 

Net capital expenditure totalled A$263 million in 2000-01.Capital expenditure on property, plant and equipment of A$289 million wasoffset by proceeds on disposal of A$26 million.

 

•                  upgrade of corrugators at Victorian and New South Wales plants inAustralia;

•                  development of Amcor Australasia’s E-Business; and

•                  relocation of the Spanish flexible packaging operation to a newgreenfield site.

 

**Environmentaland Other Regulations**

 

The regulatory constraints on Amcor’s businesses andgrowth include, among many other such regulations, compliance with:

 

•                  the Australian Corporations Act 2001 and other jurisdictions’corporate regulations;

•                  labor legislation;

•                  the provisions of the Australian and other jurisdictions’ TradePractices Acts;

•                  numerous actsrelating to workers’ compensation and rehabilitation, occupational health andsafety, dangerous goods handling; and

•                  environmental regulations of various kinds.

 

Amcor’s worldwide manufacturing operations are subjectto extensive environmental regulation. Amcor believes it is substantially incompliance with these regulations. During 2002-03, Amcor had threeenvironmental incidents. There were two chemical spills from flexibles plantsin Europe and an air pollution breach in relation to the discharge of offensiveodours from a paper mill in Victoria, Australia. The European sites haveco-operated fully with authorities and have made improvements to minimize thepotential for future spills. With regards to the paper mill breach, Amcor wasordered to pay A$45,000 to the local council to contribute to the funding of restorationworks. Amcor has also committed to an upgrade of the plant which is anticipatedto reduce the generation and impact of odours upon neighbouring residents.

 

Amcor’s current environmental system is based onInternational Standard ISO 14001. A detailed program of environmental auditingprovides feedback on the effectiveness of the management system and includessite inspections and assessments of environmental risk. Amcor’s environmentalperformance is monitored regularly by management and the Board and is acomponent of performance appraisal and management remuneration.

 

18

----

 

Amcor’s environmental objectives are:

 

•                  all major manufacturing sites to be certified to ISO 14001;

•                  reduction in energy per unit of product; and

•                  reduction in waste to landfill per unit of product.

 

All higher risk manufacturing sites that were acquiredmore than three years ago have obtained certification to ISO 14001. Morerecently acquired higher risk businesses are required to achieve certificationwithin three years of acquisition. Several lower risk businesses have alsochosen to become certified as a way to demonstrate their environmentalcommitment. The lower risk sites are implementing systems using the AmcorEnvironmental Management Manual, which is based on ISO 14001.

 

The Dow Jones Sustainability Index includes the top10% of the world’s leading sustainability companies. “Sustainability”encompasses a company’s activities, performance and contribution in regard toenvironment, safety and the community, without compromising the needs of futuregenerations. Amcor was assessed against other packaging companies and wassuccessful in being included in the 2003 Index.

 

Amcor is committed to recycling and is activelyinvolved in recycling many of its products. Amcor Australasia is a recycler ofpackaging and glass and is involved with local supermarkets in the recycling ofsoft plastics, while Amcor PET Packaging operates two recycling plants, one inthe United States and the other in France.

 

As a signatory to the National Packaging Covenant inAustralia, Amcor has prepared an action plan to reduce the environmental impactof its products. The actions include an ongoing commitment to kerb-siderecycling and product design and manufacture.

 

**Labor Relations**

 

At June 30, 2003, Amcor employed approximately28,600 persons at 250 locations around Australia and overseas.  Given the number of plants and types ofbusinesses in which Amcor is engaged, labor relations are necessarily characterizedby numerous separate arrangements within individual businesses. Thischaracteristic has, however, been heightened in recent years by theAustralia-wide trend away from industry-based wage fixation to enterpriseagreements based on productivity and performance.  The major unions which represent employees of Amcor’s companiesin Australia are the Amalgamated Metal Workers’ Union, the Printing and KindredIndustries Union, the Construction Forestry Mining Energy Union and theNational Union of Workers. Amcor believes it is in substantial compliance withall industry and labor awards relevant to its employees and that itsrelationships with its employees are good. (See Item 8 – Financial Information– Legal Proceedings).

 

**Safety**

 

Amcor’s goal is to ensure that no one who works forAmcor is ever injured and it has developed extensive procedures and practicesto safeguard its people. Amcor’s lost time injury frequency rate (number oflost time injuries per million hours worked) improved from 3.8 times for thetwelve months to June 2002 to 3.3 times for the year to June 2003;its recordable case frequency rate which is the number of medical treatmentsand lost time injuries per million hours worked also reduced – from 24.4 in thetwelve months to June 2002 to 21.5 in the equivalent period toJune 2003.

 

Regrettably, however, Amcor must report that duringthe year an employee was fatally injured while working on a paper machine atthe Fairfield Mill in Australia.

 

19

----

 

**Researchand Technology**

 

In order to develop a competitive advantage throughinnovation, during the year to June 2003, Amcor launched a ProductLeadership and Innovation (PLI) initiative which is based on leadership indeveloping profitable packaging solutions focusing on new products, productextensions and process improvements. Amcor’s research and developmentactivities play an important role in developing this strategy.

 

In the twelve months to June 2003 Amcor hasinvested approximately A$106 million globally on research and development whichis a significant increase on previous years due to the PLI strategy. A keyfocus in 2002-03 has been intellectual property which is crucial to thedelivery of the PLI strategy and Amcor has ensured that this knowledge isprotected by registration or confidentially agreements. Amcor currently hasover 350 patents registered worldwide.

 

Examples of recent initiatives include AmcorAustralasia’s re-close zip pouch, Amcor Flexibles Europe’s resealable flexiblebag and Amcor PET Packaging’s new generation of lightweight heat-set bottles.

 

**Competition**

 

Similar to other industries, packaging has undergoneconsiderable worldwide consolidation, resulting in significant structuralchanges to the competitive nature of the industry. Benchmark cost structureshave fallen in a number of the industry sectors as a result of theconsolidation that has occurred, which in turn has placed downward pressure onproduct pricing.

 

***Amcor PET Packaging***

 

Amcor believes it is the global leader in themanufacture of PET containers and estimates it has a global market share ofapproximately 12 per cent. Management also believes that Amcor’s geographicspread and comparatively efficient operations make it a strong competitor.

 

***Amcor Australasia***

 

Excluding fibre based packaging, Amcor Australasia’sremaining businesses are divided into seven separate markets: (i) beverage cans(beer and soft drinks), (ii) food cans, (iii) flexible/PET plastics, (iv)aerosol cans, (v) closures, (vi) multi-wall sacks and (vii) glass wine bottles.These businesses compete directly with manufacturers and importers of similarproducts while, at the same time, dealing with indirect competition from otherforms of packaging. They compete principally on the basis of reliability ofdelivery, product quality, innovation and price.

 

The following estimates of market share have been madeby Amcor analysts with assistance from information provided by BIS Shrapnel.

 

Amcor estimates that it has about a 67% share of theAustralian beverage can market for beer and soft drinks, supplying three of thefour major consumers.  In food canswithin Australia and New Zealand, Amcor estimates that it holds approximately45% share of the market with only one other competitor.

 

Amcor is one of only two manufacturers in Australiasupplying glass bottles to the wine industry. Amcor’s annual productioncapacity of over 200 million bottles gives it a market share of about 23%.

 

The Australasian corrugated box market is sharedprincipally by Amcor and one other major manufacturer, each holding between 40%to 45% of the market.

 

The cartonboard market consists primarily of packagingfor grocery consumer products.  InAustralia, there are five other major converters of cartonboard packaging, allof whom compete with Amcor.

 

***Amcor Flexibles Europe***

 

The three-way merger of Amcor Flexibles Europe,Danisco Flexible and Akerlund & Rausing in June 2001 has broughttogether three of the top seven flexible packaging companies in Europe tocreate a new market leader with sales in 2002-03 of more than A$2 billion.Around 80% of sales are in the relatively stable food and beverage industries.The business has a broad customer base with the largest customer representingabout 4% of total sales.

 

20

----

 

Amcor’s purchase of the minority stake in AmcorFlexibles Europe (see Recent Developments), announced in August 2003 isexpected to strengthen this competitive position.

 

***Amcor Sunclipse***

 

In California, Amcor’s corrugated box and sheet plantsface solid competition from other local producers. Sunclipse is attempting tocombat this increased competition by providing a higher standard of customerservice through improved operating systems.

 

The distribution market in the US and Mexico remainsvery competitive.

 

***Amcor Rentsch and Closures***

 

Amcor Rentsch is heavily focussed on the tobaccopackaging business in existing and emerging European markets. It hasalso continued its development of specialty folding cartons for the cosmeticsand confectionery industries.

 

The global closures industry is highly fragmented(particularly in plastic closures). The leading five producers worldwidecurrently represent less than 20% of total sales.

 

***Amcor Asia***

 

In Asia, Amcor’s corrugated fiber box plants facesignificant competition from established local producers. The corrugatingmarket is also faced with excess capacity.

 

21

----

 

**SalesRevenue by Geographic****, Business and IndustrySegments**

 

The table below shows Amcor’s sales revenue bygeographic, business and industry category for the last three financial years.See also Operating and Financial Review and Prospects for a discussion ofrevenue performance during the last three years.

 
|                         |   | **Year  Ended 30 June** |   |
|------------------------------|--------|-------------------------|--------|
|                         |   | **2003**                |   | **2002** |   | **2001** |   |
|                         |   | **(in A$ millions)**    |   |
| **Geographic Segments**      |   |                    |   |   |   |   |   |
|                         |   |                    |   |   |   |   |   |
| Australia  & New Zealand |   | 2,440.1                 |   | 2,361.9 |   | 2,304.5 |   |
| North/Latin  America         |   | 3,982.0                 |   | 2,387.2 |   | 2,079.4 |   |
| Europe                       |   | 4,005.3                 |   | 2,412.9 |   | 955.5 |   |
| Asia                         |   | 282.5                   |   | 310.4 |   | 327.8 |   |
|                         |   | 10,709.9                |   | 7,472.4 |   | 5,667.2 |   |
|                         |   |                    |   |   |   |   |   |
| **Business Segments**        |   |                    |   |   |   |   |   |
|                         |   |                    |   |   |   |   |   |
| Fibre  packaging             |   | 2,207.5                 |   | 2,123.3 |   | 2,060.5 |   |
| Flexible  packaging          |   | 2,531.9                 |   | 2,330.5 |   | 887.5 |   |
| Plastic  packaging           |   | 3,985.4                 |   | 920.7 |   | 639.9 |   |
| Distribution                 |   | 1,299.0                 |   | 1,413.2 |   | 1,426.2 |   |
| Other                        |   | 686.1                   |   | 684.7 |   | 653.1 |   |
|                         |   | 10,709.9                |   | 7,472.4 |   | 5,667.2 |   |
|                         |   |                    |   |   |   |   |   |
| **Industry Segments**        |   |                    |   |   |   |   |   |
|                         |   |                    |   |   |   |   |   |
| Amcor  Australasia           |   | 2,455.7                 |   | 2,367.7 |   | 2,361.5 |   |
| Amcor  PET Packaging         |   | 3,236.2                 |   | 802.5 |   | 806.1 |   |
| Amcor  Sunclipse             |   | 1,299.0                 |   | 1,413.2 |   | 1,182.4 |   |
| Amcor  Flexibles Europe      |   | 2,170.3                 |   | 1,976.6 |   | 986.4 |   |
| Amcor  Asia                  |   | 263.4                   |   | 310.4 |   | 327.8 |   |
| Amcor  Rentsch and Closures  |   | 1,310.6                 |   | 611.3 |   | 69.4 |   |
| Inter-segment  eliminations  |   | (25.3                   | )      | (9.3 | ) | (66.4 | ) |
|                         |   | 10,709.9                |   | 7,472.4 |   | 5,667.2 |   |

 

22

----

 

**Property****, Plant andEquipment**

 

At December 12, 2003, Amcor operatedmanufacturing and distribution facilities in the 42 countries listed in thefollowing table.

 
| **Geographic Region**    |   | **Number  of  Manufacturing  Facilities** |   | **Number  of  Distribution  Facilities** |   |
|--------------------------|--------|-------------------------------------------|--------|------------------------------------------|--------|
| Argentina                |   | 3                                         |   | —                                   |   |
| Australia                |   | 58                                        |   | —                                   |   |
| Belgium                  |   | 3                                         |   | —                                   |   |
| Brazil                   |   | 13                                        |   | —                                   |   |
| Canada                   |   | 8                                         |   | —                                   |   |
| China                    |   | 6                                         |   | —                                   |   |
| Colombia                 |   | 4                                         |   | —                                   |   |
| Denmark                  |   | 3                                         |   | —                                   |   |
| Dominican Republic       |   | 1                                         |   | —                                   |   |
| Ecuador                  |   | 1                                         |   | —                                   |   |
| El Salvador              |   | 1                                         |   | —                                   |   |
| Finland                  |   | 2                                         |   | —                                   |   |
| France                   |   | 6                                         |   | —                                   |   |
| Germany                  |   | 6                                         |   | —                                   |   |
| Honduras                 |   | 1                                         |   | —                                   |   |
| Hungary                  |   | 1                                         |   | —                                   |   |
| India                    |   | 1                                         |   | —                                   |   |
| Indonesia                |   | 2                                         |   | —                                   |   |
| Ireland                  |   | 2                                         |   | —                                   |   |
| Italy                    |   | 3                                         |   | —                                   |   |
| Malaysia                 |   | 4                                         |   | —                                   |   |
| Mexico                   |   | 5                                         |   | 4                                        |   |
| Morocco                  |   | 1                                         |   | —                                   |   |
| The Netherlands          |   | 2                                         |   | —                                   |   |
| New Zealand              |   | 12                                        |   | —                                   |   |
| Norway                   |   | 1                                         |   | —                                   |   |
| Peru                     |   | 2                                         |   | —                                   |   |
| Philippines              |   | 1                                         |   | —                                   |   |
| Poland                   |   | 4                                         |   | —                                   |   |
| Portugal                 |   | 3                                         |   | —                                   |   |
| Puerto Rico              |   | 1                                         |   | —                                   |   |
| Russian Federation       |   | 1                                         |   | —                                   |   |
| Singapore                |   | 4                                         |   | —                                   |   |
| Spain                    |   | 9                                         |   | —                                   |   |
| Sweden                   |   | 1                                         |   | —                                   |   |
| Switzerland              |   | 3                                         |   | —                                   |   |
| Thailand                 |   | 1                                         |   | —                                   |   |
| Turkey                   |   | 2                                         |   | —                                   |   |
| United Kingdom           |   | 13                                        |   | —                                   |   |
| United States of America |   | 38                                        |   | 34                                       |   |
| Uruguay                  |   | 1                                         |   | —                                   |   |
| Venezuela                |   | 4                                         |   | —                                   |   |
|                     |   | 238                                       |   | 38                                       |   |

 

Amcor believes that its facilities are suitable andadequate for its present needs and are generally well maintained and in goodoperating condition. Amcor carries insurance covering property, casualty andcertain other risks to which its worldwide facilities and operations may besubject.

 

113 of Amcor’s principal manufacturing anddistribution facilities are owned. Those facilities which are not owned areleased by Amcor for periods varying from one to 10 years.  Amcor does not believe any of its businessesis dependent on any single facility.

 

23

----

 

**ITEM 5****  OPERATING AND FINANCIAL REVIEW AND PROSPECTS**

 

The discussion below contains certain forward-lookingstatements. Amcor’s actual results could differ materially from thoseanticipated by those forward-looking statements due to a variety of factors,including those set forth under “Forward-Looking Statements”, “Risk Factors”and elsewhere in this Annual Report.

 

**Changesto Senior Management**

 

In February 2003, James Allen, President andChief Executive Officer of Amcor Closures announced his decision to retire fromthe Amcor Group, with effect from July 2003. As of April 2003, KenMacKenzie became Group Managing Director Amcor Rentsch and Closures.

 

In May 2003, Amcor announced that Peter Brown,Managing Director, Amcor Australasia had decided to retire, effective December 31,2003. Peter Sutton, currently Group General Manager of Plastic Packaging andFood Cans with Amcor Australasia will succeed Peter Brown. Subsequent to thisannouncement, Amcor and Peter Brown mutually agreed that his retirement wouldbecome effective on September 30, 2003. Consequently, Peter Sutton assumedhis role as Managing Director, Amcor Australasia, from October 1, 2003.

 

**CriticalAccounting Policies** (refer F-11 – Note 1Accounting Policies)

 

Amcor’s consolidated financial statements have been preparedin accordance with Australian GAAP. Our significant accounting policies aremore fully described in Note 1 to our financial statements. The preparation ofour financial statements requires management to make estimates and judgementsthat affect the reported amounts of assets, liabilities, revenues and expensesand the disclosure of contingent liabilities. We continually evaluate ourestimates and judgements including those related to bad debts, inventories,intangible assets, income taxes, financing activities, restructuring costs,contingencies and litigation. We base our estimates and judgments on historicalexperience and on various other assumptions we believe to be reasonable underthe circumstances. This forms the basis for making judgements about thecarrying values of assets and liabilities that are not readily apparent fromother sources. Actual results may differ from these estimates under differentassumptions.

 

Our accounting policies have been developed over manyyears as generally accepted accounting principles or “GAAP” have evolved. Asour financial statements are prepared under A-GAAP our accounting policies arenecessarily compliant with all aspects of A-GAAP. A-GAAP is based on a‘substance over form’ conceptual framework that requires us to look through thelegal interpretation of an arrangement or transaction to its underlying purposeand to reflect it in our financial statements on that basis.

 

Changes in Amcor’s accounting policies generallyreflect changes to currently applicable Australian Accounting Standards anddisclosure requirements of Australia’s professional accounting bodies. Thesechanges are described in Note 1 to our financial statements, as are thefinancial effects of these changes in the current or prior periods.

 

In developing accounting policies, in addition toA-GAAP requirements, we also consider industry practice. Where there is noconflict with A-GAAP we also align our accounting policies with US-GAAP. Thisreduces the number of A-GAAP/US-GAAP reconciliation differences required to beadjusted in Note 35 to our financial statements.

 

In all material respects our accounting policies areapplied consistently across Amcor. The critical accounting policies discussedbelow generally apply to all segments of Amcor. Management has discussed thedevelopment and selection of these critical accounting policies with the auditand compliance committee of our board of directors. The following are thecritical accounting policies we apply in producing our A-GAAP financial statements.

 

***Recovery of Long-lived Assets***

 

Long-lived assets, consisting primarily of property,plant and equipment and intangibles, comprise a significant portion of Amcor’stotal assets. Changes in the intended use of these assets may cause theestimated period of use or the value of these assets to change.

 

Long-lived assets, including goodwill and intangibles,are reviewed for impairment whenever events or changes in circumstances haveindicated that changes in their carrying amounts may not be recoverable.Estimates and assumptions used in both setting depreciable lives and testingfor recoverability require both judgements and estimations. Property assets areindependently valued on an ‘existing use’ basis every three years and we assessthe recoverable amounts of our plant and equipment bi-annually, based on adetailed analysis of the current

 

24

----

 

replacement cost of plant and equipment at eachbusiness location. We assess the carrying value of acquired goodwill forimpairment at least annually based on its recoverable amount. Our assessmentsinclude methodologies such as earnings multiples. If earnings and earningsmultiples change, Amcor may have to record additional impairment charges notpreviously recognized.

 

***Acquisition Accounting***

 

In future years, Amcor may continue to grow ourbusiness through acquisitions, such as the Schmalbach acquisition. Amcoraccounts for the acquisitions using the purchase method of accounting. Theaccounting for business acquisitions is complicated and involves the use ofsignificant judgement.

 

Under the purchase method of accounting, a businessacquisition is accounted for at a purchase price based upon the fair value ofthe consideration given, whether it is in the form of cash, assets, stock orthe assumption of liabilities. The assets and liabilities acquired are measuredat their fair values, and the purchase price is allocated to the assets andliabilities based upon these fair values. Determining the fair values of the assetsand liabilities involves the use of judgement, since the majority of the assetsand liabilities acquired do not have fair values that are readily determinable.Different techniques may be used to determine fair values, including marketprices, where available, appraisals, comparisons to transactions for similarassets and liabilities and present value of estimated future cash flows. Sincethese estimates involve the use of significant judgement, they can change asnew information becomes available.

 

***Capitalisation of Costs***

 

When we incur costs, we classify them as eitheroperating expenses or capital costs. We expense operating expenses to thestatement of financial performance as they are incurred. We only capitalisecosts where we consider that they will generate future economic benefits.Capital costs are recorded as assets and shown in our statement of financialposition based on the asset class considered most appropriate to those costs.Management judgement and accounting policy guidelines are used in determiningcosts to be capitalised.

 

***Doubtful Debts***

 

We maintain provisions for doubtful debts based on anestimate of the inability of our customers to pay amounts due to us. Theseprovisions are based on historical trends and management’s assessment ofgeneral economic conditions. If the financial condition of our customersdeteriorates these provisions may not be sufficient and may lead to an increasein bad and doubtful debt expenses. We have no reason to believe that theprovisions we have raised will not sufficiently cover bad debts arising out ofthe receivables we currently have on hand. Our provision for doubtful debts wasA$60 million at June 30, 2003, A$42 million at June 30, 2002 and A$41million at June 30, 2001. Trade debtors before any provision for doubtfuldebts were A$1,163 million at June 30, 2003, A$1,122 million atJune 30, 2002 and A$1,108 million at June 30, 2001.

 

***Slow Moving and Obsolete Inventory***

 

Amcor’s policy is to maintain a provision for slowmoving and obsolete inventory based on our best estimate of such amounts atyear-end. We base our estimate on a systematic, on-going review and evaluationof inventory balances. As part of this evaluation, we also consider the averageage of the inventory as compared to anticipated necessary levels for futureperiods. We believe that the accounting estimate related to the establishmentof a provision for slow moving and obsolete inventory is a critical accountingestimate because the evaluation is inherently judgemental and requires the useof significant judgements about expected future sales levels which may besusceptible to significant change.

 

Amcor’s inventories are valued at the lower of cost(including an appropriate proportion of fixed and variable overheads) and netrealisable value in the normal course of business.

 

Our provision for diminution in value of inventorieswas A$72 million at June 30, 2003, A$58 million at June 30, 2002 andA$54 million at June 30, 2001. Total value of inventories before anyprovision for diminution were A$1,356 million at June 30, 2003, A$1,003 atJune 30, 2002 and A$1,035 at June 30, 2001.

 

25

----

 

**Resultsof Operations**

 

The following discussion is based on Amcor’sconsolidated financial statements as prepared under A-GAAP.  A discussion of the differences betweenA-GAAP and US-GAAP, and the impact of those differences on the consolidatedfinancial statements, is set out in Note 35 to the consolidated financial statements.

 

The results the businesses have achieved in 2002-03,2001-02 and 2000-01 are presented in the table below:

 
|                                         |   | **Sales**                     |   | **Profit**                    |   |
|----------------------------------------------|--------|-------------------------------|--------|-------------------------------|--------|
|                                         |   | **Year  Ended June 30,** |   | **Year  Ended June 30,** |   |
|                                         |   | **2003**                      |   | **2002**                      |   | **2001** |   | **2003** |   | **2002** |   | **2001** |   |
|                                         |   | **(In A$  millions)**         |   |
| ***Geographic Segments (1)***                |   |                          |   |                          |   |   |   |   |   |   |   |   |   |
|                                         |   |                          |   |                          |   |   |   |   |   |   |   |   |   |
| Australia & New Zealand                  |   | 2,440.1                       |   | 2,361.9                       |   | 2,304.5 |   | 245.1 |   | 265.0 |   | 289.9 |   |
| North/Latin America                          |   | 3,982.0                       |   | 2,387.2                       |   | 2,079.4 |   | 338.0 |   | 186.3 |   | 173.2 |   |
| Europe                                       |   | 4,005.3                       |   | 2,412.9                       |   | 955.5 |   | 255.1 |   | 127.8 |   | 51.3 |   |
| Asia                                         |   | 282.5                         |   | 310.4                         |   | 327.8 |   | 31.1 |   | 43.3 |   | 35.6 |   |
|                                         |   |                          |   |                          |   |   |   |   |   |   |   |   |   |
| Total sales revenue                          |   | 10,709.9                      |   | 7,472.4                       |   | 5,667.2 |   |   |   |   |   |   |   |
|                                         |   |                          |   |                          |   |   |   |   |   |   |   |   |   |
| Significant items before tax (2)             |   |                          |   |                          |   |   |   | (86.7 | ) | 534.8 |   | 37.0 |   |
| Profit before interest, tax and amortization |   |                          |   |                          |   |   |   | 782.6 |   | 1,157.2 |   | 587.0 |   |
|                                         |   |                          |   |                          |   |   |   |   |   |   |   |   |   |
| ***Industry Segments (1)***                  |   |                          |   |                          |   |   |   |   |   |   |   |   |   |
|                                         |   |                          |   |                          |   |   |   |   |   |   |   |   |   |
| Amcor Australasia                            |   | 2,455.7                       |   | 2,367.7                       |   | 2,361.5 |   | 282.8 |   | 254.2 |   | 232.8 |   |
| Amcor PET Packaging                          |   | 3,236.2                       |   | 802.5                         |   | 806.1 |   | 305.6 |   | 79.2 |   | 64.4 |   |
| Amcor Sunclipse                              |   | 1,299.0                       |   | 1,413.2                       |   | 1,182.4 |   | 84.8 |   | 95.2 |   | 90.2 |   |
| Amcor Flexibles Europe                       |   | 2,170.3                       |   | 1,976.6                       |   | 986.4 |   | 133.6 |   | 93.2 |   | 71.0 |   |
| Amcor Asia                                   |   | 263.4                         |   | 310.4                         |   | 327.8 |   | 32.1 |   | 44.5 |   | 41.6 |   |
| Amcor Rentsch and Closures                   |   | 1,310.6                       |   | 611.3                         |   | 69.4 |   | 84.1 |   | 48.6 |   | 18.3 |   |
| Other                                        |   | (25.3                         | )      | (9.3                          | )      | (66.4 | ) | (53.7 | ) | 7.5 |   | 31.7 |   |
|                                         |   |                          |   |                          |   |   |   |   |   |   |   |   |   |
| Total sales revenue                          |   | 10,709.9                      |   | 7,472.4                       |   | 5,667.2 |   |   |   |   |   |   |   |
| Significant items before tax (2)             |   |                          |   |                          |   |   |   | (86.7 | ) | 534.8 |   | 37.0 |   |
|                                         |   |                          |   |                          |   |   |   |   |   |   |   |   |   |
| Profit before interest, tax and amortization |   |                          |   |                          |   |   |   | 782.6 |   | 1,157.2 |   | 587.0 |   |
|                                         |   |                          |   |                          |   |   |   |   |   |   |   |   |   |
| Amortization                                 |   |                          |   |                          |   |   |   | (138.8 | ) | (54.5 | ) | (42.0 | ) |
|                                         |   |                          |   |                          |   |   |   |   |   |   |   |   |   |
| Profit before interest and tax               |   |                          |   |                          |   |   |   | 643.8 |   | 1,102.7 |   | 545.0 |   |
|                                         |   |                          |   |                          |   |   |   |   |   |   |   |   |   |
| Net borrowing costs                          |   |                          |   |                          |   |   |   | (155.2 | ) | (121.5 | ) | (141.0 | ) |
|                                         |   |                          |   |                          |   |   |   |   |   |   |   |   |   |
| Income tax                                   |   |                          |   |                          |   |   |   | (110.5 | ) | (120.2 | ) | (118.2 | ) |
|                                         |   |                          |   |                          |   |   |   |   |   |   |   |   |   |
| Minority interests                           |   |                          |   |                          |   |   |   | (16.8 | ) | (9.3 | ) | (3.4 | ) |
|                                         |   |                          |   |                          |   |   |   |   |   |   |   |   |   |
| Net profit after tax                         |   |                          |   |                          |   |   |   | 361.3 |   | 851.7 |   | 282.4 |   |

 

----

(1)          Theindividual geographic and industry segments’ profit results refer to profitbefore interest, tax and amortisation, excluding significant items (PBITA).

 

(2)          Detailsof significant items are as follows:

•                  2003 – restructuring expenses following acquisition of Schmalbachassets – A$86.7 million.

•                  2002 – loss on disposal of tobacco packaging business in CanaryIslands – A$18.6 million; profit on disposal of balance of investment in KCA –A$553.4 million.

•                  2001 – loss on disposal of Amcor Flexibles Inc – A$24.2 million;profit on disposal of 10% of investment in KCA – A$61.2 million.

 

26

----

 

**Year Ended June 30****, 2003 Comparedwith Year Ended June 30, 2002**

 

***Consolidated Results of Operations***

 

Amcor’s net profit after tax decreased from A$851.7million in 2001-02 to A$361.3 million in 2002-03. The result in 2001-02included a net significant gain of A$534.8 million, the majority of whichrelated to the gain on sale of Amcor’s remaining holding in KCA.

 

The significant gain in 2001-02 of A$534.8 compareswith a significant loss (after tax) in 2002-03 of A$70.1 million. This lossrefers to the restructuring expenses consequent upon the acquisition of the PETand Closures businesses from Schmalbach.

 

Net profit after tax excluding significant items increased36% from A$316.9 million in 2001-02 to A$431.4 million in 2002-03.

 

Sales revenue grew 43% from A$7.5 billion in 2001-02to A$10.7 billion in 2002-03 mainly as a consequence of the increased sales inAmcor PET Packaging and Amcor Rentsch and Closures following the acquisition ofSchmalbach in July 2002. Other revenue in 2001-02 of A$1.1 billion wasA$0.8 billion more than 2002-03 due mainly to the disposal in 2001-02 ofAmcor’s remaining 45% investment in KCA. Amcor’s share of associates’ net profitin 2001-02 was A$48 million but was zero in 2002-03 following the disposal ofKCA.

 

Costs of goods sold in 2002-03 were 82% of salesrevenue compared with 81% in 2001-02. Selling, general and administrativeexpenses increased 7.8% in 2002-03 to A$1,517 million compared with A$1,408million in 2001-02. This majority of this increase could again be attributed tothe Schmalbach acquisition.

 

Amcor’s average interest rate decreased in 2002-03 to5.0% from 5.5% in 2001-02; however net interest increased to A$155.2 million in2002-03 from A$121.5 million in 2001-02 due to the increase in debt levelsfollowing the Schmalbach acquisition.

 

Income tax expense decreased in 2002-03 to A$110.5million from A$120.2 in 2001-02. This is explained in part by the profit on saleof our investment in KCA in 2001-02 having no tax effect while therestructuring costs following the Schmalbach acquisition in 2002-03 having atax benefit of A$16.6 million.

 

Minority interests increased in 2002-03 from A$9.3million to A$16.8 million, reflecting the improved profitability of AmcorFlexibles Europe. Following Amcor’s acquisition of AFE’s minorities fromDanisco and Ahlstrom in August, 2003 (see Recent Developments), minorityinterests in future periods are expected to be negligible.

 

***Amcor PET Packaging***

 

Amcor PET Packaging had a strong year in 2002-03 withvolumes up 11%, on a comparable year basis over 2001-02, to 27.7 billioncontainers.  Growth in the higher margincustom business was 27% with this business segment now representing 16% oftotal annual sales volume.

 

PBITA was up 286% in 2002-03 to A$306 million,reflecting the acquisition of Schmalbach-Lubeca assets as well as strong volumegrowth in all sectors of the market.

 

The business in the US showed particularly strongvolume growth in 2002-03; it grew 23% over 2001-02 on a comparable basis.  This was due to underlying volume growth inthe bottled water market and continued penetration of single serve juices andsports drinks.

 

In 2002-03 custom bottle growth was 25% over 2001-02continuing the strong trend in this higher margin segment over the past fewyears.  The Canadian businessexperienced volume growth during the year of 12%, mainly attributable toincreased demand in the water segment.

 

The North American business yielded an increase inPBITA in 2002-03 of 22% over the prior year on a comparable basis due toincreased demand for PET bottles and the benefit of synergies.

 

In Latin America, overall volumes in 2002-03 were inline with the 2001-02.  In Mexico,volumes were up strongly, particularly in the higher margin custom businessdriven mainly by the rapid growth of sports drink and juice containers.

 

27

----

 

In Brazil, volumes were down year on year due to arenewed focus on strategic customers, while in Argentina, the overall market isslowly recovering from the 2002 economic crisis.  For the Latin American region, PBITA in 2002-03 was ahead of2001-02.

 

In Europe, volume growth in 2002-03 was 4% on acomparable basis, but with an improved performance in the second half wherevolumes were up 6%.  There was continuedstrong growth in the UK, France and Spain, while volumes in Germany wereimpacted by government deposit legislation and were well down on 2001-02.

 

PBITA in Europe for 2002-03 was up 18% on 2001-02,after being slightly lower in the first half. The UK operations had a strong growth in profit, however the delayedstart-up of the new recycling facility at Beaune in France had an adverseimpact.  Elsewhere, volume and profitexpectations where largely met and custom containers continue to grow as apercent of the overall product mix.

 

The PET business continues to experience new growthopportunities and during 2002-03 over US$120 million, excluding the acquisitionof Alcoa’s PET operations in Latin America (see Recent Developments), wasapproved for expansion; this consisted of an additional 26 injection mouldingmachines and 29 blow moulding machines. This expenditure is expected to helpunderpin volume growth across all market segments, especially for the continuedexpansion in custom segments, and support cost reduction initiatives to combatexpected market pricing pressures.

 

The 2002-03 year marks the first full year ofoperation after the acquisition of Schmalbach-Lubeca’s PET business. Thebusiness ends the year having completed its restructuring program (combiningtwo plants in Southern California and upgrading the remaining plant andcombining the Peru and Venezuela businesses) and implemented an integrated worldwidemanagement structure.

 

***Amcor Australasia***

 

Amcor Australasia recorded another sound performancewith sales up 4% from A$2.368 billion in 2001-02 to A$2.456 billion in 2002-03and PBITA improving by 11.3% from A$254.2 million to A$282.8 million in 2002-03.

 

In the Fibre Packaging segment, corrugated box volumeswere up 6%.  More settled industrialconditions in Australia underpinned volume growth of 7% with 2% volume growthin New Zealand.  Earnings improved bothin Australia and New Zealand due to continued productivity gains, fibreboardrationalisation initiatives and price increases recovering cost increases.  Recent restructuring initiatives areexpected to assist in further lowering our cost base and returns are expectedto continue to improve.

 

The recycled paper mills’ buoyant first half continuedwith strong domestic demand while export pricing held their first halflevels.  The mills continue to operateefficiently and were assisted by paperboard specification rationalisation.Wastepaper collections totalled 815,000 tonnes in 2002-03 up 4% on 2001-02.

 

The Folding Carton business consists of a paper millat Petrie in Queensland, Australia as well as a number of conversion plants inAustralia and New Zealand. The Petrie Mill experienced strong domestic demandand productivity levels, which offset some volume losses in the conversionbusiness. During 2002-03 a $55 million upgrade was approved for the Petrie Millto improve the board quality and in the conversion business there was arestructuring of operations, which included labour force reduction of 6%.  These initiatives are expected to underpinearnings growth and improving returns.

 

The Sacks business continues to focus on the dairymarket, with innovative new products that reduce transport costs of bulkproducts.  The drought conditionsimpacted volumes in 2002-03, which were down 9% from 2001-02.  However, the new sack line in Victoria andstrong customer support are expected to deliver improved returns in the comingyear.

 

In Metal Packaging, the Beverage Can business had asolid year with volumes up 2% in 2002-03 on the previous year.  Pre-mixed alcoholic beverages and soft drinkmultipack promotions were the main drivers of growth.  Strategic capital investment totalling $30 million was approvedfor product development initiatives that include shaped and poly coated steelcans and a new low cost can end.

 

The Food Can business performed strongly in 2002-03despite being impacted by drought conditions in Australia.  With the closure of the plant at Dandenong,Australia the business now has three focused manufacturing plants in theGoulburn Valley in Victoria, South Queensland and Hamilton, New Zealand.  Long-term supply contracts with majorcustomers and a lower cost base are expected to improve earnings and returns infuture periods.

 

28

----

 

In Plastics, the Flexible Packaging business achievedvolume growth of 3% in 2002-03, which was slightly below expectations due tothe drought conditions affecting the dairy and produce segments of theirmarket. Profit rose in 2002-03 compared with 2001-02 and with further capitalinvestment targeted at cost reduction, a strong focus on product developmenttogether with synergies flowing from Amcor Flexible Europe, the business ispositioned to deliver improved results in future periods.

 

The Glass wine bottle operation generated a positiveprofit contribution for the 2002-03 year. A trouble free start up, strong customer support with sales aboveforecast levels and strong productivity levels were the key drivers to theprofit contribution.  Current demand,which is underpinned by long-term supply agreements, is matching the existingcapacity of the furnace.  Growth ratesin the export wine market remain strong and during 2002-03 Amcor obtainedcustomer support to enable the justification of a further investment of $125million in a second furnace that is expected to come on stream in the firsthalf of calendar year 2005 (see Recent Developments).

 

***Amcor Flexibles Europe (AFE)***

 

AFE continued to make strong progress in 2002-03 withPBITA up 43.3% on 2001-02 to A$133.6 million. This performance was achieved in an environment of volatile raw materialprices and uncertain economic conditions, particularly in France and Germany inthe second half of the fiscal year.

 

The PBITA to sales margin improved from 4.7% in2001-02 to 6.1% in 2002-03. Further improvements are expected to come fromongoing cost reductions and new product developments in future years.

 

The primary focus in 2002-03 was to improve theproduct mix to higher margin products and actively manage the impact ofvolatile raw material prices and as a result, volumes were flat. However, addedvalue improved in all market sectors and raw material price increases weresuccessfully managed through strong relationships with our customers andsuppliers.

 

The two most recent acquisitions, Rexam Food Flexiblesand Tobepal (see Recent Developments) were integrated into the AFE businesssuccessfully in 2002-03.

 

The portfolio restructuring programme, which commencedin 2001-02, continued during the year with the sale of the non-core Unibagbusiness in Denmark and the acquisition of the Leaderpack (Portugal) minoritiesin July 2002, the closure of the Dutch Flexibles business at Haarlem inAugust 2002 and the closure of the small Synco operation in Belgium inDecember 2002.  Further minorrestructuring continued at a number of plants with a resultant improvement inthe operating cost base.  Synergybenefits from the three-way merger in June 2001 continue to remain aheadof expectations.

 

During the 2002-03 year great emphasis was placed onplant focus, product leadership and innovation (PLI) (see Research &Development) and customer service. The PLI strategy strengthened AFE’s market,customer and product portfolio. Improvements were also achieved in customersatisfaction, with service, quality and on-time deliveries contributing tostronger customer relationships.

 

The small North American flexibles business performedto expectations and, along with other non-European Amcor flexibles operations,is delivering synergy benefits from its association with a large Europeanflexibles group.

 

The second half of 2002-03 saw softer demand due toeconomic weakness in France and Germany and, as a result, order books weregenerally weaker than anticipated going into the summer period.  However, AFE is expecting market focus andPLI strategy to continue to deliver performance improvements in an uncertainenvironment.

 

Industry consolidation is expected to continue in theEuropean flexibles packaging industry and AFE intends being an activeparticipant with the emphasis on value and strategic enhancement.

 

***Amcor Sunclipse***

 

For the 2002-03 year Amcor Sunclipse’s PBITA was flatin US$ terms, after being up 8% on 2001-02 in the first half.  In $A terms, PBITA in 2002-03 was down 10.9%compared with 2001-02.

 

The economy in the second half of 2002-03 was impactedby the war in Iraq, reducing demand across all segments of the business.

 

29

----

 

In the manufacturing business, cost containmentefforts were not able to keep up with reduced prices and margins and PBITA wasdown 10% in 2002-03 compared with 2001-02. Competition and difficult economicconditions were especially prevalent in the main area of operation, SouthernCalifornia.

 

In the distribution business, the Mexican operationsexperienced a reduction in demand as increased NAFTA tariffs resulted inseveral multinational customers moving manufacturing operations from Mexico toAsia.  In response, the Mexicanoperations have increased their focus on Mexican based opportunities.

 

The distribution business’s largest United Statessales regions are Southern California, Northern California and Texas.  The Northern Californian operations continueto experience reduced demand from the technology sector and, as a consequence,have increased their focus on wine and produce opportunities.  Southern California and Texas operationsgenerally experienced flat activity.

 

Overall, in local currency, sales grew by 4.8% in2002-03 over the previous year and operating margins remained stable despiteintense competitive pressure caused by the severe contraction in businessactivity. In A$ terms sales were down 8.1% in 2002-03 from A$1,413 million in2001-02 to A$1,299 million.

 

In 2002-03 the rookie sales force was increased by 11%over 2001-02 and this is expected to increase the ability to penetrate both newand existing accounts and markets.  Bestpractices in the areas of procurement and logistics proved effective indefending market share and improving customer service.  Specifically, worldwide purchasing, thedevelopment of a hub and satellite logistics network and inventory rationalisationprojects yielded positive results.  Itis expected that the benefits from these initiatives will become morepronounced when the level of activity rebounds.

 

There is cautious optimism that the economic outlookwill gradually improve during the 2003-04, however any recovery is unlikely topositively impact until the end of calendar 2003.

 

Competition will continue to be difficult especiallyfor the manufacturing business. However, it is anticipated that there will be an improvement inprofitability and other measures in fiscal year 2003-04.

 

***Amcor Rentsch and Closures***

 

For the combined Amcor Rentsch and Amcor Closuresoperations, PBITA was up 73% from A$48.6 million in 2001-02 to A$84.1 millionin 2002-03 and sales were up 114% for the equivalent period mainly due to theacquisition of Schmalbach’s closures operations.

 

Amcor Rentsch had a strong year with sales up 15% in2002-03 to A$549 million (from A$477 million in 2001-02) and profit beforeinterest, tax and goodwill amortisation in 2002-03 also up on the equivalentperiod last year.

 

Volumes were particularly strong in Russia with thethird printing press installed at Novgorod in November 2002 operating atfull capacity.  Amcor is reviewingoptions to further increase capacity in Russia to meet ongoing customer demand.

 

Volume growth in Western Europe was assisted by theimplementation of the European Union’s directive for new health warnings oncartons.  New designs from customers ledto strong sales for product development services.

 

The business will be starting up a new press inPortugal in late 2003, to meet increased volumes resulting from a new contractin the Southern European market.

 

In January 2003 Amcor announced the sale of its65% holding in the North American metal and plastic closure business to itsjoint venture partner Silgan Holdings, via an existing agreement where SilganHoldings exercised its right to acquire Amcor’s shareholding.

 

Subsequent to the 2002-03 year-end, Amcor has alsosold its plastic tub businesses for A$36 million. This business did not make apositive contribution to profit for the 2002-03 year.

 

For the ongoing White Cap Closures operations, volumesin 2002-03 were down 3.6% compared with 2001-02 due to a combination of theimpact of deposit legislation in Germany, the weaker economy in Europe and thepolitical uncertainty in Venezuela.  Thebusiness continues to focus on ongoing cost cutting initiatives to improveoperating productivity.

 

30

----

 

Expansion of the plastic closure capacity in Poland ison schedule with production expected to commence by January 2004. Anew plant in the Philippines has commenced operations and is supplyinginnovative proprietary closure technology to a food customer in the Asianregion.

 

The 51% owned plastic closure joint venture withBericap in North America operates two plants, one in Ontario and a new plant inCalifornia, which commenced production in July 2002.  Sales for the 2002-03 year were up 12% on2001-02, mainly due to the start-up of this new plant.  The weakness in the US$ impacted margins inCanada for those closures exported to the US.

 

***Amcor Asia***

 

Amcor Asia had a difficult year with PBITA in 2002-03down 21% in local currency terms and In Australian dollar terms down 28% toA$32 million from A$45 million in 2001-02.

 

After a flat first half of 2002-03, the economies ofAsia were severely impacted by the SARS virus and the advent of the war inIraq. Sales were down 15% from A$310 million in 2001-02 to A$263 million in2002-03.

 

The corrugated business, which has exposure to a broadrange of industries, faced unstable paper prices and a substantial fall indemand as a result of the SARS virus. The plant at Dongyuan in Southern China was particularly hard hit by itsimpact.

 

The tobacco carton business performed satisfactorily,although the plant in Beijing was severely impacted when distribution in thecity almost came to a halt during the SARS epidemic.

 

The two flexible plants in China continued to improvetheir operating performance and PBITA in 2002-03 was ahead of 2001-02.

 

With the region slowly recovering from the disruptioncaused by the SARS epidemic, it is anticipated that sales and profit resultswill gradually improve in 2003-04.

 

**Year Ended June ****30, 2002Compared with Year Ended June 30, 2001**

 

***Consolidated Results of Operations***

 

Amcor’s net operating profit after tax increased fromA$282.4 million in 2000-01 to A$851.7 million in 2001-02. The result in 2001-02included a net significant profit before tax of A$534.8 million comprising,mainly, of the gain on sale of Amcor’s remaining holding in KCA.

 

This significant gain in 2001-02 of A$534.8 millioncompares with a significant gain in 2000-01 of A$37 million. The gain in2000-01 relates to the profit on the initial disposal of 5% of KCA of A$61 millionoffset by a loss of A$24 million on the sale of the North American flexiblesbusiness, Cello Bag.

 

Net profit after tax excluding significant itemsincreased 31% from A$241.1 million in 2000-01 to A$316.9 million in 2001-02 aseach region achieved results in 2001-02 that were either stronger or on a parwith 2000-01.

 

Sales revenue grew 32% from A$5.7 billion in 2000-01to A$7.5 billion in 2001-02 mainly as a consequence of the increased sales inAmcor Flexibles Europe following the three-way merger with Danisco Flexiblesand Akerlund & Rausing Flexibles in June 2001. Other revenue in2001-02 of A$1.1 billion was just under A$0.9 billion more than 2000-01 duemainly to the disposal in 2001-02 of Amcor’s remaining 45% investment in KCAand the proceeds from the securitization of a number of Amcor Australasianproperties. Amcor’s share of associates’ net profit increased to A$48.0 millionin 2001-02 from A$45.5 million in 2000-01

 

Total costs and expenses in 2000-01 were A$5,341million compared with A$7,461 million in 2001-02; this increase can beattributed mainly to the increase in costs of goods sold and otheradministrative expenses following the merger of the AFE businesses, mentionedabove.

 

The decrease in Amcor’s average interest rate in2001-02 to 5.5% from 6.0% in 2000-01 contributed to the decrease in netinterest to A$121.5 million in 2001-02 from A$141.0 million in 2000-01.

 

Despite an increase in profit before tax in 2001-02 toA$981 million from A$404 million in 2000-01, income tax expense increased byjust A$2 million for the corresponding period. This was mainly due to theprofit on sale of KCA having no tax effect.

 

Minority interests increased in 2001-02 to A$9.3million from A$3.4 million in 2000-01, again mainly as a result of the three waymerger in AFE.

 

31

----

 

***Amcor Australasia***

 

Amcor Australasia recorded another sound performancewith sales up slightly from A$2.361 billion in 2000-01 to A$2.368 billion in2001-02 and PBITA improving by 9.2% from A$232.8 million to A$254.2 million in2001-02.

 

Metal and Plastic Packaging

 

Amcor Australasia’s Metal and Plastic Packaging Grouphad a strong year with PBITA increasing 11.6% from 2000-01 to 2001-02. Salesincreased 2.8% in 2001-02 from A$1,020 million to A$1,049 million.

 

The continued increase in earnings was due to salesgrowth, improved productivity and cost reduction initiatives in mostbusinesses.

 

Despite a cooler summer on the east coast ofAustralia, the beverage can business experienced growth in sales of soft drinkcans due to i) successful industry multipack promotions and ii) the continuedgrowth in the pre-mixed alcoholic beverages market.

 

During 2001-02 the Heinz contract was extended for aneight-year period and the Nestle contract was successfully re-negotiated for afurther four years.  These contractsrepresent in excess of 50% of the annual volume for the foodcan business.

 

After a sound first half the aerosol can business wasimpacted by reduced insecticide demand due to a cool summer.

 

In 2001-02, the flexibles business continued therecent trend of improved earnings through volume growth, product development,management of product mix and cost reduction initiatives. Close liaison withAmcor Flexibles Europe through the transfer of technology and innovation isproviding positive operating and product development benefits.  The new extrusion coating line installed atPreston in Victoria, Australia during 2001-02 and the recently approved newflexo printing press and extrusion upgrade in the polyethylene business areexpected to further enhance the cost base and profitability.

 

The PET business improved earnings in 2001-02 comparedwith 2000-01 with volume growth from increased demand in the hot fill andpharmaceutical markets.

 

The closures business, despite experiencing pricepressure and volume loss, managed to improve returns through a favourable salesmix, productivity improvements and cost reduction initiatives.

 

Product development opportunities from theSchmalbach-Lubeca acquisition are expected to benefit both the PET and closuresbusinesses in the future.

 

The sack business generated improved earnings in2001-02 over 2000-01 from growth in the dairy market, although increasedcompetition in the commodity segment reduced margins.

 

Fiber Packaging

 

Amcor’s Fiber Packaging Group experienced sales growthof 4.4% from A$1,263 million in 2000-01 to A$1,319 million in 2001-02; however,PBITA decreased 4.5% in 2001-02 principally due to the impact of a five weekstrike in the corrugated operations in July 2001.

 

Earnings were also negatively impacted by lower exportpaper prices to Asia and increased lease costs due to the securitisationprogram.

 

Volumes in the Australian corrugated group in 2001-02were lower than last year, however New Zealand recorded continued volume growthon higher sales into the fruit and produce sectors. Earnings for the corrugatedbusiness increased in 2001-02 due to improved utilisation of new corrugatorsdelivering productivity gains and improved service standards. An extensiveboard rationalization program and benefits from price increases helped offsetcost increases.  The New Zealandoperations delivered another solid performance.

 

The recycled paper mills had a difficult year withhistorically low Asian export prices impacting the business in a year whendomestic demand was affected by the strike in the corrugated plants. Increasedexports at lower margins resulted in lower earnings in 2001-02 compared with2000-01.  The mills continue to operateefficiently while paperboard rationalization assisted the corrugatingbusiness.  The functional coatings andrecycling businesses both reported sound results in 2001-02.

 

32

----

 

The folding cartons business experienced volume growthof 3% in 2001-02, however an unfavourable sales mix, together with the recentloss of toll conversion beverage multipack volume, necessitated furtherrestructuring and these once-off costs adversely affected the result. Therestructuring is expected to enable a lower cost base and assist in restoringoperating efficiencies. The New Zealand operations continued to improve withincreased earnings in 2001-02 over 2000-01 from sales growth and effective costmanagement.

 

***Amcor North America***

 

Amcor’s North American businesses, Amcor Twinpak andAmcor Sunclipse had a solid year with combined PBITA increasing 3.6% fromA$175.6 million in 2000-01 to A$182.0 million in 2001-02.

 

Amcor Twinpak

 

Amcor Twinpak achieved a strong lift in sales andPBITA for the year to June 2002.

 

The PET business experienced sales volume growth of12% in 2001-02 on a comparable business basis with 2000-01.  The growth was in the bottled water andcustom-designed hot fill categories as well as in the carbonated soft drink market.

 

In South America, the Brazilian operations achieved alift in earnings due to increased volumes and improved operating efficiencies,a continued focus on costs and better contractual arrangements with customers.

 

The Bericap plastic closures business had a strong2001-02 with sales volumes up 28% on 2000-01. Earnings improved through an improved product mix and increasedoperating efficiencies.  The new plantin California commenced operation in June 2002.

 

In the specialty packaging businesses of plastictubes, rigid plastic tubs and flexibles, the operations were impactednegatively by a slowing US economy.  Theplastic tube business achieved a flat profit result however, lower volumes inthe rigid plastic operations reduced profit. The flexible packaging business had an improved result in 2001-02 due tothe sale in May 2001 of the loss-making Cello Bag plant.

 

Amcor Sunclipse

 

Amcor Sunclipse, Amcor’s packaging distribution andcorrugating box manufacturing business based in California had a difficult yearin 2001-02 primarily due to the slowdown in the US economy which reduced demandfor industrial packaging.

 

Overall sales in 2001-02 declined 4% compared with2000-01 and PBITA for the 2001-02 year was down approximately 23% over 2000-01.The disparity of the 4% fall in sales compared with the 23% decline in PBITAwas generally a reflection of tightening of margins in 2001-02 and of a changein the sales mix to lower margin sales.

 

•      Thecorrugated group experienced reduced demand, particularly in the hightechnology sector, as well as increased competition from new capacity. Thebusiness, however maintained gross margins through implementing more flexiblework hours, reducing wastage levels and increasing productivity.

 

•      The sheetplants targeted increased market share in the agricultural sector to helpoffset lower demand in traditional markets. In addition, a focus on costs and productivity enabled the business tomaintain gross margins.

 

•      Thedistribution business had a difficult year but continued to focus on thedevelopment of the hub and spoke network across much of the US with the sixmain hubs being Montebello and Hayward in California, Seattle, Chicago, Atlantaand Houston.

 

***Amcor Europe***

 

Amcor’s European operations increased PBITA in 2001-02by $75 million, or 146%, on 2000-01 partly due to the successful three waymerger of the flexibles operations and partly to continued improvements atAmcor Rentsch.

 

Amcor Flexibles Europe (“AFE”) had a strong year in2001-02 confirming the strategic rationale of creating the largest flexiblepackaging manufacturer in Europe following the three-way merger with DaniscoFlexible and

 

33

----

 

Akerlund & Rausing Flexibles in June 2001.The business had better results in the seasonally more favourable second halfof 2001-02 with earnings and returns for the full year ahead of Amcor’sexpectations at the time of the merger.

 

The plant closure and restructuring program proceededin line with the plans outlined in June 2001.  The plants at Oakbank in the UK, Bialystok in Poland, Fournier inFrance and Haarlem in the Netherlands have all been closed.

 

Major restructuring programs have been completed atOtto Nielsen and Raackmann in Denmark, Lund in Sweden and Venthenat inFrance.  As a result, in the first yearof the merger we reduced employees by over 800 people.

 

The synergy benefits for 2001-02 exceeded the targeted€15 million through a combination of purchasing benefits,restructuring of sites, margin improvements and overhead savings. Most of thesynergy benefits were obtained in the second half of 2001-02, including somepurchasing benefits that were backdated to July 2001.

 

Although some volume was lost as part of the processof improving margins through selective price increases, overall volumes for theyear to June 2002 were sound and the AFE business is currently operatingat full capacity at most of its plants.

 

Towards the end of the 2001-02 year raw materialprices rose significantly.  This did notaffect the 2001-02 year earnings and AFE has implemented strategies to ensurethat these increased prices are recovered in a timely fashion, however thereare some cases where contractual arrangements could lead to a delay in theirfull recovery.

 

During the year, AFE continued the process of industryconsolidation in Europe with the acquisitions of Rexam Food Flexible Packagingin the UK and Tobepal in Spain.  The acquisitionof Rexam Food Flexible Packaging has strengthened the market position in thebakery and produce sectors in the UK, while Tobepal has significantly increasedAFE’s position in the pharmaceutical and healthcare markets across Europe.  Both acquisitions have contributed synergyand growth opportunities to AFE.

 

Amcor Rentsch had another solid 2001-02 yearincreasing sales, earnings and returns compared with 2000-01.

 

There was strong earnings growth in the six months toJune 2002 due to significant volume increases in Eastern Europe andRussia.

 

A second press was installed in Russia inSeptember 2001 and is currently operating at full capacity.

 

Tobacco volumes in Western Europe were down slightlydue to the on-going shift in volumes to Eastern Europe and Russia.

 

There was continuing growth in the non-tobaccobusinesses of high value added cartons for the cosmetic and confectionerymarkets and a new offset press was installed in Switzerland.

 

***Amcor Asia***

 

The slowdown in the US economy reduced activity levelsin Asia and this has impacted the overall sales level which in 2001-02 was down5% compared with 2000-01; however the focus on selling higher margin productswithin the business segments contributed to improved earnings and returns.

 

Amcor Asia had strong year in 2001-02 with PBITA ofA$44.5 million up 17.1% on 2000-01.

 

The corrugated business experienced the full effectsof the Asian slowdown with 2001-02 sales down 13% from 2000-01; however astrong focus on costs and increasing sales of higher margin products ensuredreturns for the business in 2001-02 were in line with 2000-01.

 

The tobacco cartons operations in Singapore andMalaysia delivered acceptable returns through a broadening of their customerbase while the returns in China improved following the sale of the tobaccooperations at Yunnan in China which had not been able to grow its marketposition.

 

The two flexibles operations in China continue to showimprovement with increases in sales and earnings in 2001-02. These businesseshave benefited from the product development and innovation being undertaken inEurope and Australia in the flexibles businesses.

 

34

----

 

***Investments (Discontinued)***

 

Kimberly-Clark Australia

 

The business had a strong year with sales up 6.9% in2001-02 to A$947 million and net profit after tax increased by 17.9% fromA$90.5 in 2000-01 to A$106.7 million in 2001-02.

 

On June 28, 2002 Amcor sold its remaining 45%investment in Kimberly-Clark Australia realizing an after tax profit of A$553.4million. Prior to the sale, Amcor received its dividend entitlement of A$48.3for the year ended June 30, 2002. Funds from the sale were applied to thepurchase of the Schmalbach assets in July 2002.

 

**Liquidityand Capital Resources**

 

Amcor believes that its operating cash flow andexisting credit facilities should be sufficient to fund all of its existingbusiness needs through to June 30, 2004, including currently anticipatedcapital expenditure, debt repayments and other contingent liabilities.

 

As indicated in the following table, Amcor hasexpended significant funds on capital expenditure projects and acquisitionsover the past five fiscal years.

 
|                                                      |   | **Year  Ended June 30,**          |       |
|-----------------------------------------------------------|--------|----------------------------------------|------------|
|                                                      |   | **2003**                               |       | **2002** |   | **2001** |   | **2000** |   | **1999** |   |
|                                                      |   | **(In  millions, except percentages)** |       |
|                                                      |   |                                   | ** ** |   | ** ** |   | ** ** |   | ** ** |   | ** ** |
| Capital  expenditure                                      |   | A$                                     | 890        |   | A$ | 351 |   | A$ | 289 |   | A$ | 330 |   | A$ | 451 |   |
| Acquisitions                                              |   | A$                                     | 2,858      |   | A$ | 371 |   | A$ | 663 |   | A$ | 101 |   | A$ | 18 |   |
| Gearing:  net debt/net debt and shareholders’ equity |   | 33                                     | %          | (6 | )% | 46 | % | 43 | % | 40 | % |
| Total  liabilities as % of total assets                   |   | 52                                     | %          | 48 | % | 63 | % | 63 | % | 57 | % |

 

Capital expenditure commitments and contingentliabilities at June 30, 2003 were A$183 million and A$225 million,respectively. Acquisition expenditure in 2001-02 of A$2,858 million relatedmainly to the acquisition of the PET Container and Closures business ofSchmalbach-Lubeca.

 

Undrawn bank facilities available to Amcor atJune 30, 2003 totalled about A$2,640 million, of which A$1,549 million iscommitted funding. These unutilized credit lines included:

 

•**       **a A$600million promissory note facility which is administered by a panel of dealers(undrawn at June 30, 2003 A$559 million);

 

•        a US$200 million commercial paper program (undrawn A$233 million);

 

•        a US$200 million multi-currency Euronote facility which is administeredby a panel of dealers with banks in Hong Kong and London (undrawn A$300million);

 

•        a A$500 million committed bi-lateral multi-currency term loanfacility (undrawn A$203 million); and

 

•        a US$1,000 million committed syndicated revolving multi-currencyloan facility (undrawn A$1,293 million).

 

Total borrowings increased from A$1,507 million atJune 30, 2002 to A$2,013 million at June 30, 2003. Net of cash andshort-term deposits there was a cash surplus of A$818 million as atJune 30, 2002 compared with net debt of A$1,851 million at June 30,2003.

 

35

----

 

Amcor’s debt profile for its last five fiscal years isshown below:

 
|                                                                                           |   | **At  June 30,**                         |       |
|------------------------------------------------------------------------------------------------|--------|-----------------------------------------------|------------|
|                                                                                           |   | **2003**                                      |       | **2002** |   | **2001** |   | **2000** |   | **1999** |   |
|                                                                                           |   | **(In A$  millions, except where indicated)** |       |
|                                                                                           |   |                                          | ** ** |   | ** ** |   | ** ** |   | ** ** |   | ** ** |
| Long-term  debt (excluding undated subordinated convertibles but including finance  leases)(1) |   | A$                                            | 1,004      |   | A$ | 1,145 |   | A$ | 1,559 |   | A$ | 990 |   | A$ | 1,191 |   |
|                                                                                           |   |                                          |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net  debt/(cash surplus)(2)                                                                    |   | A$                                            | 1,851      |   | A$ | (818 | ) | A$ | 1,733 |   | A$ | 984 |   | A$ | 1,363 |   |
| Average  interest rate(4)                                                                      |   | 5.0                                           | %          | 5.5 | % | 6.0 | % | 6.6 | % | 6.0 | % |

 

----

(1)   Non-currentliabilities (ie. debt which is due to be repaid more than twelve months afterbalance date).  Undated subordinatedconvertible securities of A$446 million are not included in long term debt.

 

(2)   Current andnon-current bank and other borrowings, current and non-current leaseliabilities and current indebtedness to related parties net of cash anddeposits.

 

(4)   Includes the6.5% and 7.25% interest rate on the A$446 million undated subordinatedconvertible and the 8.57% interest rate on the A$596.6 million PACRS.

 

By keeping a proportion of variable-rate debt, Amcorwas able to maintain the average interest rate paid on all borrowings in2002-03 at 5.0% (2001-02 – 5.5%). Net interest cover at 4.2 times is higherthan at June 30, 2002 and is well within the prudential limit establishedby Amcor’s Board of Directors.  Balancesheet gearing (net debt as a proportion of net debt plus shareholders’ equity)was 33% at June 30, 2003, compared with negative 6% as at June 30,2002 (Amcor had net surplus cash of $818 million at June 30, 2002 inanticipation of the purchase of the Schmalbach businesses on July 1,2002).

 

Amcor maintains a high level of liquidity includingpositive working capital (current assets less current liabilities), cashbalances and substantial credit facilities (described above). Our workingcapital decreased by A$2,538 million at June 30, 2003 due to a decrease incurrent assets of A$1,641 million (receivables A$186 million, inventories A$339million and cash (A$2,166 million)) and an increase in current liabilities ofA$897 million (accounts payable A$339 million, borrowings A$647 million andprovisions (A$89 million)).

 

The following table sets forth Amcor’s cash generationfor the last five fiscal years:

 
|                                     |   | **Year  Ended June 30,** |   |
|------------------------------------------|--------|-------------------------------|--------|
|                                     |   | **2003**                      |   | **2002** |   | **2001** |   | **2000** |   | **1999** |   |
|                                     |   | **(In  millions)**            |   |
|                                     |   |                          |   |   |   |   |   |   |   |   |   |
| Net  cash from operating activities      |   | A$                            | 875    |   | A$ | 901 |   | A$ | 416 |   | A$ | 467 |   | A$ | 630 |   |
| (refer  Financial Statements – F-9) |   |                          |   |   |   |   |   |   |   |   |   |
|                                          |        |                               |        |  |  |  |  |  |  |  |  |  |  |  |  |  |

 

Issued share capital increased from 822.6 millionOrdinary Shares outstanding at June 30, 2002 to 848.2 million OrdinaryShares outstanding at June 30, 2003 due primarily to the shares issued forthe Dividend Reinvestment Plan (DRP).

 

In the years 1990-1994, Amcor’s shareholders andnoteholders reinvested A$372 million of their dividends and interest into thecompany through the Dividend and Interest Investment Plan (“DIP”) and the ShareInvestment Plan (“SIP”), each since discontinued.  The DIP enabled shareholders and noteholders to apply theirdividend and interest payments from Amcor to purchase Ordinary Shares issued ata discount of 7.5%.  Shareholderselecting the SIP were required to forego their dividend entitlements in lieu ofreceiving fully paid shares issued out of the share premium reserve at adiscount of 5%.

 

Due to changes in Australian tax laws, the SIP wassuspended in 1991 and, in August 1994, the DIP was also suspended.  The Share Acquisition Scheme (“SAS”),announced in September 1994, effectively replaced the

 

36

----

 

previous plans. The SAS allowed eligible registered shareholders to acquire additionalsmall parcels of fully-paid Ordinary Shares, or to round off existingholdings.  The Ordinary Shares wereoffered at a discount of 5% to the market price up to a maximum cashcontribution of A$1,500 per shareholder each year.

 

Due to regulatory restrictions, the SAS was notoffered to shareholders with addresses in the United States, Canada andJapan.  From its commencement, eligibleAmcor shareholders contributed A$166 million in capital injections to the SASuntil its suspension in March 1997. Amcor intends to keep under review thefuture operation of the SAS and DIP.

 

A new dividend investment plan, the DRP was introducedon February 15, 2001, enabling shareholders to reinvest their dividendsinto ordinary shares at an initial 2.5% discount to a calculated weightedaverage price.  The DRP applied todividends commencing with the interim which was paid on April 4, 2001;6,165,197 shares were issued at a price of A$5.45 per share in April 2001as a consequence. During 2001-02, 11,667,886 shares were issued at a price ofA$5.71 on October 3, 2001 and 8,998,198 shares were issued at a price ofA$7.59 on March 28, 2002 to shareholders participating in the DRP for the2000-01 final and 2001-02 interim dividends respectively.

 

Subscriptions of ordinary shares were underwritten toa maximum amount of 75% of the dividends payable for the six month periodsending June 30, 2001 and December 31, 2001, subject to a maximumunderwritten amount of A$75 million in respect of each dividend. InOctober 2001 5,400,039 shares were issued to shareholders participating inthe DRP and additionally, as a result of the underwriting deed, a further6,267,847 shares were issued to the underwriter to meet the shortfall of theunderwritten amount. Both lots of shares were issued at a price of A$5.71 pershare. In March 2002 4,847,010 shares were issued to shareholdersparticipating in the DRP and a further 4,151,188 shares were issued to theunderwriter to meet the shortfall of the underwritten amount. Both lots ofshares were issued at a price of A$7.59 per share.

 

On October 2, 2002, 28,849 shareholdersparticipated in the DRP; they were issued with 6,078,501 shares at a price ofA$8.24 per share. On April 2, 2003, 29,184 shareholders participated inthe DRP; they were issued with 6,335,176 shares at a price of A$7.95 per shareand on October 1, 2003, 30,178 shareholders participated in the DRP andwere issued with 6,833,330 shares at a price of A$8.59 per share.

 

Off-Balance Sheet Arrangements

 

*Non-recourseReceivables Securitisation Programme*

 

Amcor utilises an uncommitted, multi-currency receivablessecuritisation programme in the United Kingdom, France, Germany, Spain and theUSA. The trade receivables of some of the group entities in these jurisdictionsare sold, on a non-recourse basis, into an independent securitisation conduitwhich issues asset-backed commercial paper into organised markets.

 

The programme limit is A$205 million and the balanceof trade receivables sold at June 2003 was A$190 million (there was a nilbalance at June 2002).

 

The programme is not required to be included onbalance sheet for A-GAAP purposes, but is added back and included on balancesheet in the reconciliation to US-GAAP (refer Financial Statements – F-87)

 

37

----

 

Contractual and Commercial Commitments asat June 30, 2003

 
|                     |   | **Not later than 1 year** |       | **1 and 3 years** |       | **3 and 5 years** |       | **later than 5 years** |       | **TOTAL**   |       |
|--------------------------|--------|---------------------------|------------|-------------------|------------|-------------------|------------|------------------------|------------|-------------|------------|
|                     |   |                      |       |              |       |              |       |                   |       |        |       |
| Capital  Expenditure (1) |   | 128.7                     |       | 54.2              |       | —            |       | —                 | ** ** | **182.9**   | ** ** |
|                     |   |                      |       |              |       |              |       |                   |       |        |       |
| Finance  Leases (2)      |   | 140.5                     |       | 3.5               |       | 2.2               |       | 4.4                    | ** ** | **150.6**   | ** ** |
|                     |   |                      |       |              |       |              |       |                   |       |        |       |
| Operating  Leases (3)    |   | 142.0                     |       | 250.1             |       | 205.0             |       | 373.7                  | ** ** | **970.8**   | ** ** |
|                     |   |                      |       |              |       |              |       |                   |       |        |       |
| Other  Expenditure (4)   |   | 14.2                      |       | 1.6               |       | 5.0               |       | 18.1                   | ** ** | **38.9**    | ** ** |
|                     |   |                      |       |              |       |              |       |                   |       |        |       |
| Long-Term  Debt          |   | **—**                |       | 75.0              |       | 166.1             |       | 751.6                  | ** ** | **992.7**   | ** ** |
|                     |   |                      |       |              |       |              |       |                   |       |        |       |
| **TOTAL**                |   | **425.4**                 | ** ** | **384.4**         | ** ** | **378.3**         | ** ** | **1,147.8**            | ** ** | **2,335.9** | ** ** |

 

----

(1)          Capital expenditure for plant and equipment contracted but notprovided for.

 

(2)          Amcor leases equipment under finance leases expiring from one to 11years. At the end of the lease term we have the option to purchase the equipmentat an agreed residual.

 

(3)          Amcor leases motor vehicles, plant and equipment and property underoperating leases. Leases generally provide us with a right of renewal at whichtime all terms are renegotiated.

 

(4)          Expenditure contracted but not provided for covering supplies andservices to be provided.

 

38

----

 

**ITEM 6****                 ****DIRECTORS,SENIOR MANAGEMENT AND EMPLOYEES**

 

**Directorsand Senior Management**

 

Details of the Directors in office atDecember 12, 2003 are:

 

C I (Chris) Roberts

Chairman

Independent Non-Executive Director

Age 58. BCom.  Chairman, Cockatoo RidgeWines Limited.  Director AustralianAgriculture Company Limited, Chairman of Governors, Winifred West SchoolsLimited and Adviser, Control Risks Group plc. Former roles include Chairman and Managing Director, Arnott’sLimited and Managing Director, Orlando Wyndham Wines Limited.

Chairman of Executive and Nomination Committees.

Member of Audit and Compliance Committee.

Director since 1999 - appointed Chairman 2000.

 

R H (Russell) Jones

Managing Director

Age 56. BCom.  Joined Amcor 1996.  Former Chief Executive of ACI PackagingGroup.  Prior to that was ChiefExecutive of ACI Plastics Group following ACI’s acquisition in 1988 of BlowpakLtd, of which Mr Jones was Managing Director. Earlier roles were at Alcoa Australia and James Hardie Irrigation USAand Europe.

Member of Executive and Human Resources Committees.

Director since 1998 - appointed Managing Director1998.

 

E A (Elizabeth) Alexander AM

Independent Non-Executive Director

Age 60. BCom, FCA, FCPA, FAICD.  Director Boral Ltd, CSL Ltd, WinstonChurchill Memorial Trust. Chairman Australian Institute of Company Directorsand Chairman of Board of Advice to the Salvation Army (Southern Command).  Member of the Takeovers Panel and FinancialReporting Council. Former Partner PricewaterhouseCoopers.

Chairman of Amcor Superannuation Fund.

Member of Audit and Compliance, Human Resources andNomination Committees.

Director since 1994.

 

D C K (Charles) Allen AO

Independent Non-Executive Director

Age 67. MA, MSc, LLD (Hon) Monash, FTSE, FAICD.Chairman of National Australia Bank Limited. Director of Earthwatch Australia Limited, The Australian Gas LightCompany and Air Liquide Australia Limited. Former Chairman CSIRO.  FormerManaging Director Woodside Petroleum Limited. Former President Australian Mines and Metals Association and former VicePresident Confederation of Australian Industry.

Member of Executive, Audit and Compliance andNomination Committees.

Director since 1996.

 

R K (Keith) Barton

Independent Non-Executive Director

Age 63. BSc, PhD, FTSE, FAICD.  Director of Coles Myer Ltd, Tower Limitedand Citect Ltd.  Councillor of RoyalBlind Society of New South Wales. Former Managing Director of James Hardie Industries Limited and formerExecutive Director of CSR Limited.

Chairman of Audit and Compliance Committee.

Member of Nomination Committee.

Director since 1999.

 

G J (John) Pizzey

Independent Non-Executive Director

Age 55. BE(Chemical).  Chairman of Alcoaof Australia Ltd and a Director of the Alcoa Foundation Inc.  Deputy Chairman ION Ltd, Chairman - LondonMetal Exchange Ltd and International Aluminium Institute, Trustee of theAmerican Friends of the National Gallery of Australia.

 

39

----

 

G A (Geoff) Tomlinson

Independent Non-Executive Director

Age 55. BEcon.  Chairman FuntasticLimited, Programmed Maintenance Services Limited and Reckon Limited. DeputyChairman of Hansen Technologies Limited. Director Mirrabooka Investments Limited and National Australia BankLimited. Former Group Managing Director National Mutual Holdings Ltd.

Chairman Human Resources Committee.

Member of Nomination Committee.

Director since 1999.

 

In addition to the Executive Director of Amcor notedabove, details of the Executive Officers of Amcor who are not Directors at thedate hereof are as follows:

 
| **Name**                       |   | **Position**                                                   |   | **Appointed  to Current  Position** |   | **Joined  Amcor** |   |
|--------------------------------|--------|----------------------------------------------------------------|--------|-------------------------------------|--------|-------------------|--------|
|                           |   |                                                           |   |                                |   |              |   |
| E.E. (Eric) Bloom  Age 54      |   | President and Chief Executive Officer,  Amcor Sunclipse        |   | 2002                                |   | 1995              |   |
|                           |   |                                                           |   |                                |   |              |   |
| G.S. (Graham) James  Age 57    |   | Chief Executive Officer, Amcor Flexibles  Europe               |   | 2001                                |   | 1994              |   |
|                           |   |                                                           |   |                                |   |              |   |
| K. N. (Ken) MacKenzie  Age 39  |   | Group Managing Director, Amcor Rentsch  and Closures           |   | 2001                                |   | 1992              |   |
|                           |   |                                                           |   |                                |   |              |   |
| Chan Chew Keak (Billy)  Age 53 |   | Managing Director, Amcor Asia                                  |   | 1998                                |   | 1993              |   |
|                           |   |                                                           |   |                                |   |              |   |
| W.P. (Peter) Day  Age 53       |   | Executive General Manager Finance                              |   | 2001                                |   | 2001              |   |
|                           |   |                                                           |   |                                |   |              |   |
| L.J. (Lou) Lachal  Age 52      |   | Executive General Manager Operations                           |   | 2001                                |   | 1980              |   |
|                           |   |                                                           |   |                                |   |              |   |
| W.J. Long  Age 48              |   | President, Amcor PET Packaging                                 |   | 2002                                |   | 2002              |   |
|                           |   |                                                           |   |                                |   |              |   |
| J.V. (John) Murray  Age 45     |   | Executive General Manager Corporate  Affairs                   |   | 1999                                |   | 1999              |   |
|                           |   |                                                           |   |                                |   |              |   |
| P.R. (Peter) Sutton  Age 47    |   | Managing Director, Amcor Australasia                           |   | 2003                                |   | 2001              |   |
|                           |   |                                                           |   |                                |   |              |   |
| I.G. (Ian) Wilson  Age 45      |   | Strategic Development Director                                 |   | 2000                                |   | 2000              |   |
|                           |   |                                                           |   |                                |   |              |   |
| P.S. (Peter) Wilson  Age 51    |   | Executive General Manager, Human  Resources and Operating Risk |   | 1999                                |   | 1999              |   |

 

----

Executive Officers serve at the discretion of theDirectors.  No family relationshipexists between any Director or Executive Officer and any other Director orExecutive Officer.

 

**Compensation**

 

The aggregate amount of remuneration paid by Amcorduring 2002-03 to all Directors and Executive Officers, as a group, was A$16.5million.

 

Retirement agreements have been entered into betweenAmcor and each non-executive Director that provide for the payment of benefitsupon cessation of their respective directorships as covered in Rule 55 ofAmcor’s Constitution. Retiring allowance accrual to June 30, 2003 ofA$2,475,555 is allocated as follows:

 

C.I. Roberts – A$698,662, E.A. Alexander – A$517,543,D.C.K. Allen – A$396,195, R.K. Barton – A$250,312, T.C. Bergman – A$332,751,G.A. Tomlinson – A$280,292.

 

Retiring allowance agreements will not be offered toany Non-Executive Director appointed after June 30, 2003.

 

40

----

 

The Managing Director and a number of ExecutiveOfficers are members of defined benefit superannuation plans operated by theCompany under which no specific contribution is determined in respect of anyindividual member. The Company contributes to those plans at rates determinedby an actuary as being necessary and sufficient to ensure the overall financialsoundness of the plan.  The aggregateamount set aside by the Company during 2002-03 and included in the aggregateamount of remuneration of Directors and Executive Officers above, was A$0.9million.

 

Details of the nature and amount of each major elementof the emoluments of each director of the Company and each of the five namedofficers of the Company and Amcor receiving the highest emoluments during2002-03 are set out below:

 
|               |   | **Base  Emolument** |       | **Incentive** |       | **Salary  Sacrifice** |       | **Super-  annuation** |       | **Other  (inc  Retiring  Allowance)** |       | **Total  (Excluding  Options and  Shares)****(1)(2)** |       |
|--------------------|--------|---------------------|------------|---------------|------------|-----------------------|------------|-----------------------|------------|---------------------------------------|------------|-------------------------------------------------------|------------|
|               |   | **A$**              |       | **A$**        |       | **A$**                |       | **A$**                |       | **A$**                                |       | **A$**                                                | ** ** |
| **Director**       |   |                |       |          |       |                  |       |                  |       |                                  |       |                                                  |       |
|               |   |                |       |          |       |                  |       |                  |       |                                  |       |                                                  |       |
| C.I. Roberts       |   | 249,634             |       |          |       | 62,409                |       | 22,467                |       | 295,444                               |       | 629,954                                               |       |
| R.H. Jones         |   | 1,268,750           |       | 700,000       |       |                  |       | 253,750               |       | 260,919                               |       | 2,483,419                                             |       |
| E.A. Alexander     |   | 106,718             |       |          |       | 27,981                |       | 9,605                 |       | 95,531                                |       | 239,835                                               |       |
| D.C.K. Allen       |   | 14,167              |       |          |       | 100,242               |       | 1,275                 |       | 61,698                                |       | 177,382                                               |       |
| R.K. Barton        |   | 103,054             |       |          |       | 25,763                |       | 9,275                 |       | 84,140                                |       | 222,232                                               |       |
| T.C. Bergman       |   | 88,232              |       |          |       | 22,058                |       | 7,941                 |       | 67,695                                |       | 185,926                                               |       |
| G.A. Tomlinson     |   | 93,290              |       |          |       | 23,323                |       | 8,396                 |       | 83,950                                |       | 208,959                                               |       |
| **Total**          |   | **1,923,845**       | ** ** | **700,000**   | ** ** | **261,776**           | ** ** | **312,709**           | ** ** | **949,377**                           | ** ** | **4,147,707**                                         | ** ** |
|               |   |                |       |          |       |                  |       |                  |       |                                  |       |                                                  |       |
| **Amcor  Limited** |   |                |       |          |       |                  |       |                  |       |                                  |       |                                                  |       |
|               |   |                |       |          |       |                  |       |                  |       |                                  |       |                                                  |       |
| P.J. Brown         |   | 635,000             |       | 650,000       |       |                  |       | 45,000                |       | 137,849                               |       | 1,467,849                                             |       |
| I.G. Wilson        |   | 698,241             |       | 450,122       |       |                  |       |                  |       | 238,214                               |       | 1,386,577                                             |       |
| L.J. Lachal        |   | 552,500             |       | 419,750       |       |                  |       | 77,350                |       | 59,686                                |       | 1,109,286                                             |       |
| P.S. Wilson        |   | 498,750             |       | 399,000       |       |                  |       | 69,825                |       | 93,702                                |       | 1,061,277                                             |       |
| J.V. Murray        |   | 443,641             |       | 380,000       |       |                  |       | 62,475                |       | 34,469                                |       | 920,585                                               |       |
| **Total**          |   | **2,828,132**       | ** ** | **2,298,872** | ** ** |                  |       | **254,650**           | ** ** | **563,920**                           | ** ** | **5,945,574**                                         | ** ** |
|               |   |                |       |          |       |                  |       |                  |       |                                  |       |                                                  |       |
| **Amcor**          |   |                |       |          |       |                  |       |                  |       |                                  |       |                                                  |       |
|               |   |                |       |          |       |                  |       |                  |       |                                  |       |                                                  |       |
| J.D. Allen         |   | 527,588             |       | 75,654        |       |                  |       | 117,520               |       | 1,058,630                             |       | 1,779,392                                             |       |
| G.S. James         |   | 872,801             |       | 643,031       |       |                  |       | 147,767               |       | 92,293                                |       | 1,755,892                                             |       |
| P.J. Brown         |   | 635,000             |       | 650,000       |       |                  |       | 45,000                |       | 137,849                               |       | 1,467,849                                             |       |
| C.K. Chan          |   | 665,337             |       | 539,247       |       |                  |       | 53,489                |       | 71,963                                |       | 1,330,036                                             |       |
| W.J. Long          |   | 725,132             |       | 507,593       |       |                  |       | 35,088                |       | 25,002                                |       | 1,292,815                                             |       |
| **Total**          |   | **3,425,858**       | ** ** | **2,415,525** | ** ** |                  |       | **398,864**           | ** ** | **1,385,737**                         | ** ** | **7,625,984**                                         | ** ** |

 

----

(1)           Options entitling the holder to purchase one Amcor ordinary shareper option were issued during the year. The value of options has beencalculated at the date of grant using the Black Scholes option pricing modeland is determined by factors including the option’s grant price, lifespan,share price volatility and dividend yield. Details are as follows:

 
| **Name**     |   | **Number** |   | **Exercise Price** |   | **Expiry Date** |    | **Fair Value** |   |
|--------------|--------|------------|--------|--------------------|--------|-----------------|---------|----------------|--------|
|         |   |       |   |               |   |            |    |           |   |
| R.H.  Jones  |   | 3,000,000  |   | A$                 | 8.20   |            | 09/2008 |           | A$     | 1,540,799 |   |
|         |   |       |   |               |   |            |    |           |   |
| P.J.  Brown  |   | 60,000     |   | A$                 | 5.10   |            | 10/2005 |           | A$     | 185,400 |   |
|         |   | 50,000     |   | A$                 | 8.20   |            | 11/2012 |           | A$     | 19,556 |   |
|         |   |       |   |               |   |            |    |           |   |
| L.J.  Lachal |   | 60,000     |   | A$                 | 5.10   |            | 10/2005 |           | A$     | 185,400 |   |
|         |   |       |   |               |   |            |    |           |   |
| P.S.  Wilson |   | 80,000     |   | A$                 | 5.10   |            | 10/2005 |           | A$     | 247,200 |   |
|         |   |       |   |               |   |            |    |           |   |
| G.S.  James  |   | 60,000     |   | A$                 | 5.10   |            | 10/2005 |           | A$     | 185,400 |   |
|         |   | 50,000     |   | A$                 | 8.20   |            | 11/2012 |           | A$     | 19,556 |   |
|         |   |       |   |               |   |            |    |           |   |
| C.K.  Chan   |   | 100,000    |   | A$                 | 5.10   |            | 10/2005 |           | A$     | 185,400 |   |
|         |   | 50,000     |   | A$                 | 8.20   |            | 11/2012 |           | A$     | 19,556 |   |
|         |   |       |   |               |   |            |    |           |   |
| W.J.  Long   |   | 300,000    |   | A$                 | 7.30   |            | 07/2007 |           | A$     | 373,520 |   |
|         |   | 50,000     |   | A$                 | 8.20   |            | 11/2012 |           | A$     | 19,556 |   |

 

41

----

 

(2)           Shares were issued underthe Employee Share Purchase Plan approved by shareholders on January 29,1985 and as amended on September 3, 1987, October 20, 1988,June 2, 1999 and October 12, 2000. Most of these shares have beenissued for “nil” consideration with performance restrictions of three and up tofive years. The value of these shares has been amortised over the relevanttrading restriction period. Details are as follows:

 

R.H. Jones 97,222 (A$137,594); I.G. Wilson 36,585 (A$87,281); L.J.Lachal 36,585 (A$87,281); P.S. Wilson 36,585 (A$87,281); J.V. Murray 36,585(A$87,281).

 

42

----

 

**Board Practices**

 

The primary role of the Directors of Amcor is theprotection and enhancement of long-term shareholder value. To fulfil this role,the Board has the overall responsibility for corporate governance of theCompany and is responsible for setting the strategic goals of the Company, foroversight of the management of the Company and for direction of its businessstrategy.  The Constitution of Amcorprovides that, until the Company in general meeting otherwise determines, thereshall be such number of Directors not less than seven nor more than 15 as theDirectors may determine, provided that the Directors may not determine thenumber of Directors to be less than the number in office at the time of suchdetermination.  At the date hereof, thenumber of Directors is seven, of whom one is an Executive Director.

 

Other than the Managing Director, the Directors aresubject to retirement by rotation, with one third, or the number closest to butnot exceeding one third, retiring each year at the annual general meeting ofthe Company.  Eligible retiringdirectors may offer themselves for re-election by the shareholders.

 

The Constitution also requires that at leasttwo-thirds of the Directors be Australian citizens. In addition, each Directormust hold (or acquire within two months after election) at least 1000 OrdinaryShares of Amcor.

 

The base fee for a Non-Executive Director for 2002-03was A$105,000 with the Chairman receiving A$315,000. Additional fees were paidto Non-Executive Directors as follows:

 

•      A$25,000per annum to chair the Audit and Compliance Committee;

•      A$10,000per annum as a member of the Audit and Compliance Committee;

•      A$12,500per annum to chair the Human Resources Committee;

•      A$6,000 perannum as a member of the Human Resources Committee; and

•      A$15,000per annum to chair the Amcor Superannuation Fund.

 

Fees for Non-Executive Directors are based on theirwork responsibilities. In determining the level of fees, external survey datais considered in detail. Fees are recommended by the Human Resources Committeeand determined by the Board within the amount approved by shareholders. Totalremuneration for all Non-Executive Directors last voted upon by shareholders atthe 2003 Annual General Meeting is not to exceed A$2 million per annum.

 

All Non-Executive Directors have signed retiringallowance agreements which crystallise a benefit upon retirement or death. Anybenefit paid is reduced by the amount of any superannuation benefit received.

 

Audit and Compliance Committee

 

The role of the Audit and Compliance Committee is setout in a charter which has been approved by the Board. In accordance with thischarter, all members must be independent non-executive directors. The Chairmanmay not be Chairman of the Board of directors. The role of the committee is toadvise on the maintenance of an appropriate framework of internal control andcompliance reporting for the management of the company. At least one of thecommittee members will have an expertise in financial matters.

 

The responsibilities of the Committee are to:

 

•        appoint, remove and determinethe remuneration of the external auditors and oversee the rotation of theprincipal external audit partner; 

•        review the financial reportsprior to external release;

•**       **monitor the activities of the internal and external audit function;

•        review internal and externalaudit reports to ensure that where deficiencies in controls or procedures havebeen identified, prompt remedial action is taken by management;

•        liaise with external auditorsto ensure that the annual audits and half-yearly reviews are conductedeffectively;

•        review major capitalexpenditure projects post audits;

•        monitor funding commitmentsand availability;

•        assess and review businessrisk;

•        consider, and if appropriate,approve the provision of non-audit services by the Company’s external auditor;

•        review major non-financialregulatory matters through the use of a compliance monitoring regime coveringthe following areas of exposure:

•        environment;

•        healthand safety;

 

43

----

 

•        asset protection;

•        trade practices;

•        discrimination and harassment;

•        conflict of interest; 

•        ethical standards; and

•        privacy.

•        review the Company’s policies and procedures for convergence withInternational Financial Reporting Standards for reporting periods beginningJuly 1, 2005.

 

The members of the Audit and Compliance Committeeduring 2002-03 were:

R.K. Barton (Chairman), D.C.K. Allen, E.A. Alexander,C.I. Roberts. All are non-executive directors of the Company.

 

The Managing Director and Chief Executive Officerattends all meetings in an ex-officio capacity.

 

The Audit and Compliance Committee currently conductsan annual review of its processes and charter to ensure that it has carried outits functions in an effective manner.

 

Human Resources Committee

 

The role of the Human Resources Committee is to advisethe Board on the remuneration policies and practices for the Company and makespecific recommendations to the Board on remuneration packages and policiesapplicable to non-executive directors, the Managing Director and seniormanagement. This role also includes responsibility for share/option plans,incentive performance packages and succession planning. Remuneration levels areset competitively to attract the most qualified and experienced seniorexecutives. The Human Resources Committee also considers independent advise onappropriate remuneration packages.

 

The members of the Human Resources Committee during2002-03 were:

G.A. Tomlinson (Chairman), R.H. Jones, E.A. Alexander,T.C. Bergman.

 

Although the Managing Director is a member of thisCommittee, the Managing Director will not:

 

(a)           voteon matters relating to the remuneration of executive officers of the Company,and

(b)           attendmeetings or vote on matters regarding the remuneration of the ManagingDirector.

 

**Employees**

 
| **Employee  Numbers by Segment** |   | **as at  30 June  2003** |       |
|----------------------------------|--------|--------------------------|------------|
|                             |   |                     |       |
| Amcor  PET Packaging             |   | 5,601                    |       |
|                             |   |                     |       |
| Amcor  Australasia               |   | 7,113                    |       |
|                             |   |                     |       |
| Amcor  Flexibles Europe          |   | 6,766                    |       |
|                             |   |                     |       |
| Amcor  Sunclipse                 |   | 2,367                    |       |
|                             |   |                     |       |
| Amcor  Rentsch and Closures      |   | 3,883                    |       |
|                             |   |                     |       |
| Amcor  Asia                      |   | 2,765                    |       |
|                             |   |                     |       |
| Corporate/Other                  |   | 115                      |       |
|                             |   |                     |       |
| **TOTAL**                        |   | **28,610**               | ** ** |

 

44

----

 
|                                        |   | **as at  30 June** |       |
|---------------------------------------------|--------|--------------------|------------|
| **Employee  Numbers by Geographic Segment** |   | **2002**           |       | **2001** |   |
|                                        |   |               | ** ** |   | ** ** |
| Amcor  Australasia                          |   | 7,793              |       | 7,815 |   |
|                                        |   |               |       |   |   |
| Amcor  North America                        |   | 5,006              |       | 4,567 |   |
|                                        |   |               |       |   |   |
| Amcor  Europe                               |   | 7,926              |       | 8,004 |   |
|                                        |   |               |       |   |   |
| Amcor  Asia                                 |   | 2,782              |       | 2,550 |   |
|                                        |   |               |       |   |   |
| Corporate/Other                             |   | 123                |       | 317 |   |
|                                        |   |               |       |   |   |
| **TOTAL**                                   |   | **23,650**         | ** ** | **23,253** | ** ** |

 

**Share Ownership**

 

The following table sets forth, as atDecember 12, 2003, the total amount of any class of Amcor’s votingsecurities owned by directors:

 
| **Title  of  Class** |   | **Identity of  person or  group** |   | **Amount  Owned** |   | **Percent  of Class** |   |
|----------------------|--------|-----------------------------------|--------|-------------------|--------|-----------------------|--------|
|                 |   |                              |   |              |   |                  |   |
| Ordinary  Shares     |   | Directors of Amcor Limited        |   | 675,456           |   | 0.08                  |   |

 

As of December 12, 2003 executive officers andemployees had been issued with 13,672,057 Ordinary Shares representingapproximately 1.59% of issued capital, under employee share purchase plans.

 

Executive and Employee Share Plans

 

Amcor maintains two Executive and Employee Share Plans(“ESPs”) which were introduced in 1985.

 

Under the first plan, introduced in January 1985(“1st ESP”), Ordinary Shares are issued (paid as to A$0.01 or such greateramount as may be specified by the Directors) to Executive Officers (includingDirectors who are Executives) and to senior staff members in Amcor selected bythe Directors.  The Ordinary Shares areissued at the market price at the time of issue.  The balance of the sum payable on application is advanced by theCompany by way of loans; some of the loans being interest free and some beinginterest bearing.  The Company retains alien over the Ordinary Shares issued to secure the loan monies. The balance ofthe call outstanding only becomes payable on retirement, death or at theDirectors’ discretion. The lien entitles the Company to sell the shares andapply the proceeds to meet the balance of monies then owing.  In the event of a deficiency remaining aftersale the Company has no claim against the former executive or his estate forthat amount.  The shares subject to the1st ESP carry full dividend entitlements and voting rights.

 

Under the second plan, introduced in October 1985(“2nd ESP”) Ordinary Shares or Options of the Company can be issued toExecutive Officers and Directors (including Directors who are Executives) andsenior staff members selected by the Directors.  Ordinary Shares may be issued paid to not less than A$0.05.  The Ordinary Shares are issued at marketprice at the time of issue.  The balanceof the call outstanding only becomes payable on retirement, death or at theDirectors’ discretion.  Similar to the1st ESP, the Company has a lien over the Ordinary Shares.  Any deficiency between the balance of issueprice and the realizable value of the Ordinary Shares shall be met out of theCompany’s share premium account.  These2nd ESP Ordinary Shares do not carry dividend entitlements unless determinedotherwise by the Directors.  Votingrights exercisable by holders of partly paid Ordinary Shares are reduced prorata to the portion of the issue price paid up on those shares under theAustralian Stock Exchange Listing Rules. Options under the 2nd ESP may be issued upon such terms and subject tosuch conditions as the Directors of the Company determine at the time.

 

Due to the restrictions of the Sarbanes-Oxley Act of2002 in the US, no such loans referred to in the above plans have been made orextended to Directors and Executive Officers since July 1, 2002.

 

45

----

 

The maximum number of shares that can be issued underall plans cannot exceed 5% of the Company’s issued capital.

 

Commencing from 1988, shares have been offered underthe 1st ESP for the benefit of all full-time employees, permanent part-timeemployees and executive directors of Amcor with more than twelve months’service. The number of shares offered depends upon the Company’s increase in earningsper share and is currently on the following basis; ie. an increase in earningsper share of less than 5% will result in no offer; from 5% to 10% an offer of100 Ordinary Shares; from more than 10% to 15% an offer of 200 Ordinary Shareswill be made; and above 15% an offer of 300 Ordinary Shares will be made.

 

Senior Executive Share and Retention SharePlans

 

In 2000-01, Amcor introduced two further share plansfor senior executives in Australia and the United Kingdom.

 

Under the first Senior Executive Share Plan (“SESP”),the Board may nominate specific employees who report directly to the ManagingDirector, or employees who report directly to those people, as being eligibleto participate.  Prior to the end of eachfinancial year, eligible employees may elect to receive fully paid ordinaryshares in lieu of part or all of any cash bonus which they may receive inrespect of that financial year.  Thevalue of any ordinary shares which Amcor decides to issue to eligible employeeswill be based on the simple average of the closing price of Amcor shares oneach trading day for the relevant financial year, unless Amcor decides to alterthe method for calculating this value in response to anomalouscircumstances.  The shares will beissued at the time when the cash bonus is payable and the shares may not bedisposed of by the employee for a restricted period of ten years in Australiaand five years in the United Kingdom, unless the employee ceases employment orAmcor decides otherwise prior to the expiry of the restricted period.  Any right or interest in the shares will beforfeited if the employee has acted fraudulently in relation to the affairs ofthe Company during the restricted period. The shares subject to the SESP carry full dividend entitlements and votingrights.

 

Under the second Senior Executive Retention Share Plan(“SERSP”), the Board may nominate certain senior executives as being eligibleto receive fully paid ordinary shares in part satisfaction of theirremuneration for the relevant financial year. The number of shares issued is entirely at Amcor’s discretion.  The shares may not be disposed of by theemployee for a restricted period of five years, unless the employee ceasesemployment three years after the shares were issued.  Any right or interest in the shares will be forfeited if theemployee voluntarily ceases employment within three years from the date theshares were issued or if the employee is dismissed during the restricted periodfor cause or poor performance.  If theemployee voluntarily ceases employment within four or five years from the datethe shares were issued, the employee forfeits 40% or 20% of their shares(respectively).  The shares subject tothe SERSP carry full dividend entitlements and voting rights.

 

Options

 

(i) Executive Options

 

Shareholders at the 2002 Annual General Meetingapproved the issue of 3,000,000 options to the Managing Director. The grant ofoptions was made on 14 August 2002 at an exercise price of A$8.20 whichwas the average closing market price of fully paid ordinary shares traded onthe Australian Stock Exchange during the month of July 2002.

 

On October 1, 2002, the Company issued 2,522,878executive options over 2,522,878 ordinary shares of Amcor Limited under the 2ndESP. The exercise price of this issue was A$5.10 which was based on the averageof the closing market price of Amcor Limited shares traded on the AustralianStock Exchange during the month of May 2000.

 

On October 1, 2002, the Company issued 40,000executive options over 40,000 ordinary shares of Amcor Limited under the 2ndESP. The exercise price of this issue was A$5.30 which was based on the averageof the closing market price of Amcor Limited shares traded on the AustralianStock Exchange during the first two weeks of December 2000.

 

On October 1, 2002, the Company issued 10,000executive options over 10,000 ordinary shares of Amcor Limited under the 2ndESP. The exercise price of this issue was A$5.30 which was based on the averageof the closing market price of Amcor Limited shares traded on the AustralianStock Exchange for the twenty trading days up to and including January 15,2001.

 

On October 1, 2002, the Company issued 50,000executive options over 50,000 ordinary shares of Amcor Limited under the 2ndESP. The exercise price of this issue was A$6.62 which was based on the closingmarket price of Amcor Limited shares traded on the Australian Stock Exchangefor the five trading days prior to June 18, 2001.

 

46

----

 

On October 1, 2002, the Company issued 180,000executive options over 180,000 ordinary shares of Amcor Limited under the 2ndESP. The exercise price of this issue was A$6.03 which was based on the closingmarket price of Amcor Limited shares traded on the Australian Stock Exchangefor the month of September 2001.

 

On October 1, 2002, the Company issued 40,000executive options over 40,000 ordinary shares of Amcor Limited under the 2ndESP. The exercise price of this issue was A$7.25 which was based on the closingmarket price of Amcor Limited shares traded on the Australian Stock Exchangefor the period December 2001 to February 2002.

 

On October 1, 2002, the Company issued 30,000executive options over 30,000 ordinary shares of Amcor Limited under the 2ndESP. The exercise price of this issue was A$5.71 which was based on theDividend Reinvestment Plan price for the October 2001 dividend payment.

 

On November 1, 2002, the Company issued 5,927,000executive options over 5,927,000 ordinary shares of Amcor Limited under the 2ndESP. The exercise price of this issue was A$8.20 which was based on the closingmarket price of Amcor Limited shares traded on the Australian Stock Exchangefor month of July 2002.

 

On October 1, 2003, the Company issued 180,000executive options over 180,000 ordinary shares of Amcor Limited under the 2ndESP. The exercise price of this issue was A$6.03 which was based on the closingmarket price of Amcor Limited shares traded on the Australian Stock Exchangefor the month of September 2001.

 

On October 1, 2003, the Company issued 40,000executive options over 40,000 ordinary shares of Amcor Limited under the 2ndESP. The exercise price of this issue was A$7.25 which was based on the closingmarket price of Amcor Limited shares traded on the Australian Stock Exchangefor the period December 2001 to February 2002.

 

On October 1, 2003, the Company issued 40,000executive options over 40,000 ordinary shares of Amcor Limited under the 2ndESP. The exercise price of this issue was A$5.71 which was based on the DividendReinvestment Plan price for the October 2001 dividend payment.

 

On October 13, 2003, the Company issued 165,000executive options over 165,000 ordinary shares of Amcor Limited under the 2ndESP. The exercise price of this issue was A$8.20 which was based on the closingmarket price of Amcor Limited shares traded on the Australian Stock Exchangefor month of July 2002.

 

On October 20, 2003, the Company issued 30,000executive options over 30,000 ordinary shares of Amcor Limited under the 2ndESP. The exercise price of this issue was A$8.20 which was based on the closingmarket price of Amcor Limited shares traded on the Australian Stock Exchangefor month of July 2002.

 

(ii) Special Executive Options

 

On November 1, 2002, the Company issued 2,290,000executive options over 2,290,000 ordinary shares of Amcor Limited under the 2ndESP. The exercise price of this issue was A$7.40 which was based on the closingmarket price of Amcor Limited shares traded on the Australian Stock Exchange on11 and 12 April 2002.

 

On November 1, 2002, the Company issued 350,000executive options over 350,000 ordinary shares of Amcor Limited under the 2ndESP. The exercise price of this issue was A$7.30 which was based on the closingmarket price of Amcor Limited shares traded on the Australian Stock Exchange on15 April 2002.

 

47

----

 

**ITEM 7****                 ****MAJORSHAREHOLDERS AND RELATED PARTY TRANSACTIONS**

 

**MajorShareholders**

 

The Company is not directly or indirectly owned orcontrolled by another corporation or by any foreign government.  As at December 12, 2003, DelawareInternational Advisers Limited and Commonwealth Bank of Australia were the onlyshareholders to hold more than 5% of the ordinary shares of the Company. Bynotice dated March 12, 2003, Delaware International Advisers Limited had arelevant interest in 56,227,822 Ordinary Shares which represented 6.61% of thetotal at that date. By notice dated June 4, 2003, Commonwealth Bank ofAustralia had a relevant interest in 42,431,774 Ordinary Shares whichrepresented 4.99% of the total at that date.

 

There are no arrangements known to Amcor, theoperation of which may at a subsequent date result in a change in control ofAmcor. Major shareholders enjoy no rights different from any other holder ofAmcor’s Ordinary Shares.

 

**Major Shareholders Over PreviousThree Years**

 
| **Date of Notice** |   | **Name  of Shareholder**            |   | **% of  Voting Shares at Year-end**   |   |
|--------------------|--------|-------------------------------------|--------|---------------------------------------|--------|
| 6 Apr  2000        |   | Delaware International Advisers Ltd |   | 8.13                                  |   |
| 12  Jul 2000       |   | Maple-Brown Abbot Ltd               |   | 7.13                                  |   |
| 21  May 2001  |   | Maple-Brown Abbot Ltd               |   | 6.09                                  |   |
| 3 Aug  2001        |   | Delaware International Advisers Ltd |   | 9.24                                  |   |
| 20  Aug 2001       |   | Maple-Brown Abbot Ltd               |   | 5.08                                  |   |
| 21  Aug 2001       |   | Maple-Brown Abbot Ltd               |   | Ceased  to be substantial shareholder |   |
| 8 Jul  2002        |   | Delaware International Advisers Ltd |   | 8.11                                  |   |
| 10  Jul 2002       |   | Commonwealth Bank of Australia      |   | 5.05                                  |   |
| 4 Sep  2002        |   | Commonwealth Bank of Australia      |   | 6.05                                  |   |
| 12  Mar 2003       |   | Delaware International Advisers Ltd |   | 6.73                                  |   |
| 4 Jun  2003        |   | Commonwealth Bank of Australia      |   | 5.03                                  |   |

 

**RelatedParty Transactions**

 

A number of loans have been provided by the Companyto, or for the benefit of, certain Directors who are Executives and ExecutiveOfficers.  The aggregate amount of suchloans outstanding as at December 12, 2003, was A$1.1 million.  This represents 0.02 per cent of TotalEquity as at June 30, 2003.  (SeeNote 34 to the consolidated financial statements for details on loans issuedand repaid). In addition, the Company has granted a guarantee in favour of aDirector who is an Executive for a loan of A$0.4 million. Due to therestrictions of the recently enacted Sarbanes-Oxley Act of 2002 in the US, nosuch loans have been made or extended to Directors and Executive Officers sinceJuly 1, 2002.

 

Under Amcor’s Employee Share Plans which are describedin Item 6, interest-free loans are made available to eligible employees toacquire shares, which are repaid over time by dividends received on the shares.In the past these interest-free loans have been made available to directors andexecutive officers of Amcor to acquire shares. However, due to theSarbanes-Oxley restrictions Directors and Executive Officers will no longerreceive this interest-free loan.

 

No Director or Officer of the Company (or any relativeor spouse thereof) has any interests in any material transactions of Amcorwhich were effected by the Company or any of its subsidiaries since the currentor immediately preceding financial year or were effected by the Company or anyof its subsidiaries during an earlier financial year and remain in any respectoutstanding at the date hereof. Directors and Executive Officers of Amcor have participated in recentissues of shares under Employee Share Plans which are described in Item 6.

 

Amcor trades with certain partly owned controlledentities in the normal course of business and on an arm’s length basis. Theamounts of these transactions were not material to any parties.

 

48

----

 

**ITEM 8****                 ****FINANCIALINFORMATION**

 

Please refer to the consolidated financial statementsbeginning on F-1

 

**Legal Proceedings**

 

On June 15, 2000, the Construction, Forestry,Mining and Energy Union (CFMEU) filed a proceeding in the Federal Court ofAustralia against Amcor. The proceeding related to a claim forredundancy-related payments arising out of the change of employment of CFMEUmembers stemming from the demerger by Amcor in April 2000 of the PaperlinXGroup.

 

On May 13, 2002 the judge handed down reasons forhis decision. He found that Amcor employees whose employment was transferred toPaperlinX Ltd had, nonetheless, technically been made redundant and that theCourt could not interpret the relevant clauses of the certified agreement in amanner which relieved Amcor of the obligation to make redundancy severancepayments to the transferred employees. Amcor appealed this decision.

 

The appeal was heard by a Full Bench of the FederalCourt on February 24, 2003 and its decision, dismissing Amcor’s appeal,was handed down on March 28, 2003. Amcor subsequently filed an applicationfor special leave to appeal to the High Court. On December 12, 2003special leave was granted and the matter is expected to proceed to a hearingbefore the High Court during 2004.

 

There are other outstanding court proceedings, claimsand possible claims against companies in the Amcor Group, arising in theordinary course of business, the aggregate amount of which cannot be readilyquantified.  While the outcome of suchproceedings and claims cannot be predicted with certainty, Amcor considers thatno such proceedings or claims, individually or in aggregate, will have amaterial adverse effect on the business, consolidated financial condition orresults of operations of Amcor. The foregoing discussion includes certainforward-looking statements. See “Forward-Looking Statements” and “RiskFactors”.

 

**Dividend Policy**

 

Amcor has not published a formal dividend policy.Interim and final dividends are determined at the discretion of the Directors.

 

49

----

 

**ITEM 9****                 ****THE OFFER AND THELISTING**

 

**Markets**

 

The principal trading market for Amcor’s shares is theAustralian Stock Exchange Limited. Amcor’s Ordinary Shares are also listed onthe New Zealand Stock Exchange. American Depositary Shares (“ADSs”), each representing four OrdinaryShares and evidenced by American Depositary Receipts (“ADRs”), for which MorganGuaranty Trust Company of New York (“Morgan Guaranty”) is the Depositary, arequoted on the NASDAQ National Market System. In addition to these ADRs, as of June 30, 2003, there were 2,589shareholders whose registered addresses are situated in the United Statesholding in total 1,878,412 Amcor Ordinary Shares, which is equivalent to 0.22%of Amcor’s issued share capital.

 

The following table sets out, for the periodsindicated, the respective highest and lowest prices for Amcor ADSs as traded onthe NASDAQ National Market System (with each ADS representing four OrdinaryShares) and for Amcor’s Ordinary Shares reported as the last sale on anytrading day on the Australian Stock Exchange Limited.

 
|                                            |            | **American Depositary  Shares** |   | **Ordinary Shares** |   |
|-------------------------------------------------|-----------------|---------------------------------|--------|---------------------|--------|
|                                            |            | **High**                        |   | **Low**             |   | **High** |   | **Low** |   |
|                                            |            |                            |   |                |   |   |   |   |   |
| 1998-99  From July 1998 to June 1999* |            | US$                             | 24.13  |                | US$    | 13.25 |   | A$ | 9.05 |   | A$ | 5.64 |   |
|                                            |            |                            |   |                |   |   |   |   |   |
| 1999-00  From July 1999 to June 2000* |            | US$                             | 22.69  |                | US$    | 11.38 |   | A$ | 8.66 |   | A$ | 4.79 |   |
|                                            |            |                            |   |                |   |   |   |   |   |
| 2000-01  From July 2000 to June 2001  |            | US$                             | 14.48  |                | US$    | 10.31 |   | A$ | 6.84 |   | A$ | 5.04 |   |
|                                            |            |                            |   |                |   |   |   |   |   |
| 2001-02                                         | First  Quarter  |                            | US$    | 14.59               |   | US$ | 11.07 |   | A$ | 7.05 |   | A$ | 5.69 |   |
|                                            | Second  Quarter |                            | US$    | 14.97               |   | US$ | 12.10 |   | A$ | 7.16 |   | A$ | 6.20 |   |
|                                            | Third  Quarter  |                            | US$    | 16.80               |   | US$ | 14.61 |   | A$ | 7.87 |   | A$ | 7.11 |   |
|                                            | Fourth  Quarter |                            | US$    | 16.69               |   | US$ | 12.40 |   | A$ | 9.10 |   | A$ | 7.17 |   |
|                                            |            |                            |   |                |   |   |   |   |   |
| 2002-03                                         | First  Quarter  |                            | US$    | 19.79               |   | US$ | 17.04 |   | A$ | 8.86 |   | A$ | 8.00 |   |
|                                            | Second  Quarter |                            | US$    | 19.48               |   | US$ | 17.85 |   | A$ | 8.49 |   | A$ | 7.93 |   |
|                                            | Third  Quarter  |                            | US$    | 20.40               |   | US$ | 18.73 |   | A$ | 8.68 |   | A$ | 7.76 |   |
|                                            | Fourth  Quarter |                            | US$    | 22.20               |   | US$ | 19.78 |   | A$ | 8.55 |   | A$ | 8.05 |   |
|                                            |            |                            |   |                |   |   |   |   |   |
| 2003                                            | April           |                            | US$    | 20.80               |   | US$ | 19.78 |   | A$ | 8.40 |   | A$ | 8.10 |   |
|                                            | May             |                            | US$    | 22.20               |   | US$ | 20.83 |   | A$ | 8.55 |   | A$ | 8.13 |   |
|                                            | June            |                            | US$    | 22.15               |   | US$ | 21.61 |   | A$ | 8.29 |   | A$ | 8.07 |   |
|                                            | July            |                            | US$    | 22.75               |   | US$ | 21.81 |   | A$ | 8.49 |   | A$ | 8.05 |   |
|                                            | August          |                            | US$    | 23.65               |   | US$ | 21.62 |   | A$ | 9.03 |   | A$ | 8.31 |   |
|                                            | September       |                            | US$    | 24.43               |   | US$ | 23.30 |   | A$ | 9.13 |   | A$ | 8.59 |   |
|                                            | October         |                            | US$    | 25.30               |   | US$ | 23.75 |   | A$ | 9.09 |   | A$ | 8.46 |   |
|                                            | November        |                            | US$    | 24.70               |   | US$ | 23.25 |   | A$ | 8.55 |   | A$ | 8.08 |   |

 

----

* Pre PaperlinX Limited demerger.

 

The last reported sale of our ordinary shares onDecember 12, 2003 on the ASX was A$8.09. The last reported sale of ourADSs on December 12, 2003 on Nasdaq was US$24.29.

 

50

----

 

**ITEM 10****        ****ADDITIONALINFORMATION**

 

**Constitution**

 

The following provides information on the materialprovisions of Amcor’s constitution.

 

Information in the constitution on Directors isincluded in Item 6, “Directors, Senior Management and Employees”.

 

***General Meetings***

 

By a resolution of the Board, Amcor may call a generalmeeting of the Company. No shareholder may convene a general meeting exceptwhere entitled under the Corporations Act 2001 to do so. Where a generalmeeting has been called, notice of the meeting may be given in the form andmanner the Board thinks fit. All provisions of the constitution as to generalmeetings apply to any special meeting of any class of shareholders which may beheld under the operation of this constitution or the Corporations Act 2001.

 

The business of an annual general meeting is toconsider the accounts and reports required by the Corporations Act 2001 to belaid before the meeting, to elect Directors in the place of those retiringunder this constitution, when relevant, to appoint an auditor and to transactany other business which, under this constitution, is required to be transactedat any annual general meeting.

 

Three shareholders must be present to form a quorum.No business may be transacted at a meeting except the election of a Chairmanand the adjournment of the meeting unless a quorum is present.

 

***Votes of Shareholders***

 

Shareholders may vote at a meeting of the Company inperson, by proxy or attorney. Shareholders must vote on a show of hands unlessa poll is called. A poll may be called either before a vote is taken or beforeor immediately after the voting results on a show of hands are declared. A pollmay be demanded by a shareholder under the Corporations Act 2001 (and nototherwise) or by the Chairman.

 

***Powers of the Board***

 

The management and control of the business and affairsof Amcor are vested in the Board including raising or borrowing money,guaranteeing debts or obligations of any person, providing security for a debtand authorizing persons in whose favor debenture, mortgage or other security isexecuted to make calls on shareholders in respect of uncalled capital.

 

Except where a Director is restrained by theCorporations Act 2001, a Director may be present at a meeting of the Boardwhile the matter in which the Director has an interest is being considered andmay vote in respect of that matter.

 

As remuneration for services, each non-executiveDirector is to be paid out of the funds of the Company a sum determined by theBoard but the aggregate remuneration paid to all non-executive Directors in anyyear may not exceed an amount fixed by Amcor in general meeting.

 

***Dividends***

 

The Board determines that a dividend is payable andfixes the amount, time for payment and method of payment. The Board mayestablish and maintain one or more dividend plans under which shareholders mayelect to reinvest dividends by subscribing for shares in the capital of theCompany. The Board also determines the timing and amount of interim dividends.

 

The Board may retain any dividends in respect of whichAmcor has a lien or charge and may apply any retained dividends towardssatisfaction of the calls, instalments or sums owing in respect of which thelien or charge exists.

 

All unclaimed dividends may be invested or otherwisemade use of by the Board for the benefit of Amcor until claimed or otherwisedisposed of according to law.

 

51

----

 

***Preference Shares***

 

If Amcor at any time proposes to issue preferenceshares, the preference shares confer on the holders a right to receive out ofthe profits of the Company available for dividend a preferential dividend atthe rate or of the amount and on the basis determined by the Board at the timeof issue of the preference shares.

 

The preference shares are to confer on the holders theright on redemption and, in a winding up, to payment in cash in priority to anyother class of shares of the amount paid on each of the preference shares andthe amount equal to the aggregate of any dividends accrued but unpaid.

 

The preference shares do not confer on the holders anyfurther rights to participate in assets or profits of Amcor.

 

***Partial Takeovers***

 

Where a partial takeover offer is made, a contract toaccept the offer is prohibited until an Approving Resolution is passed. AnApproving Resolution is to be voted on at a meeting, convened and conducted byAmcor and is taken to have been passed if more than one-half of eligible votesare in favour of the resolution; otherwise it is rejected.

 

52

----

 

**ExchangeControls and Other Limitations Affecting Security Holders**

 

Under existing Australian legislation, the Reserve Bankof Australia does not inhibit the import and export of funds, and no permissionis required by Amcor for the movement of funds, into and out of Australia.  However, Amcor is required to lodge acurrency transfer report disclosing all transfers of A$10,000 or more out ofAustralia with the Australian Transaction Reports and Analysis Centre.

 

There are no limitations, either under the laws ofAustralia or under the Constitution of Amcor, on the right of non-residents tohold or vote Ordinary Shares.

 

The Foreign Acquisitions and Takeovers Act 1975 (the“FATA”) and the Corporations Act 2001 (the “Act”) each regulate acquisitionsgiving rise to ownership of substantial amounts of a company’s shares.  A summary of the main provisions of the FATAand the Act is given below.

 

(a)           ForeignAcquisitions and Takeovers Act 1975

 

The FATAprohibits:

 

(i)            a natural person not ordinarily resident in Australia;

 

(ii)           a corporation in whicheither a natural person not ordinarily resident in Australia or a foreigncorporation (as defined in the FATA) holds a substantial interest or acontrolling interest;

 

(iii)          a corporation in which twoor more persons, each of whom is either a natural person not ordinarilyresident in Australia or a foreign corporation, hold an aggregate substantialinterest or an aggregate controlling interest;

 

(iv)          the trustee of a trustestate in which a natural person not ordinarily resident in Australia or aforeign corporation holds a substantial interest; or

 

(v)           the trustee of a trustestate in which two or more persons, each of whom is either a natural personnot ordinarily resident in Australia or a foreign corporation, hold anaggregate substantial interest,

 

from enteringinto an agreement to acquire shares if, after the acquisition, such person orcorporation would hold a substantial shareholding or controlling interest in anAustralian corporation (other than an exempt corporation, the definition ofwhich excludes a corporation such as Amcor) without first applying in theprescribed form for approval thereof by the Australian Treasurer and suchapproval being granted or 40 days having elapsed after such application wasmade.

 

*Substantial Interests*

 

A person willbe deemed to hold a substantial interest in a corporation if the person aloneor together with any associates (as defined in the FATA), is in a position tocontrol not less than 15 percent of the voting power in the corporation orholds legal or equitable interests in not less than 15 percent of the issuedshares in that corporation. Two or more persons will be deemed to hold anaggregate substantial interest in a corporation if they, together with anyassociates, are in a position to control not less than 40 percent of the votingpower in the corporation or hold legal or equitable interests in not less than40 percent of the issued shares in that corporation.

 

*Controlling Interests*

 

A substantialinterest or aggregate substantial interest will be deemed a controllinginterest or aggregate controlling interest respectively, unless the Treasureris satisfied that, having regard to all circumstances, the person or persons,together with any associates (as defined), is not or are not in a position todetermine the policy of the corporation.

 

(b)           CorporationsAct 2001

 

The Actprohibits a person (including a corporation) from acquiring a relevant interestin issued voting shares in a listed company (or an unlisted company with morethan 50 members) if, after the acquisition, the voting power in the company ofthat person or any other person increases:

 

•        from 20% or below to more than 20%; or

 

•        from a starting point that is above 20% and below 90%.

 

53

----

 

*Relevant Interest*

 

A person isconsidered to have a relevant interest in a security if they (whether solely orjointly, directly or indirectly, whether enforceable or not and irrespective ofcertain restrictions and restraints on such powers and other matters and thingsspecified in the Act):

 

(i)            are the holder of thesecurity;

 

(ii)           have power to exercise, orcontrol the exercise of, a right to vote attached to the security; or

 

(iii)          havepower to dispose of, or control the exercise of, a power to dispose of, thesecurity.

 

The Act also deems that a person acquires a relevantinterest in voting shares in a company if:

 

•              securitiesin which the person already had a relevant interest become voting shares in thecompany; or

 

•              thereis an increase in the number of votes that may be cast on a poll attached tovoting shares that the person already had a relevant interest in.

 

In thesecircumstances, the acquisition of the relevant interest will occur when thesecurities become voting shares or the number of votes increases.

 

*Voting Power*

 

A person’svoting power in a company is determined as follows:

 
| person’s and associate’s votes |   | x 100 |
|------------------------------------------|--------|-------|
| total votes in company                   |   |

 

where:

 

•      ‘person’sand associate’s votes’ is the total number of votes attached to all the votingshares in the company (if any) that the person or an associate has a relevantinterest in; and

 

•      ‘totalvotes in the company’ is the total number of votes attached to all votingshares in the company.

 

The Actprovides that the number of votes attached to a voting share in a company isthe maximum number of votes that can be cast in respect of the share on a poll:

 

•      on the election of a director of the company (if the election ofdirectors is not determined by the casting of votes attached to voting shares);or

 

•      on the adoption or amendment of the company’s constitution (if theelection of directors is not determined by the casting of votes attached tovoting shares).

 

*Exceptions to the Prohibition*

 

Exceptions tothis prohibition are outlined in section 611 of the Act.  Some of the more significant exceptions are:

 

•      Section 611(item 1) permits a person who proposes to become entitled to more than 20percent of the voting shares of a company to make a formal takeover offer tothe shareholders of the target company to acquire their shares.  Separate takeover schemes are required foreach class of shares sought.

 

•      UnderSection 611 (item 2), a person (either alone or together with others) canacquire in excess of 20 percent of a company’s voting shares by an on-marketpurchase during a bid period.  The bidmust be for all the voting shares in the bid class and be unconditional or onlyconditional on the happening of an event which entitles the bid to be withdrawnunder sections 652C(1) or (2).

 

•      UnderSection 611 (item 7), a person (either alone or together with others) ispermitted to acquire shares in excess of 20 percent of a company’s issuedcapital where that company has agreed to the acquisition by a resolution passedat a general meeting at which no votes were cast in relation to the resolutionin respect of any shares held by the acquirer and their associates or thepersons (if any) from whom the acquisition is to be made and their associates.

 

•      UnderSection 611 (item 9), a person who has been entitled to 19 percent or moreof the target company’s voting power for a continuous period of not less thansix months is permitted to acquire voting power in the company which is no morethan 3 percentage points higher than they had 6 months before the acquisition.

 

54

----

 

**Taxation**

 

***Australian Taxation***

 

The following summary discusses the Australian taxconsequences of owning ADSs or Ordinary Shares.  The summary is not exhaustive and is based on law in force as ofthe date of this Annual Report.  Holdersof ADSs are advised to consult their own tax advisers as to the tax and stampduty consequences of their ownership of and dealings in ADSs and OrdinaryShares.

 

Under the current double taxation convention betweenAustralia and the United States, dividends paid by Amcor to a United Statesresident shareholder of Amcor, including an ADS holder, who is not deemed to bean Australian resident for tax purposes, and does not have a permanentestablishment in Australia or perform in Australia independent personalservices from a fixed base situated in Australia, will be subject to a maximumAustralian withholding tax of 15 percent of such gross dividend.

 

From July 1, 2003 the applicable rates ofdividend withholding tax are as follows:

 

•      0% - for80% or greater shareholders (down from 15%)

 

•      5% - for10% or greater shareholders (down from 15%)

 

•      15% forothers (no change)

 

To the extent that withholding tax is paid, this is afinal tax and no other Australian tax would be payable.

 

Dividends paid to non-residents of Australia will notattract Australian withholding tax to the extent that the dividend has been“franked”.  A dividend will be frankedto the extent that the corporation declaring the dividend has tax creditsavailable from the payment of Australian corporate tax and has declared thatthe dividend is so franked.

 

The Australian Government introduced a holding periodfor shares operative from July 1, 1997, such that franking credits will bedenied on dividends payable on shares, and distributions paid on an interest inshares where:

 

•        the taxpayer effectively holds ordinary shares (or similarinterests) for less than 45 days, or less than 90 days in the case ofpreference shares; and

 

•        during this period a dividend is payable on the shares, or adistribution is payable on the interest in the shares, so that the taxpayerwould be entitled to franking credits or the section 46 inter-corporatedividend rebate (or both) in respect of the dividend distribution.

 

The test will focus only on arrangements (shareinvestments and related hedges) which remove 70% or more of downside and upsiderisk in relation to the shares.

 

Dividends paid to United States residents which arenot franked (or are partly franked) will, subject to the comments below,attract withholding tax at the rates listed above on the unfranked amount.

 

With effect from July 1, 1994, unfrankeddividends paid to non-residents of Australia will, in certain circumstances, bewholly or partly exempt from Australian withholding tax.  Where the unfranked dividend is paid out ofprofits derived by Amcor from qualifying foreign dividends, withholding taxwill not be payable on any foreign dividend account (“FDA”) amount specified ina notice provided by Amcor to shareholders.

 

Since the introduction of the imputation system, 27dividend distributions have been made by Amcor, all of which have been at leastpartly franked.  Dividend distributions,paid in April 1995, October 1995, April 1996 andOctober 1996 were franked to 100%. The dividends paid in April 1997were franked to 70%. Dividends paid in October 1997 and April 1998were franked to 25% and those paid in October 1998 were franked to 35%.The dividends paid in April 1999, October 1999 and April 2000were franked to 20%. The dividend paid in October 2000 was franked to 35%and the dividends paid in April 2001, October 2001, March 2002,October 2002 and April 2003 were franked to 50%. The dividend paid inOctober 2003 was franked to 40%. Amcor has provided and will continue toprovide all shareholders with notices which specify the franked and unfrankedamount of each dividend and the amount (if any) of dividend withholding taxdeducted.

 

Since July 1, 1991 Amcor has been obliged todeduct tax at the highest marginal rate plus the Medicare Levy (currently48.5%) from unfranked dividends or interest paid to investors resident inAustralia who have not supplied the Company with a tax file number or exemptionform.  Collection of tax file numberinformation is authorized by and its use and disclosure is strictly regulatedby the Tax Laws and Privacy Act.

 

55

----

 

A United States citizen who is a resident ofAustralia, or a United States corporation which is a resident of Australia (byreason of carrying on business in Australia and having its voting power controlledby shareholders who are residents of Australia, or being managed or controlledin Australia) may be liable to pay Australian income tax in respect of theprofit or capital gain (if any) derived upon the disposal of ADSs or OrdinaryShares.  Under current Australian taxlaws, no tax is payable in respect of the disposal of ADSs or Ordinary Sharesheld by non-residents of Australia except:

 

(a)           if the ADSs or OrdinaryShares are trading stock of the holder or if an ordinary incident of theholder’s business is the sale of securities for a profit, or the profit arisesout of a profit making scheme (in certain circumstances) and, in any case, theprofit is sourced in Australia; or

 

(b)           if disposed of and the ADSsor Ordinary Shares beneficially owned by the non-resident or his associates, orthe non-resident together with his associates, at any time during the period offive years preceding the disposal represent 10 percent or more of the issuedshare capital of Amcor (excluding share capital carrying no right toparticipate beyond a specified amount in a distribution of profits or capital).

 

From October 1, 1999 any taxable unindexedcapital gain on ADSs or Ordinary Shares acquired on or after October 1,1999 and held for at least one year is reduced by half for individuals and byone third for superannuation funds. Individuals and superannuation funds whoacquired ADSs and Ordinary Shares before October 1, 1999 and hold them forat least one year can either calculate their taxable unindexed capital gain, asabove or choose to make an indexed capital gain being the whole of thedifference between the realisation price and the indexed cost base as atSeptember 30, 1999. Corporations do not benefit from such concessions andare disadvantaged by the removal of indexation.

 

Notwithstanding that the profit or gain upon thedisposal of the ADSs or Ordinary Shares is assessable in Australia in thecircumstances of (a) or (b) above, if the vendor is a resident of the UnitedStates, then depending on the circumstances of the case, relief from Australiantax may nevertheless be available under the current double taxation conventionreferred to above.

 

Effective from July 1, 2001 stamp duty onAustralian share transfers has been abolished. In addition, under currentAustralian tax law, no Australian State or Federal estate duty or otherinheritance taxes will be payable in respect of ADSs or Ordinary Shares uponthe death of a holder thereof, regardless of the holder’s domicile.  For capital gains purposes, the death of theholder will only produce a deemed disposal, if the ADSs or Ordinary Shares arebequeathed to a tax exempt person or if the deceased was an Australianresident, the ADS or Ordinary Shares are bequeathed to a non-resident, and theADS or Ordinary Shares did not fall within the meaning of a taxable Australianasset as referred to in paragraph (b) above. In all other circumstances, the liability for tax on any gain iseffectively transferred to the deceased’s legal representatives orbeneficiaries, subject to those matters referred to above.  Such deemed disposal or a disposalsubsequently by the beneficiary will have the consequences set out above.

 

***United States Federal Income Taxation***

 

The following discussion is a summary of the materialU.S. federal income tax consequences to you of the ownership and disposition ofthe Amcor ADSs and Ordinary Shares, but it does not purport to be acomprehensive description of all of the United States tax considerations of theownership and disposition of ADSs or Ordinary Shares.

 

The discussion is based on the tax laws of the UnitedStates, including the Internal Revenue Code of 1986, as amended, itslegislative history, existing and proposed regulations, published rulings andcourt decisions, and the tax laws of Australia, as well as the double taxationconvention between Australia and the United States, and a protocol thereto(collectively the “Treasury”), all as currently in effect and all subject tochange at any time, perhaps with retroactive effect. In addition, the discussionis based in part upon the representations of the Depositary and the assumptionthat each obligation provided for in the Deposit Agreement and any relateddocument will be performed in accordance with its terms.

 

You should consult your own tax adviser as to theUnited States, Australian, or other tax consequences of the ownership anddisposition of the Amcor ADSs or Ordinary Shares in your particularcircumstances.

 

The discussion relating to U.S. tax consequences onlyapplies to you if you hold your ADSs or Ordinary Shares as capital assets fortax purposes and you are not a member of a special class of holders subject tospecial rules, including a dealer in securities, a trader in securities thatelects to use a mark-to-market method of accounting for their securitiesholdings, a tax-exempt organization, a life insurance company, a person liablefor alternative minimum tax, a person that actually or constructively owns 10%or more of our voting stock, a person that holds

 

56

----

 

Ordinary Shares or ADSs as part of a hedging orstraddle or conversion transaction or a person whose functional currency is notthe U.S. dollar.

 

You are a U.S. holder if you are a beneficial owner ofOrdinary Shares or ADSs and you are: (i) a citizen or resident of the UnitedStates, (ii) a domestic corporation, (iii) an estate whose income is subject toUnited States federal income tax regardless of its source, or (iv) a trust if aUnited States court can exercise primary supervision over the trust’sadministration and one or more United States persons are authorized to controlall substantial decisions of the trust.

 

For U.S. federal income tax purposes if you hold ADRsevidencing ADSs, you will be treated as the owner of the underlying OrdinaryShares represented by those ADSs, and exchanges of Ordinary Shares for ADSs,and ADSs for Ordinary Shares, will not be subject to United States federalincome tax.

 

*Taxationof Dividends*

 

Subject to the passive foreign investment company(“PFIC”) rules discussed below, if you are a U.S. holder you must include inyour gross income the gross amount of any dividend (or other distribution,other than certain distributions in redemption of ADSs or Ordinary Shares ordistributions of our capital stock or rights to subscribe for our capitalstock) paid (before reduction for Australian withholding taxes) by us out ofour current or accumulated earnings and profits (as determined for UnitedStates federal income tax purposes). The dividend is ordinary income that you must include in income when youreceive the dividend, either actually or constructively, in the case ofOrdinary Shares, or when the depositary receives such dividend, in the case ofADSs. For 2003, dividends will be taxed at 15% for individuals with taxableincome in the top four brackets and 5% for those with taxable income in thelowest two brackets. The dividend will not be eligible for thedividends-received deduction generally allowed to United States corporations inrespect of dividends received from other United States corporations.Distributions in excess of current and accumulated earnings and profits, asdetermined for United States federal income tax purposes, will be treated as anon-taxable return of capital to the extent of your basis in the ADSs orOrdinary Shares and thereafter as capital gain.

 

The amount of the dividend distribution that you mustinclude in your income will be the U.S. dollar value of the Australian dollarpayments made, determined at the spot Australian dollar/U.S. dollar rate on thedate such dividend distribution is includible in your income, regardless ofwhether the payment is in fact converted into U.S. dollars.  Generally, any gain or loss resulting from currencyexchange fluctuations during the period from the date you include the dividendpayment in income to the date such payment is converted into U.S. dollars willbe treated as ordinary income or loss. Such gain or loss will generally be income or loss from sources withinthe United States for foreign tax credit limitation purposes.

 

Subject to certain limitations, the Australian taxwithheld in accordance with the Treasury and paid over to Australia will becreditable against the U.S. holder’s United States federal income taxliability. For foreign tax credit purposes, the dividend will be income fromsources outside the United States, but generally will be “passive income” or“financial services income” which is treated separately from other types ofincome for purposes of computing the foreign tax credit allowable to you.  No United States foreign tax credit will beallowed to U.S. holders of Ordinary Shares or ADSs in respect of any personalproperty or similar tax imposed by Australia (or any taxing authority thereofor therein).

 

Distributions of additional Ordinary Shares to U.S.holders with respect to their Ordinary Shares or ADSs that are made as part ofa pro rata distribution to all our shareholders generally will not be subjectto United States federal income tax.

 

*Taxationof Capital Gains*

 

Subject to the PFIC rules discussed below, if you area U.S. holder and you sell or otherwise dispose of your Ordinary Shares orADSs, you will recognize a gain or loss for United States federal income taxpurposes in an amount equal to the difference between the U.S. dollar value ofthe amount realized and your tax basis (determined in U.S. dollars) in suchOrdinary Shares or ADSs.  Generally suchgain or loss will be long-term capital gain or loss if your holding period forsuch Ordinary Shares or ADSs exceeds one year and any such gain or loss will beincome or loss from sources within the United States for foreign tax creditlimitation purposes. As a result of the Jobs and Growth Tax ReliefReconciliation Act of 2003, long-term capital gains of a non-corporate U.S.holder occurring after May 6, 2003 are subject to tax at 15% for thosewith taxable income in the top four brackets and 5% for those with taxableincome in the lowest two brackets.  Forsales or exchanges occurring prior to May 6, 2003, the maximum capitalgains rate is 20%. (10% for individuals in the 10% or 15% tax bracket).  However, for tax years beginning afterDecember 31, 2000, lower capital gain rates may apply depending on theholding period and

 

57

----

 

the U.S. individual holder’s tax bracket.  A lower capital gains rate of 18% (8% forindividuals in the 10% or 15% tax bracket) may be applied if the individualholds the asset more than five years.

 

*PFICRules*

 

We believe that our Ordinary Shares and ADSs shouldnot be treated as stock of a PFIC for United States federal income taxpurposes, but this conclusion is a factual determination made annually and thusmay be subject to change.  If we were tobe treated as a PFIC, unless a U.S. holder elects to be taxed annually on amark-to-market basis with respect to the Ordinary Shares or ADSs, gain realizedon the sale or other disposition of Ordinary Shares or ADSs would in generalnot be treated as capital gain, and a U.S. holder would be treated as if suchholder had realized such gain and certain “excess distributions” rateably overthe holder’s holding period for the Ordinary Shares or ADSs and would be taxedat the highest tax rate in effect for each such year to which the gain was allocated,together with an interest charge in respect of the tax attributable to eachsuch year.

 

**Documentson Display**

 

It is possible to read and copy documents referred toin the annual report on Form 20-F that have been filed with the SecuritiesExchange Commission (SEC) at the SEC’s public reference room located at 450Fifth Street, N.W., Washington DC, 20549. Please call the SEC at 1-800-SEC-0330for further information.

 

58

----

 

**ITEM 11****                         QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK**

 

The discussion below contains certain forward-lookingstatements. Amcor’s actual results could differ materially from thoseanticipated by those forward-looking statements due to a variety of factors,including those set forth under “Forward-Looking Statements”, “Risk Factors”and elsewhere in this annual report.

 

**FinancialInstruments**

 

Derivative financial instruments are not held or usedby Amcor for speculative or trading purposes. Our policy is to hedge allmaterial foreign exchange transactions by entering into forward foreignexchange contracts and currency swaps and to manage our exposure to movementsin interest rates by entering into interest rate swaps.

 

In order to control any exposure which may result fromnon-performance by counterparties, these contracts are only entered into withmajor banks with a minimum long term rating of A+ by Standard & Poor’s orA2 by Moody’s.  In addition, these banksmust be approved for use by the Amcor Limited Board, and specific internalguidelines have been established with regard to limits, dealing and settlementprocedures. The estimated credit risk exposure of Amcor is minimal.

 

**Interest Rate Risk**

 

Amcor is exposed to adverse movements in interestrates under various debt facilities. By monitoring global interest rates and,where appropriate, hedging interest rate exposures, Amcor seeks to manage itsinterest rate risk.

 

During 2002-03, as global interest rates generallyreduced marginally, Amcor’s ratio of fixed-rate debt to total debt increasedslightly - from 54% at June 30, 2002 to 55% at the end of June 2003.By maintaining a proportion of variable rate debt, Amcor achieved an averageinterest rate paid on all borrowings (excluding the coupon on PACRS) for 2002-03of 5.0% (5.5% in 2001-02).

 

Amcor enters into interest rate swap agreements,interest rate options and forward rate agreements to hedge interest rateexposures. Net receipts and payments under the interest rate swaps arerecognized as an adjustment to interest expense.

 

59

----

 

**InterestRate Risk Exposures**

 

Exposure to interest rate risk and the effectiveweighted interest rate for classes of financial assets and liabilities is setout below:

 
|                                        |   |                         |   | **Fixed interest maturing in:** |   |                    |   |                    |   |                        |   |
|---------------------------------------------|--------|------------------------------|--------|---------------------------------|--------|-------------------------|--------|-------------------------|--------|-----------------------------|--------|
|                                        |   | **Floating  interest  rate** |   | **1 year or  less**             |   | **Over  1 to 5  years** |   | **More  than 5  years** |   | **Non-  interest  Bearing** |   | **Total** |   | **Weighted  average  interest  rate** |   |
|                                        |   | **A$m**                      |   | **A$m**                         |   | **A$m**                 |   | **A$m**                 |   | **A$m**                     |   | **A$m** |   |   |   |
| **2002-03**                                 |   |                         |   |                            |   |                    |   |                    |   |                        |   |   |   |   |   |
|                                        |   |                         |   |                            |   |                    |   |                    |   |                        |   |   |   |   |   |
| Financial Assets                            |   |                         |   |                            |   |                    |   |                    |   |                        |   |   |   |   |   |
| Cash                                        |   | 141.5                        |   | —                          |   | —                  |   | —                  |   | —                      |   | 141.5 |   | 2.61 | % |
| Receivables                                 |   | 20.5                         |   | —                          |   | —                  |   | —                  |   | 1,565.6                     |   | 1,586.1 |   | 3.28 | % |
| Other financial assets                      |   | —                       |   | —                          |   | —                  |   | —                  |   | 21.5                        |   | 21.5 |   | — |   |
|                                        |   | 162.0                        |   | —                          |   | —                  |   | —                  |   | 1,587.1                     |   | 1,749.1 |   | 2.69 | % |
| Financial Liabilities                       |   |                         |   |                            |   |                    |   |                    |   |                        |   |   |   |   |   |
| Payables                                    |   | —                       |   | —                          |   | —                  |   | —                  |   | 1,525.7                     |   | 1,525.7 |   | — |   |
| Bank and other loans                        |   | 971.4                        |   | 9.7                             |   | 21.5                    |   | 0.4                     |   | 2.3                         |   | 1,005.3 |   | 3.66 | % |
| Commercial paper                            |   | 108.4                        |   | —                          |   | —                  |   | —                  |   | —                      |   | 108.4 |   | 2.65 | % |
| US $Notes                                   |   | —                       |   | —                          |   | —                  |   | 748.9                   |   | —                      |   | 748.9 |   | 5.83 | % |
| Leases                                      |   | 138.8                        |   | 1.5                             |   | 1.6                     |   | 8.5                     |   | —                      |   | 150.4 |   | 5.31 | % |
| Employee entitlements                       |   | —                       |   | —                          |   | 80.3                    |   | —                  |   | 263.2                       |   | 343.5 |   | 6.00 | % |
| Distributions payable                       |   |                         |   |                            |   |                    |   |                    |   | 8.8                         |   | 8.8 |   | — |   |
| Undated subordinated convertible securities |   | —                       |   | —                          |   | 446.2                   |   | —                  |   | —                      |   | 446.2 |   | 7.08 | % |
|                                        |   | 1,218.6                      |   | 11.2                            |   | 549.6                   |   | 757.8                   |   | 1,800.0                     |   | 3,891.0 |   | 5.00 | % |
| Interest rate swaps/FRAs                    |   |                         |   |                            |   |                    |   |                    |   |                        |   |   |   |   |   |
| A$                                          |   | (100.0                       | )      | —                          |   | 100.0                   |   | —                  |   | —                      |   | — |   | 6.75 | % |
| Euro                                        |   | (480.0                       | )      | —                          |   | 480.0                   |   | —                  |   | —                      |   | — |   | 4.81 | % |
| A$                                          |   | 480.0                        |   | —                          |   | (480.0                  | )      | —                  |   | —                      |   | — |   | (5.67 | )% |
|                                        |   | (100.0                       | )      | —                          |   | 100.0                   |   | —                  |   | —                      |   | — |   | 4.90 | % |
|                                        |   |                         |   |                            |   |                    |   |                    |   |                        |   |   |   |   |   |
| **2001-02**                                 |   |                         |   |                            |   |                    |   |                    |   |                        |   |   |   |   |   |
|                                        |   |                         |   |                            |   |                    |   |                    |   |                        |   |   |   |   |   |
| Financial Assets                            |   |                         |   |                            |   |                    |   |                    |   |                        |   |   |   |   |   |
| Cash                                        |   | 2,307.1                      |   | —                          |   | —                  |   | —                  |   | —                      |   | 2,307.1 |   | 3.03 | % |
| Receivables                                 |   | 17.9                         |   | —                          |   | —                  |   | —                  |   | 1,360.5                     |   | 1,378.4 |   | 4.53 | % |
| Other financial assets                      |   | —                       |   | —                          |   | —                  |   | —                  |   | 12.8                        |   | 12.8 |   | — |   |
|                                        |   | 2,325.0                      |   | —                          |   | —                  |   | —                  |   | 1,373.3                     |   | 3,698.3 |   | 3.04 | % |
| Financial Liabilities                       |   |                         |   |                            |   |                    |   |                    |   |                        |   |   |   |   |   |
| Payables                                    |   | —                       |   | —                          |   | —                  |   | —                  |   | 1,314.2                     |   | 1,314.2 |   | — |   |
| Bank and other loans                        |   | 839.4                        |   | 31.7                            |   | 187.4                   |   | 54.5                    |   | —                      |   | 1,113.0 |   | 4.15 | % |
| Commercial paper                            |   | 115.8                        |   | —                          |   | —                  |   | —                  |   | —                      |   | 115.8 |   | 2.08 | % |
| US $Notes                                   |   | —                       |   | 221.3                           |   | —                  |   | —                  |   | —                      |   | 221.3 |   | 6.75 | % |
| Leases                                      |   | 5.8                          |   | 12.1                            |   | 5.1                     |   | 34.0                    |   | —                      |   | 57.0 |   | 8.75 | % |
| Employee entitlements                       |   | —                       |   | —                          |   | 55.4                    |   | —                  |   | 133.0                       |   | 188.4 |   | 6.00 | % |
| Dividend payable                            |   |                         |   |                            |   |                    |   |                    |   | 123.0                       |   | 123.0 |   | — |   |
| Undated subordinated convertible securities |   | —                       |   | —                          |   | 543.1                   |   | —                  |   | —                      |   | 543.1 |   | 7.06 | % |
|                                        |   | 961.0                        |   | 265.1                           |   | 791.0                   |   | 88.5                    |   | 1,570.2                     |   | 3,675.8 |   | 5.21 | % |
| Interest rate swaps/FRAs                    |   |                         |   |                            |   |                    |   |                    |   |                        |   |   |   |   |   |
| A$                                          |   | (100.0                       | )      | —                          |   | 100.0                   |   | —                  |   | —                      |   | — |   | 6.75 | % |
| Euro                                        |   | (480.0                       | )      | —                          |   | 480.0                   |   | —                  |   | —                      |   | — |   | 4.81 | % |
| A$                                          |   | 480.0                        |   | —                          |   | (480.0                  | )      | —                  |   | —                      |   | — |   | (5.67 | )% |
| US$                                         |   | 221.3                        |   | (221.3                          | )      | —                  |   | —                  |   | —                      |   | — |   | (6.30 | )% |
| US$                                         |   | (132.8                       | )      | 132.8                           |   | —                  |   | —                  |   | —                      |   | — |   | 6.43 | % |
| Canadian$                                   |   | (58.1                        | )      | 58.1                            |   | —                  |   | —                  |   | —                      |   | — |   | 6.55 | % |
|                                        |   | (69.6                        | )      | (30.4                           | )      | 100.0                   |   | —                  |   | —                      |   | — |   | 5.08 | % |

 

**ForeignCurrency Exchange Rate Risk**

 

In relation to transactional foreign currencyexposures, Amcor policy is to hedge all material foreign currency exposuresthrough forward cover contracts as soon as a firm and irrevocable commitment isentered into or known. Gains/losses are deferred and recognised as assets orliabilities on the statement of financial position from the inception of thehedge contract, not when the specific purchase or sale occurs. At maturity, thecosts or gains are included in the measurement of the underlying transaction.

 

Accounts payable and borrowings include amountspayable in foreign currencies shown at their Australian dollar equivalents. Allmaterial foreign currency liabilities are either fully hedged or matched byequivalent assets in the same currencies, such assets representing a naturalhedge.

 

60

----

 

The following table sets out the gross value to bereceived under foreign currency contracts, the weighted average contractedexchange rates and the settlement periods of contracts outstanding as atJune 30:

 
|                    |   | **2003**                   |   | **2002**                   |   | **2003** |   | **2002** |   |
|-------------------------|--------|----------------------------|--------|----------------------------|--------|----------|--------|----------|--------|
|                    |   | **Weighted  Average Rate** |   | **Weighted  Average Rate** |   |     |   |     |   |
|                    |   |                       |   |                       |   | **A$m**  |   | **A$m**  |   |
| *Buy Contracts*         |   |                       |   |                       |   |     |   |     |   |
|                    |   |                       |   |                       |   |     |   |     |   |
| 0 –  12 months     |   |                       |   |                       |   |     |   |     |   |
| Canadian  Dollar        |   | 1.03                       |   | 0.90                       |   | 1.0      |   | 5.3      |   |
| Swiss  Franc            |   | 0.88                       |   | 0.85                       |   | 11.9     |   | 54.7     |   |
| Danish  Kroner          |   | 4.34                       |   | 4.27                       |   | 9.1      |   | 101.9    |   |
| European  Currency Unit |   | 0.58                       |   | 0.57                       |   | 198.4    |   | 20.7     |   |
| United  Kingdom Pound   |   | 0.40                       |   | 0.37                       |   | 44.7     |   | 25.7     |   |
| Japanese  Yen           |   | 73.61                      |   | 66.04                      |   | 0.8      |   | 0.4      |   |
| Norwegian  Krone        |   | 4.69                       |   | 4.26                       |   | 0.6      |   | 13.0     |   |
| New  Zealand Dollar     |   | 1.12                       |   | —                     |   | 4.9      |   | —   |   |
| Swedish  Krona          |   | 5.37                       |   | 5.24                       |   | 15.4     |   | 77.2     |   |
| Singapore  Dollar       |   | —                     |   | 1.00                       |   | —   |   | 0.1      |   |
| United  States Dollar   |   | 0.61                       |   | 0.55                       |   | 82.3     |   | 43.1     |   |
| More  than12 months     |   |                       |   |                       |   |     |   |     |   |
| European  Currency Unit |   | 0.55                       |   | —                     |   | 8.9      |   | —   |   |
| New  Zealand Dollar     |   | 1.30                       |   | 1.30                       |   | 77.2     |   | 77.2     |   |
| United  States Dollar   |   | 0.54                       |   | —                     |   | 1.4      |   | —   |   |
|                    |   |                       |   |                       |   |     |   |     |   |
| *Sell Contracts*        |   |                       |   |                       |   |     |   |     |   |
|                    |   |                       |   |                       |   |     |   |     |   |
| 0 –  12 months     |   |                       |   |                       |   |     |   |     |   |
| Swiss  Franc            |   | —                     |   | 0.84                       |   | —   |   | 111.2    |   |
| Danish  Kroner          |   | —                     |   | 4.27                       |   | —   |   | 158.8    |   |
| United  Kingdom Pound   |   | —                     |   | 0.36                       |   | —   |   | 64.6     |   |
| Norwegian  Krone        |   | —                     |   | 4.36                       |   | —   |   | 31.1     |   |
| New  Zealand Dollar     |   | 1.11                       |   | 1.22                       |   | 26.7     |   | 29.3     |   |
| Swedish  Krona          |   | —                     |   | 5.22                       |   | —   |   | 120.1    |   |
| United  States Dollar   |   | 0.62                       |   | 0.52                       |   | 2.8      |   | 12.0     |   |

 

**Credit Risk**

 

On Balance Sheet Financial Instruments

 

The maximum credit risk on Amcor’s financial assets,other than investments in shares, is generally the carrying amount of receivables,net of provisions for doubtful debts.

 

Amcor minimises its concentrations of credit risk byundertaking transactions with a large number of customers and counterparties invarious countries. There is no material exposure to any individual customer.

 

Derivative Financial Instruments

 

In order to control any exposure which may result fromnon-performance by counterparties, hedging contracts are only entered into withmajor banks with a minimum long-term credit rating of A- by Standard &Poor’s.  In addition, the Amcor LimitedBoard must approve these banks for use, and specific internal guidelines havebeen established with regard to limits, dealing and settlement procedures.

 

The credit risk exposure arising from the derivativefinancial instruments is the sum of all contracts with a positive replacementcost.  As at June 30, 2003 the sumof all contracts with a positive replacement cost was A$50.3 million comparedto A$30.9 million at June 30, 2002.

 

The maximum credit risk exposure on foreign currencycontracts is the full amount of the foreign currency Amcor pays when settlementoccurs, should the counterparty fail to pay the amount which it is committed topay us.

 

61

----

 

**Net Fair Values**

 

On Balance Sheet Financial Instruments

 

Instruments traded on organised markets are valued byreference to market prices prevailing at balance date.

 

The net fair value of other monetary financial assetsand financial liabilities approximates their carrying value.

 

The carrying amounts and net fair values of financialassets and liabilities as at June 30 are as follows:

 
|                                         |   | **Carrying  Amount****2003** |   | **Net Fair  Value****2003** |   | **Carrying  Amount****2002** |   | **Net Fair  Value****2002** |   |
|----------------------------------------------|--------|------------------------------|--------|-----------------------------|--------|------------------------------|--------|-----------------------------|--------|
|                                         |   | **A$m**                      |   | **A$m**                     |   | **A$m**                      |   | **A$m**                     |   |
| Financial  Assets                            |   |                         |   |                        |   |                         |   |                        |   |
|                                         |   |                         |   |                        |   |                         |   |                        |   |
| Cash                                         |   | 141.5                        |   | 141.5                       |   | 2,307.1                      |   | 2,307.1                     |   |
| Receivables                                  |   | 1,586.1                      |   | 1,586.1                     |   | 1,378.4                      |   | 1,378.4                     |   |
| Other  financial assets                      |   | 21.5                         |   | 21.5                        |   | 12.8                         |   | 12.8                        |   |
|                                         |   |                         |   |                        |   |                         |   |                        |   |
| Financial  Liabilities                       |   |                         |   |                        |   |                         |   |                        |   |
|                                         |   |                         |   |                        |   |                         |   |                        |   |
| Payable                                      |   | 1,525.7                      |   | 1,525.7                     |   | 1,314.2                      |   | 1,314.2                     |   |
| Bank  and other loans                        |   | 1,005.3                      |   | 1,005.3                     |   | 1,113.1                      |   | 1,113.1                     |   |
| Commercial  paper                            |   | 108.4                        |   | 108.4                       |   | 115.8                        |   | 115.8                       |   |
| US$  Notes                                   |   | 748.9                        |   | 748.9                       |   | 221.3                        |   | 228.2                       |   |
| Lease  liabilities                           |   | 150.4                        |   | 150.4                       |   | 57.0                         |   | 57.0                        |   |
| Employee  entitlements                       |   | 343.5                        |   | 343.5                       |   | 188.4                        |   | 188.4                       |   |
| Dividends/distributions  payable             |   | 8.8                          |   | 8.8                         |   | 123.0                        |   | 123.0                       |   |
| Undated  subordinated convertible securities |   | 446.2                        |   | 515.3                       |   | 543.1                        |   | 567.1                       |   |

 

The undated subordinated convertible securities arereadily traded in organised markets.

 

Derivative Financial Instruments

 

The valuation detailed reflects the estimated amountswhich Amcor expects to pay or receive to terminate the contracts or replace thecontracts at their current market rates as at reporting date. This is based onindependent market quotations and determined using standard valuationtechniques.

 

For forward foreign exchange contracts, the net fairvalue is taken to be the unrealised gain or loss at balance date calculated byreference to current market rates.

 

The net fair value of off balance sheet financialinstruments held as at June 30, 2002 are:

 

|                                |   | **2003** |   | **2002** |   |
|-------------------------------------|--------|----------|--------|----------|--------|
|                                |   | **A$m**  |   | **A$m**  |   |
|                                |   |     |   |     |   |
| Interest  rate swaps                |   | (19.8    | )      | (11.6    | )      |
| Cross  currency swaps               |   | 41.7     |   | 23.7     |   |
| Forward  foreign exchange contracts |   | 2.9      |   | 3.1      |   |
|                                |   |     |   |     |   |
| Net Gain/(Loss)                     |   | 24.8     |   | 15.2     |   |

 

An equivalent movement on the underlying transactionsoffsets the above net notional positions.

 

62

----

 
| **ITEM 13**         |   | **DEFAULTS DIVIDEND ARREARAGES AND DELINQUENCIES**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|---------------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|                |   | None.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|                |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| **ITEM 14**         |   | **MATERIAL MODIFICATIONS TO THE RIGHT OF SECURITY HOLDERS AND USE OF  PROCEEDS**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|                |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|                |   | None.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|                |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| **ITEM 15**         |   | **CONTROLS AND PROCEDURES**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|                |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|                |   | At the end of the period covered by this  Annual Report of Form 20-F, an evaluation was carried out under the supervision  and with the participation of Amcor’s management, including our Chief  Executive Officer and Chief Financial Officer, of the effectiveness of the  design and operation of our disclosure controls and procedures (as defined in  Rule 13a-14(c) under the Securities Exchange Act of 1934). Based upon that  evaluation, the Chief Executive Officer and Chief Financial Officer concluded  that the design and operation of these disclosure controls and procedures  were effective. No significant changes were made in our internal controls or  in other factors that could significantly affect these controls subsequent to  the date of their evaluation. |
|                |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| **ITEM 16**         |   | Reserved for future use.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|                |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| **ITEM 17 &18** |   | Financial Statements. See pages F-1  through F-87.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|                |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| **ITEM 19**         |   | Exhibits                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|                |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|                |   | 1.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | Constitution of Amcor Limited |
|                |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |
|                |   | 2.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | Certain instruments defining the rights  of holders of other long-term debt of the Company and its subsidiaries have  been omitted pursuant to instruction 2(b)(i) of Item 19 of Form 20-F. The  registrant hereby undertakes to furnish to the SEC, upon request, copies of  such instruments. |
|                |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |
|                |   | 4.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | Executive Remuneration Contract – P.R.  Sutton |
|                |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |
|                |   | 7.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | Calculation of Basic and Diluted Earnings  per Share |
|                |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |
|                |   | 8.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | List of Subsidiaries of Amcor Limited |
|                |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |
|                |   | 12                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | Rule 13a-14(a)/15d-14(a) Certifications |
|                |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | (a) | Certification of the Company’s Chief  Executive Officer |
|                |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | (b) | Certification of the Company’s Chief  Financial Officer |
|                |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |   |
|                |   | 13                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | Section 1350 Certifications |
|                |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | (a) | Certification of the Company’s Chief Executive  Officer |
|                |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | (b) | Certification of the Company’s Chief  Financial Officer |

 

63

----

 

Index to Financial Statements of Amcor Limited

 

Audited Financial Statements

 
| Report of Independent  Auditors                                                                             |   |   |
|-------------------------------------------------------------------------------------------------------------|--------|--------|
|                                                                                                        |   |   |
| Consolidated  Statements of Income for the years ended June 30, 2003, 2002 and 2001                    |   |   |
|                                                                                                        |   |   |
| Consolidated Balance Sheets  at June 30, 2003, and 2002                                                |   |   |
|                                                                                                        |   |   |
| Consolidated Statements of  Shareholders’ Equity for the years ended June 30, 2003, 2002 and 2001 |   |   |
|                                                                                                        |   |   |
| Consolidated  Statements of Cash Flows for the years ended June 30, 2003, 2002 and  2001               |   |   |
|                                                                                                        |   |   |
| Notes  to the Consolidated Financial Statements 2002-2003                                                   |   |   |

 

64

----

 

Pursuant to the requirements of Section 12 of theSecurities Exchange Act of 1934, the registrant certifies that it meets all ofthe requirements for filing on Form 20-F and has duly caused this annual reportto be signed on its behalf by the undersigned, thereunto duly authorized.

 

 
|                         |   | Amcor Limited     |
|------------------------------|--------|-------------------|
|                         |   | (Registrant)      |
|                         |   |              |
|                         |   |              |
|                         |   | /s/ Bert Guy      |
|                         |   | Bert Guy          |
|                         |   | Company Secretary |
|                         |   |              |
| Date: December 19, 2003 |   |              |

 

65

----

 

**REPORT OF INDEPENDENT AUDITORS**

 

To the members of AmcorLimited:

 

We have audited theaccompanying consolidated Balance Sheets of Amcor Limited and its subsidiarycompanies (the consolidated entity) as of June 30, 2003 and 2002, and therelated consolidated Statements of Income, Shareholders’ Equity and Cash Flowsfor each of the years in the three-year period ended June 30, 2003, allexpressed in Australian dollars.  Theseconsolidated financial statements are the responsibility of the consolidated entity’smanagement.  Our responsibility is toexpress an opinion on these consolidated financial statements based on ouraudits.

 

We conducted our audits inaccordance with auditing standards generally accepted in Australia and theUnited States of America.  Thosestandards require that we plan and perform the audit to obtain reasonableassurance about whether the financial statements are free of materialmisstatement. An audit includes examining, on a test basis, evidence supportingthe amounts and disclosures in the financial statements.  An audit also includes assessing theaccounting principles used and significant estimates made by management, aswell as evaluating the overall financial statement presentation. We believethat our audits provide a reasonable basis for our opinion.

 

In our opinion, theconsolidated financial statements referred to above present fairly, in allmaterial respects, the financial position of the consolidated entity at June30, 2003 and 2002 and the results of its operations and its cash flows for eachof the years in the three-year period ended June 30, 2003, in conformity withaccounting principles generally accepted in Australia.

 

Accounting principlesgenerally accepted in Australia vary in certain respects from accounting principlesgenerally accepted in the United States of America.  An explanation of the significant differences between the twosets of principles as they relate to the consolidated entity is presented inNote 35 to the consolidated financial statements. The application of the UnitedStates of America’s principles would have affected the determination ofconsolidated net income for each of the years in the three-year period endedJune 30, 2003, and the determination of shareholders’ equity at June 30, 2003 and2002 to the extent summarised in Note 35 to the consolidated financialstatements.

 
| /s/ KPMG              |   |
|-----------------------|--------|
|                  |
| KPMG                  |
| Chartered Accountants |
|                  |
|                  |
| Melbourne, Australia  |
|                  |
|                  |
| 21 August 2003        |

 

F - 1

----

 

**AMCOR LIMITED**

**CONSOLIDATEDSTATEMENTS OF INCOME**

**FOR THEYEARS ENDED JUNE 30**

 
|                                                                |   |      |   | **(in millions of A$)** |   |
|---------------------------------------------------------------------|--------|-----------|--------|-------------------------|--------|
|                                                                |   | **Notes** |   | **2003**                |   | **2002** |   | **2001** |   |
| Revenues                                                            |   |      |   |                    |   |   |   |   |   |
| Net sales                                                           |   |      |   | 10,709.9                |   | 7,472.4 |   | 5,652.9 |   |
| Other revenue                                                       |   | 2         |   | 248.1                   |   | 1,059.8 |   | 193.3 |   |
| Total revenue                                                       |   |      |   | 10,958.0                |   | 8,532.2 |   | 5,846.2 |   |
|                                                                |   |      |   |                    |   |   |   |   |   |
| Costs and expenses                                                  |   |      |   |                    |   |   |   |   |   |
| Costs of goods sold                                                 |   |      |   | (8,786.8                | )      | (6,053.4 | ) | (4,542.2 | ) |
| Selling, general and administrative                                 |   |      |   | (1,298.8                | )      | (1,047.8 | ) | (718.1 | ) |
| Research and development                                            |   |      |   | (44.8                   | )      | (36.0 | ) | (15.0 | ) |
| Other                                                               |   |      |   | (186.2                  | )      | (283.3 | ) | (19.7 | ) |
|                                                                |   |      |   |                    |   |   |   |   |   |
| Total costs and expenses                                            |   |      |   | (10,316.6               | )      | (7,420.5 | ) | (5,295.0 | ) |
| Interest expense                                                    |   |      |   | (152.8                  | )      | (130.5 | ) | (147.2 | ) |
|                                                                |   |      |   |                    |   |   |   |   |   |
| Operating profit before income tax                                  |   | 3         |   | 488.6                   |   | 981.2 |   | 404.0 |   |
|                                                                |   |      |   |                    |   |   |   |   |   |
| Income tax                                                          |   | 5         |   | (110.5                  | )      | (120.2 | ) | (118.2 | ) |
|                                                                |   |      |   |                    |   |   |   |   |   |
| Operating profit before minority interest                           |   |      |   | 378.1                   |   | 861.0 |   | 285.8 |   |
|                                                                |   |      |   |                    |   |   |   |   |   |
| Minority interest in operating profit after tax                     |   |      |   | (16.8                   | )      | (9.3 | ) | (3.4 | ) |
|                                                                |   |      |   |                    |   |   |   |   |   |
| Net operating profit attributable to members of the Holding Company |   |      |   | 361.3                   |   | 851.7 |   | 282.4 |   |

 

----

 
|                                                                                                |   | **(in millions of A$)** |   |
|-----------------------------------------------------------------------------------------------------|--------|-------------------------|--------|
|                                                                                                |   | **2003**                |   | **2002** |   | **2001** |   |
| **Earnings per share  calculation**                                                                 |   |                    |   |   |   |   |   |
|                                                                                                |   |                    |   |   |   |   |   |
| Net operating profitafter  significant items (after convertible reset security distribution)        |   | 309.0                   |   | 815.3 |   | 279.4 |   |
|                                                                                                |   |                    |   |   |   |   |   |
| Significant items after tax                                                                         |   | 70.1                    |   | (534.8 | ) | (41.3 | ) |
| Net operating profit before significant items                                                       |   | 379.1                   |   | 280.5 |   | 238.1 |   |
|                                                                                                |   |                    |   |   |   |   |   |
| After tax cost of interest on convertible securities                                                |   | 6.0                     |   | 28.1 |   | 25.9 |   |
|                                                                                                |   |                    |   |   |   |   |   |
| After tax cost of convertible reset security distribution                                           |   | —                  |   | 25.5 |   | — |   |
| Diluted operating profit before significant items                                                   |   | 385.1                   |   | 334.1 |   | 264.0 |   |
|                                                                                                |   |                    |   |   |   |   |   |
| Diluted operating profit after significant items (including after tax  cost of dilutive securities) |   | 315.0                   |   | 868.9 |   | 305.3 |   |
|                                                                                                |   |                    |   |   |   |   |   |
| **Reconciliation of average  number of shares**                                                     |   |                    |   |   |   |   |   |
|                                                                                                |   |                    |   |   |   |   |   |
| Basic average number of shares                                                                      |   | 835.2                   |   | 666.5 |   | 627.7 |   |
|                                                                                                |   |                    |   |   |   |   |   |
| Impact of dilutive securities                                                                       |   | 22.2                    |   | 123.3 |   | 73.5 |   |
| Dilutive average number of shares                                                                   |   | 857.4                   |   | 789.8 |   | 701.2 |   |
|                                                                                                |   |                    |   |   |   |   |   |
| Basic earnings per share:                                                                           |   |                    |   |   |   |   |   |
| • before  significant items (cents)                                                            |   | 45.4                    |   | 42.1 |   | 37.9 |   |
| • after  significant items (cents)                                                             |   | 37.0                    |   | 122.3 |   | 44.5 |   |
|                                                                                                |   |                    |   |   |   |   |   |
| Diluted earnings per share:                                                                         |   |                    |   |   |   |   |   |
| • before  significant items (cents)                                                            |   | 44.9                    |   | 42.3 |   | 37.7 |   |
| • after  significant items (cents)                                                             |   | 36.7                    |   | 110.0 |   | 43.5 |   |
|                                                                                                |   |                    |   |   |   |   |   |
| Dividends per ordinary share (cents)                                                                |   |                    |   |   |   |   |   |
| • Interim                                                                                      |   | 15.0                    |   | 14.0 |   | 14.0 |   |
| • Final                                                                                        |   | 15.0                    |   | 14.0 |   | 14.0 |   |

 

Excluded from the computation of diluted earnings per share above is thefollowing table of potential common shares:

 
|                           |   | **(in millions)** | ** ** |
|--------------------------------|--------|-------------------|------------|
| Potential common shares (1)    |   | 128.0             |       | — |   | — |   |
| Options over common shares (2) |   | —            |       | 2.0 |   | 1.3 |   |
| Partly paid common shares (3)  |   | —            |       | — |   | 2.7 |   |
|                                |        |                   |            |  |  |  |  |  |

 

----

(2)          The 7.25% Undated SubordinatedConvertible Unsecured Notes, the 6.5% Undated Subordinated ConvertibleUnsecured Notes and the Perpetual Amcor Convertible Reset Securities (PACRS)are considered to be potential common stock and have been included in thecomputation of diluted earnings per share to the extent they are dilutive.

 

(3)          Options over common shares havebeen included in the computation of diluted earnings per share when the averagemarket price of common shares exceeds their exercise price.

 

(4)          Partly paid common shares, notentitled to receipt of dividends, are treated as call options in thecomputation of diluted earnings per share under the treasury stock methodology,when the average market price of common shares exceed their exercise price.

 

----

 

**AMCORLIMITED**

**CONSOLIDATED BALANCE SHEETS**

**AT JUNE 30**

 
|                          |   | **(in millions of A$)** |   |
|-------------------------------|--------|-------------------------|--------|
|                          |   | **Notes**               |   | **2003** |   | **2002** |   |
|                          |   |                    |   |   |   |   |   |
| Current assets                |   |                    |   |   |   |   |   |
|                          |   |                    |   |   |   |   |   |
| Cash and deposits             |   | 6                       |   | 162.0 |   | 2,325.0 |   |
| Accounts receivable           |   | 7                       |   | 1,399.3 |   | 1,263.8 |   |
| Inventories                   |   | 8                       |   | 1,284.0 |   | 945.0 |   |
| Prepaid expenses              |   |                    |   | 105.2 |   | 57.3 |   |
|                          |   |                    |   | 2,950.5 |   | 4,591.1 |   |
| Non-Current assets            |   |                    |   |   |   |   |   |
|                          |   |                    |   |   |   |   |   |
| Accounts receivable           |   | 9                       |   | 61.1 |   | 39.4 |   |
| Investments                   |   | 10                      |   | 21.5 |   | 12.8 |   |
| Property, plant and equipment |   | 11                      |   | 4,295.6 |   | 3,182.8 |   |
| Intangible assets             |   | 12                      |   | 1,956.9 |   | 717.8 |   |
| Other                         |   | 13                      |   | 276.7 |   | 298.1 |   |
|                          |   |                    |   | 6,611.8 |   | 4,250.9 |   |
|                          |   |                    |   |   |   |   |   |
| TOTAL ASSETS                  |   |                    |   | 9,562.3 |   | 8,842.0 |   |

 

----

 
|                                                                                                                  |   | **(in millions of A$)** |   |
|-----------------------------------------------------------------------------------------------------------------------|--------|-------------------------|--------|
|                                                                                                                  |   | **Notes**               |   | **2003** |   | **2002** |   |
| Current liabilities                                                                                                   |   |                    |   |   |   |   |   |
|                                                                                                                  |   |                    |   |   |   |   |   |
| Accounts payable                                                                                                      |   | 14                      |   | 1,646.0 |   | 1,307.3 |   |
| Bank and other borrowings                                                                                             |   | 15                      |   | 869.9 |   | 349.8 |   |
| Other liabilities and provisions                                                                                      |   | 16                      |   | 509.8 |   | 471.7 |   |
|                                                                                                                  |   |                    |   | 3,025.7 |   | 2,128.8 |   |
|                                                                                                                  |   |                    |   |   |   |   |   |
| Non-Current liabilities                                                                                               |   |                    |   |   |   |   |   |
|                                                                                                                  |   |                    |   |   |   |   |   |
| Bank and other borrowings                                                                                             |   | 17                      |   | 992.7 |   | 1,100.3 |   |
| Other liabilities and provisions                                                                                      |   | 18                      |   | 461.9 |   | 502.9 |   |
| Minority shareholders’ interest in subsidiary companies                                                          |   |                    |   | 196.0 |   | 172.2 |   |
| Undated subordinated convertible securities                                                                           |   | 19                      |   | 446.2 |   | 543.1 |   |
|                                                                                                                  |   |                    |   | 2,096.8 |   | 2,318.5 |   |
| TOTAL LIABILITIES                                                                                                     |   |                    |   | 5,122.5 |   | 4,447.3 |   |
|                                                                                                                  |   |                    |   |   |   |   |   |
| Shareholders’ equity                                                                                             |   |                    |   |   |   |   |   |
|                                                                                                                  |   |                    |   |   |   |   |   |
| Issued fully and partly paid ordinary shares and convertible reset  securities – 856,589,964 (2002: 831,607,254) |   | 20                      |   | 3,135.3 |   | 2,972.8 |   |
| Reserves                                                                                                              |   |                    |   | (210.8 | ) | 73.3 |   |
| Retained profits                                                                                                      |   |                    |   | 1,515.3 |   | 1,348.6 |   |
|                                                                                                                  |   |                    |   |   |   |   |   |
| Shareholders’ equity attributable to members of the Holding Company                                              |   |                    |   | 4,439.8 |   | 4,394.7 |   |
| TOTAL LIABILITIES & SHAREHOLDERS’ EQUITY                                                                     |   |                    |   | 9,562.3 |   | 8,842.0 |   |

 

----

 

**AMCOR LIMITED**

**CONSOLIDATED STATEMENTS OF**

**SHAREHOLDERS’EQUITY**

**FOR THE YEARS ENDED JUNE 30**

 
|                                                                           |   | **(in millions of A$)** |   |
|--------------------------------------------------------------------------------|--------|-------------------------|--------|
|                                                                           |   | **2003**                |   | **2002** |   | **2001** |   |
| ISSUED FULLY AND PARTLY PAID ORDINARY SHARES AND CONVERTIBLE RESET  SECURITIES |   |                    |   |   |   |   |   |
|                                                                           |   |                    |   |   |   |   |   |
| Opening balance                                                                |   | 2,972.8                 |   | 1,401.6 |   | 971.9 |   |
|                                                                           |   |                    |   |   |   |   |   |
| Issue of convertible reset securities                                          |   | —                  |   | 207.4 |   | 389.2 |   |
|                                                                           |   |                    |   |   |   |   |   |
| Issue of shares to employees in lieu of bonus payments                         |   | 2.3                     |   | 1.4 |   | — |   |
|                                                                           |   |                    |   |   |   |   |   |
| Employee share/option plan                                                     |   | 28.3                    |   | 23.4 |   | 7.6 |   |
|                                                                           |   |                    |   |   |   |   |   |
| Calls on partly-paid shares                                                    |   | 4.6                     |   | 6.7 |   | 10.2 |   |
|                                                                           |   |                    |   |   |   |   |   |
| Dividend Reinvestment Plan                                                     |   | 112.7                   |   | 134.9 |   | 33.6 |   |
|                                                                           |   |                    |   |   |   |   |   |
| Transaction costs arising on the PaperlinX demerger                            |   | —                  |   | — |   | (0.7 | ) |
|                                                                           |   |                    |   |   |   |   |   |
| Share buy-back                                                                 |   | —                  |   | — |   | (6.7 | ) |
|                                                                           |   |                    |   |   |   |   |   |
| Costs of share buy-back/employee share plan                                    |   | (3.7                    | )      | (3.6 | ) | (3.4 | ) |
|                                                                           |   |                    |   |   |   |   |   |
| Conversion from partly paid to fully paid shares                               |   | —                  |   | — |   | (0.1 | ) |
|                                                                           |   |                    |   |   |   |   |   |
| Conversion of convertible securities                                           |   | 34.4                    |   | 0.1 |   | — |   |
|                                                                           |   |                    |   |   |   |   |   |
| Institutional equity placement (net of transaction costs)                      |   | (16.1                   | )      | 835.4 |   | — |   |
|                                                                           |   |                    |   |   |   |   |   |
| Retail share offer                                                             |   | —                  |   | 365.5 |   | — |   |
|                                                                           |   |                    |   |   |   |   |   |
| TOTAL FULLY AND PARTLY PAID ORDINARY SHARES AND CONVERTIBLE RESET  SECURITIES  |   | 3,135.3                 |   | 2,972.8 |   | 1,401.6 |   |

 

----

 
|                                                                                         |   | **(in millions of A$)** |   |
|----------------------------------------------------------------------------------------------|--------|-------------------------|--------|
|                                                                                         |   | **2003**                |   | **2002** |   | **2001** |   |
| RETAINED PROFITS                                                                             |   |                    |   |   |   |   |   |
|                                                                                         |   |                    |   |   |   |   |   |
| Retained profits at beginning of period                                                      |   | 1,348.6                 |   | 726.4 |   | 513.1 |   |
|                                                                                         |   |                    |   |   |   |   |   |
| Adjustment to opening retained profits on application of:                                    |   |                    |   |   |   |   |   |
| •  Revised AASB 1028 ‘Employee  Benefits’                                |   | (1.5                    | )      | — |   | — |   |
| •  AASB 1044 ‘Provisions, Contingent  Liabilities and Contingent Assets’ |   | 101.5                   |   | — |   | — |   |
|                                                                                         |   |                    |   |   |   |   |   |
| Aggregate of amounts transferred from reserves                                               |   | (1.5                    | )      | 13.1 |   | 110.0 |   |
|                                                                                         |   |                    |   |   |   |   |   |
| Net profit/(loss) attributable to members of the Holding Company                             |   | 361.3                   |   | 851.7 |   | 282.4 |   |
|                                                                                         |   |                    |   |   |   |   |   |
| Final dividend                                                                               |   | (115.5                  | )      | (115.2 | ) | (88.7 | ) |
|                                                                                         |   |                    |   |   |   |   |   |
| Interim dividend                                                                             |   | (125.3                  | )      | (91.0 | ) | (87.4 | ) |
|                                                                                         |   |                    |   |   |   |   |   |
| Distribution paid on convertible reset securities                                            |   | (43.6                   | )      | (28.6 | ) | — |   |
|                                                                                         |   |                    |   |   |   |   |   |
| Distribution accrued on convertible reset securities                                         |   | (8.7                    | )      | (7.8 | ) | (3.0 | ) |
|                                                                                         |   |                    |   |   |   |   |   |
| Retained profits at end of period                                                            |   | 1,515.3                 |   | 1,348.6 |   | 726.4 |   |
|                                                                                         |   |                    |   |   |   |   |   |
| Made up of:                                                                                  |   |                    |   |   |   |   |   |
| Retained Profits – Consolidated Entity                                                  |   | 1,515.3                 |   | 1,348.6 |   | 715.8 |   |
| Retained Profits – Associates                                                           |   | —                  |   | — |   | 10.6 |   |
|                                                                                         |   | **1,515.3**             |   | **1,348.6** | ** ** | **726.4** |   |

 

----

 
|                                                                                                  |   | **(in millions of A$)** |   |
|-------------------------------------------------------------------------------------------------------|--------|-------------------------|--------|
|                                                                                                  |   | **2003**                |   | **2002** |   | **2001** |   |
| ASSET REVALUATION RESERVE                                                                             |   |                    |   |   |   |   |   |
|                                                                                                  |   |                    |   |   |   |   |   |
| Opening balance                                                                                       |   | 144.4                   |   | 140.1 |   | 250.6 |   |
| Adjustment/revaluation of non-current assets                                                          |   | —                  |   | (2.3 | ) | (0.5 | ) |
| Transfer (to)/from retained profits                                                                   |   | —                  |   | 6.6 |   | (110.0 | ) |
| Closing balance                                                                                       |   | 144.4                   |   | 144.4 |   | 140.1 |   |
| EXCHANGE FLUCTUATIONS RESERVE                                                                         |   |                    |   |   |   |   |   |
|                                                                                                  |   |                    |   |   |   |   |   |
| Opening balance                                                                                       |   | (71.1                   | )      | 89.4 |   | 34.3 |   |
| Currency translation adjustments                                                                      |   | (329.3                  | )      | (59.0 | ) | 55.1 |   |
| Currency translation adjustments on undated subordinated convertible  securities (before income tax)  |   | 62.4                    |   | (116.9 | ) | — |   |
| Income tax effect of currency translation adjustments on undated  subordinated convertible securities |   | (18.7                   | )      | 35.1 |   | — |   |
| Transfer to retained profits                                                                          |   | 1.5                     |   | (19.7 | ) | — |   |
| Closing balance                                                                                       |   | (355.2                  | )      | (71.1 | ) | 89.4 |   |
| EQUITY SHARE OF ASSOCIATES RESERVES                                                                   |   |                    |   |   |   |   |   |
|                                                                                                  |   |                    |   |   |   |   |   |
| Opening balance                                                                                       |   | —                  |   | 3.0 |   | 3.2 |   |
| Increments/(decrements)                                                                               |   | —                  |   | (3.0 | ) | (0.2 | ) |
| Closing balance                                                                                       |   | —                  |   | — |   | 3.0 |   |
| TOTAL RESERVES                                                                                        |   | (210.8                  | )      | 73.3 |   | 232.5 |   |
| TOTAL SHAREHOLDERS’ EQUITY ATTRIBUTABLE TO MEMBERS OF THE HOLDING  COMPANY                       |   | 4,439.8                 |   | 4,394.7 |   | 2,360.5 |   |

 

----

 

**AMCOR LIMITED**

**CONSOLIDATED STATEMENTS OFCASH FLOWS**

**FOR THE YEARS ENDED JUNE 30**

 
|                                                                               |   | **(in millions of A$)** |   |
|------------------------------------------------------------------------------------|--------|-------------------------|--------|
|                                                                               |   | **2003**                |   | **2002** |   | **2001** |   |
| CASH FLOWS FROM OPERATING ACTIVITIES                                               |   |                    |   |   |   |   |   |
| Receipts from customers                                                            |   | 10,514.4                |   | 7,714.7 |   | 5,823.5 |   |
| Payments to suppliers and employees                                                |   | (9,471.4                | )      | (6,725.0 | ) | (5,282.6 | ) |
| Dividends received                                                                 |   | 1.0                     |   | 49.1 |   | 46.4 |   |
| Interest received                                                                  |   | 9.6                     |   | 17.3 |   | 11.2 |   |
| Borrowing costs paid                                                               |   | (155.6                  | )      | (137.8 | ) | (158.6 | ) |
| Income taxes paid                                                                  |   | (86.6                   | )      | (59.9 | ) | (83.6 | ) |
| Other income received                                                              |   | 63.3                    |   | 42.3 |   | 59.4 |   |
| NET CASH FROM OPERATING ACTIVITIES (1)                                             |   | 874.7                   |   | 900.7 |   | 415.7 |   |
| CASH FLOWS FROM INVESTING ACTIVITIES                                               |   |                    |   |   |   |   |   |
| Loans to associated companies                                                      |   | —                  |   | (11.8 | ) | (2.7 | ) |
| Loans repaid by associated companies and other persons                             |   | —                  |   | 10.8 |   | 1.2 |   |
| Acquisition of:                                                                    |   |                    |   |   |   |   |   |
| Controlled entities and businesses                                                 |   | (2,857.9                | )      | (195.4 | ) | (662.8 | ) |
| Property, plant and equipment                                                      |   | (890.1                  | )      | (351.0 | ) | (288.7 | ) |
| Additional payments for controlled entities                                        |   | —                  |   | (175.5 | ) | — |   |
| Proceeds on disposal of:                                                           |   |                    |   |   |   |   |   |
| Controlled entities and businesses (net of cash disposed)                          |   | 186.2                   |   | 9.6 |   | (7.0 | ) |
| Equity accounted investments                                                       |   | —                  |   | 775.0 |   | (0.3 | ) |
| Property, plant and equipment                                                      |   | 57.9                    |   | 207.1 |   | 26.1 |   |
| NET CASH FROM INVESTING ACTIVITIES                                                 |   | (3,503.9                | )      | 268.8 |   | (934.2 | ) |
| CASH FLOWS FROM FINANCING ACTIVITIES                                               |   |                    |   |   |   |   |   |
| Dividends and other distributions paid                                             |   | (193.0                  | )      | (211.3 | ) | (170.5 | ) |
| Payments for share buyback scheme                                                  |   | —                  |   | — |   | (6.7 | ) |
| Proceeds from share issues, convertible securities and call on  partly-paid shares |   | 27.8                    |   | 1,602.3 |   | 398.0 |   |
| Loans from associated companies and other persons                                  |   | —                  |   | — |   | 10.5 |   |
| Proceeds from borrowings                                                           |   | 6,752.4                 |   | 3,651.5 |   | 758.9 |   |
| Repayment of borrowings                                                            |   | (6,146.4                | )      | (4,217.5 | ) | (374.8 | ) |
| Principal lease repayments                                                         |   | (43.1                   | )      | (15.1 | ) | (7.1 | ) |
| NET CASH FROM FINANCING ACTIVITIES                                                 |   | 397.7                   |   | 809.9 |   | 608.3 |   |
| NET (DECREASE)/INCREASE IN CASH HELD                                               |   | (2,231.5                | )      | 1,979.4 |   | 89.8 |   |
| CASH AT THE BEGINNING OF THE FINANCIAL YEAR                                        |   | 2,287.4                 |   | 314.0 |   | 210.9 |   |
| Exchange rate changes on foreign currency cash balances                            |   | (9.8                    | )      | (6.0 | ) | 13.3 |   |
| CASH AT THE END OF THE FINANCIAL YEAR (2)                                          |   | 46.1                    |   | 2,287.4 |   | 314.0 |   |

 

----

 
|   |                                                                                                |   | **(in millions of A$)** |   |
|--------|-----------------------------------------------------------------------------------------------------|--------|-------------------------|--------|
|   |                                                                                                |   | **2003**                |   | **2002** |   | **2001** |   |
| (1)    | RECONCILIATION OF OPERATING PROFIT AFTER TAX TO NET  CASH PROVIDED BY OPERATING ACTIVITIES          |   |                    |   |   |   |   |   |
|   |                                                                                                |   |                    |   |   |   |   |   |
|   | OPERATING PROFIT AFTER INCOME TAX                                                                   |   | 378.1                   |   | 861.0 |   | 285.8 |   |
|   | Depreciation of property, plant and equipment                                                       |   | 453.5                   |   | 278.2 |   | 191.8 |   |
|   | Amortization of leased assets                                                                       |   | 14.9                    |   | 8.4 |   | 6.5 |   |
|   | Amortization of goodwill                                                                            |   | 138.8                   |   | 54.5 |   | 42.0 |   |
|   | Interest capitalized                                                                                |   | (0.3                    | )      | (0.8 | ) | (2.2 | ) |
|   | (Profit)/loss on disposal of non-current assets                                                     |   | (13.3                   | )      | (9.0 | ) | (8.4 | ) |
|   | (Profit)/loss on disposal of business                                                               |   | (6.1                    | )      | 18.6 |   | 24.2 |   |
|   | (Profit)/loss on disposal of investment                                                             |   | (1.5                    | )      | (553.4 | ) | (61.2 | ) |
|   | Increase/(decrease) in current and deferred taxes                                                   |   | 3.3                     |   | 60.3 |   | 34.6 |   |
|   | Increase/(decrease) in provisions                                                                   |   | (15.1                   | )      | 8.3 |   | 14.8 |   |
|   | (Increase)/decrease in sundry assets                                                                |   | (25.3                   | )      | — |   | — |   |
|   | Non-cash significant item                                                                           |   | 37.5                    |   | — |   | — |   |
|   | Less share of associate companies’ net profits after adding back  dividends received           |   | —                  |   | (0.3 | ) | (2.0 | ) |
|   |                                                                                                |   |                    |   |   |   |   |   |
|   | CASH FLOW FROM OPERATIONS BEFORE CHANGES IN ASSETS AND LIABILITIES                                  |   | 964.5                   |   | 725.8 |   | 525.9 |   |
|   |                                                                                                |   |                    |   |   |   |   |   |
|   | Changes in assets and liabilities excluding acquisitions/disposals of  subsidiaries and businesses: |   |                    |   |   |   |   |   |
|   |                                                                                                |   |                    |   |   |   |   |   |
|   | (Increase)/decrease in accounts receivable and prepaid expenses                                     |   | 113.9                   |   | 60.5 |   | (45.0 | ) |
|   | (Increase)/decrease in inventories                                                                  |   | (23.3                   | )      | 90.6 |   | (6.3 | ) |
|   | Increase/(decrease) in accounts payable                                                             |   | (180.4                  | )      | 23.8 |   | (58.9 | ) |
|   | NET CASH FROM OPERATING ACTIVITIES                                                                  |   | 874.7                   |   | 900.7 |   | 415.7 |   |

 
| (2)    | RECONCILIATION OF CASH                                                                                                                                                                                                                                                                                                                 |   |   |   |   |   |   |   |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|
|   | For the purposes of the  Statements of Cash Flows, cash includes cash on hand and at bank and  short-term money market investments, net of outstanding bank overdrafts.  Cash as at the end of the financial year  as shown in the Statements of Cash Flows is reconciled to the related items  in the Balance Sheets as follows: |

 
|   | Cash and deposits – refer Note 6                                         |   | 141.5  |   | 2,307.1 |   | 322.6  |   |
|--------|-------------------------------------------------------------------------------|--------|--------|--------|---------|--------|--------|--------|
|   | Short-term deposits – refer Note 6                                       |   | 20.5   |   | 17.9    |   | 17.5   |   |
|   | Bank overdrafts – refer Note 15                                          |   | (115.9 | )      | (37.6   | )      | (26.1  | )      |
|   |                                                                          |   | 46.1   |   | 2,287.4 |   | 314.0  |   |
|   |                                                                          |   |   |   |    |   |   |   |
| (3)    | NON-CASH FINANCING ACTIVITIES                                                 |   |   |   |    |   |   |   |
|   | Capital lease obligations incurred by entering into leases for new  equipment |   | 136.0  |   | 0.2     |   | 1.6    |   |

 

----

 

**AMCOR LIMITED**

**NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS2002-2003**

 

**GENERAL**

 

Amcor Limited is a dedicatedglobal packaging company with 77% of total sales and 74% of total assetsoutside Australasia.

 

**Note 1****                   ****ACCOUNTING POLICIES**

 

The significant accountingpolicies which have been adopted by Amcor Limited and its controlled entities(“the consolidated entity”) in the preparation of this financial report are:

 

**(1)****                          ****Accounting Standards**

 

The consolidated entityadopts the currently applicable Accounting Standards and disclosurerequirements of the professional accounting bodies in Australia.

 

**(2)****                          ****Basis of Preparation**

 

The financial report of theconsolidated entity is a general purpose financial report prepared inaccordance with Accounting Standards, Urgent Issues Group Consensus Views,other authoritative pronouncements of the Australian Accounting Standards Boardand the Corporations Act 2001.

 

The financial statements havebeen prepared on the basis of historical costs and, except where stated, do nottake into account changing money values or current valuations of non-currentassets.

 

The preparation of thefinancial statements involves management estimates.

 

These accounting policieshave been consistently applied by each entity in the consolidated entity and,except where there is a change in accounting policy, are consistent with thoseof the previous year.

 

**(3)****                          ****Consolidated Financial Statements**

 

The consolidated financialstatements comprise the financial statements of the company, being the parententity, and its controlled entities in accordance with Accounting Standard AASB1024 ‘Consolidated Accounts’.  The financialstatements of controlled entities are included in the consolidated financialstatements from the date control commences until the date control ceases.

 

In preparing the financialstatements all balances and transactions between entities included in theconsolidated entity have been eliminated.

 

**(4)****                          ****Revenue Recognition**

** **

**Sale of Goods**

 

Sales revenue comprisesrevenue earned (net of returns, discounts and allowances) from the provision ofproducts to entities outside the consolidated entity.  Sales revenue is recognized when control of the goods passes tothe customer.

 

**Interest Income**

 

Interest income is recognizedas it accrues, taking into account the effective yield on the financial asset.

 

----

 

**Sales of Non-Current Assets**

 

The gross proceeds of assetsales are included as revenue of the consolidated entity.  The profit or loss on disposal of assets isbrought to account at the date control of the asset passes to the buyer. Theprofit or loss on disposal is calculated as the difference between the carryingamount of the asset at the time of disposal and the net proceeds on disposal.

 

**(5)****                          ****Taxation**

** **

**General**

 

The consolidated entityadopts the accounting policy for treatment of company income tax as set out inAccounting Standard AASB 1020 ‘Tax Effect Accounting’ whereby the taxationbenefits or liabilities which arise due to differences between the time whenitems are taken up in the consolidated entity’s financial statements and whenthey are to be taken up for income tax purposes are shown either as a futureincome tax benefit or as a deferred tax liability.  The future income tax benefit and deferred tax liability aretaken up at tax rates applicable to the periods in which they are expected toreverse.

 

The future income tax benefitrelating to tax losses is not carried forward as an asset unless the benefitcan be regarded as being virtually certain of realization.  These benefits will be brought to account asa reduction in income tax expense in the period in which they are recouped.  The tax effect of capital losses is notrecorded unless realization is virtually certain.

 

**Capital Gains Tax**

 

Capital gains tax, whereapplicable, is provided in the period in which an asset is sold.

 

**Goods and Services Tax**

 

Revenues, expenses and assetsare recognized net of the amount of goods and services tax (GST), except wherethe amount of GST incurred is not recoverable from the Australian TaxationOffice (ATO).  In these circumstancesthe GST is recognized as part of the cost of acquisition of the asset or aspart of the expense.

 

Receivables and payables arestated with the amount of GST included.

 

The net amount of GSTrecoverable from, or payable to, the ATO is included as a current asset orliability in the Consolidated Balance Sheets.

 

Cash flows are included inthe Consolidated Statements of Cash Flows on a gross basis.  The GST component of cash flows arising frominvesting and financing activities which are recoverable from, or payable to,the ATO are classified as operating cash flows.

 

----

 

**(6)****                          ****Depreciation**

 

Property, plant andequipment, excluding freehold land, are depreciated at rates based upon theirexpected useful lives using the straight line method.

 

Depreciation rates used foreach class of asset are as follows:

 

•         Land improvements between 1% - 3%(2002 1% - 3%)

•         Buildings between 1% - 5% (2002 1% - 5%)

•         Plant and equipment between 3% - 25% (2002 3%- 25%)

•         Finance leases between 4% - 20% (2002 4% -20%)

 

**(7)****                         ****Employee Entitlements**

** **

**Wages, Salaries, Annual Leave and Sick Leave**

 

Liabilities for employeeentitlements such as wages, salaries, annual leave, sick leave and othercurrent employee entitlements are calculated at nominal amounts to coveraccumulated entitlements at balance date based on remuneration wage and salaryrates that the consolidated entity expects to pay including related on-costs.

 

Liabilities for employeeentitlements include, where appropriate, forecast future increases in wages andsalaries, grossed up for on-costs, and are based on the consolidated entity’sexperience with staff departures.

 

**Long Service Leave**

 

Liabilities relating to longservice leave and post-employment benefits have been calculated to representthe present value of estimated future cash outflows discounted to balance date.

 

Liabilities which are notexpected to be settled within twelve months are discounted using the rateattaching to those national government securities at balance date which mostclosely match the terms of maturity of the related entitlements.

 

**Profit Sharing and Bonus Plans**

 

A liability is recognized forprofit sharing and bonus plans, including benefits based on the future value ofequity instruments and benefits under plans allowing the consolidated entity tosettle in either cash or shares. Entitlements under the Employee Bonus Payment Plan (EBPP) are estimatedand accrued at the end of the financial reporting period.

 

**Employee Share and Option Plans**

 

The consolidated entitymaintains two Employee Share Schemes, the Employee Share Purchase Plan (ESPP)and the Employee Share/Option Plan (ESOP). Both Schemes were introduced in 1985, and have been subsequently amendedand approved by shareholders at Annual General Meetings.

 

The number of shares issuedunder the ESPP is dependent on the increase in the consolidated entity’searnings per share (before significant items) for the year ended June 30 overthose of the previous year.  Each year,only one issue can be made to employees in accordance with the rules governingthe Scheme.

 

Shares relating to the ESOPare generally issued at the closing market price on the date of allotment.  Options are issued under the plan upon suchterms and conditions as determined by the directors at the time of theinvitation.

 

Issues relating to the ESPPand the ESOP are detailed in Note 21.

 

Loans to assist in thepurchase of shares are shown as non-current receivables.  Shares are held in trust until the loan issettled.  The loans can be paid off atany time and must be settled when an individual ceases to be employed by theconsolidated entity.  No value isrecognized at the time of issue of options under the ESOP.  If exercised, contributions are recognizedas equity.  Shares issued under the ESOPare treated as equity to the extent the shares are paid-up.  Shares issued under the ESPP are credited toequity at the discounted value at the time of allotment.

 

**Pension Plans**

 

The consolidated entitycontributes to employee superannuation funds. Contributions are charged against profit as and when they areincurred.  Further information is setout in Note 28.

 

**(8)****                          ****Provisions**

 

A provision is recognizedwhen there is a legal, equitable or constructive obligation as a result of apast event and it is probable that a future sacrifice of economic benefits willbe required to settle the obligation, the timing or amount of which isuncertain.

 

----

 

If the effect is material, aprovision is determined by discounting the expected future cash flows (adjustedfor expected future risks) required to settle the obligation at a pre-tax ratethat reflects current market assessments of the time value of money and therisks specific to the liability, being risk free rates on government bonds mostclosely matching the expected future payments, except where noted below.  The unwinding of the discount is treated aspart of the expense related to the particular provision.

 

When some or all of theeconomic benefits required to settle a provision are expected to be recoveredfrom a third party, the recovery receivable is recognized as an asset when itis probable that the recovery will be received and is measured on a basisconsistent with the measurement of the related provision.

 

In the ConsolidatedStatements of Income, the expense recognized in respect of a provision ispresented net of the recovery.  In theConsolidated Balance Sheets, the provision is recognized net of the recoveryreceivable only when the entity:

 

•                  has a legally recognized right toset-off the recovery receivable and the provision; and 

•                  intends to settle on a net basis,or to realize the asset and settle the provision simultaneously.

 

**Restructuring**

 

A provision forrestructuring, including employee termination benefits, related to an acquiredentity or operation is recognized at the date of acquisition where:

 

•                  the main features of therestructuring were announced, implementation of the restructuring commenced, orcontracts were entered by the date of acquisition; and 

•                  a detailed formal plan is developedby the earlier of three months after the date of acquisition and the completionof this financial report.

 

The provision only relates to costs associated withthe acquired entity, and is included in the determination of the fair value ofthe net assets acquired.  The provisionincludes liabilities for termination benefits that will be paid to employees ofthe acquired entity as a result of the restructuring.

 

Other provisions for restructuring or terminationbenefits are only recognized when a detailed plan has been formally approvedand the restructuring or termination benefits have either commenced or beenpublicly announced, or firm contracts related to the restructuring or thetermination benefits have been entered into. Costs related to ongoing activities are not provided for. Theliabilities for termination benefits that will be paid as a result of theserestructurings have been included in the provision for restructuring.

 

**Dividends**

 

A provision for dividendspayable is recognized in the reporting period in which the dividends aredeclared, for the entire undistributed amount, regardless of the extent towhich they will be paid in cash.

 

**Onerous Contracts**

 

A provision for onerouscontracts is recognized after impairment losses on assets dedicated to thecontract have been recognized and when the expected benefits are less than theunavoidable costs of meeting the contractual obligations.  A provision is recognized to the extent thatthe contract obligations exceed future economic benefits.

 

**Insurance/Claims**

 

Provisions for worker’scompensation, insurance and other claims are made for claims received andclaims expected to be received in relation to incidents occurring prior toreporting date, based on historical claim rates.

 

Estimated net future cashflows are based on the assumption that all claims will be settled and theweighted average cost of historical claims adjusted for inflation will continueto approximate future costs.

 

----

**(9)****                                                                                ****Borrowing Costs**

 

Borrowing costs includeinterest, amortization of discounts or premiums relating to borrowings,amortization of ancillary costs incurred in connection with the arrangement ofborrowings, foreign exchange differences net of hedged amounts on borrowings,and lease finance charges.

 

Borrowing costs are broughtto account in determining profit for the year, except to the extent theinterest incurred relates to major capital items in which case interest iscapitalized as a cost of the asset up to the time it is ready for its intendeduse and amortized over the expected useful economic life.

 

The total amount of interestcapitalized during the year as part of the carrying amount of assets is shownin Note 3.

 

**(10)****                                                                         ****Investments and Other Financial Assets**

 

Investments in listed andunlisted securities, other than controlled entities and associates, in theconsolidated financial statements, are brought to account at cost and dividendincome is recognized in the Consolidated Statements of Income when receivable.

 

The consolidated entityfollows the requirements of AASB 1016 ‘Accounting for Investments inAssociates’ and applies the equity method of accounting for investments inassociates.  Associates are thoseentities over which the consolidated entity exercises significant influence,but does not control.  The equity methodrequires the carrying amount of investments in associates to be adjusted by theconsolidated entity’s share of associates’ net profit or loss after tax andother movements in reserves. Investments in associates are carried at the lower of the equityaccounted amount and the recoverable amount. These amounts are recognized in the Consolidated Statements of Incomeand consolidated reserves respectively.

 

**(11)****                                                                         ****Non-Current Assets**

 

The recoverable amount ofnon-current assets carried at cost is reviewed at each reporting date usingprofit multiples and undiscounted cash flows. Non-current assets are writtendown to recoverable amount where the carrying value of any non-current assetexceeds recoverable amount.  Thewrite-down is recognized as an expense in the Consolidated Statements of Incomein the reporting period in which it occurs.

 

**(12)****                                                                         ****Inventories**

 

Inventories are valued at thelower of cost (including an appropriate proportion of fixed and variableoverheads) and net realizable value in the normal course of business.

 

**(13)****                                                                         ****Foreign Currency Translation**

 

The financial statements ofoverseas controlled entities which are classified as self-sustaining areconverted to Australian currency at balance date using the current rate methodas set out in Accounting Standard AASB 1012 ‘Foreign CurrencyTranslation’.  Any exchange gains/lossesarising from the effect of currency fluctuations on these investments are takendirectly to the exchange fluctuations reserve on consolidation.

 

Prior to translation, thefinancial reports of self-sustaining operations in hyper-inflationary economiesare restated to account for changes in the general purchasing power of the localcurrency, based on relevant price indices at reporting date.  For hyper-inflationary self-sustainingoperations, the translated amounts for non-monetary assets, other thaninventory, are compared to recoverable amounts translated at spot rates at reportingdates and any excess is expensed, unless a revaluation reserve balance existsfor non-current assets carried at fair value.

 

Foreign exchange differencesrelating to foreign currency transactions hedging a net investment in aself-sustaining foreign operation, together with any related income tax, aretransferred to the exchange fluctuations reserve on consolidation.

 

With the exception oftransactions hedging a net investment in a self-sustaining foreign operation,all material foreign currency transactions are subject to forward covercontracts and any exchange gains/losses arising from the effect of currencyfluctuations on the underlying transactions are offset by the exchangegains/losses on the forward cover contract. In this circumstance, hedged transactions are initially recorded at therelevant rate at the date of the transaction. Hedges outstanding at reporting date are valued at the rates ruling onthat date and gains or losses are brought to account in the ConsolidatedStatements of Income.  Costs or gainsarising at the time of entering into the hedge are deferred and amortized overthe life of the hedge.

 

**(14)****                                                                         ****Financial Instruments**

** **

**Financial InstrumentsIncluded in Equity**

 

Details of shares and othersecurities issued and the terms and conditions of options outstanding overordinary shares at balance date are set out in Notes 21 and 35(k).

 

----

 

The issue of $400 million ofPerpetual Amcor Convertible Reset Securities (PACRS) and $210 million of 2002Perpetual Amcor Convertible Reset Securities (PACRS2) are classified as equityand the coupon interest payable on the PACRS and PACRS2 is treated as adistribution of shareholders’ equity. The Consolidated Statements of Income do not include the coupon intereston the PACRS or PACRS2.

 

**Financial Instruments Included in Liabilities**

 

Liabilities are recognizedfor amounts to be paid in the future for goods and services received, whetheror not billed to the consolidated entity.

 

Bank Overdrafts, Bank Loans,Mortgage Loans and Other Loans are carried at their principal amounts.  Interest is charged as an expense as itaccrues other than for amounts capitalized - refer Note 1(9).

 

Commercial Paper is carriedat the principal amount.  The discountinterest is carried as a deferred expense and brought to account on an accrualsbasis.

 

US$ Notes are carried at facevalue and translated at the rates ruling at reporting date. Interest is chargedas an expense as it accrues.

 

Undated subordinatedconvertible securities were initially recorded at the amount of considerationreceived. Where applicable, these securities have been translated at the rateof exchange ruling at balance date. Interest payable on these securities isrecognized when entitlements accrue and is calculated in accordance with theterms of each issue.  The terms andconditions of undated subordinated convertible securities outstanding are setout in Note 19.

 

**Financial Instruments Included in Assets**

 

Trade Debtors are carried atnominal amounts due less any provision for doubtful debts.  Collectability of overdue accounts isassessed on an ongoing basis.  Specificprovision is made for all doubtful accounts. A provision for doubtful debts is recognized when collection of the fullnominal amount is no longer probable.

 

Receivables other than TradeDebtors are carried at nominal amounts due.

 

**Derivatives**

 

The consolidated entity’spolicy on interest rate risk management is to monitor and, where appropriate,hedge the consolidated entity’s exposure to movements in interest rates throughthe use of various hedging products available in the financial markets.

 

The consolidated entityenters into interest rate and cross currency swaps, forward rate agreements andinterest rate options to hedge interest rate and foreign currencyexposures.  These instruments are notheld for speculative purposes. Where hedge transactions are designated as ahedge of the anticipated purchase or sale of goods or services or ananticipated interest transaction, gains and losses on the hedge arising up tothe date of the anticipated transactions are included in the measurement of theanticipated transaction when the transaction has occurred as designated.  Any gains or losses on the hedge transactionafter that date are included in the Consolidated Statements of Income.

 

The net amounts receivable orpayable under forward foreign exchange contracts and the associated deferredgains or losses are recorded in the Consolidated Balance Sheets from the dateof inception of the hedge transaction. When recognized, the net receivables or payables are revalued using theforeign exchange rate at reporting date.

 

Where a hedge transaction isterminated early and the anticipated transaction is still expected to occur, asdesignated, the deferred gains and losses that arose prior to its terminationare included in the measurement of the purchase or sale or interest transactionwhen it occurs.  Where a hedgetransaction is terminated early because the anticipated transaction is nolonger expected to occur, as designated, deferred gains and losses that aroseon the hedge instrument are included in the Consolidated Statements of Income.

 

Netreceipts and payments under the interest rate swap contracts and forward rateagreements are recognized on an accruals basis as an adjustment to interestexpense.  The premiums paid on interestrate options are included in other assets and amortized to borrowing costs overthe term of the agreement. 

**(15)****                                                                          Leased Assets**

 

Leases under which the consolidated entity assumessubstantially all the risks and benefits of ownership are classified as financeleases. Other leases are classified as operating leases. 

 

Finance leases are capitalized. A lease asset and alease liability equal to the present value of the minimum lease payments arerecorded at the inception of the lease.

 

Payments made under operating leases are expensed overthe term of the lease. 

 

----

 

**(16)****                                                                          Research and Development Expenditure**

 

Expenditure on research anddevelopment associated with product research and development innovation ischarged against operating profit in the year in which the expenditure isincurred.

 

Where such expenditure isconsidered to have a demonstrable future economic benefit and commercial value,it is capitalized and amortized over the period of time during which thebenefits are expected to arise.

 

Expenditure on significantcommercial development, including major software applications and associatedsystems, is capitalized and amortized over the period of time during which thebenefits are expected to arise, typically not exceeding five years.

 

**(17)****                                                                         ****Trademarks / Licences**

 

The consolidated entitywrites off expenditure on trademarks / licences to profit as incurred.

 

**(18)****                                                                         ****Goodwill**

 

The consolidated entityrecognises goodwill on acquisitions of controlled entities and businesses asrequired by Accounting Standard AASB 1013 ‘Accounting for Goodwill’.

 

All goodwill is amortized inequal instalments over the period of time during which the benefits areexpected to arise but for a period not exceeding twenty years.  The unamortized balance of goodwill isreviewed at reporting date and adjusted where it is considered that thecarrying amount exceeds the expected future benefits.

 

**(19)****                                                                         ****Earnings per Share (EPS)**

 

**Basic Earnings per Share**

 

Basic earnings per share iscalculated by dividing the net profit attributable to members of theconsolidated entity for the reporting period, after adjusting for distributionson PACRS, by the weighted average number of ordinary shares of the consolidatedentity, adjusted for any bonus issue.

 

**Diluted Earnings per Share**

 

Diluted EPS earnings iscalculated by adjusting the basic EPS earnings for the after tax effect offinancing costs and the effect of conversion to ordinary shares associated withdilutive potential ordinary shares.

 

The diluted EPS weightedaverage number of shares includes the number of ordinary shares assumed to beissued for no consideration in relation to dilutive potential ordinaryshares.  The number of ordinary sharesassumed to be issued for no consideration represents the difference between thenumber that would have been issued at the exercise price and the number thatwould have been issued at the average market price.

 

The identification ofdilutive potential ordinary shares is based on net profit or loss from continuingordinary operations and is applied on a cumulative basis, taking into accountthe incremental earnings and incremental number of shares for each series ofpotential ordinary shares.

 

**(20)****                                                                         ****Acquisition of Assets**

 

All assets acquired,including property, plant and equipment and intangibles other than goodwill,are initially recorded at their cost of acquisition at the date of acquisition,being the fair value of the consideration provided plus incidental costsdirectly attributable to the acquisition. Acquired in-process research and development is only recognized as aseparate asset when future benefits are expected beyond any reasonable doubt tobe recoverable.

 

**(21)****                                                                         ****Changes in Accounting Policy**

 

**Foreign Currency Translation**

 

The consolidated entity has appliedthe revised AASB 1012 ‘Foreign Currency Translation’ for the first time fromJuly 1, 2002.

 

For hedges of specificpurchases or sales, the gains or costs on entering the hedge and the exchangedifferences up to the date of the purchase or sale are now deferred andrecognized as assets or liabilities on the Consolidated Balance Sheets from theinception of the hedge contract, not when the specific purchase or sale occurs.At maturity, the costs or gains are included in the measurement of the underlyingtransaction.

 

**Employee Benefits**

 

The consolidated entity hasapplied the revised AASB 1028 ‘Employee Benefits’ for the first time from July1, 2002.

 

The liability for wages andsalaries, annual leave and sick leave is now calculated using the remunerationrates the consolidated entity expects to pay as at each reporting date, notwage and salary rates current at reporting date.

 

----

 

The initial adjustments tothe consolidated financial report as at July 1, 2002 as a result of this changeare:

 

•             $2.2 million increase in provisionfor employee benefits;

•             $1.5 million decrease in openingretained profits; and

•             $0.7 million increase in futureincome tax benefit.

 

**Provisions and Contingent Liabilities**

 

The consolidated entity hasapplied AASB 1044 ‘Provisions, Contingent Liabilities and Contingent Assets’for the first time from July 1, 2002.

 

Dividends

 

Dividends are now recognizedat the time they are declared, determined or publicly recommended.  Previously, final dividends were recognizedin the financial year to which they related, even though the dividends wereannounced after the end of the financial year.

 

The adjustments to theconsolidated financial report as at July 1, 2002 as a result of this changeare:

 

•             $115.2 million increase in openingretained profits; and

•             $115.2 million decrease inprovision for dividends.

 

Onerous Contracts

 

AASB 1044 requires onerouscontracts to be recognized as a provision when the unavoidable costs of meetingthe consolidated entity’s obligation under contracts exceed the economicbenefits expected to be received.  Incomplying with this requirement of the standard, provisions of $20.1 millionhave been recognized together with associated future income tax benefitstotalling $6.4 million. Under the transitional arrangements of AASB 1044, thenet amount of $13.7 million has been adjusted against opening retainedearnings.

 

As a result of this change inaccounting policy, losses of $5.9 million and income tax credits of $1.9million relating to onerous contracts, which would have been recognized in thenet profit during the financial year ended June 30, 2003, were offset againstthe provision for onerous contracts and future income tax benefit respectively.

 

The discount rate used todiscount the future value of onerous contracts is 6%.

 

Changes Not Applied at HalfYear

 

The measurement of onerouscontracts under AASB 1044 was not completed and adjusted for reporting purposesuntil the second half of the full reporting period.

 

Accordingly, had the onerouscontract requirements of AASB 1044 been applied at December 31, 2002 the effecton the consolidated entity would have been to:

 

•    increaseprovisions for onerous contracts by $17.3 million;

•    increasefuture income tax benefit by $5.6 million;

•    decreaseretained profits by $11.7 million; and

•    increasefirst half net profit (after tax) by $2.0 million

 

Prior Financial Year

 

Had the new accountingpolicies described above always applied, the 2002 comparative information inthe Consolidated Balance Sheets would not be materially different except forthe derecognition of the provision for dividend ($115.2 million for theconsolidated entity) and the recognition of provision for onerous contractswhich would have been $20.1 million for the consolidated entity (net of tax $13.7million).  As a consequence, retainedprofits would have been approximately $101.5**million higher in the consolidatedentity.  Net profit attributable tomembers of the parent entity would not have been materially different for theconsolidated entity.

 

----

 
|       |                                                       | **For the Years Ended June  30** |   |
|------------|------------------------------------------------------------|----------------------------------|--------|
|       |                                                       | **(in millions of A$)**          |   |
|       |                                                       | **2003**                         |   | **2002** |   | **2001** |   |
| **Note 2** | **OTHER REVENUE**                                          |                             |   |   |   |   |   |   |
|       |                                                       |                             |   |   |   |   |   |   |
|       | Interest received:                                         |                             |   |   |   |   |   |   |
|       |                                                       |                             |   |   |   |   |   |   |
|       |  •   Other                        |                             | 10.0   |   | 16.4 |   | 14.0 |   |
|       |                                                       |                             | 10.0   |   | 16.4 |   | 14.0 |   |
|       | Dividends received:                                        |                             |   |   |   |   |   |   |
|       |                                                       |                             |   |   |   |   |   |   |
|       |  •   Other                        |                             | 1.0    |   | 0.8 |   | 2.9 |   |
|       |                                                       |                             | 1.0    |   | 0.8 |   | 2.9 |   |
|       |                                                       |                             |   |   |   |   |   |   |
|       | Proceeds on disposal of non-current assets                 |                             | 75.4   |   | 231.7 |   | 18.6 |   |
|       |                                                       |                             |   |   |   |   |   |   |
|       | Proceeds on disposal of controlled entities and businesses |                             | 98.4   |   | 55.4 |   | 6.9 |   |
|       |                                                       |                             |   |   |   |   |   |   |
|       | Proceeds on disposal of investments                        |                             | — |   | 697.5 |   | 77.2 |   |
|       |                                                       |                             |   |   |   |   |   |   |
|       | Other                                                      |                             | 63.3   |   | 58.0 |   | 73.7 |   |
|       |                                                       |                             |   |   |   |   |   |   |
|       | **TOTAL OTHER REVENUE**                                    |                             | 248.1  |   | 1,059.8 |   | 193.3 |   |

 

----

 
|       |                                                                            |   | **For the Years Ended June  30** |   |
|------------|---------------------------------------------------------------------------------|--------|----------------------------------|--------|
|       |                                                                            |   | **(in millions of A$)**          |   |
|       |                                                                            |   | **2003**                         |   | **2002** |   | **2001** |   |
| **Note 3** | **OPERATING PROFIT**                                                            |   |                             |   |   |   |   |   |
|       |                                                                            |   |                             |   |   |   |   |
|       | Operating profit before tax arrived at after (charging)/crediting:              |   |                             |   |   |   |   |   |
|       |                                                                            |   |                             |   |   |   |   |   |
|       | Amortization and depreciation:                                                  |   |                             |   |   |   |   |   |
|       | •  of property, plant and equipment - refer Note 1(6)            |   | (453.5                           | )      | (278.2 | ) | (191.8 | ) |
|       | •  of leased assets - refer Note 1(15)                           |   | (14.9                            | )      | (8.4 | ) | (6.5 | ) |
|       | •  of goodwill and other intangibles - refer Note 1(18)          |   | (138.8                           | )      | (54.5 | ) | (42.0 | ) |
|       |                                                                            |   | (607.2                           | )      | (341.1 | ) | (240.3 | ) |
|       |                                                                            |   |                             |   |   |   |   |   |
|       | Interest paid:                                                                  |   |                             |   |   |   |   |   |
|       | •  Finance charges on leased assets – refer Note 1(15)      |   | (6.3                             | )      | (4.7 | ) | (1.9 | ) |
|       | •  Other persons                                                 |   | (146.8                           | )      | (126.6 | ) | (147.5 | ) |
|       | Interest capitalized - refer Note 1(9)                                          |   | 0.3                              |   | 0.8 |   | 2.2 |   |
|       |                                                                            |   | (152.8                           | )      | (130.5 | ) | (147.2 | ) |
|       |                                                                            |   |                             |   |   |   |   |   |
|       | Interest received                                                               |   | 10.0                             |   | 16.4 |   | 14.0 |   |
|       | Net interest                                                                    |   | (142.8                           | )      | (114.1 | ) | (133.2 | ) |
|       |                                                                            |   |                             |   |   |   |   |   |
|       | Other borrowing costs                                                           |   | (12.4                            | )      | (7.4 | ) | (7.8 | ) |
|       |                                                                            |   |                             |   |   |   |   |   |
|       | Bad debts written off:                                                          |   |                             |   |   |   |   |   |
|       | •  Trade debtors                                                 |   | (1.0                             | )      | (2.4 | ) | (1.8 | ) |
|       |                                                                            |   |                             |   |   |   |   |   |
|       | Provisions:                                                                     |   |                             |   |   |   |   |   |
|       | •  Employee entitlements and directors’ retiring allowances |   | (149.3                           | )      | (92.7 | ) | (84.3 | ) |
|       | •  Doubtful debts                                                |   | (18.2                            | )      | (13.0 | ) | (7.7 | ) |
|       | •  Diminution in value of inventories                            |   | (23.1                            | )      | (10.6 | ) | (5.7 | ) |
|       | •  Insurance/workers’ compensation and other claims         |   | (40.4                            | )      | (27.2 | ) | — |   |
|       | •  Restructuring                                                 |   | (41.1                            | )      | (106.6 | ) | (57.3 | ) |
|       |                                                                            |   |                             |   |   |   |   |   |
|       | Lease rentals:                                                                  |   |                             |   |   |   |   |   |
|       | •  Operating leases                                              |   | (72.8                            | )      | (37.3 | ) | (31.1 | ) |
|       |                                                                            |   |                             |   |   |   |   |   |
|       | Profit/(loss) on disposal of non-current assets - refer Note 1(4)               |   | 13.3                             |   | 9.0 |   | 8.4 |   |
|       |                                                                            |   |                             |   |   |   |   |   |
|       | Net foreign exchange gains/(losses)                                             |   | 2.4                              |   | 5.6 |   | 4.3 |   |

 

----

 
|       |                                                                                                            |   | **For the Years Ended June  30** |   |
|------------|-----------------------------------------------------------------------------------------------------------------|--------|----------------------------------|--------|
|       |                                                                                                            |   | **(in millions of A$)**          |   |
|       |                                                                                                            |   | **2003**                         |   | **2002** |   | **2001** |   |
| **Note 4** | **SIGNIFICANT ITEMS**                                                                                           |   |                             |   |   |   |   |   |
|       |                                                                                                            |   |                             |   |   |   |   |   |
|       | SIGNIFICANT ITEMS BEFORE INCOME TAX                                                                             |   |                             |   |   |   |   |   |
|       |                                                                                                            |   |                             |   |   |   |   |   |
|       | Profit/(loss) on disposal of businesses and subsidiaries                                                        |   | —                           |   | (18.6 | ) | (24.2 | ) |
|       |                                                                                                            |   |                             |   |   |   |   |   |
|       | Profit on disposal of investment                                                                                |   | —                           |   | 553.4 |   | 61.2 |   |
|       |                                                                                                            |   |                             |   |   |   |   |   |
|       | Restructuring expenses consequent upon the acquisition of the PET and  Closures business from Schmalbach-Lubeca |   | (86.7                            | )      | — |   | — |   |
|       |                                                                                                            |   |                             |   |   |   |   |   |
|       | SIGNIFICANT ITEMS BEFORE INCOME TAX                                                                             |   | (86.7                            | )      | 534.8 |   | 37.0 |   |
|       |                                                                                                            |   |                             |   |   |   |   |   |
|       | RELATED INCOME TAX (EXPENSE) / BENEFIT ON SIGNIFICANT ITEMS (where  applicable)                                 |   |                             |   |   |   |   |   |
|       |                                                                                                            |   |                             |   |   |   |   |   |
|       | Income tax benefit/(expense) on disposal of businesses and  subsidiaries                                        |   | —                           |   | — |   | 4.3 |   |
|       |                                                                                                            |   |                             |   |   |   |   |   |
|       | Income tax benefit on the Schmalbach - Lubeca restructuring expenses                                            |   | 16.6                             |   | — |   | — |   |
|       |                                                                                                            |   |                             |   |   |   |   |   |
|       | INCOME TAX ON SIGNIFICANT ITEMS                                                                                 |   | 16.6                             |   | — |   | 4.3 |   |
|       |                                                                                                            |   |                             |   |   |   |   |   |
|       | **NET SIGNIFICANT ITEMS  AFTER INCOME TAX ATTRIBUTABLE TO MEMBERS OF AMCOR LIMITED**                            |   | (70.1                            | )      | 534.8 |   | 41.3 |   |

 

----

 
|       |                                                                                               |   | **For the Years Ended June  30** |   |
|------------|----------------------------------------------------------------------------------------------------|--------|----------------------------------|--------|
|       |                                                                                               |   | **(in millions of A$)**          |   |
|       |                                                                                               |   | **2003**                         |   | **2002** |   | **2001** |   |
| **Note 5** | **INCOME TAX EXPENSE**                                                                             |   |                             |   |   |   |   |   |
|       |                                                                                               |   |                             |   |   |   |   |   |
|       | Prima facie income tax expense calculated at standard rates of tax on  operating profit before tax |   | (146.6                           | )      | (294.4 | ) | (137.4 | ) |
|       |                                                                                               |   |                             |   |   |   |   |   |
|       | Add/(Deduct) the tax effect of:                                                                    |   |                             |   |   |   |   |   |
|       |                                                                                               |   |                             |   |   |   |   |   |
|       | •  Tax losses of controlled entities not brought to account                         |   | —                           |   | — |   | (3.9 | ) |
|       |                                                                                               |   |                             |   |   |   |   |   |
|       | •  Non-assessable profits on disposal of controlled entities and  investments       |   | 13.8                             |   | 168.2 |   | 16.9 |   |
|       |                                                                                               |   |                             |   |   |   |   |   |
|       | •  Share of associates’ net profit                                             |   | —                           |   | 12.0 |   | 15.2 |   |
|       |                                                                                               |   |                             |   |   |   |   |   |
|       | •  Tax benefit on PACRS distribution                                                |   | 15.7                             |   | 10.9 |   | — |   |
|       |                                                                                               |   |                             |   |   |   |   |   |
|       | •  Amortization/write-down of goodwill                                              |   | (27.9                            | )      | (13.1 | ) | (14.3 | ) |
|       |                                                                                               |   |                             |   |   |   |   |   |
|       | •  Over/(under) provision in prior years                                            |   | 14.3                             |   | 8.8 |   | 3.2 |   |
|       |                                                                                               |   |                             |   |   |   |   |   |
|       | •  Impact of tax rate changes on carrying value of timing differences               |   | —                           |   | — |   | 3.4 |   |
|       |                                                                                               |   |                             |   |   |   |   |   |
|       | •   Other                                                                      |   | 20.2                             |   | (12.6 | ) | (1.3 | ) |
|       | Total income tax expense                                                                           |   | (110.5                           | )      | (120.2 | ) | (118.2 | ) |

 

The balance of the frankingaccount as at June 30, 2003 was nil (2002 $5.4 million) after taking intoaccount the payment of income tax payable at that date and any franking creditsincluded therein which may not be distributable in the following year.

 

**Changes in measurement of franking account**

 

**New Business Tax System (Imputation) Act 2002**

 

In accordance with the NewBusiness Tax System (Imputation) Act 2002, the measurement basis of thedividend franking account changed on July 1, 2002 from an after-tax profitsbasis to an income tax paid basis.  Theamount of franking credits available to shareholders disclosed as at June 30,2003 has been measured under the new legislation and represents income tax paidamounts available to frank distributions. The balance disclosed as at June 30, 2002 has been measured under thelegislation existing at June 30, 2002 and represents after-tax profits able tobe distributed fully franked at the current tax rate.  The change in the basis of measurement does not change theunderlying value of franking credits or tax offsets available to shareholdersfrom the dividend franking account.  Thecomparative information has not been restated for this change inmeasurement.  Had the comparative informationbeen calculated on the new basis, the “franking credits available” balance asat June 30, 2002 would have been $2.3 million.

 

----

 
|       |                        |   | **At June 30**          |   |
|------------|-----------------------------|--------|-------------------------|--------|
|       |                        |   | **(in millions of A$)** |   |
|       |                        |   | **2003**                |   | **2002** |   |
| **Note 6** | **CASH AND DEPOSITS**       |   |                    |   |   |   |
|       |                        |   |                    |   |   |   |
|       | Cash on hand and at bank    |   | 117.0                   |   | 2,279.5 |   |
|       | Deposits at call            |   | 24.5                    |   | 27.6 |   |
|       | Short term deposits         |   | 20.5                    |   | 17.9 |   |
|       | **TOTAL CASH AND DEPOSITS** |   | 162.0                   |   | 2,325.0 |   |

 
| **Note 7** | **ACCOUNTS RECEIVABLE**          |   |    |   |    |   |
|------------|----------------------------------|--------|---------|--------|---------|--------|
|       |                             |   |    |   |    |   |
|       | Trade debtors (1)                |   | 1,163.4 |   | 1,121.7 |   |
|       | Provision for doubtful debts (2) |   | (59.8   | )      | (42.8   | )      |
|       |                             |   | 1,103.6 |   | 1,078.9 |   |
|       | Other loans                      |   | 16.1    |   | 1.5     |   |
|       | Other debtors                    |   | 279.6   |   | 183.4   |   |
|       | **TOTAL ACCOUNTS RECEIVABLE**    |   | 1,399.3 |   | 1,263.8 |   |

 

----

|   | (1) Credit terms vary  across the group                                                     |
|--------|---------------------------------------------------------------------------------------------|
|   | (2) The movement in the  provision for doubtful debts for the year is explained as follows: |

 
|       | Balance at the beginning of the year                         |   | (42.8   | )      | (41.0  | )      |
|------------|--------------------------------------------------------------|--------|---------|--------|--------|--------|
|       | Provided for during the year - refer Note 3                  |   | (18.2   | )      | (13.0  | )      |
|       | Amounts previously provided for, written off during the year |   | 11.8    |   | 9.4    |   |
|       | Amounts acquired during the year                             |   | (13.0   | )      | (2.7   | )      |
|       | Amounts disposed of during the year                          |   | 1.4     |   | 0.3    |   |
|       | Foreign exchange translation                                 |   | 1.0     |   | 4.2    |   |
|       | Balance at the end of the year                               |   | (59.8   | )      | (42.8  | )      |
|       |                                                         |   |    |   |   |   |
| **Note 8** | **INVENTORIES**                                              |   |    |   |   |   |
|       |                                                         |   |    |   |   |   |
|       | At cost:                                                     |   |    |   |   |   |
|       | Raw materials and stores                                     |   | 493.3   |   | 386.7  |   |
|       | Provision for diminution in value                            |   | (31.0   | )      | (27.5  | )      |
|       |                                                         |   | 462.3   |   | 359.2  |   |
|       | Work in progress                                             |   | 151.5   |   | 179.4  |   |
|       | Provision for diminution in value                            |   | (4.2    | )      | (4.2   | )      |
|       |                                                         |   | 147.3   |   | 175.2  |   |
|       | Finished goods                                               |   | 695.5   |   | 425.6  |   |
|       | Provision for diminution in value                            |   | (36.9   | )      | (26.0  | )      |
|       |                                                         |   | 658.6   |   | 399.6  |   |
|       | At net realizable value:                                     |   |    |   |   |   |
|       | Raw materials                                                |   | 5.3     |   | — |   |
|       | Finished goods                                               |   | 10.5    |   | 11.0   |   |
|       | **TOTAL INVENTORIES**                                        |   | 1,284.0 |   | 945.0  |   |

 

----

 
|       |                                                    |   | **At June 30**          |       |
|------------|---------------------------------------------------------|--------|-------------------------|------------|
|       |                                                    |   | **(in millions of A$)** |       |
|       |                                                    |   | **2003**                |       | **2002** |   |
| **Note 9** | **ACCOUNTS RECEIVABLE –  NON-CURRENT**             |   |                    | ** ** |   | ** ** |
|       |                                                    |   |                    |       |   |   |
|       | Loans to executive directors, officers and employees(1) |   |                    |       |   |   |
|       |                                                    |   |                    |       |   |   |
|       | •  Directors of Amcor Limited            |   | 1.1                     |       | 1.1 |   |
|       | •  Directors of subsidiaries             |   | 0.4                     |       | 0.5 |   |
|       | •  Other employees                       |   | 34.1                    |       | 27.1 |   |
|       |                                                    |   |                    |       |   |   |
|       | Other loans                                             |   | 25.5                    |       | 10.7 |   |
|       | **TOTAL ACCOUNTS RECEIVABLE  – NON-CURRENT**       |   | 61.1                    |       | 39.4 |   |

 

----

(1)          Loans to executive directors,officers and employees in the full time employment of the consolidated entityare made in accordance with:

 

•      the scheme for the provision ofhousing and other loans to employees of the consolidated entity approved byshareholders on 19 September, 1980;  and

 

•      the scheme to provide financialassistance to enable directors and employees of the consolidated entity topurchase shares in the consolidated entity as approved by Amcor Limitedshareholders on 29 January, 1985 (as subsequently amended).

 

----

 
|        |                                            |   | **At June 30**          |   |
|-------------|-------------------------------------------------|--------|-------------------------|--------|
|        |                                            |   | **(in millions of A$)** |   |
|        |                                            |   | **2003**                |   | **2002** |   |
| **Note 10** | **INVESTMENTS**                                 |   |                    |   |   |   |
|        |                                            |   |                    |   |   |   |
|        | Shares in other companies at cost:              |   |                    |   |   |   |
|        | •  listed on stock exchanges     |   | 17.0                    |   | — |   |
|        | •  not listed on stock exchanges |   | 4.5                     |   | 12.8 |   |
|        | **TOTAL INVESTMENTS**                           |   | 21.5                    |   | 12.8 |   |

 
|   | Investments in associates are accounted for in the consolidated  financial statements using the equity method of accounting. Information  relating to the investments is set out below: |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 
|   |                                                                       |   | **2003**   |   | **2002**   |   |
|--------|----------------------------------------------------------------------------|--------|------------|--------|------------|--------|
|   |                                                                       |   | **$****m** |   | **$****m** |   |
|   | **Results of associates**                                                  |   |       |   |       |   |
|   | Share of associates’ operating profit before tax                      |   | —     |   | 69.2       |   |
|   | Share of associates’ tax expense attributable to operating profit     |   | —     |   | (21.2      | )      |
|   | Share of associates’ net profit                                       |   | —     |   | 48.0       |   |
|   |                                                                       |   |       |   |       |   |
|   | **Share of post-acquisition  retained profits attributable to associates** |   |       |   |       |   |
|   | Retained profits                                                           |   |       |   |       |   |
|   | Share of associates’ retained profits at beginning of year            |   | —     |   | 10.6       |   |
|   | Share of retained profits of associates disposed of during the year        |   | —     |   | (7.2       | )      |
|   | Amount re-classified on acquisition of controlled entity                   |   | —     |   | (3.1       | )      |
|   | Share of net profit of associates                                          |   | —     |   | 48.0       |   |
|   | Less dividends received from associates                                    |   | —     |   | (48.3      | )      |
|   | Share of associates’ retained profits at end of year                  |   | —     |   | —     |   |

 
|   | Summarized and aggregated gross financial data in respect of major  associate investments is as follows: |
|--------|----------------------------------------------------------------------------------------------------------|

 
|   |                               |   | **For the Years Ended June  30** |   |
|--------|------------------------------------|--------|----------------------------------|--------|
|   |                               |   | **(in millions of A$)**          |   |
|   |                               |   | **2003**                         |   | **2002** |   | **2001** |   |
|   |                               |   |                             |   |   |   |   |   |
|   | INCOME STATEMENT ITEMS:            |   |                             |   |   |   |   |   |
|   |                               |   |                             |   |   |   |   |   |
|   | Sales revenue                      |   | —                           |   | 946.9 |   | 935.8 |   |
|   |                               |   |                             |   |   |   |   |   |
|   | Operating profit before income tax |   | —                           |   | 153.8 |   | 134.5 |   |
|   | Income tax expense                 |   | —                           |   | (47.1 | ) | (43.6 | ) |
|   | Net Profit                         |   | —                           |   | 106.7 |   | 90.9 |   |

 

As at June 30, 2003, therewere no major investments in associates.

 

----

 
|        |                                     |   | **At June 30**          |   |
|-------------|------------------------------------------|--------|-------------------------|--------|
|        |                                     |   | **(in millions of A$)** |   |
|        |                                     |   | **2003**                |   | **2002** |   |
| **Note 11** | **PROPERTY, PLANT AND  EQUIPMENT**       |   |                    |   |   |   |
|        |                                     |   |                    |   |   |   |
|        | Land:                                    |   |                    |   |   |   |
|        | •  At  cost               |   | 234.3                   |   | 241.1 |   |
|        |                                     |   | 234.3                   |   | 241.1 |   |
|        |                                     |   |                    |   |   |   |
|        | Land improvements:                       |   |                    |   |   |   |
|        | •  At  cost               |   | 15.6                    |   | 15.2 |   |
|        | Accumulated depreciation                 |   | (2.6                    | )      | (0.7 | ) |
|        |                                     |   | 13.0                    |   | 14.5 |   |
|        |                                     |   |                    |   |   |   |
|        | Buildings:                               |   |                    |   |   |   |
|        | •  At  cost               |   | 687.3                   |   | 520.6 |   |
|        | Accumulated depreciation                 |   | (79.5                   | )      | (53.5 | ) |
|        |                                     |   | 607.8                   |   | 467.1 |   |
|        | Plant and equipment:                     |   |                    |   |   |   |
|        | •  At  cost               |   | 6,329.8                 |   | 4,823.2 |   |
|        | Accumulated depreciation                 |   | (3,036.6                | )      | (2,433.2 | ) |
|        |                                     |   | 3,293.2                 |   | 2,390.0 |   |
|        | Leased assets:                           |   |                    |   |   |   |
|        | •  Finance leases         |   | 167.9                   |   | 91.1 |   |
|        | Accumulated amortization                 |   | (20.6                   | )      | (21.0 | ) |
|        |                                     |   | 147.3                   |   | 70.1 |   |
|        | **TOTAL PROPERTY, PLANT AND  EQUIPMENT** |   | 4,295.6                 |   | 3,182.8 |   |

 

As at June 30, 2003, theDirectors carried out a valuation of the consolidated entity’s land, landimprovements and buildings based on independent valuations (Jones Lang LaSalle)and carrying value assessments.  Thevaluation was carried out on the basis of existing use, resulting in anaggregate valuation of $981.1 million.

 

----

 
|        |                                 |   | **At June 30**          |   |
|-------------|--------------------------------------|--------|-------------------------|--------|
|        |                                 |   | **(in millions of A$)** |   |
|        |                                 |   | **2003**                |   | **2002** |   |
| **Note 12** | **INTANGIBLE ASSETS**                |   |                    |   |   |   |
|        |                                 |   |                    |   |   |   |
|        | Goodwill at cost                     |   | 2,425.4                 |   | 1,175.4 |   |
|        | Other Intangibles at cost            |   | 38.6                    |   | 9.5 |   |
|        | Accumulated amortization/write-downs |   | (507.1                  | )      | (467.1 | ) |
|        | **TOTAL INTANGIBLE ASSETS**          |   | 1,956.9                 |   | 717.8 |   |
|        |                                 |   |                    |   |   |   |
| **Note 13** | **OTHER NON-CURRENT ASSETS**         |   |                    |   |   |   |
|        |                                 |   |                    |   |   |   |
|        | Future income tax benefits (1)       |   | 199.4                   |   | 228.4 |   |
|        | Supply contract deposits             |   | 28.7                    |   | 30.1 |   |
|        | Other                                |   | 48.6                    |   | 39.6 |   |
|        | **TOTAL OTHER NON-CURRENT  ASSETS**  |   | 276.7                   |   | 298.1 |   |

 

----

(1) Potential further futureincome tax benefits of the consolidated entity relating to accumulatedtax-effected losses at balance date of $279.7 million (2002 $9.0 million) arenot included in the above. These benefits will only be obtainable if:

 

•             the entities derive futureassessable income of a nature and amount sufficient to enable the benefit ofthe deductions to be realised;  

 

•             the entities continue to complywith the conditions for deductibility imposed by income tax law; and

 

•             changes in income tax legislationdo not adversely affect the ability of the entities to realise the benefits ofthe deductions.

 
| **Note 14** | **ACCOUNTS PAYABLE**         |   |    |   |    |   |
|-------------|------------------------------|--------|---------|--------|---------|--------|
|        |                         |   |    |   |    |   |
|        | Secured                      |   |    |   |    |   |
|        | Other creditors              |   | —  |   | 3.0     |   |
|        |                         |   |    |   |    |   |
|        | Unsecured                    |   |    |   |    |   |
|        | Trade creditors (1)          |   | 1,078.0 |   | 713.3   |   |
|        | Other creditors and accruals |   | 539.4   |   | 572.4   |   |
|        | Accrued interest             |   | 28.6    |   | 18.6    |   |
|        | **TOTAL ACCOUNTS PAYABLE**   |   | 1,646.0 |   | 1,307.3 |   |

 

----

(1)                                Terms for trade creditors varyacross the group

 

----

 

**Note 15****                                                     ****BANK AND OTHER BORROWINGS - CURRENT**

 

The consolidated entityborrows funds from time to time for working capital purposes and also borrowsfunds in foreign currencies, which are either fully hedged or matched byequivalent assets in the same currencies, such assets representing a naturalhedge.

 

The consolidated entity doesnot, as a rule, pledge assets as security for borrowings, however, at June 30,2003, bank overdrafts, bank loans and other loans totalling $23,700,000 (2002 -$102,900,000) were secured, principally against group property, plant andequipment.  These security arrangementsrelate to acquired subsidiaries and were in place prior to the companiesconcerned becoming part of the consolidated entity.

 

The value attributed to theassets (included in the total of Property, Plant and Equipment in Note 11)which have been pledged at June 30, 2003 is $100,013,000 (2002 - $189,000,000),principally representing assets in North America and Europe.  The directors believe there are norestrictions on the net assets of subsidiary companies other than the abovemortgages entered into in the normal course of borrowings.

 

**By Currency:**

 
|                            |   |              |   |              |   | **(in millions of A$)** |   |
|---------------------------------|--------|-------------------|--------|-------------------|--------|-------------------------|--------|
| **Nature  of Borrowing**        |   | **Maturity Date** |   | **Interest Rate** |   | **2003**                |   | **2002** |   |
|                            |   |              |   | **%****p.a.**     |   |                    |   |   |   |
| SECURED BANK OVERDRAFTS (1)/(2) |   |              |   |              |   |                    |   |   |   |
| Euros                           |   | At Call           |   | 5.00              |   | 0.1                     |   | 0.8 |   |
| Norwegian Kroners               |   |              |   |              |   | —                  |   | 0.1 |   |
| Swedish Kroners                 |   |              |   |              |   | —                  |   | 1.1 |   |
| Polish Zloty                    |   | At Call           |   | Euribor + 0.6%    |   | 0.1                     |   | — |   |
|                            |   |              |   |              |   | 0.2                     |   | 2.0 |   |
| BANK TERM LOANS (2)/(3)         |   |              |   |              |   |                    |   |   |   |
| United States Dollars           |   | 06/30/2004        |   | 6.50              |   | 1.3                     |   | 20.2 |   |
| Canadian Dollars                |   | Various           |   | Various           |   | 3.8                     |   | 6.2 |   |
| Brazilian Reals                 |   |              |   |              |   | —                  |   | 0.7 |   |
| Indonesian Rupiahs              |   | 07/28/2003        |   | 12.75             |   | 0.9                     |   | 1.9 |   |
| Euros                           |   | 06/30/2004        |   | Variable          |   | 0.1                     |   | 0.2 |   |
| Turkish Lira                    |   | 07/01/2003        |   | —            |   | 0.2                     |   | — |   |
|                            |   |              |   |              |   | 6.3                     |   | 29.2 |   |
| MORTGAGE LOANS (2)/(3)          |   |              |   |              |   |                    |   |   |   |
| Euros                           |   | Various           |   | Various           |   | 0.2                     |   | — |   |
|                            |   |              |   |              |   | 0.2                     |   | — |   |
| OTHER LOANS (2)/(3)             |   |              |   |              |   |                    |   |   |   |
| Euros                           |   | Various           |   | Various           |   | 1.0                     |   | 0.2 |   |
| United States Dollars           |   |              |   |              |   | —                  |   | 1.3 |   |
| Great British Pounds            |   | 07/31/2003        |   | Libor + 0.5%      |   | 4.5                     |   | — |   |
|                            |   |              |   |              |   | 5.5                     |   | 1.5 |   |
| TOTAL SECURED CURRENT           |   |              |   |              |   | 12.2                    |   | 32.7 |   |
|                            |   |              |   |              |   |                    |   |   |   |
| UNSECURED BANK OVERDRAFTS (1)   |   |              |   |              |   |                    |   |   |   |
| United States Dollars           |   | At call           |   | Various           |   | 47.9                    |   | — |   |
| Australian Dollars              |   |              |   |              |   | —                  |   | 9.3 |   |
| Canadian Dollars                |   |              |   |              |   | —                  |   | 9.5 |   |
| Euros                           |   | At call           |   | Various           |   | 64.5                    |   | 16.8 |   |
| Great British Pounds            |   | At call           |   | Variable          |   | 2.8                     |   | — |   |
| Malaysian Ringgit               |   | At call           |   | 6.75 – 7.00  |   | 0.5                     |   | — |   |
|                            |   |              |   |              |   | 115.7                   |   | 35.6 |   |

 

----

 
|                     |   |              |   |               |   | **(in millions of A$)** |   |
|--------------------------|--------|-------------------|--------|--------------------|--------|-------------------------|--------|
| **Nature  of Borrowing** |   | **Maturity Date** |   | **Interest Rate**  |   | **2003**                |   | **2002** |   |
|                     |   |              |   | **% p.a**          |   |                    |   |   |   |
| BANK TERM LOANS (5)      |   |              |   |               |   |                    |   |   |   |
| Australian Dollars       |   | Various           |   | 4.87 – 5.01   |   | 173.6                   |   | 88.8 |   |
| United States Dollars    |   | Various           |   | Various            |   | 300.9                   |   | 19.5 |   |
| Chinese Reminbi          |   | Various           |   | 5.00 – 5.58   |   | 7.0                     |   | 8.8 |   |
| Malaysian Ringgits       |   | Various           |   | 3.00 – 4.00   |   | 9.9                     |   | 10.3 |   |
| Indian Rupees            |   | 02/20/2004        |   | 8.60               |   | 5.4                     |   | — |   |
| Hong Kong Dollars        |   |              |   |               |   | —                  |   | 1.2 |   |
| Indonesian Rupiahs       |   | Various           |   | 12.25 – 13.38 |   | 1.5                     |   | — |   |
| Philippine Pesos         |   | 08/07/2003        |   | 1.82               |   | 0.8                     |   | — |   |
| Euros                    |   | Various           |   | Various            |   | 95.0                    |   | — |   |
| Swiss Francs             |   | 07/31/2003        |   | Libor + 0.4%       |   | 30.0                    |   | — |   |
| Brazilian Reals          |   | 60 day renewal    |   | 8.00               |   | 2.6                     |   | — |   |
|                     |   |              |   |               |   | 626.7                   |   | 128.6 |   |
| BILLS OF EXCHANGE (4)    |   |              |   |               |   |                    |   |   |   |
| Australian Dollars       |   | Various           |   | 4.89               |   | 41.0                    |   | — |   |
| United States Dollars    |   | Various           |   | 1.28               |   | 67.4                    |   | 115.1 |   |
| Thai Baht                |   |              |   |               |   | —                  |   | 0.7 |   |
|                     |   |              |   |               |   | 108.4                   |   | 115.8 |   |
| OTHER LOANS              |   |              |   |               |   |                    |   |   |   |
| Australian Dollars       |   | Various           |   | Various            |   | 0.7                     |   | 0.2 |   |
| Euros                    |   | Various           |   | Various            |   | —                  |   | 33.4 |   |
| United States Dollars    |   | Various           |   | Various            |   | 1.6                     |   | 3.5 |   |
| Great British Pounds     |   | 10/31/2003        |   | 7.50               |   | 4.6                     |   | — |   |
|                     |   |              |   |               |   | 6.9                     |   | 37.1 |   |
| TOTAL UNSECURED CURRENT  |   |              |   |               |   | 857.7                   |   | 317.1 |   |
| TOTAL CURRENT            |   |              |   |               |   | 869.9                   |   | 349.8 |   |

 

----

(1)          The consolidated entity hascommitted bank overdraft facilities (both secured and unsecured) to a maximumof $275.5 million.  As at June 30, 2003the unused portions of the facilities were $159.6 million. The bank overdraftsare payable on demand and are subject to annual review.

 

(2)          These bank overdrafts/loans aresecured by a charge over assets of certain controlled entities.

 

(3)          Comprises loans secured overproperty, plant and equipment in overseas controlled entities to the extent of$77.3 million (2002: $107.2 million). The carrying value of the pledged property is $87.1 million (2002:$107.2 million)

 

(4)          Bills of exchange include:

 

Promissory NoteFacility

 

An uncommitted promissorynote facility of $600 million. Initially for a three year term, this facility, which matures inFebruary 2005, may be maintained for a rolling term of three years subject toagreement with participating banks.

 

As at June 30, 2003, therewere $41.0 million promissory notes outstanding (2002 nil).

 

Euro-CommercialPaper/Medium Term Note Program

 

A US$200 millionnon-underwritten facility under which commercial paper and medium term notescan be issued into the Asian and European capital markets.  As at June 30, 2003, there were nileuronotes outstanding (2002 nil).

 

US Commercial PaperProgram

 

An uncommitted commercialpaper program of US$200 million. As at June 30, 2003, A$67.4 million ofcommercial paper was outstanding with an average maturity of 8 days (2002A$115.8 million).

 

(5)          Principally relates to bankborrowings in;

 

•                  Amcor Limited and Amcor Finance(USA) Inc - $550 million multi-currency facility maturing in June 2004.  Drawings under this facility bear interestat BBSY or LIBOR plus an applicable credit margin (2003 $297.2 million; 2002$348.5 million).

 

•                  Amcor Limited - $150 million (2002$150 million) drawn under Amcor Limited’s $150 million fully drawn advancefacility maturing in 2004.  Thisfacility bears interest at the bank bill rate plus an applicable credit marginon rollovers from 30 to 180 days.

 

•                  Amcor (UK) Finance Limited - A$50.5million drawn under a US$1,000 million global syndicated multi-currencyfacility 364 day tranche of US$350 million maturing June 2004. Drawings are invarious European currencies and bear interest at the applicable LIBOR rate plusa credit margin.

 

----

 
|        |                                            |   | **At June 30**          |       |
|-------------|-------------------------------------------------|--------|-------------------------|------------|
|        |                                            |   | **(in millions of A$)** |       |
|        |                                            |   | **2003**                |       | **2002** |   |
| **Note 16** | **OTHER LIABILITIES AND  PROVISIONS - CURRENT** |   |                    | ** ** |   | ** ** |
|        |                                            |   |                    |       |   |   |
|        | Lease liabilities                               |   | 139.5                   |       | 12.1 |   |
|        |                                            |   |                    |       |   |   |
|        | Provisions for:                                 |   |                    |       |   |   |
|        | Dividend/distributions payable                  |   | 8.8                     |       | 123.0 |   |
|        | Income tax                                      |   | 74.1                    |       | 77.3 |   |
|        | Employee entitlements                           |   | 142.8                   |       | 133.0 |   |
|        | Insurance/claims                                |   | 67.0                    |       | 47.9 |   |
|        | Onerous contracts                               |   | 4.2                     |       | — |   |
|        |                                            |   |                    |       |   |   |
|        | Flexibles Europe restructuring                  |   |                    |       |   |   |
|        | Relocation                                      |   | 1.4                     |       |   |   |
|        | Plant closure                                   |   | 3.6                     |       |   |   |
|        | Redundancy                                      |   | 2.0                     |       |   |   |
|        | Other                                           |   | 2.9                     |       |   |   |
|        | Total Flexibles Europe restructuring            |   | 9.9                     |       | 49.9 |   |
|        |                                            |   |                    |       |   |   |
|        | Schmalbach restructuring                        |   |                    |       |   |   |
|        | Relocation                                      |   | 4.0                     |       |   |   |
|        | Plant closure                                   |   | 7.9                     |       |   |   |
|        | Redundancy                                      |   | 7.8                     |       |   |   |
|        | Asset impairment                                |   | 4.3                     |       |   |   |
|        | Other                                           |   | 7.3                     |       |   |   |
|        | Total Schmalbach restructuring                  |   | 31.3                    |       | 0.2 |   |
|        |                                            |   |                    |       |   |   |
|        | Other Business Groups restructuring             |   |                    |       |   |   |
|        | Relocation                                      |   | 3.2                     |       |   |   |
|        | Redundancy                                      |   | 14.2                    |       |   |   |
|        | Asset impairment                                |   | 7.9                     |       |   |   |
|        | Other                                           |   | 6.9                     |       |   |   |
|        | Other Business Groups restructuring             |   | 32.2                    |       | 28.3 |   |
|        | **OTHER LIABILITIES AND  PROVISIONS**           |   | 509.8                   |       | 471.7 |   |

 

----

 
|                                                                                                                                |   | **At June 30**          |       |
|-------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------|------------|
|                                                                                                                                |   | **(in millions of $A)** |       |
|                                                                                                                                |   | **2003**                |       |
| **Reconciliations**                                                                                                                 |   |                    |       |
|                                                                                                                                |   |                    |       |
| Reconciliations of the carrying amounts of each class of provision,  except for employee benefits and income tax are set out below: |   |                    |       |
|                                                                                                                                |   |                    |       |
| **Dividends/distributions**                                                                                                         |   |                    |       |
|                                                                                                                                |   |                    |       |
| Carrying amount at beginning of year                                                                                                |   | 123.0                   |       |
|                                                                                                                                |   |                    |       |
| Adjustment on adoption of AASB 1044 “Provisions, Contingent  Liabilities and Contingent Assets”                           |   | (115.2                  | )          |
|                                                                                                                                |   |                    |       |
| Provisions made during the year:                                                                                                    |   |                    |       |
| Final dividend 2002                                                                                                                 |   | 115.2                   |       |
| Interim dividend 2003                                                                                                               |   | 125.3                   |       |
| PACRS distribution                                                                                                                  |   | 52.3                    |       |
|                                                                                                                                |   |                    |       |
| Payments made during the year                                                                                                       |   | (291.8                  | )          |
|                                                                                                                                |   |                    |       |
| Carrying amount at end of year                                                                                                      |   | 8.8                     |       |
|                                                                                                                                |   |                    |       |
| **Insurance/claims**                                                                                                                |   |                    |       |
|                                                                                                                                |   |                    |       |
| Carrying amount at beginning of year                                                                                                |   | 47.9                    |       |
| Provisions made during the year                                                                                                     |   | 40.4                    |       |
| Payments made during the year                                                                                                       |   | (21.3                   | )          |
| Business acquisitions                                                                                                               |   | 0.9                     |       |
| Other movements                                                                                                                     |   | (0.9                    | )          |
| Carrying amount at end of year                                                                                                      |   | 67.0                    | ** ** |
|                                                                                                                                |   |                    |       |
| **Onerous contracts**                                                                                                               |   |                    |       |
|                                                                                                                                |   |                    |       |
| Carrying amount at beginning of year                                                                                                |   | —                  |       |
| Adjustment on adoption of AASB 1044 “Provisions, Contingent  Liabilities and Contingent Assets”                           |   | 10.1                    |       |
| Payments made during the year                                                                                                       |   | (5.9                    | )          |
| Carrying amount at end of year                                                                                                      |   | 4.2                     |       |
|                                                                                                                                |   |                    |       |
| **Flexibles Europe  restructuring**                                                                                                 |   |                    |       |
|                                                                                                                                |   |                    |       |
| Carrying amount at beginning of year                                                                                                |   | 49.9                    |       |
| Provisions made during the year                                                                                                     |   | 3.8                     |       |
| Payments made during the year                                                                                                       |   | (67.9                   | )          |
| Business acquisitions                                                                                                               |   | 0.9                     |       |
| Transfer from non-current                                                                                                           |   | 23.3                    |       |
| Other movements                                                                                                                     |   | (0.1                    | )          |
| Carrying amount at end of year                                                                                                      |   | 9.9                     |       |
|                                                                                                                                |   |                    |       |
| **Schmalbach restructuring**                                                                                                        |   |                    |       |
|                                                                                                                                |   |                    |       |
| Carrying amount at beginning of year                                                                                                |   | 0.2                     |       |
| Provisions made during the year                                                                                                     |   | 4.3                     |       |
| Payments made during the year                                                                                                       |   | (27.2                   | )          |
| Business acquisitions                                                                                                               |   | 55.7                    |       |
| Business disposals                                                                                                                  |   | (3.4                    | )          |
| Other movements                                                                                                                     |   | 1.7                     |       |
| Carrying amount at end of year                                                                                                      |   | 31.3                    | ** ** |
|                                                                                                                                |   |                    |       |
| **Other Business Groups  restructuring**                                                                                            |   |                    |       |
|                                                                                                                                |   |                    |       |
| Carrying amount at beginning of year                                                                                                |   | 28.3                    |       |
| Provisions made during the year                                                                                                     |   | 15.5                    |       |
| Payments made during the year                                                                                                       |   | (11.3                   | )          |
| Business acquisitions                                                                                                               |   | (0.3                    | )          |
| Carrying amount at end of year                                                                                                      |   | 32.2                    | ** ** |

 

**Note 17****                        ****BANK AND OTHER BORROWINGS – NON-CURRENT**

 

The following table sets outdetail in respect of the major components of Bank and Other Borrowings byCurrency:

 

----

 
|                          |   | **Maturity** |   | **Interest Rate** |   | **(in millions of A$)** |   |
|-------------------------------|--------|--------------|--------|-------------------|--------|-------------------------|--------|
| **Nature of Borrowing**       |   | **Date**     |   | **% p.a.**        |   | **2003**                |   | **2002** |   |
| SECURED BANK TERM LOANS (2)   |   |         |   |              |   |                    |   |   |   |
| United States Dollars         |   | Various      |   | Various           |   | 3.1                     |   | 6.1 |   |
| Canadian Dollars              |   |         |   |              |   | —                  |   | 4.8 |   |
| Thai Baht                     |   | 02/28/2007   |   | 3.93              |   | 7.6                     |   | 9.5 |   |
| Euros                         |   | Various      |   | 4.25              |   | 0.8                     |   | 0.4 |   |
|                          |   |         |   |              |   | 11.5                    |   | 20.8 |   |
| BONDS                         |   |         |   |              |   |                    |   |   |   |
| United States Dollars         |   |         |   |              |   | —                  |   | 49.3 |   |
|                          |   |         |   |              |   | —                  |   | 49.3 |   |
| MORTGAGE LOANS (1)            |   |         |   |              |   |                    |   |   |   |
| Canadian Dollars              |   |         |   |              |   | —                  |   | 0.1 |   |
|                          |   |         |   |              |   | —                  |   | 0.1 |   |
| TOTAL SECURED NON-CURRENT     |   |         |   |              |   | 11.5                    |   | 70.2 |   |
|                          |   |         |   |              |   |                    |   |   |   |
| UNSECURED BANK TERM LOANS (3) |   |         |   |              |   |                    |   |   |   |
| Australian Dollars            |   |         |   |              |   | —                  |   | 200.6 |   |
| Euros                         |   | Various      |   | Various           |   | 56.6                    |   | 105.1 |   |
| Polish Zloty                  |   |         |   |              |   | —                  |   | 4.5 |   |
| Swiss Francs                  |   |         |   |              |   | —                  |   | 13.1 |   |
| New Zealand Dollars           |   | 04/29/2006   |   | Variable          |   | 45.6                    |   | 65.9 |   |
| United States Dollars         |   | Various      |   | Various           |   | 19.0                    |   | 405.8 |   |
| Canadian Dollars              |   | 10/31/2006   |   | BBSY + 0.65%      |   | 101.1                   |   | — |   |
|                          |   |         |   |              |   | 222.3                   |   | 795.0 |   |
| US$ NOTES (4)                 |   |         |   |              |   |                    |   |   |   |
| United States Dollars         |   | Various      |   | 4.91 – 5.95  |   | 748.9                   |   | 221.3 |   |
|                          |   |         |   |              |   | 748.9                   |   | 221.3 |   |

 

----

 
|                                         |   |       |   |    |   | **At June 30**          |   |
|----------------------------------------------|--------|------------|--------|---------|--------|-------------------------|--------|
|                                         |   |       |   |    |   | **(in millions of A$)** |   |
|                                         |   |       |   |    |   | **2003**                |   | **2002** |   |
| OTHER LOANS                                  |   |       |   |    |   |                    |   |   |   |
| Australian Dollars                           |   | Various    |   | Various |   | 2.4                     |   | 2.6 |   |
| Brazilian Reals                              |   |       |   |    |   | —                  |   | 4.7 |   |
| Great British Pounds                         |   |       |   |    |   | —                  |   | 5.3 |   |
| United States Dollars                        |   | Various    |   | Various |   | 2.7                     |   | 1.2 |   |
| Canadian Dollars                             |   | 07/01/2004 |   | 4.81    |   | 4.0                     |   | — |   |
| Euros                                        |   | Various    |   | Various |   | 0.9                     |   | — |   |
|                                         |   |       |   |    |   | 10.0                    |   | 13.8 |   |
| TOTAL UNSECURED NON-CURRENT                  |   |       |   |    |   | 981.2                   |   | 1,030.1 |   |
| TOTAL NON-CURRENT                            |   |       |   |    |   | 992.7                   |   | 1,100.3 |   |
|                                         |   |       |   |    |   |                    |   |   |   |
| **Maturity Profile**                         |   |       |   |    |   |                    |   |   |   |
| Due within 1-2 years                         |   |       |   |    |   | 27.8                    |   | 815.0 |   |
| Due within 2-3 years                         |   |       |   |    |   | 47.1                    |   | 31.3 |   |
| Due within 3-4 years                         |   |       |   |    |   | 110.8                   |   | 77.9 |   |
| Due within 4-5 years                         |   |       |   |    |   | 55.3                    |   | 135.1 |   |
| Due after 5 years                            |   |       |   |    |   | 751.7                   |   | 41.0 |   |
| **BANK AND OTHER BORROWINGS  - NON-CURRENT** |   |       |   |    |   | 992.7                   |   | 1,100.3 |   |

 

----

(1)          These loans are secured by a chargeover assets of certain controlled entities.

 

(2)          Comprises loans secured overproperty, plant and equipment in overseas controlled entities to the extent of$12.0 million (2002: $74.1 million). The carrying value of the pledged property is $12.9 million (2002: $81.8million).

 

(3)          Principally relates to bankborrowings in:

 

•                  Amcor Finance (New Zealand) Limited- A$45.6 million (2002 A$66 million) drawn under NZ$100 million revolving cashadvance facility maturing in 2006.  Thisfacility bears interest at the bank bill rate plus an applicable credit margin.

 

•                  Amcor Packaging (USA) Inc Group -A$116 million fully-drawn under an Australian dollar bill facility maturing inOctober 2006. The amount drawn under this facility bears interest at BBSY plus acredit margin and has been converted to CAD$101.1 million under across-currency and interest rate swap.

 

•                  Amcor (UK) Finance Limited - A$46.2million drawn under a US$1,000 million global syndicated multi-currencyfacility term-tranche of US$650 million maturing June 2008.  Drawings are in various European currenciesand bear interest at the applicable LIBOR rate plus a credit margin.

 

(4)          Represents US$500 million AmcorLimited senior unsecured guaranteed notes issued in the United States PrivatePlacement market.  The notes have finalbullet maturities of seven to 15 years. Interest on these notes is payablesemi-annually.

 

----

 

 

**Note 18****                        ****OTHER LIABILITIES AND PROVISIONS - NON-CURRENT**

 
|                                                                                                                                         |   | **At June 30**          |   |
|----------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------|--------|
|                                                                                                                                         |   | **(in millions of A$)** |   |
|                                                                                                                                         |   | **2003**                |   | **2002** |   |
| Lease liabilities                                                                                                                            |   | 10.9                    |   | 44.9 |   |
| Other creditors – unsecured                                                                                                             |   | 0.1                     |   | 6.9 |   |
| Provisions for:                                                                                                                              |   |                    |   |   |   |
| Employee entitlements                                                                                                                        |   | 80.3                    |   | 55.4 |   |
| Deferred income tax                                                                                                                          |   | 345.5                   |   | 355.0 |   |
| Insurance/claims                                                                                                                             |   | 1.6                     |   | 1.8 |   |
| Onerous contracts                                                                                                                            |   | 10.0                    |   | — |   |
| Flexibles Europe restructuring                                                                                                               |   |                    |   |   |   |
| Relocation                                                                                                                                   |   | 1.2                     |   |   |   |
| Plant closure                                                                                                                                |   | 3.2                     |   |   |   |
| Redundancy                                                                                                                                   |   | 1.9                     |   |   |   |
| Other                                                                                                                                        |   | 2.6                     |   |   |   |
| Flexibles Europe restructuring                                                                                                               |   | 8.9                     |   | 38.9 |   |
| Schmalbach restructuring                                                                                                                     |   |                    |   |   |   |
| Relocation                                                                                                                                   |   | 0.5                     |   |   |   |
| Redundancy                                                                                                                                   |   | 1.3                     |   |   |   |
| Asset impairment                                                                                                                             |   | 1.0                     |   |   |   |
| Other                                                                                                                                        |   | 1.8                     |   |   |   |
| Schmalbach restructuring                                                                                                                     |   | 4.6                     |   | — |   |
| **TOTAL OTHER LIABILITIES  AND PROVISIONS - NON-CURRENT**                                                                                    |   | 461.9                   |   | 502.9 |   |
|                                                                                                                                         |   |                    |   |   |   |
| **Reconciliations**                                                                                                                          |   |                    |   |   |   |
|                                                                                                                                         |   |                    |   |   |   |
| Reconciliations of the carrying amounts of each class of provision,  except for employee benefits and deferred income tax are set out below: |   |                    |   |   |   |
|                                                                                                                                         |   |                    |   |   |   |
| **Insurance/claims**                                                                                                                         |   |                    |   |   |   |
|                                                                                                                                         |   |                    |   |   |   |
| Carrying amount at beginning of year                                                                                                         |   | 1.8                     |   |   |   |
| Other movements                                                                                                                              |   | (0.2                    | )      |   |   |
| Carrying amount at end of year                                                                                                               |   | 1.6                     |   |   |   |
|                                                                                                                                         |   |                    |   |   |   |
| **Onerous contracts**                                                                                                                        |   |                    |   |   |   |
|                                                                                                                                         |   |                    |   |   |   |
| Carrying amount at beginning of year                                                                                                         |   | —                  |   |   |   |
| Adjustment on adoption of AASB 1044 “Provisions, Contingent  Liabilities and Contingent Assets”                                    |   | 10.0                    |   |   |   |
| Carrying amount at end of year                                                                                                               |   | 10.0                    |   |   |   |
|                                                                                                                                         |   |                    |   |   |   |
| **Flexibles Europe  restructuring**                                                                                                          |   |                    |   |   |   |
|                                                                                                                                         |   |                    |   |   |   |
| Carrying amount at beginning of year                                                                                                         |   | 38.9                    |   |   |   |
| Payments made during the year                                                                                                                |   | (7.0                    | )      |   |   |
| Transfer to current                                                                                                                          |   | (23.3                   | )      |   |   |
| Other movements                                                                                                                              |   | 0.3                     |   |   |   |
| Carrying amount at end of year                                                                                                               |   | 8.9                     |   |   |   |
|                                                                                                                                         |   |                    |   |   |   |
| **Schmalbach restructuring**                                                                                                                 |   |                    |   |   |   |
|                                                                                                                                         |   |                    |   |   |   |
| Carrying amount at beginning of year                                                                                                         |   | —                  |   |   |   |
| Provisions made during the year                                                                                                              |   | 17.5                    |   |   |   |
| Payments made during the year                                                                                                                |   | (47.5                   | )      |   |   |
| Business acquisitions                                                                                                                        |   | 35.4                    |   |   |   |
| Other movements                                                                                                                              |   | (0.8                    | )      |   |   |
| Carrying amount at end of year                                                                                                               |   | 4.6                     |   |   |   |

 

----

 

**Note 19****                        ****UNDATED SUBORDINATED CONVERTIBLE SECURITIES**

 
|                                                                      |   | **At June 30**          |   |
|---------------------------------------------------------------------------|--------|-------------------------|--------|
|                                                                      |   | **(in millions of A$)** |   |
|                                                                      |   | **2003**                |   | **2002** |   |
|                                                                      |   |                    |   |   |   |
| 1997 issue of 7.25% Undated Subordinated Convertible Unsecured Notes  (1) |   | 344.5                   |   | 407.2 |   |
|                                                                      |   |                    |   |   |   |
| 1994 issue of 6.5% Undated Subordinated Convertible Unsecured Notes  (2)  |   | 101.7                   |   | 135.9 |   |
|                                                                      |   |                    |   |   |   |
| **TOTAL UNDATED SUBORDINATED  CONVERTIBLE SECURITIES**                    |   | 446.2                   |   | 543.1 |   |

 

----

(1)                                  Original issue of US$230 million7.25% undated subordinated convertible notes convertible into AmericanDepository Shares, representing four ordinary shares of the consolidatedentity, at the rate in the range of 2.347 to 2.664 for each US$50 principalamount of notes converted depending on the market price at the date ofconversion.  The market price at date ofconversion is the last bid price of the Nasdaq National Market on the date ofconversion.  The notes were convertiblefrom November 19, 1996 and may be converted until November 19, 2006.

 

These notes have no maturitydates, are only redeemable after November 19, 2006, and then only at theconsolidated entity’s option, and are subordinated to all other obligations ofthe consolidated entity save for issued capital.  Interest on these notes is payable semi-annually.

 

During the year ended June30, 2003, no notes were converted to ordinary shares.

 

(2)                                  Balance outstanding of originalissue of 16,100,000 notes of $9.35 convertible into 1.27 ordinary shares foreach note converted.  The notes wereconvertible from July 1, 1995 and may be converted until October 31, 2003.

 

These notes have no maturitydates, are only redeemable after October 31, 2003 and then only at theconsolidated entity’s option and are subordinated to all other obligations ofthe consolidated entity save for issued capital.  Interest on these notes is payable semi-annually.

 

During the year ended June30, 2003, 3,655,850 notes were converted to ordinary shares.

 

**Note 20****                        ****SHARE CAPITAL**

 
|                                                                |   | **At June 30**          |   |
|---------------------------------------------------------------------|--------|-------------------------|--------|
|                                                                |   | **(in millions of A$)** |   |
|                                                                |   | **2003**                |   | **2002** |   |
|                                                                |   |                    |   |   |   |
| Issued and paid-up:                                                 |   |                    |   |   |   |
| 848,223,877 (2002:  822,601,167)  Ordinary shares                   |   | 2,538.6                 |   | 2,376.1 |   |
|                                                                |   |                    |   |   |   |
| 2,267,000 (2002: 2,907,000)  Partly paid ordinary shares            |   | 0.1                     |   | 0.1 |   |
|                                                                |   |                    |   |   |   |
| 6,099,087 (2002: 6,099,087)  Perpetual convertible reset securities |   | 596.6                   |   | 596.6 |   |
| **TOTAL PAID-UP CAPITAL**                                           |   | 3,135.3                 |   | 2,972.8 |   |

 

----

 

**Note 21****                         EMPLOYEE BENEFITS/EMPLOYEE SHARE SCHEMES**

 

The aggregate provision for employee entitlements at balance date is:

 
| • |   | Current – refer Note 16                    |   | 142.8 |   | 133.0 |   |
|--------|--------|-------------------------------------------------|--------|-------|--------|-------|--------|
| • |   | Current – other creditors -  refer Note 14 |   | 120.4 |   | 105.9 |   |
| • |   | Non-Current - refer Note 18                     |   | 80.3  |   | 55.4  |   |
|   |   |                                            |   | 343.5 |   | 294.3 |   |

 

**Employee benefits**

** **

Included in the aboveemployee benefits of the consolidated entity are provisions relating todirectors’ retiring allowances. These provisions only relate to non-executivedirectors of Amcor Limited and are in accordance with the consolidated entity’sConstitution and with agreements between the consolidated entity and individualdirectors.

 

The consolidated entitymaintains two Executive and Employee Share Purchase Plans which were introducedin 1985.

 

**Employee Share Purchase Plan (‘ESPP’)**

** **

Under the first plan,introduced in January 1985, the Employee Share Purchase Plan (ESPP), ordinaryshares are issued (paid as to $0.01 or such greater amount as may be specifiedby the directors) to executive officers (and directors who are executives) andemployees with more than twelve months service at the date of the allotment inAustralia, NZ, US, Mexico, UK, Canada, Belgium, Germany, Holland, Portugal,Switzerland, Spain, Ireland, Brazil, Sweden, Norway and Finland.

 

The number of shares to beoffered depends upon the consolidated entity’s increase in earnings per shareon the following basis: an increase in earnings per share of less than 5% willresult in no offer, from 5% to 10% an offer of 100 Ordinary Shares, from morethan 10% to 15% an offer of 200 Ordinary Shares will be made and above 15% anoffer of 300 Ordinary Shares will be made.  Shares are currently issued at a 40% discount to the prevailing marketprice of Amcor shares and are funded by an interest-free loan from the consolidatedentity.  Dividends on the shares areapplied in repayment of the loan balance.

 

The consolidated entityretains a lien over the Ordinary Shares issued to secure the loan monies untilthe occurrence of a specified event such as retirement, death or payment infull.  Upon retirement or death, thetiming of the repayment of the balance of loan monies then owing is at thediscretion of directors.  The lienentitles the consolidated entity to sell the shares and apply the proceeds tomeet the balance of monies then owing. In the event of a deficiency remaining after sale the consolidatedentity has no claim against the former executive or his or her estate for thatamount.  The shares carry full dividendentitlements and voting rights.

 

If the employee leaves theconsolidated entity, the shares are sold and the proceeds are applied todischarge the loan.

 

On December 2, 2002, 14,208employees electing to participate received an allotment of 200 ordinary shareseach in respect of the 2002 financial year. 2,655,000 ordinary shares were issued at a price of $4.87; and in onecountry, due to legislative requirements, 186,600 ordinary shares were issuedat a price of $2.03.

 

**Other Employee Share Purchase Plan**

** **

Under the second plan,introduced in October 1985 ordinary shares or options of Amcor Limited can beissued to executive officers and directors (including directors who areexecutives) and senior staff members selected by the directors.

 

Ordinary shares may be issuedpaid to not less than $0.05.  The ordinaryshares are issued at market price at the time of issue.  The balance of the call outstanding onlybecomes payable on retirement, death or at the directors’ discretion.  Similar to the ESPP, the consolidated entityhas a lien over the ordinary shares. Any deficiency between the balance of the issue price and the realizablevalue of the ordinary shares shall be met out of the consolidated entity’sshare capital account.  These ordinaryshares do not carry dividend entitlements unless determined otherwise by thedirectors.  Voting rights exercisable byholders of partly-paid ordinary shares are reduced pro rata to the portion ofthe issue price paid up on those shares under the Australian Stock ExchangeListing Rules.

 

 

Notes 1 to 35 form part ofthese accounts and are to be read in conjunction therewith.

 

----

 

The partly-paid ordinaryshares disclosed (refer Note 20) relate to these shares.  Options under this plan may be issued uponsuch terms and subject to such conditions as the directors of Amcor Limiteddetermine at the time.

 

During the twelve monthperiod ended June 30, 2003, 14,439,878 options have been issued under thisplan, as set out in the following table. Since June 30, 2003, 455,000 options have been issued under this plan.

 

The value of any benefit todirectors and executive officers of entitlements under the ESP’s are notincluded in the aggregate amount of remuneration (refer Note 27) since there isno accessible benefit as the issue price is market value at the date of issue.

 

The maximum number of sharesthat can be issued under all plans cannot exceed 5% of the consolidatedentity’s issued capital.

** **

**Employee Bonus Payment Plan (‘EBPP’)**

** **

The Employee Bonus PaymentPlan is an alternative to the ESPP and is in place in countries where theconsolidated entity is unable to issue shares. Participants are offered entitlements, which are equivalent to 60% ofthe weighted average price of Amcor Limited shares, and over the period duringwhich employees hold their entitlements, their value will mirror thefluctuating value of Amcor Limited shares, including all dividends paid on theshares during this time.

 

Employees are only able toconvert their entitlements into a cash bonus payment when they leave theconsolidated entity or three years have passed since the date on whichentitlements were originally issued.

 

During the year, 207,800 ofthese instruments were issued at a price of $4.87 each.

 

**Other Employee Share Issues**

** **

During the year, 314,820ordinary shares were issued at a price of $7.20 to employees who elected totake part or all of their bonuses by way of shares.  The number of shares issued to employees is determined bydividing the value of the bonus amount by the simple average of the closingprice of the shares on each trading day for the relevant financial year and areissued at the time when the cash bonus is payable.  The shares may not be disposed of by the employee for arestricted period of ten years in Australia and five years in the UK, unlessthe employee ceases employment.

 

During the year 384,147(2002: 135,000) ordinary shares were issued for nil consideration withperformance restrictions of three and up to five years.

 

During the year, 300,000Share Appreciation Entitlements were issued to an employee who took part of hisbonus by way of entitlements. The number of entitlements issued was determinedby an option price formula determined by the Hay Group. During the periodduring which the employee holds his entitlements, their value will mirror thefluctuating value of Amcor Limited shares. The employee is able to convert hisentitlements to cash as they vest or when he leaves the consolidated entity.

 

F - 2

----

 

**Employeeoptions**

 

As described above, an employee share scheme has beenestablished where the consolidated entity may grant options over the ordinaryshares of Amcor Limited to executive directors, executives and certain membersof staff of the consolidated entity. The options, issued for nil consideration,are granted in accordance with performance guidelines established by thedirectors of Amcor Limited.  The optionsare issued for up to a term of ten years. The options cannot be transferred and will not be quoted on theAustralian Stock Exchange.

 
|                    |   | **Exercise  date on** |   |            |   | **Exercise  price** |   | **Number of  options at  beginning of** |      | **Options** |   | **Options** |   | **Options**   |    | **Number of options at  end of year** |      | **Proceeds  received** |      | **Date** |   | **Number  of  shares** |   | **Fair value  per share  for options  exercised** |   |
|-------------------------|--------|-----------------------|--------|-----------------|--------|---------------------|--------|-----------------------------------------|-----------|-------------|--------|-------------|--------|---------------|---------|---------------------------------------|-----------|------------------------|-----------|----------|--------|------------------------|--------|---------------------------------------------------|--------|
| **Grant date**          |   | **or after**          |   | **Expiry date** |   | **$**               |   | **year**                                |      | **granted** |   | **lapsed**  |   | **exercised** |    | **On issue**                          |      | **Vested**             |      | **$**    |   | **issued**             |   | **issued**                                        |   | **$** |   |
| **Consolidated - 2003** |   |                  |   |            |   |                |   |                                    |      |        |   |        |   |          |    |                                  |      |                   |      |     |   |                   |   |                                              |   |
|                    |   |                  |   |            |   |                |   |                                    |      |        |   |        |   |          |    |                                  |      |                   |      |     |   |                   |   |                                              |   |   |   |
| 24-Sep-98               |   | 24-Sep-01             |   | 24-Sep-03       |   | $                   | 4.64   |                                    | 130,350   |        |   |        |   |          | 44,500  |                                  | 85,850    |                   | 85,850    |     | $      | 206,480                |   | Various                                           |   | 44,500 |   | 8.59 |   |
| 16-Sep-99               |   | 16-Sep-02             |   | 16-Sep-04       |   | $                   | 6.47   |                                    | 1,100,000 |        |   |        |   |          | 289,500 |                                  | 810,500   |                   | 810,500   |     | $      | 1,873,065              |   | Various                                           |   | 289,500 |   | 8.32 |   |
| 08-Nov-99               |   | 08-Nov-99             |   | 08-Nov-04       |   | $                   | 5.43   |                                    | 200,000   |        |   |        |   |          | 100,000 |                                  | 100,000   |                   | 100,000   |     | $      | 543,000                |   | Various                                           |   | 100,000 |   | 8.76 |   |
| 31-Jul-00               |   | 31-Jul-00             |   | 31-Jul-05       |   | $                   | 5.10   |                                    | 150,000   |        |   |        |   |          | 100,000 |                                  | 50,000    |                   | 50,000    |     | $      | 510,000                |   | Various                                           |   | 100,000 |   | 8.36 |   |
| 18-Aug-00               |   | 01-Oct-01             |   | 01-Oct-05       |   | $                   | 5.67   |                                    | 1,000,000 |        |   |        |   |          |    |                                  | 1,000,000 |                   | 1,000,000 |     |   |                   |   |                                              |   |   |   |   |
| 18-Aug-00               |   | 01-Oct-02             |   | 01-Oct-05       |   | $                   | 5.67   |                                    | 1,000,000 |        |   |        |   |          |    |                                  | 1,000,000 |                   | 1,000,000 |     |   |                   |   |                                              |   |   |   |   |
| 18-Aug-00               |   | 01-Oct-03             |   | 01-Oct-05       |   | $                   | 5.67   |                                    | 1,000,000 |        |   |        |   |          |    |                                  | 1,000,000 |                   | —    |     |   |                   |   |                                              |   |   |   |   |
| 14-Sep-00               |   | 14-Sep-03             |   | 14-Sep-05       |   | $                   | 5.16   |                                    | 912,000   |        |   |        |   |          | 102,000 |                                  | 810,000   |                   | —    |     | $      | 526,320                |   | Various                                           |   | 102,000 |   | 8.38 |   |
| 01-Oct-00               |   | 01-Oct-00             |   | 01-Oct-05       |   | $                   | 5.10   |                                    | 790,000   |        |   |        |   |          | 375,000 |                                  | 415,000   |                   | 415,000   |     | $      | 1,912,500              |   | Various                                           |   | 375,000 |   | 8.49 |   |
| 15-Feb-01               |   | 15-Feb-01             |   | 15-Feb-06       |   | $                   | 5.24   |                                    | 100,000   |        |   |        |   |          |    |                                  | 100,000   |                   | 100,000   |     |   |                   |   |                                              |   |   |   |   |
| 01-Mar-01               |   | 01-Mar-01             |   | 01-Mar-06       |   | $                   | 5.47   |                                    | 20,000    |        |   |        |   |          | 10,000  |                                  | 10,000    |                   | 10,000    |     | $      | 54,700                 |   | Various                                           |   | 10,000 |   | 8.24 |   |
| 13-Sep-01               |   | 13-Sep-04             |   | 13-Sep-06       |   | $                   | 6.02   |                                    | 1,555,000 |        |   |        |   |          | 112,500 |                                  | 1,442,500 |                   | —    |     | $      | 677,250                |   | Various                                           |   | 112,500 |   | 8.30 |   |
| 01-Oct-01               |   | 01-Oct-01             |   | 01-Oct-06       |   | $                   | 6.03   |                                    | 100,000   |        |   |        |   |          |    |                                  | 100,000   |                   | 100,000   |     |   |                   |   |                                              |   |   |   |   |
| 01-Oct-01               |   | 01-Oct-01             |   | 01-Oct-05       |   | $                   | 5.10   |                                    | 1,722,000 |        |   |        |   |          | 678,000 |                                  | 1,044,000 |                   | 1,044,000 |     | $      | 3,457,800              |   | Various                                           |   | 678,000 |   | 8.51 |   |
| 01-Oct-01               |   | 01-Oct-01             |   | 01-Oct-05       |   | $                   | 6.62   |                                    | 50,000    |        |   |        |   |          |    |                                  | 50,000    |                   | 50,000    |     |   |                   |   |                                              |   |   |   |   |
| 01-Oct-01               |   | 01-Oct-01             |   | 01-Oct-05       |   | $                   | 5.30   |                                    | 10,000    |        |   |        |   |          |    |                                  | 10,000    |                   | 10,000    |     |   |                   |   |                                              |   |   |   |   |
| 01-Oct-01               |   | 01-Oct-01             |   | 01-Oct-05       |   | $                   | 5.24   |                                    | 40,000    |        |   |        |   |          |    |                                  | 40,000    |                   | 40,000    |     |   |                   |   |                                              |   |   |   |   |
| 01-Oct-01               |   | 01-Oct-01             |   | 01-Oct-06       |   | $                   | 5.71   |                                    | 30,000    |        |   |        |   |          |    |                                  | 30,000    |                   | 30,000    |     |   |                   |   |                                              |   |   |   |   |

 

F - 3

----

 
|                    |   | **Exercise  date on** |   |            |   | **Exercise  price** |   | **Number of  options at  beginning of** |   | **Options** |      | **Options** |   | **Options**   |    | **Number of options at  end of year** |      | **Proceeds  received** |      | **Date** |   | **Number  of  shares** |   | **Fair value  per share  for options  exercised** |   |
|-------------------------|--------|-----------------------|--------|-----------------|--------|---------------------|--------|-----------------------------------------|--------|-------------|-----------|-------------|--------|---------------|---------|---------------------------------------|-----------|------------------------|-----------|----------|--------|------------------------|--------|---------------------------------------------------|--------|
| **Grant date**          |   | **or after**          |   | **Expiry date** |   | **$**               |   | **year**                                |   | **granted** |      | **lapsed**  |   | **exercised** |    | **On issue**                          |      | **Vested**             |      | **$**    |   | **issued**             |   | **issued**                                        |   | **$** |   |
| **Consolidated - 2003** |   |                  |   |            |   |                |   |                                    |   |        |      |        |   |          |    |                                  |      |                   |      |     |   |                   |   |                                              |   |
| 14-Aug-02               |   | 01-Oct-04             |   | 30-Sep-08       |   | $                   | 8.20   |                                    |   |        | 1,000,000 |        |   |          |    |                                  | 1,000,000 |                   | —    |     |   |                   |   |                                              |   |   |   |   |
| 14-Aug-02               |   | 01-Oct-05             |   | 30-Sep-08       |   | $                   | 8.20   |                                    |   |        | 1,000,000 |        |   |          |    |                                  | 1,000,000 |                   | —    |     |   |                   |   |                                              |   |   |   |   |
| 14-Aug-02               |   | 01-Oct-06             |   | 30-Sep-08       |   | $                   | 8.20   |                                    |   |        | 1,000,000 |        |   |          |    |                                  | 1,000,000 |                   | —    |     |   |                   |   |                                              |   |   |   |   |
| 01-Oct-02               |   | 01-Oct-02             |   | 01-Oct-05       |   | $                   | 5.10   |                                    |   |        | 2,522,878 |        |   |          | 932,878 |                                  | 1,590,000 |                   | 1,590,000 |     | $      | 4,757,678              |   | Various                                           |   | 932,878 |   | 8.26 |   |
| 01-Oct-02               |   | 01-Oct-02             |   | 01-Oct-05       |   | $                   | 6.62   |                                    |   |        | 50,000    |        |   |          |    |                                  | 50,000    |                   | 50,000    |     |   |                   |   |                                              |   |   |   |   |
| 01-Oct-02               |   | 01-Oct-02             |   | 01-Oct-05       |   | $                   | 5.30   |                                    |   |        | 10,000    |        |   |          |    |                                  | 10,000    |                   | 10,000    |     |   |                   |   |                                              |   |   |   |   |
| 01-Oct-02               |   | 01-Oct-02             |   | 01-Oct-05       |   | $                   | 5.24   |                                    |   |        | 40,000    |        |   |          |    |                                  | 40,000    |                   | 40,000    |     |   |                   |   |                                              |   |   |   |   |
| 01-Oct-02               |   | 01-Oct-02             |   | 01-Oct-06       |   | $                   | 6.03   |                                    |   |        | 180,000   |        |   |          | 80,000  |                                  | 100,000   |                   | 100,000   |     | $      | 482,400                |   | Various                                           |   | 80,000 |   | 8.16 |   |
| 01-Oct-02               |   | 01-Oct-02             |   | 01-Oct-06       |   | $                   | 5.71   |                                    |   |        | 30,000    |        |   |          |    |                                  | 30,000    |                   | 30,000    |     |   |                   |   |                                              |   |   |   |   |
| 01-Oct-02               |   | 01-Oct-02             |   | 01-Oct-07       |   | $                   | 7.25   |                                    |   |        | 40,000    |        |   |          |    |                                  | 40,000    |                   | 40,000    |     |   |                   |   |                                              |   |   |   |   |
| 01-Nov-02               |   | 01-Nov-05             |   | 01-Nov-12       |   | $                   | 8.20   |                                    |   |        | 5,927,000 |        |   |          |    |                                  | 5,927,000 |                   | —    |     |   |                   |   |                                              |   |   |   |   |
| 01-Nov-02               |   | 30-Sep-02             |   | 01-Jul-07       |   | $                   | 7.30   |                                    |   |        | 50,000    |        |   |          |    |                                  | 50,000    |                   | 50,000    |     |   |                   |   |                                              |   |   |   |   |
| 01-Nov-02               |   | 30-Sep-02             |   | 01-Jul-07       |   | $                   | 7.30   |                                    |   |        | 100,000   |        |   |          |    |                                  | 100,000   |                   | —    |     |   |                   |   |                                              |   |   |   |   |
| 01-Nov-02               |   | 30-Sep-03             |   | 01-Jul-07       |   | $                   | 7.30   |                                    |   |        | 100,000   |        |   |          |    |                                  | 100,000   |                   | —    |     |   |                   |   |                                              |   |   |   |   |
| 01-Nov-02               |   | 30-Sep-04             |   | 01-Jul-07       |   | $                   | 7.30   |                                    |   |        | 100,000   |        |   |          |    |                                  | 100,000   |                   | —    |     |   |                   |   |                                              |   |   |   |   |
| 01-Nov-02               |   | 30-Sep-03             |   | 01-Jul-07       |   | $                   | 7.40   |                                    |   |        | 1,145,000 |        |   |          |    |                                  | 1,145,000 |                   | —    |     |   |                   |   |                                              |   |   |   |   |
| 01-Nov-02               |   | 30-Sep-04             |   | 01-Jul-07       |   | $                   | 7.40   |                                    |   |        | 1,145,000 |        |   |          |    |                                  | 1,145,000 |                   | —    |     |   |                   |   |                                              |   |   |   |   |
|                    |   |                  |   |            |   |                |   |                                    |   |        |      |        |   |          |    |                                  |      |                   |      |     |   |                   |   |                                              |   |   |   |
|                    |   |                  |   |            |   |                |   | 9,909,350                               |   | 14,439,878  |      | —      |   | 2,824,378     |    | 21,524,850                            |      | 6,755,350              |      |     |   |                   |   |                                              |   |   |   |

 

F - 4

----

 

The fair value of each option is estimated on thedate of grant using an option-pricing model with the following weighted averageassumptions used for grants made in the year to June 30, 2003, June 30, 2002and June 30, 2001:

 
|                             |   | **2003** |   | **2002** |   | **2001** |   |
|----------------------------------|--------|----------|--------|----------|--------|----------|--------|
|                             |   |     |   |     |   |     |   |
| Dividend yield  (%)              |   | 3.4      |   | 4.6      |   | 7.0      |   |
| Expected  volatility (%)         |   | 20.0     |   | 22.7     |   | 31.3     |   |
| Historical  volatility (%)       |   | 20.0     |   | 22.7     |   | 31.3     |   |
| Risk-free  interest rate (%)     |   | 5.3      |   | 5.3      |   | 6.7      |   |
| Expected life of  option (years) |   | 5.7      |   | 5.0      |   | 5.0      |   |

 

The dividend yield reflects the assumption that thecurrent dividend payout will continue with no anticipated changes. The expectedlife of the options is based on historical data and is not necessarilyindicative of exercise patterns that may occur. The expected volatilityreflects the assumption that the historical volatility is indicative of futuretrends, which may also not necessarily be the actual outcome.

 

The resulting weighted average fair values per optionfor those options vesting after July 1, 2002 are:

 
|                                      |   | **Number of options** |   | **Grant date** |       | **Vesting date** |       | **Fair value  $/option** |   |
|-------------------------------------------|--------|-----------------------|--------|----------------|------------|------------------|------------|--------------------------|--------|
| ***Issues up to June 30, 2002***          |   |                  |   |           |       |             |       |                     |   |
|                                      |   | 1,660,000             |   | 16-Sep-99      |       | 16-Sep-02        |       | 1.74                     |   |
|                                      |   | 1,104,000             |   | 14-Sep-00      |       | 14-Sep-03        |       | 1.58                     |   |
|                                      |   | 1,000,000             |   | 18-Aug-00      |       | 01-Oct-02        |       | 1.71                     |   |
|                                      |   | 1,000,000             |   | 18-Aug-00      |       | 01-Oct-03        |       | 1.71                     |   |
|                                      |   | 1,622,500             |   | 13-Sep-01      |       | 13-Sep-04        |       | 1.34                     |   |
|                                      |   |                  |   |           |       |             |       |                     |   |
|                                      |   | **6,386,500**         |   |           |       |             |       |                     |   |
|                                      |   |                  |   |           |       |             |       |                     |   |
| ***Issues in the year to June 30, 2003*** |   |                  |   |           |       |             |       |                     |   |
|                                      |   | 1,000,000             |   | 14-Aug-02      |       | 01-Oct-04        |       | 1.72                     |   |
|                                      |   | 1,000,000             |   | 14-Aug-02      |       | 01-Oct-05        |       | 1.72                     |   |
|                                      |   | 1,000,000             |   | 14-Aug-02      |       | 01-Oct-06        |       | 1.72                     |   |
|                                      |   | 2,522,878             |   | 01-Oct-02      |       | 01-Oct-02        |       | 3.09                     |   |
|                                      |   | 50,000                |   | 01-Oct-02      |       | 01-Oct-02        |       | 2.01                     |   |
|                                      |   | 10,000                |   | 01-Oct-02      |       | 01-Oct-02        |       | 2.94                     |   |
|                                      |   | 40,000                |   | 01-Oct-02      |       | 01-Oct-02        |       | 2.98                     |   |
|                                      |   | 180,000               |   | 01-Oct-02      |       | 01-Oct-02        |       | 2.47                     |   |
|                                      |   | 30,000                |   | 01-Oct-02      |       | 01-Oct-02        |       | 2.68                     |   |
|                                      |   | 40,000                |   | 01-Oct-02      |       | 01-Oct-02        |       | 1.89                     |   |
|                                      |   | 5,927,000             |   | 01-Nov-02      |       | 01-Nov-05        |       | 2.00                     |   |
|                                      |   | 50,000                |   | 01-Nov-02      |       | 30-Sep-02        |       | 1.80                     |   |
|                                      |   | 100,000               |   | 01-Nov-02      |       | 30-Sep-02        |       | 1.80                     |   |
|                                      |   | 100,000               |   | 01-Nov-02      |       | 30-Sep-03        |       | 1.80                     |   |
|                                      |   | 100,000               |   | 01-Nov-02      |       | 30-Sep-04        |       | 1.80                     |   |
|                                      |   | 1,145,000             |   | 01-Nov-02      |       | 30-Sep-03        |       | 1.76                     |   |
|                                      |   | 1,145,000             |   | 01-Nov-02      |       | 30-Sep-04        |       | 1.76                     |   |
|                                      |   | **14,439,878**        |   |           |       |             |       |                     |   |
| **2003  weighted average**                |   |                  |   |           | ** ** | **2.10**         | ** ** |

 

Currently, these fair values are not recognized asexpenses in the financial statements. However, should these grants be expensed, they would be amortized overthe vesting periods resulting in an increase in employee benefits expense of$17.8 million for the 2003 financial year (2002 $9.8 million). Note that noadjustments to these amounts have been made to reflect estimated or actualforfeitures (i.e. options that do not vest).

 

Based on similar valuation principles, if the ESPPshares and the ordinary shares issued for nil consideration (refer above) wereto be expensed, an increase in the employee benefit expense of $10.8 million(2002 $7.1 million) would result.

 

F - 5

----

 

**Note 22        CAPITAL EXPENDITURE COMMITMENTS**

 
|                                                                                      |   | **At June 30**          |   |
|-------------------------------------------------------------------------------------------|--------|-------------------------|--------|
|                                                                                      |   | **(in millions of A$)** |   |
|                                                                                      |   | **2003**                |   | **2002** |   |
| Capital expenditure  for plant and equipment contracted but not provided for and payable: |   |                    |   |   |   |
|                                                                                      |   |                    |   |   |   |
| •  Not  later than one year                                                     |   | 128.7                   |   | 163.6 |   |
| •  Later  than one year but not later than two years                            |   | 54.2                    |   | 0.5 |   |
|                                                                                      |   |                    |   |   |   |
| **TOTAL CAPITAL EXPENDITURE COMMITMENTS**                                                 |   | 182.9                   |   | 164.1 |   |

 

**Note 23        LEASE COMMITMENTS**

 

FINANCE LEASES

 

Lease expenditure contracted and provided for:

 
| •  Not  later than one year                                    |   | 140.5  |   | 17.0   |   |
|--------------------------------------------------------------------------|--------|--------|--------|--------|--------|
| •  Later  than one year but not later than two years           |   | 2.1    |   | 12.6   |   |
| **•**** **Later than two years but not later than  three years |   | 1.5    |   | 9.2    |   |
| •  Later  than three years but not later than four years       |   | 1.1    |   | 9.1    |   |
| •  Later  than four years but not later than five years        |   | 1.0    |   | 16.5   |   |
| •  Later  than five years                                      |   | 4.4    |   | 6.0    |   |
|                                                                     |   |   |   |   |   |
| Minimum lease  payments                                                  |   | 150.6  |   | 70.4   |   |
| Less: Future  finance charges                                            |   | (0.2   | )      | (13.4  | )      |
|                                                                     |   |   |   |   |   |
| **TOTAL FINANCE LEASE LIABILITY**                                        |   | 150.4  |   | 57.0   |   |
|                                                                     |   |   |   |   |   |
| Current lease  liabilities - refer Note 16                               |   | 139.5  |   | 12.1   |   |
| Non-current  lease liabilities - refer Note 18                           |   | 10.9   |   | 44.9   |   |
|                                                                     |   |   |   |   |   |
|                                                                     |   | 150.4  |   | 57.0   |   |

 

The consolidated entity leases equipment underfinance leases expiring from one to 11 years. At the end of the lease term the consolidated entity has the option topurchase the equipment at an agreed residual value.

 

F - 6

----

 
|                                                               |   | **At June 30**          |   |
|--------------------------------------------------------------------|--------|-------------------------|--------|
|                                                               |   | **(in millions of A$)** |   |
| **OPERATING LEASES**                                               |   | **2003**                |   | **2002** |   |
|                                                               |   |                    |   |   |   |
| Lease  expenditure contracted but not provided for and payable:    |   |                    |   |   |   |
|                                                               |   |                    |   |   |   |
| •  Later  than one year                                  |   | 142.0                   |   | 96.4 |   |
| •  Later  than one year but not later than two years     |   | 128.5                   |   | 85.8 |   |
| •  Later  than two years but not later than three years  |   | 121.6                   |   | 76.1 |   |
| •  Later  than three years but not later than four years |   | 88.2                    |   | 66.8 |   |
| •  Later  than four years but not later than five years  |   | 116.8                   |   | 54.0 |   |
| •  Later  than five years                                |   | 373.7                   |   | 258.7 |   |
|                                                               |   |                    |   |   |   |
| **TOTAL OPERATING LEASE COMMITMENTS**                              |   | 970.8                   |   | 637.8 |   |

 

The consolidated entity leases motor vehicles, plantand equipment and property under operating leases.  Leases generally provide the consolidated entity with a right ofrenewal at which time all terms are renegotiated.

** **

**Note 24     OTHEREXPENDITURE COMMITMENTS**

 
| Expenditure  contracted but not provided for covering supplies and services to be  provided: |   |   |   |   |   |
|----------------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|
|                                                                                         |   |   |   |   |   |
| •  Not  later than one year                                                        |   | 14.2   |   | 26.8   |   |
|                                                                                         |   |   |   |   |   |
| •  Later  than one year but not later than two years                               |   | 1.6    |   | 2.3    |   |
|                                                                                         |   |   |   |   |   |
| •  Later  than two years but not later than five years                             |   | 5.0    |   | 5.0    |   |
|                                                                                         |   |   |   |   |   |
| •  Later  than five years                                                          |   | 18.1   |   | 18.2   |   |
|                                                                                         |   |   |   |   |   |
| **TOTAL OTHER EXPENDITURE COMMITMENTS**                                                      |   | 38.9   |   | 52.3   |   |

 

F - 7

----

 

**Note 25****         ****CONTINGENT LIABILITIES**

 
|                                                     |   | **At June 30**          |       |
|----------------------------------------------------------|--------|-------------------------|------------|
|                                                     |   | **(in millions of A$)** |       |
|                                                     |   | **2003**                |       | **2002** |   |
|                                                     |   |                    | ** ** |   | ** ** |
| Contingent  liabilities arising in respect of guarantees |   | 224.7                   |       | 85.2 |   |
| **TOTAL CONTINGENT LIABILITIES**                         |   | 224.7                   |       | 85.2 |   |

 

Details of contingent liabilities,which although considered remote, the directors consider should be disclosedare set out below.  The directors are ofthe opinion that provisions are not required in respect of these matters, as itis either not probable that a future sacrifice of economic benefits will berequired or the amount is not capable of reliable measurement.

 

•                  Amcor Limited has indemnified thePaperlinX Limited Group in relation to potential taxation and workcoverliabilities in excess of any provisions made in the financial statements of thePaperlinX Limited Group at March 31, 2000.

 

•                  Amcor Limited has lodged an appealagainst the full bench of the Federal Court which has found that certainemployees of Amcor Limited (who were transferred to PaperlinX in April 2000 aspart of the demerger of Amcor Limited and PaperlinX Limited) were entitled toreceive severance payments due to the court finding that a technicaltermination of those employees had occurred. Upon legal advice, the directors are of the opinion that no provision isrequired.

 

**Note 26 AUDITORS’REMUNERATION**

 
|                                                            |   | **For the Years Ended June 30** |   |
|-----------------------------------------------------------------|--------|---------------------------------|--------|
|                                                            |   | **(in millions of A$)**         |   |
|                                                            |   | **2003**                        |   | **2002** | ** ** | **2001** | ** ** |
| **Audit services:**                                             |   |                            |   |   |   |   |   |
|                                                            |   |                            |   |   |   |   |   |
| Auditors of the  consolidated entity – KPMG                |   |                            |   |   |   |   |   |
| Audit and review  of financial reports                          |   | 5.7                             |   | 6.0 |   | 4.1 |   |
|                                                            |   |                            |   |   |   |   |   |
| Other auditors                                                  |   |                            |   |   |   |   |   |
| Audit and review  of financial reports                          |   | 2.2                             |   | — |   | — |   |
|                                                            |   |                            |   |   |   |   |   |
| **Other services:**                                             |   |                            |   |   |   |   |   |
|                                                            |   |                            |   |   |   |   |   |
| Auditors of the  consolidated entity – KPMG                |   |                            |   |   |   |   |   |
| Taxation  services                                              |   | 1.6                             |   | 1.0 |   | — |   |
| Completion  audits and acquisition/equity raising due diligence |   | 0.2                             |   | 2.2 |   | — |   |
| Other assurance  services                                       |   | 0.9                             |   | 0.7 |   | — |   |
|                                                            |   | 2.7                             |   | 3.9 |   | 3.4 |   |
| Other auditors  of the consolidated entity:                     |   |                            |   |   |   |   |   |
| Taxation  services                                              |   | 12.1                            |   | — |   | — |   |
| Completion  audits and acquisition/equity raising due diligence |   | 2.9                             |   | — |   | — |   |
| Other assurance  services                                       |   | 0.2                             |   | — |   | — |   |
|                                                            |   | 15.2                            |   | — |   | — |   |
| KPMG related  practices: (1)                                    |   |                            |   |   |   |   |   |
| Systems review                                                  |   | —                          |   | 0.4 |   | — |   |
| Other                                                           |   | —                          |   | 0.1 |   | 0.2 |   |
|                                                            |   | —                          |   | 0.5 |   | 0.2 |   |

 

----

(1)           Relates to fees paid to KPMG ConsultingAustralia to October 3, 2001. The business was sold on October 3, 2001 andceased to be a related practice of KPMG.

 

F - 8

----

 

**Note 27****                        ****REMUNERATION OF DIRECTORS AND EXECUTIVES**

 
|                                                                                                                                              |   | **For the Year Ended June 30** |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------|--------|
|                                                                                                                                              |   | **(in millions of A$)**        |   |
|                                                                                                                                              |   | **2003**                       |   | **2002** |   | **2001** |   |
|                                                                                                                                              |   |                           |   |   |   |   |   |
| REMUNERATION OF DIRECTORS                                                                                                                         |   |                           |   |   |   |   |   |
|                                                                                                                                              |   |                           |   |   |   |   |   |
| Amounts paid or due and  payable or otherwise made available to directors                                                                         |   | 4.4                            |   | 4.6 |   | 4.3 |   |
|                                                                                                                                              |   |                           |   |   |   |   |   |
| Number of directors of the  consolidated entity whose income from the consolidated entity or any related  party falls within the following bands: |   |
|                                                                                                                                              |   |                           |   |   |   |   |   |   |   |   |   |   |
| **$**                                                                                                                                             |   | **No.**                        |   | **No.** |   | **No.** | ** ** |
|                                                                                                                                              |   |                           |   |   |   |   |   |   |   |   |   |   |
| 100,001                                                                                                                                           |   | -                              |   | 110,000 |   |   | — |   | — |   | 3 |   |
| 110,001                                                                                                                                           |   | -                              |   | 120,000 |   |   | — |   | — |   | 2 |   |
| 120,001                                                                                                                                           |   | -                              |   | 130,000 |   |   | — |   | — |   | 1 |   |
| 130,001                                                                                                                                           |   | -                              |   | 140,000 |   |   | — |   | — |   | 1 |   |
| 170,001                                                                                                                                           |   | -                              |   | 180,000 |   |   | 1 |   | — |   | — |   |
| 180,001                                                                                                                                           |   | -                              |   | 190,000 |   |   | 1 |   | 1 |   | — |   |
| 200,001                                                                                                                                           |   | -                              |   | 210,000 |   |   | 1 |   | 2 |   | — |   |
| 210,001                                                                                                                                           |   | -                              |   | 220,000 |   |   | — |   | 1 |   | 1 |   |
| 220,001                                                                                                                                           |   | -                              |   | 230,000 |   |   | 1 |   | — |   | — |   |
| 230,001                                                                                                                                           |   | -                              |   | 240,000 |   |   | 1 |   | — |   | — |   |
| 250,001                                                                                                                                           |   | -                              |   | 260,000 |   |   | — |   | 1 |   | — |   |
| 500,001                                                                                                                                           |   | -                              |   | 510,000 |   |   | — |   | 1 |   | — |   |
| 620,001                                                                                                                                           |   | -                              |   | 630,000 |   |   | 1 |   | — |   | — |   |
| 2,010,001                                                                                                                                         |   |                           |   | 2,020,000 |   |   | — |   | — |   | 1 |   |
| 2,210,001                                                                                                                                         |   | -                              |   | 2,220,000 |   |   | — |   | 1 |   | — |   |
| 2,480,001                                                                                                                                         |   | -                              |   | 2,490,000 |   |   | 1 |   | — |   | — |   |
|                                                                                                                                              |   |                           |   |   |   |   |   |   |   |   |   |   |
| RETIREMENT PAYMENTS                                                                                                                               |   |                           |   |   |   |   |   |
|                                                                                                                                              |   |                           |   |   |   |   |   |
| Retirement payments to directors of Amcor Limited, being amounts  previously approved by shareholders in a general meeting                        |   | —                         |   | — |   | 0.8 |   |

 

F - 9

----

 
|                                                                                                                                                                                                                                                     |   | **For the Years Ended June  30** |       |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------|------------|
|                                                                                                                                                                                                                                                     |   | **(in millions of A$)**          |       |
|                                                                                                                                                                                                                                                     |   | **2003**                         |       | **2003** |   | **2002** |   | **2001** |   |
|                                                                                                                                                                                                                                                     |   | **(1)**                          |       | **(2)** |   | **(2)** |   | **(2)** |   |
| REMUNERATION OF EXECUTIVES                                                                                                                                                                                                                               |   |                             |       |   |   |   |   |   |   |
| Amounts received or due and receivable from the consolidated entity,  entities in the consolidated entity or related parties by executive officers  of the consolidated entity and of controlled entities whose total  remuneration exceeds $300,000 (3) |   | 30.4                             |       | 43.1 |   | 34.5 |   | 29.5 |   |
|                                                                                                                                                                                                                                                     |   |                             |       |   |   |   |   |   |   |
| Number of executive  officers whose remuneration from the consolidated entity or related parties  was within the following bands *                                                                                                                       |   |
|                                                                                                                                                                                                                                                     |   |
|                                                                                                                                                                                                                                                     |   | **Overseas****Executives**       | ** ** | **All executives****(including overseas)** | ** ** |
| **$**                                                                                                                                                                                                                                                    |   | **No.**                          | ** ** | **No.** | ** ** | **No.** | ** ** | **No.** | ** ** |
|                                                                                                                                                                                                                                                     |   |                             |       |   |   |   |   |   |   |   |   |   |   |   |
| 210,001                                                                                                                                                                                                                                                  |   | -                                |       | 220,000 |   |   | — |   | — |   | — |   | 1 |   |
| 240,001                                                                                                                                                                                                                                                  |   | -                                |       | 250,000 |   |   | — |   | — |   | — |   | 1 |   |
| 250,001                                                                                                                                                                                                                                                  |   | -                                |       | 260,000 |   |   | — |   | — |   | — |   | 1 |   |
| 260,001                                                                                                                                                                                                                                                  |   | -                                |       | 270,000 |   |   | — |   | — |   | — |   | 1 |   |
| 300,001                                                                                                                                                                                                                                                  |   | -                                |       | 310,000 |   |   | — |   | — |   | 1 |   | 3 |   |
| 310,001                                                                                                                                                                                                                                                  |   | -                                |       | 320,000 |   |   | — |   | — |   | 1 |   | 1 |   |
| 320,001                                                                                                                                                                                                                                                  |   | -                                |       | 330,000 |   |   | — |   | — |   | 1 |   | 3 |   |
| 330,001                                                                                                                                                                                                                                                  |   | -                                |       | 340,000 |   |   | 1 |   | 1 |   | 3 |   | 1 |   |
| 340,001                                                                                                                                                                                                                                                  |   | -                                |       | 350,000 |   |   | 1 |   | 1 |   | — |   | 1 |   |
| 350,001                                                                                                                                                                                                                                                  |   | -                                |       | 360,000 |   |   | 1 |   | 1 |   | 1 |   | 3 |   |
| 360,001                                                                                                                                                                                                                                                  |   | -                                |       | 370,000 |   |   | 3 |   | 3 |   | 3 |   | 1 |   |
| 370,001                                                                                                                                                                                                                                                  |   | -                                |       | 380,000 |   |   | 1 |   | 1 |   | 1 |   | 2 |   |

 

F - 10

----

 

Number of executive officers whose remuneration from the consolidatedentity or related parties was within the following bands *

 
|    |   | **Overseas  Executives** |   | **All executives  (including overseas)** |   |
|---------|--------|--------------------------|--------|------------------------------------------|--------|
| **$**   |   | **2003****No.**          |   | **2003****No.**                          |   | **2002****No.** |   | **2001****No.** |   |
|    |   |                     |   |                                     |   |   |   |   |   |   |   |   |   |   |
| 390,001 |   | -                        |   | 400,000                                  |   |   | 3 |   | 3 |   | 2 |   | — |   |
| 400,001 |   | -                        |   | 410,000                                  |   |   | — |   | — |   | 1 |   | — |   |
| 410,001 |   | -                        |   | 420,000                                  |   |   | — |   | — |   | 2 |   | 2 |   |
| 420,001 |   | -                        |   | 430,000                                  |   |   | 1 |   | 3 |   | — |   | 1 |   |
| 430,001 |   | -                        |   | 440,000                                  |   |   | 1 |   | 1 |   | 1 |   | — |   |
| 440,001 |   | -                        |   | 450,000                                  |   |   | 4 |   | 5 |   | 1 |   | — |   |
| 450,001 |   | -                        |   | 460,000                                  |   |   | — |   | — |   | 2 |   | — |   |
| 460,001 |   | -                        |   | 470,000                                  |   |   | — |   | — |   | 1 |   | — |   |
| 480,001 |   | -                        |   | 490,000                                  |   |   | — |   | 1 |   | 1 |   | 1 |   |
| 490,001 |   | -                        |   | 500,000                                  |   |   | 1 |   | 1 |   | 2 |   | — |   |
| 510,001 |   | -                        |   | 520,000                                  |   |   | 1 |   | 1 |   | — |   | 1 |   |
| 550,001 |   | -                        |   | 560,000                                  |   |   | 2 |   | 2 |   | 1 |   | 2 |   |
| 560,001 |   | -                        |   | 570,000                                  |   |   | 1 |   | 2 |   | 1 |   | — |   |
| 570,001 |   | -                        |   | 580,000                                  |   |   | — |   | — |   | 1 |   | — |   |
| 600,001 |   | -                        |   | 610,000                                  |   |   | 1 |   | 1 |   | 2 |   | — |   |
| 610,001 |   | -                        |   | 620,000                                  |   |   | 1 |   | 1 |   | — |   | — |   |
| 620,001 |   | -                        |   | 630,000                                  |   |   | — |   | — |   | 1 |   | 1 |   |
| 630,001 |   | -                        |   | 640,000                                  |   |   | — |   | 1 |   | 2 |   | — |   |
| 640,001 |   | -                        |   | 650,000                                  |   |   | 1 |   | 1 |   | 2 |   | — |   |
| 660,004 |   | -                        |   | 670,000                                  |   |   | — |   | — |   | — |   | 1 |   |
| 670,001 |   | -                        |   | 680,000                                  |   |   | 1 |   | 1 |   | 1 |   | — |   |
| 680,001 |   | -                        |   | 690,000                                  |   |   | 1 |   | 1 |   | — |   | — |   |
| 690,001 |   | -                        |   | 700,000                                  |   |   | — |   | — |   | — |   | 1 |   |
| 710,001 |   | -                        |   | 720,000                                  |   |   | — |   | — |   | 1 |   | — |   |
| 720,001 |   | -                        |   | 730,000                                  |   |   | 1 |   | 1 |   | — |   | — |   |
| 730,001 |   | -                        |   | 740,000                                  |   |   | — |   | — |   | — |   | 1 |   |
| 740,001 |   | -                        |   | 750,000                                  |   |   | — |   | — |   | 1 |   | — |   |
| 770,001 |   | -                        |   | 780,000                                  |   |   | — |   | — |   | — |   | 1 |   |
| 780,001 |   | -                        |   | 790,000                                  |   |   | — |   | 1 |   | — |   | — |   |
| 800,001 |   | -                        |   | 810,000                                  |   |   | 1 |   | 1 |   | 2 |   | — |   |
| 830,001 |   | -                        |   | 840,000                                  |   |   | — |   | — |   | — |   | 1 |   |
| 860,001 |   | -                        |   | 870,000                                  |   |   | 1 |   | 1 |   | 1 |   | — |   |
| 870,001 |   | -                        |   | 880,000                                  |   |   | — |   | — |   | 1 |   | — |   |
| 890,001 |   | -                        |   | 900,000                                  |   |   | 1 |   | 1 |   | 2 |   | — |   |
| 910,001 |   | -                        |   | 920,000                                  |   |   | — |   | — |   | — |   | 1 |   |
| 920,001 |   | -                        |   | 930,000                                  |   |   | — |   | 1 |   | — |   | — |   |

 

F - 11

----

 

Number of executive officers whose remuneration from the consolidatedentity or related parties was within the following bands *

 
|      |   | **Overseas  Executives** |   | **All executives  (including overseas)** |   |
|-----------|--------|--------------------------|--------|------------------------------------------|--------|
| **$**     |   | **2003****No.**          |   | **2003****No.**                          |   | **2002****No.** |   | **2001****No.** |   |
|      |   |                     |   |                                     |   |   |   |   |   |   |   |   |   |   |
| 930,001   |   | -                        |   | 940,000                                  |   |   | — |   | 1 |   | — |   | — |   |
| 940,001   |   | -                        |   | 950,000                                  |   |   | 1 |   | 1 |   | — |   | — |   |
| 980,001   |   | -                        |   | 990,000                                  |   |   | — |   | 1 |   | — |   | — |   |
| 1,020,001 |   | -                        |   | 1,030,000                                |   |   | 1 |   | 1 |   | 1 |   | — |   |
| 1,060,001 |   | -                        |   | 1,070,000                                |   |   | — |   | 1 |   | — |   | 1 |   |
| 1,100,001 |   | -                        |   | 1,110,000                                |   |   | — |   | 1 |   | 1 |   | — |   |
| 1,170,001 |   | -                        |   | 1,180,000                                |   |   | — |   | — |   | 1 |   | 1 |   |
| 1,210,001 |   | -                        |   | 1,220,000                                |   |   | — |   | — |   | — |   | 1 |   |
| 1,240,001 |   | -                        |   | 1,250,000                                |   |   | 1 |   | 1 |   | — |   | — |   |
| 1,250,001 |   | -                        |   | 1,260,000                                |   |   | 1 |   | 1 |   | — |   | — |   |
| 1,290,001 |   | -                        |   | 1,300,000                                |   |   | 1 |   | 1 |   | — |   | 1 |   |
| 1,320,001 |   | -                        |   | 1,330,000                                |   |   | 1 |   | 1 |   | — |   | — |   |
| 1,330,001 |   | -                        |   | 1,340,000                                |   |   | 1 |   | 1 |   | — |   | 1 |   |
| 1,380,001 |   | -                        |   | 1,390,000                                |   |   | 1 |   | 1 |   | — |   | — |   |
| 1,410,001 |   | -                        |   | 1,420,000                                |   |   | — |   | — |   | 1 |   | — |   |
| 1,460,001 |   | -                        |   | 1,470,000                                |   |   | — |   | 1 |   | — |   | — |   |
| 1,520,001 |   | -                        |   | 1,530,000                                |   |   | 1 |   | 1 |   | — |   | — |   |
| 1,750,001 |   | -                        |   | 1,760,000                                |   |   | 1 |   | 1 |   | — |   | — |   |
| 1,770,001 |   | -                        |   | 1,780,000                                |   |   | 1 |   | 1 |   | — |   | — |   |
| 1,860,001 |   | -                        |   | 1,870,000                                |   |   | — |   | — |   | 1 |   | — |   |
| 2,010,001 |   | -                        |   | 2,020,000                                |   |   | — |   | — |   | — |   | 1 |   |
| 2,210,001 |   | -                        |   | 2,220,000                                |   |   | — |   | — |   | 1 |   | — |   |
| 2,320,001 |   | -                        |   | 2,330,000                                |   |   | — |   | — |   | 1 |   | — |   |
| 2,480,001 |   | -                        |   | 2,490,000                                |   |   | — |   | 1 |   | — |   | — |   |
| 2,500,001 |   | -                        |   | 2,510,000                                |   |   | — |   | — |   | — |   | 1 |   |
| 4,540,001 |   | -                        |   | 4,550,000                                |   |   | — |   | — |   | — |   | 1 |   |

 

----

(1)          Overseas executives are grouped incolumn (1) and are also included in (2).

 

(2)          Covers Amcor Limited and itscontrolled entities on a worldwide basis and includes executives of overseascontrolled entities.

 

(3)          Executive officers are thoseofficers involved in the strategic direction, general management or control ofbusiness at a consolidated entity or operating division level.

 

*         Includes executive director of theconsolidated entity also disclosed within “Remuneration of Directors”.

 

F - 12

----

 

**Note 28****         ****SUPERANNUATION COMMITMENTS**

** **

The consolidated entity participates in a number of superannuation fundswhich were established to provide benefits for employees and theirdependants.  The funds cover companysponsored plans, industry/union plans, defined benefit plans and governmentplans.

 

COMPANY SPONSORED PLANS

 

The principal benefits are pensions or lump sums for members onresignation, retirement, death or total permanent disablement.  These benefits are determined on either adefined benefit or accumulation benefit basis.

 

Employee contribution rates are either determined by the rules of thefund or selected by members from a specified range of rates.  In addition to legislative requirements,employer companies contribute to defined benefit funds as described below or,in the case of accumulation funds, the amounts set out in the appropriate fundrules.

 

INDUSTRY/UNION PLANS

 

Employer companies participate in industry and union plans on behalf ofcertain employees.

 

These plans operate on an accumulation basis and provide lump sumbenefits for members on resignation, retirement or death.

 

The employer company has a legally enforceable obligation to contributeat varying rates to these plans.

 

GOVERNMENT PLANS

 

Employer companies participate in government plans, on behalf of certainemployees, which provide pension benefits.

 

There exists a legally enforceable obligation on employer companies tocontribute as required by legislation.

 

DEFINED BENEFIT PLANS

 

The consolidated entity maintains several defined benefit superannuationarrangements worldwide.  On a vestedbenefit basis, some arrangements are in actuarial surplus, others are in aposition of actuarial deficiency.  Surplusesand deficiencies depend on many diverse factors and can vary significantly overtime having regard, for example, to movements in the investment markets, futuresalary increases and changes in employment patterns.  This note sets out the consolidated entity’s position andaccounting policy in relation to its defined benefit arrangements.

 

The consolidated entity’s current intention is to make annualcontributions to defined benefits funds at a rate determined from time to timefollowing discussions with the funds’ actuaries or other competent authoritiesand advisers.  The consolidated entityexpects that the contribution rates will be determined after taking intoaccount sound actuarial principles and would be designed to enable allconsolidated entity defined benefit funds to meet retirement expectations andrelevant regulatory requirements.  Theconsolidated entity’s current intention is based on these assumptions.

 

F - 13

----

 

While the consolidated entity does not expect its current intention tochange, the consolidated entity does not accept any liability to fund anypresent or future deficiency in the funds, as calculated at any particularpoint in time.  The consolidated entityreserves the right to increase, reduce or terminate its contributions to thefunds as it sees fit.

 

Accordingly, the consolidated entity is of the opinion that, underAustralian accounting standards, it has no constructive or legal obligation, asat the balance date, to fund deficits that may arise in particular funds fromtime to time.  In all cases, however,the consolidated entity expects to have the financial capacity to make or causeto be made sufficient annual contributions to the funds that ensure employeeretirement expectations will be met.

 

The consolidated entity’s accounting policies and disclosures containedherein are in accordance with AASB 1028 ‘Employee Benefits’.  All plans are listed below showing the lastactuarial assessments, where applicable, made by independent actuaries on thedates indicated.

 

Fund assets net of liabilities other than accrued benefits (fundsassets) at net market value as at the reporting date, accrued benefits as atthe last actuarial review date and vested benefits of the funds/plans as at thereporting date are as follows:

 
| **Major Funds**                                                                                                                                                                  |   | **Reporting  Date**      |   | **2002-03** |   | **Reporting  Date** |   | **2001-02** |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------|--------|-------------|--------|---------------------|--------|-------------|--------|
|                                                                                                                                                                             |   | **(in  millions of A$)** |   |
| • Amcor Superannuation Fund (1)  - June 2000 by W.R. Aitchison FIA, FIAA                                                                                               |   | 30/06/02                 |   | 495.0       |   | 30/06/01            |   | 521.7       |   |
| • Amcor New Zealand Superannuation  Fund  - April 2001 by J. Spooner BSc, FIAA, FNZSA                                                                                  |   | 30/06/03                 |   | 23.3        |   | 31/03/02            |   | 23.2        |   |
| • Amcor Flexibles (UK) Pension  Plan  - April 2001 by J Porteus FFA                                                                                                    |   | 30/06/03                 |   | 165.4       |   | 30/06/02            |   | 181.6       |   |
| • Amcor PET Packaging UK Limited  - January 2003 by D Pilitz FIA                                                                                                       |   | 30/06/03                 |   | 16.1        |   | —              |   | —      |   |
| • Amcor PET Packaging Pension Plan  - July 2002 by Mercer Human Resource Consulting                                                                                    |   | 30/06/03                 |   | 14.3        |   | —              |   | —      |   |
| • Amcor Rentsch/Polylaupen  - June 2003 by M Schreiber                                                                                                                 |   | 30/06/03                 |   | 70.7        |   | —              |   | —      |   |
| • Amcor Twinpak Americas Inc  Pension Plan for salaried employees (previously Pension Plan for Twinpak Inc  and subsidiaries)  - December 2001 by M Papillon FSA, FCIA |   | 30/06/03                 |   | 11.3        |   | 30/06/02            |   | 15.5        |   |
|                                                                                                                                                                             |   |                     |   |        |   |                |   |        |   |
| • Other funds (2)                                                                                                                                                           |   |                     |   | 41.1        |   |                |   | 35.4        |   |
|                                                                                                                                                                             |   |                     |   |        |   |                |   |        |   |
| Fund assets at net market value                                                                                                                                                  |   |                     |   | 837.2       |   |                |   | 777.4       |   |
|                                                                                                                                                                             |   |                     |   |        |   |                |   |        |   |
| Accrued benefits as at last actuarial review date                                                                                                                                |   |                     |   | 960.8       | (3)    |                |   | 781.2       | (3)    |
|                                                                                                                                                                             |   |                     |   |        |   |                |   |        |   |
| Surplus/(Deficit)                                                                                                                                                                |   |                     |   | (123.6      | )(4)   |                |   | (3.8        | )(4)   |
|                                                                                                                                                                             |   |                     |   |        |   |                |   |        |   |
| Vested benefits as at reporting date                                                                                                                                             |   |                     |   | 922.3       | (5)    |                |   | 798.3       | (5)    |
|                                                                                                                                                                                  |        |                          |        |             |        |                     |        |             |        |  |

 

F - 14

----

 

----

(1)  The netdeficit as estimated by the Fund Actuary for the Amcor Limited sub-fund atJune 30, 2003 was $43.0 million compared with $34.6 million atJune 30, 2002.

 

(2) Other funds comprise thefollowing:

Amcor Twinpak America Inc Plan for PET and salaried employees -January 2003 by Avalon Consulting

Amcor Rentsch Ireland - June 2003 by M Cahill FIA

Amcor Employees Plan Belgium - AXA Royal Belge - June 2003 by IMarbaix Actuary

Amcor Workers Plan Belgium - AXA Royal Belge - June 2003 by I Marbaix,Actuary

Amcor Employee Plans Belgium - Fortis AG - June 2003 by I Marbaix,Actuary

Amcor Flexibles (Netherlands) - June 2003 by L De Gruijter, Actuary

Amcor Flexibles Netherlands Envi - June 2003 by L De Gruijter,Actuary

Amcor Flexibles Drammen Norway - June 2002 by V Pekon AS

Amcor PET Packaging Belgium - June 2002 by AON Biomet Merck

 

(3)  Accruedbenefits have been determined based on the amount calculated by the FundActuary at the date of the most recent actuarial review.

 

(4)  Theaggregate surplus/(deficit) of funds assets over accrued benefits, calculatedas the difference between fund assets at net market value as at the lastreporting date of each fund and the accrued benefits as at the last actuarialreview date of each fund is $(123.6) million (2002 $3.8 million).  This amount does not represent the actualshortfall of fund assets over accrued benefits that existed at June 30,2003 but does represent the most up to date information which it has beenpossible to obtain.

 

(5) Vested benefits are benefits which are notconditional upon membership of the respective fund or any other factor.

 
|                                                                                                   |   | **2002-03**              |   | **2001-02** |   | **2000-01** |   |
|--------------------------------------------------------------------------------------------------------|--------|--------------------------|--------|-------------|--------|-------------|--------|
|                                                                                                   |   | **(in  millions of A$)** |   |
| Employer contributions made by the consolidated  entity to major Defined Benefit Funds during the year |   | 47.6                     |   | 50.0        |   | 7.7         |   |
|                                                                                                   |   |                     |   |        |   |        |   |
| Employer contributions made to major Accumulation  Funds during the year                               |   | 9.3                      |   | 7.7         |   | 4.9         |   |

 

F - 15

----

 

Details of the funded status of material definedbenefit plans and of the Net Periodic Pension Cost as prepared by consultingactuaries, are set out below in accordance with U.S. SFAS 132.  While not related to Australian GAAP thedetails support the reconciliation to US GAAP set out in Note 35.

 
|                                                                                             |   | **For the Years Ended June 30** |   |
|--------------------------------------------------------------------------------------------------|--------|---------------------------------|--------|
|                                                                                             |   | **(in millions of A$)**         |   |
|                                                                                             |   | **2003**                        |   | **2002** |   | **2001** | ** ** |
| **Net periodic pension cost included the following  components:**                                |   |                            |   |   |   |   |   |
| Service cost                                                                                     |   | 33.7                            |   | 26.1 |   | 20.9 |   |
| Interest cost                                                                                    |   | 37.2                            |   | 33.2 |   | 18.5 |   |
| Expected return  on plan assets                                                                  |   | (35.9                           | )      | (35.6 | ) | (28.5 | ) |
| Recognized net  actuarial loss                                                                   |   | 6.3                             |   | 4.2 |   | 0.1 |   |
| Net amortization  and deferral costs                                                             |   | (2.0                            | )      | (2.1 | ) | (2.2 | ) |
| Termination  benefit arising due to settlement/disposal of business (as  required under SFAS 88) |   | 5.3                             |   | — |   | — |   |
|                                                                                             |   | 44.6                            |   | 25.8 |   | 8.8 |   |
| **Weighted average assumptions as of June 30:**                                                  |   |                            |   |   |   |   |   |
| •   Discount rate                                                                 |   | 5.2                             | %      | 6.5 | % | 6.3 | % |
| •   Rate of increase in future salary levels                                      |   | 3.2                             | %      | 3.5 | % | 3.7 | % |
| •   Expected long-term rate of return on  assets                                  |   | 6.3                             | %      | 7.5 | % | 7.3 | % |
|                                                                                             |   |                            |   |   |   |   |   |
| **Change in benefit obligation**                                                                 |   |                            |   |   |   |   |   |
| Benefit  obligation at beginning of year                                                         |   | 547.8                           |   | 532.3 |   |   |   |
| Foreign currency  exchange variation                                                             |   | (24.6                           | )      | (4.7 | ) |   |   |
| Service cost                                                                                     |   | 33.7                            |   | 26.1 |   |   |   |
| Interest cost                                                                                    |   | 37.2                            |   | 33.2 |   |   |   |
| Plan  participants’ contributions                                                           |   | 11.6                            |   | 15.3 |   |   |   |
| Acquisitions                                                                                     |   | 128.9                           |   | 0.6 |   |   |   |
| Actuarial  (gain)/loss                                                                           |   | 50.0                            |   | (6.6 | ) |   |   |
| Transfers                                                                                        |   | (1.5                            | )      | (12.1 | ) |   |   |
| Expenses  (including tax)                                                                        |   | (4.2                            | )      | (0.7 | ) |   |   |
| Benefits paid  from plan assets                                                                  |   | (45.1                           | )      | (35.6 | ) |   |   |
| Benefits paid  directly by consolidated entity                                                   |   | (1.0                            | )      | — |   |   |   |
|                                                                                             |   |                            |   |   |   |   |   |
| Estimated  benefit obligation at end of year                                                     |   | 732.8                           |   | 547.8 |   |   |   |
|                                                                                             |   |                            |   |   |   |   |   |
| **Change in plan assets**                                                                        |   |                            |   |   |   |   |   |
|                                                                                             |   |                            |   |   |   |   |   |
| Fair value of  plan assets at beginning of year                                                  |   | 453.5                           |   | 475.0 |   |   |   |
| Exchange rate  adjustment                                                                        |   | (18.6                           | )      | (3.6 | ) |   |   |
| Actual return on  plan assets                                                                    |   | 5.5                             |   | (24.7 | ) |   |   |
| Transfers                                                                                        |   | (1.5                            | )      | (12.1 | ) |   |   |
| Consolidated  entity contribution                                                                |   | 43.5                            |   | 38.6 |   |   |   |
| Plan  participants’ contributions                                                           |   | 11.6                            |   | 15.3 |   |   |   |
| Benefits paid                                                                                    |   | (45.1                           | )      | (33.9 | ) |   |   |
| Expenses etc                                                                                     |   | (4.1                            | )      | (1.1 | ) |   |   |
| Acquisitions                                                                                     |   | 94.2                            |   | — |   |   |   |
|                                                                                             |   |                            |   |   |   |   |   |
| Fair value of  plan assets at end of year                                                        |   | 539.0                           |   | 453.5 |   |   |   |

 

F - 16

----

 
|                                       |   | **For the Years Ended June 30** |   |
|--------------------------------------------|--------|---------------------------------|--------|
|                                       |   | **(in millions of A$)**         |   |
|                                       |   | **2003**                        |   | **2002** |   |
| **Reconciliation of Funded Status**        |   |                            |   |   |   |
| Funded status                              |   | (193.8                          | )      | (94.3 | ) |
| Unrecognized net  actuarial loss           |   | 191.6                           |   | 117.8 |   |
| Unrecognized  prior service cost           |   | 1.8                             |   | 3.0 |   |
| Unrecognized net  transition obligation    |   | 14.3                            |   | 12.5 |   |
| Adjustment to  recognise minimum liability |   | (67.4                           | )      | (22.0 | ) |
|                                       |   |                            |   |   |   |
| Prepaid/(accrued)  benefit cost            |   | (53.5                           | )      | 17.0 |   |

 

Note:

 

Plan assets comprise a mixed portfolio of investmentsincluding fixed interest securities, Australian listed securities and realestate investment.

 

A number of plans were noted whereby projectedbenefit obligations and/or accumulated benefit obligations exceeded plan assetsat the end of the year.  For plans whereprojected benefit obligations exceeded plan assets, total projected benefitobligations of $732,763,000 (2002: $519,788,000) and assets of  $539,003,000 (2002: $424,372,000) werenoted.  For plans where accumulatedbenefit obligations exceeded plan assets, total accumulated benefit obligationsof $286,570,000 (2002: $43,966,000) and assets of $202,884,000 (2002: $20,369,000)were noted.

 

**Note29   SEGMENT REPORTING**

** **

The primary reporting segments have been classifiedbased on the consolidated entity’s management reporting system.  The secondary segments have been classifiedbased on the geographical location of the consolidated entity’s businesssegments.  Comparative information hasbeen restated for changes in the consolidated entity’s management reporting andbusiness segments.

 

Inter-segment pricing is determined on anarm’s-length basis.

 

The consolidated entity operates its packagingbusiness through the following divisions:

 

*AmcorAustralasia*has a major share of the Australian and New Zealand markets for aluminiumbeverage cans, steel cans for food and aerosols, flexibles and film packaging,polyethylene terephthelate (“PET”) rigid plastic containers and plasticclosures.  In Australia, the businessalso makes metal and plastic caps and closures and paper sacks.  This division also operates Amcor’s fiberbox and carton manufacturing businesses in Australia and New Zealand, and inAustralia also manages Amcor’s waste-paper based packaging paper mills andpaper recycling activities.

 

*AmcorPET*, basedin Michigan in the U.S, is a market leader in the PET plastic bottlemarket.  The division has operations inNorth America, Europe, Asia and Latin America.

 

*AmcorSunclipse*,based in California in the U.S, manufactures corrugated board and boxes andoperates a distribution business based on custom-built corrugated packaging andindustrial packaging products. The distribution business also operates inMexico.

 

*AmcorFlexibles Europe* manages Amcor’s European packaging business sectors.  Products manufactured include flexiblepackaging and medical device packaging.

 

*AmcorAsia*, basedin Singapore, manages Amcor’s operations throughout Asia and is a leadingregional supplier of corrugated and tobacco packaging, closures, flexibleplastic packaging and paper sacks.

 

*AmcorRentsch/Closures* manufactures tobacco and specialty folding cartons, principally out ofEurope.  Other products manufacturedinclude plastic closures, rigid plastic containers, plastic squeeze tubes andflexible packaging.  Operations arebased in North America, Europe and Asia.

 

*Other* represents amounts attributable tothe consolidated entity’s corporate activities.

 

F - 17

----

 
| **Business  Segment**                                          |   | **Amcor  Australasia** |   | **Amcor  PET** |       | **Amcor  Sunclipse** |       | **Flexibles  Europe** |       | **Amcor  Asia** |       |
|----------------------------------------------------------------|--------|------------------------|--------|----------------|------------|----------------------|------------|-----------------------|------------|-----------------|------------|
| **For the year  ended June 30**                                |   | **2003**               |   | **2002**       |       | **2001**             |       | **2003**              |       | **2002**        |       | **2001** |   | **2003** |   | **2002** |   | **2001** |   | **2003** |   | **2002** |   | **2001** |   | **2003** |   | **2002** |   | **2001** |   |
|                                                           |   | **$m**                 |   | **$m**         | ** ** | **$m**               | ** ** | **$m**                | ** ** | **$m**          | ** ** | **$m** | ** ** | **$m** | ** ** | **$m** |   | **$m** | ** ** | **$m** | ** ** | **$m** | ** ** | **$m** | ** ** | **$m** | ** ** | **$m** | ** ** | **$m** | ** ** |
| Revenue                                                        |   |                   |   |           |       |                 |       |                  |       |            |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                           |   |                   |   |           |       |                 |       |                  |       |            |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net sales                                                      |   | 2,440.1                |   | 2,361.9        |       | 2,290.2              |       | 3,234.7               |       | 800.8           |       | 805.6 |   | 1,296.1 |   | 1,413.2 |   | 1,182.4 |   | 2,166.2 |   | 1,975.0 |   | 977.5 |   | 263.4 |   | 310.4 |   | 327.8 |   |
| Inter-segment  revenue                                         |   | 15.6                   |   | 5.8            |       | 65.9                 |       | 1.5                   |       | 1.7             |       | 0.5 |   | 2.9 |   | — |   | — |   | 4.1 |   | 1.6 |   | — |   | — |   | — |   | — |   |
| Total segment  revenue                                         |   | 2,455.7                |   | 2,367.7        |       | 2,356.1              |       | 3,236.2               |       | 802.5           |       | 806.1 |   | 1,299.0 |   | 1,413.2 |   | 1,182.4 |   | 2,170.3 |   | 1,976.6 |   | 977.5 |   | 263.4 |   | 310.4 |   | 327.8 |   |
| Other unallocated  revenue                                     |   |                   |   |           |       |                 |       |                  |       |            |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                           |   |                   |   |           |       |                 |       |                  |       |            |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                           |   |                   |   |           |       |                 |       |                  |       |            |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total revenue                                                  |   |                   |   |           |       |                 |       |                  |       |            |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                           |   |                   |   |           |       |                 |       |                  |       |            |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Result                                                         |   |                   |   |           |       |                 |       |                  |       |            |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                           |   |                   |   |           |       |                 |       |                  |       |            |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating profit  before interest, income tax and amortization |   | 282.8                  |   | 254.2          |       | 232.8                |       | 305.6                 |       | 79.2            |       | 64.4 |   | 84.8 |   | 95.2 |   | 90.2 |   | 133.6 |   | 93.2 |   | 71.0 |   | 32.1 |   | 44.5 |   | 41.6 |   |
|                                                           |   |                   |   |           |       |                 |       |                  |       |            |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating profit  before interest and tax                      |   | 267.1                  |   | 238.7          |       | 217.1                |       | 224.6                 |       | 68.9            |       | 57.0 |   | 68.5 |   | 78.1 |   | 77.0 |   | 121.1 |   | 83.5 |   | 68.3 |   | 31.5 |   | 43.6 |   | 40.8 |   |
|                                                           |   |                   |   |           |       |                 |       |                  |       |            |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net borrowing  costs                                           |   |                   |   |           |       |                 |       |                  |       |            |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                           |   |                   |   |           |       |                 |       |                  |       |            |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating profit  from ordinary activities before income tax   |   |                   |   |           |       |                 |       |                  |       |            |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                           |   |                   |   |           |       |                 |       |                  |       |            |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Significant items                                              |   |                   |   |           |       | 56.9                 |       | (59.5                 | )          |            |       |   |   |   |   |   |   | (19.9 | ) |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                           |   |                   |   |           |       |                 |       |                  |       |            |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

 
| **Business  Segment**                                          |   | **Amcor  Rentsch/Amcor  Closures** |       | **Other** |       | **Inter  segment  eliminations** |       | **Consolidated** |       |
|----------------------------------------------------------------|--------|------------------------------------|------------|-----------|------------|----------------------------------|------------|------------------|------------|
| **For the year  ended June 30**                                |   | **2003**                           |       | **2002**  |       | **2001**                         |       | **2003**         |       | **2002** |   | **2001** |   | **2003** |   | **2002** |   | **2001** |   | **2003** |   | **2002** |   | **2001** |   |
|                                                           |   | **$m**                             | ** ** | **$m**    | ** ** | **$m**                           | ** ** | **$m**           | ** ** | **$m** | ** ** | **$m** | ** ** | **$m** | ** ** | **$m** | ** ** | **$m** | ** ** | **$m** | ** ** | **$m** | ** ** | **$m** | ** ** |
| Revenue                                                        |   |                               |       |      |       |                             |       |             |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                           |   |                               |       |      |       |                             |       |             |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                           |   |                               |       |      |       |                             |       |             |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net sales                                                      |   | 1,309.4                            |       | 611.1     |       | 69.4                             |       | —           |       | — |   | — |   | — |   | — |   | — |   | 10,709.9 |   | 7,472.4 |   | 5,652.9 |   |
| Inter-segment  revenue                                         |   | 1.2                                |       | 0.2       |       | —                           |       | —           |       | — |   | — |   | (25.3 | ) | (9.3 | ) | (66.4 | ) | — |   | — |   | — |   |
| Total segment  revenue                                         |   | 1,310.6                            |       | 611.3     |       | 69.4                             |       | —           |       | — |   | — |   | (25.3 | ) | (9.3 | ) | (66.4 | ) | 10,709.9 |   | 7,472.4 |   | 5,652.9 |   |
| Other unallocated  revenue                                     |   |                               |       |      |       |                             |       |             |       |   |   |   |   |   |   |   |   |   |   | 248.1 |   | 1,059.8 |   | 193.3 |   |
|                                                           |   |                               |       |      |       |                             |       |             |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   | — |   |
|                                                           |   |                               |       |      |       |                             |       |             |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total revenue                                                  |   |                               |       |      |       |                             |       |             |       |   |   |   |   |   |   |   |   |   |   | 10,958.0 |   | 8,532.2 |   | 5,846.2 |   |
|                                                           |   |                               |       |      |       |                             |       |             |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Result                                                         |   |                               |       |      |       |                             |       |             |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                           |   |                               |       |      |       |                             |       |             |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating profit  before interest, income tax and amortization |   | 84.1                               |       | 48.6      |       | 18.3                             |       | (53.7            | )          | 7.5 |   | 27.4 |   |   |   |   |   |   |   | 869.3 |   | 622.4 |   | 550.0 |   |
|                                                           |   |                               |       |      |       |                             |       |             |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   | — |   |
| Operating profit  before interest and tax                      |   | 71.6                               |       | 47.6      |       | 16.1                             |       | (53.9            | )          | 7.5 |   | 27.4 |   |   |   |   |   |   |   | 730.5 |   | 567.9 |   | 508.0 |   |
|                                                           |   |                               |       |      |       |                             |       |             |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net borrowing  costs                                           |   |                               |       |      |       |                             |       |             |       |   |   |   |   |   |   |   |   |   |   | (155.2 | ) | (121.5 | ) | (141.0 | ) |
|                                                           |   |                               |       |      |       |                             |       |             |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating profit  from ordinary activities before income tax   |   |                               |       |      |       |                             |       |             |       |   |   |   |   |   |   |   |   |   |   | 575.3 |   | 446.4 |   | 367.0 |   |
|                                                           |   |                               |       |      |       |                             |       |             |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Significant items                                              |   | (8.2                               | )          | (18.6     | )          |                             |       | (19.0            | )          | 553.4 |   |   |   |   |   |   |   |   |   | (86.7 | ) | 534.8 |   | 37.0 |   |
|                                                           |   |                               |       |      |       |                             |       |             |       |   |   |   |   |   |   |   |   |   |   | 488.6 |   | 981.2 |   | 404.0 |   |

 

F - 18

----

 
| **Business  Segment**            |   | **Amcor  Australasia** |   | **Amcor  PET** |   | **Amcor  Sunclipse** |   | **Flexibles  Europe** |   | **Amcor  Asia** |   |
|----------------------------------|--------|------------------------|--------|----------------|--------|----------------------|--------|-----------------------|--------|-----------------|--------|
| **For the year  ended June 30**  |   | **2003**               |   | **2002**       |   | **2001**             |   | **2003**              |   | **2002**        |   | **2001** |   | **2003** |   | **2002** |   | **2001** |   | **2003** |   | **2002** |   | **2001** |   | **2003** |   | **2002** |   | **2001** |   |
|                             |   |                   |   |           |   |                 |   |                  |   |            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Depreciation  & amortization |   | 125.3                  |   | 108.1          |   | 106.8                |   | 271.1                 |   | 72.4            |   | 33.2 |   | 30.9 |   | 33.1 |   | 34.6 |   | 79.7 |   | 87.5 |   | 28.5 |   | 15.4 |   | 16.5 |   | 17.8 |   |
|                             |   |                   |   |           |   |                 |   |                  |   |            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other non-cash  expenses         |   | 75.9                   |   | 50.4           |   | 51.2                 |   | 36.6                  |   | 28.8            |   | 35.8 |   | 19.9 |   | 32.2 |   | — |   | 26.6 |   | 132.3 |   | — |   | (0.3 | ) | 6.8 |   | 8.2 |   |
|                             |   |                   |   |           |   |                 |   |                  |   |            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Segment assets                   |   | 2,447.9                |   | 2,301.7        |   | 1,920.1              |   | 3,297.2               |   | 862.9           |   | 843.6 |   | 560.8 |   | 704.4 |   | 961.0 |   | 1,758.9 |   | 1,795.4 |   | 1,887.8 |   | 320.2 |   | 406.1 |   | 458.6 |   |
|                             |   |                   |   |           |   |                 |   |                  |   |            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Capital expenditure              |   | 254.1                  |   | 118.0          |   | 126.0                |   | 375.2                 |   | 81.6            |   | 35.0 |   | 10.1 |   | 28.3 |   | 16.4 |   | 134.8 |   | 91.1 |   | 55.0 |   | 7.1 |   | 10.7 |   | 12.0 |   |

 
| **Business  Segment**            |   | **Amcor  Rentsch/Amcor  Closures** |   | **Other** |   | **Inter  segment  eliminations** |   | **Consolidated** |   |
|----------------------------------|--------|------------------------------------|--------|-----------|--------|----------------------------------|--------|------------------|--------|
| **For the year  ended June 30**  |   | **2003**                           |   | **2002**  |   | **2001**                         |   | **2003**         |   | **2002** |   | **2001** |   | **2003** |   | **2002** |   | **2001** |   | **2003** |   | **2002** |   | **2001** |   |
|                             |   |                               |   |      |   |                             |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Depreciation  & amortization |   | 84.4                               |   | 19.6      |   | 17.2                             |   | 0.4              |   | 3.9 |   | 2.2 |   | — |   | — |   | — |   | 607.2 |   | 341.1 |   | 240.3 |   |
|                             |   |                               |   |      |   |                             |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other non-cash  expenses         |   | 80.2                               |   | 3.1       |   | 48.8                             |   | 12.6             |   | (12.2 | ) | 12.8 |   | — |   | — |   | — |   | 251.5 |   | 241.4 |   | 156.8 |   |
|                             |   |                               |   |      |   |                             |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Segment assets                   |   | 1,033.2                            |   | 463.9     |   | 79.6                             |   | 144.1            |   | 2,307.6 |   | 875.0 |   | — |   | — |   | — |   | 9,562.3 |   | 8,842.0 |   | 7,025.7 |   |
|                             |   |                               |   |      |   |                             |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Capital  expenditure             |   | 127.2                              |   | 26.3      |   | 1.6                              |   | 1.0              |   | 3.9 |   | — |   | — |   | — |   | — |   | 909.5 |   | 359.9 |   | 246.0 |   |

 

Segment results and assets include items directlyattributable to a segment as well as those that can be allocated on areasonable basis.  Unallocated itemsmainly comprise other revenue.

 

Segment capital expenditure is the total costincurred during the period to acquire property, plant and equipment.

 

F - 19

----

 
| ** Geographic****Segment**  |   | **Australasia** |   | **Europe** |   | **North America** |   | **Latin America** |   | **Asia** |   | **Consolidated** |   |
|----------------------------------|--------|-----------------|--------|------------|--------|-------------------|--------|-------------------|--------|----------|--------|------------------|--------|
| **For the  year ended  June 30** |   | **2003**        |   | **2002**   |   | **2001**          |   | **2003**          |   | **2002** |   | **2001**         |   | **2003** |   | **2002** |   | **2001** |   | **2003** |   | **2002** |   | **2001** |   | **2003** |   | **2002** |   | **2001** |   | **2003** |   | **2002** |   | **2001** |   |
|                             |   | **$m**          |   | **$m**     |   | **$m**            |   | **$m**            |   | **$m**   |   | **$m**           |   | **$m** |   | **$m** |   | **$m** |   | **$m** |   | **$m** |   | **$m** |   | **$m** |   | **$m** |   | **$m** |   | **$m** |   | **$m** |   | **$m** |   |
|                             |   |            |   |       |   |              |   |              |   |     |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net sales                        |   | 2,440.1         |   | 2,361.9    |   | 2,290.2           |   | 4,005.3           |   | 2,412.9  |   | 955.5            |   | 3,519.4 |   | 2,258.2 |   | 1,956.9 |   | 462.6 |   | 129.0 |   | 122.5 |   | 282.5 |   | 310.4 |   | 327.8 |   | 10,709.9 |   | 7,472.4 |   | 5,652.9 |   |
|                             |   |            |   |       |   |              |   |              |   |     |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Segment assets                   |   | 2,511.0         |   | 4,219.5    |   | 2,774.4           |   | 3,312.0           |   | 2,471.9  |   | 1,999.8          |   | 2,770.0 |   | 1,564.4 |   | 1,619.8 |   | 609.3 |   | 159.5 |   | 162.9 |   | 360.0 |   | 426.7 |   | 468.8 |   | 9,562.3 |   | 8,842.0 |   | 7,025.7 |   |
|                             |   |            |   |       |   |              |   |              |   |     |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Long lived assets                |   | 1,884.0         |   | 1,582.0    |   | 1,878.5           |   | 2,054.0           |   | 1,094.0  |   | 1,013.8          |   | 1,794.0 |   | 1,070.7 |   | 987.9 |   | 465.0 |   | 59.5 |   | 98.9 |   | 215.0 |   | 216.3 |   | 241.2 |   | 6,412.0 |   | 4,022.5 |   | 4,220.3 |   |
|                             |   |            |   |       |   |              |   |              |   |     |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Capital  expenditure             |   | 255.1           |   | 121.8      |   | 127.0             |   | 288.8             |   | 113.0    |   | 55.6             |   | 304.4 |   | 107.6 |   | 41.1 |   | 54.1 |   | 6.8 |   | 10.3 |   | 7.1 |   | 10.7 |   | 12.0 |   | 909.5 |   | 359.9 |   | 246.0 |   |

 

 

**Segment Reporting**

 

The primary reportingsegments have been classified based on the consolidated entity’s managementreporting system.

 

The secondary reportingsegments have been classified based on the geographical location of theconsolidated entity’s business segments.

 

Comparative information hasbeen restated for changes in the consolidated entity’s management reporting andbusiness segments.

 

Long lived assets compriseassets expected to be used for more than 12 months and exclude deferred taxes.

 

F - 20

----

 

**Note 30         ACQUISITIONOF SUBSIDIARIES/BUSINESSES**

 
|                                          |   | **$ Million  FAIR VALUE** |       |                               |       |                                |       |
|-----------------------------------------------|--------|---------------------------|------------|------------------------------------|------------|-------------------------------------|------------|
| **SUBSIDIARY**                                |   | **DATE OF  ACQUISITION**  | ** ** | **NET TANGIBLE  ASSETS  ACQUIRED** | ** ** | **PROPORTION  OF SHARES  ACQUIRED** |       | **$ Million  CONSIDER  - ATION (1)** | ** ** | **METHOD OF  FUNDING** | ** ** |
|                                          |   |                      |       |                               |       |                                |       |   |   |   |   |
| **2002/2003**                                 |   |                      | ** ** |                               | ** ** |                                | ** ** |   | ** ** |   | ** ** |
|                                          |   |                      |       |                               |       |                                |       |   |   |   |   |
| Schmalbach-Lubeca                             |   | July 1, 2002              |       | 1,214.2                            |       | 100                                 | %          | 2,827.5 |   | Cash |   |
| Other – refer  below for further details |   |                      |       | (4.5                               | )          |                                |       | 30.6 |   | Cash |   |
|                                          |   |                      |       | 1,209.7                            |       |                                |       | 2,858.1 |   |   |   |
|                                          |   |                      |       |                               |       |                                |       |   |   |   |   |
| Other  represented by:                        |   |                      |       |                               |       |                                |       |   |   |   |   |
|                                          |   |                      |       |                               |       |                                |       |   |   |   |   |
| Central Coast  Cartons                        |   | July 1, 2002              |       |                               |       | 15                                  | %          |   |   | Cash |   |
| Amcor Flexibles  Zhongshan                    |   | July 1, 2002              |       |                               |       |                                | (c)        |   |   | Cash |   |
| Brick, Malow and  Camco                       |   | July 1, 2002              |       |                               |       |                                | (b)        |   |   | Cash |   |
| Injepet                                       |   | July 1, 2002              |       |                               |       |                                | (c)        |   |   | Cash |   |
| Leaderpack                                    |   | August 1, 2002            |       |                               |       |                                | (c)        |   |   | Cash |   |
| Flexoprint                                    |   | March 31, 2003            |       |                               |       | 100                                 | %          |   |   | Cash |   |
| Incentive  Innovations                        |   | May 16, 2003              |       |                               |       |                                | (a)        |   |   | Cash |   |
| LBR Marketing                                 |   | June 24, 2003             |       |                               |       |                                | (a)        |   |   | Cash |   |
| ACI Closures                                  |   | June 30, 2003             |       |                               |       |                                | (a)        |   |   | Cash |   |
|                                          |   |                      |       |                               |       |                                |       |   |   |   |   |
| **2001/2002**                                 |   |                      | ** ** |                               | ** ** |                                |       |   | ** ** |   | ** ** |
|                                          |   |                      |       |                               |       |                                |       |   |   |   |   |
| Bericap Inc                                   |   | July 1, 2001              |       | 11.3                               |       |                                | (d)        | 11.3 |   | Cash/Assets |   |
| Apollo Paper                                  |   | September 21,  2001       |       | 19.8                               |       |                                | (a)        | 51.6 |   | Cash |   |
| AF  Camvac/Ledbury                            |   | April 1, 2002             |       | 29.7                               |       |                                | (a)        | 29.7 |   | Cash |   |
| Tobepal/Tobefil                               |   | April 30, 2002            |       | 38.6                               |       | 100                                 | %          | 84.5 |   | Cash |   |
| Other – refer  below for further details |   |                      |       | 17.9                               |       |                                |       | 39.4 |   |   |   |
|                                          |   |                      |       | 117.3                              |       |                                |       | 216.5 |   |   |   |
|                                          |   |                      |       |                               |       |                                |       |   |   |   |   |
| Other  represented by:                        |   |                      |       |                               |       |                                |       |   |   |   |   |
|                                          |   |                      |       |                               |       |                                |       |   |   |   |   |
| Central Coast  Cartons / Lynyork              |   | July 1, 2001              |       |                               |       |                                | (c)        |   |   | Cash |   |
| Sirod Foam  Packaging                         |   | July 14, 2002             |       |                               |       |                                | (a)        |   |   | Cash |   |
| Vanguard  Packaging Inc                       |   | September 14,  2001       |       |                               |       |                                | (a)        |   |   | Cash |   |
| Pet Pack  Containers                          |   | December 14,  2001        |       |                               |       |                                | (a)        |   |   | Cash |   |
| Integrated  Distribution Services             |   | February 22,  2002        |       |                               |       |                                | (a)        |   |   | Cash |   |
| Malow Corp                                    |   | April 26, 2002            |       |                               |       |                                | (a)        |   |   | Cash |   |
| Brick Container                               |   | June 3, 2002              |       |                               |       |                                | (a)        |   |   | Cash |   |
|                                          |   |                      |       |                               |       |                                |       |   |   |   |   |
| **2000/01**                                   |   |                      | ** ** |                               | ** ** |                                | ** ** |   | ** ** |   | ** ** |
| Poly Laupen                                   |   | July 1, 2000              |       | 12.7                               |       | 100                                 | %          | 12.7 |   | Cash |   |
| CNC Containers                                |   | February 28,  2001        |       | 30.8                               |       | 100                                 | %          | 132.4 |   | Cash |   |
| AFE A/S                                       |   | June 29, 2001             |       | 718.1                              |       | 67                                  | %          | 845.8 |   | Cash/Assets |   |
| Other – refer  below for further details |   |                      |       | 13.1                               |       |                                |       | 23.4 |   |   |   |
|                                          |   |                      |       | 774.7                              |       |                                |       | 1,014.3 |   |   |   |
|                                          |   |                      |       |                               |       |                                |       |   |   |   |   |
| Other  represented by:                        |   |                      |       |                               |       |                                |       |   |   |   |   |
|                                          |   |                      |       |                               |       |                                |       |   |   |   |   |
| Rentsch Belfast                               |   | July 1, 2000              |       |                               |       | 100                                 | %          |   |   | Cash |   |
| EE Cartons                                    |   | July 1, 2000              |       |                               |       | 100                                 | %          |   |   | Cash |   |
| Channel Paper  Co.                            |   | July 28, 2000             |       |                               |       |                                | (a)        |   |   | Cash |   |
| Amcor Flexibles  Zhongshan                    |   | August 15, 2000           |       |                               |       | 85                                  | %          |   |   | Cash |   |
| Majestic  Packaging Inc                       |   | October 16, 2000          |       |                               |       |                                | (a)        |   |   | Cash |   |
| Ward-Bagby  Packaging                         |   | December 4, 2000          |       |                               |       | 100                                 | %          |   |   | Cash |   |
| North Star Paper  Co.                         |   | March 30, 2001            |       |                               |       |                                | (a)        |   |   | Cash |   |

 

----

(a) Acquisition of business only.

(b) Additional payment on shares acquired in prior years

(c) Acquisition of outstanding shares in former partly-owned subsidiary.

(d) Acquisition of shares in former associate company.

 

F - 21

----

 

**RECONCILIATION OF NETTANGIBLE ASSETS ACQUIRED**

 
|                                                 |   | **2002-03** |   | **2001-02** |   | **2000-01** |   |
|------------------------------------------------------|--------|-------------|--------|-------------|--------|-------------|--------|
|                                                 |   | **$m**      |   | **$m**      |   | **$m**      |   |
|                                                 |   |        |   |        |   |        |   |
| Cash, net of  bank overdraft                         |   | —      |   | 7.5         |   | 80.5        |   |
| Current  receivables                                 |   | 341.1       |   | 93.5        |   | 456.3       |   |
| Inventories                                          |   | 457.5       |   | 39.5        |   | 412.3       |   |
| Investments                                          |   | 0.9         |   | —      |   | —      |   |
| Property, plant  and equipment                       |   | 1,311.6     |   | 115.2       |   | 947.8       |   |
| Other assets                                         |   | 44.6        |   | 3.7         |   | 58.5        |   |
| Current  liabilities – creditors and borrowings |   | (606.6      | )      | (83.0       | )      | (495.9      | )      |
| Non-current  liabilities- creditors and borrowings   |   | —      |   | (30.9       | )      | (323.5      | )      |
| Provisions                                           |   | (262.6      | )      | (16.3       | )      | (225.3      | )      |
| Minority  interests                                  |   | (76.8       | )      | (11.9       | )      | (136.0      | )      |
|                                                 |   |        |   |        |   |        |   |
| Net Tangible  Assets Acquired                        |   | 1,209.7     |   | 117.3       |   | 774.7       |   |

 

**RECONCILIATION OF GOODWILLAT COST**

 
|   |                                       |   | **2002-03** |   | **2001-02** |   | **2000-01** |   |
|--------|--------------------------------------------|--------|-------------|--------|-------------|--------|-------------|--------|
|   |                                       |   | **$m**      |   | **$m**      |   | **$m**      |   |
|   |                                       |   |        |   |        |   |        |   |
| (1)    | Consideration paid                         |   | 2,858.1     |   | 216.5       |   | 1,014.3     |   |
|   | Less net  tangible assets acquired         |   | (1,209.7    | )      | (117.3      | )      | (774.7      | )      |
|   |                                       |   |        |   |        |   |        |   |
|   | Goodwill on  acquisition                   |   | 1,648.4     |   | 99.2        |   | 239.6       |   |
|   |                                       |   |        |   |        |   |        |   |
|   | Exchange  fluctuation on overseas goodwill |   | (346.1      | )      | (44.4       | )      | 77.6        |   |
|   | Goodwill  disposed                         |   | (60.5       | )      | (6.1        | )      | (33.7       | )      |
|   | Goodwill  adjustments current year         |   | 8.2         |   | (18.7       | )      | (3.9        | )      |
|   |                                       |   |        |   |        |   |        |   |
|   | Increase/(decrease)  in goodwill at cost   |   | 1,250.0     |   | 30.0        |   | 279.6       |   |

 

**PRO FORMAFINANCIAL INFORMATION**

 

Pro forma information has not been shown for the2001-02 and 2000-01 financial years, as it is not practicable to providedetails for these periods.

 

F - 22

----

 

**Note 31         DISPOSALOF SUBSIDIARIES/BUSINESSES**

 

On December 31, 2002, the consolidated entity soldits 65% stake of Amcor White Cap LLC to Silgan Holdings Inc, its 35% jointventure partner.  The joint ventureconsisted of seven plants in the United States and one plant in Mexico.  Amcor White Cap LLC was formerly part of theconsolidated entity’s Amcor Rentsch/Closures business segment.  Gains/losses arising from the disposal ofsubsidiaries and businesses are included in the operating profit before incometax result reported on F-2.

 

Consideration received and the net assets of disposedcontrolled entities and subsidiaries at the dates of disposal are set out inthe table below:

 
|                                                     |   | **$ Million** |   |
|----------------------------------------------------------|--------|---------------|--------|
|                                                     |   |          |   |
| **Business/Controlled Entities Disposed**                |   |          |   |
| Consideration  received:                                 |   |          |   |
| Cash received                                            |   | 186.4         |   |
| Cash accrued                                             |   | 38.6          |   |
|                                                     |   | 225.0         |   |
|                                                     |   |          |   |
| Net assets  disposed:                                    |   |          |   |
| Cash, net of  bank overdraft                             |   | 1.1           |   |
| Current  receivables                                     |   | 15.4          |   |
| Inventories                                              |   | 89.8          |   |
| Investments                                              |   | —        |   |
| Property, plant  and equipment                           |   | 219.2         |   |
| Intangibles                                              |   | 60.5          |   |
| Current  liabilities – creditors and borrowings     |   | (45.9         | )      |
| Provisions                                               |   | (73.6         | )      |
| Non-current  liabilities – creditors and borrowings |   | —        |   |
| Outside equity  interests                                |   | (47.6         | )      |
|                                                     |   | 218.9         |   |
| Gross  profit/(loss) on disposal                         |   | 6.1           |   |
|                                                     |   | 225.0         |   |

 

F - 23

----

 

**Note 32         ADDITIONALFINANCIAL INSTRUMENTS DISCLOSURE**

 

**InterestRate Risk**

 

The consolidated entity is exposed to adversemovements in interest rates under various debt facilities.  By monitoring global interest rates andwhere appropriate, hedging interest rate exposures, the consolidated entity isable to manage the group’s interest rate risk.

 

**InterestRate Swaps, Options and Forward Rate Agreements**

 

Interest rate swaps and forward rate agreements allow theconsolidated entity to swap floating rate borrowings into fixed rates. Interestrate swaps are also used to swap fixed rate borrowings into floatingrates.  Maturities of swap contracts areprincipally between 1 and 5 years. Maturities of forward rate agreements are principally between 3 and 6months.

 

Each contract involves quarterly or semi-annualpayment or receipt of the net amount of interest.  Floating rates are based on interest rate settings in thecurrencies concerned plus the consolidated entity’s credit margin.

 

These rates are representative of the underlyingborrowings under both domestic and international funding facilities that theconsolidated entity utilizes.

 

There were no forward rate agreements outstanding atyear-end (2002 Nil).

 

From time to time, the consolidated entity also entersinto interest rate options to reduce the impact of changes in interest rates onfloating rate long-term debt.  Therewere no interest rate options outstanding at year end (2002 Nil).

 

**InterestRate Risk Exposures**

 

Exposure to interest rate risk and the effectiveaverage weighted interest rate for classes of financial assets and liabilitiesis set out below:

 
|                                         |   | **Fixed interest maturing in:** |   |                |   | **Weighted  Average****Interest Rate** |   |
|----------------------------------------------|--------|---------------------------------|--------|---------------------|--------|----------------------------------------|--------|
|                                         |   | **Floating Interest  Rate**     |   | **1 year or  less** |   | **Over 1 to 5  years**                 |   | **More than 5  years** |   | **Non-interest  Bearing** |   | **Total** |   |   |
|                                         |   |                            |   |                |   |                                   |   |   |   |   |   |   |   |   |   |
| **2003 $million**                            |   |                            |   |                |   |                                   |   |   |   |   |   |   |   |   |   |
| Financial Assets                             |   |                            |   |                |   |                                   |   |   |   |   |   |   |   |   |   |
| Cash and  deposits                           |   | 162.0                           |   | —              |   | —                                 |   | — |   | — |   | 162.0 |   | 2.69 | % |
| Receivables                                  |   | —                          |   | —              |   | —                                 |   | — |   | 1,460.4 |   | 1,460.4 |   | — |   |
| Investments                                  |   | —                          |   | —              |   | —                                 |   | — |   | 21.5 |   | 21.5 |   | — |   |
|                                         |   | 162.0                           |   | —              |   | —                                 |   | — |   | 1,481.9 |   | 1,643.9 |   | 2.69 | % |
| Financial  Liabilities                       |   |                            |   |                |   |                                   |   |   |   |   |   |   |   |   |   |
| Payables                                     |   | —                          |   | —              |   | —                                 |   | — |   | 1,525.7 |   | 1,525.7 |   | — |   |
| Bank and other  loans                        |   | 971.4                           |   | 9.7                 |   | 21.5                                   |   | 0.4 |   | 2.3 |   | 1,005.3 |   | 3.66 | % |
| Bills of  exchange                           |   | 108.4                           |   | —              |   | —                                 |   | — |   | — |   | 108.4 |   | 2.65 | % |
| US$ Notes                                    |   | —                          |   | —              |   | —                                 |   | 748.9 |   | — |   | 748.9 |   | 5.83 | % |
| Leases                                       |   | 138.8                           |   | 1.5                 |   | 1.6                                    |   | 8.5 |   | — |   | 150.4 |   | 5.31 | % |
| Distributions  payable                       |   | —                          |   | —              |   | —                                 |   | — |   | 8.8 |   | 8.8 |   | — |   |
| Employee  entitlements                       |   | —                          |   | —              |   | 80.3                                   |   | — |   | 263.2 |   | 343.5 |   | 6.00 | % |
|                                         |   |                            |   |                |   |                                   |   |   |   |   |   |   |   |   |   |
| Undated  subordinated convertible securities |   | —                          |   | —              |   | 446.2                                  |   | — |   | — |   | 446.2 |   | 7.08 | % |
|                                         |   | 1,218.6                         |   | 11.2                |   | 549.6                                  |   | 757.8 |   | 1,800.0 |   | 4,337.2 |   | 5.00 | % |
| Interest Rate  Swaps                         |   |                            |   |                |   |                                   |   |   |   |   |   |   |   |   |   |
| AUD                                          |   | (100.0                          | )      | —              |   | 100.0                                  |   | — |   | — |   | — |   | 6.75 | % |
| EUR                                          |   | (480.0                          | )      | —              |   | 480.0                                  |   | — |   | — |   | — |   | 4.81 | % |
| AUD                                          |   | 480.0                           |   | —              |   | (480.0                                 | )      | — |   | — |   | — |   | (5.67 | )% |
| Total Swaps                                  |   | (100.0                          | )      | —              |   | 100.0                                  |   | — |   | — |   | — |   | 4.90 | % |

 

F - 24

----

 
|                                         |                        | **Fixed interest maturing in:** |                |   |                   | **Weighted  Average****Interest  Rate** |                   |
|----------------------------------------------|-----------------------------|---------------------------------|---------------------|--------|------------------------|-----------------------------------------|------------------------|
|                                         | **Floating  Interest Rate** |                            | **1 year or  less** |   | **Over 1 to 5  years** |                                    | **More than 5  years** |   | **Non-interest  Bearing** |   | **Total** |   |   |
|                                         |                        |                            |                |   |                   |                                    |                   |   |   |   |   |   |   |   |   |
| **2002 $million**                            |                        |                            |                |   |                   |                                    |                   |   |   |   |   |   |   |   |   |
|                                         |                        |                            |                |   |                   |                                    |                   |   |   |   |   |   |   |   |   |
| Financial Assets                             |                        |                            |                |   |                   |                                    |                   |   |   |   |   |   |   |   |   |
|                                         |                        |                            |                |   |                   |                                    |                   |   |   |   |   |   |   |   |   |
| Cash and  deposits                           |                        | 2,325.0                         |                | — |                   | —                                  |                   | — |   | — |   | 2,325.0 |   | 3.04 | % |
| Receivables                                  |                        | —                          |                | — |                   | —                                  |                   | — |   | 1,303.2 |   | 1,303.2 |   | — |   |
| Investments                                  |                        | —                          |                | — |                   | —                                  |                   | — |   | 12.8 |   | 12.8 |   | — |   |
|                                         |                        | 2,325.0                         |                | — |                   | —                                  |                   | — |   | 1,316.0 |   | 3,641.0 |   | 3.04 | % |
| Financial  Liabilities                       |                        |                            |                |   |                   |                                    |                   |   |   |   |   |   |   |   |   |
| Payables                                     |                        | —                          |                | — |                   | —                                  |                   | — |   | 1,208.3 |   | 1,208.3 |   | — |   |
| Bank and other  loans                        |                        | 839.4                           |                | 31.7   |                   | 187.4                                   |                   | 54.5 |   | — |   | 1,113.0 |   | 4.15 | % |
| Bills of  exchange                           |                        | 115.8                           |                | — |                   | —                                  |                   | — |   | — |   | 115.8 |   | 2.08 | % |
| US$ Notes                                    |                        | —                          |                | 221.3  |                   | —                                  |                   | — |   | — |   | 221.3 |   | 6.75 | % |
| Leases                                       |                        | 5.8                             |                | 12.1   |                   | 5.1                                     |                   | 34.0 |   | — |   | 57.0 |   | 8.75 | % |
| Employee  entitlements                       |                        | —                          |                | — |                   | 55.4                                    |                   | — |   | 238.9 |   | 294.3 |   | 6.00 | % |
| Dividend payable                             |                        | —                          |                | — |                   | —                                  |                   | — |   | 123.0 |   | 123.0 |   | — |   |
|                                         |                        |                            |                |   |                   |                                    |                   |   |   |   |   |   |   |   |   |
| Undated  subordinated convertible securities |                        | —                          |                | — |                   | 543.1                                   |                   | — |   | — |   | 543.1 |   | 7.06 | % |
|                                         |                        |                            |                |   |                   |                                    |                   |   |   |   |   |   |   |   |   |
|                                         |                        | 961.0                           |                | 265.1  |                   | 791.0                                   |                   | 88.5 |   | 1,570.2 |   | 3,675.8 |   | 5.21 | % |
| Interest Rate  Swaps                         |                        |                            |                |   |                   |                                    |                   |   |   |   |   |   |   |   |   |
|                                         |                        |                            |                |   |                   |                                    |                   |   |   |   |   |   |   |   |   |
| AUD                                          |                        | (100.0                          | )                   | — |                   | 100.0                                   |                   | — |   | — |   | — |   | 6.75 | % |
| EUR                                          |                        | (480.0                          | )                   | — |                   | 480.0                                   |                   | — |   | — |   | — |   | 4.81 | % |
| AUD                                          |                        | 480.0                           |                | — |                   | (480.0                                  | )                      | — |   | — |   | — |   | (5.67 | )% |
| USD                                          |                        | 221.3                           |                | (221.3 | )                      | —                                  |                   | — |   | — |   | — |   | (6.30 | )% |
| USD                                          |                        | (132.8                          | )                   | 132.8  |                   | —                                  |                   | — |   | — |   | — |   | 6.43 | % |
| CAD                                          |                        | (58.1                           | )                   | 58.1   |                   | —                                  |                   | — |   | — |   | — |   | 6.55 | % |
| Total Swaps                                  |                        | (69.6                           | )                   | (30.4  | )                      | 100.0                                   |                   | — |   | — |   | — |   | 5.08 | % |

 

F - 25

----

 

**ForeignExchange Risk**

 

In relation to transactional foreign currencyexposures, the consolidated entity’s policy is to hedge all foreign currencyexposures greater than A$100,000 as soon as a firm and irrevocable commitmentis entered into or known.  The gains orcosts on entering the hedge and the exchange differences up to the date of thepurchase or sale are deferred and recognized as assets or liabilities on theConsolidated Balance Sheets from the inception of the hedge contract, not whenthe specific purchase or sale occurs. At maturity, the costs or gains are included in the measurement of theunderlying transaction.

 

Accounts payable and borrowings include amountsrepayable in foreign currencies shown at their Australian dollar equivalents.All material foreign currency liabilities are fully hedged or matched byequivalent assets in the same currencies, such assets representing a naturalhedge.

 

The following table sets out the gross value to bereceived under foreign currency contracts, the weighted average contractedexchange rates and the settlement periods of contracts outstanding as at June30:

 
|                 |   | **2003**                   |   | **2002**                   |       |     |       |     |       |
|----------------------|--------|----------------------------|--------|----------------------------|------------|----------|------------|----------|------------|
|                 |   | **Weighted Average  Rate** |   | **Weighted Average  Rate** | ** ** | **2003** | ** ** | **2002** | ** ** |
|                 |   |                       |   |                       |       | **$m**   |       | **$m**   |       |
| Buy Contracts        |   |                       |   |                       |       |     |       |     |       |
| 0-12 months          |   |                       |   |                       |       |     |       |     |       |
| CAD                  |   | 1.03                       |   | 0.90                       |       | 1.0      |       | 5.3      |       |
| CHF                  |   | 0.88                       |   | 0.85                       |       | 11.9     |       | 54.7     |       |
| DKK                  |   | 4.34                       |   | 4.27                       |       | 9.1      |       | 101.9    |       |
| EUR                  |   | 0.58                       |   | 0.57                       |       | 198.4    |       | 20.7     |       |
| GBP                  |   | 0.40                       |   | 0.37                       |       | 44.7     |       | 25.7     |       |
| JPY                  |   | 73.61                      |   | 66.04                      |       | 0.8      |       | 0.4      |       |
| NOK                  |   | 4.69                       |   | 4.26                       |       | 0.6      |       | 13.0     |       |
| NZD                  |   | 1.12                       |   | —                     |       | 4.9      |       | —   |       |
| SEK                  |   | 5.37                       |   | 5.24                       |       | 15.4     |       | 77.2     |       |
| SGD                  |   | —                     |   | 1.00                       |       | —   |       | 0.1      |       |
| USD                  |   | 0.61                       |   | 0.55                       |       | 82.3     |       | 43.1     |       |
| More than 12  months |   |                       |   |                       |       |     |       |     |       |
| EUR                  |   | 0.55                       |   | —                     |       | 8.9      |       | —   |       |
| NZD                  |   | 1.30                       |   | 1.30                       |       | 77.2     |       | 77.2     |       |
| USD                  |   | 0.54                       |   | —                     |       | 1.4      |       | —   |       |
|                 |   |                       |   |                       |       |     |       |     |       |
| Sell Contracts       |   |                       |   |                       |       |     |       |     |       |
| 0-12 months          |   |                       |   |                       |       |     |       |     |       |
| CHF                  |   | —                     |   | 0.84                       |       | —   |       | 111.2    |       |
| DKK                  |   | —                     |   | 4.27                       |       | —   |       | 158.8    |       |
| GBP                  |   | —                     |   | 0.36                       |       | —   |       | 64.6     |       |
| NOK                  |   | —                     |   | 4.36                       |       | —   |       | 31.1     |       |
| NZD                  |   | 1.11                       |   | 1.22                       |       | 26.7     |       | 29.3     |       |
| SEK                  |   | —                     |   | 5.22                       |       | —   |       | 120.1    |       |
| USD                  |   | 0.62                       |   | 0.52                       |       | 2.8      |       | 12.0     |       |

 

F - 26

----

 

**Credit Risk**

 

OnBalance Sheet Financial Instruments

 

Themaximum credit risk on financial assets of the consolidated entity, other thaninvestments in shares, is generally the carrying amount of receivables, net ofprovisions for doubtful debts.

 

Theconsolidated entity minimizes its concentrations of credit risk by undertakingtransactions with a large number of customers and counterparties in variouscountries. There is no material exposure to any individual customer.

 

DerivativeFinancial Instruments

 

Inorder to control any exposure that may result from non-performance bycounterparties, hedging contracts are only entered into with major banks with aminimum long term rating of A- by Standard & Poor’s. In addition, the AmcorLimited Board must approve these banks for use, and specific internalguidelines have been established with regard to limits, dealing and settlementprocedures.

 

Thecredit risk exposure arising from the derivative financial instruments is thesum of all contracts with a positive replacement cost. As at June 30, 2003 thesum of all contracts with a positive replacement cost was $50.3 million (2002$30.9 million).

 

Themaximum credit risk exposure on foreign currency contracts is the full amountof the foreign currency the consolidated entity pays when settlement occurs,should the counterparty fail to pay the amount which it is committed to pay theconsolidated entity.

 

**Net Fair Values**

 

On Balance Sheet FinancialInstruments

 

Instruments traded on organizedmarkets are valued by reference to market prices prevailing at balance date.

 

The net fair value of othermonetary financial assets and financial liabilities approximates their carryingvalue.

 

The carrying amounts and net fairvalues of financial assets and liabilities as at reporting date are as follows:

 
|                                         |   | **Carrying  Amount  2003** |   | **Net Fair  Value  2003** |   | **Carrying  Amount  2002** |   | **Net Fair  Value  2002** |   |
|----------------------------------------------|--------|----------------------------|--------|---------------------------|--------|----------------------------|--------|---------------------------|--------|
|                                         |   | **$m**                     |   | **$m**                    |   | **$m**                     |   | **$m**                    |   |
| **Financial Assets**                         |   |                       |   |                      |   |                       |   |                      |   |
| Cash and  deposits                           |   | 162.0                      |   | 162.0                     |   | 2,325.0                    |   | 2,325.0                   |   |
| Receivables                                  |   | 1,460.4                    |   | 1,460.4                   |   | 1,303.2                    |   | 1,303.2                   |   |
| Investments                                  |   | 21.5                       |   | 21.5                      |   | 12.8                       |   | 12.8                      |   |
|                                         |   |                       |   |                      |   |                       |   |                      |   |
| **Financial Liabilities**                    |   |                       |   |                      |   |                       |   |                      |   |
| Payables                                     |   | 1,525.7                    |   | 1,525.7                   |   | 1,208.3                    |   | 1,208.3                   |   |
| Bank overdrafts  & loans                 |   | 1,005.3                    |   | 1,005.3                   |   | 1,113.0                    |   | 1,113.0                   |   |
| Bills of  exchange                           |   | 108.4                      |   | 108.4                     |   | 115.8                      |   | 115.8                     |   |
| US$ Notes                                    |   | 748.9                      |   | 748.9                     |   | 221.3                      |   | 228.2                     |   |
| Lease  liabilities                           |   | 150.4                      |   | 150.4                     |   | 57.0                       |   | 57.0                      |   |
| Employee  entitlements                       |   | 343.5                      |   | 343.5                     |   | 294.3                      |   | 294.3                     |   |
| Dividends/distributions  payable             |   | 8.8                        |   | 8.8                       |   | 123.0                      |   | 123.0                     |   |
| Undated  subordinated convertible securities |   | 446.2                      |   | 515.3                     |   | 543.1                      |   | 567.1                     |   |

 

The undated subordinated convertible securities are readily traded inorganized markets.

 

F - 27

----

 

Derivative FinancialInstruments

 

The valuation detailedreflects the estimated amounts which the consolidated entity expects to pay orreceive to terminate the contracts or replace the contracts at their currentmarket rates as at reporting date. This is based on independent marketquotations and determined using standard valuation techniques. For foreignexchange related contracts, the net fair value is taken to be the unrealizedgain or loss at balance date calculated by reference to current market rates.

 

The net fair value ofderivative financial instruments held as at reporting date are:

 
|                                |   | **2003** |   | **2002** |   |
|-------------------------------------|--------|----------|--------|----------|--------|
|                                |   | **$m**   |   | **$m**   |   |
|                                |   |     |   |     |   |
| Interest Rate  Swaps                |   | (19.8    | )      | (11.6    | )      |
| Cross Currency  Swaps               |   | 41.7     |   | 23.7     |   |
| Forward Foreign  Exchange Contracts |   | 2.9      |   | 3.1      |   |
|                                |   |     |   |     |   |
|                                |   | 24.8     |   | 15.2     |   |

 

An equivalent movement on theunderlying transactions offsets the above net notional positions.

 

Non-recourse ReceivablesSecuritization Program

 

The consolidated entityutilizes an uncommitted, multi-currency receivables securitization program inthe United Kingdom, France, Germany, Spain and the USA. The trade receivablesof some of the consolidated entity’s businesses in these jurisdictions aresold, on a non-recourse basis, into an independent securitization conduit whichissues asset-backed commercial paper into organized markets.

 

The cost of the program isincluded in the expenses from ordinary activities of the consolidated entity.

 

Theprogram limit is $205 million (2002 nil) and the balance of trade receivablessold at June 2003 was $190

million(2002 nil).

 

F - 28

----

 

**Note 33         RELATEDPARTY DISCLOSURES**

 

Directors

 

The persons who held office as adirector of Amcor Limited during the year ended June 30, 2003:

 
| C I Roberts   |   | R K Barton    |
|---------------|--------|---------------|
| R H Jones     |   | T C Bergman   |
| E A Alexander |   | G A Tomlinson |
| D C K Allen   |   |          |

 

Information on the remuneration ofdirectors is set out in Note 27.

 

Directors’ holdings of shares andshare options

 

As at June 30, 2003 directors ofAmcor Limited held in aggregate 566,546 ordinary shares of Amcor Limited, and6,000,000 options over 6,000,000 ordinary shares of Amcor Limited. Exercise of6,000,000 of these options is dependent on meeting group performance targets.

 

Directors’ transactions in sharesand share options

 

During the year the consolidatedentity granted options over 14,439,878 unissued shares under the Employee ShareOption Plan. Of these options, none were granted to non-executive directors ortheir director-related entities.

 

Loans to directors of AmcorLimited and controlled entities

 

Loans for the purchase of sharesand other loans are made in accordance with the terms and conditions of theplans referred to in Note 9(1).

 

During the year, under theemployee share plans, share loan repayments totalling $33,000 were receivedfrom C H Clayton, B Guy, R H Jones, L J Lachal and D Solomon.

 

No loans were advanced during the year.A guarantee continues in favour of R H Jones for a loan of $448,000 (2002:$448,000).

 

Loan repayments totalling $63,000were received from P F Reichler. 

 

Loans to directors of AmcorLimited in Note 9 total $1,075,000 (2002: $1,093,000).

 

Loans to directors of controlledentities in Note 9 total $435,000 (2002: $513,000).

 

Note 17 does not include any loansfrom director related entities. The loan from director related entities thatwas outstanding at June 30, 2002 of $1,482,000 was repaid in full on July 31,2002.

 

Interest received from directorsduring the year amounted to $30,000 (2002: $12,000).

 

F - 29

----

 

Othertransactions - in the normal course of business and on an arm’s length basis

 

Director-relatedentities of Messrs S Ryder and A J Foley - (Australasia) received in aggregatemanagement fees of $40,000 (2002: $40,000).

 

Salesof beverage containers totalling $6,865,000 (2002: $7,791,000) were made todirector-related entities of F Daley, B Boyd and C Newell - (Canada)

 

Salesof tobacco packaging totalling $4,260,000 (2002: $7,572,000) were made todirector-related entities of Gu A Chao.

 

Purchasesof paper products totalling $8,588,000 (2002: $7,768,000) were made fromdirector-related entities of D S Kurniawan and S Tirtowidjojo.

 

Provisionof marketing services by a director-related entity of G S James totalled$137,000 (2002: $177,000).

 

Provisionof secretarial services by a director-related entity of J Durston totalled$62,600 (2002 nil).

 

Purchasesof goods supplied at cost totalling $296,000 (2002: $431,000) were made from adirector related entity of G S James.

 

Purchasesof manufacturing supplies totalling $572,000 (2002: $688,000) were made fromdirector-related entities of S Ryder and A J Foley - (Australasia).

 

**Note 34         EVENTSSUBSEQUENT TO BALANCE DATE**

 

SinceJune 30, 2003, the consolidated entity has acquired the 28.1% minority stake inAmcor Flexibles Europe (AFE) from Danisco and Ahlstrom for $173 million. Theeffective date of this acquisition is July 1, 2003.

 

Theconsolidated entity has also announced that it entered into an agreement topurchase Rexam’s healthcare flexibles business for $330 million (GBP 135million). This business consists of ten plants in six countries and forms partof the Amcor Flexibles Europe business group.

 

Sincethe end of the financial year, the directors declared a final dividend of 15cents per share. This was paid on October 1, 2003.  The financial effect of this dividend has not been brought toaccount in the financial statements for the year ended June 30, 2003 and willbe recognized in subsequent financial reports.

 

F - 30

----

 

**Note 35         MAJORDIFFERENCES BETWEEN AUSTRALIAN GAAP AND US GAAP**

 

Theconsolidated financial statements of the consolidated entity are prepared inaccordance with Australian GAAP (refer

Note1), which differ in some respects from US GAAP.

 

Thefollowing is a summary of the major differences between Australian GAAP and USGAAP as they relate to the

consolidatedentity which provides an expansion of certain information included in Note 1:

 

(a)          Property, Plant andEquipment

 

Revaluations

 

Certain land, land improvements and buildings have beenrevalued by the consolidated entity at various times in prior financialperiods. These revaluation increments and decrements have overall increased thecarrying value of the assets and accordingly the depreciation charges have beenincreased above those which would be required on an historical cost basis.Where assets have been devalued below cost, these write-downs have been takento profit and loss. In prior years bonus shares (stock dividends) were issuedout of the asset revaluation reserve. US GAAP adjustments eliminate the effectsof these items.

 

The consolidated entity has applied revised AASB 1041‘Revaluation of Non-current Assets’ and, in accordance with the standard, haselected to apply the cost basis for non-current assets. In respect of land,land improvements and buildings, the consolidated entity has deemed the cost ofthese assets to be equal to their carrying values as at July 1, 2000. As aconsequence of making this election on the adoption of AASB 1041, the balanceof the asset revaluation reserve at July 1, 2000 relating to land, landimprovements and buildings is no longer available for asset write-downs.

 

The above policy also causes differences in reported gainsand losses on the sale of property, plant and equipment.  Gains and losses for Australian GAAP arebased on consideration less revalued amounts net of accumulated depreciationand amortization. For US GAAP purposes, gains and losses are determined havingregard to depreciated historical cost.

 

Sale and leaseback

 

Certain properties were sold during the previous financialyear and leased back under an operating lease agreement for Australian GAAPpurposes. For US GAAP purposes, this transaction did not qualify for sale andleaseback accounting as the sales agreement contained a repurchase option, andother forms of continuing involvement. Accordingly, the transaction wasrecorded as a secured borrowing and the properties recorded as an asset, with acorresponding obligation recorded for the proceeds received. For the currentfinancial year, payments made under the relevant agreements have beenapportioned between interest expense and the loan liability.

 

Glass bottle plant

 

A glass bottle manufacturing plant was constructed by athird party entity, ‘AGAL Holdings Pty Ltd’, on the consolidated entity’sbehalf. The consolidated entity was not obliged to take possession of the plantuntil certain production milestones were achieved. Accordingly, it had not beenrecorded as an asset for Australian GAAP purposes at June 30, 2002. For US GAAPpurposes, specific criteria in relation to construction risk had been satisfiedand, accordingly, the plant was recorded as an asset with correspondingborrowings. As at June 30, 2003, a finance lease asset and correspondingliability have been recognized for both Australian and US GAAP reporting purposes,with the only difference pertaining to costs which cannot be capitalized underUS GAAP and are included in Note 35 (h) as they represent start up costs.

 

F - 31

----

 

The table below outlines the impact on net profit, assetsand shareholders’ equity of the above adjustments.

 
|                                                |   | **Net profit** |       | **Assets** |       | **Shareholders’ Equity** |       |
|-----------------------------------------------------|--------|----------------|------------|------------|------------|-------------------------------|------------|
|                                                |   | **2003**       |       | **2002**   |       | **2001**                      |       | **2003** |   | **2002** |   | **2003** |   | **2002** |   |
|                                                |   |           | ** ** |       | ** ** |                          | ** ** |   | ** ** |   | ** ** |   | ** ** |   | ** ** |
| **Revaluations**                                    |   |           |       |       |       |                          |       |   |   |   |   |   |   |   |   |
| Depreciation  effect                                |   | 0.8            |       | 0.9        |       | 0.7                           |       | 28.6 |   | 27.8 |   | 28.6 |   | 27.8 |   |
| Gain or loss on  disposal                           |   | 7.9            |       | 8.6        |       | —                        |       | — |   | — |   | — |   | — |   |
| Adjustment to  revaluation surplus                  |   | —         |       | —     |       | —                        |       | (212.6 | ) | (220.4 | ) | (212.6 | ) | (220.4 | ) |
|                                                |   |           |       |       |       |                          |       |   |   |   |   |   |   |   |   |
| **Sale and leaseback**                              |   |           |       |       |       |                          |       |   |   |   |   |   |   |   |   |
| Reinstatement of  asset                             |   | (2.3           | )          | (2.4       | )          | —                        |       | 165.8 |   | 168.1 |   | (4.7 | ) | (2.4 | ) |
| Profit on sale  not recognized                      |   | —         |       | (3.5       | )          | —                        |       | — |   | — |   | (3.5 | ) | (3.5 | ) |
| Lease rentals  not recognized                       |   | 15.7           |       | 15.2       |       | —                        |       | — |   | — |   | 30.9 |   | 15.2 |   |
| Lease interest  on sale and leaseback assets        |   | (13.8          | )          | (13.8      | )          | —                        |       | — |   | — |   | (27.6 | ) | (13.8 | ) |
|                                                |   |           |       |       |       |                          |       |   |   |   |   |   |   |   |   |
| **Glass bottle plant**                              |   |           |       |       |       |                          |       |   |   |   |   |   |   |   |   |
| Costs  capitalized                                  |   | —         |       | —     |       | —                        |       | — |   | 129.9 |   | — |   | — |   |
|                                                |   |           |       |       |       |                          |       |   |   |   |   |   |   |   |   |
| **Total Property, Plant and Equipment adjustments** |   | **8.3**        | ** ** | **5.0**    | ** ** | **0.7**                       | ** ** | **(18.2** | **)** | **105.4** | ** ** | **(188.9** | **)** | **(197.1** | **)** |

 

(b)         Minority Interests

 

Minority interests are frequently included as part of totalshareholders’ equity under Australian GAAP. The financial statements haveexcluded minority interests from shareholders’ equity consistent with US GAAPtreatment.

 

 

(c)          Provisions

 

The following items represent differences in accounting forprovisions between Australian and US GAAP. The consolidated entity adopted therequirements of AASB 1044 ‘Provisions, Contingent Liabilities and ContingentAssets’ for the first time on July 1, 2002.

 

Employee provisions

 

The term “provisions” is used in Australian GAAP todesignate accrued expenses with no definitive payment date. This can includesuch items as employee leave entitlements not yet taken. Classification betweencurrent and non-current is generally based on management assessments. For USGAAP purposes, certain post-employment benefits had been brought to account in2001, which were brought to account in 2002 for Australian GAAP purposes. 

 

During the year, the consolidated entity increased theprovision for wages, salaries, annual leave and sick leave to reflect theremuneration rates the consolidated entity expects to pay. This requirement isfundamentally consistent with US GAAP. However, pursuant to the transitionalrequirements of AASB 1028 ‘Employee Entitlements’, the increase in theprovision as at July 1, 2002 was recorded against opening retained earnings.For US GAAP purposes, this increase in the provision has been recorded againstnet income.

 

F - 32

----

 

Onerous contracts

 

Under Australian GAAP, in accordance with the adoption ofAASB 1044 ‘Provisions, Contingent Liabilities and Contingent Assets’, aprovision for onerous contracts is recognized when the unavoidable costs ofmeeting the consolidated entity’s obligation under these contracts exceeds theeconomic benefits expected to be received. Under US GAAP, this represents future operating losses and therefore theprovision is reversed and contract revenues and expenses are booked insubsequent periods as sales are made under the contract. Under the transitionalarrangements of AASB 1044, a provision for onerous contracts was recordedagainst opening retained earnings. This provision has been reversed for US GAAPpurposes and any subsequent utilization of this Australian GAAP provision ischarged to US GAAP net income.

 

The table below outlines the impact on net profit, assetsand shareholders’ equity of the above adjustments.

 
|                                                                                 |   | **Net profit** |       | **Assets** |       | **Shareholders’ Equity** |       |
|--------------------------------------------------------------------------------------|--------|----------------|------------|------------|------------|-------------------------------|------------|
|                                                                                 |   | **2003**       |       | **2002**   |       | **2001**                      |       | **2003** |   | **2002** |   | **2003** |   | **2002** |   |
|                                                                                 |   |           | ** ** |       | ** ** |                          | ** ** |   | ** ** |   | ** ** |   | ** ** |   | ** ** |
| **Employee benefits**                                                                |   |           |       |       |       |                          |       |   |   |   |   |   |   |   |   |
| Post employment  benefits                                                            |   | —         |       | 4.7        |       | (4.7                          | )          | — |   | — |   | — |   | — |   |
| Charge to  opening retained earnings for Australian GAAP change in accounting policy |   | (2.2           | )          | —     |       | —                        |       | — |   | — |   | — |   | — |   |
|                                                                                 |   |           |       |       |       |                          |       |   |   |   |   |   |   |   |   |
| **Onerous contracts**                                                                |   |           |       |       |       |                          |       |   |   |   |   |   |   |   |   |
| Reversal of  provision and recognition of current year expense                       |   | (5.9           | )          | —     |       | —                        |       | — |   | — |   | 14.2 |   | — |   |
|                                                                                 |   |           |       |       |       |                          |       |   |   |   |   |   |   |   |   |
| **Total Provisions adjustments**                                                     |   | **(8.1**       | **)**      | **4.7**    | ** ** | **(4.7**                      | **)**      | **—** | ** ** | **—** | ** ** | **14.2** | ** ** | **—** | ** ** |

 

(d)         Earnings Per Share

 

The consolidated entity adopted the revised AASB 1027‘Earnings Per Share’ on July 1, 2002. The requirements of this AustralianAccounting Standard are fundamentally consistent with US GAAP requirementsdetailed in SFAS 128 ‘Earnings Per Share’. However, earnings per share resultswill differ between Australian and US GAAP due to the impact of differentAustralian and US accounting policies on operating profit – refer to the remainderof Note 35 for further details. Also, as detailed in Note 35(t), the US GAAPaccounting treatment for the PACRS results in a beneficial conversion featurewhich impacts the earnings per share reported under US GAAP. For Australianaccounting purposes, there is no such requirement.

 

F - 33

----

 

(e)          Pension Plans

 

A detailed level of reporting in respect of pension plans isnot presently required by Australian GAAP. Under Australian GAAP thecontributions to the various pension plans are recorded as an expense in theincome statement. The disclosure requirements of SFAS 87 ‘Employers’ Accountingfor Pensions’, as amended by SFAS 132 ‘Employers’ Disclosures about Pensionsand Other Postretirement Benefits—an amendment of FASB Statements No. 87, 88,and 106’, have been included in these financial statements in respect of theyears ended June 30, 2001, 2002 and 2003. Additionally, an adjustment is madeto recognize the measurement principles of SFAS 87 in determining net incomeand shareholders’ equity under US GAAP (refer Note 28).

 

The consolidated entity is not a party to any materialagreements with its employees in respect of post retirement or othercompensation benefits (other than pension plans) except for those amounts whichare provided for in the financial statements in accordance with variousstatutory entitlements.

 

As a result of the acquisition of AFE A/S and Schmalbach,certain liabilities for accrued benefit costs have been recorded for US GAAP purposes,with a corresponding adjustment to goodwill.

 

The table below outlines the impact on net profit, assetsand shareholders’ equity of the above adjustments.

 

 
|                                   |   | **Net profit** |       | **Assets** |       | **Shareholders’ Equity** |       |
|----------------------------------------|--------|----------------|------------|------------|------------|-------------------------------|------------|
|                                   |   | **2003**       |       | **2002**   |       | **2001**                      |       | **2003** |   | **2002** |   | **2003** |   | **2002** |   |
|                                   |   |           | ** ** |       | ** ** |                          | ** ** |   | ** ** |   | ** ** |   | ** ** |   | ** ** |
| **Pension plans**                      |   |           |       |       |       |                          |       |   |   |   |   |   |   |   |   |
| Prepaid/accrued  pension costs         |   | 1.5            |       | 2.7        |       | (6.7                          | )          | 59.4 |   | 69.7 |   | 54.2 |   | 52.7 |   |
| Recognition of  minimum liability:     |   |           |       |       |       |                          |       |   |   |   |   |   |   |   |   |
| Other  comprehensive income adjustment |   | —         |       | —     |       | —                        |       | — |   | — |   | (32.0 | ) | (6.7 | ) |
| Intangible  assets recognized          |   | —         |       | —     |       | —                        |       | 10.2 |   | 15.4 |   | — |   | — |   |
| Acquired funds                         |   | —         |       | —     |       | —                        |       | 4.5 |   | (1.2 | ) | — |   | — |   |
|                                   |   |           |       |       |       |                          |       |   |   |   |   |   |   |   |   |
| **Total Pension Plan adjustments**     |   | **1.5**        | ** ** | **2.7**    | ** ** | **(6.7**                      | **)**      | **74.1** | ** ** | **83.9** | ** ** | **22.2** | ** ** | **46.0** | ** ** |

 

(f)            Leases

 

The method of accounting for leases under Australian GAAPdoes not significantly differ from that for US GAAP, except as referred tounder Note 35(a).

 

(g)         Income Taxes

 

The consolidated entity applies SFAS 109 ‘Accounting forIncome Taxes’ in preparing its US GAAP information. Accounting for income taxesunder Australian GAAP is under the liability method, and is equivalent in allmajor respects to SFAS 109. For Australian GAAP purposes, deferred tax balancesbased on the liability method are adjusted for changes in the corporate taxrate. This method is fundamentally consistent with SFAS 109, in that deferredincome taxes are provided for at the statutory rates on the difference betweenthe book and tax basis of assets and liabilities.

 

In assessing the realizability of deferred assets for USGAAP, management considers whether it is more likely than not that some portionor all of the deferred tax assets will not be realized. The ultimaterealization of deferred tax assets is dependent upon the generation of futuretaxable income during the periods in which those temporary differences becomedeductible. Management considers the scheduled reversal of deferred taxliabilities, projected future taxable income, and tax planning strategies inmaking this assessment. A valuation allowance is provided against the deferredtax asset for the portion of that asset that is not likely to be realized basedon management’s assessment. As at June 30, 2003, a valuation allowance of$279.7 million has been provided against non-current deferred tax assets. Thisvaluation allowance relates to carried forward tax losses, the majority ofwhich are available to offset taxable income over the next 6 years, wheremanagement has assessed that it is more likely than not that these benefits willnot be realized.

 

F - 34

----

 

 

The consolidated entity acquired $134.8 million in carriedforward tax losses as part of the acquisition of the Schmalbach business. Avaluation allowance has been provided against the full value of thesenon-current deferred tax assets, based on management’s assessment that it ismore likely than not that these benefits will not be realized. If any of thesedeferred tax assets are subsequently recognized, they will result in a correspondingadjustment to goodwill.

 

The consolidated entity has not recognized a deferred taxliability for the undistributed earnings of its foreign subsidiaries that arosein 2003 and prior years because the consolidated entity currently does notexpect those unremitted earnings to reverse and become taxable in theforeseeable future.  A deferred taxliability will be recognized when the consolidated entity is no longer able todemonstrate that it plans to permanently reinvest the undistributed earnings.The determination of the unrecognized deferred tax liability is notpracticable.

 

Income tax expense

 

Income tax expense attributable to income calculated inaccordance with US GAAP, consists of:

 
|                         |   | **Current** |   | **Deferred** |   | **Total** |   |
|------------------------------|--------|-------------|--------|--------------|--------|-----------|--------|
|                         |   |        |   |         |   |      |   |
| **Year ended June 30, 2003** |   |        |   |         |   |      |   |
| Domestic                     |   | 4.1         |   | 21.1         |   | 25.2      |   |
| Foreign  jurisdiction        |   | 88.4        |   | (15.9        | )      | 72.5      |   |
|                         |   | 92.5        |   | 5.2          |   | 97.7      |   |
|                         |   |        |   |         |   |      |   |
| **Year ended June 30, 2002** |   |        |   |         |   |      |   |
| Domestic                     |   | 24.7        |   | 31.1         |   | 55.8      |   |
| Foreign  jurisdiction        |   | 1.3         |   | 39.6         |   | 40.9      |   |
|                         |   | 26.0        |   | 70.7         |   | 96.7      |   |

 

Income tax expenseattributable to income was $97.7 million and $96.7 million for the years endedJune 30, 2003 and 2002 respectively and differed from amounts computed byapplying the Australian income tax rate of 30% to pretax income as a result ofthe following:

 
|                                                  |                                                                                      |   | **Years ended June 30** |   |
|-------------------------------------------------------|-------------------------------------------------------------------------------------------|--------|-------------------------|--------|
|                                                  |                                                                                      |   | **(in millions of A$)** |   |
|                                                  |                                                                                      |   | **2003**                |   | **2002** |   |
|                                                  |                                                                                      |   |                    |   |   |   |
| Computed  “expensed” tax expense            |                                                                                      | 144.6  |                    | 277.6  |   |
| Increase/(reduction)  in income taxes resulting from; |                                                                                      |   |                    |   |   |
| •                                                | Deductible loss/non assessable profit on disposal  of controlled entities and investments |   | (13.8                   | )      | (168.2 | ) |
| •                                                |  Share of  associate’s net profit                                               |   | —                  |   | (12.0 | ) |
| •                                                |  Non  deductible amortization of PACRS costs                                         |   | 2.9                     |   | 1.1 |   |
| •                                                |  Amortization/write down of goodwill                                                 |   | (13.1                   | )      | 6.5 |   |
| •                                                |  Under/(over) provision in prior years                                               |   | (14.3                   | )      | (8.8 | ) |
| •                                                |  Other                                                                               |   | (8.6                    | )      | 0.5 |   |
|                                                  |                                                                                      |   |                    |   |   |   |
|                                                  |                                                                                      |   | 97.7                    |   | 96.7 |   |

 

F - 35

----

 

Deferred Taxes

 

The disclosure of deferred tax assets and liabilities calculated inaccordance with US GAAP and classified into current and non-current balances,as required by SFAS 109, is set out below:

 
|                               |                                                           |   | **Year ended June 30**  |   |
|------------------------------------|----------------------------------------------------------------|--------|-------------------------|--------|
|                               |                                                           |   | **(in millions of A$)** |   |
|                               |                                                           |   | **2003**                |   | **2002** |   |
|                               |                                                           |   |                    |   |   |   |
| Deferred Tax  Liabilities          |                                                           |   |                    |   |   |
| •                             | Current                                                        |   | 24.5                    |   | 3.4 |   |
| •                             |  Non-Current                                              |   | 334.6                   |   | 367.3 |   |
|                               |                                                           |   | 359.1                   |   | 370.7 |   |
|                               |                                                           |   |                    |   |   |   |
| Composition:                       |                                                           |   |                    |   |   |
|                               |                                                           |   |                    |   |   |   |
| •                             |  Plant and equipment, due to differences in  depreciation |   | 300.5                   |   | 259.0 |   |
| •                             |  Capitalized finance leases                               |   | —                  |   | 4.2 |   |
| •                             |  Prepaid expenses                                         |   | 0.4                     |   | 10.5 |   |
| •                             |  Inventory/Stereos & Dies                             |   | 3.5                     |   | 6.8 |   |
| •                             |  Other                                                    |   | 54.7                    |   | 90.2 |   |
|                               |                                                           |   |                    |   |   |   |
|                               |                                                           |   | 359.1                   |   | 370.7 |   |
| Deferred Tax  Assets               |                                                           |   |                    |   |   |
| •                             |  Current                                                  |   | 22.7                    |   | 7.7 |   |
| •                             |  Non-Current                                              |   | 202.5                   |   | 223.5 |   |
|                               |                                                           |   | 225.2                   |   | 231.2 |   |
|                               |                                                           |   |                    |   |   |   |
| Composition:                       |                                                           |   |                    |   |   |
|                               |                                                           |   |                    |   |   |   |
| •                             |  Employee benefits provision                              |   | 42.1                    |   | 41.7 |   |
| •                             |  Insurance/claims and restructuring  provisions           |   | 52.4                    |   | 15.6 |   |
| •                             |  Carried forward tax losses                               |   | 333.6                   |   | 53.7 |   |
| •                             |  Accruals                                                 |   | 12.3                    |   | 14.6 |   |
| •                             |  Unrealized currency differences                          |   | 6.4                     |   | 54.1 |   |
| •                             |  Other                                                    |   | 58.1                    |   | 60.5 |   |
| Total Gross  Deferred Tax Assets   |                                                           | 504.9  |                    | 240.2  |   |
|                               |                                                           |   |                    |   |   |   |
| •                             |  Less valuation allowance                                 |   | (279.7                  | )      | (9.0 | ) |
| Total Net  Deferred Tax Assets     |                                                           | 225.2  |                    | 231.2  |   |
| Net Deferred Tax  Liability        |                                                           | 133.9  |                    | 139.5  |   |
| Net change in  valuation allowance |                                                           | (270.7 | )                       | (9.0   | ) |

 

F - 36

----

 

(h)         Start-up Costs

 

Under US GAAP certain start-up costs which relate toone-time activities involving the set up of new facilities, products orconducting a new business, must be expensed as incurred under Statement ofPosition 98-5. Under Australian GAAP such start-up costs are permitted to becapitalized, and amortized over the life of the asset.

 

The impact of the above accounting policy difference on netprofit, assets and shareholders’ equity is as follows:

 
|           |   | **Net profit** |   | **Assets** |   | **Shareholders’ Equity** |   |
|----------------|--------|----------------|--------|------------|--------|-------------------------------|--------|
|           |   | **2003**       |   | **2002**   |   | **2001**                      |   | **2003** |   | **2002** |   | **2003** |   | **2002** |   |
|           |   |           |   |       |   |                          |   |   |   |   |   |   |   |   |   |
| Start up costs |   | (0.4           | )      | (9.2       | )      | (6.4                          | )      | (21.4 | ) | (21.0 | ) | (21.4 | ) | (21.0 | ) |

 

 

(i)             Goodwill

 

In 1989 and prior years, goodwill was written off in theyear of acquisition. For US GAAP purposes, such goodwill has been reinstated.Goodwill acquired subsequent to 1989 is amortized in equal instalments over amaximum of 20 years for Australian GAAP purposes – refer Note 1(18). Under USGAAP, prior to July 1, 2002, certain goodwill with an expected life greaterthan 20 years was permitted to be amortized in equal instalments over a maximumof 40 years.

 

For US GAAP purposes, the consolidated entity adopted therequirements of SFAS 142 ‘Goodwill and Intangible Assets’ on July 1, 2002. Inaccordance with this standard, goodwill acquired in business combinationscompleted after June 30, 2001 has not been amortized. As a result, for US GAAPpurposes, no amortization of goodwill is recorded, effective July 1, 2002.Instead, total goodwill is tested annually for potential impairments.

 

The impact of the above policy change on net profit, assetsand shareholders’ equity is as follows:

 

 
|                                        |   | **Net profit** |   | **Assets** |   | **Shareholders’ Equity** |   |
|---------------------------------------------|--------|----------------|--------|------------|--------|-------------------------------|--------|
|                                        |   | **2003**       |   | **2002**   |   | **2001**                      |   | **2003** |   | **2002** |   | **2003** |   | **2002** |   |
|                                        |   |           |   |       |   |                          |   |   |   |   |   |   |   |   |   |
| Reinstatement  and amortization of goodwill |   | 136.8          |   | 20.1       |   | 15.2                          |   | 387.8 |   | 251.0 |   | 387.8 |   | 251.0 |   |

 

In accordance with the transitional requirements of SFAS 142, thefollowing table includes the proforma disclosure of net income and earnings pershare, adjusted to exclude the amortization of goodwill:

 
|                                |   |        |   | **(in millions of A$)** |   |
|-------------------------------------|--------|-------------|--------|-------------------------|--------|
|                                |   |        |   | **2003**                |   | **2002** |   | **2001** |   |
| Net Income                          |   | As reported |   | 367.6                   |   | 819.3 |   | 266.0 |   |
|                                |   | Pro forma   |   | 367.6                   |   | 851.2 |   | 292.8 |   |
| Basic earnings  per share (cents)   |   | As reported |   | 44.0                    |   | 123.2 |   | 42.4 |   |
|                                |   | Pro forma   |   | 44.0                    |   | 128.0 |   | 46.6 |   |
| Diluted earnings  per share (cents) |   | As reported |   | 43.5                    |   | 111.4 |   | 41.6 |   |
|                                |   | Pro forma   |   | 43.5                    |   | 115.4 |   | 45.5 |   |

 

(j)             Provision for Dividend

 

Prior to July 1, 2002, dividends declared after balance date, but priorto the approval of the financial statements, were recorded as liabilities underAustralian GAAP.  Under US GAAP,provisions for dividends are only recognized if they are declared prior tobalance date.

 

On July 1, 2002, the consolidated entity adopted the requirements ofAASB 1044 ‘Provisions, Contingent Assets and Contingent Liabilities’ and, as aresult, Australian GAAP is now consistent with US GAAP.

 

F - 37

----

 

(k)   Employee Share Schemes 

 

EmployeeShare Purchase Plan (“ESPP”)

 

Thedetails of the ESPP are described in Note 21. 

 

Thediscount offered on these stock issues is treated as compensation expense forUS GAAP.  Under Australian GAAP thediscount represents a reduction in the fair value of the stock being issued. 

 

In addition,for US GAAP reporting, the interest-free non-recourse employee loans that aregranted in respect of these employee stock issues are classified as a reductionin stockholders’ equity.  As a result,shares issued under this plan are treated as equity to the extent the sharesare paid up.  Under Australian GAAPthese loans are recorded as receivables.

 

OtherEmployee Share Purchase Plan (“2nd ESPP”)

 

Asdetailed in Note 21, this plan relates to the issue of partly-paid shares andoptions to executive directors, directors and senior staff members.  The following disclosures are made inaccordance with SFAS 123 ‘Accounting for Stock Compensation’.

 

(i)            Partly-Paid Shares 

 

Sharesissued under this plan are treated as equity to the extent the shares are paidup. 

 

(ii)           Option Plans 

 

Underthese plans, options to subscribe for one fully-paid ordinary share in AmcorLimited may be issued in accordance with a long-term incentive plan or uponsuch terms and conditions as the directors of Amcor Limited determine at thetime.

* *

*Long-Term Incentive Plan*

 

Optionswere issued at a price of A$0.01 each in 1998-99, 1999-00, 2000-01, and 2001-02under the long-term incentive plan involving the issue of five year optionswith the options exercisable only if specific growth targets are met overthree, four and five years.  The optionswill be exercisable at a price equal to the market price of Amcor Limitedshares on the Australian Stock Exchange (“ASX”) at the date on which the optionswere granted. 

 

Underthis plan, the exercise of the options over five years will depend entirely onachievement of earnings per share (“EPS”) and Profit before Interest and Tax onFunds Employed growth targets for the consolidated entity.  These growth targets are set by the AmcorLimited Board two years in advance and are regularly reviewed to ensure thatthey are realistic in light of the prevailing circumstances and economicfactors. 

 

F - 38

----

 

*Other Options*

 

Other five year options have beenissued to selected senior managers of the consolidated entity at the discretionof directors of Amcor Limited in 1996-97, 1997-98, 1998-99, 1999-00, 2000-01,2001-02 and 2002-03 at a price of A$0.01 each, exercisable at any time duringtheir term.  The exercise price of theseoptions is the last sale price of Amcor Limited shares on the ASX at the dateon which the options are granted.

 

Details of all of the optionsissued under these plans as at June 30, 2003 are outlined below.

 
| **Issued**              |   | **Exercise Period of Option**                 | ** ** | **Exercise  Price of  Option  (3)** | ** ** | **No. of  Options  Held at  June 30,  2003** |      | **No. of  Options  Exercised  During the  Year** | ** ** | **Fair Value  of Options  on date  granted** | ** ** |
|-------------------------|--------|-----------------------------------------------|------------|-------------------------------------|------------|----------------------------------------------|-----------|--------------------------------------------------|------------|----------------------------------------------|------------|
| (1) September  24, 1998 |   | September 24,  1998 – September 24, 2003 |       | $                                   | 4.64       |                                         | 85,850    |                                             | 44,500     |                                         | $          | 1.98 |   |
| (1) September  16, 1999 |   | September 16,  2002 – September 16, 2004 |       | $                                   | 6.47       |                                         | 810,500   |                                             | 289,500    |                                         | $          | 1.36 |   |
| (2) November 8,  1999   |   | November, 8 1999  – November 8, 2004     |       | $                                   | 5.43       |                                         | 100,000   |                                             | 100,000    |                                         | $          | 2.11 |   |
| (2) July 31,  2000      |   | July 31, 2000 –  July 31, 2005           |       | $                                   | 5.10       |                                         | 50,000    |                                             | 100,000    |                                         | $          | 1.85 |   |
| (2) August 18,  2000    |   | October 1, 2001–  October 1, 2005        |       | $                                   | 5.67       |                                         | 3,000,000 |                                             | —     |                                         | $          | 1.71 |   |
| (1) September  14, 2000 |   | September 14,  2003 – September 14, 2005 |       | $                                   | 5.16       |                                         | 810,000   |                                             | 102,000    |                                         | $          | 1.58 |   |
| (2) October 1,  2000    |   | October, 1 2000  – October 1, 2005       |       | $                                   | 5.10       |                                         | 415,000   |                                             | 375,000    |                                         | $          | 1.56 |   |
| (2) February 15,  2001  |   | February 15,  2001 – February 15, 2006   |       | $                                   | 5.24       |                                         | 100,000   |                                             | —     |                                         | $          | 1.63 |   |
| (2) March 1,  2001      |   | March 1, 2001 –  March 1, 2006           |       | $                                   | 5.47       |                                         | 10,000    |                                             | 10,000     |                                         | $          | 1.69 |   |
| (1) September  13, 2001 |   | September 13,  2004 – September 13, 2006 |       | $                                   | 6.02       |                                         | 1,442,500 |                                             | 112,500    |                                         | $          | 1.34 |   |
| (2) October 1,  2001    |   | October 1, 2001  – October 1, 2006       |       | $                                   | 6.03       |                                         | 100,000   |                                             | —     |                                         | $          | 1.54 |   |
| (2) October 1,  2001    |   | October 1, 2001  – October 1, 2005       |       | $                                   | 5.10       |                                         | 1,044,000 |                                             | 678,000    |                                         | $          | 1.76 |   |
| (2) October 1,  2001    |   | October 1, 2001  – October 1, 2005       |       | $                                   | 6.62       |                                         | 50,000    |                                             | —     |                                         | $          | 1.29 |   |
| (2) October 1,  2001    |   | October 1, 2001  – October 1, 2005       |       | $                                   | 5.30       |                                         | 10,000    |                                             | —     |                                         | $          | 1.68 |   |
| (2) October 1,  2001    |   | October 1, 2001  – October 1, 2005       |       | $                                   | 5.24       |                                         | 40,000    |                                             | —     |                                         | $          | 1.71 |   |
| (2) October 1,  2001    |   | October 1, 2001  – October 1, 2006       |       | $                                   | 5.71       |                                         | 30,000    |                                             | —     |                                         | $          | 1.63 |   |
| (2) August 14,  2002    |   | October 1, 2004  – September 30, 2008    |       | $                                   | 8.20       |                                         | 1,000,000 |                                             | —     |                                         | $          | 1.72 |   |
| (2) August 14,  2002    |   | October 1, 2005  – September 30, 2008    |       | $                                   | 8.20       |                                         | 1,000,000 |                                             | —     |                                         | $          | 1.72 |   |
| (2) October 1,  2002    |   | October 1, 2006  – September 30, 2008    |       | $                                   | 8.20       |                                         | 1,000,000 |                                             | —     |                                         | $          | 1.72 |   |
| (2) October 1,  2002    |   | October 1, 2002  – October 1, 2005       |       | $                                   | 5.10       |                                         | 1,590,000 |                                             | 932,878    |                                         | $          | 3.09 |   |
| (2) October 1,  2002    |   | October 1, 2002  – October 1, 2005       |       | $                                   | 6.62       |                                         | 50,000    |                                             | —     |                                         | $          | 2.01 |   |
| (2) October 1,  2002    |   | October 1, 2002  – October 1, 2005       |       | $                                   | 5.30       |                                         | 10,000    |                                             | —     |                                         | $          | 2.94 |   |
| (2) October 1,  2002    |   | October 1, 2002  – October 1, 2005       |       | $                                   | 5.24       |                                         | 40,000    |                                             | —     |                                         | $          | 2.98 |   |
| (2) October 1,  2002    |   | October 1, 2002  – October 1, 2006       |       | $                                   | 6.03       |                                         | 100,000   |                                             | 80,000     |                                         | $          | 2.47 |   |
| (2) October 1,  2002    |   | October 1, 2002  – October 1, 2006       |       | $                                   | 5.71       |                                         | 30,000    |                                             | —     |                                         | $          | 2.68 |   |
| (2) October 1,  2002    |   | October 1, 2002  – October 1, 2007       |       | $                                   | 7.25       |                                         | 40,000    |                                             | —     |                                         | $          | 1.89 |   |
| (2) November 1,  2002   |   | November 1, 2005  – November 1, 2012     |       | $                                   | 8.20       |                                         | 5,927,000 |                                             | —     |                                         | $          | 2.00 |   |
| (2) November 1,  2002   |   | September 30,  2002 – July 1, 2007       |       | $                                   | 7.30       |                                         | 50,000    |                                             | —     |                                         | $          | 1.80 |   |
| (2) November 1,  2002   |   | September 30,  2002 – July 1, 2007       |       | $                                   | 7.30       |                                         | 100,000   |                                             | —     |                                         | $          | 1.80 |   |
| (2) November 1,  2002   |   | September 30,  2003 – July 1, 2007       |       | $                                   | 7.30       |                                         | 100,000   |                                             | —     |                                         | $          | 1.80 |   |
| (2) November 1,  2002   |   | September 30,  2004 – July 1, 2007       |       | $                                   | 7.30       |                                         | 100,000   |                                             | —     |                                         | $          | 1.80 |   |
| (2) November 1,  2002   |   | September 30,  2003 – July 1, 2007       |       | $                                   | 7.40       |                                         | 1,145,000 |                                             | —     |                                         | $          | 1.76 |   |
| (2) November 1,  2002   |   | September 30,  2004 – July 1, 2007       |       | $                                   | 7.40       |                                         | 1,145,000 |                                             | —     |                                         | $          | 1.76 |   |

 

----

(1)      Long Term Incentive Plan

(2)      Other Options

(3)       Where necessary, the exercise price has beenreduced by $1.22 to reflect the capital reduction arising from the PaperlinXdemerger.

 

F - 39

----

 

Details of the movement inoptions issued under this plan during the three years ended June 30, 2003 areshown in the table below:

 
|                              |   | **2003**   |   | **Weighted average  Exercise price** |   | **2002**   |   | **Weighted average  Exercise price** |   | **2001**   |   | **Weighted average  Exercise price** |   |
|-----------------------------------|--------|------------|--------|--------------------------------------|--------|------------|--------|--------------------------------------|--------|------------|--------|--------------------------------------|--------|
|                              |   |       |   |                                 |   |       |   |                                 |   |       |   |                                 |   |
| Outstanding at  beginning of year |   | 9,909,350  |   | 5.60                                 |   | 7,987,650  |   | 5.53                                 |   | 4,256,850  |   | 5.18                                 |   |
| Granted                           |   | 14,439,878 |   | 7.46                                 |   | 4,718,500  |   | 5.47                                 |   | 5,947,000  |   | 5.40                                 |   |
| Exercised                         |   | (2,824,378 | )      | 5.31                                 |   | (2,796,800 | )      | 5.20                                 |   | (255,500   | )      | 4.76                                 |   |
| Cancelled                         |   | —     |   | —                               |   | —     |   | —                               |   | (1,960,700 | )      | 6.14                                 |   |
| Outstanding at  end of year       |   | 21,524,850 |   | 6.89                                 |   | 9,909,350  |   | 5.60                                 |   | 7,987,650  |   | 5.53                                 |   |

 

Under Australian GAAP, nocompensation expense is recognized in relation to the options issued under thisplan.  If exercised, contributions arerecognized as equity.

 

To recognize compensationexpense in accordance with US GAAP, the consolidated entity has prospectivelyapplied the recognition and disclosure requirements of SFAS 123 ‘Accounting forStock Compensation’, as required by SFAS 148 ‘Accounting for Stock BasedCompensation – Transition and Disclosure’. Accordingly, compensation expense for all options issued in the currentfinancial year is calculated in accordance with the “fair value” requirementsof SFAS 123.  The current periodcompensation expense associated with options issued in previous financial yearsis calculated in accordance with the “intrinsic value” requirements of APBOpinion No.25 and related interpretations.

 

In previous financialperiods, the consolidated entity recognized compensation expense for alloptions issued in accordance with APB Opinion No.25.  Based on the requirements of SFAS 148, this comparativeinformation has not been restated.

 

Due to the transitionalprovisions in SFAS 148, the effect of applying SFAS 123 on US GAAP income inthe current period is not representative of the expected effect on net incomein future years.  Had compensationexpense been determined in accordance with the “fair value” provisions in SFAS123, the consolidated entity’s net income and earnings per share would havebeen compared to the pro forma amounts indicated below:

 
|                                |   |        |   | **(in millions of A$ )** |   |
|-------------------------------------|--------|-------------|--------|--------------------------|--------|
|                                |   |        |   | **2003**                 |   | **2002** |   | **2001** |   |
| Compensation  Expense               |   | As reported |   | 31.1                     |   | 18.3 |   | 9.0 |   |
|                                |   | Pro forma   |   | 32.5                     |   | 20.0 |   | 11.3 |   |
| Net Income                          |   | As reported |   | 367.6                    |   | 819.3 |   | 266.0 |   |
|                                |   | Pro forma   |   | 366.2                    |   | 817.6 |   | 263.7 |   |
| Basic earnings  per share (cents)   |   | As reported |   | 44.0                     |   | 123.2 |   | 42.4 |   |
|                                |   | Pro forma   |   | 43.8                     |   | 122.9 |   | 42.0 |   |
| Diluted earnings  per share (cents) |   | As reported |   | 43.5                     |   | 111.4 |   | 41.6 |   |
|                                |   | Pro forma   |   | 43.4                     |   | 111.2 |   | 41.3 |   |

 

Other Employee IncentivePlans

 

In addition to the incentiveschemes described above, the consolidated entity also operates a number ofnon-option based incentive schemes – a Share Appreciation Option (“SAO”) Plan,a Share Appreciation Entitlement Plan and a Phantom Option Plan.  There are no material differences betweenthe accounting for these plans under Australian GAAP and under US GAAP.

 

Under the Share AppreciationOption Plan, executive directors are given the opportunity to receive ShareAppreciation Options, subject to certain performance targets being met.

 

Each SAO represents onenotional fully paid share of Amcor Limited, that is, no entitlement to sharesexists, and is exercisable at any time after three years from the date of thegrant and before five years from that date (“expiry date”).

 

F - 40

----

 

Under this plan, SAO’s areonly granted where the earnings per share improved yearly and achievement ofProjected or Target Profit after Tax on Shareholders’ Funds performance targetsare met.  These performance targets areset by the Amcor Limited Board two years in advance and are regularly reviewedto ensure that they are realistic in light of prevailing conditions andeconomic factors.

 

The appreciation entitlementis equal to the difference between the market value of a notional Amcor Limitedshare at the date of grant, as calculated under specific criteria, and themarket value of a notional Amcor Limited share at the date the SAO isexercised.  In the event that, at theexpiry of the SAO due to either termination of employment or the reaching ofthe expiry date, the exercise price of a notional Amcor Limited share was lessthan the market value of an Amcor Limited share, an entitlement to receive 50%of the after tax dividend that was paid on Amcor Limited shares during theexercise period exists on the remaining exercisable SAO’s held.

 

Details of the movements inSAO’s issued during the three years ended June 30, 2003 are shown in the tablebelow:

 
|                              |   | **2003** |   | **Weighted average  Exercise price** |   | **2002** |   | **Weighted average  Exercise price** |   | **2001** |   | **Weighted average  Exercise price (1)** |   |
|-----------------------------------|--------|----------|--------|--------------------------------------|--------|----------|--------|--------------------------------------|--------|----------|--------|------------------------------------------|--------|
|                              |   |     |   |                                 |   |     |   |                                 |   |     |   |                                     |   |
| Outstanding at  beginning of year |   | 73,600   |   | 5.63                                 |   | 73,600   |   | 5.63                                 |   | 165,600  |   | 5.63                                     |   |
| Granted                           |   | —   |   | —                               |   | —   |   | —                               |   | —   |   | —                                   |   |
| Exercised                         |   | —   |   | —                               |   | —   |   | —                               |   | —   |   | —                                   |   |
| Cancelled                         |   | —   |   | —                               |   | —   |   | —                               |   | (92,000  | )      | 5.63                                     |   |
| Outstanding at  end of year       |   | 73,600   |   | 5.63                                 |   | 73,600   |   | 5.63                                 |   | 73,600   |   | 5.63                                     |   |

 

----

(1)      The exercise price has been reduced by $1.22 to reflect thecapital reduction arising from the PaperlinX demerger.

 

Share AppreciationEntitlements are issued to an employee who takes part of his bonus by way ofentitlements.  The number ofentitlements issued is determined by a price option formula.  During the period during which the employeeholds his entitlements, their value will mirror the fluctuating value of AmcorLimited shares.  The employee is able toconvert his entitlements to cash as they vest or when he leaves theconsolidated entity.

 

Details of the movements inShare Appreciation Entitlements issued during the three years ended June 30,2003 are shown in the table below:

 
|                              |   | **2003** |   | **Weighted average  Exercise price** |   | **2002** |   | **Weighted average  Exercise price** |   | **2001** |   | **Weighted average  Exercise price** |   |
|-----------------------------------|--------|----------|--------|--------------------------------------|--------|----------|--------|--------------------------------------|--------|----------|--------|--------------------------------------|--------|
|                              |   |     |   |                                 |   |     |   |                                 |   |     |   |                                 |   |
| Outstanding at  beginning of year |   | 615,398  |   | 5.68                                 |   | 315,398  |   | 5.63                                 |   | —   |   | —                               |   |
| Granted                           |   | 300,000  |   | 7.20                                 |   | 300,000  |   | 5.74                                 |   | 315,398  |   | 5.63                                 |   |
| Exercised                         |   | —   |   | —                               |   | —   |   | —                               |   | —   |   | —                               |   |
| Cancelled                         |   | —   |   | —                               |   | —   |   | —                               |   | —   |   | —                               |   |
| Outstanding at  end of year       |   | 915,398  |   | 6.18                                 |   | 615,398  |   | 5.68                                 |   | 315,398  |   | 5.63                                 |   |

 

Phantom options are issued toemployees residing in jurisdictions that, for statutory reasons, are notcovered by the option plans described above. This plan, which was introduced for the financial year ending June 30,2003, operates in a manner similar to option schemes, although no entitlementsto actual options or shares exist. Instead, a cash equivalent is received if the entitlement is exercisedduring the relevant vesting period.  Thecash equivalent will represent the difference between the phantom optionexercise price and the Amcor Limited market price at the date of exercise.

 

F - 41

----

 

Details of the movements inphantom options issued during the three years ended June 30, 2003 are shown inthe table below:

 
|                              |   | **2003**  |   | **Weighted average  Exercise price** |   | **2002** |   | **Weighted average  Exercise price** |   | **2001** |   | **Weighted average  Exercise price** |   |
|-----------------------------------|--------|-----------|--------|--------------------------------------|--------|----------|--------|--------------------------------------|--------|----------|--------|--------------------------------------|--------|
|                              |   |      |   |                                 |   |     |   |                                 |   |     |   |                                 |   |
| Outstanding at  beginning of year |   | —    |   | —                               |   | —   |   | —                               |   | —   |   | —                               |   |
| Granted                           |   | 1,235,000 |   | 7.94                                 |   | —   |   | —                               |   | —   |   | —                               |   |
| Exercised                         |   | —    |   | —                               |   | —   |   | —                               |   | —   |   | —                               |   |
| Cancelled                         |   | —    |   | —                               |   | —   |   | —                               |   | —   |   | —                               |   |
| Outstanding at  end of year       |   | 1,235,000 |   | 7.94                                 |   | —   |   | —                               |   | —   |   | —                               |   |

 

Other Share Issues

 

As detailed in Note 21,during the year the consolidated entity issued 384,147 (2002: 135,000)restricted shares for nil consideration. Under Australian GAAP no compensation expense has been recognized.  Under US GAAP compensation expense has beenrecognized in accordance with SFAS 123.

 

Costs of Maintenance ofEmployee Share Schemes

 

The costs incurred inmaintaining these employee share schemes are charged as a compensation expensefor US GAAP reporting purposes.  UnderAustralian GAAP, these costs are offset against stockholders’ equity.

 

The impact of the aboveaccounting policy differences on net profit, assets and shareholders’ equity isas follows:

 
|                                        |   | **Net profit** |   | **Assets** |   | **Shareholders’ Equity** |   |
|---------------------------------------------|--------|----------------|--------|------------|--------|-------------------------------|--------|
|                                        |   | **2003**       |   | **2002**   |   | **2001**                      |   | **2003** |   | **2002** |   | **2003** |   | **2002** |   |
|                                        |   |           |   |       |   |                          |   |   |   |   |   |   |   |   |   |
| **Employee Share Schemes**                  |   |           |   |       |   |                          |   |   |   |   |   |   |   |   |   |
| Compensation  expense                       |   |           |   |       |   |                          |   |   |   |   |   |   |   |   |   |
| Options                                     |   | (16.4          | )      | (7.7       | )      | —                        |   | — |   | — |   | — |   | — |   |
| Discount on ESPP                            |   | (9.7           | )      | (6.7       | )      | (4.9                          | )      | — |   | — |   | — |   | — |   |
| Shares issued  for nil consideration        |   | (1.1           | )      | (0.4       | )      | —                        |   | — |   | — |   | — |   | — |   |
| Costs of  maintenance                       |   | (3.9           | )      | (3.5       | )      | (4.1                          | )      | — |   | — |   | — |   | — |   |
|                                        |   |           |   |       |   |                          |   |   |   |   |   |   |   |   |   |
| Interest free  loans reclassified           |   | —         |   | —     |   | —                        |   | (34.5 | ) | (27.4 | ) | (34.5 | ) | (27.4 | ) |
|                                        |   |           |   |       |   |                          |   |   |   |   |   |   |   |   |   |
| **Total Employee Share Scheme adjustments** |   | **(31.1**      | **)**  | **(18.3**  | **)**  | **(9.0**                      | **)**  | **(34.5** | **)** | **(27.4** | **)** | **(34.5** | **)** | **(27.4** | **)** |

 

----

(l)    Accounting for Self-Sustaining Foreign Operations

 

Under US GAAP, any balance ofthe foreign currency translation reserve is recognized as a revenue or expensein respect of the disposal of a self-sustaining foreign operation, in the samereporting period as the gain or loss for the operation is recognized.

 

The consolidated entity hasaccounted for self-sustaining foreign operations in hyper-inflationaryeconomies in accordance with the accounting policies set out in Note 1(13),which is consistent with IFRS 21.  Thisaccounting policy is different from that required by US GAAP, but complies withthe rules as promulgated by the US Securities and Exchanges Commission (Item 17of Form 20-F).  As such, no reconcilingadjustment has been included for this difference.

 

F - 42

----

 

(m)  Consolidated Statements of Cash Flows

 

The Consolidated Statementsof Cash Flows on F-9 discloses bank overdrafts as a component of cash.  This disclosure is consistent with theAustralian GAAP cash flow statement.  Inaccordance with SFAS 95 net activity in bank overdrafts is to be disclosed ascomponents of cash flow from financing activities.  The effect on the Consolidated Statements of Cash Flows on F-9 ofadopting this disclosure would be that cash flow from financing activitieswould increase by A$78.3 million, increase by A$11.5 million, and increase byA$2.0 million in 2003, 2002 and 2001 respectively.

 

For US GAAP purposes no cashhas been classified as restricted as at June 30, 2003.  As at June 30, 2002, $2,118 million wasclassified as restricted cash and excluded from cash from the ConsolidatedBalance Sheets and Consolidated Statements of Cash Flows. This amount was usedas a partial payment for the acquisition of the PET container and closuresbusinesses of Schmalbach, which was made on July 1, 2002.

 

(n)   Non-Recourse Receivables Securitization Program

 

As described in Note 32, theconsolidated entity utilizes an uncommitted, multi-currency receivablessecuritization program in the United Kingdom, France, Germany, Spain and theUSA.  The trade receivables of some ofthe consolidated entity’s businesses in these jurisdictions are sold, on anon-recourse basis, into an independent securitization conduit, which issuesasset-backed commercial paper into organized markets.  The aggregate amount of discount on the sale of receivables underthis program, which is included in the income statement, is $4.6m (2002 – nil).

 

Under Australian GAAP thesereceivables are treated as sold, and therefore taken off-balance sheet, as therisks and rewards associated with the receivables are deemed to havetransferred to the entity purchasing the receivables, in whom the consolidatedentity has no equity or other interest. This assessment is made based on the substance of the transaction, asthere is no specific Australian GAAP guidance on this issue.

 

For US GAAP purposes, thesale of these receivables is reversed, as the sale has not been made to asubstantive third party.  As a result,the receivables are re-instated and the cash received for the sale of $190.5 millionis treated as a secured borrowing.

 

(o)   Research and Development

 

Under Australian GAAP,research and development expenditure that is considered to have a demonstrablefuture economic benefit and commercial value is capitalized and amortized overthe period of time during which the benefits are expected to arise.  Under US GAAP, all research and developmentcosts are charged as expenses as incurred, in accordance with SFAS 2.

 

The impact of the aboveaccounting policy difference on net profit, assets and shareholders’ equity isas follows:

 
|                                                         |   | **Net profit** |   | **Assets** |   | **Shareholders’ Equity** |   |
|--------------------------------------------------------------|--------|----------------|--------|------------|--------|-------------------------------|--------|
|                                                         |   | **2003**       |   | **2002**   |   | **2001**                      |   | **2003** |   | **2002** |   | **2003** |   | **2002** |   |
|                                                         |   |           |   |       |   |                          |   |   |   |   |   |   |   |   |   |
| Capitalized  research and development expenditure disallowed |   | (5.5           | )      | —     |   | —                        |   | (5.5 | ) | — |   | (5.5 | ) | — |   |

 

(p)   Statement of Comprehensive Income

 

In June 1997, the UnitedStates Financial Accounting Standards Board issued SFAS 130 ‘ReportingComprehensive Income’. This statement establishes standards for reporting anddisplay of comprehensive income and its components (revenues, expenses, gainsand losses) for each period presented. Comprehensive income for the periodsended June 30, 2003, June 30, 2002 and June 30, 2001 and accumulated othercomprehensive income as at June 30, 2003, June 30, 2002 and June 30, 2001 areincluded in the US GAAP reconciliation set out on page F-84.

 

F - 43

----

 

(q)   Derivative Instruments and Hedging Activities

 

The nature of theconsolidated entity’s business activities necessarily involves the managementof various financial and market risks, including those related to currencyexchange rates, Interest rates and commodity prices.  The consolidated entity uses derivative financial instruments tomitigate or eliminate certain of those risks.

 

Under Australian GAAP,derivative financial instruments may have hedge accounting treatment applied ifthe hedging derivatives are effective in reducing the exposure being hedged andare designated as a hedge at the inception of the contract.  Hedging derivatives are accounted for in amanner consistent with the accounting treatment of the hedged items.

 

Effective from July 1, 2000,the consolidated entity adopted the requirements of SFAS 133 ‘Accounting forDerivatives and Hedging Activities’ for US GAAP reconciliation purposes only.

 

SFAS 133, as amended,standardizes the accounting for derivative instruments and hedging activitiesand requires that derivative instruments be recognized as assets andliabilities in the balance sheet at their fair values.  If certain conditions are met, hedgeaccounting may be applied and the derivative instruments may be designated as:(a) a hedge of the exposure to changes in the fair value of a recognized asset,liability or an unrecognized firm commitment (fair value hedge); (b) a hedge ofthe exposure to variability of cash flows of a recognized asset, liability orforecasted transaction (cash flow hedge); or (c) a hedge of certain foreigncurrency exposures.

 

In the case of a qualifyingfair value hedge, changes in the value of the derivative instruments that havebeen highly effective are recognized in current earnings along with changes inthe fair value of the designated hedged item. In the case of a qualifying cash flow hedge, changes in the value of thederivative instruments that have been highly effective are recognized in othercomprehensive income, until such time that earnings are affected by the cashflows of the underlying hedged item.  Ineither a fair value hedge or a cash flow hedge, net earnings are impacted tothe extent the changes in the value of the derivative instruments do notperfectly offset the changes in the value of the hedged items (so calledineffectiveness).

 

Derivative instruments thatare non-designated or do not meet the relevant hedge accounting criteria areaccounted for at fair value with gains and losses recorded in current earnings.

 

The hedge designationrequirements under SFAS 133 vary in certain respects from Australian GAAP andas a result, the consolidated entity has not met the relevant hedge accountingcriteria under US GAAP.  Accordingly,under US GAAP, all the derivative instruments are accounted for at fair valuewith gains and losses recorded in current earnings. At July 1, 2000, the consolidatedentity recognized a cumulative-effect transition adjustment of $1.5 million todecrease post-tax net income according to US GAAP for the effect of the changein accounting principle due to the non-designation of derivative instrumentsfor the purposes of SFAS 133.

 

The impact of the accountingfor risk management activities pursuant to SFAS 133 is expected to create alevel of ongoing volatility in reported financial results reconciled to USGAAP.

 

The consolidated entityexercised an option to hedge the purchase of foreign currency on June 28,2002.  This foreign currency was used tofund the acquisition of the Schmalbach business on July 1, 2002.  Upon exercising this option in the previousfinancial year, the consolidated entity realized a hedge gain.  For Australian GAAP purposes, this wasdesignated as a specific hedge and the gain was therefore applied to record theconsideration for the acquisition of Schmalbach and the resultant goodwill atthe lower, hedged foreign exchange rate. However, as noted above, for US GAAP reporting purposes the consolidatedentity does not satisfy the relevant hedge accounting criteria.  Accordingly, this hedge gain was included innet income for the year ended June 30, 2002 for US GAAP purposes.  At June 30, 2003, a corresponding adjustmenthas been recorded against goodwill.

 

F - 44

----

 

The table below outlines the impact on net profit,assets and shareholders’ equity of the above adjustments.

 
|                                                                 |   | **Net profit** |   | **Assets** |       | **Shareholders’ Equity** |   |
|----------------------------------------------------------------------|--------|----------------|--------|------------|------------|-------------------------------|--------|
|                                                                 |   | **2003**       |   | **2002**   |       | **2001**                      |   | **2003** |   | **2002** |   | **2003** |   | **2002** |   |
|                                                                 |   |           |   |       |       |                          |   |   |   |   |   |   |   |   |   |
| **Net market value of derivatives**                                  |   |           |   |       |       |                          |   |   |   |   |   |   |   |   |   |
| Recognition and  movement in the net market value of derivatives     |   | (13.0          | )      | 5.1        |       | (3.2                          | )      | — |   | — |   | (13.2 | ) | (0.2 | ) |
| Transitional  adjustment on initial adoption of SFAS 133             |   | —         |   | —     |       | (2.1                          | )      | — |   | — |   | — |   | — |   |
| Net deferred  hedge losses brought to account                        |   | (16.5          | )      | —     |       | —                        |   | (22.5 | ) | — |   | (16.5 | ) | — |   |
|                                                                 |   |           |   |       |       |                          |   |   |   |   |   |   |   |   |   |
| **Deferred gain on hedge**                                           |   |           |   |       |       |                          |   |   |   |   |   |   |   |   |   |
| Recognition of  hedge gain                                           |   | —         |   | 51.9       |       | —                        |   | 51.9 |   | — |   | 51.9 |   | 51.9 |   |
| **Total Derivative Instruments and Hedging Activities  adjustments** |   | **(29.5**      | **)**  | **57.0**   | ** ** | **(5.3**                      | **)**  | **29.4** | ** ** | **—** | ** ** | **22.2** | ** ** | **51.7** | ** ** |

 

(r)    Grant Income

 

For Australian GAAP purposes,funds from grants have been recognized as income upon receipt.  Under US GAAP, these funds are deferred andmatched against costs on a systematic basis. The impact of this accounting policy difference on net profit, assetsand shareholders’ equity is as follows:

 
|                                 |   | **Net profit** |   | **Assets** |   | **Shareholders’ Equity** |   |
|--------------------------------------|--------|----------------|--------|------------|--------|-------------------------------|--------|
|                                 |   | **2003**       |   | **2002**   |   | **2001**                      |   | **2003** |   | **2002** |   | **2003** |   | **2002** |   |
|                                 |   |           |   |       |   |                          |   |   |   |   |   |   |   |   |   |
| Grant income  deferred and amortized |   | (5.3           | )      | (2.2       | )      | (10.3                         | )      | — |   | — |   | (17.8 | ) | (12.5 | ) |

 

(s)   Business Combinations

 

Gain on Sale of Assets

 

US GAAP requires the AFE A/Stransaction to be recorded under APB Opinion No. 16 ‘Business Combinations’ asa partial sale of Amcor Flexibles Europe and a partial acquisition of theDanisco Flexibles and Ackerlund & Rausing businesses.  For US GAAP purposes, the portion of Amcor FlexiblesEurope retained by the consolidated entity remains recorded at its historicalcost and the portions of Danisco Flexibles and Ackerlund & Rausingpurchased by the consolidated entity are recorded at their respective fairvalues.  A gain is recognized on theportion of Amcor Flexibles Europe sold for US GAAP purposes (with acorresponding adjustment to goodwill).

 

Restructuring Provision

 

US GAAP requires the AFE A/Stransaction to be recorded under APB No.16 as a partial sale of Amcor FlexiblesEurope and a partial acquisition of the Danisco Flexibles and Ackerlund andRausing businesses.  Accordingly, only67% of the restructuring provision related to the acquired businesses isrecorded for US GAAP purposes (with a corresponding adjustment to goodwill).  The remaining portion of the restructuringprovision has been expensed as incurred under US GAAP.

 

A restructuring provisionremains partially outstanding at June 30, 2003 for restructuring the operationsof AFE A/S. This provision was recorded as a liability upon the acquisition ofthis business.  The restructuringactivities involved various plant closures, plant rationalizations andreductions in employee numbers.  Anysuch plans to reorganize or exit a business are approved by the Board ofDirectors.  Once committed to, accrualsare made for the estimated costs associated with the reorganization or exitactivities.  The US GAAP criteria foraccruing costs associated with business restructurings are fundamentallyconsistent with those of Australian GAAP but contain very specific qualifyingcriteria.  Where these criteria are notsatisfied an adjustment to the restructuring provision is recorded.

 

F - 45

----

 

Other Fair Value Adjustments

 

As noted above, for US GAAPpurposes, the AFE A/S acquisition is recorded under APB No.16 as a partial saleof Amcor Flexibles Europe and a partial acquisition of the Danisco Flexiblesand Ackerlund and Rausing businesses. Accordingly, only 67% of the fair value adjustments relating to theacquired businesses have been recorded for US GAAP purposes (with acorresponding adjustment to goodwill).

 

The table below outlines theimpact on net profit, assets and shareholders’ equity of the above adjustments.

 
|                                                     |       | **Net profit** |       | **Assets** |       | **Shareholders’ Equity** |       |
|----------------------------------------------------------|------------|----------------|------------|------------|------------|-------------------------------|------------|
|                                                     |       | **2003**       |       | **2002**   |       | **2001**                      |       | **2003** |   | **2002** |   | **2003** |   | **2002** |   |
|                                                     | ** ** |           | ** ** |       | ** ** |                          | ** ** |   | ** ** |   | ** ** |   | ** ** |   | ** ** |
| **Gains on sale of assets**                              |       |           |       |       |       |                          |       |   |   |   |   |   |   |   |   |
| Gains on asset  sales                                    |       | —         |       | —     |       | 9.0                           |       | 9.0 |   | 9.0 |   | 9.0 |   | 9.0 |   |
|                                                     |       |           |       |       |       |                          |       |   |   |   |   |   |   |   |   |
| **Restructuring provisions**                             |       |           |       |       |       |                          |       |   |   |   |   |   |   |   |   |
| Restructuring  costs disallowed under US GAAP            |       | (11.1          | )          | (62.2      | )          | —                        |       | (96.9 | ) | (96.9 | ) | (73.3 | ) | (62.2 | ) |
| Foreign exchange  impact on restructuring provision      |       | —         |       | —     |       | —                        |       | — |   | — |   | (0.9 | ) | (1.3 | ) |
|                                                     |       |           |       |       |       |                          |       |   |   |   |   |   |   |   |   |
| **Other fair value adjustments**                         |       |           |       |       |       |                          |       |   |   |   |   |   |   |   |   |
| Reversal of fair  value adjustments not recognized       |       | —         |       | (11.8      | )          | —                        |       | (26.6 | ) | (26.6 | ) | (11.8 | ) | (11.8 | ) |
| Fair value  adjustments to property, plant and equipment |       | —         |       | —     |       | —                        |       | 0.9 |   | 2.0 |   | — |   | — |   |
| Goodwill  amortization disallowed                        |       | —         |       | 1.9        |       | —                        |       | 1.9 |   | 1.9 |   | 1.9 |   | 1.9 |   |
| Impact of  deferred taxes on fair value adjustments      |       | —         |       | —     |       | —                        |       | 40.4 |   | 33.5 |   | — |   | — |   |
| Foreign exchange  impact on fair value adjustments       |       | —         |       | —     |       | —                        |       | — |   | — |   | — |   | 0.1 |   |
|                                                     |       |           |       |       |       |                          |       |   |   |   |   |   |   |   |   |
| **Total Business Combination adjustments**               | ** ** | **(11.1**      | **)**      | **(72.1**  | **)**      | **9.0**                       | ** ** | **(71.3** | **)** | **(77.1** | **)** | **(75.1** | **)** | **(64.3** | **)** |

 

(t)    Perpetual Non-cumulative Subordinated Convertible Reset UnsecuredNotes (“PACRS”)

 

The PACRS are classified asequity for Australian GAAP purposes. These instruments are classified as debt for US GAAP purposes.  In addition, for US GAAP, the PACRS areconsidered to have beneficial conversion features, as PACRS holders are able toconvert the PACRS into Amcor Limited shares at a discount to the market valueof Amcor Limited shares.  Therefore, thebeneficial conversion features have been recorded by allocating a portion ofthe proceeds equal to their intrinsic value to additional paid-in capital(equity).  The debt discount resultingfrom this allocation of proceeds to the beneficial conversion features isrecognized as interest expense over the minimum period from the date ofissuance to the earliest conversion date. PACRS distributions are treated as interest expense for US GAAPpurposes.  Transaction costs associatedwith the PACRS have been offset against equity for Australian GAAPpurposes.  These transaction costs aredeferred and amortized over the period from the date of issuance to the firstreset date for US GAAP purposes.

 

F - 46

----

 

The table below outlines theimpact on net profit, assets and shareholders’ equity of the above adjustments.

 
|                                                             |   | **Net profit** |       | **Assets** |       | **Shareholders’ Equity** |       |
|------------------------------------------------------------------|--------|----------------|------------|------------|------------|-------------------------------|------------|
|                                                             |   | **2003**       |       | **2002**   |       | **2001**                      |       | **2003** |   | **2002** |   | **2003** |   | **2002** |   |
|                                                             |   |           | ** ** |       | ** ** |                          | ** ** |   | ** ** |   | ** ** |   | ** ** |   | ** ** |
| **PACRS**                                                        |   |           |       |       |       |                          |       |   |   |   |   |   |   |   |   |
| Reclassification  of balances                                    |   | —         |       | —     |       | —                        |       | 13.4 |   | 13.4 |   | (596.6 | ) | (596.6 | ) |
| Amortization of  capitalized transaction costs                   |   | (2.8           | )          | (2.2       | )          | —                        |       | (5.0 | ) | (2.2 | ) | (5.0 | ) | (2.2 | ) |
| Interest expense  recorded as distribution under Australian GAAP |   | (52.3          | )          | (36.4      | )          | (2.9                          | )          | — |   | — |   | — |   | — |   |
| Beneficial  conversion feature                                   |   | —         |       | —     |       | —                        |       | — |   | — |   | 32.5 |   | 32.5 |   |
| Amortization of  beneficial conversion feature                   |   | (7.0           | )          | (5.0       | )          | (0.5                          | )          | — |   | — |   | (12.5 | ) | (5.5 | ) |
| **Total PACRS adjustments**                                      |   | **(62.1**      | **)**      | **(43.6**  | **)**      | **(3.4**                      | **)**      | **8.4** | ** ** | **11.2** | ** ** | **(581.6** | **)** | **(571.8** | **)** |

 

(u)   Classification of Other Revenue

 

Under Australian GAAP,proceeds from the sale of non-current assets are recorded as other revenuesfrom ordinary activities and the carrying value of assets sold is included inexpenses.  Under US GAAP, the differencebetween the sales proceeds and the carrying value of the assets sold would bepresented as a net gain or loss and included in the determination of operatingincome.

 

(v)   Recent Changes to US GAAP

 

Exit or Disposal ActivitiesCosts

 

In July 2002, the FASB issuedSFAS 146 ‘Accounting for Costs Associated with Exit or DisposalActivities’.  SFAS 146 is based on thegeneral principle that a liability for a cost associated with an exit ordisposal activity should be recorded when it is incurred and initially measuredat fair value.  SFAS 146 applies to costsassociated with (1) an exit activity that does not involve an entity newlyacquired in a business combination, or (2) a disposal activity within the scopeof SFAS 144.  These costs includecertain termination benefits, costs to terminate a contract that is not acapital lease, and other associated costs to consolidate facilities or relocateemployees.  The consolidated entityimplemented SFAS 146 on July 1, 2002. This statement did not have a material impact on the consolidatedentity’s results or financial position.

 

Guarantor’s Accounting andDisclosure Requirements for Guarantees

 

In November 2002, the FASBissued Interpretation No. 45 ‘Guarantor’s Accounting and DisclosureRequirements for Guarantees, Including Indirect Guarantees of Indebtedness toOthers’.  This Interpretation elaborateson the disclosures to be made by a guarantor in its interim and annualfinancial statements about its obligations under guarantees issued.  This Interpretation also clarifies that aguarantor is required to recognize, at inception of a guarantee, a liabilityfor the fair value of the obligation undertaken.  The initial recognition and measurement provisions of thisInterpretation are applicable to guarantees issued or modified after December31, 2002.  The adoption of thisInterpretation did not have a material impact on the consolidated entity’sresults or financial position.

 

F - 47

----

 

Consolidation of VariableInterest Entities

 

In January 2003, the FASBissued Interpretation No. 46 ‘Consolidation of Variable InterestEntities’.  This Interpretation requiresthe consolidation of entities that cannot finance their activities without thesupport of other parties and that lack certain characteristics of a controllinginterest, such as the ability to make decisions about the entity’s activitiesvia voting rights or similar rights. This Interpretation applies immediately to variable interests invariable interest entities created after January 31, 2003, and to variable interestsin variable interest entities obtained after January 31, 2003.  For companies with a variable interest in avariable interest entity created before February 1, 2003, this Interpretationapplies to the consolidated entity no later than the beginning of the firstinterim or annual reporting period beginning after June 15, 2003.  The application of this Interpretation didnot have a material impact on the consolidated entity’s results or financialposition in the current financial year. The consolidated entity is in the process of evaluating the impact ofthis Interpretation, as it applies to financial statements issued in futurefinancial periods.  Additionaldisclosures may be required if it is reasonably possible that the consolidatedentity will consolidate or disclose information about variable interestentities when the Interpretation becomes effective.

 

Derivative Instruments andHedging Activities

 

In April 2003, the FASBissued SFAS 149 ‘Amendment of Statement 133 on Derivative Instruments and HedgingActivities’.  This Statement amends andclarifies financial accounting and reporting for derivative instrumentsembedded in other contracts and for hedging activities under SFAS 133‘Accounting for Derivative Instruments and Hedging Activities’.  This Statement requires contracts withcomparable characteristics to be accounted for similarly.  In particular, this Statement clarifiesunder what circumstances a contract with an initial net investment meets the characteristicof a derivative as discussed in SFAS 133. In addition, it clarifies when a derivative contains a financingcomponent that warrants special reporting in the Consolidated Statements ofCash Flows.  SFAS 149 amends certainother existing pronouncements.  ThisStatement is effective for contracts entered into or modified after June 30,2003, except for hedging relationships designated after June 30, 2003.  When it is applied, the consolidated entitydoes not expect the adoption of this Statement to have a material impact on itsconsolidated financial statements under US GAAP.

 

Financial Instruments withCharacteristics of Both Liabilities and Equity

 

In May 2003, the FASB issuedSFAS 150 ‘Accounting for Certain Financial Instruments with Characteristics ofBoth Liabilities and Equity’.  ThisStatement requires issuers to classify as liabilities (or assets in somecircumstances) three classes of freestanding financial instruments (presentlyclassified as equity) that embody obligation for the issuer.  Generally, this Statement is effective forfinancial instruments entered into or modified after May 31, 2003, and isotherwise effective at the beginning of the first interim period beginningafter June 15, 2003.  When it isapplied, the consolidated entity does not expect the adoption of this Statementto have a material impact on its consolidated financial statements under USGAAP.

 

Accounting by a Customer(Including a Reseller) for Certain Consideration Received from a Vendor

 

In November 2002, the EITFreached a consensus on Issue 02-16 ‘Accounting by a Customer (Including aReseller) for Certain Consideration Received from a Vendor’.  This Issue provides guidance on how acustomer, including a reseller, should characterize consideration received froma vendor (Issue 1) and when the customer should recognize that consideration inthe Consolidated Statements of Income (Issue 2).  The consensus on Issue 1 should be applied to fiscal periodsbeginning after December 15, 2002.  Theconsensus on Issue 2 is effective for arrangements entered into after November21, 2002.  As the guidance is applicableto customers and end-users that receive cash consideration from a vendor, theadoption of the consensus on both Issues 1 and 2 are applicable to theconsolidated entity.  However, theconsolidated entity does not expect the adoption of this Issue to have amaterial impact on its consolidated results or financial position.

 

F - 48

----

 
|                                                                            |   | **For the Years Ended June 30** |       |
|---------------------------------------------------------------------------------|--------|---------------------------------|------------|
|                                                                            |   | **(in millions of A$ )**        |       |
|                                                                            |   | **Note**                        |       | **2003** | ** ** | **2002** | ** ** | **2001** | ** ** |
| **Consolidated Statements of Income**                                           |   |                            |       |   |   |   |   |   |   |
|                                                                            |   |                            |       |   |   |   |   |   |   |
| Net profit  reported using Australian GAAP                                      |   |                            |       | 361.3 |   | 851.7 |   | 282.4 |   |
|                                                                            |   |                            |       |   |   |   |   |   |   |
| Property, plant  and equipment                                                  |   | 35                              | (a)        | 8.3 |   | 5.0 |   | 0.7 |   |
|                                                                            |   |                            |       |   |   |   |   |   |   |
| Provisions                                                                      |   | 35                              | (c)        | (8.1 | ) | 4.7 |   | (4.7 | ) |
|                                                                            |   |                            |       |   |   |   |   |   |   |
| Pension plans                                                                   |   | 35                              | (e)        | 1.5 |   | 2.7 |   | (6.7 | ) |
|                                                                            |   |                            |       |   |   |   |   |   |   |
| Start-up costs                                                                  |   | 35                              | (h)        | (0.4 | ) | (9.2 | ) | (6.4 | ) |
|                                                                            |   |                            |       |   |   |   |   |   |   |
| Goodwill                                                                        |   | 35                              | (i)        | 136.8 |   | 20.1 |   | 15.2 |   |
|                                                                            |   |                            |       |   |   |   |   |   |   |
| Employee share  schemes                                                         |   | 35                              | (k)        | (31.1 | ) | (18.3 | ) | (9.0 | ) |
|                                                                            |   |                            |       |   |   |   |   |   |   |
| Research and  development                                                       |   | 35                              | (o)        | (5.5 | ) | — |   | — |   |
|                                                                            |   |                            |       |   |   |   |   |   |   |
| Derivatives and  hedging activities                                             |   | 35                              | (q)        | (29.5 | ) | 57.0 |   | (5.3 | ) |
|                                                                            |   |                            |       |   |   |   |   |   |   |
| Grant income                                                                    |   | 35                              | (r)        | (5.3 | ) | (2.2 | ) | (10.3 | ) |
|                                                                            |   |                            |       |   |   |   |   |   |   |
| Business  combinations                                                          |   | 35                              | (s)        | (11.1 | ) | (72.1 | ) | 9.0 |   |
|                                                                            |   |                            |       |   |   |   |   |   |   |
| PACRS                                                                           |   | 35                              | (t)        | (62.1 | ) | (43.6 | ) | (3.4 | ) |
|                                                                            |   |                            |       |   |   |   |   |   |   |
| Tax effect of  above adjustments, net                                           |   |                            |       | 12.8 |   | 23.5 |   | 4.5 |   |
| **Net profit according to US GAAP**                                             |   |                            |       | **367.6** | ** ** | **819.3** | ** ** | **266.0** | ** ** |
|                                                                            |   |                            |       |   |   |   |   |   |   |
| **Other comprehensive income, net of taxes:**                                   |   |                            |       |   |   |   |   |   |   |
|                                                                            |   |                            |       |   |   |   |   |   |   |
| Exchange  Fluctuations Reserve                                                  |   |                            |       | (283.8 | ) | (162.0 | ) | 55.2 |   |
| Equity share of  Associate EFR                                                  |   |                            |       | — |   | 0.7 |   | 0.2 |   |
| Pension plan  additional minimum liability, net of tax benefit of $13.5 million |   | 35                              | (e)        | (25.3 | ) | (5.1 | ) | (1.6 | ) |
|                                                                            |   |                            |       |   |   |   |   |   |   |
| **Total other comprehensive income**                                            |   |                            |       | **(309.1** | **)** | **(166.4** | **)** | **53.8** | ** ** |
|                                                                            |   |                            | ** ** |   | ** ** |   | ** ** |   | ** ** |
| **Comprehensive income according to US GAAP**                                   |   | 35                              | (p)        | **58.5** | ** ** | **652.9** | ** ** | **319.8** | ** ** |
|                                                                            |   |                            |       |   |   |   |   |   |   |
| Accumulated  other comprehensive income balances (net of taxes):                |   |                            |       |   |   |   |   |   |   |
| Exchange  fluctuations reserve                                                  |   |                            |       | (356.3 | ) | (72.5 | ) | 89.5 |   |
| Pension plan  additional minimum liability, net of tax benefit of $13.5 million |   | 35                              | (e)        | (32.0 | ) | (6.7 | ) | (1.6 | ) |
| Equity share of  Associate EFR                                                  |   |                            |       | — |   | — |   | (0.7 | ) |
| **Total accumulated other comprehensive income**                                |   | 35                              | (p)        | (388.3 | ) | (79.2 | ) | 87.2 |   |

 

F - 49

----

 
|                                                                      |   | **(in millions of  A$ )** |   |
|---------------------------------------------------------------------------|--------|---------------------------|--------|
|                                                                      |   | **2003**                  |   | **2002** | ** ** | **2001** | ** ** |
| **Earnings per share calculation**                                        |   |                      |   |   |   |   |   |
|                                                                      |   |                      |   |   |   |   |   |
| Net profit                                                                |   | 367.6                     |   | 819.3 |   | 266.0 |   |
|                                                                      |   |                      |   |   |   |   |   |
| After tax cost  of interest on convertible securities                     |   | 26.8                      |   | 28.1 |   | 25.9 |   |
|                                                                      |   |                      |   |   |   |   |   |
| After tax cost  of convertible reset security distribution                |   | —                    |   | 25.5 |   | — |   |
|                                                                      |   |                      |   |   |   |   |   |
| Amortization of  convertible reset security beneficial conversion feature |   | —                    |   | 5.0 |   | — |   |
|                                                                      |   |                      |   |   |   |   |   |
| Diluted net  profit                                                       |   | 394.4                     |   | 877.9 |   | 291.9 |   |
|                                                                      |   |                      |   |   |   |   |   |
| **Reconciliation of average number of shares**                            |   |                      |   |   |   |   |   |
|                                                                      |   |                      |   |   |   |   |   |
| Basic average  number of shares (m’s)                                |   | 835.2                     |   | 665.0 |   | 627.7 |   |
|                                                                      |   |                      |   |   |   |   |   |
| Impact of  dilutive securities (m’s)                                 |   | 71.1                      |   | 123.1 |   | 73.5 |   |
|                                                                      |   |                      |   |   |   |   |   |
| Dilutive average  number of shares (m’s)                             |   | 906.3                     |   | 788.1 |   | 701.2 |   |
|                                                                      |   |                      |   |   |   |   |   |
| Basic earnings  per share (cents)                                         |   | 44.0                      |   | 123.2 |   | 42.4 |   |
|                                                                      |   |                      |   |   |   |   |   |
| Diluted earnings  per share (cents)                                       |   | 43.5                      |   | 111.4 |   | 41.6 |   |

 

Excluded from the computation of diluted earnings pershare above is the following table of potential common shares:

 
|                            |   | **(in millions)** |   |
|---------------------------------|--------|-------------------|--------|
| Potential common  shares (1)    |   | 79.1              |   | — |   | — |   |
| Options over  common shares (2) |   | —            |   | 2.0 |   | 1.3 |   |
| Partly paid  common shares (3)  |   | —            |   | — |   | 2.7 |   |

 

----

(1)           The 7.25% Undated Subordinated Convertible UnsecuredNotes, the 6.5% Undated Subordinated Convertible Unsecured Notes and thePerpetual Amcor Convertible Reset Securities (PACRS) are considered to bepotential common stock and have been included in the computation of dilutedearnings per share to the extent they are dilutive.

 

(2)           Options over common shares have been included in thecomputation of diluted earnings per share when the average market price ofcommon shares exceeds their exercise price.

 

(3)           Partly paid common shares, not entitled to receipt ofdividends, are treated as call options in the computation of diluted earningsper share under the treasury stock methodology, when the average market priceof common shares exceed their exercise price.

 

F - 50

----

 
|                                                      |   | **At June 30**           |   |
|-----------------------------------------------------------|--------|--------------------------|--------|
|                                                      |   | **(in millions of A$ )** |   |
|                                                      |   | **Note**                 |   | **2003** | ** ** | **2002** | ** ** |
|                                                      |   |                     |   |   |   |   |   |
| **Shareholders’ Equity at Year End**                 |   |                     |   |   |   |   |   |
|                                                      |   |                     |   |   |   |   |   |
| Shareholders’  Equity reported using Australian GAAP |   |                     |   | 4,439.8 |   | 4,394.7 |   |
|                                                      |   |                     |   |   |   |   |   |
| Property, plant  and equipment                            |   | 35                       | (a)    | (188.9 | ) | (197.1 | ) |
|                                                      |   |                     |   |   |   |   |   |
| Provisions                                                |   | 35                       | (c)    | 14.2 |   | — |   |
|                                                      |   |                     |   |   |   |   |   |
| Pension plans                                             |   | 35                       | (e)    | 22.2 |   | 46.0 |   |
|                                                      |   |                     |   |   |   |   |   |
| Start-up costs                                            |   | 35                       | (h)    | (21.4 | ) | (21.0 | ) |
|                                                      |   |                     |   |   |   |   |   |
| Goodwill                                                  |   | 35                       | (i)    | 387.8 |   | 251.0 |   |
|                                                      |   |                     |   |   |   |   |   |
| Provision for  dividend                                   |   | 35                       | (j)    | — |   | 115.2 |   |
|                                                      |   |                     |   |   |   |   |   |
| Employee share  schemes                                   |   | 35                       | (k)    | (34.5 | ) | (27.4 | ) |
|                                                      |   |                     |   |   |   |   |   |
| Research and  development                                 |   | 35                       | (o)    | (5.5 | ) | — |   |
|                                                      |   |                     |   |   |   |   |   |
| Derivative  instruments and hedging activities            |   | 35                       | (q)    | 22.2 |   | 51.7 |   |
|                                                      |   |                     |   |   |   |   |   |
| Grant income                                              |   | 35                       | (r)    | (17.8 | ) | (12.5 | ) |
|                                                      |   |                     |   |   |   |   |   |
| Business  combinations                                    |   | 35                       | (s)    | (75.1 | ) | (64.3 | ) |
|                                                      |   |                     |   |   |   |   |   |
| PACRS                                                     |   | 35                       | (t)    | (581.6 | ) | (571.8 | ) |
|                                                      |   |                     |   |   |   |   |   |
| Income tax  effect of above adjustments                   |   |                     |   | 22.9 |   | 17.3 |   |
|                                                      |   |                     |   |   |   |   |   |
| **Shareholders’ Equity according to US GAAP**        |   |                     |   | **3,984.3** | ** ** | **3,981.8** | ** ** |

 

F - 51

----

 
|                                             |   | **At June 30**           |       |
|--------------------------------------------------|--------|--------------------------|------------|
|                                             |   | **(in millions of A$ )** |       |
|                                             |   | **Note**                 |       | **2003** | ** ** | **2002** | ** ** |
|                                             |   |                     | ** ** |   | ** ** |   | ** ** |
| **Consolidated Balance Sheets**                  |   |                     |       |   |   |   |   |
|                                             |   |                     |       |   |   |   |   |
| Total Assets reported  using Australian GAAP     |   |                     |       | 9,562.3 |   | 8,842.0 |   |
|                                             |   |                     |       |   |   |   |   |
| Property, plant  and equipment                   |   | 35                       | (a)        | (18.2 | ) | 105.4 |   |
|                                             |   |                     |       |   |   |   |   |
| Pension plans                                    |   | 35                       | (e)        | 74.1 |   | 83.9 |   |
|                                             |   |                     |       |   |   |   |   |
| Reclassification  of deferred tax balances       |   | 35                       | (g)        | (225.2 | ) | (231.2 | ) |
|                                             |   |                     |       |   |   |   |   |
| Start-up costs                                   |   | 35                       | (h)        | (21.4 | ) | (21.0 | ) |
|                                             |   |                     |       |   |   |   |   |
| Goodwill                                         |   | 35                       | (i)        | 387.8 |   | 251.0 |   |
|                                             |   |                     |       |   |   |   |   |
| Employee share  schemes                          |   | 35                       | (k)        | (34.5 | ) | (27.4 | ) |
|                                             |   |                     |       |   |   |   |   |
| Non-recourse  receivables securitization program |   | 35                       | (n)        | 190.5 |   | — |   |
|                                             |   |                     |       |   |   |   |   |
| Research and  development                        |   | 35                       | (o)        | (5.5 | ) | — |   |
|                                             |   |                     |       |   |   |   |   |
| Derivative  instruments and hedging activities   |   | 35                       | (q)        | 29.4 |   | — |   |
|                                             |   |                     |       |   |   |   |   |
| Business  combinations                           |   | 35                       | (s)        | (71.3 | ) | (77.1 | ) |
|                                             |   |                     |       |   |   |   |   |
| PACRS                                            |   | 35                       | (t)        | 8.4 |   | 11.2 |   |
|                                             |   |                     |       |   |   |   |   |
| Deferred tax  effect of above adjustments        |   |                     |       | 25.7 |   | 15.1 |   |
|                                             |   |                     |       |   |   |   |   |
| **Total Assets according to US GAAP**            |   |                     |       | **9,902.1** | ** ** | **8,951.9** | ** ** |

 

F - 52

----

 

**CONSENT OF INDEPENDENT AUDITORS**

 

We consent to the incorporation by reference in theregistration statement on Form S-8 (File No. 33-86384) of Amcor Limited of ourreport dated 21 August 2003 with respect to the consolidated financialstatements of Amcor Limited and its subsidiary companies for each of the threeyears in the period ended June 30, 2003 and as at June 30, 2003 and 2002, whichreport appears in the June 30, 2003 annual report on Form 20-F of AmcorLimited.

 

 
| /s/ KPMG              |   |   |
|-----------------------|--------|--------|
|                  |
| KPMG                  |
| Chartered Accountants |

 

 

Melbourne, Australia

 

19 December 2003

 

----