<PAGE>

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                               Washington DC 20549

 -------------------------------------------------------------------------------

                                    FORM 20-F
(Mark One)

____ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES
                              EXCHANGE ACT OF 1934

                                       OR

__X__ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                                   ACT OF 1934

                   For the fiscal year ended December 31, 2002

                                       OR

____ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                              EXCHANGE ACT OF 1934


                            CLONDALKIN INDUSTRIES PLC
                 (Translation of Registrant's Name Into English)

                               Republic of Ireland
                 (Jurisdiction of incorporation or organization)

                                 Monastery Road,
                                   Clondalkin,
                                   Dublin 22,
                                    Ireland.
                    (Address of Principal Executive Offices)

Securities registered or to be registered pursuant to Section 12(b)
of the Act: None

Securities registered or to be registered pursuant to Section 12(g)
of the Act: None

Securities for which there is a reporting obligation pursuant to Section 15(d)
of the Act:

                          10.625% Senior Notes due 2010

Indicate the number of outstanding shares of each of the issuer's classes of
capital or common stock as of the close of the period covered by the annual
report: 38,095 ordinary shares of (euro)1.00 each

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities and Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

Yes      ___X__   No       _____

Indicate by check mark which financial statement item the registrant has elected
to follow

Item 17  _____    Item 18  __X___

<PAGE>
                                TABLE OF CONTENTS
<TABLE>
<CAPTION>
                                                                                              Page

<S>                         <C>                                                                <C>
Introduction                                                                                    2

                                     PART I

Item 3.             Key Information                                                             4
Item 4.             Information on the Company                                                  7
Item 5.             Operating and Financial Review and Prospects                               20
Item 6.             Directors, Senior Management and Employees                                 36
Item 7.             Major Shareholders and Related Party Transactions                          40
Item 8.             Financial Information                                                      41
Item 9.             The Offer and Listing                                                      41
Item 10.            Additional Information                                                     42
Item 11.            Quantitative and Qualitative Disclosures About Market Risk                 48

                                     PART II

Item 13.            Defaults, Dividend Arrearages and Delinquencies                            50
Item 14.            Material Modifications to the Rights of Security Holders and
                    Use of Proceeds                                                            50
Item 15.            Controls and Procedures                                                    50



                                    PART III

Item 17.            Financial Statements                                                       51
Item 18.            Financial Statements                                                       51
Item 19.            Exhibits                                                                   51




Signatures                                                                                     52
Certifications                                                                                 53
Exhibits Index                                                                                 55

Omitted items are not applicable
</TABLE>


                                       1
<PAGE>


INTRODUCTION

Annual Report for 2002

    This Annual Report for Clondalkin Industries PLC ("the Company" or
"Clondalkin Industries") contains the financial information required in a filing
with the Securities and Exchange Commission on Form 20-F. The presentation of
the annual results in this reporting format is prescribed in undertakings given
by the Company further to its issue on January 28, 2000 of (euro)125 million
fixed rate 10.625% senior notes repayable January 2010 ("the senior notes").


Currency and Presentation of Information

    On January 1, 1999, eleven participating member nations of the European
Union, including the Republic of Ireland, adopted the Euro as their official
legal currency, and fixed conversion rates were established between the Euro and
the existing national currencies. The Company publishes its consolidated
financial statements in Euro ("(euro)"). Clondalkin Group Limited, formerly
Clondalkin Group PLC, ("Clondalkin Group (Predecessor)"), adopted the Euro as
its reporting currency in its financial statements for the year ended December
31, 1998 by translating all Irish pound amounts at IEP 0.787564 to (euro)1.00,
being the Irish pound fixed conversion rate with effect from January 1, 1999, as
permitted by accounting principles generally accepted in Ireland ("Irish GAAP").
Prior to this, the consolidated financial statements were published in Irish
pounds. The Euro currency was adopted on January 1, 2002 to replace the national
currencies of the eleven participating nations of the European Union, at the
rate established on January 1, 1999.

    In this Annual Report, unless otherwise specified or unless the context
otherwise requires, all references to "Euro", "(euro)" and "c" are to the single
currency of participating member states of the European Union as contemplated by
the Treaty on European Union. All references to "Irish pounds" or "IEP" are to
the lawful currency of Ireland. All references to "U.S. dollars," "dollars" or
"$" are to the lawful currency of the United States of America ("U.S."). All
references to "sterling pounds", "(pound)" or "British pounds" are to the lawful
currency of the United Kingdom ("U.K."). All references to "CHF" or "Swiss
francs" are to the lawful currency of Switzerland.

    The following table sets forth, for the periods and dates indicated, the
average, high, low and end of period Noon Buying Rate for cable transfers as
certified for customs purposes by the Federal Reserve Bank of New York for Euro,
expressed in U.S. dollars per (euro)1.00 (to the nearest cent). For 1998 and
earlier years, the rates have been arrived at by converting the Noon Buying Rate
for Irish pounds into Euro at the fixed conversion rate of (euro)1.00 = IEP
0.787564.
<TABLE>
<CAPTION>
     Years ended December 31,            Period End      Average rate*          High              Low
     ------------------------            ----------      -------------          ----              ---
      <S>                                    <C>               <C>               <C>               <C>
     1998                                   1.17              1.12              1.22              1.06
     1999                                   1.00              1.07              1.18              1.00
     2000                                   0.94              0.92              1.03              0.83
     2001                                   0.89              0.90              0.95              0.84
     2002                                   1.05              0.94              1.05              0.86
</TABLE>

* The average of the Noon Buying Rate on the last business day of each month
during the relevant period.

    Unless otherwise indicated, the financial information presented in this
Annual Report has been prepared in accordance with Irish GAAP. Irish GAAP
differs in certain significant respects from accounting principles generally
accepted in the United States of America ("U.S. GAAP"). A discussion of the
differences between Irish GAAP and U.S. GAAP that affect the consolidated
financial statements of the Company is set forth in Note 33 of the Notes to the
Consolidated Financial Statements.

    Amounts stated in Items 3 to 5 in relation to financial results for 1999 are
for Clondalkin Industries adjusted for the effect of the acquisition of
Clondalkin Group (Predecessor) as if the acquisition had occurred on January 1,
1999.
                                       2

<PAGE>
Forward-Looking Statements

    Clondalkin Industries PLC and subsidiaries ("Clondalkin" or the "Group") and
its affiliates and representatives may from time to time make written or verbal
statements which, to the extent they are not historical fact, constitute
"forward-looking statements". The Private Securities Litigation Reform Act of
1995 (the "Reform Act") provides safe harbor for such forward-looking statements
made by or on behalf of Clondalkin Industries PLC, and any such statements are
intended to be subject to the safe harbor protection provided by the Reform Act.

    By their nature, forward-looking statements involve risk and uncertainty
because they relate to events and depend on circumstances that will occur in the
future. There are many factors that could cause actual results and developments
to differ materially from those expressed or implied by these forward-looking
statements. These factors include, but are not limited to:

    o consolidation in the industries and markets in which Clondalkin operates
      may affect demand and supply conditions;
    o changing technology may impact on the functionality of Clondalkin's
      products and production processes;
    o raw material availability and cost volatility may affect normal supply
      terms;
    o economic downturns may constrain demand and pricing;
    o competitor actions may impact customer relationships, pricing and margins;
    o changes in laws and regulations may affect production processes and
      product delivery methods; and
    o future currency exchange rates, interest rates and tax rates may have a
      significant impact on the results of Clondalkin.

    We undertake no obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events or otherwise.
In light of these risks, uncertainties and assumptions, the forward-looking
events discussed in this Annual Report might not occur. Any statements regarding
past trends or activities should not be taken as a representation that such
trends or activities will continue in the future.

    Readers are cautioned not to place undue reliance on such forward-looking
statements, which speak only as of the date hereof.


                                       3
<PAGE>


PART I
------

ITEM 3 - KEY INFORMATION
------------------------

Selected Financial Data

    The Company acquired Clondalkin Group (Predecessor) on November 9, 1999.
Prior to its acquisition of Clondalkin Group (Predecessor), the Company did not
have operations.

    The selected historical consolidated financial data presented for Clondalkin
Industries as at December 31, 2002, 2001 and 2000 and for the years then ended
and the period from its inception on July 22, 1999 to December 31, 1999, and at
December 31, 1999 are extracted or derived from its consolidated financial
statements. The consolidated financial statements as at December 31, 2002, 2001
and for each of the years in the three year period ending December 31, 2002 are
included elsewhere in this Annual Report. The selected historical consolidated
financial data presented below for Clondalkin Industries for the period from
July 22, 1999 to December 31, 1999 and as at December 31, 2000 and 1999 is
extracted or derived from its consolidated financial statements which are not
included in this Annual Report. The selected historical consolidated financial
data presented below for Clondalkin Group (Predecessor) for the 44 weeks ended
November 9, 1999 and for the 12 months ended December 31, 1998 is extracted or
derived from its consolidated financial statements which are not included
herein. The selected consolidated financial data for 1998 has been arrived at
after translating the previously reported Irish pound amounts to Euro using the
fixed conversion rate of IEP 0.787564 to (euro)1.00, being the Irish pound to
Euro fixed conversion rate with effect from January 1,1999 as permitted under
Irish GAAP.

    The consolidated financial statements are prepared in accordance with Irish
GAAP which differs in some respects from U.S. GAAP. A summary of the significant
differences between Irish GAAP and U.S. GAAP applicable to Clondalkin Industries
is set forth in Note 33 to the consolidated financial statements.

    This information should be read in conjunction with "Operating and Financial
Review and Prospects" and the consolidated financial statements of Clondalkin
Industries and accompanying notes included elsewhere in this Annual Report.

<TABLE>
<CAPTION>
Selected Historical Financial Data
((euro)thousands, except per share data and                   Clondalkin Industries                     Clondalkin Group
number of shares in issue)                                                                               (Predecessor)
                                                                                    Period from  |
                                                                                     July 22,    |                Year ended
                                              Year ended    Year ended  Year ended    1999 to    |  44 weeks to    December
                                               December      December    December   December     |    November     31, 1998
Amounts in accordance with Irish GAAP          31, 2002    31, 2001(2) 31, 2000(2)  31, 1999(2)  |   9, 1999(2)     (1)(2)
-------------------------------------      -------------- ------------ ----------- ------------  |  ------------ -------------
<S>                                               <C>            <C>        <C>         <C>             <C>         <C>
Profit and Loss Account Data                                                                     |
Sales                                          710,458      710,816      639,400       91,405    |     496,103      513,184
                                           ----------------------------------------------------  | ---------------------------
                                                                                                 |
Operating profit                                55,992       43,444       38,070        6,154    |      46,421       44,729
Exceptional items                                                                                |
  Profit on disposal of land and buildings          --           --           --           --    |          --        4,502
  Income from financial assets                      --           --        3,426           --    |          --           --
  Business termination and rationalization costs    --           --       (2,085)          --    |      (1,762)      (1,244)
                                           ----------------------------------------------------  | ---------------------------
                                                                                                 |
Profit before interest and taxation             55,992       43,444       39,411        6,154    |      44,659       47,987
Net interest payable                           (46,127)     (49,594)     (47,550)      (4,804)   |      (4,507)      (5,877)
                                           ----------------------------------------------------  | ---------------------------
Profit  (loss) on ordinary activities                                                            |
 before taxation                                 9,865       (6,150)      (8,139)       1,350    |      40,152       42,110
Taxation on profit  (loss) on ordinary                                                           |
 activities(2)                                  (8,018)      (2,002)      (1,939)        (714)   |     (10,189)     (11,175)
                                           ----------------------------------------------------  | ---------------------------
Profit  (loss)  on ordinary activities                                                           |
 after taxation                                  1,847       (8,152)     (10,078)         636    |      29,963       30,935
                                           ====================================================  | ===========================
</TABLE>


                                       4
<PAGE>
<TABLE>
<CAPTION>
Selected Historical Financial Data                             Clondalkin Industries                     |    Clondalkin Group
(Continued)                                                                                              |     (Predecessor)
((euro)thousands, except per share data and                                                 Period from  |
number of shares in issue)                                                                   July 22,    |               Year ended
                                              Year ended     Year ended      Year ended       1999 to    |  4 weeks to    December
                                               December       December       December        December    |   November     31, 1998
                                              31, 2002       31, 2001(2)    31, 2000(2)     31, 1999(2)  |  9, 1999(2)     (1)(2)
                                             -----------    ------------     ----------     -----------  |  ----------   -----------
<S>                                                <C>           <C>              <C>          <C>             <C>          <C>
Dividends                                          Nil            Nil             Nil          Nil       |     4.05c       10.14c
                                                                                                         |
Earnings (loss) per share                  (euro)48.48  ((euro)213.96)  ((euro)264.55)   (euro)18.87     |    71.01c       73.69c
                                                                                                         |
Diluted earnings (loss) per share          (euro)48.48  ((euro)213.96)  ((euro)264.55)   (euro)18.87     |    69.84c       72.32c
                                                                                                         |
Balance Sheet Data                                                                                       |
Tangible fixed assets                          195,310        203,154         189,651        194,606     |               160,239
Financial fixed assets                           1,888          1,888           1,888          1,888     |                 1,888
                                                                                                         |
Intangible fixed assets                        229,999        255,722         234,595        231,194     |                    --
                                                                                                         |
Net current assets(3)                           50,282         69,445          72,046         92,413     |                85,047
Total assets                                   638,512        690,786         640,212        676,185     |               382,106
Creditors (amounts falling due after more                                                                |
 than one year)(4)                             481,698        534,831         494,689        501,838     |               115,495
Deferred income - capital grants                    --             --              --             --     |                   789
Provisions for liabilities and charges -                                                                 |
Deferred taxation                               12,733         13,845          12,796         18,143     |                 7,851
                                              ------------------------------------------------------     |          --------------
Shareholders' funds                            (16,952)       (18,467)         (9,305)           120     |               123,039
                                              ======================================================     |          ==============
Other data                                                                                               |
Number of shares in issue ('000s)                   38             38              38             38     |                42,026
Cash flow from operating activities             92,098         82,395          79,645         25,327     |   38,362       66,426
                                                                                                         |
Returns on investments and servicing of                                                                  |
 finance                                       (29,928)       (35,857)        (25,809)        (2,501)    |   (4,530)      (6,530)
Cash flow from financing activities            (47,569)        21,306         (33,277)       517,750     |  (60,723)     (52,324)
                                                                                                         |
Purchase of tangible fixed assets               17,555         19,977          11,054          2,818     |   13,320       19,168
                                                                                                         |
Depreciation and amortization                   37,808         38,097          34,688          4,729     |   18,723       18,811
                                                                                                         |
Amounts in Accordance with U.S. GAAP (5)                                                                 |
----------------------------------------                                                                 |
Profit and Loss Account Data                                                                             |
Operating profit                                72,841         41,270          41,934          2,140     |   38,462       46,109
Net income  (loss) attributable to                                                                       |
 shareholders                                   20,744        (11,884)         (8,524)        (3,330)    |   25,060       31,695
Dividends per share                                 --             --              --            --      |    10.49c        9.55c
                                                                                                         |
Basic earnings  (loss) per share          (euro)544.53  ((euro)311.96)  ((euro)223.76)  ((euro)98.81)    |    59.39c       75.50c
Diluted earnings  (loss) per share        (euro)544.53  ((euro)311.96)  ((euro)223.76)  ((euro)98.81)    |    58.41c       74.10c
Balance Sheet Data                                                                                       |
Fixed assets                                                                                             |
Tangible fixed assets                          192,845        203,154         189,651        194,606     |               160,239
Financial fixed assets                           1,888          1,888           1,888          1,888     |                 1,888
Intangible fixed assets - goodwill             249,008        258,671         238,207        234,184     |               273,255
Intangible fixed asset - finance costs           4,381          4,978           4,542             --     |                    --
Non-current liabilities                        486.079        539,809         499,231        501,838     |               115,495
                                                                                                         |
Shareholders' funds                             (5,206)       (25,618)        (13,760)        (5,220)    |               173,975
                                                                                                         |
Capital expenditure                             17,755         19,977          11,054          2,818     |   13,320       19,168
                                                                                                         |
Depreciation and amortization                   24,444         39,338          35,801          4,827     |   19,924       20,032
</TABLE>


Notes
-----
(1)  The Euro amounts have been arrived at by converting the underlying Irish
     pound figures at the fixed conversion rate of (euro)1.00 = IEP 0.787564.
(2)  Amounts presented for comparative periods in accordance with Irish GAAP
     have been restated to reflect the adoption of FRS 19. This resulted in an
     increased deferred tax charge of (euro)1,481,000, (euro)554,000 and
     (euro)758,000 in the periods ended December 31, 2000, 1999 and 1998
     respectively and a deferred tax credit in the year ended December 31, 2001.
(3)  Net current assets comprise stocks, debtors, bank and cash balances less
     accounts payable and accrued liabilities.
(4)  Creditors falling due after more than one year solely comprise long term
     debt except for the inclusion of other creditors of (euro)2,067,000
     (euro)3,837,000, (euro)12,908,000, (euro)26,506,000 and (euro)42,413,000
     at December 31, 1998, 1999, 2000, 2001 and 2002, respectively.
(5)  Amounts shown in accordance with U.S. GAAP as of and for the year ended
     December 31,2002 reflect the adoption of SFAS 142 on January 1, 2002. The
     comparative figures have not been restated in this regard. The effects of
     the adoptions of SFAS 142 are discussed in Note 33 to our consolidated
     financial statements.

                                       5
<PAGE>


Exchange Rates

    The following table sets forth, for the periods and dates indicated, the
average, high, low and end of period Noon Buying Rate for cable transfers as
certified for customs purposes by the Federal Reserve Bank of New York for Euro,
expressed in U.S. dollars per (euro)1.00 (to the nearest cent). For 1998 and
earlier years, the rates have been arrived at by converting the Noon Buying Rate
for Irish pounds into Euro at the fixed conversion rate of IEP 0.787564 to
(euro)1.00. The exchange rate on April 29, 2003 was (euro)1.00 = U.S.$1.131.

<TABLE>
<CAPTION>
   Years ended December 31,             Period End      Average rate *        High              Low
   -------------------------------------------------------------------------------------------------
   <S>                                     <C>               <C>              <C>               <C>
   1998                                    1.17              1.12             1.22              1.06
   1999                                    1.00              1.07             1.18              1.00
   2000                                    0.94              0.92             1.03              0.83
   2001                                    0.89              0.90             0.95              0.84
   2002                                    1.05              0.94             1.05              0.86
</TABLE>

* The average of the Noon Buying Rate on the last business day of each month
during the relevant period.

<TABLE>
<CAPTION>
   Month                                Period End       Average rate         High              Low
   -------------------------------------------------------------------------------------------------
      <S>                                   <C>               <C>              <C>               <C>
   September 2002                         0.9879            0.9806           0.9959            0.9685
   October 2002                           0.9881            0.9812           0.9881            0.9708
   November 2002                          0.9932            1.0013           1.0139            0.9895
   December 2002                          1.0485            1.0194           1.0485            0.9927
   January 2003                           1.0739            1.0622           1.0861            1.0361
   February 2003                          1.0779            1.0785           1.0875            1.0708
   March 2003                             1.0895            1.0807           1.1030            1.0606
</TABLE>

Risk Factors

    The operating results are affected by a number of external factors,
including fluctuations in currency exchange rates, changes in the prices of the
raw materials used to make products, macroeconomic conditions in the principal
markets supplied and consolidation trends in the industry. Each of these factors
is described briefly below.

Fluctuations in currency exchange rates

    With the introduction of the Euro on January 1, 1999, Clondalkin's exposure
to fluctuations in exchange rates has been somewhat reduced. The Group has
significant non-Euro denominated businesses, in the U.S., Britain and
Switzerland, which collectively accounted for approximately 44.1% of sales in
the year ended December 31, 2002. A stronger Euro will reduce the Euro reported
figures of the non-Euro businesses and conversely a weaker Euro will increase
the reported figures of the non-Euro businesses. As a result, comparability of
the Group's performance between financial periods can be significantly affected
by fluctuations in the Euro against the other currencies with which the Group
transacts.

    The Group is also exposed to currency transaction risk whenever one of the
subsidiaries enters into transactions using a currency other than its functional
currency. This risk is reduced as far as possible by matching revenues and costs
in each currency, for example by buying raw materials predominantly in the local
market in the functional currency. Where this is not possible, it is the Group's
policy to enter into currency hedging from time to time, to the extent needed to
cover any unmatched currency positions. The primary transaction currency
exposures relate to purchases of U.S. dollar denominated aluminum materials by
the European flexible packaging operations. Aluminum material purchases vary
between 3% and 5% of Group sales on a year to year basis.

Prices of raw materials

    The most important materials used are polymer resins and other plastics,
paper, paperboard and aluminum foil. These materials are all commodities and
follow cyclical price movements that are, especially in the case of polymers,
subject to significant volatility. For the most part, these materials are
purchased at market rates, although from time to time, aluminum foil is bought
on a forward price basis against known customer commitments. Other raw materials
used include coatings, lacquers, adhesives and inks. Large inventories of raw
materials are not generally maintained beyond the amounts needed to meet actual


                                       6
<PAGE>

orders from customers. Furthermore, changes in raw material costs, both
increases and decreases, are typically passed on to customers within a short
period of time after such changes. The period required to implement selling
price increases varies depending on the rate and frequency of raw material cost
increases experienced and on general demand conditions. Generally, most
increases in the cost of raw materials are reflected relatively quickly in both
sales revenues and cost of sales.

    Considerable attention is devoted to managing the purchase of raw materials.
In addition, the operating subsidiaries target their business with those
customers who require high quality and on higher value-added products which
generally allow greater scope to incorporate increases in raw material prices
into the prices at which products are sold. As a result, operating margins in
value terms have not been greatly affected by volatility in commodity prices
over the years. However, future volatility in commodity prices may still
adversely affect the results of operations.


Macroeconomic and industrial conditions in the principal markets supplied

    We believe that operating performances in our businesses are more directly
affected by management initiatives, such as investments, asset utilization, new
product introductions and cost-efficiency measures than by macroeconomic
conditions. However, macroeconomic conditions do affect the overall demand for
and supply of products. This is because many products are incorporated into
consumer goods whose sales volumes may vary with the fluctuations in disposable
income that are associated with changes in the macroeconomic environment. Other
factors that may affect results of operations in specific markets include the
level of competition and scope for expansion of particular markets. Therefore
any severe or prolonged future downturn, or increase in competition, in
principal markets would be likely to have an adverse impact on the results of
operations.

Consolidation in the packaging industry

    Consolidation in the industries and markets in which Clondalkin's businesses
operate could have adverse consequences for our constituent businesses. Our
strategy is to sell higher value-added packaging products to a large number of
customers to mitigate the effect that individual customers may exert by applying
significant price pressure or by reducing their activity levels with us.
Consolidation among our customers could increase their ability to apply price
pressure, thereby causing our operations to reduce their selling prices or lose
sales. Consolidation among customers could also affect volume and product
requirements, causing them to source from competing suppliers with a cost
structure better suited to the production of higher volumes. Finally,
consolidation among competitors could facilitate their access to more
sophisticated packaging technologies than we typically employ and therefore
challenge some of the Group's competitive strengths, such as our existing level
of technical competence and product reliability.


ITEM 4 - INFORMATION ON THE COMPANY
-----------------------------------

History and Development of the Company

Overview

    The Company was incorporated on July 22, 1999 in the Republic of Ireland.
Our corporate offices are located at Monastery Road, Clondalkin, Dublin 22,
Ireland (telephone: ++ 353 1 4591559). The Company is the holding company of the
Group, with direct share, indirect share and loan interests in subsidiaries. As
described below, the Company is a wholly owned subsidiary of Clondalkin Group
Holdings Limited, whose offices are also located at the above address.

    The Company and its subsidiaries form an international group of companies
producing flexible and specialist packaging products. The Group has operating
subsidiaries in Ireland, the U.K., the Netherlands, Belgium, Germany,
Switzerland and the U.S. Clondalkin supplies value-added packaging products to a
diversified customer base principally in the food and beverage, consumer
products, industrial, healthcare, agricultural/horticultural and
services/distribution sectors. The Group manufactures and distributes products
through approximately 40 operating companies, all wholly owned subsidiaries, in
41 locations, and employs more than 4,000 employees. Each operating company is
managed by its autonomous and experienced management team.

    Clondalkin's operations manufacture a wide range of plastic, foil and
paper-based flexible packaging products and folding cartons. Flexible packaging
accounted for 66.7% of sales and specialist packaging accounted for 33.3% of
sales in 2002, (2001: 65.3% and 34.7% respectively). The operations convert raw
materials, including paper, paperboard, aluminum foil and plastic film and resin


                                       7
<PAGE>


into finished products through a range of manufacturing processes including
extrusion, laminating, lacquering, metalizing, printing, slitting and die
cutting. The higher value-added packaging products are usually designed to
satisfy highly technical operating specifications and have sophisticated
preservation and presentation features. In addition, they typically meet
stringent qualification standards because they are closely integrated with our
customers' production processes. These factors have facilitated the development
of long-lasting technology partnership relationships with many of our packaging
customers.

    We believe that the distinguishing characteristics of our business are:

    o Our businesses are non-cyclical and focus on value-added products and
      services;
    o Our flexible packaging operations, convert all three main raw materials;
      polymer, aluminum and paper, and can substitute them to better service the
      product applications and customer requirements;
    o We use advanced technologies throughout our operations;
    o We achieve flexibility and efficiency of operations by paying attention to
      increasing asset utilization rates, by implementing better work practices
      and improving material usage efficiency.
    o Our businesses are market driven, pursuing advantage and differentiation
      in product innovation, changing material substrates, new applications,
      pre-press and finishing capabilities and delivery systems;
    o Our businesses are cash generative; and
    o Our businesses are diversified by product, market and currency.

    On December 19, 2002, we acquired the business and assets of Spiralkote, a
flexible packaging company located in Orlando, Florida in the United States for
a consideration of (euro)2.1 million. The consideration was financed from our
cash balances.

    In April 2001, we acquired the flexible packaging and folding carton
businesses formerly owned by European Packaging Holdings BV ("the EPH
companies") for a consideration of (euro)46.5 million before expenses and
professional fees.

    The consideration payable was financed as to (euro)20 million with an
intercompany loan advanced by Clondalkin Group Holdings Limited to Clondalkin
Industries, wholly owned subsidiary Edgemead Limited. This loan was funded by
newly issued subordinated shareholders' loans due July 2010. The intercompany
loan advanced to Edgemead Limited is subordinate to the 10.625% senior notes due
January 2010, with respect to interest and principal payments. The interest rate
on the intercompany loan, fixed at 10% per annum, is non-cash payable, which is
accrued for on a cumulative basis until maturity in July 2010. The balance of
the consideration payable was funded by additional bank debt of (euro)30 million
drawn by Edgemead Limited by way of an amendment to the existing Senior Credit
Facility. The (euro)30 million bank loan is repayable over seven years, maturing
December 2007. The intercompany loan and bank debts are Euro denominated.

    The EPH companies supply a range of plastic, foil and paper-based flexible
packaging products and folding cartons mainly to major European food and
confectionery manufacturers and comprise a group of six separate operating
subsidiaries located in the Netherlands and Germany.

Acquisition of Clondalkin Group (Predecessor)

    In July 1999, Candover Partners, Candover Investments PLC and Candover
(Trustees) Limited (together "Candover") supporting the management and executive
directors (together "the Managers") of Clondalkin Group (Predecessor), caused
Clondalkin Group Holdings Limited, Clondalkin Industries and Edgemead Limited to
be incorporated, for the purpose of acquiring all of the outstanding shares in
Clondalkin Group (Predecessor). Edgemead Limited, which made the offer, is a
wholly owned subsidiary of Clondalkin Industries, which in turn is a wholly
owned subsidiary of Clondalkin Group Holdings Limited. All three companies were
incorporated in the Republic of Ireland. Edgemead Limited made a cash offer for
the shares in Clondalkin Group (Predecessor) on September 14, 1999. The offer
was recommended to the shareholders by the independent directors of Clondalkin
Group (Predecessor), who were not involved in making the offer.

    On November 9, 1999 the offer was declared unconditional in all respects. On
November 19, 1999 Clondalkin Group Holdings Limited made an offer to holders of
options over shares in Clondalkin Group (Predecessor). Under the terms of this
offer, options over shares which had a value of (euro)1.5 million, being the
excess of the offer price over the option exercise price, were exercised. The
remaining options were exchanged for rights to acquire preference shares of
(euro)99,625 and subordinated loan notes of (euro)12,453,125 in Clondalkin Group
Holdings Limited at a future date.

                                       8
<PAGE>

    To finance the acquisition of Clondalkin Group (Predecessor), Candover
subscribed (euro)109.2 million for fixed rate subordinated loan stock and
(euro)0.9 million for shares in Clondalkin Group Holdings Limited. The Managers
subscribed (euro)3.4 million for fixed rate subordinated loan stock and
(euro)1.0 million for shares in Clondalkin Group Holdings Limited. Clondalkin
Industries drew down a mezzanine loan facility of (euro)120 million. Edgemead
Limited and a subsidiary of Clondalkin Group (Predecessor) borrowed a further
(euro)265 million, denominated in U.S. dollars, British pounds, Swiss francs and
Euro, under a senior credit facility provided by a syndicate of banks. These
funds were applied to purchase shares and refinance the existing bank
indebtedness of Clondalkin Group (Predecessor) and its subsidiaries and to pay
fees and expenses in connection with the acquisition.

    On January 28, 2000 Clondalkin Industries raised (euro)125 million by way of
an issuance of 10.625% senior notes due January 2010 to refinance the mezzanine
loan facility of (euro)120 million and pay issue expenses and costs of (euro)5
million. These senior notes are guaranteed by Edgemead Limited. They are listed
on the Luxembourg Stock Exchange.

    A Registration Statement on Form F-4 was submitted on a confidential basis
to the Securities and Exchange Commission, in Washington D.C., under the
Securities Act of 1933 to have the exchange notes registered in substitution for
the senior notes. On July 28, 2000 the Registration Statement was declared
effective by the Securities and Exchange Commission and the Company offered the
exchange notes to all existing note holders.

History of Clondalkin

    Clondalkin traces its origins back to the formation of Clondalkin Paper
Mills Limited in Ireland in 1936, which was set up to manufacture pulp and paper
products for the Irish market. This remained the predominant activity until the
late 1970's, when profitability was adversely affected by the removal of trade
and tariff barriers following Ireland's accession to the European Economic
Community. Responding to these changed circumstances, Clondalkin, under new
management, implemented a business strategy aimed at reducing dependencies. This
new strategy focused on expanding the Group's activities outside of Ireland and
repositioning the business away from low-margin commodity businesses and toward
higher value-added market segments closer to end-users. The Group exited from
pulp and paper manufacture and developed its down-stream converting businesses
by organic investment and by acquisition.

    The table below lists the principal acquisitions over the last 15 years.

<TABLE>
<CAPTION>
 Company                         Principal Activity                     Year of Acquisition     Location
------------------------------------------------------------------------------------------------------------------------
<S>                                      <C>                                    <C>             <C>
 Fortune Plastics                Flexible packaging                            1987           United States
 Art Litho                       Printing                                      1988           United States
 Ditone Labels                   Specialist packaging                          1989           England
 BBF                             Specialist packaging                          1989           United States
 WBF                             Specialist packaging                          1989           United States
 Vaassen Flexible Packaging      Flexible packaging                            1994           Netherlands
 Nyffeler Corti                  Flexible packaging                            1994           Switzerland
 Boxes Group                     Specialist packaging                          1995           England
 Van der Windt                   Flexible packaging                            1996           Netherlands
 Wentus                          Flexible packaging                            1996           Germany
 Ritchie                         Printing                                      1997           Scotland
 Chadwicks                       Flexible packaging                            1997           England
 Velsen/Flexoplast               Flexible packaging                            1999           Netherlands
 EPH Companies                   Flexible and Specialist packaging             2001           Netherlands/Germany
 Spiralkote                      Flexible Packaging                            2002           United States
</TABLE>

    Clondalkin also has a 16.3% stake in the Kelvinside Group Limited, a holding
company that invests primarily in smaller specialist printing companies in
England.

                                       9
<PAGE>

Business Strategy

    Clondalkin's principal strategic objective is to continue to achieve
earnings and cash flow growth. Management plan to pursue this objective through
both organic developments of our existing businesses and by acquiring new
businesses. The principal elements of our strategy are:

Focus on producing higher value-added products

    Our businesses are focused on producing specialized, higher value-added
products to facilitate competition based on product quality and customer service
rather than price. By offering and delivering a discriminating product, we hope
to reduce our exposure to competitive pressures. This facilitates passing
through increases in the prices of raw materials to customers. As a result, our
businesses have generally been able to maintain stable operating profits in the
face of an unstable commodity price environment. For these reasons we are
constantly refining and adding to our product mix and service capability.

Continue to Diversify

    We seek to diversify our constituent operations as much as possible by
entering new markets, introducing new products, adding new customers and
cross-selling existing products to our customers. Product development is an
ongoing requirement to maintain and improve operating margins. The
diversification objective is implemented as follows:

    Geography and currency. We seek to achieve a balance by geographic region
and currency in order to avoid becoming overly dependent upon the economic or
monetary performance of any one country or region. In 2002, continental Europe
represented 54.8% of sales (2001: 51.4%), the U.K. and Ireland represented 24.0%
(2001: 24.7%) and the U.S. represented 21.2% (2001: 23.9%). Similarly, in 2002,
55.9% of sales were in currencies that comprise the Euro (2001: 53.2%), 21.2% of
sales were in dollars (2001: 23.9%), 17.5% of sales were in sterling pounds
(2001: 17.5%) and 5.4% of sales were in other currencies (2001: 5.4%). We also
seek to match sales and expenses by currency. Given this broad currency spread,
we believe that the Group's trading activities are naturally hedged against most
currency movements.

    Raw materials. We seek to achieve a balance among the raw materials used to
produce our products, which we believe assists us in servicing customer
requirements while also improving our ability to cross-sell products to existing
customers. In 2002, plastics/polymers based products represented 41.2% (2001:
43.5%), paper/paperboard based products represented 33.5% (2001: 33.7%) and
foils/coated products represented 25.4% of sales (2001: 22.8%), respectively.
Our competence in converting these three classes of raw material helps us
differentiate our Group from competitors that typically work in one or two of
the material substrates.

    End-user markets. We seek to diversify sales to end-user markets in order to
reduce reliance on any single industry segment. The largest end user market
supplied is the food and beverage sector accounting for approximately 30% of
sales, followed by other consumer products which account for approximately 20%
of sales. Services account for approximately 18% of sales. The other principal
markets supplied, accounting for between 8% and 12% of sales, are the
industrial, healthcare and agricultural/horticultural. Our remaining end-user
markets represent much smaller percentages of sales.

    Customers and suppliers. We seek to avoid becoming reliant on sales to any
single customer or on purchases from any single supplier. In 2002, the largest
customer represented approximately 2.9% of sales (2001: 2.6%) and the top 20
customers collectively represented less than 17.5% of sales (2001: 19.2%). Given
that the raw materials used are largely commodities traded on world markets, our
operations are not dependent on any single supplier.

Improve Competitive Position and Customer Relationships

    We seek strong market shares in each of the niche markets in which our
businesses operate. Leading positions include the supply of plastic flower
sleeves in Continental Europe; waxed papers in Continental Europe; cut dairy
lids in the U.K. and Continental Europe; specialist labels and inserts in
Ireland for the pharmaceutical industry; business documentation systems in the
South Eastern U.S. states; and betting forms and materials for racing and soccer
betting in the U.K. We intend to maintain and, where possible, enhance these
positions in specialty markets by leveraging existing customer relationships,
technical expertise and the high quality of the products and services supplied.
In particular, we will invest in existing operations where appropriate to
reposition them to meet customers' changing demands and exploit new
opportunities in the markets we service.


                                       10
<PAGE>

    Our customers demand high levels of performance from our products and
support from our technical service personnel. We produce a great number of
separate products to exacting delivery schedules. To meet these demands, we
maintain close links with our customers. In addition, we intend to continue to
improve our production processes and technological expertise to expand our
flexibility in manufacturing a wide array of products and our ability to
manufacture new products, especially time-sensitive products to meet our
customers' changing needs.

Maintain Low Costs of Production

    Although our businesses seek to avoid competition based primarily on selling
price, we keep our unit costs of production low by continuing to increase the
productivity and flexibility of our production processes. For example, operating
companies seek to maximize capacity utilization by organizing around-the-clock
production when demand allows and moving under-utilized machinery to other
operating locations where it can be used more efficiently and profitably.

Continue to Pursue Selective Acquisitions

    Over the last five years, a significant portion of Clondalkin Group's growth
has come from acquired companies. In general, the Group seeks to acquire
companies that operate as stand-alone entities or that complement specific
aspects of our existing business. For example, acquired businesses may
complement existing businesses by expanding existing product lines, improving
technological expertise, adding distribution channels or customers, improving
efficiency by reducing overhead costs or achieving critical mass in a market
segment. The companies that we seek to acquire typically have the following
characteristics:

    o focused on manufacturing higher value-added products;
    o history of strong positive cash flows;
    o sustainable operating profit margins greater than 7% of sales;
    o lack of major dependencies with respect to markets, products, customers
      and suppliers;
    o management teams that intend to stay with and develop the business; and
    o potential for growth.

    Following these preferences, we have been successful in developing the
profitability of acquired businesses and integrating them into the Group. The
added value packaging segments, in which our businesses specialize, are highly
fragmented. This fragmentation will continue to offer consolidation and
acquisition opportunities going forward.

Recent Developments

    Total investment expenditure in the last five years was (euro)123.9 million,
which was divided 50.9% as to acquisitions (as adjusted for timing of deferred
consideration payments) and 49.1% on developing existing operations.

    The most important developments in the last five years are summarized below.

    Acquisition of Spiralkote. In December 2002, the Group acquired the business
and assets of Spiralkote, a flexible packaging company located in Orlando,
Florida in the United States. Spiralkote represents an initial foothold for the
Group's existing foils & laminates operations and provides an opportunity to
market their innovative products in the extensive North American market through
a domestic U.S. base.

    Acquisition of the EPH companies. In April 2001, we acquired the flexible
packaging and folding cartons businesses of the former EPH Group. These
businesses, with manufacturing operations in the Netherlands and Germany,
complement our existing activities and expand the range of specialist packaging
products and specialist technologies we offer our customers, thereby enhancing
the market position of our laminating - coating and folding cartons businesses.

    Acquisition of Van der Windt and Velsen Flexoplast in flexible packaging. In
July 1996, we acquired the Van der Windt group of flexible packaging companies,
with manufacturing operations in the Netherlands and Germany. This acquisition
expanded our market position and distribution capability in continental Europe
and achieved a significant market share in important niche markets, such as
plastic flower and potted plant sleeves and agricultural packaging products.
Following this acquisition, measures were taken to improve Van der Windt's asset
utilization, to impose clear profit responsibility on its management and to
expand its operations into new higher value-added markets in the agricultural,
retail and industrial sectors. In February 1999, we acquired Velsen Flexoplast,
a flexible packaging manufacturer based in the Netherlands. This acquisition
further expanded our flexible packaging product range and customer service
capability and created purchasing, production and marketing synergies with the
Van der Windt group.

                                       11
<PAGE>

    Integration and expansion of our European coating and laminating operations.
In January 1997, we acquired Chadwicks and thereby expanded the product
offerings to include short-run printed foil-based lids and closures. Extensive
actions were taken at Nyffeler Corti to reduce costs through headcount
reductions, improved material usage and significant reductions in
laminate-coating capacity, strengthening its sales force and phasing out
unprofitable product lines. Investment was made in state-of-the-art lacquering
and metalizing technology at Vaassen, which has enabled the Group to consolidate
continental European lacquering production in one location to achieve lower unit
costs of production and to begin producing more environmentally friendly
water-based lacquers. We also integrated the management and sales forces of
Vaassen, Nyffeler Corti and Chadwicks to form a cohesive European coatings and
packaging division within our Group. The acquisition of the EPH companies
flexible packaging manufacturing businesses in April 2001 and Spiralkote in
December 2002 further expanded the product, market and customer reach of this
division. Our coatings and laminating division offers a full range of long run
and short-run lacquering, printing and laminating converting solutions for most
foil, plastic derivative and laminate based packaging products.

    Development of the U.S. specialist packaging operations. BBF, which operates
in the specialist documentation end of the print market, has repositioned its
business in recent years, withdrawing from the lower margin standard forms
market and by promoting its development in the higher-margin value added
segments of its market. These include form/label combinations for the direct
mail industry, label products for industrial, healthcare and retail application
and documentation management systems for healthcare and subscription products.
Recently, the production operations have been all centralized at the main BBF
facility in Florida.

    Reorganization of our specialist packaging businesses. The following steps
have been taken to improve the competitive position in the U.K. folding cartons
market. A new managing director was appointed to the Boxes Group in early 1999
and more management responsibility and accountability was devolved to the
subsidiaries within this group. Unprofitable product lines were phased out and
production was reoriented toward higher-margin products for the fast-moving
consumer goods, healthcare and toiletries/cosmetics markets. In 2001, new
state-of-the-art press equipment was added.

    In the labels business, additional capacity was added by opening a new
factory and investing in advanced digital origination equipment, and high-speed
rotary and multicolor presses. The marketing and sales staff of this business
was rebuilt. A central warehouse and logistics center was established at Boxes
(Ditone) in 1999 to streamline operations and to provide a single source of
supply over the full product range. These actions have improved the position of
the Boxes Group in the U.K. folding cartons and labels markets. Guy & Company in
Ireland also relocated in 1999 to new extensively re-equipped modern facilities.
These investments have provided a platform for the ongoing development of these
businesses.

    The acquisition of the former EPH Group businesses in April 2001 has also
added three new production locations in Continental Europe to these specialist
packaging businesses. The provision of pan-European supply capability to our
customers is becoming an increasingly important market requirement and this
acquisition addresses this trend.

    Development of Fortune Plastics. In recent years, Fortune has added
production facilities in Arizona and in Illinois increasing its number of
locations to five in total. The remaining locations are in Connecticut,
Tennessee and Florida. This geographical production representation enables
Fortune to supply nationally throughout the U.S. market and has also proved to
be a successful development strategy. Fortune has supplemented this development
with ongoing plant and machinery investment and by expanding its product range,
through new own manufacture products and also using bought in finished products.

Business Overview

    The Group operates a decentralized management structure with considerable
autonomy vested in local management. The decentralized structure facilitates
managing by profit responsibility; the structure is flat to ensure quick
responses where guidance and approval are necessary. The decentralized structure
works within a framework of coordination, control, strategy formulation and
approval from the center. This approach fosters motivation and ongoing
evaluation of operating policies, as well as ensuring responsiveness to changing
market conditions. Local management is required to take responsibility for the
development of the businesses under its control and to identify and promote
development opportunities, as well as bring forward initiatives to increase the
production output from the asset base.


                                       12
<PAGE>

    To facilitate management communications and control, operating companies are
organized broadly around products and regions. For financial reporting purposes,
the business is organized into two segments, namely flexible packaging and
specialist packaging. Each of these segments is described below.

Products

Flexible packaging products

    We manufacture flexible packaging products in the U.S., the U.K., the
Netherlands, Germany and Switzerland. The flexible packaging products include
lids and seals for dairy product containers, plastic flower sleeves,
agricultural produce bags, plastic bags, wraps, and other similar products
designed for the hospital and healthcare market, the food and delicatessen
markets and the services and janitorial markets, as well as metalized paper and
foil/paper inner liners for product freshness. Plastic, paper, foil and
combinations of these materials are used to make these products.

Specialist packaging products

    We manufacture specialist packaging products in the U.K., Ireland, the
Netherlands and the U.S., including folding cartons, labels and leaflets, and
paper bags and sacks. The principal markets supplied are in the pharmaceutical
and healthcare industry, primarily for packaging medicines and prescription
drugs, and in the fast moving consumer goods industry for packaging food and
beverage products, as well as high quality presentation boxes for cosmetics,
giftware and confectionery products.

    Paper bags and sacks are supplied to customers in the agriculture,
horticulture, dairy and construction industries. As these markets are generally
mature markets, with limited growth potential, we focus on maintaining low unit
costs of production.

Product Development

    Our research and development activities are focused on improving the
products that are already produced and increasing the efficiency of the
manufacturing processes to reduce production costs. The operating companies work
closely with customers to tailor products to their specifications, as well as to
develop innovative products to meet their emerging needs. In 2002, (euro)3.6
million (2001: (euro)2.5 million, 2000: (euro)2.9 million, 1999: (euro)4.6
million and 1998: (euro)4.9 million) was spent on product development, most of
which related to the employment of technical support staff who interact closely
with our customers' production staff.

Principal Operating Subsidiaries

Flexible packaging

    The principal operating subsidiaries that comprise the flexible packaging
operations are described briefly below.

    Van der Windt. Van der Windt is based in the Netherlands and focuses
primarily on supplying flexible packaging products to customers in the
horticultural, agricultural and industrial sectors in the Netherlands and other
parts of Europe. Van der Windt's main product-market combination is plastic
flower sleeves for the transportation, protection and presentation of cut flower
bouquets and potted plants. We believe that Van der Windt is a leading supplier
of such sleeves and that its proximity to the major flower markets of the
Netherlands allows it to maintain close relationships with growers, auctioneers
and exporters/wholesalers. Van der Windt purchases some of its products from
other Clondalkin companies, principally Wentus and Form Plastics. Van der Windt
supplements its product range by purchasing and on-selling certain ready-made
products which it sources world-wide from third party suppliers.

    Wentus. Wentus is based in Germany and specializes in the production of a
wide range of printed and unprinted plastic-based flexible packaging in sheet,
roll, sleeve and bag forms including flower sleeves, industrial packaging and
consumer goods packaging products. Since it was acquired in 1996 by Clondalkin,
Wentus has developed its sales to third party customers. In 2002, 69% of its
sales were to third party customers.


                                       13
<PAGE>

    Velsen Flexoplast. Velsen Flexoplast, acquired in February 1999, is based in
the Netherlands. This business consists of two separate operations, the Velsen
plastics extrusion business and the Flexoplast printing and conversion business.
Its major products include flexible packaging for use by customers in the
consumer goods, agricultural and horticultural industries, and industrial
applications principally for continental European customers. Velsen's extrusion
and Flexoplast's printing and conversion operations create purchasing and
marketing synergies with some of the Group's other flexible packaging
operations.

    Form Plastics. Form Plastics is based in the Netherlands and produces a wide
range of printed and unprinted polymer-based flexible packaging in sheet, roll,
sleeve and bag form. It has extensive conversion capabilities for the production
of flower sleeves and confectionery products.

    Vaassen Flexible Packaging. Vaassen Flexible Packaging is based in the
Netherlands and produces foil-based products for its customers in the European
dairy and tobacco industries. These products include lacquered foil packaging
for dairy lids and seals, lacquered foil wrappers for butter and cheese, and
lacquered foil and metalized packaging for cigarette box liners. We believe that
Vaassen is the only company in Europe that can manufacture, in one location,
both lacquered foil and metalized paper inner liners, meeting the statutory
requirements for every European jurisdiction. Vaassen also produces water-based
lacquered materials and coatings that address environmental concerns associated
with traditional solvent-based lacquering processes.

    LPF Flexible. LPF Flexible Packaging based the Netherlands, is a supplier of
high quality gravure-printed laminated flexible packaging serving markets for
convenience food, dried soup and sauces, edible fats and confectionery.

    Cats Flexible. Cats Flexible Packaging BV, based in the Netherlands, is a
specialist producer of coated and laminated waxed papers and foils mainly for
the confectionery market and is one of the largest producer of specialist waxed
packaging in Europe.

    Hansel Flexible Packaging. Hansel Flexible Packaging, based in Germany is a
specialist producer of coated and laminated waxed papers and foils mainly for
the confectionery market.

    Nyffeler Corti. Nyffeler Corti is based in Switzerland and produces
lacquered foil and polyester packaging principally for the Swiss dairy and
confectionery markets. Its leading product-market combination is dairy product
lids supplied to continental European markets. Nyffeler Corti's products are
characterized by high quality print work and high performance, through the use
of sophisticated rotogravure printing machinery that is most efficiently used
for large production runs.

    Chadwicks. Chadwicks is based in England and is a leading provider of cut
dairy lids in the U.K. and Ireland. It also produces foil-based seals for the
food, fruit, beverage and chemical industries. Chadwicks specializes in
short-run sales orders typically required by the fragmented U.K. dairy products
market.

    Fortune Plastics. Fortune Plastics manufactures more than 2,000 different
flexible packaging products for the hospital and healthcare, the food and
delicatessen, and the service and janitorial markets in the U.S. Fortune's
manufacturing facilities are located in Connecticut, Tennessee, Florida, Arizona
and Illinois. Fortune extrudes polymer resin into film and converts it into
finished products. Fortune operates a computerized warehouse management system
that allows it to offer flexible ordering and delivery of multiple product items
in each consignment.

    Spiralkote. Spiralkote is located in Orlando Florida in the United States
and is the market leader in the flexographic spiral label segment of the frozen
concentrate, refrigerated dough, and snack markets.

Specialist Packaging

    The principal operating subsidiaries that comprise the specialist packaging
operations are described briefly below.

    The Boxes Group. The Boxes Group, which focuses on the U.K. folding cartons
market, is composed of four principal operating companies, all based in England.
Boxes (Edsons) is a supplier of folding cartons and leaflets to the U.K.
pharmaceutical, healthcare and household goods markets. Boxes (Prestige) is a
supplier of folding cartons to the cosmetics, toiletries and confectionery
markets. Boxes (GH) is a supplier of folding cartons for fast moving consumer
goods such as food and beverage cartons. Boxes (Ditone) supply self-adhesive
labels principally to the toiletries and household sectors.


                                       14
<PAGE>


    LPF Folding Cartons. LPF Folding Cartons based in the Netherlands was
acquired in April 2001 and produces packaging mainly for the confectionery,
household and personal care, food and photography markets.

    Linde Vouwkartonnage. Linde Vouwkartonnage based in the Netherlands,
produces small order quantities of specialist folding cartons for a wide
cross-section of industries.

    Nimax. Nimax, based in the Netherlands, specializes in the manufacture of
labels and leaflets mainly for the coffee, tea, yarns and household sectors.

    Guy & Company. Guy & Company is located in Ireland and produces
self-adhesive labels, leaflets and inserts for the pharmaceutical, healthcare
and electronics industries in the U.K. and Ireland. Guy & Company also
manufactures labels for the food and beverage markets in Ireland.

    Other U.K. and Irish businesses. There are a number of other subsidiaries in
the U.K. and Ireland that manufacture other specialist packaging products. These
include A.P. Burt, which manufactures paper and plastic bags in the U.K., and CB
Packaging and Munster Paper Sacks, which manufacture paper sacks for customers
in the construction, agricultural, horticultural and dairy sectors.

    BBF. BBF is located in Florida and is primarily engaged in printing business
documentation and packaging components with a particular focus on the healthcare
industry. Its products include direct mail products, pre-printed business forms,
labels and hospital patient tracking materials. BBF operates web-fed and
sheet-fed presses. Starting in 1996, BBF began to refocus its printing business
away from the low value-added computer stationery sector to higher-value added
products addressing the direct mail industry and in more recent years to labels
and other packaging components.

Manufacturing Processes

The principal flexible packaging manufacturing processes are as follows:

    Extrusion. The primary manufacturing process used in the plastic flexible
packaging businesses is extrusion. Extrusion involves melting polymer resins and
forcing the molten polymer through a die to form plastic film. This film can be
single-layer or multi-layer and can be in the form of a tube, in the case of
blown extrusion, or in sheet form in the case of cast extrusion. In either
instance, the resulting film is rapidly cooled and wound onto reels ready for
printing, conversion and finishing.

    Rolling, coating and laminating. Rolling, coating and laminating
technologies are used to produce foil-based packaging products. The principal
raw material used in the foil business is aluminum. Aluminum ingots are
purchased from commodity suppliers and third-party rolling mills are contracted
to roll the aluminum to a thickness of approximately 250 microns. We then take
delivery of aluminum rolls and further process them to produce much thinner
foils. In addition, many foil-based products require lamination or coating. In
the lamination process, two or more materials, typically aluminum foil and
either paper or plastic film, are bonded together in order to produce packaging
of two or more layers, frequently incorporating heat sealing and/or protective
characteristics.

    Metalizing. The metalizing process is used primarily to manufacture
cigarette box inner liners. This process involves vaporizing a metal, which is
then condensed and applied as a thin veneer onto a 'cold' surface, typically
paper, using electrolysis. As a result of recent technological advances, the
product preservation performance of metalized materials is often very close to
that of aluminum foil.

    Lacquering. Lacquering involves the application of a thin film of lacquer
onto a finished product in order to give it protective properties, to provide a
smooth surface for printing, a high gloss finish and/or sealing properties. The
Group produces both water-based and solvent-based lacquers. Most foil-based
flexible packaging products are lacquered.

    Rotogravure printing. This printing process is used to manufacture
high-quality printed flexible packaging at Nyffeler Corti in Switzerland. It
uses etched metal cylinders to apply ink directly to aluminum foil or plastic
film in order to reproduce a high-quality printed image. Given the expense and
long preparation times associated with this process, it is most efficiently used
for large production runs where a high standard of color fidelity is required.

                                       15
<PAGE>

    Flexographic printing. This printing process is used primarily to print
flexible packaging for confectionery, frozen food, beverage and household
products. This technology uses a pliable printing plate that transfers ink
directly onto the aluminum foil, plastic film or paper and entails lower costs
and shorter preparation times than rotogravure printing. It is thus better
suited to small and medium-size production runs.

The principal specialist packaging manufacturing processes are as follows:

    There are three principal processes in producing folding cartons: sheet-fed
lithographic offset printing, cutting and creasing, and gluing. The sheet-fed
lithographic offset printing process is used for its high quality image
reproduction. After printing, the paperboard sheets are often varnished for
protection, then cut, creased and glued for ease of assembly on customers'
packing lines.

    Sheet and web-fed printing presses are used to print both labels and
leaflets that are delivered to customers in sheet, reel or folded form. In
addition, specialized label presses are used to produce high quality
self-adhesive labels delivered to customers in reel form.

    Paper sacks are produced using flexographic printing to print the outer
layer. Multiple layers of paper are then formed into a tube and the sacks are
finished by cutting, folding and sealing.

Sales and Marketing

    The sales and marketing strategy of our operating companies is focused on
its own product-market combinations. Packaging customers are typically
corporations who regularly place orders. The sales staff consists of external
sales representatives and internal customer service representatives. External
sales representatives are focused on maintaining relationships with existing
customers and identifying new customers. They do this by making regular visits
to existing customers to discuss their requirements and by extending their
contact base to include other major purchasers within their principal product
market combinations. Internal customer service representatives are responsible
for processing sales orders, expediting production and liaising with customers
on order status. Sales staff are supported by technical staff who also interact
directly with the customers.

    Our sales staff employees are compensated via salary and / or commissions
and many are entitled to the use of company cars.

    The European flexible packaging operations employ approximately 130 sales
staff. The sales staff are assigned to product-market combinations which, are
generally focused within market sectors. For example, the Van der Windt sales
staff is divided between the agricultural, horticultural and industrial sectors.
Internal customer service representatives and technical support staff are based
at the various production facilities, while external sales representatives are
principally based in regional sales offices. The external sales representatives
are paid fixed salaries and incentives and the internal customer service
representatives and technical support staff are principally paid fixed salaries.

    U.S. flexible packaging operations employ approximately 20 sales staff.
Manufacturing representatives are also employed to sell products in the U.S.
pursuant to non-exclusive agency agreements on a commission basis. Regional
sales representatives are employed to manage the relationships with
manufacturing representatives. In contrast to the European strategy of selling
directly to end-users, most packaging sales in the U.S. are made through
independent distributors who supply the end-users with a complete range of
ancillary products. In particular, Fortune Plastics has a number of exclusive
distribution arrangements with distributors in particular regions. Although the
primary sales relationships are typically with distributors, U.S. sales and
technical support staff maintain relationships directly with the distributors'
customers to ensure that they are satisfied with the quality of our products and
to facilitate product development.

    Our Specialist packaging sales staff in the U.K. and Ireland total
approximately 150 employees and 110 employees in the U.S. Each company has its
own sales staff that targets specific product-market combinations focused within
the fast moving consumer goods, pharmaceutical and healthcare, electronics and
luxury goods sectors. Compensation for the sales staff is by salary.


                                       16
<PAGE>

Distribution

Packaging products

    The finished packaging products are delivered to customers either directly
or through contract carriers. In both cases customers take ownership of the
products upon receipt. In Europe, the services of third party carriers are
generally used to deliver packaging products to customers. However, some
companies, such as Wentus and Van der Windt, operate their own fleet of trucks
for deliveries. In the U.S., third party carriers are principally used to
deliver packaging products to customers. In order to maintain cost efficiencies,
products are not typically distributed outside a radius of 600 miles. However,
packaging products for local U.S. customers are typically delivered by our own
trucks. No long-term delivery contracts are held with any U.S. carriers.

Raw Materials

    Although the purchase of some materials is coordinated between plants, each
of the operating subsidiaries is responsible for its own raw material purchases.
The materials are typically purchased from suppliers local to the operations to
reduce transportation costs. Ownership generally transfers upon receipt of goods
at production facilities. Generally supply contracts for raw materials are not
entered into. However, the flexible packaging businesses operate minimum
purchase arrangements to secure volume discounts. These minimum supply contracts
do not have fixed price stipulations nor do they impose minimum purchase
obligations. To reduce obsolescence risk, raw materials are generally purchased
to fulfill orders from customers. The supplier payment terms vary by geographic
region.

    Our flexible packaging businesses convert polymer resins, aluminum foil and
paper. Significant quantities of lacquer and ink are also purchased. These
materials are used in a variety of manufacturing processes including extrusion
of polymer resins, rolling of aluminum foil, metalization of paper, lamination
of aluminum and paper or plastic, and lacquering.

    The principal raw materials used in the specialist packaging businesses are
paper and paperboard in sheet form, which is made in single and multi-layer
grades from wood pulp and recycled wastepaper, paper, self-adhesive labels and
resins. Typically paper is purchased from mills in continental Europe and the
U.S. and paperboard from board merchants in the U.K.

Key Suppliers

    The raw materials used by the Group are mainly commodity materials in
readily available supply, supplied by a large number of alternative suppliers.
Accordingly, whereas the Group does promote long-term partnership relationships
with suppliers, it does not have significant supplier dependencies.

Competition

    Competitors to our businesses are generally local to each of the markets we
operate in. There is no single competitor we compete with in all our markets.
Competition in the markets in which we operate is based principally on quality,
product performance and characteristics, service and price. There are additional
competitive pressures in some sectors due to increasing consolidation among our
customers and, in limited circumstances, due to foreign currency fluctuations.

    Both higher value-added products and high volume-lower margin products are
made. With respect to higher value-added products, competitive strength is based
on factors such as technological competence and support capability, the ability
to produce sophisticated products tailored to the specific needs of customers,
the ability to maintain confidentiality, a wide product range, product
innovation and the ability to deliver time-sensitive products in an efficient
manner. In addition, there is close involvement in developing the products that
customers need, as it can often be costly for them to change suppliers. With
respect to higher volume products, the competition is mainly on quality and
price as low costs of production are maintained through efficient use of plant.

    The principal competitive strengths promoted by our operations include: low
unit costs, ability to interchange material substrates, strong customer
relationships, manufacturing economies of scale, advanced technologies,
technological expertise in production processes and new product development, a
wide product range and efficient logistics and delivery systems. While customers
include large international companies and substantial organizations, the top 20
customers accounted for less than 17.5% of sales in 2002 (2001: 19.2% of sales)
and the largest customer accounted for approximately 2.9% of sales in 2002
(2001: 2.6% of sales).

                                       17
<PAGE>

Insurance

    Comprehensive insurance policies are maintained with respect to property
damage, business interruption, employers' liability, public/products liability
and contract works for all European subsidiaries. The U.S. subsidiaries
self-insure against claims up to $500,000 while the European subsidiaries
self-insure against claims of up to (euro)250,000. Claims greater than these
amounts are insured by third parties. The appropriate level of insurance is
maintained for the risks of the business and is comparable to that maintained by
other companies in the packaging industry.


                                       18
<PAGE>
Property, Plants and Equipment

    Clondalkin owns freehold title to 28 of the 36 principal properties used in
the businesses and leases the remaining properties. The following table sets out
certain information about the principal properties.
<TABLE>
<CAPTION>
 Facilities by Industry                                      Owned /        Plant /             Building
 and Country                       Subsidiary                Leased         Warehouse           (square feet)
----------------------------------------------------------------------------------------------------------------
<S>                                     <C>                     <C>             <C>                 <C>
 Flexible Packaging
 Belgium
    Hoogstraten                    Van der Windt              Leased         Warehouse              8,320

 England
    Bury                           Chadwicks                  Leased         Plant                 26,000
 Germany
    Hoxter                         Wentus                     Owned          Plant                237,775
    Dresden                        Hansel                     Leased         Plant                107,600


 Netherlands
    Harlingen                      Flexoplast                 Owned          Plant                114,097
    Grootegast                     Form Plastics              Owned          Plant                 61,246
    Honselersdijk                  Van der Windt              Owned          Warehouse            175,129
    Vaassen                        Vaassen Flexible Packaging Owned          Plant                280,906
    Weiringerwerf                  Velsen                     Owned          Plant                 92,569
    Leeuwarden                     LPF Flexibles              Leased         Plant                110,261
    Rotterdam                      Cats                       Leased         Plant                118,360

 Switzerland
    Kirchberg                      Nyffeler Corti             Owned          Plant                269,098

 United States
    Chicago, Illinois              Fortune Plastics           Leased         Plant                 30,000
    Lebanon, Tennessee             Fortune Plastics           Owned          Plant                 81,000
    Old Saybrook, Connecticut      Fortune Plastics           Owned          Plant                 97,367
    Orlando, Florida               Fortune Plastics           Owned          Plant                 42,000
    Phoenix, Arizona               Fortune Plastics           Owned          Plant                 47,000
    Orlando, Florida               Spiralkote                 Owned          Plant                 68,000

Specialist Packaging
 Ireland
    Dublin                         Cahill Printers            Owned          Plant                118,000
    Clonmel                        Munster Paper Sacks        Owned          Plant                 40,000
    Dublin                         CB Packaging               Owned          Plant                 92,000
    Cork                           Guy & Company              Owned          Plant                 72,000
    Dublin                         Wilkes-Cerdac              Leased         Plant                 23,500

England
    Blackburn                      Boxes (GH)                 Owned          Plant                 82,128
    Burnley                        Cakeboards                 Owned          Plant                 99,996
    Kimbolton                      Boxes (Ditone)             Owned          Plant                 22,000
    Leicester                      Cavendish Press            Owned          Plant                 28,000
    Bristol                        A P Burt                   Owned          Plant                 90,000
    Northampton                    Boxes (Prestige)           Leased         Plant                 42,000
    Watford                        Boxes (Edson)              Owned          Plant                 41,990

Netherlands
    Leeuwarden                     LPF Cartons                Leased         Plant                 73,507
    Denekamp                       Linde                      Owned          Plant                 32,280
    Elst                           Nimax                      Owned          Plant                 15,064

Scotland
    Kilmarnock                     Ritchie (U.K.)             Owned          Plant                 65,000

 United States
    Baltimore, Maryland            Art Litho                  Owned          Plant                 61,000
    Tampa, Florida                 BBF                        Owned          Plant                200,000
    Winston Salem, North Carolina  BBF                        Owned          Plant                 78,000
</TABLE>

    To secure bank borrowings, fixed and floating charges have been given in
respect of all freehold properties except the properties in Germany and
Switzerland and the Netherlands.

                                       19
<PAGE>

    All of the properties are well maintained and in good condition. Each
property is adequate for its immediate and future anticipated business needs.

    The aggregate annual lease payments in 2002 for leased properties were
approximately (euro)1,380,000 (2001: (euro)2,112,000 and 2000: (euro)1,520,000).
Except for the lease on Chadwicks' main plant (which expires in 2113), the
leases on properties expire between 2003 and 2009.


ITEM 5 - OPERATING AND FINANCIAL REVIEW AND PROSPECTS

    The following discussion and analysis should be read in conjunction our
consolidated financial statements, which are included in this Annual Report
beginning on page F-3. These financial statements are prepared in accordance
with Irish GAAP, which differs in certain significant respects from U.S. GAAP.
The main differences between Irish GAAP and U.S. GAAP, as they relate to us are
described in Note 33 to these consolidated financial statements.


2002 RESULTS COMPARED TO 2001

    The following discussion relates to the financial condition and results of
operations of Clondalkin Industries PLC and its subsidiaries for the year ended
December 31, 2002 compared to the results for the year ended December 31, 2001.

    In this commentary, the operating review is analyzed as between flexible
packaging and specialist packaging activities, which we adopted first for our
quarterly review of results for the quarter ended March 31, 2002.

    This change in commentary analysis, which replaces the packaging and
printing analysis we used in previous years, was prompted by the expansion of
our specialist packaging activities and the reduction in our printing
activities. In 2001, the expansion in specialist packaging has been propelled by
the EPH speciality packaging business acquisition and by BBF's increasing
emphasis on packaging manufacture in substitution for print manufacture.

Sales

Flexible Packaging

    Our flexible packaging businesses include our plastic / polymer based
businesses and our foils and laminate businesses. Our specialist packaging
businesses include folding cartons, labels and paper packaging and printing
businesses.

    Flexible packaging sales increased by (euro)10.1 million, or by 2.2%, from
(euro)463.8 million in the year ended December 31, 2001 compared to sales of
(euro)473.9 million in the year ended December 31, 2002. The increase is
primarily attributable to:

    o The acquisition of the EPH flexible packaging businesses in April 2001
      contributed an extra(euro)13.6 million to sales in the year ended December
      31, 2002; and
    o Increases in activity and improved sales mix.
    o These increases were offset by the depreciation of the U.S. dollar and
      sterling against the euro at December 31, 2002, compared to the
      corresponding exchange rates at December 31, 2001. This caused reported
      sales to decrease by (euro)6.9 million.
    o Additionally, lower selling prices in the year caused by lower average raw
      material costs for the year ended December 31, 2002 compared to the
      average costs in 2001 caused sales to decrease. The net price and volume
      increase effects caused sales to increase by (euro)3.4 million.

     We observed increased activity in our flexible packaging operations, with
the biggest increases reported in our foils and laminating businesses,
reflecting increased capacity as well as successful product and customer
developments.

    Our flexible packaging sales accounted for 66.7% of our total sales in
2002, compared to 65.2% in 2001.

                                       20

<PAGE>

Specialist Packaging

    Specialist packaging sales decreased by (euro)10.4 million or by 4.2% from
(euro)247.0 million in the year ended December 31, 2001 to (euro)236.6 million
in the year ended December 31, 2002. The decrease is primarily attributable to:

    o The depreciation of the U.S. dollar and sterling against the euro at
      December 31, 2002 compared to the corresponding exchange rates at
      December 31, 2001 caused reported sales to decrease by (euro)9.0 million;
      and
    o Reported sales also declined due to lower selling prices caused by lower
      average raw material costs in the year ended December 31, 2002 compared
      to 2001. These decreases were partly compensated by volume increases
      achieved in our folding cartons businesses. The net effect of the price
      and volume effects caused sales to decrease by (euro)7.3 million.
    o These decreases were partly offset by the acquisition of the EPH
      specialist packaging businesses in April 2001, which contributed an
      extra (euro)5.9 million to sales in the year ended December 31, 2002.

    The strongest advances compared to the prior year were recorded in our
folding cartons businesses due primarily to new business gains. The printing
operations recorded improved results, notwithstanding lower levels of activity
due to planned withdrawals from lower profitability work.

    Our specialist packaging sales accounted for 33.3% of our total sales in
2002, compared to 34.8% in 2001.

Cost of Sales

    Our cost of sales decreased by (euro)14.1 million, or by 2.4%, to
(euro)565.3 million which represents 79.6% of sales for 2002 compared to
(euro)579.4 million representing 81.5% of sales in 2001. The decrease in cost of
sales is primarily attributable to:

    o The depreciation of the U.S. dollar and sterling against the euro at
      December 31, 2002 compared to the corresponding exchange rates at
      December 31, 2001 caused reported cost of sales to decrease by
      (euro)12.3 million; and
    o Lower raw material costs obtained during the year ended December 31,
      2002 compared to 2001, across most of the materials we use. Increased
      activity in our businesses, mainly in our coating and laminating and
      folding cartons and resin converting businesses reflecting additional
      production throughput caused cost of sales to increase. The net effect
      of these price volume effects is that cost of sales decreased by
      (euro)17.5 million.
    o These decreases were offset by increases due to the acquisition of the
      EPH companies in April 2001 that resulted in an additional (euro)15.7
      million in cost of sales in the year ended December 31, 2002.

    At December 31, 2002, plastic resins, paper and paperboard materials were
at a higher cost level than at December 31, 2001 whereas the foil materials used
in our coating and laminating businesses were at a lower cost level at December
31, 2002 compared to December 31, 2001.

Flexible Packaging

    Our flexible packaging cost of sales decreased from (euro)380.9 million,
equivalent to 82.1% of sales, in 2001, to (euro)378.9 million, or 80.0% of
sales, in 2002. The increase in gross profit as a percentage of sales, up from
17.9% of sales to 20.0% of sales reflects many factors, mainly cost efficiency
gains and improved value added content in our mix of products.

    Gross profit increased in the year ended December 31, 2002 by (euro)12.1
million or by 14.6%, to (euro)95.0 million, compared to (euro)82.9 million for
the year ended December 31, 2001.

Specialist Packaging

    Our specialist packaging cost of sales decreased from (euro)198.4 million,
equivalent to 80.3% of sales in 2001, to (euro)186.4 million, or 78.8% of sales
in 2002. This represents an improvement in the gross profit margin from 19.7% of
sales in 2001 to 21.2% of sales in 2002. The gross profit improvement is mainly
due to cost efficiency gains and the higher value added content in our product
mix.

    Gross profit increased in the year ended December 31, 2002 by (euro)1.6
million or by 3.2%, to (euro)50.1 million, compared to (euro)48.6 million for
the year ended December 31, 2001.

                                       21

<PAGE>

Net Operating Costs

    The following table provides a breakdown of our net operating costs in the
year ended December 31, 2002 compared to the prior year.

<TABLE>
<CAPTION>
                                                     December 31,        % of          December 31,        % of
                                                          2002           sales             2001            sales
                                                  -------------------------------------------------------------------
                                                   (euro)thousands)                  (euro)thousands)
<S>                                                      <C>              <C>              <C>              <C>
Distribution costs                                       34,879           4.9%             36,414           5.1%
Administrative expenses                                  41,084           5.8%             38,741           5.5%
Profit on disposal of tangible fixed assets                (922)         (0.1%)              (813)         (0.1%)
Goodwill amortization                                    14,108           2.0%             13,681           1.9%
                                                  -------------------------------------------------------------------
Net operating costs                                      89,149          12.6%             88,023          12.4%
                                                  ===================================================================
</TABLE>

    Our 2002 net operating costs were (euro)89.1 million compared to (euro)88.0
million in 2001. Operating costs before goodwill amortization were (euro)75.0
million and (euro)74.3 million in 2002 and 2001 respectively. As a percentage of
sales, excluding goodwill amortized, our net operating costs increased from
10.5% to 10.6% of sales. In aggregate terms, our net operating costs before
goodwill amortization increased by (euro)0.7 million in 2002 compared to 2001.
This increase is primarily attributable to:

    o The  acquisition of the EPH companies in April 2001 contributed an
      additional(euro)1.6 million to net operating costs in 2002 compared to
      2001; and
    o Inflationary and higher activity effects caused operating costs to
      increase by (euro)1.2 million.
    o These net cost increases were offset by profits realized on the disposal
      of tangible fixed assets increased by (euro)0.1 million; and
    o The depreciation of the U.S. dollar and sterling against the euro at
      December 31, 2002 compared to the corresponding exchange rates at December
      31, 2001 which caused reported operating costs to decrease by (euro)2.2
      million.

Amortization of Goodwill

    Clondalkin Industries PLC recorded goodwill of (euro)254.4 million on the
acquisition by its subsidiary, Edgemead Limited, of Clondalkin Group Limited in
November 1999. In April 2001, an additional goodwill amount of (euro)31.2
million was recorded mainly related to the acquisition of the EPH group
businesses. Subject to impairment reviews, goodwill is amortized over 20 years.
In 2002, the Group acquired Spiralkote, a U.S. based foil and laminate packaging
business and recorded a discount on this acquisition of (euro)2.5 million. The
goodwill amortization charge for 2002 was (euro)14.1 million compared to
(euro)13.7 million charged in 2001. The increase of (euro)0.4 million in the
charge relates mainly an additional three months amortization charge in 2002 in
respect of the EPH goodwill on acquisition.

Operating profit

    The net effect of the above revenue and cost developments caused operating
profits to increase by (euro)12.5 million, or by 28.9%, to (euro)56.0 million in
the year ended December 31, 2002 compared to (euro)43.4 million in the year
ended December 31, 2001.

Exceptional items

    There were no exceptional income or costs recorded in 2002 or 2001.

                                       22

<PAGE>


Net Interest Payable

    The following table shows the composition of our interest payable in the
year ended December 31, 2002 compared to the prior year.

<TABLE>
<CAPTION>
                                                                       December 31,        December 31,
                                                                           2002                2001
                                                                   --------------------------------------
                                                                              (euro) thousands)
               <S>                                                          <C>                 <C>
         Bank and other loans - net interest expense                      16,344              21,663
         Senior notes of(euro)125 million at 10.625% coupon
         interest rate                                                    13,281              13,281
                                                                   --------------------------------------
         Cash interest payable                                            29,625              34,944

         Subordinated shareholders' loans 10% coupon                      15,907              13,981
         Debt issue cost amortization                                        595                 669
                                                                   --------------------------------------
         Net interest payable                                             46,127              49,594
                                                                   ======================================
</TABLE>

    The net cash interest payable decreased by (euro)5.3 million to (euro)29.6
million for the year ended December 31, 2002, compared to (euro)34.9 million for
2001. The decrease in the cash interest payable charge is mainly due to lower
interest rates and reflects the repayment of term borrowing of (euro)47.6
million in 2002 and (euro)27.8 million in 2001.

    The interest charge payable on the senior notes did not change in 2002
compared to 2001 as the loan amount of (euro)125 million and interest coupon of
10.625% are both fixed for the borrowing period until maturity in January 2010.
The annual interest charge of (euro)13.3 million is payable in two installments
each year, in January and July.

    The (euro)1.9 million increase in non cash payable interest on the
subordinated shareholders' loans is due mainly to the roll-up effects of adding
1999, 2000 and 2001 non cash interest payable accrued on shareholders' loan at
December 31, 2001. This roll-up effect caused the interest charge to increase by
(euro)1.4 million. Also, the draw down of non cash payable 10% interest coupon
parent company loans of (euro)20 million to part finance the EPH businesses
acquired in April 2001, caused the interest expense to increase by (euro)0.5
million in 2002 compared to 2001.

    The shareholders' loans annual interest rate coupon is 10%, payable as to a
maximum 5% per annum, subject to the various restrictions under the senior
credit facility and senior note financing documents. The practical effect of the
various financing undertakings is that the maximum annual interest payment on
shareholders' loans will not be greater than (euro)5.5 million and payments are
restricted until the Group's consolidated retained earnings are positive.

    The interest accrued on the shareholders' loans to December 31, 2002 is all
non-cash payable which results in it being accrued for on a cumulative basis.
Interest not paid is compounded with the loan principal at December 31 each
year.


Provisions for Income Taxes

    The provision for income taxes recorded for the year ended December 31, 2002
was (euro)8.0 million compared to (euro)2.0 million for the prior year 2001.
Excluding the effect of non-tax deductible goodwill amortization and other
non-deductible charges, mainly accrued interest, the effective tax rate for 2002
was 33.4% compared to 33.7% in 2001 before the deferred taxation restatement
effect. The restatement of the 2001 tax charge, prompted by the adoption of
Financial Reporting Standard 19 "Deferred Tax" caused the prior year tax charge
to be restated from (euro)2.8 million to (euro)2.0 million which is an effective
tax rate of 26.7%.

Profit/(Loss) on Ordinary Activities after Taxation

    The profit after taxation for the year ended December 31, 2002 was (euro)1.8
million compared to a loss after taxation of (euro)8.2 million for 2001.

                                       23

<PAGE>

OVERVIEW OF 2001 RESULTS COMPARED TO 2000

    The following discussion, which has been restated to comply with the
segmental format adopted in the year ended December 31, 2002, relates to the
financial condition and results of operations of Clondalkin Industries PLC and
its subsidiaries for the year ended December 31, 2001 compared to the results
for the year ended December 31, 2000.

Sales

Flexible Packaging

    Our flexible packaging businesses include our plastic / polymer based
businesses and our foils and laminate businesses. Flexible packaging sales
increased by (euro)48.1 million, or 11.6%, from (euro)415.6 million in 2000 to
(euro)463.8 million in 2001. This increase was primarily attributable to:

    o the acquisition of the EPH group flexible packaging businesses in April
      2001 contributed an extra(euro)39.0 million to sales;
    o the  appreciation  of the U.S.  dollar,  sterling  pound and Swiss franc
      against the Euro at December 31, 2001 compared to the corresponding rates
      at December 31, 2000 used to translate the non Euro denominated results
      caused reported sales to increase by (euro)6.5 million; and
    o existing activities, with acquisition and translation effects removed,
      contributed a net (euro)2.8 million of the sales increase. This increase
      is attributable to higher activity that fully compensated lower average
      raw material prices that prevailed for most of 2001 compared to 2000.

    Our flexible packaging sales accounted for 65.2% of our total sales in 2001,
compared to 65.0% in 2000.

Specialist Packaging

    Our specialist packaging businesses include folding cartons, labels, paper
packaging and commercial print businesses. Specialist packaging sales increased
by (euro)23.2 million, or 10.4%, from (euro) 223.8 million in 2000 to
(euro)247.0 million in 2001 and was attributable to:

    o the acquisition of the EPH group cartons and labels businesses in April
      2001 contributed an extra(euro)16.5 million to sales;
    o the  appreciation  of the sterling pound and U.S.  dollar against the Euro
      at December 31, 2001 compared to the  corresponding rate at December 31,
      2000 used to translate the non Euro denominated results caused reported
      sales to increase by (euro) 6.6 million;
    o Sales from existing operations, excluding acquisition and translation
      effects, increased by (euro)0.1 million with increased sales in our
      cartons and labels businesses offsetting lower sales in our commercial
      print operations.

    Our specialist packaging sales accounted for 34.8% of the Group's total
sales in 2001 compared to 35.0% in 2000.


Cost of Sales

    The cost of sales includes the cost of the raw materials used in the
production process, the cost of goods purchased for resale, labor costs directly
associated with production, depreciation and certain other production costs,
such as energy costs. It does not include costs incurred in the distribution of
products.

    The cost of sales increased from (euro)522.5 million, or 81.7% of sales in
2000, to (euro)579.3 million, or 81.5% of sales in 2001. The increase of
(euro)56.8 million in cost of sales is primarily attributable to:

    o the acquisition of EPH group businesses in April 2001 and the resultant
      increases in raw materials and labor costs associated with their
      manufacturing activities amounting to approximately (euro)46.6 million;
    o the 2001 currency translation effects, mainly due to the appreciation of
      the U.S. dollar and sterling pound against the Euro at December 31, 2001
      compared to the corresponding rates at December 31, 2000 used to translate
      the non Euro denominated results caused reported cost of sales to increase
      by (euro)8.3 million; and

                                       24

<PAGE>

    o increased volume throughput activity achieved entirely in our packaging
      operations caused cost of sales to increase by (euro)1.9 million. The
      increase in our packaging activities fully compensated lower average raw
      material prices that prevailed for most of 2001 compared to 2000 and lower
      print throughput.


Flexible Packaging

    Flexible packaging cost of sales decreased from 83.3% of segment sales in
2000 to 82.1% in 2001, equivalent to an increase in gross profit margin from
16.7% to 17.9%. The gross profit recorded in the year ended December 31, 2001
was (euro)82.9 million compared to (euro)69.3 million in 2000, up 19.6% or
(euro)13.6 million on sales up 11.6%.

    The gross profit achieved in flexible packaging businesses in the year ended
December 31, 2001 is up (euro)13.6 million or 19.6% on the prior year. The gross
profit increase is due to EPH group acquisition effects of (euro)6.4 million and
organic activity increases of (euro)7.3 million. We benefited in 2001 from new
production capacity added in recent years. We also benefited from increased
production efficiency, the expansion of the product range towards higher value
added products and from better coordination of activities between the companies
comprising these businesses. The easing raw material costs experienced in 2001
presented a more benign environment, compared to the pressure on gross profit
experienced in 2000 due to abnormally high raw material cost escalation in that
year.

Specialist Packaging

    Specialist packaging cost of sales increased from 78.7% of segment sales in
2000 to 80.3% in 2001, equivalent to a decrease in gross profit margin from
21.3% to 19.7%. The gross profit recorded in the year ended December 31, 2001
was (euro)48.6 million compared to (euro)47.6 million in 2000, up 2.0%
equivalent to (euro)1.0 million, on sales up 10.4%.

    The EPH group cartons and labels businesses accounted for (euro)2.5 million
of this increase. The remaining organic activity increase was modest primarily
reflecting increased gross profits achieved in our folding cartons and
specialist label businesses, offset by lower gross profit margins recorded in
our commercial print operations and one off additional trading costs arising on
our withdrawal from certain segments not producing an adequate return.


Net Operating Costs

    The following table provides a breakdown of our net operating costs in the
year ended December 31, 2001 compared to the prior year.

<TABLE>
<CAPTION>
                                                    December 31,         % of         December 31,         % of
                                                        2001             sales            2000             sales
                                                 --------------------------------------------------------------------
                                                  (euro)thousands)                  (euro)thousands)
<S>                                                      <C>              <C>              <C>              <C>
Distribution costs                                       36,414           5.1%             32,714           5.1%
Administrative expenses                                  38,741           5.5%             35,808           5.6%
Profit on disposal of tangible fixed assets                (813)         (0.1%)            (2,103)         (0.3%)
Goodwill amortization                                    13,681           1.9%             12,440           1.9%
                                                  -------------------------------------------------------------------
Net operating costs                                      88,023          12.4%             78,859          12.3%
                                                  ===================================================================
</TABLE>

    Our 2001 net operating costs were (euro)88.0 million compared to (euro)78.9
million in 2000. As a percentage of sales, excluding goodwill amortized, our net
operating costs increased from 10.4% to 10.5% of sales. In aggregate terms, our
net operating costs before goodwill amortization increased by (euro)7.9 million
in 2001 compared to 2000. This increase is primarily attributable to:

    o the acquisition of the EPH group businesses in April 2001 added(euro)4.7
      million to operating costs;
    o the appreciation  of the U.S. dollar, sterling  pound and Swiss franc
      against the Euro at the end of 2001 compared to the exchange rates at the
      end of 2000 accounted for(euro)1.3 million of the increase in reported net
      operating costs;
    o the decrease in profits on disposal of tangible  fixed assets to(euro)0.8
      million in 2001  compared to(euro)2.1 million in 2000 caused net operating
      costs to increase by(euro)1.3 million; and
    o other net operating costs increased by (euro)0.6 million, which is less
      than 1%. This modest increase reflects our operating companies' close
      attention to effecting cost savings.

                                       25

<PAGE>

Amortization of Goodwill

    Clondalkin Industries PLC recorded goodwill of (euro)254.4 million on the
acquisition by its subsidiary, Edgemead Limited, of Clondalkin Group Limited in
November 1999. In 2001, an additional goodwill amount of (euro)31.2 million was
recorded mainly related to the acquisition of the EPH group businesses. Subject
to impairment reviews, goodwill is amortized over 20 years. The goodwill
amortization charge for 2001 was (euro)13.7 million compared to the 2000
amortization of (euro)12.4 million. The increase of (euro)1.3 million in the
goodwill amortization charge relates mainly to the acquisition of the EPH group
businesses in April 2001.


Operating profit

     The net effect of the above revenue and cost developments caused operating
profits to increase by (euro)5.4 million, or by 14.1%, to (euro)43.4 million in
the year ended December 31, 2001 compared to (euro)38.1 million in the year
ended December 31, 2000.


Exceptional items

    There were no exceptional income or costs recorded in 2001.

    The exceptional costs incurred in the year ended December 31, 2000 amounted
to (euro)2.1 million and related to business termination costs, mainly employee
settlement costs, due to the restructuring of our print operations. An
exceptional gain of (euro)3.4 million was recorded in the year ended December
31, 2000 relating to a distribution received on the Group's financial investment
in the Kelvinside Group Limited.

Net Interest Payable

    The following table shows the composition of our interest payable in the
year ended December 31, 2001 compared to the prior year.
<TABLE>
<CAPTION>
                                                                       December 31,        December 31,
                                                                          2001                2000
                                                                   --------------------------------------
                                                                              (euro) thousands)
          <S>                                                               <C>                 <C>
         Bank and other loans - net interest expense                      21,663              22,470
         Senior notes 10.625% coupon interest rate and
          mezzanine finance                                               13,281              13,369
                                                                   --------------------------------------
         Cash interest payable                                            34,944              35,839

         Subordinated shareholders' loans 10% coupon                      13,981              11,253
         Debt issue cost amortization                                        669                 458
                                                                   --------------------------------------
         Net interest payable                                             49,594              47,550
                                                                   ======================================
</TABLE>

    The net interest charge, including accrued interest on shareholders' loans,
increased by (euro)2.0 million to (euro)49.6 million for the year ended December
31, 2001 compared to (euro)47.6 million for 2000. The main changes in the
composition of the interest charges between 2001 and 2000 are as follows:

    o Before the EPH group acquisition debt financing effects, cash payable
      interest on the senior credit bank facility decreased by approximately
      (euro)2.9 million in the year ended December 31, 2001 compared to the
      2000 interest payable. This is mainly due to the repayment of debt. In
      the two years ended December 31, 2001, we have repaid (euro)44.3 million
      bank term debt. Also we have not drawn on the (euro)35 million revolver
      facility in year ended December 31, 2001 compared to between (euro)15
      million and (euro)20 million regular usage during 2000;
    o The draw down of (euro)30 million senior credit bank facility in April
      2001 to part finance the acquisition of the EPH group caused interest
      payable to increase by (euro)1.5 million in the year;
    o The appreciation of the U.S. dollar and sterling pound and the Swiss
      franc against the Euro at December 30, 2001 compared to the corresponding
      rates at December, 2000, caused the interest charge to increase by
      (euro)0.7 million in the year; and
    o The interest expense on the senior notes at(euro)13.3 million in 2001 is
      down modestly due the repayment of the mezzanine finance with the senior
      note proceeds in January 2000.

                                       26

<PAGE>

    In aggregate, the net effect of the above movements is that the net cash
payable interest decreased by (euro)0.9 million to (euro)34.9 million in 2001
compared to (euro)35.8 million in 2000.

    Non cash payable interest on shareholder loans increased by (euro)2.7
million to (euro)14.0 million in the year ended December 31, 2001 compared to
(euro)11.3 million for the previous year. This increase is due to the draw down
of non cash payable 10% coupon interest shareholders' loans of (euro)20 million
to part finance the acquisition of the EPH group in April 2001 causing a
(euro)1.5 million interest increase. Also, the roll-up effects of adding 1999
and 2000 non cash interest payable accrued on shareholders' loan at December 31,
2000 caused interest to increase by (euro)1.2 million in 2001.


    The (euro)125 million senior note interest rate coupon is fixed at 10.625%
per annum and is payable in two installments each year in January and July until
maturity in January 2010.

    The shareholders' loans annual interest rate coupon is 10%, payable as to a
maximum 5% per annum, subject to the various restrictions under the senior
credit facility and senior note financing documents. The practical effect of the
various financing undertakings is that the maximum annual interest payment on
shareholders' loans will not be greater than (euro)5.5 million and payments are
restricted until the Group's consolidated retained earnings are positive. The
interest on the shareholders' loans to December 31, 2001 is all non-cash payable
and is accrued for on a cumulative basis every year. Interest not paid is
compounded with the loan principal at December 31 each year.


Provisions for Income Taxes

    The provision for income taxes recorded for the year ended December 31, 2001
was (euro)2.0 million compared to (euro)3.2 million for the prior year 2000.
Excluding the effect of non-tax deductible goodwill amortization and other
non-deductible charges, mainly accrued interest, the effective tax rate for 2001
was 33.7% compared to 32.4% in 2001 before the deferred taxation restatement
effect. The restatement of the 2001 tax charge, prompted by the adoption of
Financial Reporting Standard 19 "Deferred Tax" caused the 2001 tax charge to be
restated from (euro)2.8 million to (euro)2.0 million and the 2000 tax charge to
be restated from (euro)458,000 to (euro)1.9 million. The effective tax rates for
2001 and 2000 including the FRS 19 restatement effect were 26.7% and 45.1%
respectively.


Loss on Ordinary Activities after Taxation

    The loss after taxation for the year ended December 31, 2001 was (euro)8.2
million compared to (euro)10.1 million for the prior year 2000.


                                       27

<PAGE>

Liquidity and Capital Resources

    The following table provides a summary of our cash flows since the Group was
privatized in November 1999:
<TABLE>
<CAPTION>
                                                                                                             Eight weeks
                                                                                 Year ended                        ended
                                                                                December 31,                 December 31,
                                                        ------------------------------------------------------------------
                                                             Total        2002         2001        2000             1999
                                                        ------------------------------------------------------------------
                                                        (euro)'000                     (euro) thousands
<S>                                                        <C>          <C>          <C>         <C>              <C>
Cash flow from operating activities                        279,465      92,098       82,395      79,645           25,327
Sale of assets held for disposal                            24,569       6,475           --      18,094               --
Sale of tangible fixed assets                                6,057       1,722        1,469       2,866               --
Distribution received on financial assets                    3,426          --           --       3,426               --
Proceeds from share issued                                      10          --           --          --               10
Loan from parent company                                   134,333          --       20,000       2,133          112,200
                                                        ------------------------------------------------------------------
Total cash inflow                                          447,860     100,295      103,864     106,164          137,537
                                                        ------------------------------------------------------------------

Interest paid net of interest receipts                     (97,521)    (29,928)     (35,857)    (29,235)          (2,501)
Taxation paid                                              (16,837)     (3,983)      (3,136)     (7,606)          (2,112)
Purchase of tangible fixed assets                          (51,404)    (17,555)     (19,977)    (11,054)          (2,818)
Subsidiaries acquired                                      (50,890)     (2,054)     (48,836)         --               --
Clondalkin Group acquired                                 (499,627)         --         (346)    (12,117)        (487,164)
Deferred acquisition consideration paid                     (9,081)       (330)        (608)     (8,143)              --
Business termination costs                                  (2,085)         --           --      (2,085)              --
                                                        ------------------------------------------------------------------
Total cash outflow                                        (727,445)    (53,850)    (108,760)    (70,240)        (494,595)
                                                        ------------------------------------------------------------------

(Increase) decrease in debt net of cash                   (279,585)     46,445       (4,896)     35,924         (357,058)
                                                        ==================================================================

(Funded) applied as follows
Mezzanine finance repaid (drawn)                                --          --           --     120,000        (120,000)
Issue of senior notes                                     (125,000)         --           --    (125,000)              --
Payment of fees in respect of acquisition financing            706          --          706          --               --
Finance costs paid including legal costs                     5,000          --          900       4,100               --
Bank debt repaid - term and revolver                       111,673      47,569       27,794      36,310               --
Bank debt drawn                                           (315,540)         --      (30,000)         --         (285,540)
Increase (decrease) in cash and bank deposits               43,576      (1,124)      (4,296)        514           48,482
                                                        ------------------------------------------------------------------
(Increase)  decrease in debt net of cash                  (279,585)     46,445       (4,896)     35,924         (357,058)
                                                        ==================================================================
</TABLE>

    Cash Flow

    The following cash flow milestones have been achieved over the past three
years:

    o The Group's operating cash inflow since it was privatized just over three
      years ago is (euro)279.5 million;
    o The operating cash inflow includes a reduction of funds tied up in working
      capital in the period of (euro)30.0 million;
    o We realized proceeds on surplus asset disposals of (euro)24.6 million;
    o We invested (euro)51.4 million in our existing operations to add new
      technologies and additional capacities;
    o We invested (euro)50.9 million in acquiring new businesses to complement
      our existing Product Market Combinations in our preferred operating
      segments;
    o We repaid debt and debt equivalents of(euro)111.7 million;
    o We paid (euro)9.1 million of deferred payments due in respect of
      acquisitions completed before the privatization; and
    o Our cash balances increased by (euro)43.6 million since the privatization.

    At December 31, 2002 our gross senior bank debt was (euro)206.1 million and
our net senior bank debt was (euro)163.4 million. This compares with gross bank
facilities provided by our bank syndicate of (euro)330 million to fund the
acquisition of Clondalkin Group Limited and the subsequent acquisition of the
EPH Group of companies.

                                       28

<PAGE>


    Cash flow developments in 2002 compared to 2001

    Our principal source of liquidity is operating cash flow. Our operating cash
flow increased from (euro)82.4 million in the year ended December 31, 2001 to
(euro)92.1 million in the year ended December 31, 2002, due to the increase in
operating profit as explained in Management Discussion and Analysis.

    Our other main cash inflows in 2002 were:

    o Proceeds from the disposal of tangible fixed assets arising in the
      ordinary  course of asset  replacement  and retirement were (euro)1.7
      million (2001:(euro)1.5 million); and
    o We sold surplus assets during the year and realized(euro)6.5 million
      (2001: nil).

    The total cash inflows, described above, from operating activities, from
shareholder financing and from asset sales amounted to (euro)100.3 million in
the year ended December 31, 2002 compared with (euro)103.9 million in the year
ended December 31, 2001.

    The main cash outflows in the period were as follows:

    o Interest costs paid in 2002 were (euro)29.9 million compared to (euro)35.9
      million in 2001. The decrease in interest payments of (euro)6.0 million is
      mainly due to the decrease in the cash interest charge as already
      explained;
    o Taxation paid in 2002 was(euro)4.0 million compared to(euro)3.1 million
      in 2001;
    o Payments in respect of tangible fixed asset additions were (euro)17.6
      million in 2002 compared to (euro)20.0 million paid in 2001. The
      investments in tangible fixed assets in both years were mainly production
      capacity additions;
    o Payments for subsidiaries acquired, at (euro)2.1 million, relates to the
      Spiralkote acquisition in December 2002; and
    o Deferred acquisition consideration payments in respect of acquisitions
      completed by Clondalkin Group Limited before December 31, 1999 were
      (euro)0.3 million in 2002, compared to (euro)0.6 million in 2001. At
      December 31, 2002, there are no further deferred consideration
      entitlements due.

    The above cash inflows and outflows produced a net cash inflow surplus of
(euro)46.4 million. We used this surplus to repay bank borrowings, including
(euro)23.2 million prepaid early on a voluntary basis.

    Gross indebtedness under the senior bank facilities decreased from
(euro)277.0 million at December 31, 2001 to (euro)206.1 million at December 31,
2002. The decrease of (euro)70.9 million comprises loans repaid of (euro)47.5
million and currency translation effects of (euro)23.4 million which caused our
debt to decrease, due to the depreciation of the U.S. dollar and sterling
against the euro at December 31, 2002 compared to the exchange rates at December
31, 2001. Our senior credit bank facility debt is denominated in U.S. dollars,
sterling, Swiss francs and euro to align the debt servicing requirements with
underlying cash flows in these currencies.

    Cash balances decreased from (euro)46.5 million at December 31, 2001 to
(euro)42.6 million at December 31, 2002, a decrease of (euro)3.9 million. Of
this decrease, (euro)2.8 million represents currency translation effects. The
remaining decrease of (euro)1.1 million represents cash balances we used, in
addition to cash generated by our businesses, to repay debt.


Sources of Finance

    At December 31, 2002 the Group had drawn term loans of (euro)195.6 million
drawn under the senior credit facility agreement and (euro)10.5 million due
under Industrial Development Revenue Bonds, secured by letters of credit issued
under the senior credit facility agreement. The term loans were drawn in U.S.
dollars, sterling pounds, Swiss francs and Euro to align the Group's total long
term debt service requirements with approximate annual cash flows by currency
denomination.

    The total borrowings available under the term loan facilities have been
fully drawn down. Interest is payable on the bank debt at a margin of between
1.5% and 3% above the inter-bank offer rates appropriate to the currency of draw
down.

    At December 31, 2002, the Industrial Development Revenue Bonds carried an
interest of 1.75% as to (euro)5.7 million of the outstanding debt and 1.56% on
the remainder of (euro)4.8 million.

    In addition to the term loan facilities, revolving credit facilities up to
(euro)35.0 million may be utilized in connection with short period borrowings of
one, three and six months and for letters of credit and lender guarantees and
other working capital and foreign exchange requirements. At December 31, 2002 we
had no drawings under this facility except to cover outstanding foreign exchange
contracts and letters of credit.

                                       29

<PAGE>

The following provides a description of the financing instruments available or
outstanding at the year end:


10.625% Senior notes

    On January 28 2000, the Group issued (euro)125,000,000 10.625% fixed
interest senior notes due in January 2010. The maturity may be accelerated at
the option of the note holders in certain limited circumstances, such as change
of control of Clondalkin Industries. The annual interest charge on the senior
notes is payable in two installments in January and July each year. The senior
notes are unsecured obligations of Clondalkin Industries, the issuer. Edgemead
has guaranteed the senior notes. The guarantee is a general obligation that
becomes due 179 days after a payment default or earlier in limited circumstances
and is subordinated to the rights of the lenders under the senior credit
facility agreement. The guarantee ranks equally with or senior to any other
current or future subordinated indebtedness of Edgemead. Additionally, under the
terms of the senior note indenture agreement, the Group has entered into various
covenants, which place restrictions on the incurrence of additional indebtedness
and dividend and other shareholder payments and liens.

Shareholders' loans

    The shareholders' loans, which mature in 2010, are subordinated to the
prior rights of the bank debt and the senior notes and do not qualify for
repayment until the bank debt is repaid and while the senior notes are unpaid,
significant restrictions on repayment are also applied. The shareholder loan
notes carry a coupon interest rate of 10%, payable as to 5%, subject to various
restrictions under the senior credit facility and senior note indenture
agreements. Interest accrued in the year ended December 31 2002 and earlier
periods are not payable. Interest not paid is compounded with the principal
amount outstanding each year.

    The Group has provided a combination of first priority fixed and floating
charges over most of its tangible and intangible assets as collateral for the
bank loans, including the revolving credit facilities. Where such charges were
not attached to assets, alternative security enforcement rights such as share
pledges have been given. In addition, the security agent for the bank syndicate
holds an A ordinary share in Edgemead. This share entitles the agent to withhold
consent to proceed with an insolvency procedure for a specified standstill
period of 179 days. The senior credit facility agreement also prescribes
operating and financial covenants. These include requirements to maintain
minimum ratios of earnings to interest charges, cash flow to total debt service
requirements, maximum indebtedness conditions and capital expenditure
maintenance.


Credit Statistics

    The credit statistics for the year ended December 31, 2002 are as follows:

    o The EBiTDA times cash interest payable cover for the year ended December
      31, 2002 was 3.17 and is improved from 2.33 in 2001;

    o The year end bank debt net of cash  balances and senior notes times EBiTDA
      ratio was 3.11 for the year ended  December 31, 2002 and is improved from
      4.29 in 2001; and

    o The EBiTDA minus net capital expenditures times cash interest expense
      returned at 2.63 compared to 1.81 in 2001.

    For the year ended December 31, 2002, we met our bank covenant conditions
with EBiTDA headroom clearances ranging from (euro)26.9 million to (euro)35.7
million.

    Based on our operating cash flow and on the commitments of which we are
aware of at this time we believe that the facilities available are sufficient to
meet our short term and long term requirements.


                                       30

<PAGE>


Contractual Obligations and Commercial Commitments
<TABLE>
<CAPTION>

                                                                        Payments Due by Period
                                                               Less than                                     Due after
Contractual Obligations                             Total       one year   1 - 3  years     4 -5 years      five years
                                        -------------------------------------------------------------------------------
                                                                           (euro) thousands
<S>                                                <C>             <C>            <C>            <C>             <C>
Long term debt  (1), (2)                          206,053         21,720         82,099         61,539          40,695
Senior notes (1)                                  125,000              -              -              -         125,000
Shareholders' loans                               132,547              -              -              -         132,547
Interest due on shareholders' loans                42,413              -              -              -          42,413
Operating leases (2)                               11,739          3,237          3,704            963           3,835
Capital expenditure contracted for (2)              4,838          4,838              -              -               -
                                        -------------------------------------------------------------------------------
Total contractual cash obligations                522,590         29,795         85,803         62,502         344,490
                                        ===============================================================================


                                                                  Amount of Commitment Expiration Per Period
                                            Total Amounts      Less than                                     Due after
Other Commercial Commitments                    Committed       one year   1 - 3  years     4 -5 years      five years
                                        -------------------------------------------------------------------------------
                                                                     (euro) thousands
Foreign currency contracts (3)                      8,821          8,186            635              -               -
Standby letters of credit                             942            942              -              -               -
                                                                                                                     -
                                        -------------------------------------------------------------------------------
Total                                               9,763          9,128            635              -               -
                                        ===============================================================================
</TABLE>

    Notes

    (1)  These debt instruments are subject to certain restrictive financial
         covenants. If there is any violation of such covenants, these payments
         could be accelerated.

    (2)  These payments represent the Euro conversion of the actual obligations,
         which are based on varying currencies, using the December 31, 2002
         exchange rate. The amount of Euro payments is subject to changes based
         on variation in the exchange rates, however the actual cash payment (in
         local currency) is fixed.

    (3)  These commitments are based on the maturity value of equivalent
         instruments at the balance sheet date. The amount is subject to change
         based the actual exchange rate variances in the future.


                                       31

<PAGE>


Critical accounting policies

    The preparation of financial statements in conformity with Irish GAAP
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities at the date of the financial statements and
revenues and expenses during the period. Significant accounting policies
employed by the Group, including the use of estimates, are presented in the
Notes to Consolidated Financial Statements. Critical accounting policies are
those that are most important to the portrayal of Group's financial condition
and results of operations, and require management's most difficult, subjective
or complex judgments, as a result of the need to make estimates about the effect
of matters that are inherently uncertain. The Corporation's most critical
accounting policies are discussed below. Actual results could differ from
estimates used in employing the critical accounting policies, although the
Corporation does not believe that any differences would materially affect its
financial condition or results of operations.

Revenue recognition

Revenue is derived from product sales to customers.

Revenue is recognized when all of the following criteria are met; persuasive
evidence of an arrangement exists; delivery has occurred; vendor's fee is fixed
or determinable; and collectibility is reasonably assured.

Accordingly, revenue is recognized where a binding purchase order exists,
shipment has occurred and title to product has passed to the customer, net of
allowances for estimated future returns, provided no collection uncertainties
remain. The establishment of allowances for estimated returns and the assessment
of collection require our management to exercise judgment, which will be
primarily based on historical trends, payment history and specific credit
information. While historical losses have been within our expectations and
provisions, if these estimates are revised in the future based on additional
facts, this may result in the recording of additional allowances in future
periods which would reduce income in that period.

Goodwill

Goodwill represents the difference between

(i)  The fair value attributable to the net separable assets of undertakings
     acquired, and;

(ii) The fair value of the acquisition consideration.

Goodwill is capitalized and classified as an asset on the balance sheet.
Goodwill is amortized on a straight line basis over its useful economic life
(not exceeding twenty years), which has been determined by reference to the
periods over which the value of the underlying businesses are expected to exceed
the values of their identifiable net assets.

Reviews are performed on an annual basis to determine whether facts or
circumstances exist which indicate that the carrying value of goodwill is
impaired.

The Company assesses the recoverability of goodwill by comparing the projected
undiscounted cash flows of the entity acquired against the respective carrying
amount of goodwill. Impairment, if any, is based on the fair value of the
goodwill and will result in the carrying value of the goodwill being reduced by
the estimated shortfall of cash flows. No impairment has been indicated to date.
The financial information used in this impairment analysis is based on the best
estimates at the time the impairment analysis is completed. Although we
currently believe that the estimates used in the evaluation of goodwill are
reasonable, differences between actual and expected revenue, operating results,
and cash flow could cause these assets to be deemed impaired. If this were to
occur, we would be required to charge to earnings the write-down in value of
such assets, which could have a material adverse effect on our results of
operations and financial position.

Stocks

Stocks are stated at the lower of cost and net realizable value on a
first-in-first out basis. Cost includes direct costs and applicable production
and other relevant overheads. Net realizable value is actual or estimated
selling price less trade discounts, all further costs to completion and all
costs to be incurred in marketing, selling and distribution. Our management are
required to make estimates of net realizable value of stocks at each balance
sheet date based on their experience and judgment. Management frequently reviews
inventory to determine the necessity of reserves for excess, obsolete or
unsaleable inventory. These reviews require management to assess customer and
market demand. These estimates may prove to be inaccurate, in which case we may
have overstated or understated the reserve required for excess, obsolete or
unsaleable inventory.

                                       32

<PAGE>

Deferred taxation

On January 1, 2002 the Group adopted Financial Reporting Standard 19 'Deferred
Tax' (FRS 19). Under FRS 19, deferred tax is recognized in respect of timing
differences that have originated but not reversed at the balance sheet date
where transactions or events have occurred at the balance sheet date that result
in an obligation to pay more tax or a right to pay less tax in the future.

Timing differences are differences between profit as computed for taxation
purposes and profit as stated in the financial statements which arise between
certain items of income and expenditure in the financial statements which are
dealt with in different periods for taxation purposes.

Deferred tax assets are regarded as recoverable and therefore recognized only
when, on the basis of all available evidence, it can be regarded as more likely
than not that there will be suitable taxable profits from which the future
reversal of the underlying timing differences can be deducted.

Deferred tax is measured at the tax rates that are expected to reverse based on
tax rates and laws enacted or substantially enacted at the balance sheet date.
Deferred tax is measured on a non-discounted basis.

On adoption of FRS 19, the Group has changed its accounting policy in respect of
deferred taxation for all years presented and restated prior year results
accordingly. The cumulative effect of the adoption of FRS 19 for the years prior
to the years presented has been booked directly to equity. The impact of this
restatement is set out in Note 21.

Deferred tax is provided for based on current tax legislation in the
jurisdictions in which the Group operates. Changes in tax legislation and/or
changes in the tax rates applied in each jurisdiction could have a significant
effect on the deferred tax liability recorded in the balance sheet and on the
deferred tax charge recorded in the profit and loss account.

Pensions

Contributions to defined benefit pension schemes are based on the advice of
independent professional actuaries and are charged to the profit and loss
account so as to spread the cost of pensions over the employees' working lives
as a level percentage of pensionable pay. Contributions to defined contribution
pension schemes are charged on an accruals basis. The Group continues to use
SSAP 24 "Accounting for pension costs" to account for pension costs and provides
the required disclosures under FRS 17 "Retirement Benefits". The actuarial
assessments are based on certain assumptions including the return on assets,
discount rates, and other variables. The assumptions used in determining the
pension cost are subject to judgement and may change based on actual results in
the future. Changes to these assumptions may result in additional costs to be
recorded in future periods in order to revise these estimate.



Differences between Irish GAAP and U.S. GAAP

    The profit on ordinary activities after taxation for 2002 of (euro)1.8
million, loss on ordinary activities after taxation for 2001 of (euro)8.2
million and 2000 of (euro)10.1, under Irish GAAP, compares with a net profit
(euro)20.7 million and a net loss of (euro)11.9 million and (euro)8.5 million
respectively under U.S. GAAP.

    Shareholders' equity for 2002 of ((euro)17.0) million and 2001 of
((euro)18.5) million, under Irish GAAP, compare with shareholders' equity of
((euro)5.2) million and (euro)25.6) million, respectively, under U.S. GAAP.

    The differences between Irish and U.S. GAAP are disclosed in Note 33 in the
Notes to the Consolidated Financial Statements. They arise principally from the
differing accounting treatment for amortization of goodwill and other intangible
assets, deferred income taxes and pensions follows:

Goodwill

Goodwill under Irish GAAP is amortized over the estimated life (not to exceed
twenty years).

Under U.S. GAAP goodwill is accounted for as follows:

    o Periods ending on or before December 31, 2001

    For periods ending on or before December 31, 2001 goodwill was amortized on
    a straight line basis over its useful economic life.

                                       33

<PAGE>

    Goodwill recognized in respect of each significant business combination was
    amortized over a period of 20 years on a straight line basis depending on
    the nature of the goodwill, and was evaluated for impairment when events or
    changes in circumstances indicate, in management's judgment, that the
    carrying value of such assets may not be recoverable. Impairments of
    goodwill were recognized if expected undiscounted cash flows were not
    sufficient to recover the goodwill. If a material impairment was
    identified, goodwill was written down to its estimated fair value. Fair
    value was determined based on the present value of expected net cash flows
    to be generated by the business, discounted using a rate commensurate with
    the risks involved.

    o Periods commencing January 1, 2002

    Effective January 1, 2002, the Group adopted SFAS 142, "Goodwill and Other
    Intangible Assets" ("SFAS 142"). The statement directs that goodwill and
    intangible assets that have indefinite useful lives will not be amortized
    but rather will be tested at least annually for impairment. Intangible
    assets that have finite lives will continue to be amortized over their
    useful lives, but without the constraint of an arbitrary ceiling. Going
    forward, the Company will carry out an annual impairment review of goodwill
    as of the September 30 anniversary date unless any events occur which
    trigger the need for an earlier impairment review.

    With the introduction of FASB statement no 142 "Goodwill and Other
    Intangible Assets" goodwill is not required to be amortized over its useful
    economic life under U.S. GAAP. Impairment reviews are required to be
    performed and the value of goodwill must be written down where the review
    indicates that impairment has occurred. The requirements of FASB statement
    number 142 have been applied from January 1, 2002.

    The transitional provisions of SFAS 142 require disclosure of reported net
    income in all periods presented, exclusive of amortization expense
    recognized in those periods related to goodwill and the effects of other
    accounting changes pursuant to the adoption of SFAS 142. Those disclosures
    are set forth below, presented as a reconciliation from net income as
    stated.


In addition, there is a difference between the amount recorded as goodwill for
Irish GAAP and U.S. GAAP. Upon the original formation in 1999 there were certain
items, described below, which resulted in a different goodwill balance and the
acquisition in 2002 there was negative goodwill which is reflected in the net
goodwill balance for Irish GAAP which has reduced tangible fixed assets for U.S.
GAAP purposes. This difference has a direct impact on the amortization expense
reflected for each period presented.

Pension costs

Under Irish GAAP, pension costs in respect, of defined benefit plans are
assessed in accordance with the advice of independent actuaries, using
assumptions and methods which, taken as a whole, produce the actuaries' best
estimates of the cost of providing the pension benefits promised.

U.S. GAAP, pension costs are determined in accordance with SFAS 87 "Employers
Accounting for Pensions" ("SFAS 87") and SFAS 88, "Employers' Accounting for
Settlements and Curtailments of Defined Benefit Pension Plans and for
Termination Benefits" ("SFAS 88").

Differences between the Irish GAAP and U.S. GAAP figures arise from the
requirement to use different methods and assumptions for valuing scheme assets,
the required use of projected benefit unit credit method for costing purposes
under U.S.GAAP and a different method of amortizing surpluses or deficits.

Deferred taxation

Under Irish GAAP, deferred taxation is recognized in respect of all timing
differences that have originated but not reversed at the balance sheet date
where transactions or events that result in an obligation to pay more tax in the
future or a right to pay less tax in the future, have occurred at the balance
sheet date.

Under U.S. GAAP, deferred tax liabilities relating to temporary timing
differences are fully provided for and future benefits are recognized as
deferred tax assets to the extent that their realization is more likely than
not.

Under Irish GAAP, FRS 19 requires deferred tax to be provided on all
liabilities. Deferred tax assets are recognized only to the extent that it is
considered more likely than not there will be suitable taxable profits from
which future reversal of the underlying timing differences can be deducted. In
certain circumstances, where it is expected to take some time for tax losses to
be relived, it may not be appropriate to recognize the deferred tax assets at
all.

                                       34

<PAGE>

Under U.S. GAAP, deferred tax assets and liabilities are recognized for the
estimated future consequences of events attributable to differences between the
financial statements carrying amounts of existing assets and liabilities and
their respective tax bases and operating and capital loss and tax credits
forward. Deferred tax assets are reduced through the establishment of a
valuation allowance at such time as, based on available evidence, it is more
likely than not that the deferred tax assets will not be realized. This may
result in deferred tax assets being recognized for U.S. GAAP purposes which do
not comply with Irish GAAP criteria. There were no such items in the periods
presented.

Under Irish GAAP, deferred tax is not provided on the revaluation of fixed
assets. Under U.S. GAAP such a provision is made. The quantitative effect in the
difference between the standards is (euro)8,044,000 (2001:(euro)8,350,000).

Under Irish GAAP, deferred tax is provided on the pension surpluses arising on
acquisition of companies. Under U.S. GAAP, such a provision is not made. The
quantitative effect in the difference between the standards is (euro)1,624,000
(2001: (euro)1,739,000).

Under Irish GAAP, deferred tax is based on tax rates and laws that have been
enacted or substantively enacted. For U.S. GAAP, only tax rates and laws that
have been enacted have been taken into account. This difference has not resulted
in any material difference in 2002, 2001 and 2000.

Under Irish GAAP, passing certain criteria, the group may net deferred tax
liabilities and assets and present a net balance in the balance sheet, within
provisions for liabilities and charges. Additionally, under Irish GAAP the tax
rate reconciliation is performed to the current tax charge for the year.

Under U.S. GAAP deferred taxes are classified between current and non-current,
depending on the items they relate to, disclosed separately and presented on a
net basis, by tax jurisdiction. Additionally, under U.S. GAAP the tax rate
reconciliation is performed to the total tax charge for the year.

New U.S. accounting pronouncements

In June 2001, the Financial Accounting Standards Board (FASB) issued SFAS 143,
"Accounting for Asset Retirement Obligations" ("SFAS 143"). SFAS 143 requires
that the fair value of a liability for asset retirement obligations be
recognized in the period in which it is incurred if a reasonable estimate of the
fair value can be made. The associated asset retirement costs are capitalized as
part of the carrying amount of the related long-lived asset. SFAS 143 is
effective for financial statements issued for fiscal years beginning after June
15, 2002. The Group has assessed the potential impact of the adoption of SFAS.
143 and concluded that there is no impact.

In April 2002, the FASB issued SFAS. 145, "Rescission of FASB Statements No.4,
44 and 64, Amendment of FASB Statement No.13 and Technical Corrections" ("SFAS
145"). The principal change is that gains or losses from extinguishment of debt
which are classified as extraordinary items by SFAS 4 will no longer be
classified as such. The provisions of SFAS 145 are effective for fiscal years
beginning after May 15, 2002 although early application of the Statement related
to the rescission of SFAS 4 is encouraged. The Group plans to adopt SFAS 145 for
its fiscal year ending December 31, 2003.

In June 2002, the FASB issued SFAS 146, "Accounting for Costs Associated with
Exit or Disposal Activities" ("SFAS 146"), which addresses accounting and
processing for costs associated with exit or disposal activities and nullifies
Emerging Issues Task Force (EITF) Issue 94-3, "Liability Recognition for Certain
Employee Termination Benefits and Other Costs to Exit and Activity (including
Certain Costs Incurred in a Restructuring)" (Issue 94-3). SFAS 146 requires that
a liability for a cost associated with an exit or disposal liability be
recognized when the liability is incurred. Under Issue 94-3, a liability for an
exit cost was recognized at the date of an entity's commitment to an exit plan.
Under SFAS 146, fair value is the objective for initial measurement of the
liability. SFAS 146 is effective for exit or disposal activities that are
initiated after December 31, 2002, with early application encouraged. The Group
does no expect the adoption of SFAS. 146 to have a material impact on our
financial position, results of operations or cash flows.

In December 2002, the FASB issued SFAS 148, "Accounting for Stock-Based
Compensation-Transition and Disclosure" ("SFAS 148"). SFAS 148 amends SFAS 123
and provides alternative methods of transition for a voluntary change to the
fair value based method of accounting for stock-based employee compensation.
SFAS 148 also amends the disclosure requirements of SFAS 123 to require more
prominent and frequent disclosures in financial statements about the effects of
stock-based compensation. The transition guidance and annual disclosure
provisions of SFAS 148 are effective for financial statements issued for fiscal
years ending after December 15, 2002. The interim disclosure provisions are
effective for financial reports containing financial statements for interim
periods beginning after December 15, 2002. As the Group does not have any
outstanding stock options there will be no impact of the adoption off SFAS 148.

                                       35

<PAGE>

In November 2002, the FASB issued Interpretation FIN No. 45, "Guarantor's
Accounting and Disclosure Requirements for Guarantees, Including Indirect
Guarantees of Indebtedness of Others" ("FIN 45"). This interpretation elaborates
on the disclosures to be made by a guarantor in its interim and annual financial
statements about its obligations under certain guarantees that it has issued. It
also clarifies that a guarantor is required to recognize, at the inception of a
guarantee, a liability for the fair value of the obligation undertaken in
issuing the guarantee. The disclosure requirements of FIN 45 are effective for
interim and annual periods after December 15, 2002. The initial recognition and
initial measurement requirements of FIN 45 are effective prospectively for
guarantees issued or modified after December 31, 2002. The Group is assessing,
but at this point does not believe the adoption of the recognition and initial
measurement requirements of FIN 45 will have a material impact on its financial
position, cash flows or results of operations

In January 2003, the FASB issued Interpretation FIN No. 46, "Consolidation of
Variable Interest Entities, an Interpretation of APB No. 51" ("FIN 46"). FIN 46
requires certain variable interest entities to be consolidated by the primary
beneficiary of the entity if the equity investors in the entity do not have the
characteristics of a controlling financial interest or do not have sufficient
equity at risk for the entity to finance its activities without additional
subordinated financial support from other parties. FIN 46 is effective for all
new variable interest entities created or acquired after January 31, 2003. For
variable interest entities created or acquired prior to February 1, 2003, the
provisions of FIN 46 must be applied for the first interim or annual period
beginning after June 15, 2003. The Group is currently evaluating the effect that
the adoption of FIN 46 will have on its results of operations and financial
condition.


                                       36

<PAGE>


ITEM 6 - DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

    The following table sets out certain information about the members of the
boards of directors of Clondalkin Group Holdings Limited, Clondalkin Industries,
Edgemead Limited and Clondalkin Group Limited.

         Name                                                              Age

         Directors of Clondalkin Group Holdings Limited
         Henry Lund                                                         61
         Norbert McDermott                                                  52
         Colman O'Neill                                                     45
         Marek Gumienny                                                     44
         Ian Gray                                                           41

         Directors of Clondalkin Industries PLC
         Norbert McDermott                                                  52
         Colman O'Neill                                                     45
         Liam Bergin                                                        44

         Directors of Edgemead Limited
         Norbert McDermott                                                  52
         Colman O'Neill                                                     45
         Liam Bergin                                                        44

         Directors of Clondalkin Group Limited
         Norbert McDermott                                                  52
         Colman O'Neill                                                     45
         Derek Scally                                                       55
         Liam Bergin                                                        44

    The following table lists the members of senior management and their
positions.
<TABLE>
<CAPTION>
         Name                           Age                                                       Position
          <S>                           <C>                                                         <C>
         Norbert McDermott              52                                                 Chief Executive
         Colman O'Neill                 45                                                Finance Director
         Derek Scally                   55                                            Development Director
         Joe Baker                      56                                                  President, BBF
         Arthur Barlow                  38                            Vice President, European Development
         Liam Bergin                    44                               Chief Executive, Irish Operations
         Gordon Cunningham              59                                      Managing Director, Ritchie
         Marinus Ditzel                 54                   Managing Director, Vaassen Flexible Packaging
         John Duhig                     64                                     President, Fortune Plastics
         Jim Farrell                    32                                 Chief Financial Officer (Europe)
         Paul Hogan                     39                                   Chief Financial Officer (U.S.)
         Allen Jerman                   58                                  Managing Director, Boxes Group
         John Voetman                   50                                Managing Director, Van der Windt
</TABLE>

Board of Directors and Officers

Directors of Clondalkin Group Limited

    Norbert McDermott joined Clondalkin in 1980 and has been a member of the
board of directors since 1997. He has been Chief Executive of Clondalkin Group
since 1998. Previously he worked in the U.K. and Germany, and he has over
eighteen years' experience in operational and development positions. Prior to
his appointment as Chief Executive, he was the Development Director at
Clondalkin Group. He graduated from University College Dublin with a degree in
physics and mathematics. As part of his MBA studies, he attended University
College Dublin and the University of Chicago.

                                       37

<PAGE>

    Colman O'Neill has been Finance Director since 1991. He joined Clondalkin
Group in 1988 as Group Financial Controller. Previously he worked with Price
Waterhouse in Ireland, Italy and the U.S., with specialized experience in
initial public offerings, due diligence, acquisitions and in auditing. He is a
Fellow of the Institute of Chartered Accountants in Ireland. He holds bachelor
of commerce and master of business studies degrees from University College
Dublin.

    Derek Scally has been a member of the board of directors since 1991. He
joined Clondalkin Group in 1982 as General Manager of the subsidiary Swiftbrook
before being appointed Chief Financial Officer of Clondalkin Group's U.S.
operations in 1987. As Development Director, he has responsibility for
acquisitions and development. Previously he was employed in a food distribution
company as financial controller, and gained professional experience in auditing
with a firm of chartered accountants. For his MBA, he attended University
College Dublin.

    Liam Bergin joined Clondalkin Group in 1986, as Assistant Group Secretary.
He became Group Secretary shortly thereafter, and he presently holds the
position of Chief Executive of Irish Operations. Prior to this, he gained
experience in the company secretarial divisions of Ernst & Young and Touche Ross
& Co, and he has been an Associate of the Institute of Chartered Secretaries &
Administrators in Ireland since 1985.

Officers

    Joe Baker has been President of BBF since 1985. He started his career at BBF
in 1963, and has held a number of positions, including Vice
President-Manufacturing, Plant Manager and Production Control Manager. Since
1986, he has held senior professional appointments at IBFI, including Chairman
of the Board, Treasurer and Pension Plan Trustee. He holds a degree in business
administration and is a member of the board of directors of the Printing
Industries of Florida.

    Arthur Barlow has been Vice President for European Development since 1998.
Previously, he was General Manager of Brittas Plastics, a subsidiary of
Clondalkin Group. He joined Clondalkin Group in 1988 as an acquisition analyst.
He holds a bachelor degree in economics and politics, and received his MBA from
University College Dublin.

    Gordon Cunningham has been the Managing Director of Ritchie since 1995.
Prior to this appointment, he held the position of Group Sales Director from
1991 and held management positions in the firm's racing and football division
between 1987 and 1991. He has extensive experience in running businesses in the
leisure industry.

    Marinus Ditzel is the Managing Director of Vaassen Flexible Packaging and
has held senior management positions at Vaassen since 1984, including Head of
Sales and Deputy General Manager. Prior to this, he has held a range of
management positions, with a focus on exports and sales. He holds a bachelor of
engineering degree.

    John Duhig has been the President of Fortune Plastics since 1987. Prior to
that, he was president of the U.S. flexible packaging division of Lawson Mardon,
a leading international packaging company. Prior to that he held similar
positions in a number of other flexible packaging companies. He holds a bachelor
of engineering degree from University College Dublin.

    Jim Farrell has held the position of Chief Financial Officer (Europe) since
1999. He has held various internal audit roles since joining Clondalkin Group in
1996. Prior to this, he worked for Ernst & Young as a Senior Auditor. He holds a
bachelor degree in accounting and finance from Dublin City University. He is a
member of the Institute of Chartered Accountants in Ireland.

    Paul Hogan has been Chief Financial Officer (U.S.) since 1994, in which
capacity he also has responsibility for the development of the U.S. business
operations. Previously he was Group Internal Auditor of Clondalkin Group from
1991 and Audit Supervisor for Price Waterhouse from 1988. He holds a degree in
business studies from Trinity College Dublin and is a Fellow of the Institute of
Chartered Accountants in Ireland.

    Allen Jerman is the Managing Director of the Boxes Group. He was appointed
to this position in May 1999. He has worked in the packaging industry for over
30 years and most recently was Managing Director of Lawson Mardon's carton
businesses in the U.K.

    John Voetman has been Managing Director of Van der Windt since 1996, prior
to which he was Financial Director for five years. He is a registered accountant
in the Netherlands and during the 1970s and 1980s he held senior financial
positions with departments of the Amsterdam local government, including internal
auditing manager and financial manager for the health service.

                                       38

<PAGE>

    The aggregate amount of compensation paid in 2002 by the Clondalkin Group to
these directors and officers, including salaries, bonuses and payments to
pension plans, was (euro)3,027,000. (2001: (euro)2,967,000).

Board Practices

    Clondalkin Group Holdings Limited's board of directors currently has five
members. The articles of association of Clondalkin Group Holdings provide that
Clondalkin Group Holdings is required to have a minimum of two directors with no
upper limit. Directors are elected by shareholders in general meeting or by the
board, although the current directors were appointed pursuant to the
Shareholders' Agreement dated September 8, 1999. Directors may be removed
without cause by a resolution of the shareholders but otherwise cannot be
removed except for cause. Shareholders voting against a resolution to remove an
Investor Director are deemed to have three times the votes of a person voting in
favor of such a resolution. Such causes include the prohibition by law of a
director acting in such capacity, the bankruptcy of a director, mental
incapacity or absence from meetings for a period of six months.

    Clondalkin Industries' board of directors currently has three members. The
articles of association of Clondalkin Industries provide for a minimum of two
directors and a maximum of ten. Directors are elected by shareholders in general
meeting or by the board. Directors may be removed without cause by a resolution
of the shareholders but otherwise cannot be removed except for cause. Such
causes include the prohibition by law of a director acting in such capacity, the
bankruptcy of a director, mental incapacity or absence from meetings for a
period of six months.

    Edgemead's board of directors currently has three members. The articles of
association of Edgemead provide that Edgemead is required to have a minimum of
two directors and a maximum of ten. Directors are elected by shareholders in
general meeting or by the board. Directors may be removed without cause by a
resolution of the shareholders but otherwise cannot be removed except for cause.
Such reasons include the prohibition by law of a director acting in such
capacity, the bankruptcy of a director, mental incapacity or absence from
meetings for a period of six months.

    The Clondalkin Group's board of directors currently has four members. The
articles of association of Clondalkin Group (Predecessor) provide that it is
required to have a minimum of two directors, with no upper limit. Directors may
be removed without cause by resolution of the shareholders but otherwise cannot
be removed except for cause. Such reasons include the prohibition by law of a
director acting in such capacity, the bankruptcy of a director, mental
incapacity or absence from meetings for a period of six months. Directors are
elected by a general meeting of shareholders or by the board. The articles of
association provide that one-third of the directors is required to resign
annually and the annual general meeting of shareholders may elect directors to
replace those resigning. There is no limit on the number of times that a
director may be re-elected.

Compensation

    For the year ended December 31, 2002, the aggregate compensation of the
directors and officers of Clondalkin Industries paid or accrued was
(euro)2,633,000 (2001: (euro)2,762,000). The aggregate amount set aside or
accrued by the Group for the year ended December 31, 2002 to provide pension,
retirement or similar benefits for the directors and officers included in the
aggregate compensation was (euro)210,000 (2001: (euro)205,000). Performance
related benefits paid or payable to directors and officers also included in the
aggregate compensation in 2002 amounted to (euro)184,000 (2001: (euro)159,000).

Employees

    At December 31, 2002, the Group employed 3,982 employees, which was a
decrease of 123 employees from December 31, 2001. The average number of
employees was 4,047 for the year ended December 31, 2002, 3,989 for the year
ended December 31,2001 and 3,787 for the year ended December 31, 2000.

    Most operating subsidiaries maintain employee pension plans, which may be
defined benefit plans or defined contribution plans. Defined contribution
pension plans predominate and where practicable are being introduced to replace
defined benefit arrangements.

    The subsidiaries' defined benefit plans are adequately funded on a current
funding level basis.

                                       39

<PAGE>

    Subsidiaries in the U.K., Ireland, Germany and the Netherlands are subject
to either industry-wide collective bargaining agreements or national collective
agreements. The U.S. subsidiaries are not subject to collective bargaining
agreements. In the last three years, no material labor disputes have been
experienced and relations with employees are good.

Share Ownership

    There are currently no shares in the Clondalkin Industries PLC held by
directors or officers. For a description of the interests of directors and
officers in Clondalkin Group Holdings Limited, as well as the option
arrangements, see Item 7 - Major Shareholders and Related Party Transactions.

    Under the terms of the offer to option holders made by Clondalkin Group
Holdings Limited, options over 520,000 ordinary shares in Clondalkin Group
(Predecessor) remain outstanding. Upon exercise, the option holders, and or
Clondalkin Group Holdings Limited, have the right to exchange the Clondalkin
Group (Predecessor) shares acquired for a total of 617 preference shares in
Clondalkin Group Holdings Limited, representing 1.1% of its fully diluted share
capital, and a total of (euro)1,928,125 loan notes in Clondalkin Group Holdings
Limited.


ITEM 7 - MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

    The issued share capital of Clondalkin Industries consists of 38,095
ordinary shares of (euro)1.00 each. Two shares of Clondalkin Industries are
fully paid up with the remaining issued shares paid up as to (euro)0.25 per
share. All shares are held by Clondalkin Group Holdings Limited. The authorized
share capital of Clondalkin Group Holdings Limited consists of 14,054 ordinary
shares of (euro)0.01 each and 45,556 preferred ordinary shares of (euro)0.01
each. Clondalkin Group Holdings Limited has issued 10,000 ordinary shares and
41,571 preferred ordinary shares, all of which are fully paid up. The unissued
preferred ordinary share capital is reserved to meet the subscription rights of
holders of certain options. These subscription rights arise under arrangements
concluded for holders of existing Clondalkin Group (Predecessor) share options
in connection with the acquisition. Subscription rights will be exercisable upon
exit, or earlier in certain circumstances.

    The following table shows the principal shareholders in Clondalkin Group
Holdings Limited ("CGHL") at December 31, 2002.
<TABLE>
<CAPTION>
                                                                                           Number of
                                                                       Number of           preferred          % of fully
                                                                 ordinary shares     ordinary shares      diluted equity
Principal shareholders                                        of (euro)0.01 each     (euro)0.01 each             of CGHL
-------------------------------------------------------------------------------------------------------------------------
<S>                                                                           <C>                <C>                 <C>
Candover Investments PLC                                                      Nil              3,506                6.16
Candover Partners                                                             Nil             29,225               51.32
Candover (Trustees) Limited                                                   Nil                390                0.68
Standard Life Investment (Private Equity) Limited                             Nil              3,680                6.46
HarbourVest International Private Equity Partners III                         Nil              3,680                6.46
Liam Bergin                                                                   715                 46                1.51
Norbert McDermott                                                           2,000                194                4.34
Colman O'Neill                                                                715                 16                1.46
Other                                                                       6,570                834               14.60
                                                             ------------------------------------------------------------
    Total of Issued Share Capital                                          10,000             41,571               93.00

Reserved for Holders of Options                                               Nil              3,985                7.00
                                                             ------------------------------------------------------------
    Total of Fully Diluted Share Capital                                   10,000             45,556              100.00
                                                             ============================================================
</TABLE>

    Candover, is a leading European and U.S. backed arranger and provider of
private equity for large European buyouts. Since its formation in 1980, Candover
has invested in 115 transactions with an aggregate value in excess of (pound)21
billion. In addition to its status as a publicly quoted investment trust with an
audited net asset value at December 31, 2001 of approximately (pound)250
million, Candover Investments, through its wholly owned subsidiary Candover
Partners, manages funds invested in various limited partnerships. To date,
Candover has managed eight funds totaling (pound)3.0 billion; the most recent of
which is the (pound)1.8 billion Candover 2001 fund. Standard Life Investment
(Private Equity) Limited and HarbourVest International Private Equity Partners
III acquired a 12.70% shareholder interest in Clondalkin Group Holdings Limited
from Candover Investments, Candover Partners and Candover Trustees in February
2000 and subsequently increased their holding to 12.92% in April 2001.

                                       40

<PAGE>

Related Party Transactions

    The executive directors and officers and other members of management of
Clondalkin Group (Predecessor) either participated directly in the purchase of
predecessor company and / or subsequently bought ordinary shares and preference
shares in Clondalkin Group Holdings Limited. The total management equity
interest in Clondalkin Group Holdings Limited on a fully diluted basis is
28.91%.


ITEM 8 - FINANCIAL INFORMATION

Please see the Company's Consolidated Financial Statements included under Item
17 of this Form 20-F.


ITEM 9 - THE OFFER AND LISTING

The following table sets forth, for the periods and dates indicated, the price
history of the notes quoted on the Luxembourg Stock Exchange. The 10.625% fixed
interest senior notes due 2010 issued by Clondalkin Industries PLC are traded in
the over-the-counter market and there is no active public trading market for
such securities.


       Year Ended                          High            Low
       --------------------------------------------------------------
                                          (euro)          (euro)
                                      -------------------------------
       December 31, 2002                   111.0          101.0

       Quarter Ended
       ------------------------------

       March 31, 2002                      108.0          107.0
       June 30, 2002                       111.0          107.0
       September 30, 2002                  108.0          101.5
       December 31, 2002                   108.0          101.0

       Month Ended
       ------------------------------

       October 2002                        103.5          101.0
       November 2002                       107.0          104.5
       December 2002                       108.0          108.0
       January 2003                        109.0          108.0
       February 2003                       110.5          110.0
       March 2003                          111.0          110.5

    Management does not have any reliable information as to the position of the
senior notes held in the United States of America or the number of record
holders of senior notes in the United States of America.


                                       41

<PAGE>

ITEM 10 - ADDITIONAL INFORMATION

Exchange Controls

    There are currently no Irish foreign exchange control restrictions on the
payment of interest on the senior notes or on the conduct of Clondalkin
Industries' operations.

    There are also no limitations under the laws of Ireland or under the
Memorandum and Articles of Association of the Company restricting the right of
persons not resident in Ireland to hold the senior notes.


Taxation

United States Taxation

    The following generally summarizes the material U.S. federal income tax
consequences of the acquisition, ownership and disposition of notes by a U.S.
Holder, as defined below. This summary deals only with noteholders that will
hold notes as capital assets. The discussion does not cover all aspects of U.S.
federal taxation that may be relevant to, or the actual tax effect that any of
the matters described herein will have on, the acquisition, ownership or
disposition of notes by particular investors, and does not address state, local,
foreign or other tax laws. In particular, this summary does not address tax
considerations applicable to investors that own (directly or indirectly) 10% or
more of the voting shares of Clondalkin Industries, nor does this summary
discuss all of the tax considerations that may be relevant to certain types of
investors subject to special treatment under the U.S. federal income tax laws
(such as banks, insurance companies, investors liable for the alternative
minimum tax, individual retirement accounts and other tax-deferred accounts,
tax-exempt organizations, dealers in securities or currencies, investors that
will hold the notes as part of straddles, hedging transactions or conversion
transactions for U.S. federal tax purposes or investors whose functional
currency is not the U.S. dollar).

    As used herein, the term `U.S. Holder' means a beneficial owner of the notes
that is (1) a citizen or resident of the U.S. for U.S. federal income tax
purposes, (2) business entity organized under laws of the U.S. or any State or
District of Columbia and which is treated as a corporation under U.S. tax
principles. `Non-U.S. Holder' means a beneficial owner of a note that is (1) a
nonresident alien individual, (2) a business entity organized under the laws of
a country other than the U.S. and which is treated as a corporation under U.S.
tax principles. Partnerships, trust and other various types of fiscally
transparent entities may be subject to complex U.S. withholding and reporting
rules, and it is recommended those holders of the note who fall into these
categories consult U.S. tax specialist for further guidance. Any holder of the
note which is a non-incorporated entity must also consider the effect of so
called "check-the-box regulations", the entity classification regulations, in
order to correctly assess its U.S. tax reporting and withholding certificate
requirements. The entity classification under the U.S. tax principles may result
in different treatment from the classification under the corporate law or tax
law of the host country in which such an entity is organized. It is highly
recommended that those note holders which are not natural persons and are
organized or formed under non-U.S. law consult U.S. tax advisors.

    This discussion assumes that the notes will be treated as debt for U.S.
federal income tax purposes.

    This discussion is based on the Code, its legislative history, existing and
proposed regulations thereunder, published rulings and court decisions, all as
currently in effect and all subject to change at any time, perhaps with
retroactive effect.

Payment of Interest

General

    Interest on a note will be taxable to a U.S. Holder as ordinary income at
the time it is received or accrued, depending on the holder's method of
accounting for tax purposes. Interest paid by Clondalkin Industries on the notes
will generally constitute income from sources outside the U.S. and will
generally be treated for U.S. foreign tax credit purposes as "passive income,"
(or "high withholding tax interest" if the applicable tax is imposed at a rate
of 5% or more) or, in the case of certain holders, "financial services income."
If taxes must be withheld by Clondalkin Industries or paid by the U.S. Holder,
Clondalkin Industries would, with certain exceptions, be liable for the payment
of additional amounts so that the U.S. Holder would receive the same amounts
payable had no such withholding taxes been imposed. If such additional amounts
are paid due to the imposition of Irish withholding taxes, the U.S. Holder will
be treated as having actually received the amount of Irish taxes withheld by
Clondalkin Industries with respect to a note, and as then having paid over such

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withheld taxes to the Irish taxing authorities. As a result, the amount of
interest income included in gross income for U.S. federal income tax purposes by
a U.S. Holder with respect to a payment of interest may be greater than the
amount of cash actually received by the U.S. Holder with respect to such
payment. Subject to certain limitations, a U.S. Holder would generally be
entitled to a credit against its U.S. federal income tax liability, or a
deduction in computing its U.S. federal taxable income, for Irish withholding
taxes withheld by Clondalkin Industries and paid over to the Irish taxing
authorities or for any taxes paid directly to the Irish taxing authorities.


Foreign Currency Denominated Interest

    If an interest payment is denominated in, or determined by reference to, a
foreign currency, the amount of income recognized by a cash basis U.S. Holder
will be the U.S. dollar value of the interest payment, based on the spot rate in
effect on the date of receipt, regardless of whether the payment is in fact
converted into U.S. dollars.

    An accrual basis U.S. Holder may determine the amount of income recognized
with respect to accrued interest denominated in, or determined by reference to,
a foreign currency in accordance with either of two methods. Under the first
method, the amount of income accrued will be the U.S. dollar value of the
accrued interest based on the average rate, being the average of the spot rates,
in effect during the interest accrual period (or, with respect of an accrual
period that spans two taxable years of a U.S. Holder, the part of the period
within the taxable year). A spot rate is a rate that is demonstrated to reflect
a fair market rate of exchange available to the public for currency under a spot
contract in a free market and involving representative amounts.

    Under the second method, the U.S. Holder may elect to determine the amount
of income accrued on the basis of the spot rate in effect on the last day of the
accrual period or, in the case of an accrual period that spans two taxable
years, the spot rate in effect on the last day of the part of the period within
the taxable year.

    Additionally, if a payment of interest is actually received within five
business days of the last day of the accrual period or taxable year, an electing
accrual basis U.S. Holder may determine the amount of income accrued on the
basis of the spot rate in effect on the date of receipt. Any such election will
apply to all debt instruments held by the U.S. Holder at the beginning of the
first taxable year to which the election applies or thereafter acquired by the
U.S. Holder, and will be irrevocable without the consent of the Internal Revenue
Service (the "IRS").

    Upon receipt of the interest payment (including a payment attributable to
accrued but unpaid interest upon the sale or retirement of a note) denominated
in, or determined by reference to, a foreign currency, the U.S. Holder will
recognize ordinary income or loss with respect to accrued interest income in an
amount equal to the difference between the U.S. dollar value of the payment
received (determined using the spot rate in effect on the date such payment is
received) in respect of such interest accrual period and the U.S. dollar value
of the interest income that has accrued during such interest accrual period (as
determined by one of the two above methods) regardless of whether the payment is
in fact converted into U.S. dollars.

Purchase, Sale and Retirement of notes

    A U.S. Holder's tax basis in a note will generally be its U.S. dollar cost
(as defined below) reduced by (1) the amount of any payments that are not
interest payments, and (2) the amount of any amortizable bond premium applied to
reduce interest on the note. The U.S. dollar cost of a note purchased with a
foreign currency will generally be the U.S. dollar value of the purchase price
on the date of purchase or, in the case of notes traded on an established
securities market, as defined in the applicable Treasury Regulations, that are
purchased by a cash basis U.S. Holder (or an accrual basis U.S. Holder that so
elects), on the settlement date for the purchase.

    Except as noted below, a U.S. Holder will generally recognize gain or loss
on the sale or retirement of a note equal to the difference between the amount
realized on the sale or retirement (other than any amount attributable to
accrued interest) and the tax basis of the note. The amount realized on a sale
or retirement for an amount in foreign currency will be the U.S. dollar value of
such amount on the date of sale or retirement or, in the case of notes traded on
an established securities market, as defined in the applicable Treasury
Regulations, sold by a cash basis U.S. Holder (or an accrual basis U.S. Holder
that so elects), on the settlement date for the sale. Except as described in the
next paragraph, gain or loss recognized on the sale or retirement of a note will
be capital gain or loss and will be long-term capital gain or loss if the note
was held for more than one year.

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    Gain or loss recognized by a U.S. Holder with respect to the principal
amount of a note on the sale or retirement of a note that is attributable to
changes in exchange rates will be treated as ordinary income or loss. Such gain
or loss will be determined by reference to the difference between the U.S.
dollar amount of the principal on the date such principal is received or deemed
received, determined using the spot rate on such date, and the U.S. dollar
amount of the principal on the date the note was acquired, determined using the
spot rate on the date the note was acquired. However, exchange gain or loss is
taken into account only to the extent of total gain or loss realized on the
transaction.

    Gain realized by a U.S. Holder on the sale or retirement of a note generally
will be U.S. source income. The deductibility of capital losses is subject to
limitations. Prospective investors should consult their tax advisers with regard
to their particular situation, as to the foreign tax credit implications of such
sale or retirement of notes.

Exchange of Amounts in other than U.S. Dollars

    Foreign currency received as interest on a note or on the sale or retirement
of a note will have a tax basis equal to its U.S. dollar value at the time such
interest is received or at the time of such sale or retirement. Foreign currency
that is purchased will generally have a tax basis equal to the U.S. dollar value
of the foreign currency on the date of purchase. Any gain or loss recognized on
a sale or other disposition of a foreign currency (including its use to purchase
notes or upon exchange for U.S. dollars) will be ordinary income or loss.

Non-U.S. Holders

    In general, subject to the discussion below of special rules that may apply
to certain Non-U.S. Holders and the discussion below of backup withholding, (a)
payments of principal, interest and any additional amounts by Clondalkin
Industries or any paying agent to a Non-U.S. Holder will not be subject to U.S.
federal income or withholding tax, (b) gain realized by a Non-U.S. Holder on the
sale, exchange, redemption, retirement or other disposition of the notes is not
subject to U.S. federal income tax or withholding tax and (c) the notes are not
subject to U.S. federal estate tax, if beneficially owned by an individual who
was a Non-U.S. Holder at the time of his death. Special rules may apply in the
case of Non-U.S. Holders (1) that are engaged in a U.S. trade or business, (2)
that are former citizens or long-term residents of the U.S., "controlled foreign
corporations," "foreign personal holding companies," corporations which
accumulate earnings to avoid U.S. federal income tax, and certain foreign
charitable organizations, each within the meaning of the Internal Revenue Code
of 1986. Such persons are urged to consult their U.S. tax advisers, with regard
to their particular situation, before purchasing notes.

Withholding Certificate and Information Reporting

    The interest income on the note is generally expected to be foreign source,
and the interest received by a Non-U.S. Holder is generally not subject to U.S.
tax nor U.S. withholding tax, provided that the Non-U.S. Holder provides
necessary documentation to prove the `foreign status' as explained below. The
interest received by a U.S. Holder is generally subject to a reporting
requirement. Under the requirement, each Depository Trust Company participant or
indirect participant holding an interest in a note on behalf of a beneficial
owner of a note and each paying agent making payment in respect of a note is
generally required to provide the IRS with certain information, including such
beneficial owner's name, address, taxpayer identification number (either such
beneficial owner's Social Security number, its employer identification number or
its IRS individual taxpayer identification number, as the case may be), and the
aggregate amount of principal, interest, and original issue discount paid to
such beneficial owner during the calendar year. These reporting requirement does
not apply to interest received by foreign beneficial owners and certain other
types of beneficial owners, including corporations, securities broker-dealers,
other financial institutions, tax-exempt organizations, qualified pension and
profit sharing trusts and individual retirement accounts. Foreign beneficial
owners generally include non-resident alien individuals and corporations and
other entities organized under the laws of a country other than the U.S. and
which are not fiscally transparent under U.S. tax principles, who receive
economic benefit of the interest income. For a foreign beneficial owner to
qualify for the exemption from the reporting requirement, the `payer' must be
able to identify the beneficial owner as a foreign beneficial owner before the
interest is paid by a valid withholding certificate or other appropriate
documents in accordance with the standard set under U.S. tax regulations.
Therefore, it is recommended that each recipient of the interest income who
wishes to claim such an exemption to consult a specialized U.S. tax advisor to
determine (1) who is the `beneficial owner' of income for U.S. tax purposes in
the particular situation, (2) what is the appropriate withholding certificate
(generally Form W-8 BEN) or other documentation to claim the exemption and (3)
who is considered to be the `payer' for U.S. withholding tax regulations
purposes to determine to whom the documentation should be submitted. A U.S.
Holder is required to provide certain information to identify the beneficial
owner, including Social Security Number, Employer Identification Number or Other
Federal tax identification number on Form W-9 as required by U.S. tax
regulations. Failure to provide necessary information may result in a
withholding of 31% backup withholding tax.

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    In the case a part of the interest income becomes U.S. source because of the
change in the activities of the issuer or for other reasons, there could be a
substantial increase in the U.S. tax compliance requirement for tax withholding
and reporting with respect to the holders other than the U.S Holders.

Irish Taxation

    The following is a brief discussion of applicable current Irish tax law and
practice with regard to holders of notes issued under this program. The comments
herein regarding taxation are based on the laws currently in force in Ireland
which may be subject to change, in particular, if the new EU Withholding Tax
Directive is implemented (see below). The comments are not exhaustive and relate
only to the position of persons who are the absolute beneficial owners of the
notes and may not apply to certain classes of persons such as dealers in
securities or charities. Prospective purchasers of notes should be aware that
the particular terms of issue of any notes may affect the Irish tax treatment of
that series of notes. Prospective purchasers of the notes are advised to consult
their own tax advisers concerning the overall tax consequences of their
ownership of the notes. The comments are generally based upon the provisions of
the Irish tax laws and the Irish Revenue Commissioners' practice as of the date
hereof, and such provisions and practice may be repealed, revoked or modified
(possibly with retroactive effect) so as to result in Irish tax consequences
different from those discussed below.

Withholding Tax

    Principal, interest, discount and premium payable on notes issued in bearer
form which are quoted on a recognized stock exchange may be made free of Irish
withholding tax where the payments are made by a paying agent outside Ireland on
the Company's behalf.

    If the exemption under the preceding paragraph is not available then
principal, interest, discount and premium payable on bearer notes which are
quoted on a recognized stock exchange may also be made free of Irish withholding
tax where the paying agent is within Ireland provided:

    o the notes are held in a recognized clearing system (Euroclear and
      Clearstream Banking, societe anonyme, Luxembourg); or
    o the person who is the beneficial owner of the notes and who is
      beneficially entitled to the coupon is not resident in Ireland and has
      made a declaration in the form prescribed by the Irish Revenue
      Commissioners. If the form is required, contact Clondalkin Industries.

    Interest, premium and discount payable on any other notes not falling within
the categories outlined above including specifically registered notes may be
subject to Irish withholding tax at the standard rate (currently 20%) subject to
double tax treaty relief. Advance treaty claim is required in this instance.

    In addition, prospective purchasers should note that the appointment of an
Irish collection agent may also give rise to Irish withholding tax obligations
for that agent in certain circumstances.

Liability to Income Tax

    Interest, discount and premium may be payable on the notes issued by the
company. Interest and such other amounts as are Irish source income are within
the change to Irish income tax, potentially a health levy and/or potentially
social security. Ireland operates a self-assessment system of tax. Subject to
double tax treaty relief and full relief in respect of interest which is
available to companies resident in countries with which Ireland has a double tax
treaty or the EU and which are not tax resident in Ireland, any person,
including a non-resident person with Irish source income chargeable to Irish tax
comes within its scope. However, in the absence of a withholding tax there is no
mechanism for collecting such tax from non-residents. It has been the practice
of the Revenue Commissioners not to seek to collect the liabilities from such
non-resident persons unless the recipient has any other tax connection with
Ireland such as a claim for repayment of Irish tax deducted at source, an Irish
agency, branch, trustee or trade.


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Tax on Capital Gains

    A holder of notes who is neither resident nor ordinarily resident in Ireland
and who does not carry on a trade in Ireland through a branch or agency to which
such notes are attributable, is not liable to Irish tax on capital gains arising
on the disposal of the notes.

    A holder of notes who is resident or ordinarily resident in Ireland is
potentially liable to Irish tax on capital gains arising on the disposal,
exchange (subject to specific CGT relief) or redemption of the notes. Capital
gains tax is chargeable at the rate of 20% on taxable capital gains with
allowances being made for inflation adjusted acquisition costs and enhancement
expenditure. The notes are chargeable assets for Irish capital gains tax
purposes.

Stamp Duty

    No Irish stamp duty is payable on issue of the notes.

    In the case of bearer notes, no Irish stamp duty is payable on a subsequent
transfer of bearer notes where the transfer is effected by physical delivery
only. In the case of registered notes, no Irish stamp duty is payable on a
subsequent transfer of registered notes where the registered notes have a
maturity of less than 30 years, are not issued at a discount of more than 10%,
are not convertible into shares, do not carry rights akin to share rights and do
not carry a right to a payment linked to an index or indices.

    In all other cases, a subsequent transfer of notes may be subject to Irish
stamp duty at a rate of 1%.

Capital Acquisitions Tax

    Bearer notes are regarded for Irish CAT purposes as situate in the country
in which the bearer instrument is situate at the date of the gift or
inheritance. Thus, so long as the notes are in bearer form, a gift or bequest of
notes may give rise to a liability to Irish gift tax or inheritance tax (CAT) in
the hands of the donee or successor if, at the date of the disposition, the
notes which are the subject of the disposition are located in Ireland.

    A charge to CAT will also arise if the notes are registered in Ireland or if
the disposer or beneficiary is resident or ordinarily resident in Ireland.

    Taxable gifts and inheritances received by an individual on or after
December 2, 1988 are aggregated and only the excess over a certain tax-free
threshold is taxed at a rate of 20%. Gifts and inheritances between spouses are
exempt from CAT.

Proposed EU Withholding Directive

    The Directive, as drafted envisaged a 20% withholding tax on cross border
interest payments to individuals in another Member State or alternatively the
provision of information about such payments to the authorities of the Member
State in which the investor is resident. In late 2000 agreement was reached on
the substantial content of the Directive. The principal features of the draft
Directive are as follows.

    The draft Directive will apply to individuals who are residents of a Member
State and who receive in another Member State income in the form of interest
payments.

    All Member States will exchange information with each one of the other
States seven years after the date on which the Directive enters into force.

    In the intervening transition period, except for Luxembourg, Belgium and
Austria, Member States will communicate automatically information on interest
payments without reciprocity reservation (that is, even though during the
transitional period some member States will withhold tax and not provide
information). The scope of the Directive will include interest from debt claims
of every kind and in particular income from domestic or international bonds,
accrued interest, capitalized interest, zero-coupon bonds and similar products.
A grandfathering clause will apply until the end of the transition period in
respect of income from certain bonds. Bonds the prospectuses of which have been
published by 1 March 2001 or, in the absence of prospectus, bonds issued before
that date will not be subject to the Directive during the transition period. The
Directive applies at level of the paying agent. Accordingly, it is the financial
operator ultimately responsible for implementing the terms of the Directive,
whether or not that operator is the debtor. The Council will decide on the
adoption and implementation of the Directive no later than December 31, 2002.

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ERISA Considerations

    The U.S. Employee Retirement Income Security Act of 1974, as amended
("ERISA"), imposes certain requirements on "employee benefit plans" (as defined
in Section 3(3) of ERISA) subject to ERISA, including entities such as
collective investment funds and separate accounts whose underlying assets
include the assets of such plans (collectively, "ERISA Plans") and on those
persons who are fiduciaries with respect to ERISA Plans. Investments by ERISA
Plans are subject to ERISA's general fiduciary requirements, including the
requirement of investment prudence and diversification and the requirement that
an ERISA Plan's investments be made in accordance with the documents governing
the ERISA Plan.

    Section 406 of ERISA and Section 4975 of the U.S. Internal Revenue Code of
1986, as amended (the "Code") prohibit certain transactions involving the assets
of an ERISA Plan (as well as those plans that are not subject to ERISA but which
are subject to Section 4975 of the Code, such as individual retirement accounts
(together with ERISA Plans, "Plans")) and certain persons (referred to as
"parties in interest" or "disqualified persons") having certain relationships to
such Plans, unless a statutory or administrative exemption is applicable to the
transaction.

    Prohibited transactions within the meaning of Section 406 of ERISA or
Section 4975 of the Code may arise if notes are acquired by a Plan with respect
to which Clondalkin Industries or Edgemead or any of their respective affiliates
is a party in interest or a disqualified person. Certain exemptions from the
prohibited transaction provisions of Section 406 of ERISA and Section 4975 of
the Code may be applicable, however, depending in part on the type of Plan
fiduciary making the decision to acquire a note and the circumstances under
which such decision is made. Included among those exemptions are Prohibited
Transaction Class Exemption ("PTCE") 91-38 (relating to investments by bank
collective investment funds), PTCE 84-14 (relating to transactions effected by a
"qualified professional asset manager"), PTCE 90-1 (relating to investments by
insurance company pooled separate accounts), PTCE 95-60 (relating to investments
by insurance company general accounts) and PTCE 96-23 (relating to transactions
directed by in-house asset managers). There can be no assurance that any of
these class exemptions or any other exemption will be available with respect to
any particular transaction involving the notes. By its purchase of any note, the
purchaser thereof will be deemed to have represented and agreed either that (a)
it is not an ERISA Plan or other plan, an entity whose underlying assets include
the assets of any such ERISA Plan or other plan, or a governmental plan which is
subject to any federal, state or local law that is substantially similar to the
provisions of Section 406 of ERISA or Section 4975 of the Code or (b) its
purchase and holding of a note will not result in a prohibited transaction under
Section 406 of ERISA or Section 4975 of the Code (or, in the case of a
governmental plan, any substantially similar federal, state or local law) for
which an exemption is not available.

    Governmental plans and certain church plans, while not subject to the
fiduciary responsibility provisions of ERISA or the provisions of Section 4975
of the Code, may nevertheless be subject to state or other federal laws that are
substantially similar to the foregoing provisions of ERISA and the Code.
Fiduciaries of any such plans should consult with their counsel before
purchasing any notes.

    Any insurance company proposing to invest assets of its general account in
the notes should consider the extent to which such investment would be subject
to the requirements of ERISA in light of the U.S. Supreme Court's decision in
John Hancock Mutual Life Insurance Co. v. Harris Trust and Savings Bank and
under any subsequent guidance that may be or become available relating to that
decision. In particular, such an insurance company should consider the exemptive
relief granted by the Department of Labor for transactions involving insurance
company general accounts in PTCE 95-60.

    Any Plan fiduciary who proposes to cause a Plan to purchase any notes should
consult with its counsel regarding the applicability of the fiduciary
responsibility and prohibited transaction provisions of ERISA and Section 4975
of the Code to such an investment, and to confirm that such investment will not
constitute or result in a prohibited transaction or any other violation of an
applicable requirement of ERISA.

    The sale of any notes to a Plan is in no respect a representation by us that
such an investment meets all relevant requirements with respect to investments
by Plans generally or any particular Plan, or that such an investment is
appropriate for Plans generally or any particular Plan.

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Regulatory and Environmental Matters

    Clondalkin operates in a large number of jurisdictions and is required to
comply with a large number of regulations, including environmental, health and
safety and other regulations, such as, for example, the regulations imposed by
the U.S. Food and Drug Administration with respect to food packaging in the U.S.
In addition, compliance with environmental requirements is a significant factor
in the business operations and substantial resources are committed to
maintaining compliance and management of environmental risk. Numerous national
and local environmental laws, regulations and directives must be complied with,
particularly those relating to air and water quality, waste minimization and
waste disposal.

    The European packaging operations are subject to the requirements of the EU
Directive (94/62/EC). The regulations impose legal obligations on packaging
producers to ensure that recovery and recycling targets are achieved. The
directive sets out targets for member states and requires that by the end of
2001 between 50% and 65% by weight of all packaging waste be recycled. Companies
can either decide whether to comply individually or as part of a wider program.
Where companies join a registered compliance program the sponsor undertakes to
satisfy the recovery/recycling and certifying obligations on behalf of its
members. It is not anticipated that such controls as currently legislated will
adversely affect the business.

    Some manufacturing facilities are located on properties with a long history
of industrial use including the use, storage and disposal of hazardous
materials. If releases of such materials occur or have occurred from these
facilities, there may be a requirement to remedy such releases. Environmental
assessments have recently been conducted on the majority of the Group's material
properties. These assessments have not revealed any material environmental
concerns.

Legal Proceedings

    We are, from time to time, involved in contractual disputes, administrative
and legal proceedings and investigations of various types arising in the normal
course of business. While any litigation, proceeding or investigation has an
element of uncertainty, we believe that the outcome of any proceeding, lawsuit
or claim that is pending or threatened, or all of them combined, will not have a
material adverse effect on our consolidated financial position, liquidity or
results of operations.

ITEM 11 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market Risk

    Clondalkin is exposed to market risk from changes in interest rates, foreign
currency exchange rates and commodity prices. The exposure to market risk is
managed through regular operating and financing activities and, where
appropriate, through the use of derivatives. Derivative transactions are not
entered into for speculative purposes.

Interest Rate Risk

    The gross bank and Industrial Revenue bonds borrowings at December 31, 2002
were (euro)195.6 million and (euro)10.5 million respectively (2001: (euro)264.5
million and (euro)12.5 million respectively). The interest rate applicable to
these borrowings varies between 1.5% and 3% above inter bank offer rates. In
respect of the borrowings, we have generally elected for interest periods with
maturities between three and ten months, using a combination of fixed period
borrowings and forward rate agreements. The effect of all these arrangements
taken together is that Clondalkin's exposure to interest rate volatility is
limited mainly to drawings made under the revolver facilities.

    At December 31, 2002 interest and foreign exchange rates, the annual cash
interest payments due on the above (euro)206.1 million borrowings and on the
(euro)125 million senior notes issued on January 28, 2000, are estimated at an
aggregate of (euro)21.4 million. The estimate comprises bank borrowing interest
costs of (euro)8.1 million and (euro)13.3 million senior note interest costs.
This compares with actual interest costs in the year ended December 31, 2002 of
(euro)29.6 million on these borrowing sources.

    An increase of 1% in interest rates, after taking account of the interest
protection arrangements in place, applied to the year end gross borrowings
position, would add approximately (euro)1.9 million to the annual cash interest
charges. In addition to the interest protection arrangements described above, we
also vary the maturity of our short term borrowing requirements between three to
ten months to further limit the Group's exposure to interest rate volatility.

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    Management believes that the existing interest rate protection arrangements
in place are sufficient to cover the interest exposure in the near term. The
directors monitor and review this exposure on an ongoing basis in light of
actual and expected interest rate movements.

Foreign Currency Risk

    Clondalkin does not have significant foreign currency transaction risk.
However, limited use is made of derivatives to hedge the foreign currency
transaction exposures. The primary exposures to currency transaction risk are
associated with (1) trading transactions denominated in currencies other than
our functional currencies and (2) purchases of aluminum denominated in dollars
by non-U.S. subsidiaries, which account for between 3% and 5% of Group sales.

    The derivative instruments used by the Group are mainly foreign currency
forward purchase and sale contracts. At December 31, 2002, Clondalkin had
(euro)8.8 million (2001: (euro)20.2 million) of foreign currency purchase and
sale contracts outstanding. The fair value of these instruments at December 31,
2002 rates indicates a net unrealized gain of approximately (euro)0.2 million.

    With regard to managing foreign currency translation exposures, Clondalkin
drew down the bank borrowings used to part finance the acquisition of Clondalkin
Group (Predecessor) in those proportions which, having regard to the total
borrowing requirements, aligned the prospective interest and debt repayments to
correspond with underlying operating profitability and cash flow by currency.
The directors estimated the underlying profitability and cash flow proportions
by reference to historical results and expected future operating performance.
The intention is that cash flows arising in the various currency denominations
will be applied to pay interest and principal payments due in the same currency.
Management does not anticipate that significant cross currency repatriations
will be necessary in the near term. Also, management expects that the alignment
of debt service costs with underlying profitability by currency will reduce
Clondalkin's net reported income exposure to changes in foreign currency
translation rates going forward.

Quantitative Information about Market Risk

    As at December 31, 2002, Clondalkin had gross bank and other borrowings of
(euro)206.1 million (2001: (euro)277.0 million), (euro)195.6 million (2001:
(euro)264.5 million) of which is drawn under term loan facilities and (euro)10.5
million (2001: (euro)12.5 million) under other facilities. On January 28, 2000,
the (euro)120 million mezzanine facility outstanding at December 31, 1999 was
refinanced by the issue of (euro)125 million 10.625% fixed rate senior notes
maturing in January 2010. At December 31, 2002 Clondalkin also had an
intercompany loan from its parent company amounting to (euro)132.2 million
(2000: (euro)132.2 million) carrying a 10% interest coupon rate, which is
subject to interest and principal payment restrictions under the bank facility
agreement and the senior notes indenture agreement.

Interest Rate Sensitivity

    The table below provides information about Clondalkin's debt obligations and
interest rate swap arrangements that are sensitive to change in interest rates.
For long-term debt obligations, the table presents principal cash flows and
related weighted average interest rates by expected maturity dates. The weighted
average variable rates are based on the December 31, 2002 rates and forecast
inter-bank offer rates.
<TABLE>
<CAPTION>
                                                                                    After                   Fair
At December 31, 2002              2003      2004      2005      2006      2007       2007      Total       Value
                              -----------------------------------------------------------------------------------
                                                   ((euro) thousands, except percentages)
<S>                                 <C>      <C>       <C>       <C>       <C>        <C>        <C>         <C>
Fixed rate
Long term debt                      --        --        --        --        --    125,000    125,000     135,000
Average interest rate               --        --        --        --        --    10.625%    10.625%

Variable rate (Note 1)
Long term debt                  21,720    25,628    27,796    28,675    61,539     40,695    206,053     206,053
Average interest rate            5.77%     5.76%     5.76%     5.77%     5.49%      6.90%      5.63%
</TABLE>

Note 1
The fair value of the Group's variable rate long term debt (including current
maturities of long term debt) is approximately its fair value as all such debt
is subject to interest at variable rates. The fair value of fixed rate long-term
debt is stated at its market value.

                                       49

<PAGE>

    The following table summarizes the Group's principal foreign currency
derivative contracts outstanding at December 31, 2002.
<TABLE>
<CAPTION>
                                                                            Average   Fair Value gain or (loss) at
                                                          Notional         Contract         December 31, 2002
 Foreign Currency Forward Exchange Contracts               Amount            Rate           ((euro)thousands)
-------------------------------------------------------------------------------------------------------------------
     <S>                                                    <C>              <C>                  <C>
 Receive Euro and Pay Australian dollars               (euro)210,000        1.8202                 4
 Receive Euro and Pay Danish krona                     (euro)19,000         7.4951                (1)
 Receive Euro and Pay sterling pounds                 (euro)5,321,000       0.6328                145
 Receive Euro and Pay New Zealand dollars              (euro)27,000         2.2514                (3)


 Receive sterling pounds and Pay Euro                 (pound)200,000        0.6504                 --
 Receive Swedish krona and Pay Euro                   SEK 18,861,000        9.6850                113


 Receive U.S. dollars and Pay Euro                     U.S.$ 972,000        1.0054               (40)
 Receive U.S. dollars and Pay sterling pounds           U.S.$ 14,000        1.5505                (1)
 Receive Swiss francs and Pay sterling pounds           CHF 229,000         2.2934                 4
</TABLE>

PART II

ITEM 13 - DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

    None

ITEM 14 - MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF
PROCEEDS

    None

ITEM 15 - CONTROLS AND PROCEDURES

    Within 90 days prior to the date of this report, the Company carried out an
evaluation, under the supervision and with the participation of its principal
executive officer and principal financial officer, of the effectiveness of the
design and operation of the Company's disclosure controls and procedures. Based
on this evaluation, the Company's principal executive officer and principal
financial officer concluded that the Company's disclosure controls and
procedures are effective in timely alerting them to material information
required to be included in the Company's periodic SEC reports. It should be
noted that the design of any system of controls is based in part upon certain
assumptions about the likelihood of future events, and there can be no assurance
that any design will succeed in achieving its stated goals under all potential
future conditions, regardless of how remote.

    In addition, the Company reviewed its internal controls, and there have been
no significant changes in the Company's internal controls or in other factors
that could significantly affect those controls subsequent to the date of their
last evaluation.

                                       50

<PAGE>


PART III

ITEM 17 - FINANCIAL STATEMENTS

    The consolidated financial statements and related notes thereto required by
this Item are contained on pages F-1 to F-53 and S-1 hereof. Reference is made
to Item 18 for a list of all financial statements included as part of this
Annual Report.


ITEM 18 - FINANCIAL STATEMENTS

(a)      Financial Statements

The following financial statements and schedules of the Company together with
the auditors' reports thereon are filed as part of this Annual Report:

                                                                         Page
                                                                         ----
Report of Independent Auditors                                            F-1

Consolidated Profit and Loss Accounts                                     F-2

Consolidated Statements of Total Recognized Gains and Losses              F-3

Consolidated Balance Sheets                                               F-4

Consolidated Statements of Change in Shareholders' Funds                  F-5

Consolidated Cashflow Statements                                          F-6

Notes to the Consolidated Financial Statements                            F-7

Schedule II Valuation and Qualifying Accounts                             S-1




ITEM 19 - EXHIBITS

     See the Exhibit Index appearing on page 55 for a list of all exhibits
either filed as part of this Form 20-F or incorporated by reference herein.





                                       51
<PAGE>


SIGNATURES


    This Annual Report is prepared to contain the information that would be
required in a filing on Form 20-F with the Securities and Exchange Commission.
The undersigned has been authorized to sign this Annual Report on behalf of the
Company.

For and on behalf of
Clondalkin Industries PLC




By: Colman O'Neill
---------------------------
Finance Director

Date: April 30, 2003



                                       52
<PAGE>


CERTIFICATION

I, Norbert McDermott, Chief Executive Officer of Clondalkin Industries PLC,
certify that:

1.       I have reviewed this annual report on Form 20-F of Clondalkin
         Industries PLC;

2.       Based on my knowledge, this annual report does not contain any untrue
         statement of a material fact or omit to state a material fact necessary
         to make the statements made, in light of the circumstances under which
         such statements were made, not misleading with respect to the period
         covered by this annual report;

3.       Based on my knowledge, the financial statements, and other financial
         information included in this annual report, fairly present in all
         material respects the financial condition, results of operations and
         cash flows of the registrant as of, and for, the periods presented in
         this annual report;

4.       The registrant's other certifying officers and I are responsible for
         establishing and maintaining disclosure controls and procedures (as
         defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
         we have:

                  a) designed such disclosure controls and procedures to ensure
                  that material information relating to the registrant,
                  including its consolidated subsidiaries, is made known to us
                  by others within those entities, particularly during the
                  period in which this annual report is being prepared;

                  b) evaluated the effectiveness of the registrant's disclosure
                  controls and procedures as of a date within 90 days prior to
                  the filing date of this annual report (the "Evaluation Date");
                  and

                  c) presented in this annual report our conclusions about the
                  effectiveness of the disclosure controls and procedures based
                  on our evaluation as of the Evaluation Date;

5.       The registrant's other certifying officers and I have disclosed, based
         on our most recent evaluation, to the registrant's auditors and the
         audit committee of the registrant's board or directors (or persons
         performing the equivalent function):

                  a) all significant deficiencies in the design or operation of
                  internal controls which could adversely affect the
                  registrant's ability to record, process, summarize and report
                  financial data and have identified for the registrant's
                  auditors any material weaknesses in internal controls; and

                  b) any fraud, whether or not material, that involves
                  management or other employees who have a significant role in
                  the registrant's internal controls; and

6.       The registrant's other certifying officers and I have indicated in this
         annual report whether or not there were significant changes in internal
         controls or in other factors that could significantly affect internal
         controls subsequent to the date of our most recent evaluation,
         including any corrective actions with regard to significant
         deficiencies and material weaknesses.


By: Norbert McDermott
--------------------------
Chief Executive Officer




Date: April 30, 2003


                                       53
<PAGE>


CERTIFICATION

I, Colman O'Neill, Finance Director of Clondalkin Industries PLC, certify that:

1.       I have reviewed this annual report on Form 20-F of Clondalkin
         Industries PLC;

2.       Based on my knowledge, this annual report does not contain any untrue
         statement of a material fact or omit to state a material fact necessary
         to make the statements made, in light of the circumstances under which
         such statements were made, not misleading with respect to the period
         covered by this annual report;

3.       Based on my knowledge, the financial statements, and other financial
         information included in this annual report, fairly present in all
         material respects the financial condition, results of operations and
         cash flows of the registrant as of, and for, the periods presented in
         this annual report;

4.       The registrant's other certifying officers and I are responsible for
         establishing and maintaining disclosure controls and procedures (as
         defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
         we have:

                  a) designed such disclosure controls and procedures to ensure
                  that material information relating to the registrant,
                  including its consolidated subsidiaries, is made known to us
                  by others within those entities, particularly during the
                  period in which this annual report is being prepared;

                  b) evaluated the effectiveness of the registrant's disclosure
                  controls and procedures as of a date within 90 days prior to
                  the filing date of this annual report (the "Evaluation Date");
                  and

                  c) presented in this annual report our conclusions about the
                  effectiveness of the disclosure controls and procedures based
                  on our evaluation as of the Evaluation Date;

5.       The registrant's other certifying officers and I have disclosed, based
         on our most recent evaluation, to the registrant's auditors and the
         audit committee of the registrant's board or directors (or persons
         performing the equivalent function):

                  a) all significant deficiencies in the design or operation of
                  internal controls which could adversely affect the
                  registrant's ability to record, process, summarize and report
                  financial data and have identified for the registrant's
                  auditors any material weaknesses in internal controls; and

                  b) any fraud, whether or not material, that involves
                  management or other employees who have a significant role in
                  the registrant's internal controls; and

6.       The registrant's other certifying officers and I have indicated in this
         annual report whether or not there were significant changes in internal
         controls or in other factors that could significantly affect internal
         controls subsequent to the date of our most recent evaluation,
         including any corrective actions with regard to significant
         deficiencies and material weaknesses.


By: Colman O'Neill
-----------------------
Finance Director




Date: April 30, 2003


                                       54

<PAGE>


                                 EXHIBIT INDEX

<TABLE>
<CAPTION>

Number         Description                                       Location
--------------------------------------------------------------------------------------------------------------------
<C>               <C>                                                           <C>
1.1            Memorandum and Articles of Association of         Incorporated by reference from Exhibit 3.1 to the
               Registrant                                        Registrant's Form F-4 Registration Statement filed
                                                                 with the Commission on July 27,2000 (the
                                                                 "Registration Statement")

2.1            Indenture dated January 28, 2000 among            Incorporated by reference from Exhibit 4.1 to the
               Registrant, Edgemead Limited and Bankers Trust    Registration Statement
               Company (New York), relating to the 10.625%
               Senior Notes due 2010 (the "Senior Notes")

2.2            Registration Rights Agreement dated January 28,   Incorporated by reference from Exhibit 4.2 to the
               2000 among Registrant, Edgemead Limited and       Registration Statement
               Lehman Brothers International, relating to the
               Senior Notes

2.3            Note Depositary Deed dated January 28, 2000       Incorporated by reference from Exhibit 4.3 to the
               among Registrant, Bankers Trust Company and       Registration Statement
               Deutsche Bank Luxembourg S.A., relating to the
               Senior Notes

2.4            Agency Agreement dated January 28, 2000 among     Incorporated by reference from Exhibit 4.4 to the
               Registrant, Edgemead Limited, Bankers Trust       Registration Statement
               Company and Deutsche Bank Luxembourg S.A.,
               relating to the Senior Notes

4.1            Intercreditor Deed dated September 8, 1999        Incorporated by reference from Exhibit 10.1 to the
               among Lucorn Limited, Registrant, Edgemead        Registration Statement
               Limited, UBS AG, Allied Irish Banks p.l.c.,
               Lehman Commercial Paper, Inc., various other
               parties named therein and the high-yield bond
               trustee

4.2            Deed of Accession dated January 28, 2000 among    Incorporated by reference from Exhibit 10.2 to the
               the various parties to the Intercreditor Deed     Registration Statement
               and Bankers Trust Company

4.3            Parent Loan Agreement dated September 8, 1999     Incorporated by reference from Exhibit 10.3 to the
               between Lucorn Limited and Registrant             Registration Statement

4.4            Issuer Original Investments Loan Agreement        Incorporated by reference from Exhibit 10.4 to the
               dated September 8, 1999 between Registrant and    Registration Statement
               Edgemead Limited

4.5            Issuer Mezzanine Loan Agreement dated September   Incorporated by reference from Exhibit 10.5 to the
               8, 1999 between Registrant and Edgemead Limited   Registration Statement

4.6            Amendment to the Issuer Mezzanine Loan            Incorporated by reference from Exhibit 10.6 to the
               Agreement dated January 27, 2000 between          Registration Statement
               Registrant and Edgemead Limited

</TABLE>

                                       55
<PAGE>

                             EXHIBIT INDEX CONTINUED

<TABLE>
<CAPTION>

Number         Description                                       Location
--------------------------------------------------------------------------------------------------------------------
<C>               <C>                                                        <C>
4.7            The EUR 265,000,000 Term Loan and EUR             Incorporated by reference from Exhibit 10.7 to the
               35,000,000 Revolving Credit Facilities dated      Registration Statement
               September 8, 1999 among Lucorn Limited,
               Registrant, Edgemead Limited, Warburg Dillon
               Read, Allied Irish Banks p.l.c. and UBS AG

4.8            Amendment Agreement to the EUR 265,000,000 Term   Incorporated by reference from Exhibit 10.8 to the
               Loan and EUR 35,000,000 Revolving Credit          Registration Statement
               Facilities dated November 18, 1999 among
               Edgemead Limited, Warburg Dillon Read, Allied
               Irish Banks p.l.c. and various financial
               institutions

4.9            Letter dated January 21, 2000 from Allied Irish   Incorporated by reference from Exhibit 10.9 to the
               Banks p.l.c. to Lucorn Limited, Registrant and    Registration Statement
               Edgemead Limited, relating to the EUR
               265,000,000 Term Loan and EUR 35,000,000
               Revolving Credit Facilities

4.10           Deed of Release dated January 28, 2000 among      Incorporated by reference from Exhibit 10.10 to the
               Allied Irish Banks p.l.c., Edgemead Limited and   Registration Statement
               various continuing and former guarantors under
               the EUR 265,000,000 Term Loan and EUR
               35,000,000 Revolving Credit Facilities

4.11           Deed of Release dated January 28, 2000 between    Incorporated by reference from Exhibit 10.11 to the
               Allied Irish Banks p.l.c. and Lucorn Limited,     Registration Statement
               relating to the EUR 265,000,000 Term Loan and
               EUR 35,000,000 Revolving Credit Facilities

4.12           Deed of Release dated January 28, 2000 between    Incorporated by reference from Exhibit 10.12 to the
               Allied Irish Banks p.l.c. and Registrant,         Registration Statement
               relating to the EUR 265,000,000 Term Loan and
               EUR 35,000,000 Revolving Credit Facilities

4.13           Composite Debenture dated September 8, 1999       Incorporated by reference from Exhibit 10.13 to the
               among Allied Irish Banks p.l.c., Lucorn           Registration Statement
               Limited, Edgemead Limited and Registrant

8.1            List of Subsidiaries of the Registrant            Filed herewith

</TABLE>

                                       56

<PAGE>

                            CLONDALKIN INDUSTRIES PLC

                          INDEPENDENT AUDITORS' REPORT



To the Board of Directors and Shareholders of Clondalkin Industries PLC

We have audited the accompanying consolidated balance sheets of Clondalkin
Industries PLC and subsidiaries at December 31, 2002 and December 31, 2001 and
the related consolidated profit and loss accounts, statement of total recognized
gains and losses, changes in shareholders' funds and cashflows for each of the
three years in the accounts statements of the period ended December 31, 2002.
Our audits also included the financial statement schedule for each of the three
years in the period ended December 31, 2002 listed in the index at Item 18.
These financial statements and the financial statement schedule are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements and the financial statement schedule based
on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free from material misstatement. An audit includes examining, on
a test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all
material respects, the financial position of the Group at December 31, 2002 and
December 31, 2001 and the results of their operations and their cash flows for
each of the three years in the period ended December 31, 2002 in conformity with
accounting principles generally accepted in Ireland. Also, in our opinion, such
financial statement schedule, when considered in relation to the basic
consolidated financial statements taken as a whole, presents fairly in all
material respects the information set forth therein.

As explained in note 2 to the financial statements, the Group has given
retroactive effect to the change in accounting for deferred taxes as a result of
the adoption of Financial Reporting Standard 19 "Deferred Tax".

Accounting principles generally accepted in Ireland differ in certain
significant respects from accounting principles generally accepted in the United
States of America. The application of the latter would have affected the
determination of the profit/(loss) on ordinary activities after taxation for
each of the three years in the period ended December 31, 2002 and the
determination of shareholders' funds as at December 31, 2002 and December 31,
2001 to the extent summarized in Note 33 to the consolidated financial
statements.

DELOITTE & TOUCHE



Dublin, Ireland
April 30, 2002



                                      F-1





<PAGE>

                            CLONDALKIN INDUSTRIES PLC
                      CONSOLIDATED PROFIT AND LOSS ACCOUNTS
<TABLE>
<CAPTION>

                                                                                            Restated          Restated
                                                                          Year ended       Year ended        Year ended
                                                                         December 31,      December 31,      December 31,
                                                                             2002             2001              2000
                                                                      -------------------------------------------------------
                                                              Notes            ((euro)thousands, except per share data)

<S>                                                             <C>         <C>               <C>               <C>
Sales                                                           3           710,458           710,816           639,400
                                                                      ------------------------------------------------------
Continuing operations                                                       710,458           655,257           639,400
Acquisition                                                                      --            55,559                --
                                                                      ------------------------------------------------------
                                                                            710,458           710,816           639,400
Cost of sales                                                              (565,317)         (579,349)         (522,471)
                                                                      ------------------------------------------------------
Gross profit                                                                145,141           131,467           116,929
Net operating costs                                             4           (89,149)          (88,023)          (78,859)
                                                                      ------------------------------------------------------
Continuing operations                                                        55,992            40,030            38,070
Acquisition                                                                      --             3,414                --
                                                                      ------------------------------------------------------
Operating profit                                                3            55,992            43,444            38,070
Exceptional items
  Income from financial assets                                                   --                --             3,426
  Business termination and rationalization costs                                 --                --            (2,085)
                                                                      ------------------------------------------------------
Profit before interest and taxation                                          55,992            43,444            39,411
Net interest payable                                            5           (46,127)          (49,594)          (47,550)
                                                                      ------------------------------------------------------
Profit (loss) on ordinary activities before taxation            6             9,865            (6,150)           (8,139)
Taxation on profit (loss) on ordinary activities                8            (8,018)           (2,002)           (1,939)
                                                                      ------------------------------------------------------
Profit (loss) on ordinary activities after taxation*                          1,847            (8,152)          (10,078)
Dividends                                                                        --                --                --
                                                                      ------------------------------------------------------
Profit (loss) retained for year                                               1,847            (8,152)          (10,078)
                                                                      ======================================================
Earnings (loss) per share                                       9       (euro)48.48     ((euro)213.99)    ((euro)264.55)
                                                                      ======================================================
Diluted earnings (loss) per share                               9       (euro)48.48     ((euro)213.99)    ((euro)264.55)
                                                                      ======================================================

</TABLE>

A summary of the significant adjustments to profit/(loss) on ordinary activities
after taxation which would be required if generally accepted accounting
principles in the United States ("U.S. GAAP") had been applied instead of those
generally accepted in the Republic of Ireland ("Irish GAAP") is given in Note
33.

** The 2001 and 2000 comparative figures have been restated for the effect of
the adoption of Financial Reporting Standard 19 - Deferred Tax. Under FRS 19,
deferred tax is recognized in respect of timing differences that have originated
but not reversed at the balance sheet date where transactions or events have
occurred at the balance sheet date that result in an obligation to pay more tax
or a right to pay less tax in the future.


The Notes to the Consolidated Financial Statements are an integral part of these
Financial Statements.


                                      F-2
<PAGE>



                            CLONDALKIN INDUSTRIES PLC

          CONSOLIDATED STATEMENTS OF TOTAL RECOGNIZED GAINS AND LOSSES

<TABLE>
<CAPTION>

                                                                           Year ended       Year ended        Year ended
                                                                          December 31,      December 31,      December 31,
                                                                              2002             2001              2000
                                                                        ----------------------------------------------------
                                                                                           ((euro) thousands)
<S>                                                                           <C>              <C>              <C>
Profit (loss) on ordinary activities after taxation                           1,847            (8,152)          (10,078)
Movement on currency translation reserve                                       (332)              302                99
                                                                        ----------------------------------------------------
Total recognized gains and losses for the financial year                      1,515            (7,850)           (9,979)
Prior year adjustment - FRS 19 Adoption*                                     (1,978)               --                --
                                                                        ----------------------------------------------------
Total recognized gains and losses                                              (463)           (7,850)           (9,979)
                                                                        ====================================================

</TABLE>

* The 2001 and 2000 comparative figures have been restated for the effect of the
adoption of FRS 19- Deferred Tax.
Under FRS 19, deferred tax is recognized in respect of timing differences that
have originated but not reversed at the balance sheet date where transactions or
events have occurred at the balance sheet date that result in an obligation to
pay more tax or a right to pay less tax in the future.




























The Notes to the Consolidated Financial Statements are an integral part of these
Financial Statements.


                                      F-3
<PAGE>



                            CLONDALKIN INDUSTRIES PLC

                           CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                                                             Restated
                                                                                   December 31,             December 31,
                                                                                      2002                      2001
                                                                                  -------------------------------------
                                                                          Notes                 ((euro)thousands)
<S>                                                                         <C>       <C>                       <C>
Fixed assets
Intangible assets                                                           10        229,999                   255,722
Tangible assets                                                             11        195,310                   203,154
Financial assets                                                            12          1,888                     1,888
                                                                                   ----------                 ---------
                                                                                      427,197                   460,764

Current assets
Assets held for disposal                                                    13             --                     6,350
Stocks                                                                      14         70,240                    72,553
Debtors                                                                     15         98,508                   104,633
Bank and cash balances                                                                 42,567                    46,486
                                                                                   ----------                 ---------
                                                                                      211,315                   230,022
Current liabilities
Creditors - amounts falling due within one year                             16        161,033                   160,577
                                                                                   ----------                 ---------
Net current assets                                                                     50,282                    69,445
                                                                                   ----------                 ---------
Total assets less current liabilities                                                 477,479                   530,209
                                                                                   ==========                 =========

Creditors - amounts falling due after more than one year                    18        481,698                   534,831
Provisions for liabilities and charges - deferred taxation                  21         12,733                    13,845
                                                                                   ----------                 ---------
                                                                                      494,431                   548,676
Capital and reserves
Called up share capital                                                     22             38                        38
Currency translation reserve                                                23             69                       401
Profit and loss account                                                               (17,059)                  (18,906)
                                                                                   ----------                 ---------
Shareholders' funds *                                                                 (16,952)                  (18,467)
                                                                                   ----------                 ---------
                                                                                      477,479                   530,209
                                                                                   ==========                 =========

</TABLE>




* A summary of the significant adjustments to shareholders' funds which would be
required if US GAAP had been applied instead of those Irish GAAP is given in
Note 33.


** The 2001 comparative figures have been restated for the effect of the
adoption of FRS 19 - Deferred Tax.

Under FRS 19, deferred tax is recognized in respect of timing differences that
have originated but not reversed at the balance sheet date where transactions or
events have occurred at the balance sheet date that result in an obligation to
pay more tax or a right to pay less tax in the future.






The Notes to the Consolidated Financial Statements are an integral part of these
Financial Statements.




                                       F-4
<PAGE>

                            CLONDALKIN INDUSTRIES PLC

            CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' FUNDS


Clondalkin Industries
<TABLE>
<CAPTION>

                                                                         Called up    Currency    Profit and       Total
                                                                           share     translation     loss      shareholders'
                                                                          capital      reserve      account        funds
                                                                        ------------------------------------------------------
                                                                                            ((euro) thousands)
<S>                                                                          <C>          <C>        <C>           <C>
Balance at December 31, 1999                                                 38            --         636           674
Cumulative effect of FRS 19 adoption                                         --            --      (1,312)       (1,312)
                                                                        ------------------------------------------------------
Balance at December 31, 1999 (restated)                                      38            --        (676)         (638)
Loss for the financial year                                                  --            --     (10,078)      (10,078)
Foreign currency translation reserve                                         --            99          --            99
                                                                        ------------------------------------------------------
Balance at December 31, 2000                                                 38            99     (10,754)      (10,617)
Loss for the financial year                                                  --            --      (8,152)       (8,152)
Foreign currency translation reserve                                         --           302          --           302
                                                                        ------------------------------------------------------
Balance at December 31, 2001                                                 38           401     (18,906)      (18,467)
Profit for the financial year                                                --            --       1,847         1,847
Foreign currency translation reserve                                         --          (332)         --          (332)
                                                                        ------------------------------------------------------
Balance at December 31, 2002                                                 38            69     (17,059)      (16,952)
                                                                        ======================================================

</TABLE>

Shareholders' funds comprise equity interests only.







** The comparative figures have been restated for the effect of the adoption of
FRS 19 - Deferred Tax.


Under FRS 19, deferred tax is recognized in respect of timing differences that
have originated but not reversed at the balance sheet date where transactions or
events have occurred at the balance sheet date that result in an obligation to
pay more tax or a right to pay less tax in the future.






The Notes to the Consolidated Financial Statements are an integral part of these
Financial Statements.


                                      F-5
<PAGE>



                            CLONDALKIN INDUSTRIES PLC

                        CONSOLIDATED CASHFLOW STATEMENTS
<TABLE>
<CAPTION>

                                                                           Year ended       Year ended        Year ended
                                                                          December 31,     December 31,       December 31,
                                                                              2002             2001              2000
                                                                        ----------------------------------------------------
                                                                 Notes                      ((euro)thousands)
<S>                                                                          <C>               <C>              <C>
Cash flow from operating activities                               24          92,098            82,395           79,645
                                                                        ----------------------------------------------------
Returns on investment and servicing of finance
Interest received                                                                599               637              934
Interest paid                                                                (30,527)          (36,494)         (30,169)
Income from financial assets                                                      --                --            3,426
                                                                        ----------------------------------------------------
                                                                             (29,928)          (35,857)         (25,809)
                                                                        ----------------------------------------------------
Taxation paid                                                                 (3,983)           (3,136)          (7,606)
                                                                        ----------------------------------------------------
Net cash outflow from capital expenditure and
 Financial investment
Purchase of tangible fixed assets                                            (17,555)          (19,977)         (11,054)
Sale of assets held for disposal                                               6,475                --           18,094
Sale of tangible fixed assets                                                  1,722             1,469            2,866
Business termination and rationalization costs                                    --                --           (2,085)
                                                                        ----------------------------------------------------
                                                                              (9,358)          (18,508)           7,821
Subsidiaries acquired                                             25          (2,054)          (48,836)
                                                                                                                     --
Payments of amounts due on acquisition of Clondalkin Group                        --              (346)         (12,117)
(Predecessor)
Payment of deferred acquisition consideration                                   (330)             (608)          (8,143)
                                                                        ----------------------------------------------------
                                                                             (11,742)          (68,298)         (12,439)
                                                                        ----------------------------------------------------
Dividends paid                                                                    --                --               --
                                                                        ----------------------------------------------------

Cash inflow (outflow) before Financing                                        46,445           (24,896)          33,791
Increase (decrease) in loans due within one year                  27             125             3,883           (7,636)
Payment of fees related to Acquisition Financing                                                  (706)
Decrease in loans due after more than one year                    27         (47,694)           (1,677)         (28,674)
Increase in senior notes                                          26              --                --          125,000
Payment of fees related to issue of senior notes                                  --              (900)          (4,100)
Decrease in mezzanine finance                                     26              --                --         (120,000)
Loan from parent company                                                          --            20,000            2,133
                                                                        ----------------------------------------------------
                                                                             (47,569)           20,600          (33,277)
                                                                        ----------------------------------------------------
(Decrease) increase in cash                                                   (1,124)           (4,296)             514
                                                                        ====================================================
</TABLE>

* The 2001 comparative figures have been restated for the effect of the adoption
of FRS 19 - Deferred Tax.

Under FRS 19, deferred tax is recognized in respect of timing differences that
have originated but not reversed at the balance sheet date where transactions or
events have occurred at the balance sheet date that result in an obligation to
pay more tax or a right to pay less tax in the future.

A summary of the significant adjustments to cash flows, which would be required
if U.S.GAAP had been applied instead of Irish GAAP, is given in Note 33 to the
Consolidated Financial Statements.




The Notes to the Consolidated Financial Statements are an integral part of these
Financial Statements.



                                      F-6
<PAGE>


                            CLONDALKIN INDUSTRIES PLC

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1. Description of Operations and Basis of Preparation


Clondalkin Industries ("the Company") was incorporated on July 22, 1999 in the
Republic of Ireland. The Company is the holding company of the Group, with
direct share, indirect share and loan interests in subsidiaries. The Company is
a wholly owned subsidiary of Clondalkin Group Holdings Limited.

Clondalkin Industries and its subsidiaries (collectively, "Clondalkin" or the
"Group") form an international group of companies producing flexible and
specialist packaging products. The Group has operating subsidiaries in Ireland,
the U.K., the Netherlands, Belgium, Germany, Switzerland and the U.S. Clondalkin
supplies value-added packaging products to a diversified customer base
principally in the food and beverage, consumer products, industrial, healthcare,
agricultural/horticultural and services/distribution sectors. The Group
manufactures and distributes products through approximately 40 operating
companies, all wholly owned subsidiaries, in 41 locations, and employs more than
3,900 employees. Each operating company is managed by its autonomous and
experienced management team.

These consolidated financial statements have been prepared in accordance with
Irish GAAP and Irish statute comprising the Companies Acts, 1963 to 2001 and the
European Communities (Companies: Group Accounts) Regulations, 1992 to show the
performance of the Group, from, January 1, 2000, to 31 December 2002.

After making enquiries, the directors have a reasonable expectation that the
Group has adequate resources to continue in operational existence for the
foreseeable future. For this reason, they continue to adopt the going concern
basis in preparing the financial statements.

2. Accounting Policies

Basis of accounting

The consolidated financial statements of the Company are prepared under the
historical cost convention and include the results of operations, account
balances and cash flows of the Company and its wholly owned subsidiaries.
Consolidation

The consolidated financial statements consolidate the financial statements of
the Company and its subsidiaries, made up to each year end. All material
intercompany balances have been eliminated. The results of companies acquired
during each year are dealt with in the profit and loss account from the date of
acquisition.

Revenue recognition

Revenue is derived from product sales to customers.

Revenue is recognized when all of the following criteria are met; persuasive
evidence of an arrangement exists; delivery has occurred; vendor's fee is fixed
or determinable; and collectibility is reasonably assured.

Accordingly, revenue is recognized where a binding purchase order exists,
shipment has occurred and title to product has passed to the customer, net of
allowances for estimated future returns, provided no collection uncertainties
remain.

Goodwill

Goodwill represents the difference between

(i) the fair value attributable to the net separable assets of undertakings
acquired, and;

(ii) the fair value of the acquisition consideration. Goodwill is capitalized
and classified as an asset on the balance sheet. Goodwill is amortized on a
straight line basis over its useful economic life (not exceeding twenty years),
which has been determined by reference to the periods over which the value of
the underlying businesses are expected to exceed the values of their
identifiable net assets. Reviews are performed regularly to determine whether
facts or circumstances exist which indicate that the carrying value of Goodwill
is impaired.




                                       F-7
<PAGE>


                            CLONDALKIN INDUSTRIES PLC

          NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)


The Company assesses the recoverability of goodwill by comparing the projected
undiscounted cash flows of the entity acquired against the respective carrying
amount of goodwill. Impairment, if any, is based on the fair value of the
goodwill and will result in the carrying value of the goodwill being reduced by
the estimated shortfall of cash flows. No impairment has been indicated to date.

Translation of foreign currencies

The functional currency of each of the Group's subsidiaries is the local
currency.

Monetary assets and liabilities in foreign currencies are translated into the
relevant functional currency at the rate of exchange ruling at the balance sheet
date, or forward contract rates where appropriate. Transactions in foreign
currencies are translated into the relevant functional currency at the rate of
exchange ruling at the date of the transaction or at forward contract rates,
where appropriate. Transaction gains and losses are recognized in arriving at
operating income.

With effect from January 1, 2002, the results of operations of subsidiaries,
whose functional currencies are not euros, are translated at the average rates
of exchange during the period and their balance sheets at the rates ruling at
the balance sheet date. Prior to January 1, 2002, the results of operations of
such subsidiaries were translated at the rates ruling at the balance sheet date.
The cumulative effect of exchange rate movements is included in a separate
component of other shareholders' funds. The effect of this change has been to
increase the reported profit after tax in 2002 by (euro)490,000 compared to what
the profit after tax would have been had the balance sheet exchange rate been
used. The 2001 and prior year comparatives have not been restated to reflect
this change, because the effect on the financial statements is not material.

Depreciation

Depreciation is provided at rates calculated to write-off the cost or valuation
of individual tangible assets, by equal annual installments, over their
estimated normal lives as follows:
<TABLE>
<CAPTION>

<S>                                                           <C>
         Freehold and long leasehold buildings                50 years
         Short leasehold buildings                            Lesser of useful life or period of lease
         Plant and machinery                                  5 - 10 years
         Fixtures and fittings                                1 - 5 years
</TABLE>

Freehold and long leasehold land is not depreciated.

Leased assets

Assets held under operating leases are not capitalized; the related leasing
charges are charged to the profit and loss account as incurred. The Group has no
assets held under capital/finance type leases.

Impairment of tangible fixed assets

The Group evaluates the carrying amounts and periods over which long-lived
tangible and intangible assets are depreciated or amortized, at each reporting
period. An impairment is recorded when the future discounted net cash flows
expected to be generated by the asset are less than the carrying value of the
asset.

Stocks

Stocks are stated at the lower of cost and net realizable value on a
first-in-first out basis. Cost includes direct costs and applicable production
and other relevant overheads. Net realizable value is actual or estimated
selling price less trade discounts, all further costs to completion and all
costs to be incurred in marketing, selling and distribution.

Deferred taxation

On January 1, 2002 the Group adopted Financial Reporting Standard 19 'Deferred
Tax' (FRS 19). Under FRS 19, deferred tax is recognized in respect of all timing
differences that have originated but not reversed at the balance sheet date
where transactions or events have occurred at the balance sheet date that result
in an obligation to pay more tax or a right to pay less tax in the future.

                                      F-8
<PAGE>

                            CLONDALKIN INDUSTRIES PLC

          NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Timing differences are differences between profit as computed for taxation
purposes and profit as stated in the financial statements which arise between
certain items of income and expenditure in the financial statements which are
dealt with in different periods for taxation purposes.

Deferred tax assets are regarded as recoverable and therefore recognized only
when, on the basis of all available evidence, it can be regarded as more likely
than not that there will be suitable taxable profits from which the future
reversal of the underlying timing differences can be deducted.

Deferred tax is measured at the tax rates that are expected to reverse based on
tax rates and laws enacted or substantially enacted at the balance sheet date.
Deferred tax is measured on a non-discounted basis.

On adoption of FRS 19, the Group has changed its accounting policy in respect of
deferred taxation for all years presented and restated prior year results
accordingly. The cumulative effect of the adoption of FRS 19 for the years prior
to the years presented has been booked directly to equity. The impact of this
restatement is set out in Note 21.

Advertising, and promotion expenses

All costs associated with advertising are expensed as incurred.

Product development costs

Product development costs are charged to the profit and loss account, primarily
within cost of sales, as incurred.

Finance costs

Costs arising from the issue of fixed term debt are recognized and amortized at
a constant rate over the period of the debt. In accordance with the provisions
of FRS 4, finance costs are netted against bank loans falling due after more
than one year in the balance sheet.

Financial instruments

Interest rate swaps are treated as hedges, and the net interest payable is
reflected in the profit and loss account. The receivable or payable associated
with the interest rate swaps is reflected in interest payable.

Forward currency contracts, that qualify for Hedge Accounting, are recognized in
the profit and loss account in the period in which they settle and are reflected
against the related expense being hedged. There is no recognition of any open
contracts at the end of the period.

Where raw materials are purchased under forward price agreements to hedge
against price movements, the gain or loss on the forward contract is not
recorded until closed and then, at that time, any gain or loss is included in
the measurement of the related purchased raw materials.

Pensions

Contributions to defined benefit pension schemes are based on the advice of
independent professional actuaries and are charged to the profit and loss
account so as to spread the cost of pensions over the employees' working lives
as a level percentage of pensionable pay. Contributions to defined contribution
pension schemes are charged on an accruals basis. The Group continues to use
SSAP 24 "Accounting for pension costs" to account for pension costs and provides
the required disclosures under FRS 17 "Retirement Benefits". This standard
replaces the use of actuarial values for assets in a pension scheme in favor of
a market-based approach. In order to cope with the volatility inherent in this
measurement basis, the standard requires that the profit and loss account shows
the relatively stable ongoing service cost, interest cost, and expected return
on assets. Fluctuations in market values are reflected in the statement of total
recognized gains and losses.

Compliance with FRS17 has not given rise to any restatement of figures reported
for prior periods, though a restatement in respect of FRS 17 is expected when
full compliance is required.

Use of estimates

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts reported in the of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates, financial statements
and accompanying notes. Actual results could differ from those estimates

                                      F-9

<PAGE>

                            CLONDALKIN INDUSTRIES PLC

          NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Companies Acts, 1963 to 2001

The financial information relating to the Company and its subsidiaries, included
in this document does not comprise statutory financial statements as referred to
in Section 19 of the Companies (Amendment) Act, 1986, copies of which are
required by that Act to be annexed to the Company's annual return lodged with
the Registrar of Companies. The auditors have made reports without qualification
under Section 163 of the Companies Act, 1963 in respect of all such financial
statements. Copies of statutory financial statements of Clondalkin for the years
up to and including the year ended December 31, 2001 have been so annexed to the
relevant annual returns.

Reclassifications:

Certain prior year amounts have been reclassified to conform fiscal 2002
presentation. These changes have no impact on previously reported results of
operations or shareholders' equity.


                                      F-10

<PAGE>

                            CLONDALKIN INDUSTRIES PLC

          NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

3. Sales and operating profit before goodwill amortization

Sales comprise the amount earned by the Group in the ordinary course of business
for goods supplied and for services provided to third parties, net of value
added and sales taxes.
<TABLE>
<CAPTION>
                                                                           Year ended        Year ended        Year ended
                                                                          December 31,      December 31,      December 31,
                                                                              2002             2001              2000
                                                                        ----------------------------------------------------
                                                                                         ((euro) thousands)
<S>                                                                              <C>               <C>              <C>
Analysis of sales by location
Europe                                                                       559,873           541,138          480,730
United States of America                                                     150,585           169,678          158,670
                                                                        ----------------------------------------------------
                                                                             710,458           710,816          639,400
                                                                        ====================================================
Analysis of sales by sector
Flexible Packaging                                                           473,893           463,771          415,636
Specialist Packaging                                                         236,565           247,045          223,764
                                                                        ----------------------------------------------------
                                                                             710,458           710,816          639,400
                                                                        ====================================================
Analysis of operating profit before goodwill amortization by location
Europe                                                                        57,597            44,247           38,670
United States of America                                                      12,503            12,878           11,840
Unallocated goodwill amortization                                            (14,108)          (13,681)         (12,440)
                                                                        ----------------------------------------------------
                                                                              55,992            43,444           38,070
                                                                        ====================================================
Analysis of operating profit before goodwill amortization by sector
Flexible Packaging                                                            53,536            42,274           36,873
Specialist Packaging                                                          16,565            14,851           13,637
Unallocated goodwill amortization                                            (14,108)          (13,681)         (12,440)
                                                                        ----------------------------------------------------
                                                                              55,992            43,444           38,070
                                                                        ====================================================
Analysis of net assets by location
Europe                                                                       196,704           199,269          182,730
United States of America                                                      49,856            53,646           54,069
                                                                        ----------------------------------------------------
                                                                             246,560           252,915          236,799
                                                                        ====================================================
</TABLE>

4. Net operating costs

<TABLE>
<CAPTION>
                                                                           Year ended        Year ended        Year ended
                                                                          December 31,      December 31,      December 31,
                                                                              2002             2001              2000
                                                                        ----------------------------------------------------
                                                                                         ((euro) thousands)
<S>                                                                              <C>               <C>              <C>
Distribution costs                                                            34,879            36,414           32,714
Administrative expenses                                                       41,084            38,741           35,808
Profit on disposal of tangible fixed assets                                     (922)             (813)          (2,103)
Goodwill amortization                                                         14,108            13,681           12,440
                                                                        ----------------------------------------------------
Net operating costs                                                           89,149            88,023           78,859
                                                                        ====================================================
</TABLE>

                                      F-11

<PAGE>

                            CLONDALKIN INDUSTRIES PLC

          NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

5. Net interest payable
<TABLE>
<CAPTION>
                                                                           Year ended        Year ended        Year ended
                                                                          December 31,      December 31,      December 31,
                                                                              2002             2001              2000
                                                                        ----------------------------------------------------
                                                                                         ((euro) thousands)
<S>                                                                              <C>               <C>              <C>
On bank loans and overdrafts
Repayable within five years, otherwise than installments                          --                --            1,044
Repayable within five years, by installments                                      --                --               --
                                                                        ----------------------------------------------------
                                                                                  --                --            1,044
On all other loans                                                            46,124            49,576           46,982
Finance cost amortization                                                        597               669              458
                                                                        ----------------------------------------------------
                                                                              46,721            50,245           48,484
Interest receivable                                                             (594)             (651)            (934)
                                                                        ----------------------------------------------------
                                                                              46,127            49,594           47,550
                                                                        ====================================================
</TABLE>

6. Profit/(loss) on ordinary activities before taxation
<TABLE>
<CAPTION>
                                                                           Year ended        Year ended        Year ended
                                                                          December 31,      December 31,      December 31,
                                                                              2002             2001              2000
                                                                        ----------------------------------------------------
                                                                                         ((euro) thousands)
<S>                                                                              <C>               <C>              <C>
The profit/(loss) on ordinary activities before taxation is stated after
Charging
        Directors' fees                                                           --                --               --
        Other directors emoluments                                               729               739              654
        Pensions - normal                                                         99               105               93
Auditors' remuneration                                                           599               400              316
Depreciation                                                                  23,531            24,416           22,248
Goodwill amortization                                                         14,108            13,681           12,440
Pension amortization                                                             169               169               --
Operating leases -  Premises                                                   1,380             2,112            1,520
Operating leases -  Other                                                      1,329             1,410            1,676
                                                                        ====================================================
</TABLE>

                                      F-12

<PAGE>

                            CLONDALKIN INDUSTRIES PLC

          NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

7. Employees and remuneration
<TABLE>
<CAPTION>
                                                                           Year ended        Year ended        Year ended
                                                                          December 31,      December 31,      December 31,
                                                                              2002             2001              2000
                                                                        ----------------------------------------------------
                                                                                         ((euro) thousands)
<S>                                                                              <C>               <C>              <C>
Wages and salaries                                                           144,749           144,773          128,960
Social welfare costs and other taxes                                          17,925            18,717           16,984
Pension costs                                                                  4,760             4,795            4,551
                                                                        ----------------------------------------------------
                                                                             167,434           168,285          150,495
                                                                        ====================================================
Average number of employees during the period                                  4,047             3,989            3,787
                                                                        ====================================================
</TABLE>

8. Taxation on profit (loss) on ordinary activities
<TABLE>
<CAPTION>
                                                                                              Restated          Restated
                                                                           Year ended        Year ended        Year ended
                                                                          December 31,      December 31,      December 31,
                                                                              2002             2001              2000
                                                                       -----------------------------------------------------
                                                                                          ((euro)thousands)
<S>                                                                            <C>               <C>               <C>
Taxation on the profit (loss) from ordinary activities comprises
Irish
   Corporation taxation                                                         --               100               155
Non - Irish
   Corporation taxation                                                      8,412             2,658               947
Deferred taxation                                                             (394)             (756)              837
                                                                      ------------------------------------------------------
                                                                             8,018             2,002             1,939
                                                                      ======================================================
</TABLE>

The adoption of FRS 19 has resulted in an additional deferred taxation credit of
(euro)815,000 being booked in the year ended December 31 2001 and an additional
charge of (euro)1,481,000 being booked in the year ended December 31, 2000.

The standard rates of Corporation Tax are 16% (2001: 20%, 2000: 24%) for trading
profits and 25% for investment income in the Republic of Ireland. The charge for
tax is higher than the standard rates due to higher tax rates on foreign
earnings and provision for certain expenses not deductible for tax purposes.


                                      F-13



<PAGE>

                            CLONDALKIN INDUSTRIES PLC

          NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

8. Taxation on profit (loss) on ordinary activities - continued
<TABLE>
<CAPTION>
                                                                                                  Restated        Restated
                                                                               Year ended       Year ended      Year ended
                                                                               December 31,    December 31,    December 31,
                                                                                  2002              2001             2000
                                                                              ----------------------------------------------
                                                                                             ((euro) thousands)
<S>                                                                                 <C>            <C>              <C>
Profit (loss) on ordinary activities before tax                                     9,865          (6,150)          (8,139)
                                                                              ==============================================
Profit (loss) on ordinary activities multiplied by standard rate of
 corporation tax in Ireland of 16% (2001: 20%, 2000: 24%)                           1,578          (1,230)          (1,953)

Factors affecting charge:
Expenses not deducted for tax purposes
     (primarily goodwill amortisation)                                              2,258           2,770            3,096

Capital allowances for period in excess of depreciation                              (392)           (883)            (351)

Other timing differences                                                              286             954               96
Higher tax rates on overseas earnings
                                                                                    4,682           1,525              393
Adjustment to tax charge in respect of previous periods
                                                                                       --            (378)            (179)
                                                                              ----------------------------------------------
Current tax charge for period                                                       8,412           2,758            1,102
                                                                              ==============================================
</TABLE>

9. Earnings (loss) per share
<TABLE>
<CAPTION>
                                                                                                Restated          Restated
                                                                           Year ended         Year ended        Year ended
                                                                           December 31,      December 31,      December 31,
                                                                              2002                2001               2000
                                                                          --------------------------------------------------
                                                                                           ((euro) thousands)
<S>                                                                               <C>               <C>                <C>
Profit (loss) on ordinary activities after taxation                             1,847            (8,152)           (10,078)
                                                                          --------------------------------------------------
Weighted average number of shares in issue (thousands)                           38.1              38.1               38.1
                                                                          --------------------------------------------------
Earnings (loss) per share (in(euro)'s and c's)                            (euro)48.48     ((euro)213.99)     ((euro)264.55)
                                                                          ==================================================
Diluted earnings (loss) per share (in(euro)'s and c's)                    (euro)48.48     ((euro)213.99)     ((euro)264.55)
                                                                          ==================================================
</TABLE>

10.   Intangible Assets
<TABLE>
<CAPTION>
                                                                                           December 31,      December 31,
                                                                                              2002               2001
                                                                                        ------------------------------------
                                                                                                ((euro) thousands)
<S>                                                                                            <C>                 <C>
Goodwill
Cost
At January 1                                                                                 283,765            248,759
Subsidiaries acquired                                                                         (2,465)            31,173
Foreign currency translation                                                                 (10,556)             3,833
                                                                                        ------------------------------------
At end of period                                                                             270,744            283,765
                                                                                        ====================================
</TABLE>

                                      F-14

<PAGE>

                            CLONDALKIN INDUSTRIES PLC

          NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

10. Intangible Assets (continued)
<TABLE>
<CAPTION>
                                                                                           December 31,      December 31,
                                                                                              2002               2001
                                                                                        ------------------------------------
                                                                                                ((euro) thousands)
<S>                                                                                            <C>                 <C>
Amortization
At January 1                                                                                (28,043)             14,164
Charge for period                                                                           (14,108)             13,681
Foreign currency translation                                                                  1,406                 198
                                                                                        ------------------------------------
At end of period                                                                            (40,745)             28,043
                                                                                        ====================================
Net book amount
At end of period                                                                            229,999             255,722
                                                                                        ====================================
</TABLE>

11. Tangible assets
<TABLE>
<CAPTION>
                                                       Land and         Plant and        Fixtures and
                                                      Buildings         Machinery          Fittings            Total
                                                 ---------------------------------------------------------------------------
                                                                            ((euro) thousands)
<S>                                                         <C>                <C>               <C>                <C>

Cost
At December 31, 2000                                     87,126            121,081             6,391            214,598
Foreign currency translation                              2,905              1,369                11              4,285
Assets acquired                                             561             14,357               712             15,630
Additions                                                   285             18,515               638             19,438
Disposals                                                   (19)            (3,525)             (113)            (3,657)
                                                 ---------------------------------------------------------------------------
At December 31, 2001                                     90,858            151,797             7,639            250,294
Foreign currency translation                             (4,846)            (6,491)             (201)           (11,538)
Assets acquired                                           1,859              5,781                --              7,640
Additions                                                 1,763             14,660             1,589             18,012
Disposals                                                  (545)            (3,421)             (955)            (4,921)
                                                 ---------------------------------------------------------------------------
At December 31, 2002                                     89,089            162,326             8,072            259,487
                                                 ===========================================================================

Accumulated depreciation
At December 31, 2000                                      1,904             21,464             1,579             24,947
Foreign currency translation                                 42                409                29                480
Charge for period                                         2,603             20,388             1,425             24,416
Disposals                                                   (19)            (2,513)             (171)            (2,703)
                                                 ---------------------------------------------------------------------------
At December 31, 2001                                      4,530             39,748             2,862             47,140
Foreign currency translation                               (248)            (2,088)              (93)            (2,429)
Charge for period                                         1,658             20,331             1,542             23,531
Disposals                                                  (521)            (2,638)             (906)            (4,065)
                                                 ---------------------------------------------------------------------------
At December 31, 2002                                      5,419             55,353             3,405             64,177
                                                 ===========================================================================

Net book amount
At December 31, 2001                                     86,328            112,049             4,777            203,154
                                                 ===========================================================================
At December 31, 2002                                     83,670            106,973             4,667            195,310
                                                 ===========================================================================
</TABLE>

12. Financial assets
<TABLE>
<CAPTION>
                                                                                           December 31,      December 31,
                                                                                              2002               2001
                                                                                        ------------------------------------
                                                                                                ((euro) thousands)
<S>                                                                                            <C>                 <C>
Shares in unlisted company at cost                                                            1,888              1,888
                                                                                        ====================================
</TABLE>

The shares in unlisted company represent a 16.3% (2001: 16.3%) equity holding in
Kelvinside Group Limited on a fully diluted basis. Management has assessed,
based on historical and projected financial results, that the value of this
investment is realizable.

                                      F-15

<PAGE>

                            CLONDALKIN INDUSTRIES PLC

          NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

13. Assets held for disposal
<TABLE>
<CAPTION>
                                                                                           December 31,      December 31,
                                                                                              2002               2001
                                                                                        ------------------------------------
                                                                                                ((euro) thousands)
<S>                                                                                            <C>                 <C>
Cost
At January 1                                                                                  6,350               6,350
Disposals                                                                                    (6,350)                 --
                                                                                        -----------------   ----------------
At December 31                                                                                   --               6,350
                                                                                        =================   ================
</TABLE>
14. Stocks
<TABLE>
<CAPTION>
                                                                                           December 31,      December 31,
                                                                                              2002               2001
                                                                                        ------------------------------------
                                                                                                ((euro) thousands)
<S>                                                                                            <C>                 <C>
Raw materials                                                                                23,195              23,794
Work in progress                                                                             10,644              12,850
Finished goods                                                                               36,401              35,909
                                                                                        -----------------   ----------------
                                                                                             70,240              72,553
                                                                                        =================   ================
</TABLE>

The replacement cost of stocks does not differ significantly from the balance
sheet amounts.

15. Debtors
<TABLE>
<CAPTION>
                                                                                           December 31,      December 31,
                                                                                              2002               2001
                                                                                        ------------------------------------
                                                                                                ((euro) thousands)
<S>                                                                                            <C>                 <C>
Amounts falling due within one year
Trade debtors                                                                                84,086              94,485
Prepayments and accrued income                                                               12,760               8,317
                                                                                        -----------------   ----------------
                                                                                             96,846             102,802
                                                                                        -----------------   ----------------
Amounts falling due after more than one year
Pension surplus
At January 1                                                                                  1,831               2,000
Amortized                                                                                      (169)               (169)
                                                                                        -----------------   ----------------
At December 31                                                                                1,662               1,831
                                                                                        -----------------   ----------------

                                                                                        -----------------   ----------------
                                                                                             98,508             104,633
                                                                                        =================   ================
</TABLE>

Trade debtors are stated after deduction of provisions for bad and doubtful
debts of(euro)2,212,000 (2001:(euro)2,395,000).

                                      F-16

<PAGE>

                            CLONDALKIN INDUSTRIES PLC

          NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

16. Creditors - amounts falling due within one year
<TABLE>
<CAPTION>
                                                                                           December 31,      December 31,
                                                                                              2002               2001
                                                                                        ------------------------------------
                                                                                                ((euro) thousands)
<S>                                                                                            <C>                 <C>
Bank loans and overdrafts                                                                     21,720             22,980
Trade creditors and accruals                                                                 116,406            119,910
Taxation creditors (Note 17)                                                                  15,942              9,691
Interest due on bank loans                                                                     6,965              7,387
Deferred acquisition consideration                                                                --                609
                                                                                        -----------------   ----------------
                                                                                             161,033            160,577
                                                                                        =================   ================
</TABLE>

17. Taxation creditors
<TABLE>
<CAPTION>
                                                                                           December 31,      December 31,
                                                                                              2002               2001
                                                                                        ------------------------------------
                                                                                                ((euro) thousands)
<S>                                                                                            <C>                 <C>
Corporation tax                                                                                7,988              1,964
Income tax deducted under PAYE (Irish)                                                           128                142
Pay related social insurance (Irish)                                                             135                153
Social security and other taxes                                                                3,786              2,842
Value added and sales taxes                                                                    3,905              4,590
                                                                                        -----------------   ----------------
                                                                                              15,942              9,691
                                                                                        =================   ================
</TABLE>

17. Creditors (amounts falling due after more than one year)
<TABLE>
<CAPTION>
                                                                                           December 31,      December 31,
                                                                                              2002               2001
                                                                                        ------------------------------------
                                                                                                ((euro) thousands)
<S>                                                                                            <C>                 <C>
Long term debt (Note 19)                                                                     443,666            513,303
Interest due on loans from parent company                                                     42,413             26,506
                                                                                        -----------------   ----------------
                                                                                             486,079            539,809
Finance costs, net of amortization                                                            (4,381)            (4,978)
                                                                                        -----------------   ----------------
                                                                                             481,698            534,831
                                                                                        =================   ================
</TABLE>

18. Long term debt
<TABLE>
<CAPTION>
                                                                                           December 31,      December 31,
                                                                                              2002               2001
                                                                                        ------------------------------------
                                                                                                ((euro) thousands)
<S>                                                                                            <C>                 <C>
Bank and other loans                                                                         184,333            253,970
Senior notes                                                                                 125,000            125,000
Shareholders' loans                                                                          134,333            134,333
                                                                                        -----------------   ----------------
                                                                                             443,666            513,303
                                                                                        =================   ================
</TABLE>

                                      F-17

<PAGE>

                            CLONDALKIN INDUSTRIES PLC

          NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

19.   Long term debt

Bank and other loans
<TABLE>
<CAPTION>
                                                                                           December 31,      December 31,
The bank and other loans due after more than one year mature as follows:                      2002               2001
                                                                                        ------------------------------------
                                                                                                ((euro) thousands)
<S>                                                                                            <C>                 <C>
Between one and two years                                                                     25,628             26,314
Between two and three years                                                                   27,796             31,058
Between three and four years                                                                  28,675             33,711
Between four and five years                                                                   61,539             34,711
Thereafter
   By installment                                                                             30,206            115,694
   Other than by installment                                                                  10,489             12,482
                                                                                        -----------------   ----------------
                                                                                             184,333            253,970
                                                                                        =================   ================
</TABLE>

Bank and other loans due after more than one year from December 31, 2002 were
(euro)184,333,000 (2001; (euro)253,970,000). These include term loans of
(euro)173,844,000 drawn under the senior credit facility agreement and
(euro)10,489,000 due under Industrial Development Revenue Bonds, secured by
letters of credit issued under the senior credit facility agreement. The term
loans were drawn in U.S. dollars, sterling pounds, Swiss francs and Euro to
align the Group's total long term debt service requirements with approximate
annual cash flows by currency denomination.

The total borrowings available under the term loan facilities have been fully
drawn down. Interest is payable on the bank debt at a margin of between 1.5% and
3% above the inter-bank offer rates appropriate to the currency of draw down.

At year end, the Industrial Development Revenue Bonds carried interest at 1.75%
as to (euro)5,721,000 of the outstanding debt and 1.56% on the remainder.

In addition to the term loan facilities, revolving credit facilities up to
(euro)35,000,000 may be utilized in connection with short period borrowings of
one, three and six months and for letters of credit and lender guarantees and
other working capital and foreign exchange requirements. At year end, nothing
was drawn under this facility except to cover outstanding foreign exchange
contracts and letters of credit.

The Group has provided a combination of first priority fixed and floating
charges over most of its tangible and intangible assets as collateral for the
bank loans, including the revolving credit facilities. Where such charges were
not attached to assets, alternative security enforcement rights such as share
pledges have been given. In addition, the security agent for the bank syndicate
holds an A ordinary share in Edgemead. This share entitles the agent to withhold
consent to proceed with an insolvency procedure for a specified standstill
period of 179 days. The senior credit facility agreement also prescribes
operating and financial covenants. These include requirements to maintain
minimum ratios of earnings to interest charges, cash flow to total debt service
requirements, maximum indebtedness conditions and capital expenditure
maintenance.

Mezzanine finance replaced with 10.625% senior notes on January 28, 2000

On January 28 2000, (euro)120,000,000 drawn under the mezzanine facility was
replaced by the (euro)125,000,000 10.625% fixed interest senior notes due
January 2010. The maturity may be accelerated at the option of the note holders
in certain limited circumstances, such as change of control of Clondalkin
Industries. The annual interest charge on the senior notes is payable in two
installments in January and July each year. The senior notes are unsecured
obligations of Clondalkin Industries, the issuer. Edgemead has guaranteed the
senior notes. The guarantee is a general obligation that becomes due 179 days
after a payment default or earlier in limited circumstances and is subordinated
to the rights of the lenders under the senior credit facility agreement. The
guarantee ranks equally with or senior to any other current or future
subordinated indebtedness of Edgemead. Additionally, under the terms of the
senior note indenture agreement, the Group has entered into various covenants,
which place restrictions on the incurrence of additional indebtedness and
dividend and other shareholder payments and liens.

                                      F-18

<PAGE>

                            CLONDALKIN INDUSTRIES PLC

          NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

19. Long term debt - continued

Shareholders' loans


The shareholders' loans, which mature in 2010, are subordinated to the prior
rights of the bank debt and the senior notes and do not qualify for repayment
until the bank debt is repaid and while the senior notes are unpaid, significant
restrictions on repayment are also applied. The shareholder loan notes carry a
coupon interest rate of 10%, payable as to 5%, subject to various restrictions
under the senior credit facility and senior note indenture agreements. Interest
accrued in the year ended December 31, 2002 and in earlier periods is not
payable. Interest not paid is compounded with the principal amount outstanding
each year.

20. Derivatives and financial instruments

The principal financial instruments used to fund the operations comprise bank
loans, senior notes, shareholders' loans and cash. Other financial instruments
such as trade debtors, trade creditors, accruals and provisions also arise from
the Group's operations.

The Group does not trade in financial instruments.

The Group enters into forward exchange contracts to hedge against exposures
associated with operating activities denominated in currencies other than
functional currencies. At December 31 2002, the Group had forward exchange
contracts to exchange the currency equivalent of (euro)8,821,000 (2000:
(euro)20,204,000).

The other main risk arising from the Group's financial instruments is interest
rate risk. The Group manages its interest maturities by entering into roll-over
periods from three to ten months. In prior years the Group also entered into
interest rate swaps to hedge part of its interest rate risk.

Interest rate and currency profile

The interest rate and currency profile on the Group's principal financial
instruments (excluding short term debtors and creditors) at December 31 2002 and
2001 were as follows:

<TABLE>
<CAPTION>
                                                    Euro        U.S. Dollar         Sterling         Other           Total
                                              ----------------------------------------------------------------------------------
December 31, 2002                                                             ((euro) thousands)
<S>                                                    <C>             <C>            <C>              <C>              <C>
Senior notes                                       125,000              --              --              --          125,000
Weighted average fixed debt interest rates          10.625%                                                          10.625%
Weighted average fixed debt period - years               7                                                                7
Shareholders' loans                                134,333              --              --              --          134,333
Weighted average fixed debt interest rates              10%                                                              10%
Weighted average fixed debt period - years               7                                                                7
Variable rate debt
Bank and other loans                                63,116          89,670          40,661          12,605          206,052
                                              ----------------------------------------------------------------------------------
Total borrowings                                   322,449          89,670          40,661          12,605          465,385
Bank and cash balances - floating rates             28,381           6,518           4,789           2,947           42,635
                                              ----------------------------------------------------------------------------------
Net debt by major currency                         294,068          83,152          35,872           9,658          422,750
                                              ==================================================================================
</TABLE>

                                      F-19

<PAGE>

                            CLONDALKIN INDUSTRIES PLC

          NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

20. Derivatives and financial instruments - continued

<TABLE>
<CAPTION>
                                                    Euro        U.S. Dollar         Sterling         Other           Total
                                              ----------------------------------------------------------------------------------
December 31, 2002                                                             ((euro) thousands)
<S>                                                    <C>             <C>            <C>              <C>              <C>
Fixed rate debt
Bank and other loans                                77,668         112,381          57,958          16,461          264,468
Weighted average fixed debt interest rates            6.20%           7.75%           8.25%           4.49%            7.22%
Weighted average fixed debt period - years            1.09             1.0            0.87            1.04             0.98
Senior notes                                       125,000              --              --              --          125,000
Weighted average fixed debt interest rates          10.625%             --              --              --           10.625%
Weighted average fixed debt period - years               8              --              --              --                8
Shareholders' loans                                134,333              --              --              --          134,333
Weighted average fixed debt interest rates              10%             --              --              --               10%
Weighted average fixed debt period - years               8              --              --              --                8
Variable rate debt
Bank and other loans                                    --          12,482              --              --           12,482
                                              ----------------------------------------------------------------------------------
Total Borrowings                                   337,001         124,863          57,958          16,461          536,283
Bank and cash balances - floating rates            (21,259)        (13,062)         (8,616)         (3,549)         (46,486)
                                              ----------------------------------------------------------------------------------
Net debt by major currency                         315,742         111,801          49,342          12,912          489,797
                                              ==================================================================================
</TABLE>

The Group's long term financial liabilities, comprising interest due on
shareholders' loans are payable in Euro. The fixed interest rates listed above
for bank and other loans reflect the swap of the variable interest rate on this
debt for fixed interest rate.

Fair value of financial assets and financial liabilities

The book values and estimated fair values of the financial assets and financial
liabilities at December 31, 2002 and 2001 are summarized below. Certain
estimates and judgments were required to develop the fair value amounts. The
fair value amounts shown below are not necessarily indicative of the amounts
that the Company would realize upon disposition nor do they indicate the
Company's intent or ability to dispose of such financial instruments:

<TABLE>
<CAPTION>
                                                                      December 31, 2002              December 31, 2001
                                                                   Carrying          Fair           Carrying          Fair
                                                                    Amount          Value            Amount          Value
                                                               ---------------------------------------------------------------
                                                                                       ((euro) thousands)
<S>                                                                    <C>             <C>             <C>              <C>
Assets
Bank and cash balances                                              42,635          42,635          46,486           46,486
Accounts receivable and prepayments                                 98,508          98,508         102,802          102,802
Liabilities
Bank loans and overdrafts                                               --              --              --               --
Accounts payable and accrued liabilities                           117,508         117,508         164,103          164,103
Long term debt and Shareholder loans' (including current           422,752         432,752         536,283          546,283
maturities) Off-balance sheet instruments
Forward exchange contracts                                              --             221              --             (326)
Interest rate swaps                                                     --              --              --           (1,375)
</TABLE>

The following methods and assumptions were used in estimating the fair value
disclosures for financial instruments:

Bank and cash balances, accounts receivable, accounts payable and accrued
liabilities and short term borrowings: The carrying amount reported in the
balance sheet approximates fair value due to the short maturity of these
instruments.

Long-term debt and shareholders' loans: The carrying amount of variable rate
debt reported in the balance sheet approximates fair value. The fair value of
the senior notes is their market value which is (euro)135 million compared to
its carrying value which is (euro)125 million. The interest rate on long term
debt, including current maturities of long term debt varies between 1.25% and 3%
above inter bank offer rates, on senior notes the interest rate is 10.625%
(2001: 10.625%), and on shareholders' loans the interest rate is 10% (2001:
10%).

                                      F-20

<PAGE>

                            CLONDALKIN INDUSTRIES PLC

          NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

20. Derivatives and financial instruments - continued

Forward exchange contracts and interest rate swaps: The fair value of these
instruments is based on the estimated replacement cost of equivalent instruments
at the balance sheet date. The recognition of the unrealized gains/(losses) on
the forward exchange contracts and interest rate swaps in the profit and loss
account in future periods is dependent on future exchange rates and interest
rates which cannot be determined.

21. Provision for liabilities and charges - deferred taxation

<TABLE>
<CAPTION>
                                                                                                               Restated
                                                                                           December 31,      December 31,
                                                                                              2002               2001
                                                                                        ------------------------------------
                                                                                                ((euro) thousands)
<S>                                                                                            <C>                 <C>
All in respect of accelerated capital allowances
At January 1                                                                                  11,867             11,315
Prior year adjustment FRS 19                                                                   1,978              2,793
                                                                                        -----------------   ----------------
At January 1 as restated                                                                      13,845             14,108
Acquired on acquisition                                                                           --                150
Foreign currency translation                                                                    (718)               343
Released to profit for the period                                                               (394)              (756)
                                                                                        -----------------   ----------------
At December 31                                                                                12,733             13,845
                                                                                        =================   ================
</TABLE>

The adoption of FRS 19 has resulted in deferred tax assets and liabilities being
provided for in full.

The Group does not provide for deferred taxation on the fair value revaluation
of land and buildings acquired in a business combination except where there is
an intention to dispose of these assets. The amount of deferred tax that would
arise on such revaluations if they were all realized would be (euro)8,044,000
(2001: (euro)8,350,000).


22. Called up share capital
<TABLE>
<CAPTION>

                                                         Ordinary shares of (euro)1 each       Ordinary shares of (euro)1each
                                                                     2002                                  2001
                                                       -----------------------------------------------------------------------
                                                              Number             Value            Number             Value
                                                            (thousands)    ((euro) thousands)   (thousands)    ((euro) thousands)
<S>                                                             <C>             <C>               <C>                <C>
Authorized
At December 31                                                   100             100               100                100
                                                       =======================================================================
Issued
At January 1                                                      38              38                38                 38
Issued                                                            --              --                --                 --
                                                       -----------------------------------------------------------------------
At December 31                                                    38              38                38                 38
                                                       =======================================================================
</TABLE>

On November 15, 1999, 38,093 ordinary shares of (euro)1.00 each were issued for
cash at par with 25% of the nominal value of each share paid up.

23. Currency translation reserve
<TABLE>
<CAPTION>

                                                                                       December 31,          December 31,
                                                                                         2002                     2001
                                                                                  --------------------------------------------
                                                                                                 ((euro) thousands)
<S>                                                                                      <C>                          <C>
At January 1                                                                              401                          99
Currency translation adjustments                                                        (332)                         302
                                                                                      ------                        -----
At December 31                                                                            69                          401
                                                                                      ======                        =====


                                      F-21
<PAGE>


                            CLONDALKIN INDUSTRIES PLC

          NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

24. Cash flow from operating activities

</TABLE>

<TABLE>
<CAPTION>
                                                                            Year ended       Year ended       Year ended
                                                                           December 31,     December 31,     December 31,
                                                                               2002             2001             2000
                                                                         ---------------------------------------------------
                                                                                           ((euro) thousands)
<S>                                                                            <C>              <C>              <C>
Operating profit                                                               55,992           43,444           38,070
Depreciation                                                                   23,531           24,416           22,248
Goodwill amortization                                                          14,108           13,681           12,440
Pension amortization                                                              169              169               --
Profit on disposal of tangible assets                                            (922)            (813)          (2,103)

Decrease in stocks                                                              1,067            2,414            3,801
Decrease in debtors                                                             2,388            2,450            2,646
(Decrease) increase in creditors                                               (4,235)          (3,366)           2,543
                                                                         ---------------------------------------------------
                                                                               92,098           82,395           79,645
                                                                         ===================================================
</TABLE>


25.   Subsidiaries acquired

On December 19, 2002, the Group acquired the business and assets of Spiralkote,
a flexible packaging company located in Orlando, Florida in the United States
for consideration of (euro)2.1 million which was paid from the Group's cash
resources.

On April 6, 2001 the Company's wholly owned subsidiary, Clondalkin Holdings BV,
acquired 100% of the issued share capital of Frievaart Holding BV, the holding
company of European Packaging Holding businesses ("the EPH companies") for
consideration of (euro)47.5 million.

The consideration payable was financed as to (euro)20 million with an
intercompany loan advanced by the parent, Clondalkin Group Holdings Limited, to
Edgemead Limited, funded by newly issued subordinated shareholders' loans due
July 2010. The intercompany loan carries a coupon interest rate of 10% per
annum, which is non-cash payable and therefore is accrued for on a cumulative
basis every year. The balance of the consideration payable was funded by
additional bank debt of (euro)30 million drawn by Edgemead under the senior
credit facility agreement and is repayable over seven years, maturing December
2007. The intercompany loan advanced to Edgemead is subordinate to the senior
notes due January 2010, with respect to interest and principal payments. The
intercompany loan and bank debt is Euro denominated.

<TABLE>
<CAPTION>
                                                                          Year ended       Year ended        Year ended
                                                                         December 31,     December 31,       December 31,
                                                                             2002             2001               2000
                                                                        ----------------------------------------------------
                                                                                           ((euro) thousands)

<S>                                                                           <C>             <C>                   <C>
Tangible assets                                                               7,640           15,630                 --
Stocks                                                                        1,231           11,430                 --
Debtors                                                                       1,926           10,439                 --
Creditors                                                                    (6,278)         (19,419)                --
Provisions for liabilities and charges - deferred taxation                       --             (150)                --
                                                                        ----------------------------------------------------
                                                                              4,519           17,930                 --
(Discount on acquisition) Goodwill on acquisition                            (2,465)          31,173                 --
                                                                        ----------------------------------------------------
                                                                              2,054           49,103                 --
                                                                        ====================================================
Satisfied by
Consideration and expenses paid                                               2,054           48,836                 --
Amounts due                                                                      --              267                 --
                                                                        ----------------------------------------------------
                                                                              2,054           49,103                 --
                                                                        ====================================================
</TABLE>

                                      F-22
<PAGE>


                            CLONDALKIN INDUSTRIES PLC

          NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)


25.   Subsidiaries acquired - continued

Year ended December 31, 2002
<TABLE>
<CAPTION>
                                                                                              Accounting
                                                            Book Value        Fair Value        Policy         Fair value
                                                             Acquired        adjustments       Alignments       acquired
                                                         ----------------------------------------------------------------------
                                                                                     ((euro) thousands)
The fair values attributed to the business were as follows
<S>                                                              <C>              <C>                <C>          <C>
Tangible fixed assets                                                -            7,640               --         7,640
Stocks                                                           1,469            (238)               --         1,231
Debtors                                                          2,198            (272)               --         1,926
Creditors                                                       (4,131)          (2,147)              --        (6,278)
                                                         ----------------------------------------------------------------------
                                                                 (464)            4,983               --         4,519
                                                         ----------------------------------------------------
Discount on acquisition                                                                                         (2,465)
                                                                                                               -------
                                                                                                                 2,054
                                                                                                               =======
Satisfied by
Consideration paid
                                                                                                                 2,054
                                                                                                               =======

</TABLE>
Year ended December 31, 2001
<TABLE>
<CAPTION>
                                                                                                Accounting
                                                            Book Value        Fair Value         Policy         Fair value
                                                             Acquired        adjustments        Alignments       acquired
                                                         ----------------------------------------------------------------------
                                                                                     ((euro) thousands)
The fair values attributed to the business were as follows

<S>                                                             <C>               <C>            <C>                <C>
Tangible fixed assets                                           18,533            (102)          (2,801)            15,630
Stocks                                                          11,793            (136)            (227)            11,430
Debtors                                                         10,666              --             (227)            10,439
Creditors                                                      (17,082)         (2,337)              --            (19,419)
Provision for liabilities and charges - deferred
   taxation                                                       (150)             --               --               (150)
                                                         ----------------------------------------------------------------------
                                                                23,760          (2,575)          (3,255)            17,930
                                                         ----------------------------------------------------
Goodwill                                                                                                            31,173
                                                                                                                   -------
                                                                                                                    49,103
                                                                                                                   =======
Satisfied by
                                                                                                                   -------
Consideration and expenses paid (including expenses payable of(euro)267,000)                                        49,103
                                                                                                                   =======
</TABLE>


26. Movement in net debt
<TABLE>
<CAPTION>
                                                                           Year ended        Year ended       Year ended
                                                                           December 31,      December 31,     December 31,
                                                                               2002             2001             2000
                                                                        ----------------------------------------------------
                                                                                           ((euro) thousands)

<S>                                                                            <C>              <C>                 <C>
(Decrease) increase in cash                                                    (1,124)          (4,296)             514
Decrease (increase) in loans                                                    47,569          (2,206)          36,310
Increase in senior notes                                                           --               --         (125,000)
Decrease in mezzanine finance                                                      --               --          120,000
Foreign currency translation                                                    20,533          (8,187)          (9,369)
                                                                        ----------------------------------------------------
                                                                                66,978         (14,689)          22,455
Net debt at beginning of period                                               (355,464)       (340,775)        (363,230)
                                                                        ----------------------------------------------------
Net debt at end of period                                                     (288,486)       (355,464)        (340,775)
                                                                        ====================================================

</TABLE>

                                      F-23
<PAGE>


                            CLONDALKIN INDUSTRIES PLC

          NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

27. Analysis of changes in net debt
<TABLE>
<CAPTION>

                                                           January 1,                          Exchange       December 31,
                                                              2002          Cash flows         Movement           2002
                                                       ---------------------------------------------------------------------
                                                                                  ((euro) thousands)

<S>                                                           <C>               <C>              <C>               <C>
Cash balances and call deposits                               46,486            (1,124)          (2,795)           42,567
Loans due within one year                                    (22,980)             (125)           1,385           (21,720)
Loans due after one year                                    (378,970)           47,694           21,943          (309,333)
                                                       ---------------------------------------------------------------------
Net debt                                                   (355,464)            46,445           20,553          (288,486)
                                                       =====================================================================

                                                          January 1,                           Exchange       December 31,
                                                             2001             Cash flows       Movement           2001
                                                       ---------------------------------------------------------------------
                                                                                  ((euro) thousands)

Cash balances and call deposits                               49,889            (4,296)             893            46,486
Loans due within one year                                    (18,674)           (3,883)            (423)          (22,980)
Loans due after one year                                    (371,990)            1,677           (8,657)         (378,970)
                                                       ---------------------------------------------------------------------
Net debt                                                    (340,775)           (6,502)          (8,187)         (355,464)
                                                       =====================================================================

                                                           January 1,                          Exchange       December 31,
                                                             2000             Cash flows       Movement           2000
                                                       ---------------------------------------------------------------------
                                                                                  ((euro) thousands)

Cash balances and call deposits                               48,720               514              655            49,889
Loans due within one year                                    (26,149)            7,636             (161)          (18,674)
Loans due after one year                                    (385,801)           23,674           (9,863)         (371,990)
                                                       ---------------------------------------------------------------------
Net debt                                                    (363,230)           31,824           (9,369)         (340,775)
                                                       =====================================================================

</TABLE>


The directors consider cash deposits with maturities of less than one year to be
liquid resources.

28.   Capital expenditure commitments
At the year end the following capital expenditure commitments authorized by the
board of directors have not been provided in the financial statements:
<TABLE>
<CAPTION>

                                                                                   December 31,               December 31,
                                                                                       2002                       2001
                                                                                   --------------------------------------
                                                                                                 ((euro) thousands)
<S>                                                                                    <C>                       <C>
Contracted for                                                                         4,818                     1,483
Not contracted for                                                                     4,260                     2,020
                                                                                    --------                   -------
                                                                                       9,078                     3,503
                                                                                    ========                   =======
</TABLE>


29.   Leasing commitments

At December 31 2002, the Group had annual commitments under non-cancelable
operating leases which expire as follows:
<TABLE>
<CAPTION>

                                                                                     Premises                  Equipment
                                                                                   --------------------------------------
                                                                                                 ((euro)thousands)
<S>                                                                                       <C>                         <C>
Within one year                                                                           242                         395
One to five years                                                                       1,330                         363
Over five years                                                                           747                          47
                                                                                     --------                       -----
                                                                                        2,555                         805
                                                                                     ========                       =====
</TABLE>


                                      F-24
<PAGE>

                            CLONDALKIN INDUSTRIES PLC

          NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)


30.   Post Balance Sheet Events

There have been no significant post balance sheet events.

31.   Controlling Parties

The controlling party of the company is Clondalkin Group Holdings Limited, a
company registered in the Republic of Ireland. Copies of the consolidated
financial statements of Clondalkin Group Holdings Limited will be available from
the Companies' Registration Office in Ireland.


32. Pensions

The Group companies contribute to pension benefit arrangements operated in
accordance with the local conditions and practices in the jurisdictions in which
the companies operate. These arrangements are administered in funded pension
schemes held separately from, and managed independently of, the participating
companies.

The most common type of pension scheme operated by the participating companies
is the defined contribution type of scheme. In these schemes, the employer
obligation is to pay agreed annual contributions. In addition, certain group
companies based in the Netherlands, in accordance with common practice in that
country, contribute to defined benefit schemes operated as part of broadly based
industry schemes. In these industry schemes, there is no practical way to
separate the pension benefit affairs of the operating companies' beneficiaries
from the general membership of these schemes. These industry schemes therefore
reflect features more normal to defined contribution schemes than defined
benefit schemes. The annual contributions, expressed as a percentage of salary,
both to the defined contribution schemes and the industry schemes have not
varied significantly in recent years. The charge for the year in respect of the
defined contribution schemes was (euro)3.0 million (2001: (euro)3.2m) and the
contributions due at 31 December 2002 were (euro)368,000 (2001: (euro)393,000).

Defined benefit type schemes are also operated. In these schemes, the employer
obligation is to provide benefits linked to employees' service years. Annual
contributions to these schemes are based on advice from independent professional
actuaries. Actuarial valuations have been carried out on all these schemes
within the last three years, using the projected unit method to determine
pension contributions. These valuations are reviewed annually. Qualified
independent actuaries perform the actuarial valuations and the annual reviews.
The most significant actuarial valuation assumptions are disclosed below. The
actuarial value of the assets of these plans was sufficient to cover
approximately 103% (2001: 120%) of the benefits that had accrued to members
after allowing for expected future increases in salaries and wages and pensions.
The charge for the year in respect of these defined benefit schemes was
(euro)1.6 million (2001: (euro)1.6 million) and the contributions prepaid at 31
December 2002 was (euro)184,000(2001: (euro) nil).

The additional disclosures required by FRS 17 - Retirement Benefits for the
defined benefit schemes are set out below. The FRS 17 implementation requires
additional disclosures in the year ended 31 December 2002. The current year
implementation consists of disclosure requirements only in compliance with the
requirements of the standard. The full implementation of FRS 17 in the year
ended 31 December 2005 is expected to lead to prior period restatement and will
impact on the profit and loss account charges and credits recorded.

The market value and expected long term rate of returns on the main assets held
by the pension schemes at 31 December 2002, compared to the liability position
at that date, were as follows:


                                      F-25

<PAGE>

                            CLONDALKIN INDUSTRIES PLC

          NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)




32. Pensions - continued
<TABLE>
<CAPTION>
                                                          Expected     Market value at        Expected     Market value at
                                                       long term rate    December 31,     long term rate    December 31,
                                                       of return 2002        2002          of return 2002      2001
                                                     -------------------------------------------------------------------
                                                               %         (euro)'000                 %        (euro)'000
<S>                                                         <C>              <C>                   <C>          <C>
Equities                                                    7.2%           36,652                7.1%         47,830
Fixed income and indexed linked investments                 4.6%           51,460                5.0%         54,805
Properties                                                  5.4%           17,504                5.4%         16,715
Cash and other                                              2.7%            9,782                3.4%          5,902
                                                                        ---------                           ---------
Total assets                                                              115,398                            125,252
Present value of scheme liabilities                                      (112,249)                          (104,230)
                                                                        ---------                           ---------
Surplus of assets over present value of liabilities                         3,149                             21,022
Surplus restriction                                                        (5,855)                           (16,579)
                                                                        ---------                           ---------
Net (deficit) surplus after restriction                                    (2,706)                             4,443
Related deferred tax asset (liability)                                        759                             (1,247)
                                                                        ---------                           ---------
Net pension (liability) asset                                              (1,947)                             3,196
                                                                        =========                           =========

</TABLE>

The movements on the surplus of pension fund assets over the present value of
liabilities in the year ended 31 December 2002 were as follows:
<TABLE>
<CAPTION>
                                                                                            For the year
                                                                                               ending
                                                                                          December 31, 2002
                                                                                        -------------------
                                                                                              (euro)'000
<S>                                                                                             <C>
Surplus of assets over present value of liabilities at January 1, 2002                          21,022
Movements in the year ended December 31, 2002
    Current service cost                                                                        (2,010)
    Contributions                                                                                1,557
    Past service costs                                                                             (12)
    Other finance income                                                                         1,903
Actuarial loss                                                                                 (19,311)
                                                                                          ------------
Surplus of assets over present value of liabilities at December 31, 2002                         3,149
                                                                                          ============
</TABLE>

The experience gains and losses in the year ended December 31, 2002 were as
follows:
<TABLE>
<CAPTION>
                                                                                              For the year
                                                                                                ending
                                                                                           December 31, 2002
                                                                                          -------------------
                                                                                              (euro)'000
<S>                                                                                             <C>                  <C>
Shortfall between the actual and expected return on scheme assets                              (14,630)
     Shortfall expressed as percentage of scheme assets as at December 31, 2002                                      12.7%
Experience gain on pension scheme liabilities                                                    1,163
     Gain expressed as percentage of scheme liabilities as at December 31, 2002                                       1.0%
Loss arising from changes in the assumptions used to value liabilities                          (5,844)
     Loss expressed as percentage of scheme liabilities as at December 31, 2002                                       5.2%
                                                                                          ------------
Total actuarial loss                                                                           (19,311)              17.2%
                                                                                          ============
</TABLE>
     Total actuarial loss expressed as percentage of scheme liabilities as at
December 31, 2002 17.2%.

                                      F-26
<PAGE>

                            CLONDALKIN INDUSTRIES PLC

          NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)


32. Pensions - continued

The major assumptions, weighted by reference to the pension scheme liabilities
of the participating pension schemes, used by the actuary in presenting the
above summary details were as follows:
<TABLE>
<CAPTION>

                                                                        At December 31,            At December 31,
                                                                             2002                        2001
                                                                        ---------------            ---------------
<S>                                                                           <C>                       <C>
Rate of increase in salaries                                                  2.6%                      2.5%
Rate of increase in pensions in payment                                       1.4%                      1.3%
Discount rate                                                                 5.1%                      5.3%
Inflation assumption                                                          1.8%                      1.8%

</TABLE>












                                      F-27
<PAGE>



                            CLONDALKIN INDUSTRIES PLC

          NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

33. Summary of significant differences between Irish and U.S. GAAP


The consolidated financial statements are prepared in accordance with Irish
GAAP, which differ in certain respects from U.S. GAAP. These differences relate
to the following items and the necessary adjustments are shown in the following
tables.

Goodwill

Goodwill under Irish GAAP is amortized over the estimated life (not to exceed
twenty years).

Under U.S. GAAP goodwill is accounted for as follows:

Periods ending on or before December 31, 2001

For periods ending on or before December 31, 2001 goodwill was amortized on a
straight-line basis over its useful economic life.

Goodwill recognized in respect of each significant business combination was
amortized over a period of 20 years on a straight line basis, and was evaluated
for impairment when events or changes in circumstances indicated, that in
management's judgment, the carrying value of such assets may not be recoverable.
Impairments of goodwill were recognized if expected undiscounted cash flows were
not sufficient to recover the goodwill. If a material impairment was identified,
goodwill was written down to its estimated fair value. Fair value was determined
based on the present value of expected net cash flows to be generated by the
business, discounted using a rate commensurate with the risks involved.

Periods commencing January 1, 2002

Effective January 1, 2002, the Group adopted SFAS No. 142, Goodwill and Other
Intangible Assets" ("SFAS 142"). This statement directs that goodwill and
intangible assets that have indefinite useful lives will not be amortized but
rather will be tested at least annually for impairment. Intangible assets that
have finite lives will continue to be amortized over their useful lives, but
without the constraint of an arbitrary ceiling. Going forward, the Group will
carry out an annual impairment review of goodwill as of the December 31
anniversary date unless any events occur which trigger the need for an earlier
impairment review.

The transitional provisions of SFAS 142 require disclosure of reported net
income in all periods presented, exclusive of amortization expense recognized in
those periods related to goodwill and the effects of other accounting changes
pursuant to the adoption of SFAS 142. Those disclosures are set forth below,
presented as a reconciliation from net income as stated.

<TABLE>
<CAPTION>

                                                                      Year ended        Year ended       Year ended
                                                                    December 31,      December 31,     December 31,
                                                                            2002              2001             2000
                                                                 ---------------------------------------------------
                                                                                    (euro) thousands

<S>                                                                       <C>             <C>               <C>
Net income (loss) attributable to shareholders under U.S. GAAP            20,744          (11,884)          (8,524)
Effect on net income had SFS 142 been adopted for all periods
   presented                                                                  --           14,012           12,652
                                                                    ------------      -----------     ------------
Restated net income attributable to
Shareholders under U.S. GAAP                                              20,744            2,128            4,128
                                                                    ============      ===========     ============
Basic and diluted net income per share under U.S. GAAP              (euro)544.53      (euro)55.86     (euro)108.36
                                                                    ============      ===========     ============
</TABLE>


                                      F-28
<PAGE>




                            CLONDALKIN INDUSTRIES PLC

          NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

33. Summary of significant differences between Irish and U.S. GAAP - continued

There is a difference between the amount recorded as goodwill for Irish GAAP and
U.S. GAAP. Upon the original formation in 1999 there were certain items,
described below, which resulted in a different goodwill balance under Irish GAAP
and U.S. GAAP. Additionally, the acquisition of 2002 resulted in negative
goodwill of (euro)2,465,000, which is reflected in the net goodwill balance for
Irish GAAP and for U.S. GAAP has reduced tangible fixed assets. These
differences have a direct impact on the amortization expense reflected for each
period presented. The following amounts were recognized under U.S. GAAP at the
date of the original formation: goodwill (euro)233,378,000, pensions surplus
(euro)13,267,000, deferred taxation (euro)23,938,000. The corresponding amounts
recognized under Irish GAAP were: goodwill (euro)230,602,000, pension surplus
(euro)2,000,000 and deferred taxation (euro)7,270,000.

Pension costs

Under Irish GAAP, pension costs in respect of defined benefit plans are assessed
in accordance with the advice of independent actuaries, using assumptions and
methods which, taken as a whole, produce the actuaries' best estimates of the
cost of providing the pension benefits promised.

Under U.S. GAAP, pension costs are determined in accordance with SFAS 87
"Employers Accounting for Pensions" ("SFAS 87") and SFAS 88, "Employers'
Accounting for Settlements and Curtailments of Defined Benefit Pension Plans and
for Termination Benefits" ("SFAS 88").

Differences between the Irish GAAP and U.S. GAAP figures arise from the
requirement to use different methods and assumptions for valuing scheme assets,
the required use of projected benefit unit credit method for costing purposes
under U.S.GAAP and a different method of amortizing surpluses or deficits.

Deferred taxation

Under Irish GAAP, deferred taxation is recognized in respect of all timing
differences that have originated but not reversed at the balance sheet date
where transactions or events that result in an obligation to pay more tax in the
future or a right to pay less tax in the future, have occurred at the balance
sheet date.

Under U.S. GAAP, deferred tax liabilities relating to temporary timing
differences are fully provided for and future benefits are recognized as
deferred tax assets to the extent that their realization is more likely than
not.

Under Irish GAAP, FRS 19 requires deferred tax to be provided on all
liabilities. Deferred tax assets are recognized only to the extent that it is
considered more likely than not there will be suitable taxable profits from
which future reversal of the underlying timing differences can be deducted. In
certain circumstances, where it is expected to take some time for tax losses to
be relived, it may not be appropriate to recognize the deferred tax assets at
all.

Under U.S.GAAP, deferred tax assets and liabilities are recognized for the
estimated future consequences of events attributable to differences between the
financial statements carrying amounts of existing assets and liabilities and
their respective tax bases and operating and capital loss and tax credits
forward. Deferred tax assets are reduced through the establishment of a
valuation allowance at such time as, based on available evidence, it is more
likely than not that the deferred tax assets will not be realized. This may
result in deferred tax assets being recognized for U.S GAAP purposes which do
not comply with Irish GAAP criteria. There were no such items in the periods
presented.

Under Irish GAAP, deferred tax is not provided on the revaluation of fixed
assets. Under U.S. GAAP such a provision is made. The quantitative effect in the
difference between the standards is (euro)8,044,000 (2001: (euro)8,350,000).

Under Irish GAAP, deferred tax is provided on the pension surpluses arising on
acquisition of companies. Under U.S. GAAP, such a provision is not made. The
quantitative effect in the difference between the standards is (euro)1,624,000
(2001: (euro)1,739,000).

Under Irish GAAP, deferred tax is based on tax rates and laws that have been
enacted or substantively enacted. For U.S. GAAP, only tax rates and laws that
have been enacted have been taken into account. This difference has not resulted
in any material difference in 2002, 2001 and 2000.



                                      F-29
<PAGE>


                            CLONDALKIN INDUSTRIES PLC

          NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

33. Summary of significant differences between Irish and U.S. GAAP - continued

Under Irish GAAP, passing certain criteria, the group may net deferred tax
liabilities and assets and present a net balance in the balance sheet, within
provisions for liabilities and charges. Additionally, under Irish GAAP the tax
rate reconciliation is performed to the current tax charge for the year.

Under U.S. GAAP deferred taxes are classified between current and non-current,
depending on the items they relate to, disclosed separately and presented on a
net basis, by tax jurisdiction. Additionally, under U.S. GAAP the tax rate
reconciliation is performed to the total tax charge for the year.


The Company has not provided any deferred taxes on the undistributed earnings of
its foreign subsidiaries based upon its determination that such earnings will be
indefinitely reinvested. As at December 31, 2002, the cumulative undistributed
earnings of these subsidiaries were approximately (euro)302.5 million. If such
earnings were not considered indefinitely reinvested, deferred Irish and foreign
taxes would have been provided, after consideration of foreign tax credits.
However, determination of the amount of deferred Irish and foreign taxes is not
practical.

Finance costs

Under Irish GAAP the costs incurred in issuing debt instruments are required to
be netted against the proceeds received from the debt instrument and amortized
over the life of the debt. Thus the debt liability is shown net of finance costs
in the balance sheet. Under U.S. GAAP the costs of issuing debt instruments are
required to be capitalized as an intangible asset and amortized over the life of
the debt. Thus the debt liability is shown gross of finance costs under U.S.
GAAP.

Foreign currency translation

The consolidated profit and loss account for the years ended December 31 2000
and 2001 was prepared using year-end exchange rates when translating the income
of subsidiaries, as permitted under Irish GAAP. The consolidated profit and loss
account for the year ended December 31, 2002 has been prepared using the average
exchange rate when translating the income of subsidiaries.

U.S. GAAP requires the use of average exchange rates. As a result of the change
in accounting under Irish GAAP there is no longer a difference in this area.

Derivative instruments and hedging activities

SFAS No. 133, Accounting for Derivatives and Hedging Activities ("SFAS 133")
became effective for the Company January 1, 2001 SFAS No. 133 establishes
accounting and reporting standards for derivative instruments, including certain
derivative instruments embedded in other contracts, and for hedging activities.
It requires the recognition of derivatives in the balance sheet and the
measurement of those instruments at fair value. Changes in the fair value of
derivatives are recorded in earnings, unless (i) the normal purchase or sale
exception or (ii) hedge accounting is elected. The adoption of SFAS 133,
effective January 1, 2001, resulted in other comprehensive income, net of tax,
of (euro)312,000 being reported as the cumulative effect of adopting an
accounting principle.

Accordingly, since adoption changes in the fair value of forward contracts and
interest rate swaps are recorded each period in current earnings, as the forward
contracts do not qualify as hedges under SFAS 133.

The Group does not have embedded derivatives that would require to be accounted
separately in accordance with SFAS 133 for the periods presented in accordance
with SFAS 133.

Formation Accounting

Upon the formation of the Group in 1999, there were certain amounts that were
accounted for differently under U.S. GAAP and Irish GAAP. These items are as
follows:

o Imputed interest

Under U.S. GAAP, interest is required to be imputed on the consideration
outstanding from the date on which the offer for Clondalkin Group (Predecessor)
by the Company became unconditional, and control passed, to the date on which
the consideration was paid. A similar adjustment is not required under Irish
GAAP.


                                      F-30
<PAGE>


                            CLONDALKIN INDUSTRIES PLC

          NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)


33. Summary of significant differences between Irish and U.S. GAAP - continued

Formation Accounting - continued

o  Inventory fair value

Under U.S. GAAP the fair values of inventories acquired in a business
combination are calculated as the selling price less any future anticipated
costs and a reasonable profit allowance for the selling effort of the acquiring
company. Under Irish GAAP, the fair values of inventories are determined by the
lower of replacement cost and net realizable value, which approximates the
carrying value of inventories.

o  Carryover basis in leveraged buyout transactions

Under U.S. GAAP, EITF 88-16 "Basis in Leveraged Buyout Transactions" requires
the carryover of management's investment in Clondalkin Group (Predecessor) in
determining the value of the consideration paid by the Company and the
corresponding reduction in the fair value of the net assets acquired. The
application of such carryover basis results in a higher goodwill amount being
recorded under U.S. GAAP than under Irish GAAP, which does not require
application of this carryover basis.

Each of these items resulted in a difference in the amount of goodwill recorded
under Irish GAAP and U.S. GAAP as a result of the acquisition. As noted above,
these amounts are being amortized over time as a component of the goodwill
adjustment.

Unpaid share capital

Under Irish GAAP called up share capital is recorded at full nominal value,
including unpaid amounts. Under U.S. GAAP, called up share capital is recorded
as the amount of proceeds received.

Exceptional items

Under Irish GAAP, exceptional items of income and expenditure are separately
disclosed after operating profit on the face of the profit and loss account.
Under U.S. GAAP, these items would be classified within operating income.

Assets held for disposal

Under Irish GAAP, assets classified as held for disposal under current assets
representing primarily land, would not meet the criteria for such
classifications under U.S. GAAP as set out in SAB100 "Restructuring and
Impairment Changes". Under U.S. GAAP, such assets would be classified as fixed
assets.

New accounting pronouncements

In June 2001, the Financial Accounting Standards Board (FASB) issued SFAS. 143,
"Accounting for Asset Retirement Obligations" (SFAS. 143). SFAS. 143 requires
that the fair value of a liability for asset retirement obligations be
recognized in the period in which it is incurred if a reasonable estimate of the
fair value can be made. The associated asset retirement costs are capitalized as
part of the carrying amount of the related long-lived asset. SFAS 143 is
effective for financial statements issued for fiscal years beginning after June
15, 2002. The Group has assessed the potential impact of the adoption of SFAS
No. 143 and concluded that there is no impact.

In April 2002, the FASB issued SFAS. 145, "Rescission of FASB Statements No.4,
44 and 64, Amendment of FASB Statement No.13 and Technical Corrections" (SFAS.
145). The principal change is that gains or losses from extinguishment of debt
which are classified as extraordinary items by SFAS. 4 will no longer be
classified as such. The provisions of SFAS. 145 are effective for fiscal years
beginning after May 15, 2002 although early application of the Statement related
to the rescission of SFAS 4 is encouraged. The Group plans to adopt SFAS. 145
for its fiscal year ending December 31, 2003.

In June 2002, the FASB issued SFAS. 146, "Accounting for Costs Associated with
Exit or Disposal Activities" (SFAS. 146), which addresses accounting and
processing for costs associated with exit or disposal activities and nullifies
Emerging Issues Task Force (EITF) Issue 94-3, "Liability Recognition for Certain
Employee Termination Benefits and Other Costs to Exit and Activity (including
Certain Costs Incurred in a Restructuring)" (Issue 94-3). SFAS 146 requires that
a liability for a cost associated with an exit or disposal liability be
recognized when the liability is incurred. Under Issue 94-3, a liability for an
exit cost was recognized at the date of an entity's commitment to an exit plan.
Under SFAS. 146, fair value is the objective for initial measurement of the
liability. SFAS 146 is effective for exit or disposal activities that are
initiated after December 31, 2002, with early application encouraged. The Group
is currently evaluating the impact on operations and cash flows of the adoption
of SFAS 146.


                                      F-31
<PAGE>

                            CLONDALKIN INDUSTRIES PLC

          NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)


In November 2002, the FASB issued Interpretation FIN 45, "Guarantor's Accounting
and Disclosure Requirements for Guarantees, Including Indirect Guarantees of
Indebtedness of Others" ("FIN 45"). This interpretation elaborates on the
disclosures

33. Summary of significant differences between Irish and U.S. GAAP - continued

New accounting pronouncements - continued

to be made by a guarantor in its interim and annual financial statements about
its obligations under certain guarantees that it has issued. It also clarifies
that a guarantor is required to recognize, at the inception of a guarantee, a
liability for the fair value of the obligation undertaken in issuing the
guarantee. The disclosure requirements of FIN 45 are effective for interim and
annual periods after December 15, 2002. The initial recognition and initial
measurement requirements of FIN 45 are effective prospectively for guarantees
issued or modified after December 31, 2002. The Group is assessing, but at this
point does not believe the adoption of the recognition and initial measurement
requirements of FIN 45 will have a material impact on its financial position,
cash flows or results of operations.

In January 2003, the FASB issued FIN. 46, "Consolidation of Variable Interest
Entities, an Interpretation of APB No. 51" ("FIN 46"). FIN 46 requires certain
variable interest entities to be consolidated by the primary beneficiary of the
entity if the equity investors in the entity do not have the characteristics of
a controlling financial interest or do not have sufficient equity at risk for
the entity to finance its activities without additional subordinated financial
support from other parties. FIN 46 is effective for all new variable interest
entities created or acquired after January 31, 2003. For variable interest
entities created or acquired prior to February 1, 2003, the provisions of FIN 46
must be applied for the first interim or annual period beginning after June 15,
2003. The Group is currently evaluating the effect that the adoption of FIN 46
will have on its results of operations and financial condition.

Additional U.S. GAAP disclosure information

The following is a summary of the significant adjustments that would be required
to reconcile profit after taxation (net income) and shareholders' funds from
Irish GAAP to U.S. GAAP:

Profit (loss) after taxation attributable to shareholders
<TABLE>
<CAPTION>

                                                                                                   Restated       Restated
                                                                            Year ended           Year ended      Year ended
                                                                           December 31,          December 31,     December
                                                                                2002                 2001         31, 2000
                                                                         --------------------------------------------------
                                                                                           ((euro) thousands)
<S>                                                                               <C>               <C>            <C>
Profit (loss) after taxation attributable to shareholders under Irish
   GAAP (restated)                                                                1,847             (8,152)        (10,078)
U.S. GAAP adjustments
Goodwill amortization                                                            14,108               (331)           (212)
Pension costs                                                                       819               (418)            682
Deferred taxation                                                                 2,048             (1,558)            969
Foreign currency translation                                                        --                 276             115
Derivative instruments                                                            1,922             (1,701)             --
                                                                         --------------------------------------------------
Net income/(loss) attributable to shareholders under U.S.GAAP                    20,744            (11,884)         (8,524)
                                                                         ==================================================


Basic and diluted net income/(loss) per share under U.S. GAAP              (euro)544.53      ((euro)311.96)  ((euro)223.76)
                                                                         ==================================================

</TABLE>



                                      F-32
<PAGE>


                            CLONDALKIN INDUSTRIES PLC

          NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

33. Summary of significant differences between Irish and U.S. GAAP - continued
Statement of comprehensive income

SFAS 130 "Reporting Comprehensive Income" ("SFAS 130") requires reporting and
display of comprehensive income and its components.

Under U.S. GAAP, other comprehensive income for each period was as follows:
<TABLE>
<CAPTION>

                                                                            Year ended         Year ended          Year ended
                                                                           December 31,       December 31,        December 31,
                                                                               2002               2001               2000
                                                                          ---------------------------------------------------
                                                                                           ((euro) thousands)
<S>                                                                             <C>             <C>                 <C>
Net income/(loss) attributable to ordinary shareholders under U.S.GAAP          20,744          (11,884)            (8,524)
Foreign currency translation adjustment                                           (332)              26                (16)
Cumulative effect of adoption of SFAS 133                                           --              312                 --
Reclassification of gains and losses on derivative instruments                      --             (312)                --
                                                                          ----------------------------------------------------
Comprehensive /income/(loss) under U.S. GAAP                                    20,412          (11,858)            (8,540)
                                                                          ====================================================
Foreign currency translation adjustment
At January 1                                                                        42               16                 32
Arising during the year                                                           (332)              26                (16)
                                                                          ----------------------------------------------------
At December 31                                                                    (290)              42                 16
                                                                          ====================================================

</TABLE>

Shareholders' deficiency
<TABLE>
<CAPTION>
                                                                                    December 31,               December 31,
                                                                                        2002                      2001
                                                                                 ---------------------------------------------
                                                                                                ((euro) thousands)
<S>                                                                                    <C>                         <C>
Shareholders' funds under Irish GAAP (restated)                                        (16,952)                    (18,467)
U.S. GAAP adjustments
Goodwill - aggregate amortization                                                       13,467                        (641)
Pension costs                                                                            1,131                         312
Deferred taxation                                                                        2,771                         723
Derivative instruments                                                                     221                      (1,701)
Formation accounting                                                                    (5,844)                     (5,844)
                                                                                     ---------                   ---------
Shareholders' equity under U.S. GAAP                                                    (5,206)                    (25,618)
                                                                                     =========                   =========
</TABLE>

Consolidated Statement of Changes in Shareholders' Deficiency in accordance with
U.S. GAAP

<TABLE>
<CAPTION>

                                                        Ordinary     Additional     Currency     Net (loss)        Total
                                                         shares        paid-in     translation                 shareholders'
                                                                       Capital       reserve                    deficiency
                                                      ------------------------------------------------------------------------
                                                                                   ((euro) thousands)
<S>                                                         <C>         <C>            <C>          <C>             <C>
Balance at January 1, 2000                                   10            --            32        (5,262)         (5,220)
Net loss                                                     --            --            --        (8,524)         (8,524)
Foreign currency translation reserve                         --            --           (16)           --             (16)
                                                      ------------------------------------------------------------------------
Balance at December 31, 2000                                 10            --            16       (13,786)        (13,760)
Net loss                                                     --            --            --       (11,884)        (11,884)
Foreign currency translation reserve                         --            --            26            --              26
                                                      ------------------------------------------------------------------------
Balance at December 31, 2001                                 10            --            42       (25,670)        (25,618)
Net income                                                   --            --            --        20,744          20,744
Foreign currency translation reserve                         --            --          (332)           --            (332)
                                                      ------------------------------------------------------------------------
Balance at December 31, 2002                                 10                        (290)       (4,926)         (5,206)
                                                      ========================================================================

</TABLE>




                                      F-33

<PAGE>
                            CLONDALKIN INDUSTRIES PLC

          NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

33. Summary of significant differences between Irish and U.S. GAAP - continued

Diluted net income/(loss) per share in accordance with U.S. GAAP
<TABLE>
<CAPTION>
                                                                                        Clondalkin Industries


                                                                           Year ended         Year ended         Year ended
                                                                          December 31,       December 31,       December 31,
                                                                              2002               2001               2000
                                                                        ----------------------------------------------------
                                                                              ((euro) thousands, except per share amounts)
<S>                                                                     <C>                <C>                 <C>
Net income/(loss) attributable to ordinary shareholders under U.S.
GAAP - Numerator                                                             20,744            (11,884)            (8,524)
                                                                        =================================================

Weighted average outstanding ordinary shares (in thousands)
                                                                                 38                 38                 38
Effect of dilutive securities - share options                                    --                 --                 --
                                                                        -------------------------------------------------
Denominator                                                                      38                 38                 38
                                                                        -------------------------------------------------
Basic and diluted net income/(loss) per share                          (euro)544.53      ((euro)311.96)     ((euro)223.76)
                                                                        =================================================
</TABLE>


Pension costs - Additional Information Required by SFAS 87 and SFAS 132
("Employers' Disclosures about Pensions and Other Post-Retirement Benefits")

The components of pension expense in respect of defined benefit pension plans
under SFAS 87 are estimated to be as follows:
<TABLE>
<CAPTION>
                                                                           Year ended         Year ended         Year ended
                                                                          December 31,       December 31,       December 31,
                                                                              2002               2001               2000
                                                                        ----------------------------------------------------
                                                                                          ((euro) thousands)
<S>                                                                     <C>                <C>                 <C>
Service cost                                                                  1,918              1,946              1,388
Interest cost                                                                 5,344              4,388              2,798
Expected return on assets                                                    10,705             (2,574)            (3,279)
Net amortization and deferral                                               (17,973)            (2,448)              (688)
                                                                            ---------------------------------------------
Net pension benefit/(cost)                                                       (6)             1,312                219
                                                                            =============================================
</TABLE>

The principal defined benefit plans are in the Republic of Ireland and
Continental Europe. The estimated funded status of these plans under SFAS 87,
amended by SFAS 132, was as follows:

                                      F-34
<PAGE>
                            CLONDALKIN INDUSTRIES PLC

          NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

33. Summary of significant differences between Irish and U.S. GAAP - continued
<TABLE>
<CAPTION>
                                                                                             Year ended         Year ended
                                                                                            December 31,       December 31,
                                                                                                2002              2001
                                                                                            -------------------------------
                                                                                                     ((euro) thousands)
<S>                                                                                      <C>                     <C>
Change in benefit obligation
Benefit obligation at beginning of period                                                      100,871             64,214
Service cost                                                                                     1,918              1,946
Interest cost                                                                                    5,344              4,388
Plan participants' contributions                                                                   826                814
Actuarial gains                                                                                  6,906             (1,896)
Benefit paid                                                                                    (5,556)            (4,638)
Acquisitions                                                                                        --             35,120
Translation                                                                                        691                923
                                                                                               --------------------------
Benefit obligation at end of year                                                              111,000            100,871
                                                                                               ==========================
Change in plan assets
Fair value of plan assets at beginning of year                                                 123,653             77,238
Actual return on plan assets                                                                    (9,105)               383
Group contributions                                                                              4,792                741
Plan participants' contributions                                                                   826                814
Benefit paid                                                                                    (5,556)            (4,638)
Acquisitions                                                                                        --             48,080
Translation                                                                                        788              1,035
                                                                                               --------------------------
Fair value of plan assets at end of year                                                       115,398            123,653
                                                                                               ==========================
Funded status of plans                                                                           4,398             22,782
Unrecognized net actuarial loss                                                                 24,592              4,355
                                                                                               --------------------------
Prepaid benefit cost                                                                            28,990             27,137
                                                                                               ==========================

Weighted average assumptions as at December 31

                                                                                               --------------------------
                                                                                                  2002               2001
                                                                                               --------------------------
Discount rates                                                                                    5.1%               5.3%
Rates of increase in compensation                                                                 2.6%               2.6%
Rates of return on assets                                                                         5.5%               6.1%
</TABLE>

The plan assets are invested primarily in equities and fixed income securities.

The Group also operates defined contribution plans in Ireland, Britain and the
United States of America. The amounts charged to income for those plans was
(euro)3,203,000 in 2002, (euro)3,200,000 in 2001and (euro)2,813,000 in 2000.

                                      F-35
<PAGE>
                            CLONDALKIN INDUSTRIES PLC

          NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

33. Summary of significant differences between Irish and U.S. GAAP - continued

Consolidated Statement of Cash Flows

The consolidated statement of cash f1ows prepared under Irish GAAP presents
substantially the same information as that required under U.S. GAAP by SFAS 95
"Statement of Cash Flows". This standard differs, however, with regard to the
classification of items within the statements and as regards the definition of
cash. Under U.S. GAAP, cash would not include bank overdrafts. The movements on
such overdrafts are required to be included in financing activities under SFAS
95. Under U.S. GAAP, cash and cash equivalents include short term investments
with a maturity of three months or less at the date of acquisition. Under Irish
GAAP, movements in short term investments are classified as management of liquid
resources. Under Irish GAAP, cash flows are presented separately for operating
activities, returns on investments and servicing of finance, taxation, capital
expenditure and financial investment, equity dividends paid, management of
liquid resources and financing. U.S. GAAP however, requires only three
categories of cash f1ow activity to be reported; operating, investing and
financing. Cash flows from taxation and returns on investments and servicing of
finance shown under Irish GAAP would be included as operating activities under
U.S. GAAP. Cash f1ows from capital expenditure, financial investment and
acquisitions and disposals would be included under investing activities under
U.S. GAAP. The payment of dividends would be included as a financing activity
under U.S. GAAP.

The categories of cash flow activity under U.S. GAAP can be summarized as
follows:
<TABLE>
<CAPTION>
                                                                         Year ended           Year ended         Year ended
                                                                        December 31,         December 31,       December 31,
                                                                            2002                 2001               2000
                                                                        ----------------------------------------------------
                                                                                          ((euro) thousands)
<S>                                                                     <C>                <C>                 <C>

Cash inflow from operating activities                                       58,187              43,402             44,145
Cash (outflow) from investing activities                                   (11,742)            (68,298)           (10,354)
Cash (outflow)/inflow from financing activities                            (47,569)             20,600            (33,277)
Effect of foreign exchange rates on cash balances                           (2,795)                893                655
                                                                           ----------------------------------------------
                                                                            (3,919)             (3,403)             1,169
Cash and cash equivalents at beginning of period                            46,486              49,889             48,720
                                                                           ----------------------------------------------

Cash and cash equivalents at end of period                                  42,567              46,486             49,889
                                                                           ==============================================
</TABLE>

Concentration of credit risk

Potential concentrations of credit risk to the Group consist principally of
short-term cash investments and trade receivables. The Group deposits short-term
cash surpluses with high credit quality banks and institutions, and, as a matter
of policy, limits the amount of credit exposure to any one bank or institution
in respect of short-term cash balances. Trade receivables comprise a large,
widespread customer base across a range of market sectors and geographic
locations. At December 31, 2002, the Group did not consider there to be any
significant concentration of credit risk.

                                      F-36

<PAGE>
                            CLONDALKIN INDUSTRIES PLC

          NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

33. Summary of significant differences between Irish and U.S. GAAP - continued

Income taxes

Deferred taxation - The significant components of deferred income tax assets and
liabilities and their balance sheet classifications, at December 31, are as
follows:
<TABLE>
<CAPTION>
                                                                                     December 31,               December 31,
(Amounts stated in accordance with U.S. GAAP)                                           2002                        2001
                                                                                     ---------------------------------------
                                                                                                 ((euro) thousands)
<S>                                                                                  <C>                          <C>
Deferred tax liabilities
Excess of book value over taxation value of fixed assets                               23,222                       25,053
Other timing differences                                                                4,371                        3,380
                                                                                       ------                       ------
                                                                                       27,593                       28,433
Deferred tax assets
Other timing differences                                                               (5,204)                      (4,509)
                                                                                       ------                       ------
Net deferred tax liability under U.S. GAAP                                             22,389                       23,924
                                                                                       ======                       ======

Current                                                                                 1,199                        2,866
Non-Current                                                                            21,190                       21,058
                                                                                       ------                       ------
                                                                                       22,389                       23,924
                                                                                       ======                       ======
</TABLE>

Components of income tax - The components of profit/(loss) before taxation,
under Irish GAAP are as follows:
<TABLE>
<CAPTION>
                                                                         Year ended           Year ended         Year ended
                                                                        December 31,         December 31,       December 31,
                                                                            2002                 2001               2000
                                                                        ----------------------------------------------------
                                                                                          ((euro) thousands)
<S>                                                                     <C>                <C>                 <C>
Analysis of profit/(loss) before taxation

Republic of Ireland                                                        (6,718)             (9,716)            (7,898)
Overseas                                                                   16,583               3,566               (241)
                                                                           ---------------------------------------------
                                                                            9,865              (6,150)            (8,139)
                                                                           =============================================
</TABLE>


                                      F-37

<PAGE>
                            CLONDALKIN INDUSTRIES PLC

          NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

33. Summary of significant differences between Irish and U.S. GAAP - continued

Effective rate reconciliation (Irish GAAP basis) - The following table
reconciles the applicable Republic of Ireland statutory tax rate to the
effective tax rate of the Group obtained by computing the tax charge as a
percentage of profit/(loss) before taxation.
<TABLE>
<CAPTION>
                                                                         Year ended           Year ended         Year ended
                                                                        December 31,         December 31,       December 31,
                                                                            2002                 2001               2000
                                                                        ----------------------------------------------------
                                                                                          ((euro) thousands)
<S>                                                                     <C>                <C>                 <C>
Irish corporation tax at standard rate                                     16.0%             (20.0%)             (24.0%)
Expenses not deductible for tax purposes (primarily goodwill
amortization)                                                              22.9%              45.0%               38.0%
Higher tax rates on overseas earnings                                      47.5%              24.8%                4.8%
Other                                                                      (5.1%)            (17.2%)               4.8%
                                                                          -----              -----                ----
                                                                           81.3%              32.6%               23.6%
                                                                          =====              =====                ====
</TABLE>

Financial instruments with off-balance sheet risk

Forward exchange contracts

Because the Group transacts business in many different currencies, it is exposed
to the risks of foreign currency exchange rate movements. To hedge this exposure
the Group enters into forward foreign exchange contracts.

Under U.S. GAAP, the fair value of these contracts is recorded as assets or
liabilities with changes in the fair value of effective hedges recorded in net
income.

The table below summarizes by major currency the contractual amounts of the
Group's forward contracts. Foreign currency notional amounts are reported in
Euros translated at spot rates as at December 31, 2002 and 2001.

                                 Year ended            Year ended
                                 December 31,          December 31,
                                     2002                 2001
                                 ----------------------------------
                                           ((euro) thousands)
Euro                                5,577                11,721
Swedish Krone                       2,061                 4,304
U.S. dollars                          940                 2,378
Swiss francs                          157                 1,671
Other                                 307                   561
                                    ---------------------------
                                    9,042                20,635
                                    ===========================

                                      F-38
<PAGE>
                            CLONDALKIN INDUSTRIES PLC

          NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

33. Summary of significant differences between Irish and U.S. GAAP - continued

Interest rate agreements

In order to manage interest rate risk the Group enters into interest rate swaps
and fixed rate agreements to receive a fixed rate of interest over a portion of
the Group's debt. The fair value of these contracts is recorded as assets or
liabilities as appropriate with changes in the fair value recorded in interest
payable. Net losses of (euro)1.8 million were recorded in the year ended
December 31 2001.

The Group's interest rate swap and fixed rate agreements by major currency at
December 31, 2001 were (there were no interest rate swaps outstanding as at
December 31, 2002:)


                            Notional (i)                    Weighted
                              Amounts       Termination     average
                            (euro)'000         date      interest rate
                            --------------------------------------------

Euro                          77,668          2002-3          6.20%
U.S. dollars                 112,385          2002-3          7.75%
Pound sterling                57,958          2002-3          8.25%
Other                         16,461          2002-3          4.69%

(i) Notional amounts represent Euro equivalents translated at the spot rate as
at December 31, 2001.


Analysis of creditors and accruals

The components of creditors and accruals that constitute 5% or more of the total
can be analyzed as follows:

                                         December 31,      December 31,
                                            2002              2001
                                         ------------------------------
                                               (euro) thousands

Trade creditors                             87,015            90,192
Accrued payroll                             11,026            12,505
Other accrued expenses                      18,365            17,213
                                           -------           -------
                                           116,406           119,910
                                           =======           =======


                                      F-39
<PAGE>
                            CLONDALKIN INDUSTRIES PLC

          NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

33. Summary of significant differences between Irish and U.S. GAAP - continued

Segmental Analysis - Information Required by SFAS 131

Note 3 of the notes to the consolidated financial statements has been prepared
under Irish GAAP on a geographical analysis by origin and also by class of
business as distinct from segment analysis by the way management makes decisions
about the business. SFAS 131 "Disclosures about Segments of an Enterprise and
Related Information" ("SFAS 131") defines operating segments as components of
the enterprise whose operating results are regularly reviewed by the
enterprise's Chief Operating Decision Maker to make decisions about resources to
be allocated to the segment and assess its performance. The geographic
information required by SFAS 131 is also presented below.

The Group is an international producer of flexible and specialist packaging
products. The Group has identified the reportable segments as being flexible
packaging and specialist packaging activities. Prior to 2002, the Group had
identified the reportable segments as being flexible packaging, specialist
packaging and printing. The change in analysis was prompted by expansion of the
Group's specialist packaging activities and the reduction in printing
activities. In 2001, the expansion in Specialist Packaging was propelled by the
EPH specialist packaging businesses acquisition and by BBF's increasing emphasis
on packaging manufacture in substitution for print manufacture. The segmental
analyses provided below for the years ended December 31, 2001 and 2000 have been
restated to comply with the 2002 format.

Set out below, are segmental analyses of sales, cost of sales, operating costs,
reportable net income, segmental assets and capital expenditures. Segmental
reportable net income as analyzed below is income before profit or loss on
disposal of fixed assets, net interest payable, exceptional items, goodwill
amortization and taxation. In the analysis of segmental assets, the assets in
the `All Other' column below consist primarily of properties and cash balances
held in Group holding companies. Similarly the costs in the "All other" column
below consist primarily of costs relating to head office. This is reconciled in
the reconciliation table below.

The accounting policies of the segments are the same as those described in note
2 "Accounting policies". Inter-segment sales are not material.

Year ended December 31, 2002
<TABLE>
<CAPTION>
                                              Flexible      Specialist     Segments                   Consolidated
                                             Packaging      Packaging        Total       All Other       Total
                                             ---------------------------------------------------------------------
                                                                        ((euro) thousands)
<S>                                            <C>           <C>            <C>          <C>          <C>
Sales                                          473,892       236,566        710,458            --        710,458
Cost of sales                                 (378,882)     (186,435)      (565,317)           --       (565,317)
                                              ------------------------------------------------------------------
Gross profit                                    95,010        50.131        145,161            --        145,141
Operating costs                                (39,464)      (33,119)       (72,558)      (16,556)       (89,149)
Non operating costs                                 --            --             --       (46,127)       (46,127)
                                              ------------------------------------------------------------------
Segmental reportable net income                 55,546        17,012         72,558       (62,693)         9,865
                                              ==================================================================
Segment assets                                 232,898       135,900        368,798        39,715        408,513
                                              ==================================================================
Unallocated goodwill                                --            --             --            --        229,999
                                              ==================================================================
Capital expenditure                              9,883         7,672         17,555            --         17,555
                                              ==================================================================
</TABLE>

                                      F-40
<PAGE>
                            CLONDALKIN INDUSTRIES PLC

          NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

33. Summary of significant differences between Irish and U.S. GAAP - continued

Year ended December 31, 2001 (restated)
<TABLE>
<CAPTION>
                                              Flexible      Specialist     Segments                   Consolidated
                                             Packaging      Packaging        Total       All Other       Total
                                             ---------------------------------------------------------------------
                                                                        ((euro) thousands)
<S>                                            <C>           <C>            <C>          <C>          <C>
Sales                                          463,771       247,045        710,816            --        710,816
Cost of sales                                  380,866       198,403        579,349            --        579,349
                                              ------------------------------------------------------------------
Gross profit                                    82,905        48,562        131,467            --        131,467
Operating costs                                 38,845        33,924         72,769        15,254         88,023
Non operating costs                                 --            --             --        49,594         49,594
                                              ------------------------------------------------------------------
Segmental reportable net income                 44,060        14,638         58,698       (64,848)        (6,150)
                                              ==================================================================
Segment assets                                 233,086       157,541        390,627        44,437        435,064
                                              ==================================================================
Unallocated goodwill                                --            --             --       255,722        255,722
                                              ==================================================================
Capital expenditure                             13,780         6,197         19,977            --         19,977
                                              ==================================================================


Year ended December 31, 2000 (restated)

                                              Flexible      Specialist     Segments                   Consolidated
                                             Packaging      Packaging        Total       All Other       Total
                                             ---------------------------------------------------------------------
                                                                        ((euro) thousands)
Sales                                          415,636       223,764        639,400            --        639,400
Cost of sales                                  346,295       176,176        522,471            --        522,471
                                              ------------------------------------------------------------------
Gross profit                                    69,341        47,588        116,929            --        116,929
Operating costs                                 33,386        32,477         65,863        12,996         78,859
Non operating costs                                 --            --             --        46,209         46,209
                                              ------------------------------------------------------------------
Segmental reportable net income                 35,955        15,111         51,066       (59,205)        (8,139)
                                              ==================================================================
Segment assets                                 210,855       144,838        355,693        49,924        405,617
                                              ==================================================================
Unallocated goodwill                                --            --             --       234,595        234,595
                                              ==================================================================
Capital expenditure                              7,623         3,431         11,054            --         11,054
                                              ==================================================================
</TABLE>

                                      F-41
<PAGE>
                            CLONDALKIN INDUSTRIES PLC

          NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

33. Summary of significant differences between Irish and U.S. GAAP - continued


The reconciliation of segmental reportable net income to profit (loss) Year
ended Year ended Year ended on ordinary activities before taxation is as
follows:
<TABLE>
<CAPTION>
                                                                         Year ended           Year ended         Year ended
                                                                        December 31,         December 31,       December 31,
                                                                            2002                 2001               2000
                                                                        ----------------------------------------------------
                                                                                          ((euro) thousands)
<S>                                                                     <C>                <C>                 <C>
Segmental reportable net income                                             72,558              58,698             51,066
Unallocated central costs                                                   (3,380)             (2,386)            (2,659)
Profit on asset disposals                                                      922                 813              2,103
Goodwill amortization                                                      (14,108)            (13,681)           (12,440)
Interest expense, net                                                      (46,127)            (49,594)           (47,550)
Exceptional items, net                                                          --                  --              1,341
                                                                           ----------------------------------------------
Profit (loss) on ordinary activities before taxation                         9,865              (6,150)            (8,139)
                                                                           ==============================================
</TABLE>

The distribution of net revenue by geographical area based on location of
subsidiary operations was as follows:
<TABLE>
<CAPTION>
                                                                         Year ended           Year ended         Year ended
                                                                        December 31,         December 31,       December 31,
                                                                            2002                 2001               2000
                                                                        ----------------------------------------------------
                                                                                          ((euro) thousands)
<S>                                                                     <C>                <C>                 <C>
Country of domicile
   Republic of Ireland                                                      46,082              51,383             53,720
Foreign countries
   United Kingdom                                                          124,289             124,210            117,269
   United States                                                           150,585             169,679            158,669
   The Netherlands                                                         284,737             263,729            215,233
   Other                                                                   104,765             101,815             94,509
                                                                           ----------------------------------------------
Total revenues                                                             710,458             710,816            639,400
                                                                           ==============================================
</TABLE>


The distribution of long lived assets by geographical area based on location of
subsidiary operations was as follows:

<TABLE>
<CAPTION>
                                         December 31,      December 31,
                                             2002              2001
                                         ------------------------------
                                                 ((euro) thousands)
<S>                                             <C>             <C>
Country of domicile
   Republic of Ireland                       49,749            49,035
Foreign countries
  United Kingdom                             55,762            57,846
  United States of America                   84,967            96,589
  The Netherlands                           185,097           183,022
  Germany                                    56,265            57,990
  Other                                       9,984            16,282
                                            -------           -------
                                            441,824           460,764
                                            =======           =======
</TABLE>

                                      F-42
<PAGE>
                            CLONDALKIN INDUSTRIES PLC

          NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

33. Summary of significant differences between Irish and U.S. GAAP - continued

Pro-forma Acquisition Information

As described in Note 25 to the Consolidated Financial Statements, in December
2002 the Company's wholly owned subsidiary, Clondalkin Holdings Inc., acquired
the assets and business and business of Spiralkote, a flexible packaging company
located in Orlando, Florida in the United States of America for a consideration
of (euro)2.1 million, paid from the Group's cash resources. This acquisition had
an immaterial effect on the Group's 2002 results, and therefore has not been
recognized.

In April 2001, the Group's wholly owned subsidiary, Clondalkin Holdings BV,
acquired 100% of the issued share capital of Frievaart Holding BV, the holding
company of European Packaging Holding businesses ("the EPH companies") for a
consideration of (euro)47.5 million.


The consideration payable was financed as to (euro)20 million with an
intercompany loan advanced by Clondalkin Group Holdings Limited to Edgemead
Limited, funded by newly issued subordinated shareholders' loans due July 2010.
The intercompany loan carries a coupon interest rate of 10% per annum, which is
non-cash payable and is accrued for on a cumulative basis every year. The
intercompany loan advanced to Edgemead Limited is subordinate to the senior
notes due January 2010, with respect to interest and principal payments. The
balance of the consideration payable was funded by additional bank debt of
(euro)30 million drawn by Edgemead Limited under the senior credit facility
agreement and is repayable over seven years, maturing December 2007. The
intercompany loan and bank debt are both Euro denominated.

The acquisitions noted above have been accounted for using the purchase method
of accounting and, accordingly, the assets acquired and liabilities assumed have
been recorded at their fair value as of the respective dates of acquisition. The
difference between the purchase price and the fair value of the assets acquired
and liabilities assumed has been recorded as goodwill. Results of operations for
the acquisitions noted above have been included in the accompanying consolidated
financial statements since the respective dates of acquisition.

The following unaudited consolidated pro forma results of operations for the
years ended December 31, 2002, 2001 and 2000 give effect to the above noted
acquisitions as if such transactions had occurred at the beginning of the
period:
<TABLE>
<CAPTION>
                                                                         Year ended           Year ended         Year ended
                                                                        December 31,         December 31,       December 31,
                                                                            2002                 2001               2000
                                                                        ----------------------------------------------------
                                                                                          ((euro) thousands)
<S>                                                                        <C>                 <C>                <C>
Pro-forma revenue                                                          710,458             730,948            707,733
Pro-forma net income (loss)                                                  1,847              (8,374)            (6,008)
Pro-forma basic and diluted earnings (loss) per share                  (euro)48.48       ((euro)219.82)     ((euro)157.71)
</TABLE>

The unaudited pro forma consolidated financial information does not purport to
represent what the Company's financial position or results of operations would
actually have been if these transactions had occurred at such dates or to
project the Company's future results of operations.

                                      F-43

<PAGE>
                            CLONDALKIN INDUSTRIES PLC

          NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

33. Summary of significant differences between Irish and U.S. GAAP - continued

Operating Lease Commitments

Irish GAAP require disclosure of annual commitments under non-cancelable
operating leases by reference to the year in which the lease expires. Under U.S.
GAAP, as required by SFAS 13 "Accounting for Leases", disclosure of future
minimum lease payments at December 31, 2002 is required as follows:

Year ending December 31,
                                                              ((euro) thousands)
2003                                                                3,237
2004                                                                2,563
2005                                                                1,141
2007                                                                  963
2006                                                                  868
Thereafter                                                          2,967
                                                                   ------
Total minimum lease payments                                       11,739
                                                                   ======

Product Development Costs
<TABLE>
<CAPTION>
                                                                         Year ended           Year ended         Year ended
                                                                        December 31,         December 31,       December 31,
                                                                            2002                 2001               2000
                                                                        ----------------------------------------------------
                                                                                          ((euro) thousands)
<S>                                                                        <C>                 <C>                <C>
Product development costs                                                   3,647               2,494              2,869
                                                                            ============================================
</TABLE>

                                      F-44
<PAGE>
                            CLONDALKIN INDUSTRIES PLC

          NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

34. Consolidating Guarantor and non - Guarantor Information

As described in Note 20 to the Consolidated Financial Statements, the senior
notes issued by Clondalkin Industries, are guaranteed by the Company's wholly
owned subsidiary, Edgemead Limited.

The following consolidating information presents condensed profit and loss
accounts and condensed cash flow statements for the years ended December 31,
2002, December 31, 2001 and December 31, 2000 and condensed balance sheets at
December 31, 2002 and 2001 of Clondalkin Industries, and the guarantor
subsidiary, Edgemead Limited, and the non-guarantor subsidiaries and the
elimination and reclassification entries necessary to arrive at consolidated
figures for Clondalkin Industries and its subsidiaries as a whole.

These statements are prepared in accordance with Irish GAAP with the exception
that subsidiaries are accounted for as investments under the equity method
rather than being consolidated.

The significant differences between Irish and U.S. GAAP as they affect
Clondalkin Industries and Clondalkin Group (Predecessor) are set forth in Note
33 of the notes to the consolidated financial statements.

The adjustments relating to imputed interest relate to Clondalkin Industries and
Edgemead in proportion to their respective financing of the acquisition of
Clondalkin Group (Predecessor). All other adjustments with the exception of
goodwill arising on consolidation are in respect of the non-guarantor
subsidiaries.

Supplemental condensed consolidated Profit and Loss Account
<TABLE>
<CAPTION>
Year ended December 31, 2002                                                       Non         Eliminate       Clondalkin
                                               Clondalkin       Guarantor       Guarantor        and         Industries and
                                               Industries       Edgemead      Subsidiaries    Reclassify      Subsidiaries
                                               ----------------------------------------------------------------------------
                                                                              ((euro) thousands)
<S>                                            <C>              <C>          <C>              <C>           <C>
Sales                                                 --              --         710,458              --          710,458
Cost of sales                                         --              --        (565,317)             --         (565,317)
                                                  -----------------------------------------------------------------------
Gross profit                                          --              --         145,141              --          145,141
Net operating expenses                                --              --        (76,787)         (12,362)         (89,149)
                                                  -----------------------------------------------------------------------
Operating profit                                      --              --          68,354         (12,362)          55,992
Exceptional items (net)                               --              --              --              --               --
Profit before interest and tax                        --              --          68,354         (12,362)          55,992
Net interest payable                                             (21,818)        (24,309)             --          (46,127)
Equity in profit before taxation of
   subsidiaries                                    9,865          31,683              --         (41,548)              --
                                                  -----------------------------------------------------------------------
Profit before taxation                             9,865           9,865          44,045         (53,910)           9,865
                                                  -----------------------------------------------------------------------
Taxation                                          (8,018)         (8,018)        (13,473)         21,491           (8,018)
                                                  -----------------------------------------------------------------------
Profit after taxation                              1,847           1,847          30,573         (32,420)           1,847
                                                  -----------------------------------------------------------------------
Dividends declared                                    --              --         (22,000)         22,000               --
                                                  -----------------------------------------------------------------------
Profit retained for the period                     1,847           1,847           8,573         (10,420)           1,847
                                                  =======================================================================
</TABLE>

                                      F-45

<PAGE>
                            CLONDALKIN INDUSTRIES PLC

          NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

34. Consolidating Guarantor and non - Guarantor Information - continued
<TABLE>
<CAPTION>
Year ended December 31, 2001                                                       Non         Eliminate       Clondalkin
                                               Clondalkin       Guarantor       Guarantor        and         Industries and
                                               Industries       Edgemead      Subsidiaries    Reclassify      Subsidiaries
                                               ----------------------------------------------------------------------------
                                                                              ((euro) thousands)
<S>                                            <C>              <C>          <C>              <C>           <C>
Sales                                                 --              --         710,816              --          710,816
Cost of sales                                         --              --        (579,349)             --         (579,349)
                                                  -----------------------------------------------------------------------
Gross profit                                          --              --         131,467              --          131,467
Net operating expenses                                --            (202)        (74,763)        (13,058)         (88,023)
                                                  -----------------------------------------------------------------------
Operating profit                                      --            (202)         56,704         (13,058)          43,444
Exceptional items (net)                               --              --              --              --               --
                                                  -----------------------------------------------------------------------
(Loss) profit before interest and tax                 --           (202)          56,704         (13,058)          43,444
Net interest payable                                  --         (25,104)        (24,490)             --          (49,594)
Equity in profit before taxation of
   subsidiaries                                   (6,150)         19,156              --         (13,006)              --
                                                  -----------------------------------------------------------------------
(Loss) profit before taxation                     (6,150)         (6,150)         32,214         (26,064)          (6,150)
                                                  -----------------------------------------------------------------------
Taxation                                          (2,002)         (2,002)         (8,329)         10,331           (2,002)
                                                  -----------------------------------------------------------------------
(Loss) profit after taxation                      (8,152)         (8,152)         23,885         (15,733)          (8,152)
                                                  -----------------------------------------------------------------------
Dividends declared                                    --              --         (25,306)         25,306               --
                                                  -----------------------------------------------------------------------
Loss retained for the period                      (8,152)         (8,152)         (1,421)          9,573           (8,152)
                                                  =======================================================================


Year ended December 31, 2000                                                       Non         Eliminate       Clondalkin
                                               Clondalkin       Guarantor       Guarantor        and         Industries and
                                               Industries       Edgemead      Subsidiaries    Reclassify      Subsidiaries
                                               ----------------------------------------------------------------------------
                                                                              ((euro) thousands)
Sales                                                 --              --         639,400              --          639,400
Cost of sales                                         --              --        (522,471)             --         (522,471)
                                                  -----------------------------------------------------------------------
Gross profit                                          --              --         116,929              --          116,929
Net operating expenses                                --              13         (66,432)        (12,440)         (78,859)
                                                  -----------------------------------------------------------------------
Operating profit                                      --              13          50,497         (12,440)          38,070
Exceptional items (net)                               --              --           1,341              --            1,341
                                                  -----------------------------------------------------------------------
Profit before interest and tax                        --              --          51,838         (12,440)          39,411
Net interest payable                                  --         (27,955)        (19,595)             --          (47,550)
Equity in profit before taxation of
   subsidiaries                                   (8,139)         19,803              --         (11,664)              --
                                                  -----------------------------------------------------------------------
(Loss) profit before taxation                     (8,139)         (8,139)         32,243         (24,104)          (8,139)
Taxation                                          (1,939)         (1,939)        (11,100)         13,039           (1,939)
                                                  -----------------------------------------------------------------------
(Loss) profit for the period                     (10,078)        (10,078)         21,143         (11,065)         (10,078)
                                                  =======================================================================
</TABLE>

                                      F-46

<PAGE>
                            CLONDALKIN INDUSTRIES PLC

          NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

34. Consolidating Guarantor and non - Guarantor Information - continued

Supplemental condensed consolidated Balance Sheet
<TABLE>
<CAPTION>
At December 31, 2002                                                              Non         Eliminate       Clondalkin
                                               Clondalkin       Guarantor       Guarantor        and         Industries and
                                               Industries       Edgemead      Subsidiaries    Reclassify      Subsidiaries
                                               ----------------------------------------------------------------------------
                                                                              ((euro) thousands)
<S>                                            <C>             <C>           <C>              <C>            <C>
Fixed Assets
Tangible assets                                       --              --         186,802           8,508          195,310
Financial assets                                      --              --           1,888              --            1,888
Goodwill                                              --              --          25,891         204,108          229,999
Investment in subsidiaries                       (16,990)        459,243              --        (442,253)              --
                                                 ------------------------------------------------------------------------
Total fixed assets                               (16,990)        459,243         214,581        (229,637)         427,197

Current assets
Stocks                                                --              --          70,240              --           70,240
Debtors                                          359,865         131,455         195,021        (587,833)          98,508
Bank and cash balances                                23           3,715          38,829              --           42,567
                                                 ------------------------------------------------------------------------
Total current assets                             359,888         135,170         304,090        (587,833)         211,315

Current liabilities
Bank loans, overdrafts and other borrowings           --              --          21,720              --           21,720
Accounts payable and accrued liabilities          84,259         152,389         136,615        (233,950)         139,313
                                                  -----------------------------------------------------------------------
Total current liabilities                         84,259         152,389         158,335        (233,950)         161,033
                                                 ------------------------------------------------------------------------
Net current assets/(liabilities)                 275,629         (17,219)        145,755        (353,883)          50,282
                                                 ------------------------------------------------------------------------
Total assets less current liabilities            258,639         442,024         360,336        (583,520)         477,479
                                                 ========================================================================
Creditors: amounts falling due after one
   year
Long-term debt                                   233,178         396,985         160,386        (351,264)         439,285
Other liabilities                                 42,413          42,413              --         (42,413)          42,413
                                                 ------------------------------------------------------------------------
                                                 275,591         439,398         160,386        (393,677)         481,698
Provisions - deferred taxation                        --              --          11,463           1,270           12,733
                                                 ------------------------------------------------------------------------
                                                 275,591         439,398         171,849        (392,407)         494,431
                                                 ------------------------------------------------------------------------
Shareholders' equity
Share capital                                         38              --          13,518         (13,518)              38
Profit and loss account and other reserves       (16,990)          2,626         174,969        (177,595)         (16,990)
                                                 ------------------------------------------------------------------------
Total shareholders' equity                       (16,952)          2,626         188,487        (191,113)         (16,952)
                                                 ------------------------------------------------------------------------
                                                 258,639         442,024         360,336        (583,520)         477,479
                                                 ========================================================================
</TABLE>

                                      F-47

<PAGE>
                            CLONDALKIN INDUSTRIES PLC

          NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

34. Consolidating Guarantor and non - Guarantor Information - continued

Supplemental condensed consolidated Balance Sheet
<TABLE>
<CAPTION>
At December 31, 2001                                                              Non         Eliminate       Clondalkin
                                               Clondalkin       Guarantor       Guarantor        and         Industries and
                                               Industries       Edgemead      Subsidiaries    Reclassify      Subsidiaries
                                               ----------------------------------------------------------------------------
                                                                              ((euro) thousands)
<S>                                            <C>             <C>           <C>              <C>            <C>
Fixed Assets
Tangible assets                                       --              --         194,924           8,230          203,154
Financial assets                                      --              --           1,888                            1,888
Goodwill                                              --              --          30,104         225,618          255,722
Investment in subsidiaries                       (18,505)        434,401              --        (415,896)              --
                                                 ------------------------------------------------------------------------
Total fixed assets                               (18,505)        434,401         226,916        (182,048)         460,764

Current assets
Assets held for disposal                              --              --           6,350              --            6,350
Stocks                                                --              --          72,553              --           72,553
Debtors                                          287,766         117,815         161,805        (462,753)         104,633
Bank and cash balances                                23             754          45,709                           46,486
                                                 ------------------------------------------------------------------------
Total current assets                             287,789         118,569         286,417        (462,753)         230,022

Current liabilities
Bank loans, overdrafts and other borrowings           --          13,015           9,965              --           22,980
Accounts payable and accrued liabilities          28,067          71,305         245,628        (207,403)         137,597
                                                 ------------------------------------------------------------------------
Total current liabilities                         28,067          84,320         255,593        (207,403)         160,577
                                                 ------------------------------------------------------------------------
Net current assets                               259,722          34,249          30,824        (255,350)          69,445
                                                 ------------------------------------------------------------------------
Total assets less current liabilities            241,217         468,650         257,740        (437,398)         530,209
                                                 ========================================================================
Creditors: amounts falling due after one
   year
Long-term debt                                   233,178         439,245         203,655        (367,753)         508,325
Other liabilities                                 26,506          26,506              --         (26,506)          26,506
                                                 ------------------------------------------------------------------------
                                                 259,684         465,751         203,655        (394,259)         534,831
Provisions - deferred taxation                        --              --          12,575           1,270           13,845
                                                 ------------------------------------------------------------------------
                                                 259,684         465,751         216,230        (392,989)         548,676
                                                 ------------------------------------------------------------------------
Shareholders' equity
Share capital                                         38              --          13,518         (13,518)              38
Profit and loss account and other reserves       (18,505)          2,899          27,992         (30,891)         (18,505)
                                                 ------------------------------------------------------------------------
Total shareholders' equity                       (18,467)          2,899          41,510         (44,409)         (18,467)
                                                 ------------------------------------------------------------------------
                                                 241,217         468,650         257,740        (437,398)         530,209
                                                 ========================================================================
</TABLE>

                                      F-48

<PAGE>
                            CLONDALKIN INDUSTRIES PLC

          NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

34. Consolidating Guarantor and non - Guarantor Information - continued

Supplemental condensed consolidated Cash Flow statement
<TABLE>
<CAPTION>
At December 31, 2002                                                              Non         Eliminate       Clondalkin
                                               Clondalkin       Guarantor       Guarantor        and         Industries and
                                               Industries       Edgemead      Subsidiaries    Reclassify      Subsidiaries
                                               ----------------------------------------------------------------------------
                                                                              ((euro) thousands)
<S>                                            <C>             <C>           <C>              <C>            <C>
Cash flow from operating activities                   --              --          92,098              --           92,098
                                                 ------------------------------------------------------------------------

Returns on investment and  servicing of finance
Interest received                                     --              --             599              --              599
Interest paid                                                    (21,818)         (8,709)             --          (30,527)
                                                 ------------------------------------------------------------------------
Taxation paid                                         --         (21,818)         (8,110)             --          (29,928)
                                                 ------------------------------------------------------------------------

Net cash outflow from capital expenditure and
  financial investment                                --              --          (3,983)             --           (3,983)
Purchase of tangible fixed assets                     --              --         (17,555)             --          (17,555)
Sale of tangible fixed assets                         --              --           1,722              --            1,722
Sale of assets held for disposal                      --              --           6,475              --            6,475
Subsidiaries acquired                                 --              --          (2,054)             --           (2,054)
Payment of deferred acquisition considerations        --              --            (330)             --             (330)
                                                 ------------------------------------------------------------------------
                                                      --              --         (11,742)             --          (15,725)
                                                 ------------------------------------------------------------------------
Repayments from (advances to) subsidiaries            --          61,470         (61,470)             --               --
                                                 ------------------------------------------------------------------------
Cash inflow before financing                          --          39,652           6,793              --           46,445
Net cash outflow from financing                       --         (12,039)         12,164              --              125
(Decreases) increases in loans due within one
  year                                                --         (24,652)        (23,042)             --          (47,694)
Decreases in loans due after more than one year       --         (36,691)        (10,878)             --          (47,569)
                                                 ------------------------------------------------------------------------
Increase (decrease) in cash                           --           2,961          (4,085)             --           (1,124)
                                                 ========================================================================
</TABLE>


                                      F-49



<PAGE>
                            CLONDALKIN INDUSTRIES PLC

          NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

34. Consolidating Guarantor and non - Guarantor Information - continued

Supplemental condensed consolidated Cash Flow statement
<TABLE>
<CAPTION>
At December 31, 2001                                                              Non         Eliminate       Clondalkin
                                               Clondalkin       Guarantor       Guarantor        and         Industries and
                                               Industries       Edgemead      Subsidiaries    Reclassify      Subsidiaries
                                               ----------------------------------------------------------------------------
                                                                              ((euro) thousands)
<S>                                            <C>             <C>           <C>              <C>            <C>
Cash flow from operating activities                   --              --          82,395              --           82,395
                                                 ------------------------------------------------------------------------

Returns on investment and  servicing of
  finance
Interest received                                     --             259             378              --              637
Interest paid                                         --         (16,418)        (20,076)             --          (36,494)
                                                 ------------------------------------------------------------------------
                                                      --         (16,159)        (19,698)             --          (35,857)
                                                 ------------------------------------------------------------------------
Taxation paid                                         --              --          (3,136)             --           (3,136)
                                                 ------------------------------------------------------------------------

Net cash outflow from capital expenditure
  and financial investment
Purchase of tangible fixed assets                     --              --         (19,977)             --          (19,977)
Sale of tangible fixed assets                         --              --           1,469              --            1,469
Subsidiaries acquired                                 --              --         (48,836)             --          (48,836)
Payment of amount due on acquisition of
Clondalkin Group (predecessor)                        --              --            (346)             --             (346)
Payment of deferred acquisition
  considerations                                      --              --            (608)             --             (608)
                                                 ------------------------------------------------------------------------
                                                      --              --         (68,298)             --          (68,298)
                                                 ------------------------------------------------------------------------
(Advances to) repayments from subsidiaries            --         (26,135)          6,135          20,000               --
                                                 ------------------------------------------------------------------------
Cash outflow before financing                         --         (42,294)         (2,602)         20,000          (24,896)
Net cash inflow from financing
Increases (decreases) in loans due within
  one year                                            --           6,042          (2,159)             --            3,883
Payment of fees related to acquisition
  financing                                           --              --            (706)             --             (706)
Increases (decreases) in loans due after
  more than one year                                  --          10,156         (11,833)             --           (1,677)
Payment of fees related to issue of senior
  notes                                               --              --            (900)             --             (900)
Loan from parent company                              --          20,000          20,000         (20,000)          20,000
                                                 ------------------------------------------------------------------------
                                                      --          36,198           4,402         (20,000)          20,600
                                                 ------------------------------------------------------------------------
(Decrease) increase in cash                           --          (6,096)          1,800              --           (4,296)
                                                 ========================================================================
</TABLE>

                                      F-50

<PAGE>
                            CLONDALKIN INDUSTRIES PLC

          NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

34. Consolidating Guarantor and non - Guarantor Information - continued
<TABLE>
<CAPTION>
At December 31, 2000                                                              Non         Eliminate       Clondalkin
                                               Clondalkin       Guarantor       Guarantor        and         Industries and
                                               Industries       Edgemead      Subsidiaries    Reclassify      Subsidiaries
                                               ----------------------------------------------------------------------------
                                                                              ((euro) thousands)
<S>                                            <C>             <C>           <C>              <C>            <C>
Cash flow from operating activities                   --              --          79,645              --           79,645
                                                 ------------------------------------------------------------------------

Returns on investment and  servicing of
  finance
Interest received                                     --              --             934              --              934
Interest paid                                     (8,005)        (15,551)         (6,613)             --          (30,169)
Income from financial assets                          --              --           3,426              --            3,426
                                                 ------------------------------------------------------------------------
                                                  (8,005)        (15,551)         (2,253)             --          (25,809)
                                                 ------------------------------------------------------------------------
Taxation paid                                         --              --          (7,606)             --           (7,606)
                                                 ------------------------------------------------------------------------

Net cash outflow from capital expenditure
  and financial investment
Purchase of tangible fixed assets                     --              --         (11,054)             --          (11,054)
Sale of assets held for disposal                      --              --          18,094              --           18,094
Sale of tangible fixed assets                         --              --           2,866              --            2,866
Subsidiaries acquired                                 --         (10,971)         (1,146)             --          (12,117)
Payment of deferred acquisition
  considerations                                      --              --          (8,143)             --           (8,143)
Business termination and rationalization
  costs                                               --              --          (2,085)             --           (2,085)
                                                 ------------------------------------------------------------------------
                                                      --         (10,971)         (1,468)             --          (12,439)
                                                 ------------------------------------------------------------------------
Repayments from (advances to) subsidiaries         6,143          39,385         (45,528)             --               --
                                                 ------------------------------------------------------------------------
Cash (outflow) inflow before financing            (1,862)         12,863          22,790              --           33,791

Net cash inflow (outflow) from financing
Increases (decrease) in loans due within
  one year                                            --           3,474         (11,110)             --           (7,636)
(Decrease) in loans due after more than one
  year                                                --         (21,451)         (7,223)             --          (28,674)
Increase in senior notes                         125,000              --              --              --          125,000
Payment of fees related to issue of senior
  notes                                           (4,100)             --              --              --           (4,100)
Decrease in mezzanine finance                   (120,000)             --              --              --         (120,000)
Loan from parent company                              20              20           2,133             (40)           2,133
                                                 ------------------------------------------------------------------------
Increase (decrease) in cash                           11          (5,094)          5,637             (40)             514
                                                 ========================================================================
</TABLE>

                                      F-51

<PAGE>
<TABLE>
<CAPTION>
                                  Balance at      Charged to                     Charge to                    Balance
                                beginning of        cost and                         other    Translation   at end of
Description                           period        expenses     Deductions       accounts     adjustment      period
                                ------------------------------------------------------------------------------------
                                                                 ((euro) thousands)
<S>                             <C>              <C>            <C>             <C>           <C>          <C>
Clondalkin Industries PLC                                            (a)            (b)

2002
Doubtful debts                       2,395            447          (576)            --            (54)         2,212
                                   ---------------------------------------------------------------------------------

2001
Doubtful debts                       1,797          1,173          (840)           261              4          2,395
                                   ---------------------------------------------------------------------------------

2000
Doubtful debts                       2,451           (320)         (354)            --             21          1,797
                                   =================================================================================
</TABLE>


(a) Amounts written off.

(b) Acquired on acquisitions.

                                      S-1