##### Table of Contents









UNITED STATES SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549





Form 20-F





|           |  |                                                                                                   
|---------- |  | --------------------------------------------------------------------------------------------------
|(Mark One) |  |                                                                                                   
|o          |  | REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g)
    OF THE SECURITIES EXCHANGE ACT OF 1934
|          
|or        
|          
|þ          |  | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934          
|          
|           |  | For the fiscal year ended March 31, 2005                                                          
|          
|or        
|          
|o          |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934      
|          
|           |  | For the transition period
    from           to                                                   

Commission file number 1-15240


James Hardie Industries N.V.


(Exact name of Registrant as specified in its charter)


N/A


(Translation of Registrants name into English)


The Netherlands


(Jurisdiction of incorporation or organization)


Atrium, 8th floor


Strawinskylaan 3077


1077 ZX Amsterdam, The Netherlands


(Address of principal executive offices)


Securities registered or to be registered pursuant to
Section 12(b) of the Act:


|                                                                                                  |  |                                           
|------------------------------------------------------------------------------------------------- |  | ------------------------------------------
|Title of Each Class:                                                                              |  | Name of Each Exchange on Which Registered:
|                                                                                                  |  |                                           
|Common stock, represented by CHESS Units of
    Foreign Securities                                |  | New York Stock Exchange*                  
|CHESS Units of Foreign Securities                                                                 |  | New York Stock Exchange*                  
|American Depositary Shares, each representing five units of
    CHESS Units of Foreign Securities |  | New York Stock Exchange                   






|  |                                                                                                                                                                               
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|* | Listed, not for trading, but only in connection with the
    registered American Depositary Shares, pursuant to the
    requirements of the Securities and Exchange Commission

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.


None.




þ o


o þ










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TABLE OF CONTENTS


|             |  |                                                                                  |  |                            |     |  |    | 
|------------ |  | -------------------------------------------------------------------------------- |  | -------------------------- | --- |  | -- | 
|             |  |                                                                                  |  | Page                       |    
|             |  |                                                                                  |  |                            |    
|PART I      
|Item 1       |  | Identity of Directors, Senior Management
    and Advisers                        |  |                            | 2   | 
|Item 2       |  | Offer Statistics and Expected Timetable                                          |  |                            | 2   | 
|Item 3       |  | Key Information                                                                  |  |                            | 2   | 
|             |  |                                                                                  |  | Selected Financial Data    |     |  | 2  | 
|             |  |                                                                                  |  | Risk Factors               |     |  | 6  | 
|             |  |                                                                                  |  | Forward-Looking Statements |     |  | 19 | 
|Item 4       |  | Information on the Company                                                       |  |                            | 19  | 
|Item 5       |  | Operating and Financial Review and
    Prospects                                 |  |                            | 49  | 
|Item 6       |  | Directors, Senior Management and
    Employees                                   |  |                            | 71  | 
|Item 7       |  | Major Shareholders and Related Party
    Transactions                            |  |                            | 108 | 
|Item 8       |  | Financial Information                                                            |  |                            | 111 | 
|Item 9       |  | Listing Details                                                                  |  |                            | 111 | 
|Item 10      |  | Additional Information                                                           |  |                            | 114 | 
|Item 11      |  | Quantitative and Qualitative Disclosures
    About Market Risk                   |  |                            | 128 | 
|Item 12      |  | Description of Securities Other Than Equity
    Securities                       |  |                            | 130 | 
|            
|PART II     
|Item 13      |  | Defaults, Dividend Arrearages and
    Delinquencies                              |  |                            | 131 | 
|Item 14      |  | Material Modifications to the Rights of
    Security Holders and Use of Proceeds |  |                            | 131 | 
|Item 15      |  | Controls and Procedures                                                          |  |                            | 131 | 
|Item 16A     |  | Audit Committee Financial Expert                                                 |  |                            | 131 | 
|Item 16B     |  | Code of Business Conduct and Ethics                                              |  |                            | 131 | 
|Item 16C     |  | Principal Accountant Fees and Services                                           |  |                            | 132 | 
|Item 16D     |  | Exemptions from the Listing Standards for
    Audit Committees                   |  |                            | 133 | 
|Item 16E     |  | Purchases of Equity Securities by the
    Issuer and Affiliated Purchasers       |  |                            | 133 | 
|            
|PART III    
|Item 18      |  | Financial Statements                                                             |  |                            | 133 | 
|Item 19      |  | Exhibits                                                                         |  |                            | 133 | 
|EXHIBIT 2.1 
|EXHIBIT 2.2 
|EXHIBIT 2.3 
|EXHIBIT 2.4 
|EXHIBIT 2.5 
|EXHIBIT 2.22
|EXHIBIT 2.23
|EXHIBIT 2.24
|EXHIBIT 2.25
|EXHIBIT 4.1 
|EXHIBIT 4.2 
|EXHIBIT 4.3 
|EXHIBIT 4.4 
|EXHIBIT 4.5 
|EXHIBIT 4.8 
|EXHIBIT 4.9 
|EXHIBIT 4.10
|EXHIBIT 4.11
|EXHIBIT 4.12
|EXHIBIT 4.14
|EXHIBIT 4.15
|EXHIBIT 4.16
|EXHIBIT 4.17
|EXHIBIT 4.18
|EXHIBIT 4.25
|EXHIBIT 4.26
|EXHIBIT 4.27
|EXHIBIT 8.1 
|EXHIBIT 12.1
|EXHIBIT 12.2
|EXHIBIT 13.1
|EXHIBIT 15.1
|EXHIBIT 15.2
|EXHIBIT 99.1
|EXHIBIT 99.2
|EXHIBIT 99.3
|EXHIBIT 99.4



1



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##### Table of Contents






PART I







|        |                                                          
|------- | ---------------------------------------------------------
|Item 1. | Identity of Directors, Senior Management and
    Advisers








|        |                                        
|------- | ---------------------------------------
|Item 2. | Offer Statistics and Expected Timetable








|        |                
|------- | ---------------
|Item 3. | Key Information

In this annual report, unless the context otherwise
indicates, James Hardie Industries N.V., a naamloze
vennootschap, or a Dutch public limited liability company
incorporated and existing under the laws of The Netherlands, is
referred to as JHI NV. JHI NV and together with its
direct and indirect wholly owned subsidiaries as of the time
relevant to the applicable reference, the James Hardie
Group, and JHI NV and its current direct and indirect
wholly owned subsidiaries are collectively referred to as
we, us, our, JHI NV
and its wholly owned subsidiaries, or the
Company.


The term fiscal year refers to our fiscal year
ended March 31 of such year; the term dollars
or $ refers to U.S. dollars; the term
A$ refers to Australian dollars; the term
NZ$ refers to New Zealand dollars; the term
PHP refers to Philippine pesos; and the term
CLP refers to Chilean pesos. The term
msf or thousand square feet refers to
thousands of square feet, where a square foot is defined as a
standard square foot of 5/16 thickness and the term
mmsf or million square feet refers to
millions of square feet, where a square foot is defined as a
standard square foot of 5/16 thickness.


As a company incorporated under the laws of The Netherlands,
JHI NV has listed its securities for trading on the Australian
Stock Exchange (ASX) through the use of the Clearing
House Electronic Subregister System (CHESS) Units of
Foreign Securities (CUFS). CUFS are a form of
depositary security that represents a beneficial ownership
interest in the securities of a non-Australian corporation. Each
of our CUFS represents the beneficial ownership of one share of
common stock of JHI NV, the legal ownership of which is held by
CHESS Depositary Nominees Pty Ltd. The CUFS are listed and
traded on the ASX under the symbol JHX.


The Company has also listed its securities for trading on the
New York Stock Exchange (NYSE). The Company sponsors
a program, whereby beneficial ownership of five CUFS is
represented by one American Depositary Share (ADS),
which is issued by The Bank of New York. These ADSs trade on the
NYSE in the form of American Depositary Receipts
(ADRs) under the symbol JHX. Unless the
context indicates otherwise, when we refer to ADRs, we are
referring to ADRs or ADSs and when we refer to our common
stock we are referring to the shares of our common stock
that are represented by CUFS.





Selected Financial Data






2



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##### Table of Contents





|                                                                 |                              |                                                               |        |       |         |   |       |       |       |   |        |       |       |      |       |       |       |   |        |       |       | 
|---------------------------------------------------------------- | ---------------------------- | ------------------------------------------------------------- | ------ | ----- | ------- | - | ----- | ----- | ----- | - | ------ | ----- | ----- | ---- | ----- | ----- | ----- | - | ------ | ----- | ----- | 
|                                                                 |                              | Fiscal Years Ended March 31,                                  |       
|                                                                 |                              |                                                               |       
|                                                                 |                              | 2005                                                          |        |       | 2004    |   |       | 2003  |       |   | 2002   |       |       | 2001 |      
|                                                                 |                              |                                                               |        |       |         |   |       |       |       |   |        |       |       |      |      
|                                                                 |                              | (In millions, except sales price per unit and per share data) |       
|Consolidated Statements of Income Data:                          |                              |                                                               |        |       |         |   |       |       |       |   |        |       |       |      |       |       |       |   |        |      
|Net Sales                                                        |                              |                                                               |        |       |         |   |       |       |       |   |        |       |       |      |       |       |       |   |        |      
|                                                                 | USA Fiber Cement             |                                                               | $      | 939.2 |         |   | $     | 738.6 |       |   | $      | 599.7 |       |      | $     | 444.8 |       |   | $      | 373.0 |      
|                                                                 | Asia Pacific Fiber Cement(1) |                                                               |        | 236.1 |         |   |       | 219.8 |       |   |        | 174.3 |       |      |       | 141.7 |       |   |        | 152.0 |      
|                                                                 | Other(2)                     |                                                               |        | 35.1  |         |   |       | 23.5  |       |   |        | 9.6   |       |      |       | 5.2   |       |   |        | 1.3   |      
|                                                                 |                              |                                                               |        |       |         |   |       |       |       |   |        |       |       |      |      
|                                                                 |                              | Total net sales                                               |        | $     | 1,210.4 |   |       | $     | 981.9 |   |        | $     | 783.6 |      |       | $     | 591.7 |   |        | $     | 526.3 | 
|                                                                 |                              |                                                               |        |       |         |   |       |       |       |   |        |       |       |      |      
|Operating income(3)                                              |                              | $                                                             | 196.2  |       |         | $ | 172.2 |       |       | $ | 128.8  |       |       | $    | 46.8  |       |       | $ | 40.5   |      
|Interest expense                                                 |                              |                                                               | (7.3   | )     |         |   | (11.2 | )     |       |   | (23.8  | )     |       |      | (18.4 | )     |       |   | (21.4  | )    
|Interest income                                                  |                              |                                                               | 2.2    |       |         |   | 1.2   |       |       |   | 3.9    |       |       |      | 2.4   |       |       |   | 8.2    |      
|Other (expense) income(4)                                        |                              |                                                               | (1.3   | )     |         |   | 3.5   |       |       |   | 0.7    |       |       |      | (0.4  | )     |       |   | 1.6    |      
|                                                                 |                              |                                                               |        |       |         |   |       |       |       |   |        |       |       |      |      
|Income from continuing operations before income taxes            |                              |                                                               | 189.8  |       |         |   | 165.7 |       |       |   | 109.6  |       |       |      | 30.4  |       |       |   | 28.9   |      
|Income tax (expense) benefit                                     |                              |                                                               | (61.9  | )     |         |   | (40.4 | )     |       |   | (26.1  | )     |       |      | (3.1  | )     |       |   | 0.6    |      
|                                                                 |                              |                                                               |        |       |         |   |       |       |       |   |        |       |       |      |      
|Income from continuing operations                                |                              | $                                                             | 127.9  |       |         | $ | 125.3 |       |       | $ | 83.5   |       |       | $    | 27.3  |       |       | $ | 29.5   |      
|                                                                 |                              |                                                               |        |       |         |   |       |       |       |   |        |       |       |      |      
|Net income                                                       |                              | $                                                             | 126.9  |       |         | $ | 129.6 |       |       | $ | 170.5  |       |       | $    | 30.8  |       |       | $ | 38.6   |      
|                                                                 |                              |                                                               |        |       |         |   |       |       |       |   |        |       |       |      |      
|Income from continuing operations per common share 
    basic   |                              | $                                                             | 0.28   |       |         | $ | 0.27  |       |       | $ | 0.18   |       |       | $    | 0.06  |       |       | $ | 0.07   |      
|Net income per common share  basic                              |                              |                                                               | 0.28   |       |         |   | 0.28  |       |       |   | 0.37   |       |       |      | 0.07  |       |       |   | 0.09   |      
|Income from continuing operations per common share 
    diluted |                              |                                                               | 0.28   |       |         |   | 0.27  |       |       |   | 0.18   |       |       |      | 0.06  |       |       |   | 0.07   |      
|Net income per common share  diluted                            |                              |                                                               | 0.28   |       |         |   | 0.28  |       |       |   | 0.37   |       |       |      | 0.07  |       |       |   | 0.09   |      
|Dividends paid per share                                         |                              |                                                               | 0.03   |       |         |   | 0.05  |       |       |   | 0.08   |       |       |      | 0.05  |       |       |   | 0.10   |      
|Return of capital per share                                      |                              | $                                                             |       |       |         | $ | 0.15  |       |       | $ | 0.20   |       |       | $    | 0.05  |       |       | $ |       |      
|Weighted average number of common shares outstanding             |                              |                                                               |        |       |         |   |       |       |       |   |        |       |       |      |       |       |       |   |        |      
|                                                                 | Basic                        |                                                               |        | 458.9 |         |   |       | 458.1 |       |   |        | 456.7 |       |      |       | 438.4 |       |   |        | 409.6 |      
|                                                                 | Diluted                      |                                                               |        | 461.0 |         |   |       | 461.4 |       |   |        | 459.4 |       |      |       | 440.4 |       |   |        | 409.6 |      
|Consolidated Cash Flow Information:                              |                              |                                                               |        |       |         |   |       |       |       |   |        |       |       |      |       |       |       |   |        |      
|Cash flows provided by operating activities                      |                              | $                                                             | 219.8  |       |         | $ | 162.6 |       |       | $ | 64.8   |       |       | $    | 76.6  |       |       | $ | 94.6   |      
|Cash flows (used in) provided by investing activities            |                              |                                                               | (149.2 | )     |         |   | (58.0 | )     |       |   | 237.9  |       |       |      | (77.2 | )     |       |   | (162.9 | )    
|Cash flows (used in) provided by financing activities            |                              | $                                                             | (28.2  | )     |         | $ | (87.9 | )     |       | $ | (279.4 | )     |       | $    | (40.8 | )     |       | $ | 1.3    |      
|Other Data:                                                      |                              |                                                               |        |       |         |   |       |       |       |   |        |       |       |      |       |       |       |   |        |      
|Depreciation and amortization(5)                                 |                              | $                                                             | 36.3   |       |         | $ | 36.4  |       |       | $ | 27.4   |       |       | $    | 23.5  |       |       | $ | 20.6   |      
|Adjusted EBITDA(6)                                               |                              |                                                               | 232.5  |       |         |   | 208.6 |       |       |   | 156.2  |       |       |      | 70.3  |       |       |   | 68.6   |      
|Capital expenditures(7)                                          |                              | $                                                             | 153.0  |       |         | $ | 74.1  |       |       | $ | 90.2   |       |       | $    | 50.8  |       |       | $ | 114.7  |      

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|                                                        |                              |                                                               |         |         |      |   |       |         |  |   |       |         |  |      |       |       |  |   |       |       | 
|------------------------------------------------------- | ---------------------------- | ------------------------------------------------------------- | ------- | ------- | ---- | - | ----- | ------- |  | - | ----- | ------- |  | ---- | ----- | ----- |  | - | ----- | ----- | 
|                                                        |                              | Fiscal Years Ended March 31,                                  |        
|                                                        |                              |                                                               |        
|                                                        |                              | 2005                                                          |         |         | 2004 |   |       | 2003    |  |   | 2002  |         |  | 2001 |      
|                                                        |                              |                                                               |         |         |      |   |       |         |  |   |       |         |  |      |      
|                                                        |                              | (In millions, except sales price per unit and per share data) |        
|Volume (million square feet)(8)                         |                              |                                                               |         |         |      |   |       |         |  |   |       |         |  |      |       |       |  |   |       |      
|                                                        | USA Fiber Cement             |                                                               |         | 1,855.1 |      |   |       | 1,519.9 |  |   |       | 1,273.6 |  |      |       | 988.5 |  |   |       | 852.3 | 
|                                                        | Asia Pacific Fiber Cement(1) |                                                               |         | 376.9   |      |   |       | 362.1   |  |   |       | 349.9   |  |      |       | 320.7 |  |   |       | 318.9 | 
|Average sales price per unit (per thousand square feet) |                              |                                                               |         |         |      |   |       |         |  |   |       |         |  |      |       |       |  |   |       |      
|                                                        | USA Fiber Cement             |                                                               | $       | 506     |      |   | $     | 486     |  |   | $     | 471     |  |      | $     | 450   |  |   | $     | 438   | 
|                                                        | Asia Pacific Fiber Cement(1) |                                                               | A$      | 846     |      |   | A$    | 862     |  |   | A$    | 887     |  |      | A$    | 861   |  |   | A$    | 857   | 
|Consolidated Balance Sheet Data:                        |                              |                                                               |         |         |      |   |       |         |  |   |       |         |  |      |       |       |  |   |       |      
|Net current assets(9)                                   |                              | $                                                             | 180.2   |         |      | $ | 195.9 |         |  | $ | 159.4 |         |  | $    | 115.1 |       |  | $ | 84.9  |      
|Total assets                                            |                              |                                                               | 1,088.9 |         |      |   | 971.2 |         |  |   | 851.8 |         |  |      | 968.0 |       |  |   | 969.0 |      
|Long-term debt(10)                                      |                              |                                                               | 147.4   |         |      |   | 165.0 |         |  |   | 165.0 |         |  |      | 325.0 |       |  |   | 357.3 |      
|Shareholders equity                                    |                              |                                                               | 624.7   |         |      |   | 504.7 |         |  |   | 434.7 |         |  |      | 370.7 |       |  |   | 281.1 |      






| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (1) | Asia Pacific Fiber Cement includes all fiber cement manufactured
    in Australia, New Zealand and the Philippines and sold in
    Australia, New Zealand and Asia. See Item 5, Notes to
    Results of Operations, on page 61 for additional
    details on sales volume and average sales price per unit in
    fiscal years 2004 and 2003.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|
| | (2) | Includes fiber cement manufactured and sold in Chile, fiber
    reinforced concrete pipes manufactured and sold in the United
    States, fiber cement operations in Europe and roofing operations
    in the United States. Also includes general corporate income in
    fiscal years 2002 and 2001 comprised primarily of rental income
    from subleasing office space in Sydney, Australia.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|
| | (3) | For fiscal year 2005, operating income includes Special
    Commission of Inquiry and other related expenses of
    $28.1 million. In addition, operating income includes
    restructuring and other operating income/expenses as follows:
    (i) for fiscal year 2005, $6.0 million consisting of a
    settlement loss of $5.3 million related to an employee
    retirement plan and a $0.7 million loss on the sale of land
    in Sacramento, California; (ii) for fiscal year 2004,
    $2.1 million expense primarily related to an increase in
    cost provisions for our Australian and New Zealand business;
    (iii) for fiscal year 2003, $1.0 million income
    related to the settlement of a terminated derivative contract;
    (iv) for fiscal year 2002, $12.6 million expense
    related to the roofing Class Action Settlement Agreement in
    the United States, $7.4 million expense associated with the
    corporate reorganization and $8.1 million expense related
    to the decrease in fair value of derivative contracts; and
    (v) for fiscal year 2001, asset write-downs, lease
    termination charges and employee termination costs of
    $15.5 million primarily associated with the restructuring
    of our fiber cement business in Australia and the creation of
    the new Asia Pacific regional structure.
|
| | (4) | Consists primarily of the following: (i) for fiscal year
    2005, the $1.3 million expense consisted of a
    $2.1 million impairment charge that we recorded on an
    investment in a company that filed a voluntary petition for
    reorganization under Chapter 11 of the U.S. bankruptcy
    code, partly offset by a $0.8 million gain on a separate
    investment; (ii) for fiscal year 2004, the net gain
    achieved after accounting for income items, including a
    $4.5 million profit on the sale of our New Zealand
    property, was partially offset by expense items, including
    $3.2 million primarily due to a capital duty fee paid in
    conjunction with our Dutch corporate structure; (iii) for
    fiscal year 2003, investment income of $0.7 million;
    (iv) for fiscal year 2002, investment expenses of
    $0.4 million; and (v) for fiscal year 2001, investment
    income of $1.6 million.                                                                                                                                                                                                                                                                                                                                                                                                                         
|
| | (5) | Information for depreciation and amortization is for continuing
    businesses only.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

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| |     |                                                                                                                                                                                                                                                                                                                  
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (6) | Represents income from continuing operations before interest
    income, interest expense, income taxes, other nonoperating
    expenses, described in footnote four above, net, depreciation
    and amortization charges, and certain other property, goodwill
    and equipment impairment charges as follows:

|                                          |                                                                                           |                              |       |       |      |   |       |       |   |   |       |       |   |      |      |       |   |   |      |       |  
|----------------------------------------- | ----------------------------------------------------------------------------------------- | ---------------------------- | ----- | ----- | ---- | - | ----- | ----- | - | - | ----- | ----- | - | ---- | ---- | ----- | - | - | ---- | ----- | -
|                                          |                                                                                           | Fiscal Years Ended March 31, |      
|                                          |                                                                                           |                              |      
|                                          |                                                                                           | 2005                         |       |       | 2004 |   |       | 2003  |   |   | 2002  |       |   | 2001 |     
|                                          |                                                                                           |                              |       |       |      |   |       |       |   |   |       |       |   |      |     
|(Adjusted EBITDA)                       |                                                                                           |                             
|                                          |                                                                                           | (In millions)                |      
|Net cash provided by operating activities |                                                                                           | $                            | 219.8 |       |      | $ | 162.6 |       |   | $ | 64.8  |       |   | $    | 76.6 |       |   | $ | 94.6 |      
|                                          | Adjustments to reconcile net income to net cash provided by
    operating activities, net |                              |       | (61.2 | )    |   |       | (51.1 | ) |   |       | 62.1  |   |      |      | (41.1 | ) |   |      | (44.8 | )
|                                          | Change in operating assets and liabilities, net                                           |                              |       | (31.7 | )    |   |       | 18.1  |   |   |       | 43.6  |   |      |      | (4.7  | ) |   |      | (11.2 | )
|                                          |                                                                                           |                              |       |       |      |   |       |       |   |   |       |       |   |      |     
|Net Income                                |                                                                                           | $                            | 126.9 |       |      | $ | 129.6 |       |   | $ | 170.5 |       |   | $    | 30.8 |       |   | $ | 38.6 |      
|                                          | Loss (income) from discontinued operations                                                |                              |       | 1.0   |      |   |       | (4.3  | ) |   |       | (87.0 | ) |      |      | (3.5  | ) |   |      | (9.1  | )
|                                          | Income tax expense (benefit)                                                              |                              |       | 61.9  |      |   |       | 40.4  |   |   |       | 26.1  |   |      |      | 3.1   |   |   |      | (0.6  | )
|                                          | Interest expense                                                                          |                              |       | 7.3   |      |   |       | 11.2  |   |   |       | 23.8  |   |      |      | 18.4  |   |   |      | 21.4  |  
|                                          | Interest income                                                                           |                              |       | (2.2  | )    |   |       | (1.2  | ) |   |       | (3.9  | ) |      |      | (2.4  | ) |   |      | (8.2  | )
|                                          | Other expense (income)                                                                    |                              |       | 1.3   |      |   |       | (3.5  | ) |   |       | (0.7  | ) |      |      | 0.4   |   |   |      | (1.6  | )
|                                          | Depreciation and amortization                                                             |                              |       | 36.3  |      |   |       | 36.4  |   |   |       | 27.4  |   |      |      | 23.5  |   |   |      | 20.6  |  
|                                          | Impairment of property, plant and equipment                                               |                              |       |      |      |   |       |      |   |   |       |      |   |      |      |      |   |   |      | 7.5   |  
|                                          |                                                                                           |                              |       |       |      |   |       |       |   |   |       |       |   |      |     
|Adjusted EBITDA                           |                                                                                           | $                            | 232.5 |       |      | $ | 208.6 |       |   | $ | 156.2 |       |   | $    | 70.3 |       |   | $ | 68.6 |      
|                                          |                                                                                           |                              |       |       |      |   |       |       |   |   |       |       |   |      |     



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Adjusted EBITDA is not a measure of financial performance under
    U.S. GAAP and should not be considered an alternative to,
    or more meaningful than, income from operations, net income or
    cash flows as defined by U.S. GAAP or as a measure of our
    profitability or liquidity. Not all companies calculate Adjusted
    EBITDA in the same manner as we have and, accordingly, Adjusted
    EBITDA may not be comparable with other companies. We have
    included information concerning Adjusted EBITDA because we
    believe that this data is commonly used by investors to evaluate
    the ability of a companys earnings from its core business
    operations to satisfy its debt, capital expenditure and working
    capital requirements. To permit evaluation of this data on a
    consistent basis from period to period, Adjusted EBITDA has been
    adjusted for noncash charges such as goodwill and asset
    impairment charges, as well as nonoperating income and expense
    items. See our consolidated financial statements and our
    discussion under Operating and Financial Review and
    Prospects for further information to assist in identifying
    and evaluating trends in Adjusted EBITDA.



| |     |                                                                                                                         
| | --- | ------------------------------------------------------------------------------------------------------------------------
| | (7) | Information for capital expenditures includes both cash and
    credit purchases, and is for continuing businesses only.
|
| | (8) | Fiber cement volume is measured in 5/16 thick square feet,
    which are referred to as standard feet.                 
|
| | (9) | Total current assets less total current liabilities.                                                                    



|     |                                            
|---- | -------------------------------------------
|(10) | Includes current portion of long-term debt.

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Risk Factors




| |                                                                                                                                                                              
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | We may be subject to potential liability because certain
    current and former James Hardie Group subsidiaries previously
    manufactured products that contained asbestos.







| |                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | As a result of the Special Commission of Inquiry that was
    established in Australia to consider matters related to the
    Foundation, we may be subject to claims and allegations
    regarding asbestos-related liability and our corporate
    restructurings, including the corporate restructurings that
    resulted in the creation of the Foundation and the ABN 60
    Foundation and associated intercompany transactions.







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| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | In the future, we may have difficulty maintaining existing
    financial accommodation on their current terms, obtaining
    financial accommodation (debt or equity) on usual terms for
    other entities in the same businesses or with the same credit
    ratings, or obtaining certain types of financial accommodation
    at all. In addition, we may not be able to maintain our
    historical level of liquidity because we may have to make
    significant payments under an agreement to resolve outstanding
    asbestos matters.









| |                                                                                                                                                                                                                                                                                                                        
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Government of the State of New South Wales has
    announced that it is prepared to pass legislation that would
    impose retroactive liability on the Company if current
    negotiations between the Company, the NSW Government, the ACTU
    and asbestos claimants do not reach an acceptable
    conclusion.





| |                                                                                                                                                                                                                                                                                                              
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | We have experienced product bans and boycotts and negative
    publicity and have been subject to other measures taken by the
    Representatives and others to influence the resolution of
    matters relating to the SCI investigation and to encourage
    governmental action if there is no resolution.



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| |                                                                                                         
| | --------------------------------------------------------------------------------------------------------
| | Continued scrutiny resulting from ongoing investigations
    may have an adverse effect on our business.





| |                                                                                                                                                                                                                                  
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Our board of directors and senior management continue to
    devote significant attention to matters arising from and related
    to the Special Commission of Inquiry, including the negotiation
    of the Principal Agreement.





| |                                                                                 
| | --------------------------------------------------------------------------------
| | Continuing negative publicity may continue to adversely
    affect our business.





| |                                                                                                                                                                                                                                                                                          
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | We may be liable for costs, penalties, fees or expenses
    incurred by current or former directors, officers or employees
    of the James Hardie Group to the extent that those costs are
    covered by indemnity arrangements granted by the James Hardie
    Group to those persons.



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| |                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Under the U.S.-Netherlands income tax treaty and Dutch tax
    law, we derive substantial tax benefits from the group finance
    operations of our Netherlands-based finance subsidiary, and
    changes in either the treaty or laws applicable to the finance
    subsidiary, including the recent changes to the tax treaty,
    could increase our effective tax rate and, as a result, reduce
    our future profits and cash flows.









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| |                                                                                                                  
| | -----------------------------------------------------------------------------------------------------------------
| | Substantial and increasing competition in the building
    products industry could adversely affect our business.









| |                                                                                                                                                                                                                    
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | If damages resulting from product defects exceed our
    insurance coverage, paying these damages could result in a
    material adverse effect on our business, results of operations
    and financial condition.



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| |                                                                                                                                                                                                                                                                                                  
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | If one or more of our fiber cement products fail to
    perform as expected or contain a design defect, such failure or
    defect, and any resulting negative publicity, could result in
    lower sales and may subject us to claims from purchasers or
    users of our fiber cement products.





| |                                                                                                                                                                                                                       
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Warranty claims resulting from unforeseen defects in our
    products and exceeding our warranty reserves could have a
    material adverse effect on our business, results of operations
    and financial condition.





| |                                                                                                                                                                                                                                                                                                                          
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | We may incur significant costs in the future in complying
    with applicable environmental and health and safety laws and
    regulations. A failure to comply with or a change in these laws
    and regulations could subject us to significant liabilities,
    including, but not limited to, damages and penalties.





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| |                                                                                      
| | -------------------------------------------------------------------------------------
| | Our business is dependent on the residential and
    commercial construction markets.





| |                                                                                                                                            
| | -------------------------------------------------------------------------------------------------------------------------------------------
| | Because demand for our products in our major markets is
    seasonal, our quarterly results of operations may vary
    throughout the year.





| |                                                                                                                                                                                                                                                                                                                                           
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | We may experience adverse fluctuations in the supply and
    cost of raw materials necessary to our business. A significant
    reduction or cessation of shipments from an important supplier
    could adversely affect our business if we are unable to secure
    alternative supplies within a short time or on reasonable
    terms.



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| |                                                                                                                                                                                                                                                                                       
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | If our research and development efforts fail to generate
    new, innovative products or processes, our overall profit
    margins may decrease and demand for our products may fall, which
    would have an adverse effect on our results of operations and
    financial condition.





| |                                                                          
| | -------------------------------------------------------------------------
| | Demand for our products is subject to changes in consumer
    preference.





| |                                                                                                                                                        
| | -------------------------------------------------------------------------------------------------------------------------------------------------------
| | We rely on only a few distributors to distribute our fiber
    cement products and the loss of any distributor could adversely
    affect our business.





| |                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Changes in, or failure to comply with, the laws,
    regulations, policies or conditions of any jurisdiction in which
    we conduct our business could result in, among other
    consequences, the loss of our assets in such jurisdiction, the
    elimination of certain rights that are critical to the operation
    of our business in such jurisdiction, a decrease in revenues or
    the imposition of additional taxes or other costs.





| |   |                                                                                                                                                           
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | changing political and economic conditions;                                                                                                               
|
| |  | changing laws and policies;                                                                                                                               
|
| |  | the general hazards associated with the assertion of sovereign
    rights over certain areas in which we conduct our
    business; and                    
|
| |  | laws limiting or conditioning the right and ability of
    subsidiaries and joint ventures to pay dividends or remit
    earnings to affiliated companies.



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| |                                                                                                                                                               
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Our reliance on intellectual property and other
    proprietary information subjects us to the risk that competitors
    could copy our products or processes.





| |                                                                                                                                                                                                     
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | We rely on a continuous power supply and availability of
    utilities to conduct our operations, and any shortages or
    interruptions could disrupt our operations and increase our
    expenses.





| |                                                                                                                                                                                                                                                  
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Because we have significant operations outside of the
    United States and report our earnings in U.S. dollars,
    unfavorable fluctuations in currency values and exchange rates
    could have a significant negative impact on our earnings.





| |                                                                                                                                                                    
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Information technology systems integration issues could
    disrupt our internal operations, which could have significant
    adverse effects on our profitability.



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| |                                                                                                                                                              
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Our Articles of Association and Dutch law contain
    provisions that could delay or prevent a change of control that
    may otherwise be beneficial to you.





| |                                                                                                                                                                                                                                             
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Because we are incorporated under Dutch laws, you may not
    be able to effectively seek legal recourse against us or our
    management and you may have difficulty enforcing any
    U.S. judgments or rulings in a foreign jurisdiction.







| |                                                                                                                                                                                                       
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The issuance of shares of common stock or the grant of
    options to acquire shares of common stock could dilute the value
    of your shares and adversely affect the price of our common
    stock.





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| |                                                                                                                                                                                                                                   
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | If we experience labor disputes or interruptions, as we
    have from time to time in the past, our operations may be
    disrupted and our business, financial condition and results of
    operations may be adversely affected.





| |                                                                                             
| | --------------------------------------------------------------------------------------------
| | Our effective income tax rate could increase and adversely
    affect our operating results.





| |                                                                                                                                                                                                                                           
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | If we are classified as a controlled foreign
    corporation or a passive foreign investment
    company, our shareholders could be subject to increased
    tax liability as a consequence of their investment in our
    securities.





| |                                                                                                                                                                                                                                  
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | We may acquire or divest businesses from time to time, and
    this may adversely affect our operating results and financial
    condition and may significantly change the nature of the company
    in which you have invested.





| |                                                                                                                                                                                                     
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Our current Chief Executive Officer and Chief Financial
    Officer were appointed in October 2004 after the resignations of
    our former Chief Executive Officer and Chief Financial
    Officer.



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Forward-Looking Statements






| |   |                                                                                                                                                   
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------
| |  | projections of our operating results or financial condition;                                                                                      
|
| |  | statements regarding our plans, objectives or goals, including
    those relating to competition, acquisitions, dispositions and
    our products;
|
| |  | statements about our future performance;                                                                                                          
|
| |  | statements about product or environmental liabilities; and                                                                                        
|
| |  | expectations about payments to a special purpose fund for the
    compensation of proven asbestos-related personal injury and
    death claims.   










|        |                           
|------- | --------------------------
|Item 4. | Information on the Company

History and Development of the Company


besloten vennootschap met beperkte
aansprakelijkheid naamloze
vennootschap




| |                        
| | -----------------------
| | Corporate Restructuring



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| |   |                                                                                                                                                                                                                                                                                             
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | the formation of JHNV;                                                                                                                                                                                                                                                                      
|
| |  | the transfer to subsidiaries of JHNV of all of our fiber cement
    businesses, our U.S. gypsum wallboard business, our
    Australian and New Zealand building systems business and our
    Australian windows business, all of which, except for fiber
    cement, were subsequently sold;
|
| |  | a debt financing, consisting of an issuance of notes to
    U.S. purchasers, and the arrangement of an Australian
    credit facility; and                                                                                                                                                  
|
| |  | the relocation of most of our senior executives and managers to
    our operational headquarters in the United States.                                                                                                                                                                      





| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | the issuance of shares of JHI NV common stock represented by
    CUFS to substantially all ABN 60 shareholders in exchange
    for their shares of ABN 60 common stock pursuant to an
    approved Australian scheme of arrangement;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|
| |  | the transfer by ABN 60 of all of the outstanding shares of JHNV
    (which directly or indirectly held substantially all of the
    assets of the James Hardie Group at that time) to JHI NV;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|
| |  | a capital reduction and payment of a dividend by ABN 60 to its
    then sole shareholder, JHI NV;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|
| |  | the issuance by ABN 60 of 100,000 partly-paid ordinary
    shares to JHI NV for a total issue price approximately equal to
    the market value of the James Hardie Group immediately prior to
    the schemes implementation (which equaled approximately
    A$1.9 billion). There was an initial subscription price
    paid of A$50 per partly-paid ordinary share (that is, for a
    total subscription price for such shares of A$5 million),
    and the remainder was left uncalled. A partly-paid share is a
    share that is issued with only part of its value paid by the
    owner of the share. The partly-paid shares were issued by
    ABN 60 to enable it to call on JHI NV for funds in the
    future if ABN 60 needed such funds to maintain its solvency;
|
| |  | The Deed of Covenant and Indemnity provided that, apart from
    ABN 60s limited financial obligations to Amaba and
    Amaca under the deed (for which ABN 60, at the time of the
    establishment of the ABN 60 Foundation, had been provided
    with funds to invest so as to be able to meet those
    obligations), ABN 60 had no further obligations to Amaca or
    Amaba in connection with their asbestos-related liabilities, and
    that ABN 60 was indemnified by those entities in the event
    that ABN 60 incurred or suffered any such liabilities;                                                                                                                                                                                                          
|
| |  | the listing of the shares of JHI NV represented by CUFS on
    the Australian Stock Exchange and the listing of ADRs,
    representing CUFS, which in turn represent shares of
    JHI NV, on the New York Stock Exchange; and                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|
| |  | the establishment of a Dutch financing subsidiary, James Hardie
    International Finance B.V. (JHIF BV).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       





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| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | JHI NV and ABN 60 cancelled the partly-paid shares.
    The decision to cancel the partly-paid shares was taken by the
    directors of ABN 60 who did so based on a determination
    that the reduction in capital would not materially prejudice
    ABN 60s ability to pay its creditors, including Amaba
    and Amaca, which, under the terms of the Deed of Covenant and
    Indemnity, were creditors of ABN 60 only to the extent of
    the limited financial obligations under that Deed. The directors
    determined that the funds in ABN 60 at that time would be
    sufficient for any such creditors;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|
| |  | ABN 60 transferred control of all of its non-operating
    subsidiaries to RCI Holdings Pty Ltd, a wholly owned subsidiary
    of JHI NV, to distinguish between the operating group of
    companies and non-operating subsidiaries; and                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|
| |  | Following the consolidation of the operating assets of the James
    Hardie Group under JHI NV and JHNV in fiscal year 2003, the
    principal activity of ABN 60 was paying amounts in
    accordance with the Deed of Covenant and Indemnity. As described
    above, ABN 60 was regarded as having more than sufficient
    funds invested to enable it to meet its liabilities in full as
    they became due and payable. Also, at that time, the cash
    position of the Company had improved significantly as a result
    of the sale of the Companys Gypsum business in the United
    States and the impending sale of a gypsum mine in Nevada.
    Despite such cash position and the ability of ABN 60 to
    meet its obligations under the Deed of Covenant and Indemnity,
    the presence of the Companys obligation to ABN 60 was
    constraining the Companys borrowing capacity because
    U.S. GAAP required the amount of the liability under the
    Deed of Covenant and Indemnity to be recorded on an undiscounted
    basis. On March 31, 2003, following a review of all
    available options to address this issue and after a thorough
    review had been conducted to determine that the funds available
    to ABN 60 would be sufficient to meet the claims of all
    creditors, the shares in ABN 60 were transferred to a newly
    established company named the

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| |  |                                                                                                                                                                                                      
| |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | ABN 60 Foundation. ABN 60 Foundation was established
    to be the sole shareholder of ABN 60. ABN 60 is
    managed by independent directors and operates entirely
    independently of the Company.






Recent Developments




| |                                                           
| | ----------------------------------------------------------
| | Special Commission of Inquiry and Related
    Developments









| |                                                                   
| | ------------------------------------------------------------------
| | Australian Securities and Investments Commission
    Investigation



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| |                             
| | ----------------------------
| | Board and Management Changes















| |                
| | ---------------
| | Debt Facilities



General Overview of Our Business


tm




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1 2




|                        |                                |                   |                                                |   |       |         |   |      |       |       |   |      |       |       | 
|----------------------- | ------------------------------ | ----------------- | ---------------------------------------------- | - | ----- | ------- | - | ---- | ----- | ----- | - | ---- | ----- | ----- | 
|                        |                                | Fiscal Year Ended |                                               
|                        |                                | March 31,         |                                               
|                        |                                |                   |                                               
|                        |                                | 2005              |                                                |   | 2004  |         |   | 2003 |      
|                        |                                |                   |                                                |   |       |         |   |      |      
|                        |                                | (In millions)     |                                               
|Continuing Operations   |                                |                   |                                                |   |       |         |   |      |       |       |   |     
|                        | Fiber Cement                   |                   |                                                |   |       |         |   |      |       |       |   |      |      
|                        |                                | United States     |                                                | $ | 939.2 |         |   | $    | 738.6 |       |   | $    | 599.7 |      
|                        |                                | Asia Pacific      |                                                |   | 236.1 |         |   |      | 219.8 |       |   |      | 174.3 |      
|                        |                                | Other             |                                                |   | 35.1  |         |   |      | 23.5  |       |   |      | 9.6   |      
|                        |                                |                   |                                                |   |       |         |   |      |      
|                        |                                |                   | Total Continuing Operations                    |   | $     | 1,210.4 |   |      | $     | 981.9 |   |      | $     | 783.6 | 
|                        |                                |                   |                                                |   |       |         |   |      |      
|Discontinued Operations |                                |                   |                                                |   |       |         |   |      |       |       |   |     
|                        | Gypsum (United States)         |                   | $                                              |  |       |         | $ |     |       |       | $ | 18.7 |      
|                        | Building Systems (New Zealand) |                   |                                                |  |       |         |   | 2.9  |       |       |   | 20.1 |      
|                        |                                |                   |                                                |   |       |         |   |      |      
|                        |                                |                   | Total Discontinued Operations                  |   | $     |        |   |      | $     | 2.9   |   |      | $     | 38.8  | 
|                        |                                |                   |                                                |   |       |         |   |      |      
|                        |                                |                   | Total (Continuing and Discontinued Operations) |   | $     | 1,210.4 |   |      | $     | 984.8 |   |      | $     | 822.4 | 
|                        |                                |                   |                                                |   |       |         |   |      |      

Industry Overview




| |                                                    
| | ---------------------------------------------------
| | U.S. Housing Industry and Fiber Cement
    Industry





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1 2






| |                                    
| | -----------------------------------
| | International Fiber Cement Industry





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Products














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1 2 tm tm 1 4 tm tm tm tm tm tm tm


Seasonality




Raw Materials




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Cellulose Fiber.


Silica.


Cement.


Water.


Sales, Marketing and Distribution


tm






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Research and Development




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| |   |                                                                                                                                                                         
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | continue to lower the capital cost of each unit of production at
    new plants by learning from past projects and through continuing
    innovation in engineering; and
|
| |  | reduce operating costs at each plant by improving manufacturing
    processes, raw materials yields and machine productivity.                                           

Dependence on Trade Secrets and Research and Development




Governmental Regulation




| |                         
| | ------------------------
| | Environmental Regulation





| |   |                                                                              
| | - | -----------------------------------------------------------------------------
| |  | the Resource Conservation and Recovery Act;                                  
|
| |  | the Comprehensive Environmental Response, Compensation and
    Liability Act;
|
| |  | the Clean Air Act;                                                           
|
| |  | the Occupational Safety and Health Act;                                      
|
| |  | the Emergency Planning and Community Right to Know Act;                      
|
| |  | the Clean Water Act;                                                         
|
| |  | the Safe Drinking Water Act;                                                 
|
| |  | the Surface Mining Control and Reclamation Act;                              
|
| |  | the Toxic Substances Control Act;                                            

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| |   |                                           
| | - | ------------------------------------------
| |  | the National Environmental Policy Act; and
|
| |  | the Endangered Species Act,               



Organizational Structure






|                                               |  |                           |               | 
|---------------------------------------------- |  | ------------------------- | ------------- | 
|                                               |  | Jurisdiction of           |              
|Name of Company                                |  | Establishment             |              
|                                               |  |                           |              
|James Hardie Aust Holdings Pty Ltd.            |  |                           | Australia     | 
|James Hardie Aust Investco Pty Ltd.            |  |                           | Australia     | 
|James Hardie Aust Investments No. 1 Pty Ltd.   |  |                           | Australia     | 
|James Hardie Austgroup Pty Ltd.                |  |                           | Australia     | 
|James Hardie Australia Management Pty Ltd.     |  |                           | Australia     | 
|James Hardie Australia Pty Ltd.                |  |                           | Australia     | 
|James Hardie Building Products Inc.            |  |                           | United States | 
|James Hardie Europe B.V.                       |  | France and United Kingdom
|James Hardie Fibre Cement Pty Ltd.             |  |                           | Australia     | 
|James Hardie International Finance B.V.        |  |                           | Netherlands   | 
|James Hardie International Holdings B.V.       |  |                           | Netherlands   | 
|James Hardie N.V.                              |  |                           | Netherlands   | 
|James Hardie New Zealand Limited               |  |                           | New Zealand   | 
|James Hardie NZ Holdings Trust                 |  |                           | New Zealand   | 
|James Hardie Philippines Inc.                  |  |                           | Philippines   | 
|James Hardie Research (Holdings) Pty Ltd.      |  |                           | Australia     | 
|James Hardie U.S. Investments Sierra Inc.      |  |                           | United States | 
|N.V. Technology Holdings A Limited Partnership |  |                           | Australia     | 
|RCI Pty Ltd.                                   |  |                           | Australia     | 

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Capital Expenditures and Divestitures




| |                     
| | --------------------
| | Capital Expenditures



|                      |                   |                                            |                            |   |       |       |  |      |      |      |  |     |      |      | 
|--------------------- | ----------------- | ------------------------------------------ | -------------------------- | - | ----- | ----- |  | ---- | ---- | ---- |  | --- | ---- | ---- | 
|                      |                   | Fiscal Years Ended                         |                           
|                      |                   | March 31,                                  |                           
|                      |                   |                                            |                           
|                      |                   | 2005                                       |                            |   | 2004  |       |  | 2003 |     
|                      |                   |                                            |                            |   |       |       |  |      |     
|                      |                   | (In millions)                              |                           
|Continuing Operations |                   |                                            |                            |   |       |       |  |      |      |      |  |    
|                      | Fiber Cement      |                                            |                            |   |       |       |  |      |      |      |  |     |     
|                      |                   | United States                              |                            | $ | 144.8 |       |  | $    | 56.2 |      |  | $   | 81.0 |     
|                      |                   | Asia Pacific                               |                            |   | 4.1   |       |  |      | 8.4  |      |  |     | 6.6  |     
|                      |                   | Chile, U.S. Pipes, U.S. Roofing and Europe |                            |   | 4.1   |       |  |      | 9.5  |      |  |     | 2.5  |     
|                      |                   |                                            |                            |   |       |       |  |      |     
|                      |                   |                                            | Total Fiber Cement         |   |       | 153.0 |  |      |      | 74.1 |  |     |      | 90.1 | 
|                      | General Corporate |                                            |                            |  |       |       |  |     |      |      |  | 0.1 |     
|                      |                   |                                            |                            |   |       |       |  |      |     
|                      |                   |                                            | Total Capital Expenditures |   | $     | 153.0 |  |      | $    | 74.1 |  |     | $    | 90.2 | 
|                      |                   |                                            |                            |   |       |       |  |      |     





| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | the commencement of construction of a new fiber cement
    manufacturing plant in Pulaski, Virginia at a total estimated
    cost of $98.0 million. Construction of the plant began in
    March 2005 and will include two manufacturing lines, each with a
    design capacity of 300 million square feet. The first line
    is expected to be to be completed for the first quarter of
    fiscal year 2007. The plant will produce external siding and
    interior backerboard products for new residential construction,
    repair and remodel and manufactured housing markets. Funding of
    the new plant is expected to be provided by the Companys
    cash flow and current or future debt facilities. As of
    March 31, 2005, we have incurred $7.7 million related
    to the construction of the Virginia plant;
|
| |  | the commencement in fiscal year 2005 of additional
    ColorPlus® coating capacity inside our existing plants,
    which includes a building expansion at our Peru, Illinois plant
    and the new ColorPlus coating lines at our Peru, Illinois and
    Blandon, Pennsylvania plants;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|
| |  | the addition of a new fiber cement plant in Reno, Nevada at a
    cost of $52.5 million, which occurred during fiscal years
    2005 and 2004;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|
| |  | the construction of a new trim line at our Peru, Illinois plant.
    As of March 31, 2005, we were in pre-production and had
    incurred $56.2 million, which occurred during fiscal years
    2005 and 2004;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|
| |  | upgrades to our Blandon, Pennsylvania plant at a cost of
    $17.1 million, which occurred during fiscal years 2005,
    2004 and 2003;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|
| |  | the addition of a panel production line at our Waxahachie, Texas
    plant at a cost of $26.5 million, which occurred during
    fiscal years 2004 and 2003;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|
| |  | the addition of a pre-finishing line and expansion of the
    building at our Peru, Illinois plant at a total cost of
    $7.9 million, which primarily occurred during fiscal years
    2004 and 2003;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|
| |  | the purchase of land and buildings in Summerville, South
    Carolina and Blandon, Pennsylvania at a cost of
    $10.0 million and $7.6 million, respectively, in
    fiscal year 2003; and                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|
| |  | the addition of a second flat sheet production line at our Peru,
    Illinois plant at a total cost of $24.7 million, consisting
    of capital expenditures of $9.0 million, which occurred
    during fiscal year 2003, and $15.7 million, which occurred
    during fiscal years 2002 and 2001.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

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| |   |                                                                                                                                                               
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | the construction of a new fiber cement manufacturing plant in
    Pulaski, Virginia, discussed above, at an estimated cost of
    approximately $75.0 million;
|
| |  | the building expansion and addition of ColorPlus® coating
    lines at our Peru, Illinois and Blandon, Pennsylvania plants,
    discussed above; and          
|
| |  | the remaining cost of the Peru trim line at an estimate of
    approximately $4.8 million.                                                                    









| |             
| | ------------
| | Divestitures



| |                 
| | ----------------
| | Building Systems





| |       
| | ------
| | Gypsum





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| |                  
| | -----------------
| | Building Services





| |       
| | ------
| | ABN 60



34



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Property, Plant and Equipment












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| |                   
| | ------------------
| | Plants and Process



|                                                 |                                       |                                          |                                       |                     |             |         |       |             |     |  |  |         |     |         |       | 
|------------------------------------------------ | ------------------------------------- | ---------------------------------------- | ------------------------------------- | ------------------- | ----------- | ------- | ----- | ----------- | --- |  |  | ------- | --- | ------- | ----- | 
|                                                 |                                       | Existing                                 |                                       |                     | Committed   |         |       | Total       |    
|                                                 |                                       | Annual                                   |                                       |                     | Additional  |         |       | Planned     |    
|                                                 |                                       | Design                                   |                                       |                     | Design      |         |       | Design      |    
|Location                                         |                                       | Capacity(1)                              |                                       |                     | Capacity(1) |         |       | Capacity(1) |    
|                                                 |                                       |                                          |                                       |                     |             |         |       |             |    
|Fiber Cement Flat Sheet (in million square feet) |                                       |                                          |                                       |                     |             |         |       |             |     |  |  |        
|                                                 | United States                         |                                          |                                       |                     |             |         |       |             |     |  |  |         |    
|                                                 |                                       | Fontana, California                      |                                       |                     | 180         |         |       |             |    |  |  |         | 180 |        
|                                                 |                                       | Plant City, Florida                      |                                       |                     | 300         |         |       |             |    |  |  |         | 300 |        
|                                                 |                                       | Cleburne, Texas                          |                                       |                     | 500         |         |       |             |    |  |  |         | 500 |        
|                                                 |                                       | Tacoma, Washington                       |                                       |                     | 200         |         |       |             |    |  |  |         | 200 |        
|                                                 |                                       | Peru, Illinois                           |                                       |                     | 400         |         |       |             | 160 |  |  |         | 560 |        
|                                                 |                                       | Waxahachie, Texas                        |                                       |                     | 360         |         |       |             |    |  |  |         | 360 |        
|                                                 |                                       | Blandon, Pennsylvania                    |                                       |                     | 200         |         |       |             |    |  |  |         | 200 |        
|                                                 |                                       | Summerville, South Carolina              |                                       |                     | 190         |         |       |             |    |  |  |         | 190 |        
|                                                 |                                       | Reno, Nevada                             |                                       |                     | 300         |         |       |             |    |  |  |         | 300 |        
|                                                 |                                       | Pulaski, Virginia                        |                                       |                     |            |         |       |             | 600 |  |  |         | 600 |        
|                                                 |                                       |                                          |                                       |                     |             |         |       |             |    
|                                                 |                                       |                                          |                                       | Total United States |             |         | 2,630 |             |     |  |  |         |     |         | 3,390 | 
|                                                 | Australia                             |                                          |                                       |                     |             |         |       |             |     |  |  |         |    
|                                                 |                                       | Sydney, New South Wales(2)               |                                       |                     | 200         |         |       |             |    |  |  |         | 200 |        
|                                                 |                                       | Brisbane, Queensland (Carole Park)(2)(3) |                                       |                     | 160         |         |       |             |    |  |  |         | 160 |        
|                                                 |                                       |                                          |                                       |                     |             |         |       |             |    
|                                                 |                                       |                                          | Total Australia                       |                     |             | 360     |       |             |     |  |  |         |     | 360     |      
|                                                 | New Zealand                           |                                          |                                       |                     |             |         |       |             |     |  |  |         |    
|                                                 |                                       | Auckland(2)                              |                                       |                     | 75          |         |       |             |    |  |  |         | 75  |        
|                                                 | The Philippines                       |                                          |                                       |                     |             |         |       |             |     |  |  |         |    
|                                                 |                                       | Manila                                   |                                       |                     | 145         |         |       |             |    |  |  |         | 145 |        
|                                                 | Chile                                 |                                          |                                       |                     |             |         |       |             |     |  |  |         |    
|                                                 |                                       | Santiago                                 |                                       |                     | 55          |         |       |             |    |  |  |         | 55  |        
|                                                 |                                       |                                          |                                       |                     |             |         |       |             |    
|                                                 |                                       |                                          | Total Fiber Cement Flat Sheet         |                     |             | 3,265   |       |             |     |  |  |         |     | 4,025   |      
|Fiber Reinforced Concrete Pipes(in tons)(4)      |                                       |                                          |                                       |                     |             |         |       |             |     |  |  |        
|                                                 | Plant City, Florida (pipes)           |                                          |                                       | 100,000             |             |         |       |            |     |  |  | 100,000 |    
|                                                 | Brisbane, Queensland (Meeandah)(2)(3) |                                          |                                       | 50,000              |             |         |       |            |     |  |  | 50,000  |    
|                                                 |                                       |                                          |                                       |                     |             |         |       |             |    
|                                                 |                                       |                                          | Total Fiber Reinforced Concrete Pipes |                     |             | 150,000 |       |             |     |  |  |         |     | 150,000 |      






|    |                                                                                                                                                                                                                                                                                                                                        
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Annual design capacity is based on managements historical
    experience with our production process and is calculated
    assuming continuous operation, 24 hours per day, seven days
    per week, producing 5/16 thickness siding at a target
    operating speed. Plants outside the United States produce a
    range of thicker

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|    |                                                                                                                                                                                                                                                                                                                                                                                         
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    | products, which negatively affect their outputs. Actual
    production is affected by factors such as product mix, batch
    size, plant availability and production speeds and is usually
    less than annual design capacity.                                                                                                                                                        
|   
|(2) | Prior to March 2004, the land and buildings on which these
    facilities are located was leased on a long-term basis from
    Amaca Pty Limited. In March 2004, various subsidiaries of
    Multiplex Property Trust (together, Multiplex), an
    unrelated third party, acquired the land and buildings related
    to these four fiber cement manufacturing facilities from Amaca.
|   
|(3) | There are two manufacturing plants in Brisbane. Carole Park
    produces only flat sheets and Meeandah produces only pipes and
    columns.                                                                                                                                                                                                                                             
|   
|(4) | Pipe and column capacity is measured in tons rather than million
    square feet.                                                                                                                                                                                                                                                                                                       





|              |  |                |     | 
|------------- |  | -------------- | --- | 
|              |  | Capacity       |    
|Country       |  | Utilization(1) |    
|              |  |                |    
|United States |  |                | 91% | 
|Australia     |  |                | 54% | 
|New Zealand   |  |                | 54% | 
|Philippines   |  |                | 83% | 
|Chile         |  |                | 75% | 






|    |                                                                                                                                                                                                                                                  
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Capacity utilization is based on design capacity. Design
    capacity is based on managements estimates, as described
    above. No accepted industry standard exists for the calculation
    of fiber cement manufacturing facility capacities.



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| |      
| | -----
| | Mines



Legal Proceedings








| |                                               
| | ----------------------------------------------
| | Claims Against Former and Current Subsidiaries



| |                                        
| | ---------------------------------------
| | Amaca Pty Ltd, Amaba Pty Ltd and ABN 60











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| |                              
| | -----------------------------
| | Special Commission of Inquiry







| |   |                                                                                                                                                                                                                                                                                                                
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | speedy, fair and equitable compensation for all existing and
    future claimants, including objective criteria to reduce
    superimposed (judicial) inflation. Superimposed inflation
    is inflation in claim awards above the underlying rate of
    inflation and is sometimes called judicial inflation;
|
| |  | contributions to be made in a manner which provide certainty to
    claimants as to their entitlement, the scheme administrator as
    to the amount available for distribution, and the proposed
    contributors (including the Company) as to the ultimate amount
    of their contributions;               
|
| |  | significant reductions in legal costs through reduced and more
    abbreviated litigation; and                                                                                                                                                                                                                 
|
| |  | limitation of legal avenues outside of the scheme.                                                                                                                                                                                                                                                             







Principal Findings in Favor of the Company






| |   |                                                                                                                                                                                                                                                                                                                         
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | the establishment of the Foundation was legally effective and
    causes of action which the Foundation, Amaba or Amaca might have
    against the James Hardie Group, its officers and advisers would
    be unlikely to result in any significant increase in the funds
    of Amaba, Amaca or the Foundation (putting

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| |   |                                                                                                                                                                                                                                                                                                                         
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   | this finding conversely, the Company is unlikely to face any
    significant liability to the Foundation, Amaba or Amaba as a
    result of the then current causes of action of such entities
    against the current members of the James Hardie Group);                                                              
|
| |  | there was no finding that JHI NV had committed any material
    breach of any law as a result of the separation and
    reorganization transactions which took place in 2001;                                                                                                                                           
|
| |  | many of the allegations and causes of action put forward by
    lawyers for the Foundation, Amaba and Amaca were described as
    speculative; and                                                                                                                                                                    
|
| |  | the SCI rejected the suggestion that JHI NV had breached
    any law or was part of a conspiracy in relation to the fact that
    the reorganization scheme documents prepared in 2001 did not
    refer to the possibility of the partly-paid shares being
    cancelled (whereas they in fact were cancelled in 2003).

Other Principal Findings Relevant to the Company






| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | as a practical (but not legal) matter, if the right
    amount (and not merely the minimum amount) of funding was not
    provided to the Foundation, the Company would face potential
    legislative, customer, union and public action to apply
    legislative and boycott measures and public pressure to ensure
    that the Company met any significant funding shortfall; and                                                                                                                                                 
|
| |  | the directors of ABN 60 at the time of the cancellation of the
    partly-paid shares (Messrs. Morley and Salter) effectively
    followed the instructions of JHI NV in relation to the
    cancellation. As a result, it might be concluded that
    JHI NV was a shadow director of ABN 60 at that time.
    However, while expressing some reservations about what occurred,
    the SCI did not find that the ABN 60 directors (including
    JHI NV as a shadow director) breached their duty in
    undertaking the cancellation.

Principal Findings Against ABN 60 (formerly called JHIL)








Principal Findings Against Mr. Macdonald and
Mr. Shafron






| |   |                                                                                                                                                                                                                                                                                            
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | alleged false and misleading conduct associated with a
    February 16, 2001 press release, particularly regarding a
    statement that the Foundation was fully funded in
    contravention of New South Wales and Commonwealth legislation
    prohibiting false or misleading conduct;

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| |   |                                                                                                                                                                                                                                                                                                                                                            
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | allegedly breaching their duties as officers of ABN 60 by
    encouraging the board of directors of ABN 60 to act on the
    Trowbridge report, dated February 13, 2001 (the
    Trowbridge Report), in forming a view that the
    Foundation would be fully funded; and                                                                              
|
| |  | criticisms, falling short of findings of contraventions of law,
    based on their respective roles in the separation and
    reorganization transactions. These included criticisms relating
    to their development, control over, reliance on and use of the
    Trowbridge Report, despite (in the SCIs view) their
    knowledge of its limitations.

















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| |                   
| | ------------------
| | Heads of Agreement







| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | the establishment of the SPF to compensate asbestos claimants;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|
| |  | initial funding of the SPF by the Company on the basis of a
    November 2004 KPMG report (which provided a net present value
    central estimate of A$1.536 billion ($1.03 billion)
    for all present and future claims at June 30, 2004). The
    undiscounted value of the central estimate of the asbestos
    liabilities of Amaca and Amaba as determined by KPMG was
    approximately A$3.586 billion ($2.471 billion). At
    December 21, 2004, the initial funding for the first three
    years was expected to be A$239 million (based on
    KPMGs estimate of liabilities as of June 30, 2004)
    less the assets to be contributed by the Foundation which were
    expected to be approximately A$125 million. The actuarial
    assessment is to be updated annually;
|
| |  | a two-year rolling cash buffer in the SPF and an annual
    contribution in advance based on actuarial assessments of
    expected claims for the next three years, to be revised annually;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|
| |  | a cap on the annual payments made by the Company to the SPF,
    initially set at 35% of annual net operating cash flow (defined
    as cash from operations in accordance with U.S. GAAP) for
    the immediately preceding year, with provisions for the
    percentage to decline over time depending upon the
    Companys financial performance and claims outlook; and                                                                                                                                                                                                                                                                                                                                                                                                               
|
| |  | no cap on individual payments to asbestos claimants.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        





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| |                                         
| | ----------------------------------------
| | Updated Actuarial Study; Claims Estimate











44



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| |            
| | -----------
| | Claims Data



|                                |  |           |     |  |      |  |     | 
|------------------------------- |  | --------- | --- |  | ---- |  | --- | 
|                                |  | March 31, |    
|                                |  |           |    
|                                |  | 2005      |     |  | 2004 | 
|                                |  |           |     |  |      | 
|Australia                       |  |           | 712 |  |      |  | 687 | 
|New Zealand                     |  |           |    |  |      |  |    | 
|Unknown-Court Not Identified(1) |  |           | 36  |  |      |  | 51  | 
|USA                             |  |           | 1   |  |      |  | 5   | 






|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | The Unknown  Court Not Identified
    designation reflects that the information for such claims had
    not been, as of the date of publication, entered into the
    database which the Foundation maintains. Over time, as the
    details of unknown claims are provided to the
    Foundation, the Company believes the database is updated to
    reflect where such claims originate. Accordingly, the Company
    understands the number of unknown claims pending fluctuates due
    to the resolution of claims as well as the reclassification of
    such claims.

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|                                               |  |                       |         |  |      |    |         |      |  |    |         | 
|---------------------------------------------- |  | --------------------- | ------- |  | ---- | -- | ------- | ---- |  | -- | ------- | 
|                                               |  | Australia             |        
|                                               |  | Years Ended March 31, |        
|                                               |  |                       |        
|                                               |  | 2005                  |         |  | 2004 |    |         | 2003 | 
|                                               |  |                       |         |  |      |    |         |      | 
|Number of claims filed                         |  |                       | 489     |  |      |    | 379     |      |  |    | 402     | 
|Number of claims dismissed                     |  |                       | 62      |  |      |    | 119     |      |  |    | 29      | 
|Number of claims settled or otherwise resolved |  |                       | 402     |  |      |    | 316     |      |  |    | 231     | 
|Average settlement amount per claim            |  | A$                    | 157,594 |  |      | A$ | 167,450 |      |  | A$ | 204,194 | 

|                                               |  |                       |   |  |      |  |   |      |  |    |       | 
|---------------------------------------------- |  | --------------------- | - |  | ---- |  | - | ---- |  | -- | ----- | 
|                                               |  | New Zealand           |  
|                                               |  | Years Ended March 31, |  
|                                               |  |                       |  
|                                               |  | 2005                  |   |  | 2004 |  |   | 2003 | 
|                                               |  |                       |   |  |      |  |   |      | 
|Number of claims filed                         |  |                       |  |  |      |  |  |      |  |    |      | 
|Number of claims dismissed                     |  |                       |  |  |      |  |  |      |  |    | 2     | 
|Number of claims settled or otherwise resolved |  |                       |  |  |      |  |  |      |  |    | 1     | 
|Average settlement amount per claim            |  |                       |  |  |      |  |  |      |  | A$ | 2,000 | 

|                                               |  |                                |        |  |      |  |    |      |  |    |        | 
|---------------------------------------------- |  | ------------------------------ | ------ |  | ---- |  | -- | ---- |  | -- | ------ | 
|                                               |  | Unknown  Court Not Identified |       
|                                               |  | Years Ended March 31,          |       
|                                               |  |                                |       
|                                               |  | 2005                           |        |  | 2004 |  |    | 2003 | 
|                                               |  |                                |        |  |      |  |    |      | 
|Number of claims filed                         |  |                                | 7      |  |      |  | 1  |      |  |    | 7      | 
|Number of claims dismissed                     |  |                                | 20     |  |      |  | 15 |      |  |    |       | 
|Number of claims settled or otherwise resolved |  |                                | 2      |  |      |  |   |      |  |    | 3      | 
|Average settlement amount per claim            |  | A$                             | 47,000 |  |      |  |   |      |  | A$ | 37,090 | 

|                                               |  |                       |         |  |      |  |   |      |  |  |   | 
|---------------------------------------------- |  | --------------------- | ------- |  | ---- |  | - | ---- |  |  | - | 
|                                               |  | USA                   |        
|                                               |  | Years Ended March 31, |        
|                                               |  |                       |        
|                                               |  | 2005                  |         |  | 2004 |  |   | 2003 | 
|                                               |  |                       |         |  |      |  |   |      | 
|Number of claims filed                         |  |                       |        |  |      |  |  |      |  |  |  | 
|Number of claims dismissed                     |  |                       | 3       |  |      |  | 1 |      |  |  |  | 
|Number of claims settled or otherwise resolved |  |                       | 1       |  |      |  |  |      |  |  |  | 
|Average settlement amount per claim            |  | A$                    | 228,293 |  |      |  |  |      |  |  |  | 



|                                            |  |                 |         |  |      |    |         |      |  |    |         |  |  |      |         |  |  |    |         | 
|------------------------------------------- |  | --------------- | ------- |  | ---- | -- | ------- | ---- |  | -- | ------- |  |  | ---- | ------- |  |  | -- | ------- | 
|                                            |  | As of March 31, |        
|                                            |  |                 |        
|                                            |  | 2005            |         |  | 2004 |    |         | 2003 |  |    | 2002    |  |  | 2001 |        
|                                            |  |                 |         |  |      |    |         |      |  |    |         |  |  |      |        
|Number of open claims at beginning of year  |  |                 | 743     |  |      |    | 814     |      |  |    | 671     |  |  |      | 569     |  |  |    | 507     | 
|Number of new claims                        |  |                 | 496     |  |      |    | 380     |      |  |    | 409     |  |  |      | 375     |  |  |    | 284     | 
|Number of closed claims                     |  |                 | 490     |  |      |    | 451     |      |  |    | 266     |  |  |      | 273     |  |  |    | 222     | 
|Number of open claims at year-end           |  |                 | 749     |  |      |    | 743     |      |  |    | 814     |  |  |      | 671     |  |  |    | 569     | 
|Average settlement amount per settled claim |  | A$              | 157,223 |  |      | A$ | 167,450 |      |  | A$ | 201,200 |  |  | A$   | 197,941 |  |  | A$ | 179,629 | 
|Average settlement amount per case closed   |  | A$              | 129,949 |  |      | A$ | 117,327 |      |  | A$ | 177,752 |  |  | A$   | 125,435 |  |  | A$ | 128,653 | 

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| |                               
| | ------------------------------
| | SCI and Other Related Expenses



|                                     |  |              |      | 
|------------------------------------ |  | ------------ | ---- | 
|                                     |  | Year Ended   |     
|                                     |  | March 31,    |     
|                                     |  | 2005         |     
|                                     |  |              |     
|                                     |  | (Millions of |     
|                                     |  | US dollars)  |     
|SCI                                  |  | $            | 6.8  | 
|Internal investigation               |  |              | 4.9  | 
|ASIC investigation                   |  |              | 1.2  | 
|Severance and consulting             |  |              | 6.0  | 
|Resolution advisory fees             |  |              | 6.4  | 
|Funding advice and other             |  |              | 2.8  | 
|                                     |  |              |     
|Total SCI and other related expenses |  | $            | 28.1 | 
|                                     |  |              |     





| |                                                                   
| | ------------------------------------------------------------------
| | Australian Securities and Investments Commission
    Investigation









| |                     
| | --------------------
| | Severance Agreements



48



---



##### Table of Contents





| |                                     
| | ------------------------------------
| | Interim Funding and ABN 60 Indemnity















| |                                     
| | ------------------------------------
| | Financial Position of the Foundation








|        |                                             
|------- | --------------------------------------------
|Item 5. | Operating and Financial Review and Prospects



Overview




49



---



##### Table of Contents







| |                                             
| | --------------------------------------------
| | The Company and the Building Product Markets









| |                             
| | ----------------------------
| | Fiscal Year 2005 Key Results







50



---



##### Table of Contents





tm




Critical Accounting Policies






| |                             
| | ----------------------------
| | Accounting for Contingencies





| |      
| | -----
| | Sales





| |                    
| | -------------------
| | Accounts Receivable



51



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| |          
| | ---------
| | Inventory





| |                         
| | ------------------------
| | Accrued Warranty Reserve





| |                          
| | -------------------------
| | Accounting for Income Tax







52



---



##### Table of Contents



Results of Operations






|                                                      |                           |                              |        |       |         |  |       |      |       |   |        |       |       |  |       |      |       |   |        |       |       |  |       |      |       | 
|----------------------------------------------------- | ------------------------- | ---------------------------- | ------ | ----- | ------- |  | ----- | ---- | ----- | - | ------ | ----- | ----- |  | ----- | ---- | ----- | - | ------ | ----- | ----- |  | ----- | ---- | ----- | 
|                                                      |                           | Fiscal Years Ended March 31, |       
|                                                      |                           |                              |       
|                                                      |                           | 2005                         |        |       | 2004    |  |       | 2003 |      
|                                                      |                           |                              |        |       |         |  |       |      |      
|Net sales:                                            |                           |                              |        |       |         |  |       |      |       |   |        |       |       |  |       |      |       |   |        |       |       |  |       |     
|                                                      | USA Fiber Cement          |                              | $      | 939.2 |         |  |       | 77.6 | %     |   | $      | 738.6 |       |  |       | 75.2 | %     |   | $      | 599.7 |       |  |       | 76.5 | %    
|                                                      | Asia Pacific Fiber Cement |                              |        | 236.1 |         |  |       | 19.5 |       |   |        | 219.8 |       |  |       | 22.4 |       |   |        | 174.3 |       |  |       | 22.2 |      
|                                                      | Other(1)                  |                              |        | 35.1  |         |  |       | 2.9  |       |   |        | 23.5  |       |  |       | 2.4  |       |   |        | 9.6   |       |  |       | 1.3  |      
|                                                      |                           |                              |        |       |         |  |       |      |       |   |        |       |       |  |       |      |       |  
|                                                      |                           | Total net sales              |        |       | 1,210.4 |  |       |      | 100.0 |   |        |       | 981.9 |  |       |      | 100.0 |   |        |       | 783.6 |  |       |      | 100.0 | 
|Cost of goods sold                                    |                           |                              | (784.0 | )     |         |  | (64.8 | )    |       |   | (623.0 | )     |       |  | (63.4 | )    |       |   | (492.8 | )     |       |  | (62.9 | )   
|                                                      |                           |                              |        |       |         |  |       |      |       |   |        |       |       |  |       |      |       |  
|Gross profit                                          |                           |                              | 426.4  |       |         |  | 35.2  |      |       |   | 358.9  |       |       |  | 36.6  |      |       |   | 290.8  |       |       |  | 37.1  |     
|Selling, general and administrative expenses          |                           |                              | (174.5 | )     |         |  | (14.4 | )    |       |   | (162.0 | )     |       |  | (16.5 | )    |       |   | (144.9 | )     |       |  | (18.5 | )   
|Research and development expenses                     |                           |                              | (21.6  | )     |         |  | (1.8  | )    |       |   | (22.6  | )     |       |  | (2.3  | )    |       |   | (18.1  | )     |       |  | (2.3  | )   
|SCI and other related expenses                        |                           |                              | (28.1  | )     |         |  | (2.3  | )    |       |   |       |       |       |  |      |      |       |   |       |       |       |  |      |     
|Other operating (expense) income                      |                           |                              | (6.0   | )     |         |  | (0.5  | )    |       |   | (2.1   | )     |       |  | (0.3  | )    |       |   | 1.0    |       |       |  | 0.1   |     
|                                                      |                           |                              |        |       |         |  |       |      |       |   |        |       |       |  |       |      |       |  
|Operating income                                      |                           |                              | 196.2  |       |         |  | 16.2  |      |       |   | 172.2  |       |       |  | 17.5  |      |       |   | 128.8  |       |       |  | 16.4  |     
|Interest expense                                      |                           |                              | (7.3   | )     |         |  | (0.6  | )    |       |   | (11.2  | )     |       |  | (1.1  | )    |       |   | (23.8  | )     |       |  | (3.0  | )   
|Interest income                                       |                           |                              | 2.2    |       |         |  | 0.2   |      |       |   | 1.2    |       |       |  | 0.1   |      |       |   | 3.9    |       |       |  | 0.5   |     
|Other (expense) income                                |                           |                              | (1.3   | )     |         |  | (0.1  | )    |       |   | 3.5    |       |       |  | 0.4   |      |       |   | 0.7    |       |       |  | 0.1   |     
|                                                      |                           |                              |        |       |         |  |       |      |       |   |        |       |       |  |       |      |       |  
|Income from continuing operations before income taxes |                           |                              | 189.8  |       |         |  | 15.7  |      |       |   | 165.7  |       |       |  | 16.9  |      |       |   | 109.6  |       |       |  | 14.0  |     
|Income tax expense                                    |                           |                              | (61.9  | )     |         |  | (5.1  | )    |       |   | (40.4  | )     |       |  | (4.1  | )    |       |   | (26.1  | )     |       |  | (3.3  | )   
|                                                      |                           |                              |        |       |         |  |       |      |       |   |        |       |       |  |       |      |       |  
|Income from continuing operations                     |                           | $                            | 127.9  |       |         |  | 10.6  | %    |       | $ | 125.3  |       |       |  | 12.8  | %    |       | $ | 83.5   |       |       |  | 10.7  | %   
|                                                      |                           |                              |        |       |         |  |       |      |       |   |        |       |       |  |       |      |       |  






|    |                                                                                                                                                                                             
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Includes sales of fiber cement in Chile and fiber reinforced
    concrete pipes in the United States, our roofing operations in
    the United States and fiber cement operations in Europe.



| |                                                                    
| | -------------------------------------------------------------------
| | Year Ended March 31, 2005 Compared to Year Ended
    March 31, 2004

Total Net Sales.


USA Fiber Cement Net Sales.


53



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##### Table of Contents





tm


tm




Asia Pacific Fiber Cement Net Sales.


tm tm




Other Sales.




54



---



##### Table of Contents









tm


Gross Profit.






Selling, General and Administrative (SG&A)
Expenses.


Research and Development Expenses.


55



---



##### Table of Contents





SCI and Other Related Expenses.






Other Operating Expense.


Operating Income.






56



---



##### Table of Contents











Net Interest Expense.


Other (Expense) Income.


Income Tax Expense.


Income from Continuing Operations.




| |                                                                    
| | -------------------------------------------------------------------
| | Year Ended March 31, 2004 Compared to Year Ended
    March 31, 2003

Total Net Sales.


USA Fiber Cement Net Sales.


57



---



##### Table of Contents







tm




tm


Asia Pacific Fiber Cement Net Sales (See Notes to
Results of Operations on page 61).




58



---



##### Table of Contents





Other Sales.








tm


Gross Profit.






59



---



##### Table of Contents



Selling, General and Administrative (SG&A) Expenses.


Research and Development Expenses.


Other Operating (Expenses)/ Income.


Operating Income.














Net Interest Expense.


60



---



##### Table of Contents



Other Income.


Income Tax Expense.


Income from Continuing Operations.


Notes to Results of Operations




| |                                                                                 
| | --------------------------------------------------------------------------------
| | Volume and Average Net Selling Price  Asia
    Pacific Fiber Cement  Adjusted:



|                                                        |  |                              |       |  |          |    |       |               |  |    |          |  |  |    |       | 
|------------------------------------------------------- |  | ---------------------------- | ----- |  | -------- | -- | ----- | ------------- |  | -- | -------- |  |  | -- | ----- | 
|                                                        |  | Fiscal Years Ended March 31, |      
|                                                        |  |                              |      
|                                                        |  | 2004                         |       |  | 2003     |   
|                                                        |  |                              |       |  |          |   
|                                                        |  | As Previously                |       |  | Adjusted |    |       | As Previously |  |    | Adjusted | 
|                                                        |  | Published                    |       |  | Figure   |    |       | Published     |  |    | Figure   | 
|                                                        |  |                              |       |  |          |    |       |               |  |    |          | 
|Volume (million square feet)                            |  |                              | 402.1 |  |          |    | 362.1 |               |  |    | 368.3    |  |  |    | 349.9 | 
|Average sales price per unit (per thousand square feet) |  | A$                           | 788   |  |          | A$ | 862   |               |  | A$ | 843      |  |  | A$ | 887   | 



| |                                                     
| | ----------------------------------------------------
| | Net Sales  Philippines Fiber Cement 
    Adjusted:



|                    |  |               |      |  
|------------------- |  | ------------- | ---- | -
|                    |  | Fiscal Year   |     
|                    |  | Ended         |     
|                    |  | March 31,     |     
|                    |  | 2004          |     
|                    |  |               |     
|                    |  | (In millions) |     
|Previously Reported |  | $             | 24.2 |  
|Adjustment          |  |               | (3.4 | )
|                    |  |               |     
|Adjusted Net Sales  |  | $             | 20.8 |  
|                    |  |               |     

61



---



##### Table of Contents



Discontinued Operations






| |                 
| | ----------------
| | Building Systems





| |       
| | ------
| | Gypsum







| |                  
| | -----------------
| | Building Services





| |       
| | ------
| | ABN 60



62



---



##### Table of Contents









Impact of Recent Accounting Pronouncements




| |                                                                            
| | ---------------------------------------------------------------------------
| | Employers Disclosures about Pensions and Other
    Postretirement Benefits





| |                                            
| | -------------------------------------------
| | Consolidation of Variable Interest Entities





| |                                                                                              
| | ---------------------------------------------------------------------------------------------
| | The Meaning of Other-Than-Temporary Impairment and its
    Application to Certain Investments



63



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##### Table of Contents





| |                
| | ---------------
| | Inventory Costs





| |                            
| | ---------------------------
| | American Jobs Creations Act







| |                                 
| | --------------------------------
| | Exchanges of Non-monetary Assets





| |                    
| | -------------------
| | Share-Based Payment





| |                                         
| | ----------------------------------------
| | Conditional Asset Retirement Obligations



64



---



##### Table of Contents





Liquidity and Capital Resources








|                                                                                                                                                                                                                        |       |               |      |   |             |   |       |                |  |   |       |       | 
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----- | ------------- | ---- | - | ----------- | - | ----- | -------------- |  | - | ----- | ----- | 
|                                                                                                                                                                                                                        |       | Interest      |      |   | Total       |   |       | Principal      | 
|                                                                                                                                                                                                                        |       | Rate at       |      |   | Facility at |   |       | Outstanding at | 
|                                                                                                                                                                                                                        |       | March 31,     |      |   | March 31,   |   |       | March 31,      | 
|Description                                                                                                                                                                                                             |       | 2005          |      |   | 2005        |   |       | 2005           | 
|                                                                                                                                                                                                                        |       |               |      |   |             |   |       |                | 
|                                                                                                                                                                                                                        |       | (In millions) |     
|US$ notes, fixed interest, repayable annually in varying
    tranches from November 2005 through November 2013                                                                                                          |       |               | 7.12 | % |             | $ | 147.4 |                |  | $ | 147.4 |      
|A$ revolving loan, can be drawn down in either US$ or A$,
    variable interest based on US$ LIBOR or A$ bank bill rate plus
    margin, can be repaid and redrawn until maturity in November 2006                      |       |               | N/A  |   |             |   | 154.5 |                |  |   |      |      
|US$ stand-by loan, can be drawn down in either US$ or A$,
    variable interest based on US$ LIBOR or A$ bank bill rate plus
    margin until maturity of $117.5 million in April and
    $15.0 million in October 2005 |       |               | N/A  |   |             |   | 132.5 |                |  |   |      |      
|US$ line of credit, can be drawn down in Chilean Pesos, variable
    interest based on Chilean Tasa Activa Bancaria rate plus margin
    until maturity in April and December 2005(1)                                   |       |               | 3.52 | % |             |   | 15.0  |                |  |   | 11.9  |      
|                                                                                                                                                                                                                        |       |               |      |   |             |   |       |                | 
|                                                                                                                                                                                                                        | Total |               |      |   |             |   | $     | 449.4          |  |   | $     | 159.3 | 
|                                                                                                                                                                                                                        |       |               |      |   |             |   |       |                | 






|    |                                       
|--- | --------------------------------------
|(1) | Renewed and extended until March 2006.





65



---



##### Table of Contents











| |                                                                                
| | -------------------------------------------------------------------------------
| | Cash Flow  Year Ended March 31, 2005
    compared to Year Ended March 31, 2004









| |                                                                                
| | -------------------------------------------------------------------------------
| | Cash Flow  Year Ended March 31, 2004
    compared to Year Ended March 31, 2003





66



---



##### Table of Contents









| |                                   
| | ----------------------------------
| | Capital Requirements and Resources











67



---



##### Table of Contents

















| |                     
| | --------------------
| | Capital Expenditures



68



---



##### Table of Contents









| |                        
| | -----------------------
| | Contractual Obligations



|                           |       |               |       |                                     |      |   |      |              |  |   |              |      |  |            |      |      |  |   |      |       | 
|-------------------------- | ----- | ------------- | ----- | ----------------------------------- | ---- | - | ---- | ------------ |  | - | ------------ | ---- |  | ---------- | ---- | ---- |  | - | ---- | ----- | 
|                           |       | Payments Due  |      
|                           |       |               |      
|                           |       |               |       | During Fiscal Year Ending March 31, |      |   |     
|                           |       |               |       |                                     |      |   |     
|                           |       | Total         |       |                                     | 2006 |   |      | 2007 to 2008 |  |   | 2009 to 2010 |      |  | Thereafter |     
|                           |       |               |       |                                     |      |   |      |              |  |   |              |      |  |            |     
|                           |       | (In millions) |      
|Long-Term Debt             |       | $             | 147.4 |                                     |      | $ | 25.7 |              |  | $ | 35.2         |      |  | $          | 46.2 |      |  | $ | 40.3 |      
|Interest on Long-Term Debt |       |               | 44.3  |                                     |      |   | 10.5 |              |  |   | 15.5         |      |  |            | 9.3  |      |  |   | 9.0  |      
|Operating Leases           |       |               | 133.8 |                                     |      |   | 11.7 |              |  |   | 21.4         |      |  |            | 19.4 |      |  |   | 81.3 |      
|Purchase Obligations(1)    |       |               | 70.3  |                                     |      |   | 50.2 |              |  |   | 17.8         |      |  |            | 2.3  |      |  |   |     |      
|Line of Credit             |       |               | 11.9  |                                     |      |   | 11.9 |              |  |   |             |      |  |            |     |      |  |   |     |      
|                           |       |               |       |                                     |      |   |      |              |  |   |              |      |  |            |     
|                           | Total |               | $     | 407.7                               |      |   | $    | 110.0        |  |   | $            | 89.9 |  |            | $    | 77.2 |  |   | $    | 130.6 | 
|                           |       |               |       |                                     |      |   |      |              |  |   |              |      |  |            |     






|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Purchase Obligations are defined as agreements to purchase goods
    or services that are enforceable and legally binding on us and
    that specify all significant terms, including: fixed or minimum
    quantities to be purchased; fixed, minimum or variable price
    provisions; and the approximate timing of the transactions.
    Purchase obligations listed above primarily represent
    commitments for capital expenditures, the majority of which
    relate to the construction of our new Pulaski, Virginia plant.
    In addition, the total purchase obligations includes agreements
    related to software maintenance contracts and approximately
    $20 million that will be incurred beginning fiscal year
    2006, related to the implementation and maintenance of a new ERP
    system. Contracts related to our new ERP system were executed
    after the end of fiscal year 2005. We did not have any
    significant agreements with variable price provisions.







69



---



##### Table of Contents



Off-Balance Sheet Arrangements




Inflation




Seasonality and Quarterly Variability




Research and Development














| |   |                                                                                                                                                                         
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | continue to lower the capital cost of each unit of production at
    new plants by learning from past projects and through continuing
    innovation in engineering; and
|
| |  | reduce operating costs at each plant by improving manufacturing
    processes, raw materials yields and machine productivity.                                           

Outlook








70



---



##### Table of Contents




















|        |                                           
|------- | ------------------------------------------
|Item 6. | Directors, Senior Management and Employees

Board Practices and Senior Management




| |                
| | ---------------
| | Board Structure









| |               
| | --------------
| | Managing Board



| |        
| | -------
| | Members





71



---



##### Table of Contents











| |                 
| | ----------------
| | Responsibilities





| |   |                                                         
| | - | --------------------------------------------------------
| |  | the general affairs, operations and finance; and        
|
| |  | achieving our goals, strategy and policies, and results.









| |                  
| | -----------------
| | Supervisory Board



| |        
| | -------
| | Members







| |   |                                                                                                                                                                                                                                 
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | that these member(s) retire(s) no later than at the end of the
    first Annual General Meeting following their
    appointment; and                                                                                            
|
| |  | the number of the members of the Supervisory Board appointed by
    the Joint Board at any given time does not exceed one-third of
    the aggregate number of members of the Supervisory Board as
    fixed by the Joint Board.





72



---



##### Table of Contents





| |                 
| | ----------------
| | Responsibilities





| |   |                                                                              
| | - | -----------------------------------------------------------------------------
| |  | supervising the policy and actions pursued by the Managing
    Board; and    
|
| |  | the general course of our affairs and the business enterprise we
    operate.







| |            
| | -----------
| | Joint Board



| |        
| | -------
| | Members











| |                 
| | ----------------
| | Responsibilities











| |          
| | ---------
| | Processes



73



---



##### Table of Contents









Directors




| |               
| | --------------
| | Qualifications







| |             
| | ------------
| | Independence



















74



---



##### Table of Contents













| |   |                                                                                                                        
| | - | -----------------------------------------------------------------------------------------------------------------------
| |  | undertaken to advise the Joint Board of any change in their
    circumstances that could affect their independence; and
|
| |  | completed a comprehensive questionnaire that confirms their
    independence.                                          



| |                     
| | --------------------
| | Director Orientation







| |   |                                                                                        
| | - | ---------------------------------------------------------------------------------------
| |  | visits to our facilities, meetings with management and customers;                      
|
| |  | reviews of financial position, strategy, operating performance
    and risk management;
|
| |  | a review of his or her rights, duties and
    responsibilities; and                    
|
| |  | a discussion of the role of Joint Board Committees.                                    







| |             
| | ------------
| | Remuneration







75



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##### Table of Contents







| |                
| | ---------------
| | Indemnification





| |                      
| | ---------------------
| | Management Succession



Board Committees








| |                
| | ---------------
| | Audit Committee





| |                         
| | ------------------------
| | Members and Independence







76



---



##### Table of Contents









| |                                     
| | ------------------------------------
| | Purpose, Duties and Responsibilities



Standards and Quality:


Financial Reports:




| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Oversees the submission of financial information by the Company
    (including information relating to the Companys choice of
    accounting policies, the application and assessment of the
    effects of new relevant legislation, and information on the
    treatment of estimated entries in the annual accounts).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|
| |  | Meets to review and discuss with management and the external
    auditor the annual audited and quarterly financial statements of
    the Company, including: (i) an analysis of the external
    auditors judgment as to the quality of the Companys
    accounting principles, including significant financial reporting
    issues and judgments made in connection with the preparation of
    the financial statements; (ii) the Companys specific
    disclosures under Managements Discussion and
    Analysis of Financial Condition and Results of Operations,
    including accounting policies that may be regarded as critical;
    and (iii) major issues regarding the Companys
    accounting principles and financial statement presentations,
    including any significant changes in the Companys
    selection or application of accounting principles and financial
    statement presentations.
|
| |  | Assesses whether the external reporting is consistent with the
    members of the Audit Committees information and knowledge
    and is adequate for shareholder needs.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|
| |  | Reviews and discusses corporate policies with respect to
    earnings press releases, as well as financial information and
    earnings guidance, if any, provided to analysts and ratings
    agencies.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

Risk Assessment and Management:




| |   |                                                                                                         
| | - | --------------------------------------------------------------------------------------------------------
| |  | the identification of strategic, operational and financial risks;                                       
|
| |  | the establishment of effective systems to monitor, assess,
    prioritize, mitigate and manage risk; and
|
| |  | reporting systems for monitoring compliance with risk policies.                                         

77



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External Audit:




| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Is responsible, in its capacity as a committee of the Board, for
    the selection, retention, compensation, and general oversight of
    the work of the external auditor. Accordingly, it recommends the
    appointment and, as appropriate, the termination of the external
    auditor to the General Meeting of shareholders. The external
    auditor reports directly to the Audit Committee. At least every
    four years, the Audit Committee shall, together with the
    Managing Board, thoroughly assess the functioning of the
    external auditor in the various entities and capacities in which
    the external auditor operates. The main conclusions of the
    assessment are notified to the General Meeting, accompanied by,
    if appropriate, a proposal for the replacement of the external
    auditor and appointment of a new external auditor.                                                                                                                                                       
|
| |  | Reviews all audit reports provided to the Company by the
    external auditor.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|
| |  | Obtains and reviews, at least annually, a report by the external
    auditor describing: (i) the external auditors
    internal quality-control procedures; (ii) any material
    issues raised by the most recent internal quality-control
    review, peer review, or by any inquiry or investigation by
    governmental or professional authorities, within the preceding
    five years relating to one or more independent audits carried
    out by the external auditors, as well as any steps taken by the
    external auditor to deal with any such issues; and
    (iii) all relationships between the external auditor and
    the Company.                                                                                                                                                                                                                                                                                                                                                                              
|
| |  | Approves in advance all audit services to be provided by the
    external auditor.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|
| |  | Establishes policies and procedures for the engagement of the
    external auditor to provide permissible non-audit services,
    which shall include pre-approval of all permissible non-audit
    services to be provided by the external auditor, and determines
    the involvement of the external auditor in respect of the
    contents and publication of financial reporting by the Company
    other than the annual accounts.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|
| |  | Considers, at least annually, the independence of the external
    auditor, including whether the external auditors
    performance of permissible non-audit services is compatible with
    the auditors independence, and obtains and reviews a
    report by the external auditor describing any relationships
    between the external auditor and the Company or any other
    relationships that may adversely affect the independence of the
    external auditor. At least once a year, the Audit Committee
    shall, together with the Managing Board, report to the Board on
    the developments concerning the relationship with the external
    auditor, in particular its independence. The report shall
    address issues including the adequacy of the rotation of the
    partners within the external auditor firm, and the
    appropriateness of any non-audit services provided by the
    external auditor. Ongoing retention of the external auditor will
    take into account the outcome of this report.
|
| |  | Oversees the compliance with recommendations and observations of
    the external auditor.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|
| |  | Reviews and discusses with the external auditor: (i) the
    scope of the audit, the results of the audit, any irregularities
    in respect of the content of the financial reporting, and any
    difficulties the external auditor encountered in the course of
    its audit work, including managements response, any
    restrictions on the scope of the external auditors
    activities or on access to requested information, and any
    significant disagreements with management; and (ii) any
    reports of the external auditor with respect to interim periods.                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|
| |  | Establishes policies for the hiring of employees and former
    employees of the external auditor.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

Internal Audit:




| |   |                                                                                               
| | - | ----------------------------------------------------------------------------------------------
| |  | Discusses with the internal auditors the overall scope and plans
    for its audit activities.

78



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| |   |                                                                                                 
| | - | ------------------------------------------------------------------------------------------------
| |  | Reviews and approves the annual internal audit plan and the
    related budget and work program.
|
| |  | Reviews all internal audit reports.                                                             
|
| |  | Oversees the implementation of corrective actions by management
    personnel.                  



Internal Controls:


Disclosure Controls and Procedures:


Complaints:




| |         
| | --------
| | Meetings





| |               
| | --------------
| | Communications





| |                    
| | -------------------
| | Access and Advisors





| |          
| | ---------
| | Standards



79



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| |        
| | -------
| | Charter





| |              
| | -------------
| | Annual Review





| |                      
| | ---------------------
| | Conflicts of Interest





| |          
| | ---------
| | Reporting





| |                
| | ---------------
| | Special Reviews





| |                           
| | --------------------------
| | Annual Information Meeting







| |                                    
| | -----------------------------------
| | Nominating and Governance Committee





| |                         
| | ------------------------
| | Members and Independence









80



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| |                                     
| | ------------------------------------
| | Purpose, Duties and Responsibilities





| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Develop criteria for identifying and evaluating candidates for
    the Managing Board and the Board. These criteria include a
    candidates business experience and skills, independence,
    judgment, integrity, ability to commit sufficient time and
    attention to the activities of the Managing Board and Board, as
    well as the absence of any potential conflicts with the
    Companys interests. In applying these criteria, the
    committee considers the needs of the Managing Board and the
    Board as a whole and seeks to achieve a diversity of
    occupational and personal backgrounds on the Board.
|
| |  | Identify and review the qualifications of, and recruit
    candidates for, the Managing Board and the Board.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|
| |  | Assess the contributions and independence of incumbent directors
    in determining whether to recommend them for re-election to the
    Board.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|
| |  | Establish a procedure for the consideration of candidates for
    the Managing Board and the Board recommended by the
    Companys stockholders.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|
| |  | Recommend to the Board candidates for election or re-election to
    the Managing Board and the Board, all to be elected by
    shareholders at a General Meeting.                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|
| |  | Recommend to the Board candidates to be appointed by the Board
    as necessary to fill vacancies and newly created directorships
    and make recommendations for the removal of directors.                                                                                                                                                                                                                                                                                                                                                                                                                                        
|
| |  | Develop and recommend to the Board a set of corporate governance
    principles and review and recommend changes to these principles,
    as necessary.                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|
| |  | Make recommendations to the Board concerning the structure,
    composition and functioning of the Board and its committees.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|
| |  | Recommend to the Board candidates for appointment to board
    committees and consider periodically rotating directors among
    the committees.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|
| |  | Review and recommend to the Board retirement and other tenure
    policies for directors.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|
| |  | Review directorships in other public companies held by or
    offered to directors and senior officers of the Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|
| |  | Review and assess the channels through which the Board receives
    information, and the quality and timeliness of information
    received.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|
| |  | Review the Companys succession plans relating to the CEO
    and other senior officers.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|
| |  | Periodically evaluate the functioning of the individual members
    of the Managing Board and the Board and report the results of
    the evaluation to the Board.                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|
| |  | Periodically evaluate the scope and composition of the Managing
    Board and the Board, and propose the profile of the Board.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

81



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| |   |                                                                                                                                                                
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Supervise the policy of the Managing Board in relation to the
    selection and appointment criteria for senior management.                                    
|
| |  | Annually evaluate the performance of the committee and the
    adequacy of the committees charter.                                                            
|
| |  | Perform such other duties and responsibilities as are consistent
    with the purpose of the committee and as the Board or the
    committee deems appropriate.



| |                 
| | ----------------
| | Outside Advisors





| |         
| | --------
| | Meetings





| |       
| | ------
| | Report







| |                       
| | ----------------------
| | Remuneration Committee





| |                         
| | ------------------------
| | Members and Independence











82



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| |                                      
| | -------------------------------------
| | Purpose, Duties, and Responsibilities





| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Oversee the Companys overall remuneration structure,
    policies and programs, assess whether the Companys
    remuneration structure establishes appropriate incentives for
    management and employees, and approve any significant changes in
    the Companys remuneration structure, policies and programs.                                                                                                                                                                                                                                                                                                     
|
| |  | Administer and make recommendations to the Board with respect to
    the Companys incentive-compensation and equity-based
    remuneration plans, including the JHI NV 2001 Equity Incentive
    Plan (the 2001 Equity Incentive Plan).                                                                                                                                                                                                                                                                                                                                                                                
|
| |  | Review the remuneration of directors, for service on the Board
    and the Board committees and recommend changes in remuneration
    to the Board.                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|
| |  | Prepare a proposal for the Board concerning the remuneration
    policy for the members of the Managing Board to be put to a
    General Meeting.                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|
| |  | Review and make recommendations to the Board on the
    Companys recruitment, retention and termination policies
    and procedures for senior management.                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|
| |  | Prepare a proposal concerning the individual remuneration of the
    members of the Managing Board to be put to the Board, including:
    (i) the remuneration structure; and (ii) the amount of
    fixed remuneration, shares and/or options and/or other variable
    remuneration components, pension rights, severance pay and other
    forms of remuneration to be awarded, as well as the related
    performance criteria.                                                                                                                                                                                       
|
| |  | Review and approve corporate goals and objectives relevant to
    the remuneration of the members of the Managing Board, evaluate
    the performance of the members of the Managing Board in light of
    those goals and objectives, and recommend to the Board the
    remuneration of the members of the Managing Board.                                                                                                                                                                                                                                                                                              
|
| |  | Prepare the remuneration report on the remuneration policies for
    the Managing Board to be put to the Board for adoption. The
    remuneration report comprises a report on the way in which the
    remuneration policy was implemented in the most recent financial
    year as well as an outline of the remuneration policy that will
    be implemented in the following years. At a minimum, the outline
    must contain the information as referred to in best practice
    provision II.2.10 of the Dutch Corporate Governance Code. The
    remuneration report shall be posted on the Companys
    website.
|
| |  | Make recommendations regarding the remuneration of the
    Companys other senior executives.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|
| |  | Approve stock option and other stock incentive awards for senior
    executives.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|
| |  | Review and approve the design of incentive schemes and other
    benefit plans pertaining to senior executives.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|
| |  | Review and recommend employment agreements and severance
    arrangements for senior executives, including change-in-control
    provisions, plans or agreements.                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|
| |  | Approve, amend or modify the terms of any remuneration or
    benefit plan that does not require shareholder approval.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

83



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| |   |                                                                                                                                                                                          
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Annually evaluate the performance of the Remuneration Committee
    and the adequacy of this charter.                                                                                    
|
| |  | Perform such other duties and responsibilities as are consistent
    with the purpose of the Remuneration Committee and as the Board
    or the Remuneration Committee deems appropriate.



| |              
| | -------------
| | Subcommittees





| |                 
| | ----------------
| | Outside Advisors





| |         
| | --------
| | Meetings





| |       
| | ------
| | Report







| |                  
| | -----------------
| | Special Committee







| |   |                                                                                                                                                                                                                    
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | reviewing the SCIs report, which was delivered to the NSW
    Government on September 21, 2004, and recommending to the
    Joint Board appropriate actions in response to its
    findings; and                  
|
| |  | overseeing any developments with respect to or discussion of
    arrangements as to the SCIs findings and taking any
    recommendations to the Joint Board and, ultimately, to our
    shareholders for approval.

Policies and Programs






| |   |                                               
| | - | ----------------------------------------------
| |  | Risk Management                               
|
| |  | Business Conduct and Ethics                   
|
| |  | Ethics Hotline (Whistleblower)                
|
| |  | Continuous Disclosure and Market Communication
|
| |  | Insider Trading                               

84



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| |                
| | ---------------
| | Risk Management





| |   |                                                                                                                            
| | - | ---------------------------------------------------------------------------------------------------------------------------
| |  | the principal strategic, operational and financial risks are
    identified;                                               
|
| |  | effective systems are in place to monitor and manage
    risks; and                                                        
|
| |  | reporting systems, internal controls and arrangements for
    monitoring compliance with laws and regulations are adequate.





| |   |                                                                                                                                                                             
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | established policies and procedures in relation to treasury
    operations, including the use of financial derivatives;                                                     
|
| |  | issued and revised standards and procedures in relation to
    environmental and health and safety matters;                                                                 
|
| |  | implemented and maintained training programs in relation to
    legal issues such as trade practices/antitrust, trade secrecy,
    and Intellectual Property protection; and
|
| |  | issued procedures requiring that significant capital and
    recurring expenditure is approved at an appropriate level of
    management or by the Joint Board.             









| |                            
| | ---------------------------
| | Business Conduct and Ethics







| |                               
| | ------------------------------
| | Ethics Hotline (Whistleblower)





| |                                                          
| | ---------------------------------------------------------
| | Continuous Disclosure and Market Communication
    Policy





85



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| |   |                                                                                                                                                                                                                     
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | management briefings and presentations to accompany quarterly
    results, which are accessible on a live webcast and
    teleconference;                                                                           
|
| |  | audio webcasts of other management briefings and view webcasts
    of the shareholder information meeting;                                                                                                          
|
| |  | a comprehensive Investor Relations website that displays all
    Company announcements and notices as soon as they have been
    cleared by the ASX, as well as all major management and roadshow
    presentations;
|
| |  | Australian and United States site visits and briefings on
    strategy for investment analysts;                                                                                                                     
|
| |  | a quarterly newsletter available to shareholders and other
    interested parties;                                                                                                                                  
|
| |  | an e-mail alert service to advise investors and other interested
    parties of announcements and other events; and                                                                                                 
|
| |  | equality of access for shareholders, investment analysts and the
    media to briefings, presentations and meetings.                                                                                                





| |                
| | ---------------
| | Insider Trading











| |                                                    
| | ---------------------------------------------------
| | Current and Former Directors and Executive Officers



| |                    
| | -------------------
| | Recent Developments







86



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87



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|                                        |                      |     |  |    |          |  |                                                                                                                   |  |  |      | 
|--------------------------------------- | -------------------- | --- |  | -- | -------- |  | ----------------------------------------------------------------------------------------------------------------- |  |  | ---- | 
|Name                                    |                      | Age |  |    | Position |  | Term Expires                                                                                                      | 
|                                        |                      |     |  |    |          |  |                                                                                                                   | 
|Supervisory Board                       |                      |     |  |    |          |  |                                                                                                                   |  |  |     
|                                        | Meredith Hellicar    |     |  | 51 |          |  | Chairman of the Joint Board and Chairman of the Supervisory Board                                                 |  |  | 2006 | 
|                                        | John Barr            |     |  | 58 |          |  | Deputy Chairman of the Joint Board and Deputy Chairman of the
    Supervisory Board                               |  |  | 2007 | 
|                                        | Michael Brown        |     |  | 59 |          |  | Member of the Joint Board and the Supervisory Board                                                               |  |  | 2005 | 
|                                        | Peter Cameron        |     |  | 54 |          |  | Member of the Joint Board and the Supervisory Board                                                               |  |  | 2006 | 
|                                        | Gregory Clark        |     |  | 62 |          |  | Member of the Joint Board and the Supervisory Board                                                               |  |  | 2005 | 
|                                        | Michael Gillfillan   |     |  | 57 |          |  | Member of the Joint Board and the Supervisory Board                                                               |  |  | 2006 | 
|                                        | James Loudon         |     |  | 62 |          |  | Member of the Joint Board and the Supervisory Board                                                               |  |  | 2005 | 
|                                        | Donald McGauchie     |     |  | 55 |          |  | Member of the Joint Board and the Supervisory Board                                                               |  |  | 2006 | 
|                                       
|Managing Board                          |                      |     |  |    |          |  |                                                                                                                   |  |  |     
|                                        | Louis Gries          |     |  | 51 |          |  | Chief Executive Officer, Interim Member of the Joint Board and
    Interim Chairman of the Managing Board        
|                                        | Benjamin Butterfield |     |  | 45 |          |  | General Counsel, Interim Member of the Managing Board and
    Company Secretary                                  
|                                       
|Other Executive Officers                |                      |     |  |    |          | 
|                                        | Russell Chenu        |     |  | 55 |          |  | Chief Financial Officer                                                                                          
|                                        | Donald Merkley       |     |  | 42 |          |  | Executive Vice President  Research and Development                                                              
|                                        | David Merkley        |     |  | 42 |          |  | Executive Vice President  Engineering and Process
    Development                                               
|                                        | James Chilcoff       |     |  | 40 |          |  | Vice President  International(1)                                                                                
|                                        | Mark Fisher          |     |  | 34 |          |  | Vice President  Specialty Products(2)                                                                           
|                                        | Nigel Rigby          |     |  | 38 |          |  | Vice President  Emerging Markets(2)                                                                             
|                                        | Robert Russell       |     |  | 39 |          |  | Vice President  Established Markets(2)                                                                          
|                                       
|Former Directors and Executive Officers |                      |     |  |    |          | 
|                                        | Alan McGregor        |     |  | 68 |          |  | Former Chairman of the Joint Board and Former Chairman of the
    Supervisory Board(3)                           
|                                        | Peter Macdonald      |     |  | 52 |          |  | Former Chief Executive Officer, Former Member of the Joint Board
    and Former Chairman of the Managing Board(4)
|                                        | Peter Shafron        |     |  | 44 |          |  | Former Senior Vice President Legal and Chief Financial Officer(5)                                                
|                                        | Phillip Morley       |     |  | 57 |          |  | Former Chief Financial Officer(5)                                                                                
|                                        | Folkert Zwinkels     |     |  | 36 |          |  | Former Treasurer and Former Member of the Managing Board(6)                                                      
|                                        | W. (Pim) Vlot        |     |  | 40 |          |  | Former Interim Member of the Managing Board and Former Company
    Secretary(7)                                  






|    |                                                                                   
|--- | ----------------------------------------------------------------------------------
|(1) | Mr. Chilcoff became a Vice President in August 2004.                              
|   
|(2) | Mr. Fisher, Mr. Rigby and Mr. Russell became Vice
    Presidents in November 2004.

88



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|    |                                                                                                                                                                                                                                                        
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(3) | On August 11, 2004, Mr. McGregor resigned as Chairman.
    On August 25, 2004, he resigned his Board and committee
    memberships due to continuing ill health. Mr. McGregor
    passed away on February 19, 2005.                                    
|   
|(4) | Mr. Macdonald resigned on October 21, 2004.                                                                                                                                                                                                            
|   
|(5) | At the end of May 2004, Mr. Shafron replaced
    Mr. Morley as Chief Financial Officer. Mr. Shafron
    resigned on October 20, 2004.                                                                                                                  
|   
|(6) | On October 21, 2004, Mr. Zwinkels resigned from the
    Managing Board and Mr. Vlot, Company Secretary, was
    appointed as an interim member of the Managing Board on the same
    day. Mr. Zwinkels resigned as our Treasurer on
    April 30, 2005.
|   
|(7) | Mr. Vlots temporary employment agreement, as amended,
    provided that unless an indefinite contract was negotiated, the
    contract would automatically terminate on June 30, 2005.
    The agreement expired by its terms on June 30, 2005.       

Directors


Meredith Hellicar


John Barr


89



---



##### Table of Contents



Michael Brown


Peter Cameron


Gregory Clark


Michael Gillfillan


James Loudon


90



---



##### Table of Contents





Donald McGauchie


Louis Gries


Benjamin Butterfield


Executive Officers


Russell Chenu


Donald Merkley


91



---



##### Table of Contents



David Merkley


James Chilcoff


Mark Fisher


Nigel Rigby


Robert Russell




92



---



##### Table of Contents



Former Directors and Executive Officers




| |                 
| | ----------------
| | Former Directors

Alan McGregor, AO


Peter Macdonald


Folkert Zwinkels


W. (Pim) Vlot




| |                          
| | -------------------------
| | Former Executive Officers

Peter Shafron


93



---



##### Table of Contents





Phillip Morley


Employees




|                      |                                              |                                     |                    |     |       |       |  |      |       |       |  |     |       |       | 
|--------------------- | -------------------------------------------- | ----------------------------------- | ------------------ | --- | ----- | ----- |  | ---- | ----- | ----- |  | --- | ----- | ----- | 
|                      |                                              | Fiscal Years Ended                  |                   
|                      |                                              | March 31,                           |                   
|                      |                                              |                                     |                   
|                      |                                              | 2005                                |                    |     | 2004  |       |  | 2003 |      
|                      |                                              |                                     |                    |     |       |       |  |      |      
|Continuing Operations |                                              |                                     |                    |     |       |       |  |      |       |       |  |    
|                      | Fiber Cement:                                |                                     |                    |     |       |       |  |      |       |       |  |     |      
|                      |                                              | United States (includes Canada)     |                    |     | 1,820 |       |  |      | 1,722 |       |  |     | 1,500 |      
|                      |                                              | Australia                           |                    |     | 424   |       |  |      | 459   |       |  |     | 539   |      
|                      |                                              | New Zealand                         |                    |     | 147   |       |  |      | 161   |       |  |     | 183   |      
|                      |                                              | Philippines                         |                    |     | 211   |       |  |      | 225   |       |  |     | 209   |      
|                      |                                              | Chile                               |                    |     | 139   |       |  |      | 122   |       |  |     | 91    |      
|                      |                                              | Pipes (United States and Australia) |                    |     | 162   |       |  |      | 178   |       |  |     | 162   |      
|                      |                                              | Europe                              |                    |     | 31    |       |  |      | 37    |       |  |     | 30    |      
|                      |                                              | Roofing (United States)             |                    |     | 19    |       |  |      | 18    |       |  |     |      |      
|                      |                                              |                                     |                    |     |       |       |  |      |      
|                      |                                              |                                     | Total Fiber Cement |     |       | 2,953 |  |      |       | 2,922 |  |     |       | 2,714 | 
|                      | Research & Development, including Technology |                                     |                    | 131 |       |       |  | 117  |       |       |  | 107 |      
|                      | General Corporate                            |                                     |                    | 38  |       |       |  | 34   |       |       |  | 34  |      
|Discontinued Business |                                              |                                     |                    |     |       |       |  |      |       |       |  |    
|                      | Building Systems (New Zealand)               |                                     |                    |    |       |       |  |     |       |       |  | 65  |      
|                      |                                              |                                     |                    |     |       |       |  |      |      
|                      |                                              | Total Employees                     |                    |     | 3,122 |       |  |      | 3,073 |       |  |     | 2,920 |      
|                      |                                              |                                     |                    |     |       |       |  |      |      



Compensation




| |             
| | ------------
| | Remuneration





94



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|                                                   |                  |            |   |         |          |  |   |                   |  |            |          |        |  |       |   |         |  |  |   |           | 
|-------------------------------------------------- | ---------------- | ---------- | - | ------- | -------- |  | - | ----------------- |  | ---------- | -------- | ------ |  | ----- | - | ------- |  |  | - | --------- | 
|                                                   |                  | Primary    |   |         | Equity   |  |   | Post-employment   |  |            | Other    |        |  | Total |  
|                                                   |                  |            |   |         |          |  |   |                   |  |            |          |        |  |       |  
|                                                   |                  | Directors |   |         | JHI NV   |  |   |                   |  | Retirement |          |        | 
|                                                   |                  | Fees       |   |         | Stock(1) |  |   | Superannuation(2) |  |            | Benefits |        |  |      
|Name                                               |                  | US$        |   |         | US$      |  |   | US$               |  |            | US$      |        |  | US$   |  
|                                                   |                  |            |   |         |          |  |   |                   |  |            |          |        |  |       |  
|Non-Executive Directors                            |                  |            |   |         |          |  |   |                   |  |            |          |       
|M. Hellicar                                        |                  |            |   |         |          |  |   |                   |  |            |          |        |  |       |   |         |  |  |   |          
|                                                   | Fiscal year 2005 |            | $ | 128,750 |          |  | $ | 20,000            |  |            | $        | 13,388 |  |       | $ |        |  |  | $ | 162,138   | 
|                                                   | Fiscal year 2004 |            |   | 43,333  |          |  |   | 20,000            |  |            |          | 5,700  |  |       |   |        |  |  |   | 69,033    | 
|M. R. Brown                                        |                  |            |   |         |          |  |   |                   |  |            |          |        |  |       |   |         |  |  |   |          
|                                                   | Fiscal year 2005 |            |   | 60,000  |          |  |   | 10,000            |  |            |          | 6,300  |  |       |   |        |  |  |   | 76,300    | 
|                                                   | Fiscal year 2004 |            |   | 53,333  |          |  |   | 10,000            |  |            |          | 5,700  |  |       |   |        |  |  |   | 69,033    | 
|D. G. McGauchie                                    |                  |            |   |         |          |  |   |                   |  |            |          |        |  |       |   |         |  |  |   |          
|                                                   | Fiscal year 2005 |            |   | 55,000  |          |  |   | 10,000            |  |            |          | 5,850  |  |       |   |        |  |  |   | 70,850    | 
|                                                   | Fiscal year 2004 |            |   | 31,667  |          |  |   | 15,000            |  |            |          | 4,200  |  |       |   |        |  |  |   | 50,867    | 
|J. D. Barr                                         |                  |            |   |         |          |  |   |                   |  |            |          |        |  |       |   |         |  |  |   |          
|                                                   | Fiscal year 2005 |            |   | 60,000  |          |  |   | 10,000            |  |            |          |       |  |       |   |        |  |  |   | 70,000    | 
|                                                   | Fiscal year 2004 |            |   | 33,519  |          |  |   |                  |  |            |          |       |  |       |   |        |  |  |   | 33,519    | 
|P. Cameron                                         |                  |            |   |         |          |  |   |                   |  |            |          |        |  |       |   |         |  |  |   |          
|                                                   | Fiscal year 2005 |            |   | 40,000  |          |  |   | 20,000            |  |            |          | 5,400  |  |       |   |        |  |  |   | 65,400    | 
|                                                   | Fiscal year 2004 |            |   |        |          |  |   | 63,333            |  |            |          | 5,700  |  |       |   |        |  |  |   | 69,033    | 
|M.J. Gillfillan                                    |                  |            |   |         |          |  |   |                   |  |            |          |        |  |       |   |         |  |  |   |          
|                                                   | Fiscal year 2005 |            |   | 55,000  |          |  |   | 10,000            |  |            |          |       |  |       |   |        |  |  |   | 65,000    | 
|                                                   | Fiscal year 2004 |            |   | 53,333  |          |  |   | 10,000            |  |            |          |       |  |       |   |        |  |  |   | 63,333    | 
|G. J. Clark                                        |                  |            |   |         |          |  |   |                   |  |            |          |        |  |       |   |         |  |  |   |          
|                                                   | Fiscal year 2005 |            |   | 50,000  |          |  |   | 10,000            |  |            |          |       |  |       |   |        |  |  |   | 60,000    | 
|                                                   | Fiscal year 2004 |            |   |        |          |  |   | 63,333            |  |            |          |       |  |       |   |        |  |  |   | 63,333    | 
|J. R. H. Loudon                                    |                  |            |   |         |          |  |   |                   |  |            |          |        |  |       |   |         |  |  |   |          
|                                                   | Fiscal year 2005 |            |   | 40,000  |          |  |   | 20,000            |  |            |          |       |  |       |   |        |  |  |   | 60,000    | 
|                                                   | Fiscal year 2004 |            |   | 47,333  |          |  |   | 16,000            |  |            |          |       |  |       |   |        |  |  |   | 63,333    | 
|Former Non-Executive Director                      |                  |            |   |         |          |  |   |                   |  |            |          |        |  |       |   |         |  |  |   |          
|A. G. McGregor(3)                                  |                  |            |   |         |          |  |   |                   |  |            |          |        |  |       |   |         |  |  |   |          
|                                                   | Fiscal year 2005 |            |   | 38,750  |          |  |   | 2,500             |  |            |          | 3,713  |  |       |   | 640,976 |  |  |   | 685,939   | 
|                                                   | Fiscal year 2004 |            |   | 160,000 |          |  |   | 10,000            |  |            |          | 15,300 |  |       |   |        |  |  |   | 185,300   | 
|Total Compensation for
    Non-Executive Directors |                  |            |   |         |          |  |   |                   |  |            |          |        |  |       |   |         |  |  |   |          
|                                                   | Fiscal year 2005 |            |   | 527,500 |          |  |   | 112,500           |  |            |          | 34,651 |  |       |   | 640,976 |  |  |   | 1,315,627 | 
|                                                   | Fiscal year 2004 |            |   | 422,518 |          |  |   | 207,666           |  |            |          | 36,600 |  |       |   |        |  |  |   | 666,784   | 

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|                                           |                  |          |   |                |            |  |            |           |  |           |          |         |           |            |   |        |     |  |   |         |  |  |   |           |  |  |   |           | 
|------------------------------------------ | ---------------- | -------- | - | -------------- | ---------- |  | ---------- | --------- |  | --------- | -------- | ------- | --------- | ---------- | - | ------ | --- |  | - | ------- |  |  | - | --------- |  |  | - | --------- | 
|                                           |                  |          |   | Post-          |            |  |            |           |  |           |         
|                                           |                  | Primary  |   |                | employment |  |            | Equity    |  |           | Other    |         |           | Total      |  
|                                           |                  |          |   |                |            |  |            |           |  |           |          |         |           |            |  
|                                           |                  |          |   | Superannuation |            |  | Shadow     |           |  |           |          |        
|                                           |                  |          |   | Noncash        |            |  | and 401(K) |           |  | Share and |          |         | Severance |            |   |       
|                                           |                  | Base Pay |   |                | Bonuses    |  |            | Benefits  |  |           | Benefits |         |           | Options(4) |   |        | Pay |  |   |        
|Name                                       |                  | US$      |   |                | US$        |  |            | US$       |  |           | US$      |         |           | US$        |   |        | US$ |  |   | US$     | 
|                                           |                  |          |   |                |            |  |            |           |  |           |          |         |           |            |   |        |     |  |   |         | 
|Executive Directors                        |                  |          |   |                |            |  |            |           |  |           |          |         |           |            |   |        |     |  |   |         |  |  |   |           |  |  |   |          
|L. Gries(5)                                |                  |          |   |                |            |  |            |           |  |           |          |         |           |            |   |        |     |  |   |         |  |  |   |           |  |  |   |          
|                                           | Fiscal year 2005 |          | $ | 576,654        |            |  | $          | 1,160,452 |  |           | $        | 136,012 |           |            | $ | 13,000 |     |  | $ | 233,155 |  |  | $ |          |  |  | $ | 2,119,273 | 
|                                           | Fiscal year 2004 |          |   | 439,427        |            |  |            | 753,720   |  |           |          | 114,725 |           |            |   | 12,000 |     |  |   | 228,535 |  |  |   |          |  |  |   | 1,548,407 | 
|P. Vlot(6)                                 |                  |          |   |                |            |  |            |           |  |           |          |         |           |            |   |        |     |  |   |         |  |  |   |           |  |  |   |          
|                                           | Fiscal year 2005 |          |   | 136,436        |            |  |            |          |  |           |          |        |           |            |   | 3,619  |     |  |   |        |  |  |   |          |  |  |   | 140,055   | 
|                                           | Fiscal year 2004 |          |   | N/A            |            |  |            | N/A       |  |           |          | N/A     |           |            |   | N/A    |     |  |   | N/A     |  |  |   | N/A       |  |  |   | N/A       | 
|Former Executive Directors                 |                  |          |   |                |            |  |            |           |  |           |          |         |           |            |   |        |     |  |   |         |  |  |   |           |  |  |   |          
|P. D. Macdonald(7)                         |                  |          |   |                |            |  |            |           |  |           |          |         |           |            |   |        |     |  |   |         |  |  |   |           |  |  |   |          
|                                           | Fiscal year 2005 |          |   | 471,219        |            |  |            |          |  |           |          | 17,697  |           |            |   | 13,000 |     |  |   | 138,430 |  |  |   | 6,513,284 |  |  |   | 7,153,630 | 
|                                           | Fiscal year 2004 |          |   | 822,500        |            |  |            | 1,745,390 |  |           |          | 15,693  |           |            |   | 12,000 |     |  |   | 593,558 |  |  |   |          |  |  |   | 3,189,141 | 
|F. H. Zwinkels(8)                          |                  |          |   |                |            |  |            |           |  |           |          |         |           |            |   |        |     |  |   |         |  |  |   |           |  |  |   |          
|                                           | Fiscal year 2005 |          |   | 188,377        |            |  |            |          |  |           |          |        |           |            |   | 31,326 |     |  |   | 3,379   |  |  |   |          |  |  |   | 223,082   | 
|                                           | Fiscal year 2004 |          |   | 121,756        |            |  |            | 27,921    |  |           |          | 10,715  |           |            |   | 13,526 |     |  |   | 3,345   |  |  |   |          |  |  |   | 177,263   | 
|Total Compensation for Executive Directors |                  |          |   |                |            |  |            |           |  |           |          |         |           |            |   |        |     |  |   |         |  |  |   |           |  |  |   |          
|                                           | Fiscal year 2005 |          |   | 1,372,686      |            |  |            | 1,160,452 |  |           |          | 153,709 |           |            |   | 60,945 |     |  |   | 374,964 |  |  |   | 6,513,284 |  |  |   | 9,636,040 | 
|                                           | Fiscal year 2004 |          |   | 1,383,683      |            |  |            | 2,527,031 |  |           |          | 141,133 |           |            |   | 37,526 |     |  |   | 825,438 |  |  |   |          |  |  |   | 4,914,811 | 

|                           |                  |          |   |         |            |        |        |          |           |            |          |            |                |            |   |           |     |  |   |           |  |  |     |     |  |  |   |         |  |  |   |           | 
|-------------------------- | ---------------- | -------- | - | ------- | ---------- | ------ | ------ | -------- | --------- | ---------- | -------- | ---------- | -------------- | ---------- | - | --------- | --- |  | - | --------- |  |  | --- | --- |  |  | - | ------- |  |  | - | --------- | 
|                           |                  |          |   | Post-   |            |        |        |          |           |            |         
|                           |                  | Primary  |   |         | employment |        |        | Equity   |           |            | Other    |            |                | Total      |  
|                           |                  |          |   |         |            |        |        |          |           |            |          |            |                |            |  
|                           |                  |          |   |         |            |        |        |          |           | Relocation |          |            |               
|                           |                  |          |   |         |            | Shadow |        |          | Severance |            |          | Allowances |                |            |  
|                           |                  |          |   | Noncash |            |        | 401(K) |          |           | Share &    |          |            | and Retirement |            |   | and Other |     |  |  
|                           |                  | Base Pay |   |         | Bonuses    |        |        | Benefits |           |            | Benefits |            |                | Options(4) |   |           | Pay |  |   | Non-      |  |  |    
|Name                       |                  | US$      |   |         | US$        |        |        | US$      |           |            | US$      |            |                | US$        |   |           | US$ |  |   | recurring |  |  | US$ |    
|                           |                  |          |   |         |            |        |        |          |           |            |          |            |                |            |   |           |     |  |   |           |  |  |     |    
|Current Executive Officers |                  |          |   |         |            |        |        |          |           |            |          |            |                |            |   |           |     |  |   |           |  |  |     |     |  |  |   |         |  |  |   |          
|Donald Merkley             |                  |          |   |         |            |        |        |          |           |            |          |            |                |            |   |           |     |  |   |           |  |  |     |     |  |  |   |         |  |  |   |          
|                           | Fiscal year 2005 |          | $ | 334,000 |            |        | $      | 521,656  |           |            | $        | 65,245     |                |            | $ | 13,000    |     |  | $ | 195,177   |  |  | $   |    |  |  | $ |        |  |  | $ | 1,129,078 | 
|                           | Fiscal year 2004 |          |   | 315,577 |            |        |        | 437,401  |           |            |          | 68,503     |                |            |   | 12,000    |     |  |   | 173,176   |  |  |     |    |  |  |   |        |  |  |   | 1,006,657 | 
|David Merkley              |                  |          |   |         |            |        |        |          |           |            |          |            |                |            |   |           |     |  |   |           |  |  |     |     |  |  |   |         |  |  |   |          
|                           | Fiscal year 2005 |          |   | 303,769 |            |        |        | 475,573  |           |            |          | 87,978     |                |            |   | 13,000    |     |  |   | 192,269   |  |  |     |    |  |  |   |        |  |  |   | 1,072,589 | 
|                           | Fiscal year 2004 |          |   | 285,577 |            |        |        | 394,064  |           |            |          | 68,481     |                |            |   | 12,000    |     |  |   | 135,437   |  |  |     |    |  |  |   |        |  |  |   | 895,559   | 
|J. Chilcoff                |                  |          |   |         |            |        |        |          |           |            |          |            |                |            |   |           |     |  |   |           |  |  |     |     |  |  |   |         |  |  |   |          
|                           | Fiscal year 2005 |          |   | 234,231 |            |        |        | 259,688  |           |            |          | 31,956     |                |            |   | 12,000    |     |  |   | 27,172    |  |  |     |    |  |  |   | 104,971 |  |  |   | 670,018   | 
|                           | Fiscal year 2004 |          |   | N/A     |            |        |        | N/A      |           |            |          | N/A        |                |            |   | N/A       |     |  |   | N/A       |  |  |     | N/A |  |  |   | N/A     |  |  |   | N/A       | 
|M. T. Fisher               |                  |          |   |         |            |        |        |          |           |            |          |            |                |            |   |           |     |  |   |           |  |  |     |     |  |  |   |         |  |  |   |          
|                           | Fiscal year 2005 |          |   | 215,770 |            |        |        | 262,062  |           |            |          | 50,301     |                |            |   | 12,946    |     |  |   | 107,084   |  |  |     |    |  |  |   | 17,438  |  |  |   | 665,601   | 
|                           | Fiscal year 2004 |          |   | N/A     |            |        |        | N/A      |           |            |          | N/A        |                |            |   | N/A       |     |  |   | N/A       |  |  |     | N/A |  |  |   | N/A     |  |  |   | N/A       | 
|R. P. Russell              |                  |          |   |         |            |        |        |          |           |            |          |            |                |            |   |           |     |  |   |           |  |  |     |     |  |  |   |         |  |  |   |          
|                           | Fiscal year 2005 |          |   | 233,751 |            |        |        | 234,542  |           |            |          | 32,366     |                |            |   | 12,833    |     |  |   | 111,733   |  |  |     |    |  |  |   |        |  |  |   | 625,224   | 
|                           | Fiscal year 2004 |          |   | N/A     |            |        |        | N/A      |           |            |          | N/A        |                |            |   | N/A       |     |  |   | N/A       |  |  |     | N/A |  |  |   | N/A     |  |  |   | N/A       | 

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|                                          |                  |          |  |           |            |        |        |           |           |            |          |            |                |            |  |           |     |  |  |           |  |  |     |           |  |  |  |         |  |  |  |           | 
|----------------------------------------- | ---------------- | -------- |  | --------- | ---------- | ------ | ------ | --------- | --------- | ---------- | -------- | ---------- | -------------- | ---------- |  | --------- | --- |  |  | --------- |  |  | --- | --------- |  |  |  | ------- |  |  |  | --------- | 
|                                          |                  |          |  | Post-     |            |        |        |           |           |            |         
|                                          |                  | Primary  |  |           | employment |        |        | Equity    |           |            | Other    |            |                | Total      | 
|                                          |                  |          |  |           |            |        |        |           |           |            |          |            |                |            | 
|                                          |                  |          |  |           |            |        |        |           |           | Relocation |          |            |               
|                                          |                  |          |  |           |            | Shadow |        |           | Severance |            |          | Allowances |                |            | 
|                                          |                  |          |  | Noncash   |            |        | 401(K) |           |           | Share &    |          |            | and Retirement |            |  | and Other |     |  | 
|                                          |                  | Base Pay |  |           | Bonuses    |        |        | Benefits  |           |            | Benefits |            |                | Options(4) |  |           | Pay |  |  | Non-      |  |  |    
|Name                                      |                  | US$      |  |           | US$        |        |        | US$       |           |            | US$      |            |                | US$        |  |           | US$ |  |  | recurring |  |  | US$ |          
|                                          |                  |          |  |           |            |        |        |           |           |            |          |            |                |            |  |           |     |  |  |           |  |  |     |          
|Former Executive Officers                 |                  |          |  |           |            |        |        |           |           |            |          |            |                |            |  |           |     |  |  |           |  |  |     |           |  |  |  |         |  |  |  |          
|P.J. Shafron(9)                           |                  |          |  |           |            |        |        |           |           |            |          |            |                |            |  |           |     |  |  |           |  |  |     |           |  |  |  |         |  |  |  |          
|                                          | Fiscal year 2005 |          |  | 211,427   |            |        |        |          |           |            |          | 38,924     |                |            |  | 12,855    |     |  |  | 21,674    |  |  |     | 863,162   |  |  |  | 8,686   |  |  |  | 1,156,728 | 
|                                          | Fiscal year 2004 |          |  | 307,500   |            |        |        | 375,951   |           |            |          | 34,625     |                |            |  | 12,000    |     |  |  | 360,222   |  |  |     |          |  |  |  | 16,356  |  |  |  | 1,106,654 | 
|P.G. Morley(10)                           |                  |          |  |           |            |        |        |           |           |            |          |            |                |            |  |           |     |  |  |           |  |  |     |           |  |  |  |         |  |  |  |          
|                                          | Fiscal year 2005 |          |  | 275,833   |            |        |        |          |           |            |          | 93,872     |                |            |  | 13,000    |     |  |  | 137,082   |  |  |     | 1,028,708 |  |  |  |        |  |  |  | 1,548,496 | 
|                                          | Fiscal year 2004 |          |  | 327,630   |            |        |        | 445,742   |           |            |          | 78,802     |                |            |  | 12,000    |     |  |  | 580,926   |  |  |     |          |  |  |  |        |  |  |  | 1,445,100 | 
|Total Compensation for Executive Officers |                  |          |  |           |            |        |        |           |           |            |          |            |                |            |  |           |     |  |  |           |  |  |     |           |  |  |  |         |  |  |  |          
|                                          | Fiscal year 2005 |          |  | 1,808,781 |            |        |        | 1,753,521 |           |            |          | 400,642    |                |            |  | 89,634    |     |  |  | 792,191   |  |  |     | 1,891,870 |  |  |  | 131,095 |  |  |  | 6,867,734 | 
|                                          | Fiscal year 2004 |          |  | 1,236,284 |            |        |        | 1,653,158 |           |            |          | 250,411    |                |            |  | 48,000    |     |  |  | 1,249,761 |  |  |     |          |  |  |  | 16,356  |  |  |  | 4,453,970 | 






|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | The annual allocation to non-executive directors of JHI NV stock
    to the value of $10,000 was approved by shareholders at the
    Annual General Meeting held on July 19, 2002. The
    non-executive directors can elect to take additional stock in
    lieu of fees.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   
|(2) | The superannuation benefits include Australian mandated 9%
    superannuation guarantee contributions on the Australian
    directors total fees.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   
|(3) | On August 11, 2004, Mr. McGregor resigned as Chairman
    of the Supervisory Board due to ill health. On August 25,
    2004, he resigned from the Joint and Supervisory Boards and from
    all Board committees.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   
|(4) | Options are valued using the Black-Scholes option-pricing model
    and the fair value of options granted are included in
    compensation during the period in which the options vest. The
    weighted average assumptions and weighted average fair valued
    used for grants in fiscal year 2005 were as follows: 1.1%
    dividend yield; 29.1% expected volatility; 3.2% risk free
    interest rate; 3.3 years of expected life; and A$1.35
    weighted average fair value used at grant date. Shadow share
    expense included in compensation is calculated based on the
    movement in our share price during the year and the increase in
    vesting of the shadow shares; A$/US$ foreign exchange movements
    also affect the result. Actual benefit received depends on our
    share price and foreign exchange rates at the time of exercise.
    Our U.S. Shadow Stock Plan and Non-U.S. Based
    Employees Stock Plan were terminated at the end of February 2005
    and the value on that day of all the outstanding shares of these
    plans were paid to the participants.
|   
|(5) | On October 21, 2004, Mr. Gries was appointed as an
    interim member of the Managing Board and named interim Chief
    Executive Officer. On February 14, 2005, he was appointed
    Chief Executive Officer. Mr. Gries appointment, as a
    member of the Managing Board, will require shareholders
    approval at the next General Meeting of shareholders.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   
|(6) | On October 21, 2004, Mr. Vlot, the Companys
    secretary at the time, was appointed as an interim member of the
    Managing Board. On June 30, 2005, Mr. Vlots
    temporary employment agreement expired by its terms and
    Mr. Butterfield was appointed as an interim member of the
    Managing Board on July 1, 2005. In connection with the
    expiration of his agreement, we expect to make a lump sum
    payment to Mr. Vlot of approximately 50,000 Euros.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   
|(7) | On October 21, 2004, Mr. Macdonald resigned from the
    Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   
|(8) | On October 21, 2004, Mr. Zwinkels resigned from his
    position on the Managing Board. On April 30, 2005,
    Mr. Zwinkels resigned as Treasurer. In connection with his
    resignation, in May 2005 (after the end of fiscal year 2005), we
    made a lump sum payment to Mr. Zwinkels of approximately
    $65,000 in connection with his final settlement agreement.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

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|    |                                                                
|--- | ---------------------------------------------------------------
|(9) | On October 20, 2004, Mr. Shafron resigned from the
    Company.



|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(10) | Consistent with prior years, gross up of tax on the
    increase/decrease in investment value of superannuation is
    included for Mr. Morley. This benefit is provided to
    Mr. Morley to offset U.S. taxes he would not have had
    to pay on his superannuation if he were still in Australia. At
    the end of May 2004, Mr. Morley retired from his position
    of Chief Financial Officer, but remained an employee until
    January 31, 2005. In connection with his retirement, we
    made a lump sum payment to Mr. Morley equal to
    18 months of salary based on his salary at the time of his
    departure. We also paid additional salary amounts owned to him
    related to expatriate pay. On February 1, 2005,
    Mr. Morley entered into a consulting agreement with the
    Company.











Service Contracts and Severance Agreements




| |                                         
| | ----------------------------------------
| | Service Contracts with Current Directors



98



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##### Table of Contents





| |            
| | -----------
| | Louis Gries







| |                     
| | --------------------
| | Benjamin Butterfield







| |                                        
| | ---------------------------------------
| | Service Contracts with Former Directors





| |                
| | ---------------
| | Peter Macdonald





99



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##### Table of Contents





| |                 
| | ----------------
| | Folkert Zwinkels





| |         
| | --------
| | Pim Vlot





| |                     
| | --------------------
| | Severance Agreements







100



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##### Table of Contents



Share Ownership




|                                                                                |  |              |         |  |          |  |   | 
|------------------------------------------------------------------------------- |  | ------------ | ------- |  | -------- |  | - | 
|                                                                                |  | Number of    |         |  |         
|                                                                                |  | Shares       |         |  | Percent  | 
|                                                                                |  | Beneficially |         |  | of       | 
|Name                                                                            |  | Owned(1)     |         |  | Class(2) | 
|                                                                                |  |              |         |  |          | 
|Current Directors and Executive Officers                                        |  |              |         |  |          |  |   | 
|Meredith Hellicar                                                               |  |              | 10,051  |  |          |  | * | 
|John Barr(3)                                                                    |  |              | 22,068  |  |          |  | * | 
|Michael Brown                                                                   |  |              | 13,969  |  |          |  | * | 
|Peter Cameron                                                                   |  |              | 13,719  |  |          |  | * | 
|Gregory Clark                                                                   |  |              | 13,358  |  |          |  | * | 
|Michael Gillfillan(4)                                                           |  |              | 53,969  |  |          |  | * | 
|James Loudon                                                                    |  |              | 5,597   |  |          |  | * | 
|Donald McGauchie(5)                                                             |  |              | 5,811   |  |          |  | * | 
|Louis Gries                                                                     |  |              | 823,462 |  |          |  | * | 
|Pim Vlot                                                                        |  |              |        |  |          |  | * | 
|Donald Merkley                                                                  |  |              | 473,532 |  |          |  | * | 
|David Merkley                                                                   |  |              | 368,402 |  |          |  | * | 
|James Chilcoff                                                                  |  |              | 237,648 |  |          |  | * | 
|Mark Fisher                                                                     |  |              | 211,974 |  |          |  | * | 
|Robert Russell                                                                  |  |              | 88,500  |  |          |  | * | 
|                                                                               
|Former Directors and Executive Officers                                         |  |              |         |  |          |  |   | 
|Peter Macdonald (former CEO)(6)                                                 |  |              | 884,587 |  |          |  | * | 
|Peter Shafron (former CFO)                                                      |  |              |        |  |          |  | * | 
|Phillip Morley (former CFO)                                                     |  |              | 622,634 |  |          |  | * | 
|Folkert Zwinkels (former Treasurer and former member of our
    Managing Board) |  |              |        |  |          |  | * | 






|  |                                                                                                
|- | -----------------------------------------------------------------------------------------------
|* | Indicates that the individual beneficially owns less than 1% of
    our shares of common stock.

101



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|    |                                                                                                                                                                                                                        
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Since the SBSP was approved at the 2002 Annual General Meeting,
    three general allotments have been made to non-executive
    directors. The number of beneficial shares includes the
    following SBSP allotments:

|                   |  |                            |       |  |            |  |       |            |  |  |       | 
|------------------ |  | -------------------------- | ----- |  | ---------- |  | ----- | ---------- |  |  | ----- | 
|                   |  | Shares Allotted Under SBSP |      
|                   |  | December 3,                |       |  | August 22, |  |       | August 27, | 
|Name               |  | 2004(a)                    |       |  | 2003(b)    |  |       | 2002(c)    | 
|                   |  |                            |       |  |            |  |       |            | 
|Meredith Hellicar  |  |                            | 2,117 |  |            |  | 2,225 |            |  |  | 2,948 | 
|John Barr          |  |                            | 1,068 |  |            |  |      |            |  |  |      | 
|Michael Brown      |  |                            | 1,068 |  |            |  | 1,260 |            |  |  | 1,641 | 
|Peter Cameron      |  |                            | 2,117 |  |            |  | 5,602 |            |  |  |      | 
|Gregory Clark      |  |                            | 1,068 |  |            |  | 5,602 |            |  |  | 6,688 | 
|Michael Gillfillan |  |                            | 1,068 |  |            |  | 1,260 |            |  |  | 1,641 | 
|James Loudon       |  |                            | 2,117 |  |            |  | 1,839 |            |  |  | 1,641 | 
|Donald McGauchie   |  |                            | 1,068 |  |            |  | 1,743 |            |  |  |      | 



| | 
| | 
| | 



| |     |                                                                                                                                                                         
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (a) | Each participants December 3, 2004 mandatory
    participation of 1,068 shares is subject to a two-year
    escrow period ending on December 4, 2006.                  
|
| | (b) | Each participants August 22, 2003 mandatory
    participation of 1,260 shares is subject to a two-year
    escrow period ending on August 22, 2005.                    
|
| | (c) | Each participants August 27, 2002 mandatory
    participation of 1,641 shares were subject to a two-year
    escrow period until they were released on August 27, 2004.



|    |                                                                                                                                                                         
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | Based on 460,967,944 shares of common stock outstanding at
    May 31, 2005 (all of which are subject to CUFS).                                                         
|   
|(3) | As of May 31, 2005, 21,000 shares were held in a
    trust, of which Mr. Barr and his wife are trustees.                                                                
|   
|(4) | As of May 31, 2005, 50,000 shares were held in a
    trust, of which Mr. Gillfillan and his wife are trustees.                                                          
|   
|(5) | Includes 3,000 shares held in the McGauchie Superfund, of
    which Mr. McGauchie is a trustee.                                                                         
|   
|(6) | As of May 31, 2005, 403,600 shares were held jointly
    by Mr. Macdonald and his wife and 380 shares were held
    by Mr. Macdonalds wife in trust for their children.



Option Ownership




|                           |  |                  |         |        |                |  |                |                 |  |  |               | 
|-------------------------- |  | ---------------- | ------- | ------ | -------------- |  | -------------- | --------------- |  |  | ------------- | 
|                           |  | Number of Shares |         |        |                |  |               
|                           |  | Underlying       |         |        |                |  |               
|Name                       |  | Options Owned    |         |        | Exercise Price |  |                | Expiration Date | 
|                           |  |                  |         |        |                |  |                |                 | 
|Current Executive Officers |  |                  |         |        |                |  |                |                 |  |  |               | 
|Louis Gries                |  |                  | 40,174  | (1)(2) |                |  | A$3.1321/share | (3)(4)(5)       |  |  | November 2009 | 
|                           |  |                  | 175,023 | (1)(6) |                |  | A$3.0921/share | (3)(4)(5)       |  |  | November 2010 | 
|                           |  |                  | 324,347 | (7)    |                |  | A$5.0586/share | (4)(5)          |  |  | December 2011 | 
|                           |  |                  | 325,000 | (8)    |                |  | A$6.4490/share | (5)             |  |  | December 2012 | 
|                           |  |                  | 325,000 | (9)    |                |  | A$7.05/share   |                 |  |  | December 2013 | 
|                          
|Pim Vlot                   |  |                  |        |        |                |  |                |                 |  |  |               | 

102



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|                                                                                |  |                  |           |         |                |  |                |                 |  |  |               | 
|------------------------------------------------------------------------------- |  | ---------------- | --------- | ------- | -------------- |  | -------------- | --------------- |  |  | ------------- | 
|                                                                                |  | Number of Shares |           |         |                |  |               
|                                                                                |  | Underlying       |           |         |                |  |               
|Name                                                                            |  | Options Owned    |           |         | Exercise Price |  |                | Expiration Date | 
|                                                                                |  |                  |           |         |                |  |                |                 | 
|                                                                               
|Donald Merkley                                                                  |  |                  | 48,209    | (1)(2)  |                |  | A$3.1321/share | (3)(4)(5)       |  |  | November 2009 | 
|                                                                                |  |                  | 138,170   | (1)(10) |                |  | A$3.0921/share | (3)4)(5)        |  |  | November 2010 | 
|                                                                                |  |                  | 170,709   | (7)     |                |  | A$5.0586/share | (4)(5)          |  |  | December 2011 | 
|                                                                                |  |                  | 200,000   | (8)     |                |  | A$6.4490/share | (5)             |  |  | December 2012 | 
|                                                                                |  |                  | 250,000   | (9)     |                |  | A$7.05/share   |                 |  |  | December 2013 | 
|                                                                                |  |                  | 230,000   | (11)    |                |  | A$5.99/share   |                 |  |  | December 2014 | 
|                                                                               
|David Merkley                                                                   |  |                  | 48,209    | (1)(2)  |                |  | A$3.1321/share | (3)(4)(5)       |  |  | November 2009 | 
|                                                                                |  |                  | 82,902    | (1)(10) |                |  | A$3.0921/share | (3)(4)(5)       |  |  | November 2010 | 
|                                                                                |  |                  | 102,425   | (7)     |                |  | A$5.0586/share | (4)(5)          |  |  | December 2011 | 
|                                                                                |  |                  | 200,000   | (8)     |                |  | A$6.4490/share | (5)             |  |  | December 2012 | 
|                                                                                |  |                  | 250,000   | (9)     |                |  | A$7.05/share   |                 |  |  | December 2013 | 
|                                                                                |  |                  | 230,000   | (11)    |                |  | A$5.99/share   |                 |  |  | December 2014 | 
|                                                                               
|James Chilcoff                                                                  |  |                  | 40,174    | (1)(2)  |                |  | A$3.1321/share | (3)(4)(5)       |  |  | November 2009 | 
|                                                                                |  |                  | 92,113    | (1)(12) |                |  | A$3.0921/share | (3)(4)(5)       |  |  | November 2010 | 
|                                                                                |  |                  | 68,283    | (7)     |                |  | A$5.0586/share | (4)(5)          |  |  | December 2011 | 
|                                                                                |  |                  | 111,000   | (8)     |                |  | A$6.4490/share | (5)             |  |  | December 2012 | 
|                                                                                |  |                  | 180,000   | (11)    |                |  | A$5.99/share   |                 |  |  | December 2014 | 
|                                                                               
|Mark Fisher                                                                     |  |                  | 92,113    | (1)(12) |                |  | A$3.0921/share | (3)(4)(5)       |  |  | November 2010 | 
|                                                                                |  |                  | 68,283    | (7)     |                |  | A$5.0586/share | (4)(5)          |  |  | December 2011 | 
|                                                                                |  |                  | 74,000    | (8)     |                |  | A$6.4490/share | (5)             |  |  | December 2012 | 
|                                                                                |  |                  | 132,000   | (9)     |                |  | A$7.05/share   |                 |  |  | December 2013 | 
|                                                                                |  |                  | 180,000   | (11)    |                |  | A$5.99/share   |                 |  |  | December 2014 | 
|                                                                               
|Robert Russell                                                                  |  |                  | 27,634    | (1)(13) |                |  | A$3.0921/share | (3)(4)(5)       |  |  | November 2010 | 
|                                                                                |  |                  | 111,000   | (8)     |                |  | A$6.4490/share | (5)             |  |  | December 2012 | 
|                                                                                |  |                  | 132,000   | (9)     |                |  | A$7.05/share   |                 |  |  | December 2013 | 
|                                                                                |  |                  | 180,000   | (11)    |                |  | A$5.99/share   |                 |  |  | December 2014 | 
|                                                                               
|Former Directors and
    Executive Officers                                     |  |                  |           |         |                |  |                |                 |  |  |               | 
|Peter Macdonald (former CEO)                                                    |  |                  | 1,950,000 | (14)    |                |  | A$5.7086/share | (4)(5)          |  |  | July 2012     | 
|                                                                               
|Phillip Morley (former CFO)                                                     |  |                  | 273,134   | (7)(15) |                |  | A$5.0586/share | (4)(5)          |  |  | February 2007 | 
|                                                                                |  |                  | 134,300   | (8)(15) |                |  | A$6.4490/share | (5)             |  |  | February 2007 | 
|                                                                                |  |                  | 100,000   | (9)(15) |                |  | A$7.05/share   |                 |  |  | February 2007 | 
|                                                                               
|Peter Shafron (former CFO)                                                      |  |                  |          |         |                |  |                |                 |  |  |               | 
|Folkert Zwinkels (former Treasurer and former member of our
    Managing Board) |  |                  |          |         |                |  |                |                 |  |  |               | 






| |     |                                                                                                                                                                                                                                                                                                                                                  
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (1) | This nonqualified stock option to purchase shares of our common
    stock was granted on October 19, 2001 under our 2001 Equity
    Incentive Plan in exchange for the termination of an award of
    shadow stock covering an equal number of shares of JHIL common
    stock. See Equity Plans  2001 Equity Incentive
    Plan under Item 6.
|
| | (2) | All options vested and became exercisable in November 2004.                                                                                                                                                                                                                                                                                      

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| |     |                                                                                                                                                                                                    
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (3) | The exercise price reflects an A$0.0965 per share price
    reduction due to a capital return paid to shareholders in
    December 2001.                                                           
|
| | (4) | The exercise price reflects an A$0.3804 per share price
    reduction due to a capital return paid to shareholders in
    November 2002.                                                           
|
| | (5) | The exercise price reflects an A$0.2110 per share price
    reduction due to a capital return paid to shareholders in
    November 2003.                                                           
|
| | (6) | Options vest and become exercisable in two equal installments in
    November 2004 and 2005.                                                                                                       
|
| | (7) | Granted under the 2001 Equity Incentive Plan. All options vested
    and became exercisable in December 2004.                                                                                      
|
| | (8) | Granted under the 2001 Equity Incentive Plan. Options vest and
    become exercisable in three installments: 25% on
    December 3, 2003; 25% on December 3, 2004; and 50% on
    December 3, 2005.
|
| | (9) | Granted under the 2001 Equity Incentive Plan. Options vest and
    become exercisable in three installments: 25% on
    December 5, 2004; 25% on December 5, 2005; and 50% on
    December 5, 2006.



|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(10) | Options vest and become exercisable in three equal installments
    in November 2003, 2004 and 2005.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    
|(11) | Granted under the 2001 Equity Incentive Plan. Options vest and
    become exercisable in three installments: 25% on
    December 14, 2005; 25% on December 14, 2006; and 50%
    on December 14, 2007.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    
|(12) | The options are 80% vested. The remaining options vest and
    become exercisable in November 2005.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    
|(13) | Options vest and become exercisable in November 2005.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    
|(14) | This option was granted to Mr. Macdonald on July 19,
    2002 under the 2002 Peter Donald Macdonald Share Option Plan.
    These options will become exercisable for 1,462,500 shares
    on the first business day on or after July 19, 2005 if our
    TSR from July 19, 2002 to July 19, 2005 is at least
    equal to the median TSR for the companies comprising our peer
    group. In addition, for each one-percent improvement in our TSR
    ranking above the median TSR for our peer group,
    19,500 shares become exercisable (up to a total of 487,500
    additional shares). The vested options will remain exercisable
    until July 19, 2012. As of March 31, 2005, all
    1,950,000 options were outstanding. If the performance hurdle is
    not met by October 31, 2005, the options will lapse and be
    cancelled. See  Equity Plans  JHI NV
    Peter Donald Macdonald Share Option Plan 2002 below.
|    
|(15) | All options vested and became exercisable at retirement at
    February 2005.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

Stock-Based Compensation






| |                                          
| | -----------------------------------------
| | Peter Donald Macdonald Share Option Plans



| |                                         
| | ----------------------------------------
| | Peter Donald Macdonald Share Option Plan



104



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| |                                              
| | ---------------------------------------------
| | Peter Donald Macdonald Share Option Plan 2001





| |                                              
| | ---------------------------------------------
| | Peter Donald Macdonald Share Option Plan 2002





| |                           
| | --------------------------
| | 2001 Equity Incentive Plan





105



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##### Table of Contents







|                  |  |           |           |  |                   |  |            | 
|----------------- |  | --------- | --------- |  | ----------------- |  | ---------- | 
|                  |  | Number of |           |  | Options           | 
|                  |  | Options   |           |  | Outstanding as of | 
|Share Grant Date  |  | Granted   |           |  | May 31, 2005      | 
|                  |  |           |           |  |                   | 
|October 2001(1)   |  |           | 5,468,829 |  |                   |  | 1,323,066  | 
|December 2001     |  |           | 4,248,417 |  |                   |  | 1,992,746  | 
|December 2002     |  |           | 4,037,000 |  |                   |  | 2,622,300  | 
|December 2003     |  |           | 6,179,583 |  |                   |  | 4,503,355  | 
|December 2004     |  |           | 5,391,100 |  |                   |  | 5,079,100  | 
|February 2005     |  |           | 273,000   |  |                   |  | 273,000    | 
|                  |  |           |           |  |                   | 
|Total outstanding |  |           |           |  |                   |  | 15,793,567 | 
|                  |  |           |           |  |                   | 






|    |                                                                                                                                                                       
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Awarded to our employees on October 19, 2001 in exchange
    for the cancellation of JHIL shadow stock awards under the JHIL
    Key Management Equity Incentive Plan.





Stock Options.


Performance Awards.


106



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##### Table of Contents



Restricted Stock Awards.


Stock Appreciation Rights.


Dividend Equivalent Rights.


Other Stock-Based Benefits.


Effect of Change in Control.




| |                                                 
| | ------------------------------------------------
| | Shadow Stock and Stock Appreciation Rights Plans







107



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##### Table of Contents







| |                             
| | ----------------------------
| | Supervisory Board Share Plan



Other Compensation: Economic Profit Incentive Plan




Employment Agreements









|        |                                                  
|------- | -------------------------------------------------
|Item 7. | Major Shareholders and Related Party Transactions

Major Shareholders




108



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##### Table of Contents





|                                                  |  |              |            |  |               |  |        | 
|------------------------------------------------- |  | ------------ | ---------- |  | ------------- |  | ------ | 
|                                                  |  | Shares       |            |  | Percentage of | 
|                                                  |  | Beneficially |            |  | Shares        | 
|Shareholder                                       |  | Owned        |            |  | Outstanding   | 
|                                                  |  |              |            |  |               | 
|Commonwealth Bank of Australia (and subsidiaries) |  |              | 75,268,867 |  |               |  | 16.40% | 
|Lazard Asset Management Pacific Co.               |  |              | 40,876,189 |  |               |  | 8.90%  | 
|Schroder Investment Management Australia Limited  |  |              | 39,835,741 |  |               |  | 8.69%  | 
|National Australia Bank Limited Group             |  |              | 28,198,184 |  |               |  | 6.15%  | 
|The Capital Group Companies, Inc.                 |  |              | 28,039,211 |  |               |  | 6.11%  | 















Other Security Ownership Information




109



---



##### Table of Contents



Related Party Transactions






| |                                                                                       
| | --------------------------------------------------------------------------------------
| | Transactions and Existing Loans to our Directors and
    Directors of our Subsidiaries







|            |       |         |        |        | 
|----------- | ----- | ------- | ------ | ------ | 
|            |       | May 31, |       
|Director    |       | 2005    |       
|            |       |         |       
|A. Kneeshaw |       | $       | 12,012 |       
|D. Salter   |       |         | 20,496 |       
|            |       |         |       
|            | Total |         | $      | 32,508 | 
|            |       |         |       



| |                                                                                 
| | --------------------------------------------------------------------------------
| | Payments Made to Directors and Director Related Entities
    of our Subsidiaries











110



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##### Table of Contents
















|        |                      
|------- | ---------------------
|Item 8. | Financial Information










|        |                
|------- | ---------------
|Item 9. | Listing Details

Price History








|                   |                |      |  |      |       |  |  |      |  |  |       |      |  |  |  |      | 
|------------------ | -------------- | ---- |  | ---- | ----- |  |  | ---- |  |  | ----- | ---- |  |  |  | ---- | 
|                   |                | High |  |      | Low   | 
|                   |                |      |  |      |       | 
|Period             |                | (A$) |  |      | (US$) |  |  | (A$) |  |  | (US$) |     
|                   |                |      |  |      |       |  |  |      |  |  |       |     
|Fiscal year ended: |                |      |  |      |       |  |  |      |  |  |       |      |  |  |  |     
|                   | March 31, 2005 |      |  | 7.23 |       |  |  | 5.35 |  |  |       | 4.95 |  |  |  | 3.66 | 
|                   | March 31, 2004 |      |  | 8.04 |       |  |  | 5.58 |  |  |       | 5.84 |  |  |  | 4.05 | 
|                   | March 31, 2003 |      |  | 7.06 |       |  |  | 3.96 |  |  |       | 5.56 |  |  |  | 3.12 | 
|                   | March 31, 2002 |      |  | 6.77 |       |  |  | 3.47 |  |  |       | 4.19 |  |  |  | 2.15 | 
|                   | March 31, 2001 |      |  | 4.65 |       |  |  | 2.58 |  |  |       | 3.36 |  |  |  | 1.87 | 

111



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|                      |                    |      |  |      |       |  |  |      |  |  |       |      |  |  |  |      | 
|--------------------- | ------------------ | ---- |  | ---- | ----- |  |  | ---- |  |  | ----- | ---- |  |  |  | ---- | 
|                      |                    | High |  |      | Low   | 
|                      |                    |      |  |      |       | 
|Period                |                    | (A$) |  |      | (US$) |  |  | (A$) |  |  | (US$) |     
|                      |                    |      |  |      |       |  |  |      |  |  |       |     
|Fiscal quarter ended: |                    |      |  |      |       |  |  |      |  |  |       |      |  |  |  |     
|                      | March 31, 2005     |      |  | 7.23 |       |  |  | 5.63 |  |  |       | 5.79 |  |  |  | 4.49 | 
|                      | December 31, 2004  |      |  | 6.77 |       |  |  | 5.09 |  |  |       | 5.50 |  |  |  | 4.13 | 
|                      | September 30, 2004 |      |  | 6.30 |       |  |  | 4.52 |  |  |       | 4.95 |  |  |  | 3.55 | 
|                      | June 30, 2004      |      |  | 6.88 |       |  |  | 4.92 |  |  |       | 5.22 |  |  |  | 3.73 | 
|                      | March 31, 2004     |      |  | 7.02 |       |  |  | 5.44 |  |  |       | 6.15 |  |  |  | 4.77 | 
|                      | December 31, 2003  |      |  | 8.04 |       |  |  | 5.74 |  |  |       | 6.32 |  |  |  | 4.51 | 
|                      | September 30, 2003 |      |  | 7.80 |       |  |  | 5.14 |  |  |       | 6.64 |  |  |  | 4.38 | 
|                      | June 30, 2003      |      |  | 7.20 |       |  |  | 4.61 |  |  |       | 5.84 |  |  |  | 3.74 | 
|Month ended:          |                    |      |  |      |       |  |  |      |  |  |       |      |  |  |  |     
|                      | May 31, 2005       |      |  | 6.77 |       |  |  | 5.19 |  |  |       | 5.51 |  |  |  | 4.22 | 
|                      | April 30, 2005     |      |  | 6.13 |       |  |  | 4.74 |  |  |       | 5.49 |  |  |  | 4.25 | 
|                      | March 31, 2005     |      |  | 6.40 |       |  |  | 5.04 |  |  |       | 5.79 |  |  |  | 4.56 | 
|                      | February 28, 2005  |      |  | 6.96 |       |  |  | 5.44 |  |  |       | 5.88 |  |  |  | 4.60 | 
|                      | January 31, 2005   |      |  | 7.23 |       |  |  | 5.55 |  |  |       | 6.48 |  |  |  | 4.98 | 
|                      | December 31, 2004  |      |  | 6.75 |       |  |  | 5.22 |  |  |       | 5.66 |  |  |  | 4.38 | 





|                      |                    |       |  |       |       |  |  |       | 
|--------------------- | ------------------ | ----- |  | ----- | ----- |  |  | ----- | 
|                      |                    | High  |  |       | Low   | 
|Period                |                    | (US$) |  |       | (US$) | 
|                      |                    |       |  |       |       | 
|Fiscal year ended:    |                    |       |  |       |       |  |  |      
|                      | March 31, 2005     |       |  | 27.21 |       |  |  | 18.10 | 
|                      | March 31, 2004     |       |  | 28.50 |       |  |  | 18.25 | 
|                      | March 31, 2003     |       |  | 19.95 |       |  |  | 15.29 | 
|                      | March 31, 2002(1)  |       |  | 17.95 |       |  |  | 11.10 | 
|Fiscal quarter ended: |                    |       |  |       |       |  |  |      
|                      | March 31, 2005     |       |  | 27.21 |       |  |  | 22.60 | 
|                      | December 31, 2004  |       |  | 26.52 |       |  |  | 20.50 | 
|                      | September 30, 2004 |       |  | 22.26 |       |  |  | 18.10 | 
|                      | June 30, 2004      |       |  | 25.05 |       |  |  | 18.82 | 
|                      | March 31, 2004     |       |  | 27.60 |       |  |  | 23.60 | 
|                      | December 31, 2003  |       |  | 28.50 |       |  |  | 24.40 | 
|                      | September 30, 2003 |       |  | 25.85 |       |  |  | 22.50 | 
|                      | June 30, 2003      |       |  | 23.95 |       |  |  | 18.25 | 

112



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|             |                   |       |  |       |       |  |  |       | 
|------------ | ----------------- | ----- |  | ----- | ----- |  |  | ----- | 
|             |                   | High  |  |       | Low   | 
|Period       |                   | (US$) |  |       | (US$) | 
|             |                   |       |  |       |       | 
|Month ended: |                   |       |  |       |       |  |  |      
|             | May 31, 2005      |       |  | 25.55 |       |  |  | 21.54 | 
|             | April 30, 2005    |       |  | 23.50 |       |  |  | 21.66 | 
|             | March 31, 2005    |       |  | 25.15 |       |  |  | 22.60 | 
|             | February 28, 2005 |       |  | 26.76 |       |  |  | 23.30 | 
|             | January 31, 2005  |       |  | 27.21 |       |  |  | 24.92 | 
|             | December 31, 2004 |       |  | 26.07 |       |  |  | 21.87 | 






|    |                                                                                                                                                                                                                                                                                                                                                                                                                                  
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Prior to the 2001 Reorganization, JHIL ADRs traded
    over-the-counter. Because historically the JHIL ADRs have not
    been actively traded, complete trading price information is not
    readily available. However, we believe that the trading price of
    the JHIL ADRs generally reflect the price of the underlying JHIL
    shares represented thereby, as well as any transaction costs
    associated with the ADRs.





Trading Markets




|                                   |  |  |                           | 
|---------------------------------- |  |  | ------------------------- | 
|Common Stock (in the form of CUFS) |  |  | Australian Stock Exchange | 
|ADRs                               |  |  | New York Stock Exchange   | 



Trading on the Australian Stock Exchange




Trading on the New York Stock Exchange




113



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|         |                       
|-------- | ----------------------
|Item 10. | Additional Information

General


besloten vennootschap met
beperkte aansprakelijkheid naamloze vennootschap




Key Provisions of our Articles of Association of JHI NV




| |                       
| | ----------------------
| | Purpose of the Company





| |   |                                                                                                                                             
| | - | --------------------------------------------------------------------------------------------------------------------------------------------
| |  | to participate in, to take an interest in any other way in and
    to conduct the management of business enterprises of whatever
    nature;
|
| |  | to raise funds through the issuance of debt or equity or in any
    other way and to finance third parties;                                 
|
| |  | to provide guarantees, including guarantees for the debts of
    third parties; and                                                         
|
| |  | to perform all activities which are incidental to or which may
    be conducive to, or connected with, any of the foregoing.                



| |                                                                              
| | -----------------------------------------------------------------------------
| | Provisions of our Articles of Association or Charter
    Related to Directors

Power to vote when director is materially interested.






Power to vote compensation.




114



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Borrowing Powers.


Age Limit Requirement for Retirement or
Non-Retirement.


Number of shares for directors qualification.




| |                                      
| | -------------------------------------
| | Issuance of Shares; Preemptive Rights











| |                     
| | --------------------
| | Repurchase of Shares



115



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| |                           
| | --------------------------
| | Reduction of Share Capital

pro rata pro
rata




| |                                        
| | ---------------------------------------
| | Shareholders Meetings and Voting Rights





116



---



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| |              
| | -------------
| | Annual Report





| |                
| | ---------------
| | Indemnification





| |          
| | ---------
| | Dividends







117



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| |                                     
| | ------------------------------------
| | Amendment of Articles of Association





| |                   
| | ------------------
| | Liquidation Rights

pro rata




| |                                          
| | -----------------------------------------
| | Limitations on Right to Hold Common Stock

inter alia


118



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| |   |                                                                                                                                                                                                                                                                                                                                                   
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | acquisitions that result from acceptances under a takeover bid,
    which complies with the Articles of Association, including the
    principles set forth above;                                                                                                                                                                                
|
| |  | acquisitions which result in a persons voting power
    increasing by not more than 3% in a six-month period;                                                                                                                                                                                                                                    
|
| |  | acquisitions which are consistent with the principles set forth
    above, conform to the other takeover principles set out in the
    Articles of Association (adjusting those principles as
    appropriate to meet the particular circumstances of the
    acquisitions) and have received the prior approval of the
    Supervisory Board; and
|
| |  | acquisitions approved at a general meeting of shareholders,
    subject to certain requirements being satisfied in relation to
    voting and the provision of information.                                                                                                                                                                       









| |                                                                                                                                                          
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------
| | (i) ASX requires an amendment to the takeover provisions in
    our Articles of Association to comply with the ASX Listing Rules
    as then in force; or
|
| | (ii) any waiver of the ASX Listing Rules permitting the
    inclusion of the takeovers provisions has ceased to have effect.                             







| |                       
| | ----------------------
| | Disclosure of Holdings

Wet toezicht effectenverkeer


Stichting Autoriteit Financiele
Markten


119



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| |   |                                                                                                                                                                                                                                                                                                                                                                                   
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | persons who directly or indirectly hold more than 25% of JHI
    NVs outstanding share capital;                                                                                                                                                                                                                                                                                  
|
| |  | managing and supervisory directors of such greater than 25%
    shareholders; and                                                                                                                                                                                                                                                                                                 
|
| |  | the spouses of the persons referred to above, relations by blood
    or affinity to the first degree and other persons who share a
    household with these persons, and relations by blood or affinity
    to the first degree who do not share a household with these
    persons but hold at least 5% of our shares or will obtain this
    percentage through the transaction.





www.sec.gov


Material Contracts


Notes.


Revolving Loan Facility.


120



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Stand-by Loan Facility.


U.S. Dollar Cash Advance Facilities.


Exchange Controls






Taxation




121



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PROSPECTIVE INVESTORS SHOULD CONSULT THEIR TAX ADVISORS
REGARDING THE PARTICULAR TAX CONSEQUENCES OF THEIR ACQUIRING,
OWNING AND DISPOSING OF OUR COMMON SHARES, INCLUDING THE EFFECT
OF ANY FOREIGN, STATE OR LOCAL TAXES.




| |                       
| | ----------------------
| | United States Taxation





Treatment of ADRs.


Taxation of Distributions.




122



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Credit of Foreign Taxes Withheld.




Sale or Other Disposition of Shares.


123



---



##### Table of Contents





Capital Gains Rates.


Controlled Foreign Corporation Status.






Passive Foreign Investment Company Status.


pro rata


Foreign Personal Holding Company Status.


124



---



##### Table of Contents





pro rata pro rata


Foreign Investment Company Status.


U.S. Federal Income Tax Provisions Applicable to
Non-United States Holders.


U.S. Information Reporting and Backup Withholding.


125



---



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| |                     
| | --------------------
| | Netherlands Taxation



Treatment of ADRs.


Dutch Dividend Withholding Tax.




| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (1) direct or indirect distributions in cash or in kind,
    deemed or constructive distributions, and repayments of
    additional paid-in capital not recognized as such for
    Netherlands dividend withholding tax purposes;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|
| | (2) liquidation proceeds, proceeds of redemption of shares
    of common stock or, generally, except if a certain specific
    exemption applies, consideration paid by us for the repurchase
    of shares of common stock in excess of the average paid-in
    capital recognized for Netherlands dividend withholding tax
    purposes;                                                                                                                                                                                                                                                                                                                                                                                                                   
|
| | (3) the par value of shares of common stock issued to a
    holder of shares of common stock or an increase of the par value
    of shares of common stock, as the case may be, to the extent
    that no contribution to capital, recognized for Netherlands
    dividend withholding tax purposes, was made or will be made; and                                                                                                                                                                                                                                                                                                                                                                                                                           
|
| | (4) the partial repayment of paid-in capital, recognized
    for Netherlands dividend withholding tax purposes, if and to the
    extent that there are net profits (zuivere
    winst) for dividend withholding tax purposes, unless
    the general meeting of our shareholders has previously resolved
    to make such repayment and provided that the par value of the
    shares of common stock concerned has been reduced by a
    corresponding amount by changing our Articles of Association. As
    a result of contributions in kind (i.e., in shares) to our
    paid-in capital made prior to the listing of our common shares,
    a portion of such paid-in capital may not be recognized for
    Dutch dividend withholding tax purposes.





126



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Taxes on Income and Capital Gains.




| |                                                                                                                                                                                                                                                                                                                                                                   
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (1) such shareholder is neither resident nor deemed to be
    resident in The Netherlands, nor has elected to be subject to
    the rules of the Dutch Income Tax Act 2001 that apply to
    residents of The Netherlands;                                                                                                                                        
|
| | (2) such shareholder does not have a business or an
    interest in a business that is, in whole or in part, carried on
    through a permanent establishment or a permanent representative
    in The Netherlands and to which business or part of a business,
    as the case may be, the shares of common stock are attributable;                              
|
| | (3) such shareholder does not perform independent personal
    services in The Netherlands giving rise to a fixed base in The
    Netherlands to which the shares of common stock are
    attributable; and                                                                                                                                                       
|
| | (4) the shares of common stock owned by such shareholder do
    not form part of a substantial interest or a deemed substantial
    interest, as defined below, in the share capital of the Company
    or, if such shares of common stock do form part of such an
    interest, they form part of the assets of a business other than
    a Netherlands business.



127



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Other Taxes and Duties.


Documents Available for Review


www.sec.gov




| |   |                                                                                                                                                                                   
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | furnish our shareholders with annual reports containing
    consolidated financial statements examined by an independent
    registered public accounting firm; and               
|
| |  | furnish quarterly reports for the first three quarters of each
    fiscal year containing unaudited consolidated financial
    information in filings with the SEC under Form 6-K.






|         |                                                               
|-------- | --------------------------------------------------------------
|Item 11. | Quantitative and Qualitative Disclosures About Market
    Risk



128



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##### Table of Contents







Foreign Currency Exchange Rate Risk






|                                   |  |     |       |  |    |  |       |     |  |  |          |  |  |  |      | 
|---------------------------------- |  | --- | ----- |  | -- |  | ----- | --- |  |  | -------- |  |  |  | ---- | 
|                                   |  | US$ |       |  | A$ |  |       | NZ$ |  |  | Other(1) | 
|                                   |  |     |       |  |    |  |       |     |  |  |          | 
|Net sales                          |  |     | 79.0% |  |    |  | 13.3% |     |  |  | 4.1%     |  |  |  | 3.6% | 
|Cost of goods sold                 |  |     | 81.5% |  |    |  | 12.0% |     |  |  | 3.1%     |  |  |  | 3.4% | 
|Expenses                           |  |     | 60.3% |  |    |  | 31.5% |     |  |  | 2.5%     |  |  |  | 5.7% | 
|Liabilities (excluding borrowings) |  |     | 73.9% |  |    |  | 17.6% |     |  |  | 5.1%     |  |  |  | 3.4% | 



|                                   |  |     |       |  |    |  |       |     |  |  |          |  |  |  |      | 
|---------------------------------- |  | --- | ----- |  | -- |  | ----- | --- |  |  | -------- |  |  |  | ---- | 
|                                   |  | US$ |       |  | A$ |  |       | NZ$ |  |  | Other(1) | 
|                                   |  |     |       |  |    |  |       |     |  |  |          | 
|Net sales                          |  |     | 76.3% |  |    |  | 15.8% |     |  |  | 4.1%     |  |  |  | 3.8% | 
|Cost of goods sold                 |  |     | 77.3% |  |    |  | 15.0% |     |  |  | 3.6%     |  |  |  | 4.1% | 
|Expenses                           |  |     | 68.6% |  |    |  | 18.9% |     |  |  | 6.3%     |  |  |  | 6.2% | 
|Liabilities (excluding borrowings) |  |     | 83.2% |  |    |  | 9.4%  |     |  |  | 4.2%     |  |  |  | 3.2% | 






|    |                                                        
|--- | -------------------------------------------------------
|(1) | Comprised of Philippine Pesos, Euros and Chilean Pesos.



Interest Rate Risk






129



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Future Principal Repayments by Expected Maturity Date


(In millions of U.S. dollars, except percentages)


|                               |  |                       |      |   |      |   |      |      |  |   |      |   |  |      |      |            |  |   |       |  |  |            |      |   |  |   |       |   |  |   |       | 
|------------------------------ |  | --------------------- | ---- | - | ---- | - | ---- | ---- |  | - | ---- | - |  | ---- | ---- | ---------- |  | - | ----- |  |  | ---------- | ---- | - |  | - | ----- | - |  | - | ----- | 
|                               |  | Year Ending March 31, |      |   |      |   |      |     
|                               |  |                       |      |   |      |   |      |     
|                               |  | 2006                  |      |   | 2007 |   |      | 2008 |  |   | 2009 |   |  | 2010 |      | Thereafter |  |   | Total |  |  | Fair Value |     
|                               |  |                       |      |   |      |   |      |      |  |   |      |   |  |      |      |            |  |   |       |  |  |            |     
|Fixed rate debt                |  | $                     | 25.7 |   |      | $ | 27.1 |      |  | $ | 8.1  |   |  | $    | 46.2 |            |  | $ |      |  |  | $          | 40.3 |   |  | $ | 147.4 |   |  | $ | 173.6 | 
|Weighted-average interest rate |  |                       | 6.92 | % |      |   | 6.99 | %    |  |   | 7.05 | % |  |      | 7.12 | %          |  |   |      |  |  |            | 7.35 | % |  |   | 7.12  | % |  |   |       | 
|Variable rate debt             |  | $                     | 11.9 |   |      |   |     |      |  |   |     |   |  |      |     |            |  |   |      |  |  |            |     |   |  | $ | 11.9  |   |  | $ | 11.9  | 
|Weighted-average interest rate |  |                       | 3.52 | % |      |   |     |      |  |   |     |   |  |      |     |            |  |   |      |  |  |            |     |   |  |   | 3.52  | % |  |   |       | 



Commodity Price Risk









|         |                                                           
|-------- | ----------------------------------------------------------
|Item 12. | Description of Securities Other Than Equity
    Securities



130



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PART II







|         |                                                
|-------- | -----------------------------------------------
|Item 13. | Defaults, Dividend Arrearages and Delinquencies








|         |                                                                                 
|-------- | --------------------------------------------------------------------------------
|Item 14. | Material Modifications to the Rights of Security Holders
    and Use of Proceeds








|         |                        
|-------- | -----------------------
|Item 15. | Controls and Procedures










|          |                                 
|--------- | --------------------------------
|Item 16A. | Audit Committee Financial Expert








|          |                                    
|--------- | -----------------------------------
|Item 16B. | Code of Business Conduct and Ethics







| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | to prohibit, directly or indirectly, extending or maintaining
    credit, arranging for the extension of credit or renewing an
    extension of credit, in the form of a personal loan to or for
    any of our directors or executive officers;                                                                                                                                                                                                                                                                                                                                                 
|
| |  | to add a mechanism to enable employees to submit any concerns or
    complaints regarding questionable accounting or auditing
    matters. Such submissions may be made on an anonymous,
    confidential basis and may be directed to an employees
    supervisor(s), corporate controller or the secretary of Audit
    Committee. In addition, we added a section that prohibits
    retaliation of any kind against individuals who have made good
    faith reports or complaints of violations of our code of ethics
    or other known or suspected illegal or unethical
    conduct; and
|
| |  | to add a section that provides that our code of ethics may be
    amended or modified by our Supervisory Board. In addition,
    waivers of this code may only be granted by our Supervisory
    Board or a committee of our Supervisory Board with specific
    delegated authority, and any such waiver, will be disclosed to
    our shareholders.                                                                                                                                                                                                                                            

131



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##### Table of Contents







| |   |                                                                                                                                                                                                                                                                                     
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | to change its name to the Code of Business Conduct and
    Ethics, to reflect the fact that it sets forth our
    standards of business conduct as well as ethical behavior, and
    in accordance with the relevant rules and regulations of the New
    York Stock Exchange; and
|
| |  | to make our Code of Business Conduct and Ethics applicable to
    our directors, in addition to all of our employees, in
    compliance with the relevant rules and regulations of the New
    York Stock Exchange.                                                                 












|          |                                       
|--------- | --------------------------------------
|Item 16C. | Principal Accountant Fees and Services

Fees Paid to Our Independent Registered Public Accounting
Firm




|                      |  |                   |     |  |      |   |     |      |  |   |     | 
|--------------------- |  | ----------------- | --- |  | ---- | - | --- | ---- |  | - | --- | 
|                      |  | Fiscal Year Ended |    
|                      |  | March 31,         |    
|                      |  |                   |    
|                      |  | 2005              |     |  | 2004 |   |     | 2003 | 
|                      |  |                   |     |  |      |   |     |      | 
|                      |  | (In millions)     |    
|Audit Fees(1)         |  | $                 | 3.1 |  |      | $ | 1.2 |      |  | $ | 1.1 | 
|Audit-Related Fees(2) |  |                   | 0.2 |  |      |   | 0.1 |      |  |   | 0.6 | 
|Tax Fees(3)           |  |                   | 4.2 |  |      |   | 3.5 |      |  |   | 3.4 | 






|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Audit Fees include the aggregate fees for professional services
    rendered by our independent registered public accounting firm.
    Professional services include the audit of our annual financial
    statements and services that are normally provided in connection
    with statutory and regulatory filings. During the fiscal year
    ended March 31, 2005, total audit fees also included
    internal investigation fees of $1.9 million.
|   
|(2) | Audit-Related Fees include the aggregate fees billed for
    assurance and related services rendered by our independent
    registered public accounting firm. Our independent registered
    public accounting firm did not engage any temporary employees to
    conduct any portion of the audit of our financial statements for
    the fiscal year ended March 31, 2005.                                                                          
|   
|(3) | Tax Fees include the aggregate fees billed for tax compliance,
    tax advice and tax planning services rendered by our independent
    registered public accounting firm.                                                                                                                                                                                                                                                                             



Audit Committee Pre-Approval Policies and Procedures




132



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|          |                                                           
|--------- | ----------------------------------------------------------
|Item 16D. | Exemptions from Listing Standards for Audit
    Committees








|          |                                                                           
|--------- | --------------------------------------------------------------------------
|Item 16E. | Purchases of Equity Securities by the Issuer and
    Affiliated Purchasers






PART III







|         |                     
|-------- | --------------------
|Item 18. | Financial Statements








|         |         
|-------- | --------
|Item 19. | Exhibits



|        |   |     |                         |                                                                                                                                                                                                                                                                                                                                    
|------- | - | --- | ----------------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |   |     |                        
|Number  |   |     | Description of Exhibits
|        |   |     |                        
|        | 1 | .1  |                         | Articles of Association, as amended on November 5, 2003 of
    James Hardie Industries N.V. (English Translation)(4)                                                                                                                                                                                                               
|       
|        | 2 | .1  |                         | Letter Agreement of September 6, 2001 by and between James
    Hardie Industries N.V. and CHESS Depositary Nominees Pty
    Limited, as the depositary for CHESS Units of Foreign
    Securities(1)                                                                                                                                
|       
|        | 2 | .2  |                         | Deposit Agreement dated as of September 24, 2001 between
    The Bank of New York, as depositary, and James Hardie Industries
    N.V.(1)                                                                                                                                                                                          
|       
|        | 2 | .3  |                         | Note Purchase Agreement, dated as of November 5, 1998,
    among James Hardie Finance B.V., James Hardie N.V. and certain
    purchasers thereto re: $225,000,000 Guaranteed Senior Notes(1)                                                                                                                                       
|       
|        | 2 | .4  |                         | Assignment and Assumption Agreement and First Amendment to Note
    Purchase Agreement, dated as of January 24, 2000, by and
    among James Hardie Finance B.V., James Hardie U.S. Funding,
    Inc., James Hardie N.V., James Hardie Aust Investco Pty Limited
    and certain noteholders thereto(1)                            
|       
|        | 2 | .5  |                         | Second Amendment to the Note Purchase Agreement dated as of
    October 22, 2001, by and among, James Hardie
    U.S. Funding, Inc., James Hardie N.V., James Hardie Aust
    Investco Pty Limited, James Hardie Australia Finance Pty
    Limited, James Hardie International Finance B. V. and certain
    noteholders thereto(1)
|       
|        | 2 | .6  |                         | Novation Agreement, dated August 27, 2001, relating to
    Amended and Restated Revolving Loan Agreement among James Hardie
    International Finance B.V., James Hardie N.V., James Hardie
    U.S. Funding Inc. and Australia and New Zealand Banking
    Group Limited(2)                                                       
|       
|        | 2 | .7  |                         | Novation Agreement, dated August 27, 2001, relating to
    Amended and Restated Revolving Loan Agreement among James Hardie
    International Finance B.V., James Hardie N.V., James Hardie
    U.S. Funding Inc. and Bank One, NA(2)                                                                                              
|       
|        | 2 | .8  |                         | Novation Agreement, dated August 27, 2001, relating to
    Amended and Restated Revolving Loan Agreement among James Hardie
    International Finance B.V., James Hardie N.V., James Hardie
    U.S. Funding Inc. and BNP Paribas(2)                                                                                               
|       
|        | 2 | .9  |                         | Novation Agreement, dated August 27, 2001, relating to
    Amended and Restated Revolving Loan Agreement among James Hardie
    International Finance B.V., James Hardie N.V., James Hardie
    U.S. Funding Inc. and Australia and Westdeutsche Landesbank
    Girozentrale, Sydney Branch(2)                                     
|       
|        | 2 | .10 |                         | Novation Agreement, dated August 27, 2001, relating to
    Amended and Restated Standby Loan Agreement among James Hardie
    International Finance B.V., James Hardie N.V., James Hardie
    U.S. Funding Inc. and Australia and New Zealand Banking
    Group Limited(2)                                                         

133



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|        |   |     |                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|------- | - | --- | ----------------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |   |     |                        
|Number  |   |     | Description of Exhibits
|        |   |     |                        
|       
|        | 2 | .11 |                         | Novation Agreement, dated August 27, 2001, relating to
    Amended and Restated Standby Loan Agreement among James Hardie
    International Finance B.V., James Hardie N.V., James Hardie
    U.S. Funding Inc. and Bank One, NA(2)                                                                                                                                                                                                                                                                  
|       
|        | 2 | .12 |                         | Novation Agreement, dated August 27, 2001, relating to
    Amended and Restated Standby Loan Agreement among James Hardie
    International Finance B.V., James Hardie N.V., James Hardie
    U.S. Funding Inc. and BBL Australia Limited(2)                                                                                                                                                                                                                                                         
|       
|        | 2 | .13 |                         | Novation Agreement, dated August 27, 2001, relating to
    Amended and Restated Standby Loan Agreement among James Hardie
    International Finance B.V., James Hardie N.V., James Hardie
    U.S. Funding Inc. and BNP Paribas(2)                                                                                                                                                                                                                                                                   
|       
|        | 2 | .14 |                         | Novation Agreement, dated August 27, 2001, relating to
    Amended and Restated 364 Day Standby Loan Agreement among James
    Hardie International Finance B.V., James Hardie N.V., James
    Hardie U.S. Funding Inc. and Wells Fargo HSBC Trade Bank,
    National Association(2)                                                                                                                                                                                                                 
|       
|        | 2 | .15 |                         | Novation Agreement, dated August 27, 2001, relating to
    Amended and Restated 364 Day Standby Loan Agreement among James
    Hardie International Finance B.V., James Hardie N.V., James
    Hardie U.S. Funding Inc. and Westdeutsche Landesbank
    Girozentrale, Sydney Branch(2)                                                                                                                                                                                                               
|       
|        | 2 | .16 |                         | Form of Novation Agreement, dated December 16, 2002,
    relating to Amended and Restated Revolving Loan Agreement among
    James Hardie International Finance B.V., James Hardie N.V.,
    James Hardie U.S. Funding Inc., James Hardie Industries
    N.V., and each of the following banks: Australia and New Zealand
    Banking Group Limited; Bank One, NA; BNP Paribas; and WestLB AG,
    Sydney Branch(3)                                                                                  
|       
|        | 2 | .17 |                         | Form of Novation Agreement, dated December 16, 2002,
    relating to Amended and Restated Standby Loan Agreement among
    James Hardie International Finance B.V., James Hardie N.V.,
    James Hardie U.S. Funding Inc., James Hardie Industries
    N.V. and each of the following banks: Australia and New Zealand
    Banking Group Limited; Bank One, NA; ING Bank N.V., Sydney
    Branch; BNP Paribas; Wells Fargo HSBC Trade Bank, National
    Association; and WestLB AG, Sydney Branch(3)
|       
|        | 2 | .18 |                         | Amendment Agreement to Amended and Restated Standby Loan
    Agreement, effective April 30, 2004, among James Hardie
    International Finance B.V., James Hardie Industries N.V. and
    Wells Fargo HSBC Trade Bank, National Association(4)                                                                                                                                                                                                                                                       
|       
|        | 2 | .19 |                         | Form of Extension Letter, relating to 364 Day Standby Loan
    Agreement among James Hardie International Finance B.V., James
    Hardie Industries N.V. and each of the following banks:
    Australia and New Zealand Banking Group Limited; Bank One, NA;
    ING Bank NV, Sydney Branch; BNP Paribas; and WestLB AG, Sydney
    Branch(4)                                                                                                                                                        
|       
|        | 2 | .20 |                         | Extension Letter relating to 364 Day Standby Loan Agreement
    among James Hardie International Finance B.V., James Hardie
    Industries N.V. and Wells Fargo HSBC Trade Bank N.A.(4)                                                                                                                                                                                                                                                                                                              
|       
|        | 2 | .21 |                         | Assignment and Assumption Agreement and Third Amendment to Note
    Purchase Agreement, dated as of November 18, 2002, among
    James Hardie U.S. Funding Inc, James Hardie International
    Finance B.V., James Hardie Industries N.V., James Hardie N.V.
    and certain noteholders thereto(3)                                                                                                                                                                                                  
|       
|        | 2 | .22 |                         | Common Terms Deed Poll dated June 15, 2005 between James
    Hardie International Finance B.V. and James Hardie Industries
    N.V.                                                                                                                                                                                                                                                                                                                                                                  
|       
|        | 2 | .23 |                         | Form of Term Facility Agreement between James Hardie
    International Finance B.V. and Financier                                                                                                                                                                                                                                                                                                                                                                                                    
|       
|        | 2 | .24 |                         | Form of 364-day Facility Agreement between James Hardie
    International Finance B.V. and Financier                                                                                                                                                                                                                                                                                                                                                                                                 
|       
|        | 2 | .25 |                         | Form of Guarantee Deed between James Hardie Industries N.V. and
    Financier                                                                                                                                                                                                                                                                                                                                                                                                                        
|       
|        | 4 | .1  |                         | James Hardie Industries N.V. 2001 Equity Incentive Plan                                                                                                                                                                                                                                                                                                                                                                                                                                              
|       
|        | 4 | .2  |                         | James Hardie Industries N.V. Peter Donald Macdonald Share Option
    Plan 2002(1)                                                                                                                                                                                                                                                                                                                                                                                                                    
|       
|        | 4 | .3  |                         | Economic Profit and Individual Performance Incentive Plans                                                                                                                                                                                                                                                                                                                                                                                                                                           
|       
|        | 4 | .4  |                         | JHI NV Stock Appreciation Rights Incentive Plan                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|       
|        | 4 | .5  |                         | Supervisory Board Share Plan, dated July 19, 2002(1)                                                                                                                                                                                                                                                                                                                                                                                                                                                 

134



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|        |   |     |                         |                                                                                                                                                                                                                                                                                              
|------- | - | --- | ----------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |   |     |                        
|Number  |   |     | Description of Exhibits
|        |   |     |                        
|       
|        | 4 | .6  |                         | Letter of Resignation, dated October 21, 2004, between
    James Hardie Industries N.V. and Peter Donald Macdonald(4)                                                                                                                                                                        
|       
|        | 4 | .7  |                         | Consulting agreement, dated November 15, 2004, between
    James Hardie Industries N.V. and Peter Shafron(4)                                                                                                                                                                                 
|       
|        | 4 | .8  |                         | Employment Agreement effective as of February 10, 2005,
    among James Hardie Building Products, Inc., James Hardie
    Industries N.V. and Louis Gries                                                                                                                                     
|       
|        | 4 | .9  |                         | Summary of Employment Terms between James Hardie Industries N.V.
    and Russell Chenu                                                                                                                                                                                                       
|       
|        | 4 | .10 |                         | International Assignment Agreement dated May 10, 2005,
    between James Hardie Industries N.V. and Benjamin Butterfield                                                                                                                                                                     
|       
|        | 4 | .11 |                         | Employment Agreement, effective September 1, 2004, between
    James Hardie Buildings Products, Inc. and David Merkley                                                                                                                                                                       
|       
|        | 4 | .12 |                         | Employment Agreement, effective September 1, 2004, between
    James Hardie Building Products and Donald Merkley                                                                                                                                                                             
|       
|        | 4 | .13 |                         | Amended Secondment dated October 8, 2004 between James
    Hardie Building Products Inc. and James Chilcoff(4)                                                                                                                                                                               
|       
|        | 4 | .14 |                         | Final Settlement Agreement between James Hardie International
    Finance B.V. and Folkert Zwinkels dated March 24, 2005                                                                                                                                                                     
|       
|        | 4 | .15 |                         | Form of Joint and Several Indemnity Agreement among James Hardie
    N.V., James Hardie (USA) Inc. and certain indemnitees thereto(1)                                                                                                                                                        
|       
|        | 4 | .16 |                         | Form of Joint and Several Indemnity Agreement among James Hardie
    Industries N.V., James Hardie Inc. and certain indemnitees
    thereto(1)                                                                                                                                               
|       
|        | 4 | .17 |                         | Form of Deed of Access to Documents, Indemnity and Insurance
    among James Hardie Industries N.V. and certain indemnitees
    thereto(1)                                                                                                                                                   
|       
|        | 4 | .18 |                         | Form of Joint and Several Indemnity Agreement among James Hardie
    Industries N.V., James Hardie Building Products Inc. and certain
    indemnities thereto                                                                                                                                
|       
|        | 4 | .19 |                         | Lease Amendment, dated March 23, 2004, among Amaca Pty
    Limited (f/k/a/ James Hardie & Coy Pty Limited), James
    Hardie Australia Pty Limited and James Hardie Industries N.V. re
    premises at the corner of Cobalt & Silica Street,
    Carole Park, Queensland, Australia(4)       
|       
|        | 4 | .20 |                         | Variation of Lease dated March 23, 2004, among Amaca Pty
    Limited (f/k/a/ James Hardie & Coy Pty Limited), James
    Hardie Australia Pty Limited and James Hardie Industries N.V. re
    premises at the corner of Colquhoun & Devon Streets,
    Rosehill, New South Wales, Australia(4)
|       
|        | 4 | .21 |                         | Extension of Lease dated March 23, 2004, among Amaca Pty
    Limited (f/k/a/ James Hardie & Coy Pty Limited), James
    Hardie Australia Pty Limited and James Hardie Industries N.V. re
    premises at Rutland, Avenue, Welshpool, Western Australia,
    Australia(4)                     
|       
|        | 4 | .22 |                         | Lease Amendment dated March 23, 2004, among Amaca Pty
    Limited (f/k/a/ James Hardie & Coy Pty Limited), James
    Hardie Australia Pty Limited and James Hardie Industries N.V. re
    premises at 46 Randle Road, Meeandah, Queensland, Australia (4)                                    
|       
|        | 4 | .23 |                         | Lease Agreement dated March 23, 2004 among Studorp Limited,
    James Hardie New Zealand Limited and James Hardie Industries
    N.V. re premises at the corner of ORorke and Station
    Roads, Penrose, Auckland, New Zealand(4)                                                          
|       
|        | 4 | .24 |                         | Lease Agreement dated March 23, 2004 among Studorp Limited,
    James Hardie New Zealand Limited and James Hardie Industries
    N.V. re premises at 44-74 ORorke Road, Penrose, Auckland,
    New Zealand(4)                                                                               
|       
|        | 4 | .25 |                         | Industrial Building Lease Agreement, effective October 6,
    2000, between James Hardie Building Products, Inc. and Fortra
    Fiber-Cement L.L.C., re premises at Waxahachie, Ellis County,
    Texas(1)                                                                                   
|       
|        | 4 | .26 |                         | Asset Purchase Agreement by and between James Hardie Building
    Products, Inc. and Cemplank, Inc. dated as of December 12,
    2001(1)                                                                                                                                                     
|       
|        | 4 | .27 |                         | Amended and Restated Stock Purchase Agreement dated
    March 12, 2002, between BPB U.S. Holdings, Inc. and
    James Hardie Inc.(1)                                                                                                                                                         

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|        |    |    |                         |                                                                                                                                           
|------- | -- | -- | ----------------------- | ------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |    |                        
|Number  |    |    | Description of Exhibits
|        |    |    |                        
|       
|        | 8  | .1 |                         | List of significant subsidiaries of James Hardie Industries N.V.                                                                          
|       
|        | 12 | .1 |                         | Certification of the Chief Executive Officer pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002                                
|       
|        | 12 | .2 |                         | Certification of the Chief Financial Officer pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002                                
|       
|        | 13 | .1 |                         | Certification of the Chief Executive Officer and Chief Financial
    Officer pursuant to Section 906 of the Sarbanes-Oxley Act
    of 2002
|       
|        | 15 | .1 |                         | Consent of independent registered public accounting firm                                                                                  
|       
|        | 15 | .2 |                         | Consent of KPMG Actuaries Pty Ltd                                                                                                         
|       
|        | 99 | .1 |                         | Excerpts of the ASX Settlement and Transfer Corporation Pty Ltd
    as of May 2005                                                        
|       
|        | 99 | .2 |                         | Excerpts of the Financial Services Reform Act 2001, as of
    March 11, 2002                                                              
|       
|        | 99 | .3 |                         | ASIC Class Order 02/311, dated November 3, 2002                                                                                           
|       
|        | 99 | .4 |                         | ASIC Modification, dated March 7, 2002(1)                                                                                                 






|    |                                                                                                                                               
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------
|(1) | This document was previously filed on paper as an exhibit to a
    prior Form 20-F. It is being re-filed herewith
    electronically.         
|   
|(2) | Previously filed as an exhibit to our Registration Statement on
    Form 20-F dated September 7, 2001 and incorporate
    herein by reference.
|   
|(3) | Previously filed as an exhibit to our Annual Report on
    Form 20-F dated July 2, 2003 and incorporated herein
    by reference.             
|   
|(4) | Previously filed as an exhibit to our Annual Report on
    Form 20-F dated November 22, 2004 and incorporated
    herein by reference.        

136



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SIGNATURES






| |                                 
| | --------------------------------
| | James Hardie Industries
    N.V.



| |     |                    
| | --- | -------------------
| | By: | /s/
    Louis Gries

| |                        
| | -----------------------
| |                        
| | Louis Gries            
| | Chief Executive Officer



137



---










JAMES HARDIE INDUSTRIES N.V. AND SUBSIDIARIES


INDEX


|                                                                                                                     |  |      |      | 
|-------------------------------------------------------------------------------------------------------------------- |  | ---- | ---- | 
|                                                                                                                     |  | Page |     
|                                                                                                                     |  |      |     
|Report of Independent Registered Public
    Accounting Firm                                                          |  |      | F-2  | 
|Consolidated Balance Sheets as of
    March 31, 2005 and 2004                                                        |  |      | F-3  | 
|Consolidated Statements of Income for the
    Years Ended March 31, 2005, 2004 and 2003                              |  |      | F-4  | 
|Consolidated Statements of Cash Flows for
    the Years Ended March 31, 2005, 2004 and 2003                          |  |      | F-5  | 
|Consolidated Statements of Changes in
    Shareholders Equity for the Years Ended March 31,
    2005, 2004 and 2003 |  |      | F-6  | 
|Notes to Consolidated Financial
    Statements                                                                       |  |      | F-7  | 
|Remuneration Disclosures (unaudited)                                                                                 |  |      | F-54 | 
|Selected Quarterly Financial Data
    (unaudited)                                                                    |  |      | F-56 | 



F-1



---



##### Table of Contents






REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM












| |                                   
| | ----------------------------------
| | /s/ PricewaterhouseCoopers
    LLP
| |                                   
| | PricewaterhouseCoopers LLP        





F-2



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##### Table of Contents



JAMES HARDIE INDUSTRIES N.V. AND SUBSIDIARIES





CONSOLIDATED BALANCE SHEETS


|                                        |                                                                                                                                                                                                           |                                            |       |              |      |  |       |       |         |  |       |       |       | 
|--------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------ | ----- | ------------ | ---- |  | ----- | ----- | ------- |  | ----- | ----- | ----- | 
|                                        |                                                                                                                                                                                                           |                                            |       | March 31     |     
|                                        |                                                                                                                                                                                                           |                                            |       |              |     
|                                        |                                                                                                                                                                                                           | Notes                                      |       |              | 2005 |  |       | 2004  |        
|                                        |                                                                                                                                                                                                           |                                            |       |              |      |  |       |       |        
|                                        |                                                                                                                                                                                                           |                                            |       | (Millions of |     
|                                        |                                                                                                                                                                                                           |                                            |       | US dollars)  |     
|ASSETS                                 
|Current assets:                         |                                                                                                                                                                                                           |                                            |       |              |      |  |       |       |         |  |       |      
|                                        | Cash and cash equivalents                                                                                                                                                                                 |                                            |       | 3            |      |  | $     | 113.5 |         |  | $     | 72.3  |      
|                                        | Accounts and notes receivable, net of allowance for doubtful
    accounts of $1.5 million and $1.2 million as of
    March 31, 2005 and March 31, 2004, respectively                                      |                                            |       | 4            |      |  |       | 127.2 |         |  |       | 118.4 |      
|                                        | Inventories                                                                                                                                                                                               |                                            |       | 5            |      |  |       | 99.9  |         |  |       | 103.2 |      
|                                        | Refundable income taxes                                                                                                                                                                                   |                                            |       | 14           |      |  |       |      |         |  |       | 37.8  |      
|                                        | Prepaid expenses and other current assets                                                                                                                                                                 |                                            |       |              |      |  |       | 12.0  |         |  |       | 8.8   |      
|                                        | Deferred tax assets                                                                                                                                                                                       |                                            |       | 14           |      |  |       | 26.0  |         |  |       | 24.7  |      
|                                        |                                                                                                                                                                                                           |                                            |       |              |      |  |       |       |        
|                                        |                                                                                                                                                                                                           | Total current assets                       |       |              |      |  |       |       | 378.6   |  |       |       | 365.2 | 
|Long-term receivables and other assets  |                                                                                                                                                                                                           |                                            |       |              |      |  | 0.8   |       |         |  | 9.8   |      
|Property, plant and equipment, net      |                                                                                                                                                                                                           |                                            | 6     |              |      |  | 685.7 |       |         |  | 567.1 |      
|Intangible assets, net                  |                                                                                                                                                                                                           |                                            | 7     |              |      |  | 3.1   |       |         |  | 3.0   |      
|Prepaid pension cost                    |                                                                                                                                                                                                           |                                            | 8     |              |      |  | 8.4   |       |         |  | 14.1  |      
|Deferred tax assets                     |                                                                                                                                                                                                           |                                            | 14    |              |      |  | 12.3  |       |         |  | 12.0  |      
|                                        |                                                                                                                                                                                                           |                                            |       |              |      |  |       |       |        
|                                        |                                                                                                                                                                                                           | Total assets                               |       |              |      |  |       | $     | 1,088.9 |  |       | $     | 971.2 | 
|                                        |                                                                                                                                                                                                           |                                            |       |              |      |  |       |       |        
|                                       
|LIABILITIES AND SHAREHOLDERS EQUITY   
|Current liabilities:                    |                                                                                                                                                                                                           |                                            |       |              |      |  |       |       |         |  |       |      
|                                        | Accounts payable and accrued liabilities                                                                                                                                                                  |                                            |       | 9            |      |  | $     | 94.0  |         |  | $     | 78.5  |      
|                                        | Current portion of long-term debt                                                                                                                                                                         |                                            |       | 10           |      |  |       | 25.7  |         |  |       | 17.6  |      
|                                        | Short-term debt                                                                                                                                                                                           |                                            |       | 10           |      |  |       | 11.9  |         |  |       | 10.8  |      
|                                        | Accrued payroll and employee benefits                                                                                                                                                                     |                                            |       |              |      |  |       | 35.7  |         |  |       | 41.1  |      
|                                        | Accrued product warranties                                                                                                                                                                                |                                            |       | 12           |      |  |       | 8.0   |         |  |       | 9.7   |      
|                                        | Income taxes payable                                                                                                                                                                                      |                                            |       | 14           |      |  |       | 21.4  |         |  |       | 9.8   |      
|                                        | Other liabilities                                                                                                                                                                                         |                                            |       |              |      |  |       | 1.7   |         |  |       | 1.8   |      
|                                        |                                                                                                                                                                                                           |                                            |       |              |      |  |       |       |        
|                                        |                                                                                                                                                                                                           | Total current liabilities                  |       |              |      |  |       |       | 198.4   |  |       |       | 169.3 | 
|Long-term debt                          |                                                                                                                                                                                                           |                                            | 10    |              |      |  | 121.7 |       |         |  | 147.4 |      
|Deferred income taxes                   |                                                                                                                                                                                                           |                                            | 14    |              |      |  | 77.5  |       |         |  | 65.2  |      
|Accrued product warranties              |                                                                                                                                                                                                           |                                            | 12    |              |      |  | 4.9   |       |         |  | 2.3   |      
|Other liabilities                       |                                                                                                                                                                                                           |                                            | 11,14 |              |      |  | 61.7  |       |         |  | 82.3  |      
|                                        |                                                                                                                                                                                                           |                                            |       |              |      |  |       |       |        
|                                        |                                                                                                                                                                                                           | Total liabilities                          |       |              |      |  |       |       | 464.2   |  |       |       | 466.5 | 
|                                        |                                                                                                                                                                                                           |                                            |       |              |      |  |       |       |        
|Commitments and contingencies (Note 13) |                                                                                                                                                                                                           |                                            |       |              |      |  |       |       |         |  |       |      
|Shareholders equity:                   |                                                                                                                                                                                                           |                                            |       |              |      |  |       |       |         |  |       |      
|                                        | Common stock, Euro 0.59 par value, 2.0 billion shares
    authorized; 459,373,176 shares issued and outstanding at
    March 31, 2005 and 458,558,436 shares issued and
    outstanding at March 31, 2004 |                                            |       | 16,20        |      |  |       | 245.8 |         |  |       | 245.2 |      
|                                        | Additional paid-in capital                                                                                                                                                                                |                                            |       | 16,20        |      |  |       | 139.4 |         |  |       | 134.0 |      
|                                        | Retained earnings                                                                                                                                                                                         |                                            |       |              |      |  |       | 264.3 |         |  |       | 151.1 |      
|                                        | Employee loans                                                                                                                                                                                            |                                            |       | 16           |      |  |       | (0.7  | )       |  |       | (1.3  | )    
|                                        | Accumulated other comprehensive loss                                                                                                                                                                      |                                            |       | 19           |      |  |       | (24.1 | )       |  |       | (24.3 | )    
|                                        |                                                                                                                                                                                                           |                                            |       |              |      |  |       |       |        
|                                        |                                                                                                                                                                                                           | Total shareholders equity                 |       |              |      |  |       |       | 624.7   |  |       |       | 504.7 | 
|                                        |                                                                                                                                                                                                           |                                            |       |              |      |  |       |       |        
|                                        |                                                                                                                                                                                                           | Total liabilities and shareholders equity |       |              |      |  |       | $     | 1,088.9 |  |       | $     | 971.2 | 
|                                        |                                                                                                                                                                                                           |                                            |       |              |      |  |       |       |        



F-3



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##### Table of Contents



JAMES HARDIE INDUSTRIES N.V. AND SUBSIDIARIES





CONSOLIDATED STATEMENTS OF INCOME


|                                                       |                                                                                                                                                                                  |       |    |                          |      |   |         |       |   |   |        |       |  |   |        |       | 
|------------------------------------------------------ | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----- | -- | ------------------------ | ---- | - | ------- | ----- | - | - | ------ | ----- |  | - | ------ | ----- | 
|                                                       |                                                                                                                                                                                  |       |    | Years Ended March 31     |     
|                                                       |                                                                                                                                                                                  |       |    |                          |     
|                                                       |                                                                                                                                                                                  | Notes |    |                          | 2005 |   |         | 2004  |   |   | 2003   |      
|                                                       |                                                                                                                                                                                  |       |    |                          |      |   |         |       |   |   |        |      
|                                                       |                                                                                                                                                                                  |       |    | (Millions of US dollars, |     
|                                                       |                                                                                                                                                                                  |       |    | except per share data)   |     
|Net sales                                              |                                                                                                                                                                                  |       | 18 |                          |      | $ | 1,210.4 |       |   | $ | 981.9  |       |  | $ | 783.6  |      
|Cost of goods sold                                     |                                                                                                                                                                                  |       |    |                          |      |   | (784.0  | )     |   |   | (623.0 | )     |  |   | (492.8 | )    
|                                                       |                                                                                                                                                                                  |       |    |                          |      |   |         |       |   |   |        |      
|                                                       | Gross profit                                                                                                                                                                     |       |    |                          |      |   |         | 426.4 |   |   |        | 358.9 |  |   |        | 290.8 | 
|Selling, general and administrative expenses           |                                                                                                                                                                                  |       |    |                          |      |   | (174.5  | )     |   |   | (162.0 | )     |  |   | (144.9 | )    
|Research and development expenses                      |                                                                                                                                                                                  |       |    |                          |      |   | (21.6   | )     |   |   | (22.6  | )     |  |   | (18.1  | )    
|SCI and other related expenses                         |                                                                                                                                                                                  |       | 13 |                          |      |   | (28.1   | )     |   |   |       |       |  |   |       |      
|Other operating (expense) income                       |                                                                                                                                                                                  |       | 8  |                          |      |   | (6.0    | )     |   |   | (2.1   | )     |  |   | 1.0    |      
|                                                       |                                                                                                                                                                                  |       |    |                          |      |   |         |       |   |   |        |      
|                                                       | Operating income                                                                                                                                                                 |       |    |                          |      |   |         | 196.2 |   |   |        | 172.2 |  |   |        | 128.8 | 
|Interest expense                                       |                                                                                                                                                                                  |       |    |                          |      |   | (7.3    | )     |   |   | (11.2  | )     |  |   | (23.8  | )    
|Interest income                                        |                                                                                                                                                                                  |       |    |                          |      |   | 2.2     |       |   |   | 1.2    |       |  |   | 3.9    |      
|Other (expense) income                                 |                                                                                                                                                                                  |       |    |                          |      |   | (1.3    | )     |   |   | 3.5    |       |  |   | 0.7    |      
|                                                       |                                                                                                                                                                                  |       |    |                          |      |   |         |       |   |   |        |      
|                                                       | Income from continuing operations before income taxes                                                                                                                            |       |    | 18                       |      |   |         | 189.8 |   |   |        | 165.7 |  |   |        | 109.6 | 
|Income tax expense                                     |                                                                                                                                                                                  |       |    |                          |      |   | (61.9   | )     |   |   | (40.4  | )     |  |   | (26.1  | )    
|                                                       |                                                                                                                                                                                  |       |    |                          |      |   |         |       |   |   |        |      
|                                                       | Income from continuing operations                                                                                                                                                |       |    |                          |      |   |         | 127.9 |   |   |        | 125.3 |  |   |        | 83.5  | 
|                                                       |                                                                                                                                                                                  |       |    |                          |      |   |         |       |   |   |        |      
|Discontinued operations:                               |                                                                                                                                                                                  |       |    |                          |      |   |         |       |   |   |        |       |  |   |        |      
|                                                       | (Loss) income from discontinued operations, net of income tax
    benefit (expense) of $0.2 million, ($0.1) million
    and ($1.6) million for 2005, 2004 and 2003, respectively |       |    | 15                       |      |   |         | (0.3  | ) |   |        | 0.2   |  |   |        | 3.0   | 
|                                                       | (Loss) gain on disposal of discontinued operations, net of
    income tax benefit (expense) of nil, $4.8 million and
    ($45.3) million for 2005, 2004 and 2003, respectively   |       |    | 15                       |      |   |         | (0.7  | ) |   |        | 4.1   |  |   |        | 84.0  | 
|                                                       |                                                                                                                                                                                  |       |    |                          |      |   |         |       |   |   |        |      
|                                                       | (Loss) income from discontinued operations                                                                                                                                       |       |    |                          |      |   |         | (1.0  | ) |   |        | 4.3   |  |   |        | 87.0  | 
|                                                       |                                                                                                                                                                                  |       |    |                          |      |   |         |       |   |   |        |      
|                                                       | Net income                                                                                                                                                                       |       |    |                          |      |   | $       | 126.9 |   |   | $      | 129.6 |  |   | $      | 170.5 | 
|                                                       |                                                                                                                                                                                  |       |    |                          |      |   |         |       |   |   |        |      
|Income per share  basic:                              |                                                                                                                                                                                  |       |    |                          |      |   |         |       |   |   |        |       |  |   |        |      
|                                                       | Income from continuing operations                                                                                                                                                |       |    |                          |      |   | $       | 0.28  |   |   | $      | 0.27  |  |   | $      | 0.18  | 
|                                                       | Income from discontinued operations                                                                                                                                              |       |    |                          |      |   |         |      |   |   |        | 0.01  |  |   |        | 0.19  | 
|                                                       |                                                                                                                                                                                  |       |    |                          |      |   |         |       |   |   |        |      
|                                                       | Net income per share  basic                                                                                                                                                     |       |    |                          |      |   | $       | 0.28  |   |   | $      | 0.28  |  |   | $      | 0.37  | 
|                                                       |                                                                                                                                                                                  |       |    |                          |      |   |         |       |   |   |        |      
|Income per share  diluted:                            |                                                                                                                                                                                  |       |    |                          |      |   |         |       |   |   |        |       |  |   |        |      
|                                                       | Income from continuing operations                                                                                                                                                |       |    |                          |      |   | $       | 0.28  |   |   | $      | 0.27  |  |   | $      | 0.18  | 
|                                                       | Income from discontinued operations                                                                                                                                              |       |    |                          |      |   |         |      |   |   |        | 0.01  |  |   |        | 0.19  | 
|                                                       |                                                                                                                                                                                  |       |    |                          |      |   |         |       |   |   |        |      
|                                                       | Net income per share  diluted                                                                                                                                                   |       |    |                          |      |   | $       | 0.28  |   |   | $      | 0.28  |  |   | $      | 0.37  | 
|                                                       |                                                                                                                                                                                  |       |    |                          |      |   |         |       |   |   |        |      
|Weighted average common shares outstanding (Millions): |                                                                                                                                                                                  |       |    |                          |      |   |         |       |   |   |        |       |  |   |        |      
|                                                       | Basic                                                                                                                                                                            |       |    | 2                        |      |   |         | 458.9 |   |   |        | 458.1 |  |   |        | 456.7 | 
|                                                       | Diluted                                                                                                                                                                          |       |    | 2                        |      |   |         | 461.0 |   |   |        | 461.4 |  |   |        | 459.4 | 



F-4



---



##### Table of Contents



JAMES HARDIE INDUSTRIES N.V. AND SUBSIDIARIES





CONSOLIDATED STATEMENTS OF CASH FLOWS


|                                                                                      |                                                                                 |                                                     |       |        |        |   |       |       |       |   |       |        |        |  
|------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------- | --------------------------------------------------- | ----- | ------ | ------ | - | ----- | ----- | ----- | - | ----- | ------ | ------ | -
|                                                                                      |                                                                                 | Years Ended March 31                                |      
|                                                                                      |                                                                                 |                                                     |      
|                                                                                      |                                                                                 | 2005                                                |       |        | 2004   |   |       | 2003  |      
|                                                                                      |                                                                                 |                                                     |       |        |        |   |       |       |      
|                                                                                      |                                                                                 | (Millions of US dollars)                            |      
|Cash flows from operating activities:                                                 |                                                                                 |                                                     |       |        |        |   |       |       |       |   |       |       
|Net income                                                                            |                                                                                 | $                                                   | 126.9 |        |        | $ | 129.6 |       |       | $ | 170.5 |       
|Adjustments to reconcile net income to net cash provided by
    operating activities: |                                                                                 |                                                     |       |        |        |   |       |       |       |   |       |       
|                                                                                      | Gain on disposal of subsidiaries and businesses                                 |                                                     |       |       |        |   |       | (4.1  | )     |   |       | (84.8  | )     
|                                                                                      | Loss (gain) on sale of land and buildings                                       |                                                     |       | 0.7    |        |   |       | (4.2  | )     |   |       |       |       
|                                                                                      | Gain on disposal of investments and negotiable securities                       |                                                     |       |       |        |   |       |      |       |   |       | (0.4   | )     
|                                                                                      | Impairment loss on investment                                                   |                                                     |       | 2.1    |        |   |       | 2.2   |       |   |       |       |       
|                                                                                      | Depreciation and amortization                                                   |                                                     |       | 36.3   |        |   |       | 36.4  |       |   |       | 28.7   |       
|                                                                                      | Deferred income taxes                                                           |                                                     |       | 11.1   |        |   |       | 14.6  |       |   |       | (10.6  | )     
|                                                                                      | Prepaid pension cost                                                            |                                                     |       | 7.6    |        |   |       | 1.8   |       |   |       | 2.3    |       
|                                                                                      | Tax benefit from stock options exercised                                        |                                                     |       | 0.4    |        |   |       | 0.4   |       |   |       | 0.8    |       
|                                                                                      | Stock compensation                                                              |                                                     |       | 3.0    |        |   |       | 3.3   |       |   |       | 1.9    |       
|                                                                                      | Other                                                                           |                                                     |       |       |        |   |       | 0.7   |       |   |       |       |       
|Changes in operating assets and liabilities:                                          |                                                                                 |                                                     |       |        |        |   |       |       |       |   |       |       
|                                                                                      | Accounts receivable                                                             |                                                     |       | (3.7   | )      |   |       | (24.8 | )     |   |       | (10.8  | )     
|                                                                                      | Inventories                                                                     |                                                     |       | 4.3    |        |   |       | (24.9 | )     |   |       | (8.5   | )     
|                                                                                      | Prepaid expenses and other current assets                                       |                                                     |       | 32.6   |        |   |       | 2.1   |       |   |       | (12.5  | )     
|                                                                                      | Accounts payable                                                                |                                                     |       | 15.0   |        |   |       | 1.3   |       |   |       | 14.5   |       
|                                                                                      | Accrued liabilities and other liabilities                                       |                                                     |       | (16.5  | )      |   |       | 28.2  |       |   |       | (26.3  | )     
|                                                                                      |                                                                                 |                                                     |       |        |        |   |       |       |      
|                                                                                      |                                                                                 | Net cash provided by operating activities           |       |        | 219.8  |   |       |       | 162.6 |   |       |        | 64.8   |  
|                                                                                      |                                                                                 |                                                     |       |        |        |   |       |       |      
|                                                                                      | Cash flows from investing activities:                                           |                                                     |       |        |        |   |       |       |       |   |       |        |       
|                                                                                      | Purchases of property, plant and equipment                                      |                                                     |       | (153.2 | )      |   |       | (74.8 | )     |   |       | (90.2  | )     
|                                                                                      | Proceeds from sale of property, plant and equipment                             |                                                     |       | 3.4    |        |   |       | 10.9  |       |   |       | 49.0   |       
|                                                                                      | Proceeds from disposal of subsidiaries and businesses, net of
    cash invested |                                                     |       |       |        |   |       | 5.0   |       |   |       | 334.4  |       
|                                                                                      | Proceeds from sale and maturity of investments                                  |                                                     |       |       |        |   |       |      |       |   |       | 1.1    |       
|                                                                                      | Collections on loans receivable                                                 |                                                     |       | 0.6    |        |   |       | 0.9   |       |   |       | 0.7    |       
|                                                                                      | Cash transferred on establishment of ABN 60 Foundation                          |                                                     |       |       |        |   |       |      |       |   |       | (57.1  | )     
|                                                                                      |                                                                                 |                                                     |       |        |        |   |       |       |      
|                                                                                      |                                                                                 | Net cash (used in) provided by investing activities |       |        | (149.2 | ) |       |       | (58.0 | ) |       |        | 237.9  |  
|                                                                                      |                                                                                 |                                                     |       |        |        |   |       |       |      
|Cash flows from financing activities:                                                 |                                                                                 |                                                     |       |        |        |   |       |       |       |   |       |       
|                                                                                      | Net proceeds from line of credit                                                |                                                     |       | 0.5    |        |   |       | 0.5   |       |   |       | 3.1    |       
|                                                                                      | Proceeds from borrowings                                                        |                                                     |       |       |        |   |       |      |       |   |       | 2.4    |       
|                                                                                      | Repayments of borrowings                                                        |                                                     |       | (17.6  | )      |   |       |      |       |   |       | (160.0 | )     
|                                                                                      | Proceeds from issuance of shares                                                |                                                     |       | 2.6    |        |   |       | 3.2   |       |   |       | 4.2    |       
|                                                                                      | Repayments of capital                                                           |                                                     |       |       |        |   |       | (68.7 | )     |   |       | (94.8  | )     
|                                                                                      | Dividends paid                                                                  |                                                     |       | (13.7  | )      |   |       | (22.9 | )     |   |       | (34.3  | )     
|                                                                                      |                                                                                 |                                                     |       |        |        |   |       |       |      
|                                                                                      |                                                                                 | Net cash used in financing activities               |       |        | (28.2  | ) |       |       | (87.9 | ) |       |        | (279.4 | )
|                                                                                      |                                                                                 |                                                     |       |        |        |   |       |       |      
|Effects of exchange rate changes on cash                                              |                                                                                 |                                                     | (1.2  | )      |        |   | 0.5   |       |       |   | 0.7   |       
|Net increase in cash and cash equivalents                                             |                                                                                 |                                                     | 41.2  |        |        |   | 17.2  |       |       |   | 24.0  |       
|Cash and cash equivalents at beginning of period                                      |                                                                                 |                                                     | 72.3  |        |        |   | 55.1  |       |       |   | 31.1  |       
|                                                                                      |                                                                                 |                                                     |       |        |        |   |       |       |      
|Cash and cash equivalents at end of period                                            |                                                                                 |                                                     | 113.5 |        |        |   | 72.3  |       |       |   | 55.1  |       
|                                                                                      |                                                                                 |                                                     |       |        |        |   |       |       |      
|Components of cash and cash equivalents:                                              |                                                                                 |                                                     |       |        |        |   |       |       |       |   |       |       
|                                                                                      | Cash at bank and on hand                                                        |                                                     |       | 28.6   |        |   |       | 24.6  |       |   |       | 39.7   |       
|                                                                                      | Short-term deposits                                                             |                                                     |       | 84.9   |        |   |       | 47.7  |       |   |       | 14.9   |       
|                                                                                      |                                                                                 |                                                     |       |        |        |   |       |       |      
|                                                                                      | Cash and cash equivalents  continuing operations                               |                                                     |       | 113.5  |        |   |       | 72.3  |       |   |       | 54.6   |       
|                                                                                      | Cash at bank and on hand  discontinued operations                              |                                                     |       |       |        |   |       |      |       |   |       | 0.5    |       
|                                                                                      |                                                                                 |                                                     |       |        |        |   |       |       |      
|Cash and cash equivalents at end of period                                            |                                                                                 | $                                                   | 113.5 |        |        | $ | 72.3  |       |       | $ | 55.1  |       
|                                                                                      |                                                                                 |                                                     |       |        |        |   |       |       |      
|Supplemental disclosure of cash flow activities:                                      |                                                                                 |                                                     |       |        |        |   |       |       |       |   |       |       
|Cash paid during the period for interest, net of amounts
    capitalised              |                                                                                 | $                                                   | 10.7  |        |        | $ | 11.7  |       |       | $ | 28.1  |       
|Cash paid (refunded) during the period for income taxes, net                          |                                                                                 | $                                                   | 15.7  |        |        | $ | (6.5  | )     |       | $ | 77.3  |       



F-5



---



##### Table of Contents



JAMES HARDIE INDUSTRIES N.V. AND SUBSIDIARIES





CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS
EQUITY


|                                                                                                                  |                                    |                                                                          |       |            |         |          |          |              |   |   |             |       |   |               |      |   |       |   |       |   |      |   |       |       |       |  
|----------------------------------------------------------------------------------------------------------------- | ---------------------------------- | ------------------------------------------------------------------------ | ----- | ---------- | ------- | -------- | -------- | ------------ | - | - | ----------- | ----- | - | ------------- | ---- | - | ----- | - | ----- | - | ---- | - | ----- | ----- | ----- | -
|                                                                                                                  |                                    |                                                                          |       |            |         | Retained |          |              |   |   | Accumulated |       |   |              
|                                                                                                                  |                                    |                                                                          |       | Additional |         |          | Earnings |              |   |   |             | Other |   |               |     
|                                                                                                                  |                                    | Common                                                                   |       |            | Paid-In |          |          | (Accumulated |   |   | Employee    |       |   | Comprehensive |      |   |      
|                                                                                                                  |                                    | Stock                                                                    |       |            | Capital |          |          | Deficit)     |   |   | Loans       |       |   | Income (Loss) |      |   | Total |  
|                                                                                                                  |                                    |                                                                          |       |            |         |          |          |              |   |   |             |       |   |               |      |   |       |  
|                                                                                                                  |                                    | (Millions of US dollars)                                                 |      
|Balances as of March 31, 2002                                                                                     |                                    | $                                                                        | 205.4 |            |         | $        | 323.5    |              |   | $ | (91.8       | )     |   | $             | (2.1 | ) |       | $ | (64.3 | ) |      | $ | 370.7 |      
|Comprehensive income (loss):                                                                                      |                                    |                                                                          |       |            |         |          |          |              |   |   |             |       |   |               |      |   |       |   |       |   |      |   |       |      
|                                                                                                                  | Net income                         |                                                                          |       |           |         |          |          |             |   |   |             | 170.5 |   |               |      |  |       |   |       |  |      |   |       | 170.5 |      
|                                                                                                                  | Other comprehensive income (loss): |                                                                          |       |            |         |          |          |              |   |   |             |       |   |               |      |   |       |   |       |   |      |   |       |       |      
|                                                                                                                  |                                    | Amortization of unrealized transition loss on derivative
    instruments |       |            |        |          |          |              |  |   |             |       |  |               |      |   |      |   |       |   | 1.1  |   |       |       | 1.1   |  
|                                                                                                                  |                                    | Foreign currency translation gain                                        |       |            |        |          |          |              |  |   |             |       |  |               |      |   |      |   |       |   | 21.9 |   |       |       | 21.9  |  
|                                                                                                                  |                                    | Additional minimum pension liability adjustment                          |       |            |        |          |          |              |  |   |             |       |  |               |      |   |      |   |       |   | (7.7 | ) |       |       | (7.7  | )
|                                                                                                                  |                                    |                                                                          |       |            |         |          |          |              |   |   |             |       |   |               |      |   |       |  
|                                                                                                                  |                                    | Other comprehensive income                                               |       |            |        |          |          |              |  |   |             |       |  |               |      |   |      |   |       |   | 15.3 |   |       |       | 15.3  |  
|                                                                                                                  |                                    |                                                                          |       |            |         |          |          |              |   |   |             |       |   |               |      |   |       |  
|                                                                                                                  |                                    | Total comprehensive income                                               |       |            |         |          |          |              |   |   |             |       |   |               |      |   |       |   |       |   |      |   |       |       | 185.8 |  
|Dividends paid                                                                                                    |                                    |                                                                          |      |            |         |          |         |              |   |   | (34.3       | )     |   |               |     |   |       |   |      |   |      |   | (34.3 | )    
|Conversion of common stock from Euro 0.50 par value to Euro
    0.85 par value                                    |                                    |                                                                          | 157.9 |            |         |          | (157.9   | )            |   |   |            |       |   |               |     |   |       |   |      |   |      |   |      |      
|Conversion of common stock from Euro 0.85 par value to Euro
    0.64 par value and subsequent return of capital   |                                    |                                                                          | (94.8 | )          |         |          |         |              |   |   |            |       |   |               |     |   |       |   |      |   |      |   | (94.8 | )    
|Stock compensation                                                                                                |                                    |                                                                          |      |            |         |          | 1.9      |              |   |   |            |       |   |               |     |   |       |   |      |   |      |   | 1.9   |      
|Tax benefit from stock options exercised                                                                          |                                    |                                                                          |      |            |         |          | 0.8      |              |   |   |            |       |   |               |     |   |       |   |      |   |      |   | 0.8   |      
|Employee loans repaid                                                                                             |                                    |                                                                          |      |            |         |          |         |              |   |   |            |       |   |               | 0.4  |   |       |   |      |   |      |   | 0.4   |      
|Stock options exercised                                                                                           |                                    |                                                                          | 1.2   |            |         |          | 3.0      |              |   |   |            |       |   |               |     |   |       |   |      |   |      |   | 4.2   |      
|                                                                                                                  |                                    |                                                                          |       |            |         |          |          |              |   |   |             |       |   |               |      |   |       |  
|Balances as of March 31, 2003                                                                                     |                                    | $                                                                        | 269.7 |            |         | $        | 171.3    |              |   | $ | 44.4        |       |   | $             | (1.7 | ) |       | $ | (49.0 | ) |      | $ | 434.7 |      
|                                                                                                                  |                                    |                                                                          |       |            |         |          |          |              |   |   |             |       |   |               |      |   |       |  
|Comprehensive income (loss):                                                                                      |                                    |                                                                          |       |            |         |          |          |              |   |   |             |       |   |               |      |   |       |   |       |   |      |   |       |      
|                                                                                                                  | Net income                         |                                                                          |       |           |         |          |          |             |   |   |             | 129.6 |   |               |      |  |       |   |       |  |      |   |       | 129.6 |      
|                                                                                                                  | Other comprehensive income (loss): |                                                                          |       |            |         |          |          |              |   |   |             |       |   |               |      |   |       |   |       |   |      |   |       |       |      
|                                                                                                                  |                                    | Amortization of unrealized transition loss on derivative
    instruments |       |            |        |          |          |              |  |   |             |       |  |               |      |   |      |   |       |   | 1.1  |   |       |       | 1.1   |  
|                                                                                                                  |                                    | Foreign currency translation gain                                        |       |            |        |          |          |              |  |   |             |       |  |               |      |   |      |   |       |   | 16.0 |   |       |       | 16.0  |  
|                                                                                                                  |                                    | Unrealized loss on available-for-sale securities                         |       |            |        |          |          |              |  |   |             |       |  |               |      |   |      |   |       |   | (0.1 | ) |       |       | (0.1  | )
|                                                                                                                  |                                    | Additional minimum pension liability adjustment                          |       |            |        |          |          |              |  |   |             |       |  |               |      |   |      |   |       |   | 7.7  |   |       |       | 7.7   |  
|                                                                                                                  |                                    |                                                                          |       |            |         |          |          |              |   |   |             |       |   |               |      |   |       |  
|                                                                                                                  |                                    | Other comprehensive income                                               |       |            |        |          |          |              |  |   |             |       |  |               |      |   |      |   |       |   | 24.7 |   |       |       | 24.7  |  
|                                                                                                                  |                                    |                                                                          |       |            |         |          |          |              |   |   |             |       |   |               |      |   |       |  
|                                                                                                                  |                                    | Total comprehensive income                                               |       |            |         |          |          |              |   |   |             |       |   |               |      |   |       |   |       |   |      |   |       |       | 154.3 |  
|Dividends paid                                                                                                    |                                    |                                                                          |      |            |         |          |         |              |   |   | (22.9       | )     |   |               |     |   |       |   |      |   |      |   | (22.9 | )    
|Conversion of common stock from Euro 0.64 par value to Euro
    0.73 par value                                    |                                    |                                                                          | 48.4  |            |         |          | (48.4    | )            |   |   |            |       |   |               |     |   |       |   |      |   |      |   |      |      
|Conversion of common stock from Euro 0.73 par value to Euro
    0.5995 par value and subsequent return of capital |                                    |                                                                          | (68.7 | )          |         |          |         |              |   |   |            |       |   |               |     |   |       |   |      |   |      |   | (68.7 | )    
|Conversion of common stock from Euro 0.5995 par value to
    Euro 0.59 par value                                  |                                    |                                                                          | (5.0  | )          |         |          | 5.0      |              |   |   |            |       |   |               |     |   |       |   |      |   |      |   |      |      
|Stock compensation                                                                                                |                                    |                                                                          |      |            |         |          | 3.3      |              |   |   |            |       |   |               |     |   |       |   |      |   |      |   | 3.3   |      
|Tax benefit from stock options exercised                                                                          |                                    |                                                                          |      |            |         |          | 0.4      |              |   |   |            |       |   |               |     |   |       |   |      |   |      |   | 0.4   |      
|Employee loans repaid                                                                                             |                                    |                                                                          |      |            |         |          |         |              |   |   |            |       |   |               | 0.4  |   |       |   |      |   |      |   | 0.4   |      
|Stock options exercised                                                                                           |                                    |                                                                          | 0.8   |            |         |          | 2.4      |              |   |   |            |       |   |               |     |   |       |   |      |   |      |   | 3.2   |      
|                                                                                                                  |                                    |                                                                          |       |            |         |          |          |              |   |   |             |       |   |               |      |   |       |  
|Balances as of March 31, 2004                                                                                     |                                    | $                                                                        | 245.2 |            |         | $        | 134.0    |              |   | $ | 151.1       |       |   | $             | (1.3 | ) |       | $ | (24.3 | ) |      | $ | 504.7 |      
|                                                                                                                  |                                    |                                                                          |       |            |         |          |          |              |   |   |             |       |   |               |      |   |       |  
|Comprehensive income (loss):                                                                                      |                                    |                                                                          |       |            |         |          |          |              |   |   |             |       |   |               |      |   |       |   |       |   |      |   |       |      
|                                                                                                                  | Net income                         |                                                                          |       |           |         |          |          |             |   |   |             | 126.9 |   |               |      |  |       |   |       |  |      |   |       | 126.9 |      
|                                                                                                                  | Other comprehensive income (loss): |                                                                          |       |            |         |          |          |              |   |   |             |       |   |               |      |   |       |   |       |   |      |   |       |       |      
|                                                                                                                  |                                    | Amortization of unrealized transition loss on derivative
    instruments |       |            |        |          |          |              |  |   |             |       |  |               |      |   |      |   |       |   | 1.1  |   |       |       | 1.1   |  
|                                                                                                                  |                                    | Foreign currency translation gain                                        |       |            |        |          |          |              |  |   |             |       |  |               |      |   |      |   |       |   | (0.9 | ) |       |       | (0.9  | )
|                                                                                                                  |                                    |                                                                          |       |            |         |          |          |              |   |   |             |       |   |               |      |   |       |  
|                                                                                                                  |                                    | Other comprehensive income                                               |       |            |        |          |          |              |  |   |             |       |  |               |      |   |      |   |       |   | 0.2  |   |       |       | 0.2   |  
|                                                                                                                  |                                    |                                                                          |       |            |         |          |          |              |   |   |             |       |   |               |      |   |       |  
|                                                                                                                  |                                    | Total comprehensive income                                               |       |            |         |          |          |              |   |   |             |       |   |               |      |   |       |   |       |   |      |   |       |       | 127.1 |  
|Dividends paid                                                                                                    |                                    |                                                                          |      |            |         |          |         |              |   |   | (13.7       | )     |   |               |     |   |       |   |      |   |      |   | (13.7 | )    
|Stock compensation                                                                                                |                                    |                                                                          |      |            |         |          | 3.0      |              |   |   |            |       |   |               |     |   |       |   |      |   |      |   | 3.0   |      
|Tax benefit from stock options exercised                                                                          |                                    |                                                                          |      |            |         |          | 0.4      |              |   |   |            |       |   |               |     |   |       |   |      |   |      |   | 0.4   |      
|Employee loans repaid                                                                                             |                                    |                                                                          |      |            |         |          |         |              |   |   |            |       |   |               | 0.6  |   |       |   |      |   |      |   | 0.6   |      
|Stock options exercised                                                                                           |                                    |                                                                          | 0.6   |            |         |          | 2.0      |              |   |   |            |       |   |               |     |   |       |   |      |   |      |   | 2.6   |      
|                                                                                                                  |                                    |                                                                          |       |            |         |          |          |              |   |   |             |       |   |               |      |   |       |  
|Balances as of March 31, 2005                                                                                     |                                    | $                                                                        | 245.8 |            |         | $        | 139.4    |              |   | $ | 264.3       |       |   | $             | (0.7 | ) |       | $ | (24.1 | ) |      | $ | 624.7 |      
|                                                                                                                  |                                    |                                                                          |       |            |         |          |          |              |   |   |             |       |   |               |      |   |       |  



F-6



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##### Table of Contents



JAMES HARDIE INDUSTRIES N.V. AND SUBSIDIARIES





NOTES TO CONSOLIDATED FINANCIAL STATEMENTS




|   |                                     
|-- | ------------------------------------
|1. | Background and Basis of Presentation



| |                     
| | --------------------
| | Nature of Operations





| |           
| | ----------
| | Background









| |                      
| | ---------------------
| | Basis of Presentation







|   |                                           
|-- | ------------------------------------------
|2. | Summary of Significant Accounting Policies



| |                      
| | ---------------------
| | Accounting Principles



F-7



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##### Table of Contents



JAMES HARDIE INDUSTRIES N.V. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




| |                 
| | ----------------
| | Use of Estimates





| |                  
| | -----------------
| | Reclassifications





| |                             
| | ----------------------------
| | Foreign Currency Translation





| |                          
| | -------------------------
| | Cash and Cash Equivalents





| |            
| | -----------
| | Inventories





| |                              
| | -----------------------------
| | Property, Plant and Equipment



|                               |  |       |         | 
|------------------------------ |  | ----- | ------- | 
|                               |  | Years |        
|                               |  |       |        
|Buildings                      |  |       | 40      | 
|Building improvements          |  |       | 5 to 10 | 
|Manufacturing machinery        |  |       | 20      | 
|General equipment              |  |       | 5 to 10 | 
|Computer equipment             |  |       | 3 to 4  | 
|Office furniture and equipment |  |       | 3 to 10 | 



F-8



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##### Table of Contents



JAMES HARDIE INDUSTRIES N.V. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




| |                  
| | -----------------
| | Intangible Assets





| |                                
| | -------------------------------
| | Impairment of Long-Lived Assets





| |              
| | -------------
| | Environmental





| |                          
| | -------------------------
| | Mineral Acquisition Costs







| |                    
| | -------------------
| | Revenue Recognition



F-9



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##### Table of Contents



JAMES HARDIE INDUSTRIES N.V. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






| |                   
| | ------------------
| | Cost of Goods Sold





| |                      
| | ---------------------
| | Shipping and Handling





| |                                    
| | -----------------------------------
| | Selling, General and Administrative





| |            
| | -----------
| | Advertising





| |                           
| | --------------------------
| | Accrued Product Warranties





| |             
| | ------------
| | Income Taxes





| |                      
| | ---------------------
| | Financial Instruments



F-10



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##### Table of Contents



JAMES HARDIE INDUSTRIES N.V. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)








| |                         
| | ------------------------
| | Stock-Based Compensation





| |                       
| | ----------------------
| | Employee Benefit Plans





| |          
| | ---------
| | Dividends





| |                   
| | ------------------
| | Earnings per Share



F-11



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##### Table of Contents



JAMES HARDIE INDUSTRIES N.V. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                                  |  |                      |       |  |      |  |       |      |  |  |       | 
|--------------------------------- |  | -------------------- | ----- |  | ---- |  | ----- | ---- |  |  | ----- | 
|                                  |  | Years Ended March 31 |      
|                                  |  |                      |      
|                                  |  | 2005                 |       |  | 2004 |  |       | 2003 | 
|                                  |  |                      |       |  |      |  |       |      | 
|                                  |  | (Millions of shares) |      
|Basic common shares outstanding   |  |                      | 458.9 |  |      |  | 458.1 |      |  |  | 456.7 | 
|Dilutive effect of stock options  |  |                      | 2.1   |  |      |  | 3.3   |      |  |  | 2.7   | 
|                                  |  |                      |       |  |      |  |       |      | 
|Diluted common shares outstanding |  |                      | 461.0 |  |      |  | 461.4 |      |  |  | 459.4 | 
|                                  |  |                      |       |  |      |  |       |      | 

|                               |  |                          |      |  |      |   |      |      |  |   |      | 
|------------------------------ |  | ------------------------ | ---- |  | ---- | - | ---- | ---- |  | - | ---- | 
|                               |  | 2005                     |      |  | 2004 |   |      | 2003 | 
|                               |  |                          |      |  |      |   |      |      | 
|                               |  | (Continuing operations  |     
|                               |  | US dollar)               |     
|Net income per share  basic   |  | $                        | 0.28 |  |      | $ | 0.28 |      |  | $ | 0.37 | 
|Net income per share  diluted |  | $                        | 0.28 |  |      | $ | 0.28 |      |  | $ | 0.37 | 





| |                                              
| | ---------------------------------------------
| | Accumulated Other Comprehensive Income (Loss)





| |                        
| | -----------------------
| | Extinguishments of Debt





| |                                 
| | --------------------------------
| | Recent Accounting Pronouncements



| |                                                                            
| | ---------------------------------------------------------------------------
| | Employers Disclosures about Pensions and Other
    Postretirement Benefits



F-12



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##### Table of Contents



JAMES HARDIE INDUSTRIES N.V. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






| |                                            
| | -------------------------------------------
| | Consolidation of Variable Interest Entities





| |                                                                                              
| | ---------------------------------------------------------------------------------------------
| | The Meaning of Other-Than-Temporary Impairment and its
    Application to Certain Investments





| |                
| | ---------------
| | Inventory Costs





| |                           
| | --------------------------
| | American Jobs Creation Act



F-13



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##### Table of Contents



JAMES HARDIE INDUSTRIES N.V. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






| |                                 
| | --------------------------------
| | Exchanges of Non-monetary Assets





| |                    
| | -------------------
| | Share-Based Payment





| |                                         
| | ----------------------------------------
| | Conditional Asset Retirement Obligations





|   |                          
|-- | -------------------------
|3. | Cash and Cash Equivalents



|                         |                                 |              |      |       |      |   |      |      | 
|------------------------ | ------------------------------- | ------------ | ---- | ----- | ---- | - | ---- | ---- | 
|                         |                                 | March 31     |     
|                         |                                 |              |     
|                         |                                 | 2005         |      |       | 2004 |  
|                         |                                 |              |      |       |      |  
|                         |                                 | (Millions of |     
|                         |                                 | US dollars)  |     
|Cash at bank and on hand |                                 | $            | 28.6 |       |      | $ | 24.6 |     
|Short-term deposits      |                                 |              | 84.9 |       |      |   | 47.7 |     
|                         |                                 |              |      |       |      |  
|                         | Total cash and cash equivalents |              | $    | 113.5 |      |   | $    | 72.3 | 
|                         |                                 |              |      |       |      |  

F-14



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##### Table of Contents



JAMES HARDIE INDUSTRIES N.V. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






|   |                              
|-- | -----------------------------
|4. | Accounts and Notes Receivable



|                                |                                     |              |       |       |      |   |       |       | 
|------------------------------- | ----------------------------------- | ------------ | ----- | ----- | ---- | - | ----- | ----- | 
|                                |                                     | March 31     |      
|                                |                                     |              |      
|                                |                                     | 2005         |       |       | 2004 |  
|                                |                                     |              |       |       |      |  
|                                |                                     | (Millions of |      
|                                |                                     | US dollars)  |      
|Trade receivables               |                                     | $            | 121.6 |       |      | $ | 109.9 |      
|Other receivables and advances  |                                     |              | 7.1   |       |      |   | 9.7   |      
|Allowance for doubtful accounts |                                     |              | (1.5  | )     |      |   | (1.2  | )    
|                                |                                     |              |       |       |      |  
|                                | Total accounts and notes receivable |              | $     | 127.2 |      |   | $     | 118.4 | 
|                                |                                     |              |       |       |      |  



|                           |  |              |      |   |      |   |      |  
|-------------------------- |  | ------------ | ---- | - | ---- | - | ---- | -
|                           |  | March 31     |     
|                           |  |              |     
|                           |  | 2005         |      |   | 2004 |  
|                           |  |              |      |   |      |  
|                           |  | (Millions of |     
|                           |  | US dollars)  |     
|Balance at April 1         |  | $            | 1.2  |   |      | $ | 1.0  |  
|Charged to expense         |  |              | 0.4  |   |      |   | 0.9  |  
|Costs and deductions       |  |              | (0.1 | ) |      |   | (0.8 | )
|Foreign currency movements |  |              |     |   |      |   | 0.1  |  
|                           |  |              |      |   |      |  
|Balance at March 31        |  | $            | 1.5  |   |      | $ | 1.2  |  
|                           |  |              |      |   |      |  



|   |            
|-- | -----------
|5. | Inventories



|                                                        |                   |              |      |      |      |   |      |       | 
|------------------------------------------------------- | ----------------- | ------------ | ---- | ---- | ---- | - | ---- | ----- | 
|                                                        |                   | March 31     |     
|                                                        |                   |              |     
|                                                        |                   | 2005         |      |      | 2004 |  
|                                                        |                   |              |      |      |      |  
|                                                        |                   | (Millions of |     
|                                                        |                   | US dollars)  |     
|Finished goods                                          |                   | $            | 71.1 |      |      | $ | 76.7 |      
|Work-in-process                                         |                   |              | 8.5  |      |      |   | 6.4  |      
|Raw materials and supplies                              |                   |              | 22.4 |      |      |   | 22.3 |      
|Provision for obsolete finished goods and raw materials |                   |              | (2.1 | )    |      |   | (2.2 | )    
|                                                        |                   |              |      |      |      |  
|                                                        | Total inventories |              | $    | 99.9 |      |   | $    | 103.2 | 
|                                                        |                   |              |      |      |      |  

F-15



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##### Table of Contents



JAMES HARDIE INDUSTRIES N.V. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|   |                              
|-- | -----------------------------
|6. | Property, Plant and Equipment



|                                         |  |                          |      |   |           |           |       |           |              |   |             |   |  |       |       |   |  |   |        |  
|---------------------------------------- |  | ------------------------ | ---- | - | --------- | --------- | ----- | --------- | ------------ | - | ----------- | - |  | ----- | ----- | - |  | - | ------ | -
|                                         |  |                          |      |   |           | Machinery |       |           |              |   |            
|                                         |  |                          |      |   |           | and       |       |           | Construction |   |             |  
|                                         |  | Land                     |      |   | Buildings |           |       | Equipment |              |   | in Progress |   |  | Total |      
|                                         |  |                          |      |   |           |           |       |           |              |   |             |   |  |       |      
|                                         |  | (Millions of US dollars) |     
|Balance at April 1, 2003:                |  |                          |      |   |           |           |       |           |              |   |             |   |  |       |       |   |  |   |        |  
|Cost                                     |  | $                        | 8.6  |   |           | $         | 119.8 |           |              | $ | 444.4       |   |  | $     | 107.0 |   |  | $ | 679.8  |  
|Accumulated depreciation                 |  |                          |     |   |           |           | (20.9 | )         |              |   | (138.9      | ) |  |       |      |   |  |   | (159.8 | )
|                                         |  |                          |      |   |           |           |       |           |              |   |             |   |  |       |      
|Net book value                           |  |                          | 8.6  |   |           |           | 98.9  |           |              |   | 305.5       |   |  |       | 107.0 |   |  |   | 520.0  |  
|Changes in net book value:               |  |                          |      |   |           |           |       |           |              |   |             |   |  |       |       |   |  |   |        |  
|Capital expenditures                     |  |                          | 3.5  |   |           |           | 25.1  |           |              |   | 89.5        |   |  |       | (44.0 | ) |  |   | 74.1   |  
|Retirements and sales                    |  |                          | (0.8 | ) |           |           | (5.3  | )         |              |   | (0.6        | ) |  |       |      |   |  |   | (6.7   | )
|Depreciation                             |  |                          |     |   |           |           | (4.7  | )         |              |   | (31.2       | ) |  |       |      |   |  |   | (35.9  | )
|Other movement                           |  |                          |     |   |           |           |      |           |              |   | (0.7        | ) |  |       |      |   |  |   | (0.7   | )
|Foreign currency translation adjustments |  |                          |     |   |           |           |      |           |              |   | 16.3        |   |  |       |      |   |  |   | 16.3   |  
|                                         |  |                          |      |   |           |           |       |           |              |   |             |   |  |       |      
|Total changes                            |  |                          | 2.7  |   |           |           | 15.1  |           |              |   | 73.3        |   |  |       | (44.0 | ) |  |   | 47.1   |  
|Balance at March 31, 2004:               |  |                          |      |   |           |           |       |           |              |   |             |   |  |       |       |   |  |   |        |  
|Cost                                     |  |                          | 11.3 |   |           |           | 135.0 |           |              |   | 562.8       |   |  |       | 63.0  |   |  |   | 772.1  |  
|Accumulated depreciation                 |  |                          |     |   |           |           | (21.0 | )         |              |   | (184.0      | ) |  |       |      |   |  |   | (205.0 | )
|                                         |  |                          |      |   |           |           |       |           |              |   |             |   |  |       |      
|Net book value                           |  | $                        | 11.3 |   |           | $         | 114.0 |           |              | $ | 378.8       |   |  | $     | 63.0  |   |  | $ | 567.1  |  
|                                         |  |                          |      |   |           |           |       |           |              |   |             |   |  |       |      

|                                         |  |                          |      |  |           |           |       |           |              |   |             |   |  |       |       |   |  |   |        |  
|---------------------------------------- |  | ------------------------ | ---- |  | --------- | --------- | ----- | --------- | ------------ | - | ----------- | - |  | ----- | ----- | - |  | - | ------ | -
|                                         |  |                          |      |  |           | Machinery |       |           |              |   |            
|                                         |  |                          |      |  |           | and       |       |           | Construction |   |             |  
|                                         |  | Land                     |      |  | Buildings |           |       | Equipment |              |   | in Progress |   |  | Total |      
|                                         |  |                          |      |  |           |           |       |           |              |   |             |   |  |       |      
|                                         |  | (Millions of US dollars) |     
|Balance at 1 April 2004:                 |  |                          |      |  |           |           |       |           |              |   |             |   |  |       |       |   |  |   |        |  
|Cost                                     |  | $                        | 11.3 |  |           | $         | 135.0 |           |              | $ | 562.8       |   |  | $     | 63.0  |   |  | $ | 772.1  |  
|Accumulated depreciation                 |  |                          |     |  |           |           | (21.0 | )         |              |   | (184.0      | ) |  |       |      |   |  |   | (205.0 | )
|                                         |  |                          |      |  |           |           |       |           |              |   |             |   |  |       |      
|Net book value                           |  |                          | 11.3 |  |           |           | 114.0 |           |              |   | 378.8       |   |  |       | 63.0  |   |  |   | 567.1  |  
|Changes in net book value:               |  |                          |      |  |           |           |       |           |              |   |             |   |  |       |       |   |  |   |        |  
|Capital expenditures                     |  |                          | 0.2  |  |           |           | 3.2   |           |              |   | 32.5        |   |  |       | 117.1 |   |  |   | 153.0  |  
|Retirements and sales                    |  |                          |     |  |           |           |      |           |              |   |            |   |  |       | (4.1  | ) |  |   | (4.1   | )
|Depreciation                             |  |                          |     |  |           |           | (4.5  | )         |              |   | (31.8       | ) |  |       |      |   |  |   | (36.3  | )
|Other movement                           |  |                          |     |  |           |           |      |           |              |   | 3.4         |   |  |       |      |   |  |   | 3.4    |  
|Foreign currency translation adjustments |  |                          |     |  |           |           |      |           |              |   | 2.6         |   |  |       |      |   |  |   | 2.6    |  
|                                         |  |                          |      |  |           |           |       |           |              |   |             |   |  |       |      
|Total changes                            |  |                          | 0.2  |  |           |           | (1.3  | )         |              |   | 6.7         |   |  |       | 113.0 |   |  |   | 118.6  |  
|Balance at March 31, 2005:               |  |                          |      |  |           |           |       |           |              |   |             |   |  |       |       |   |  |   |        |  
|Cost                                     |  |                          | 11.5 |  |           |           | 131.1 |           |              |   | 606.6       |   |  |       | 176.6 |   |  |   | 925.8  |  
|Accumulated depreciation                 |  |                          |     |  |           |           | (24.4 | )         |              |   | (215.7      | ) |  |       |      |   |  |   | (240.1 | )
|                                         |  |                          |      |  |           |           |       |           |              |   |             |   |  |       |      
|Net book value                           |  | $                        | 11.5 |  |           | $         | 106.7 |           |              | $ | 390.9       |   |  | $     | 176.6 |   |  | $ | 685.7  |  
|                                         |  |                          |      |  |           |           |       |           |              |   |             |   |  |       |      



F-16



---



##### Table of Contents



JAMES HARDIE INDUSTRIES N.V. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






|   |                  
|-- | -----------------
|7. | Intangible Assets



|                                         |  |                          |      |   |       |   |      |       |  |   |      |  
|---------------------------------------- |  | ------------------------ | ---- | - | ----- | - | ---- | ----- |  | - | ---- | -
|                                         |  | Goodwill                 |      |   | Other |   |      | Total | 
|                                         |  |                          |      |   |       |   |      |       | 
|                                         |  | (Millions of US dollars) |     
|Balance at April 1, 2004:                |  |                          |      |   |       |   |      |       |  |   |      |  
|Cost                                     |  | $                        | 2.3  |   |       | $ | 2.1  |       |  | $ | 4.4  |  
|Accumulated amortization                 |  |                          | (0.2 | ) |       |   | (1.2 | )     |  |   | (1.4 | )
|                                         |  |                          |      |   |       |   |      |       | 
|Net book value                           |  |                          | 2.1  |   |       |   | 0.9  |       |  |   | 3.0  |  
|Changes in net book value:               |  |                          |      |   |       |   |      |       |  |   |      |  
|Amortization                             |  |                          |     |   |       |   |     |       |  |   |     |  
|Foreign currency translation adjustments |  |                          | 0.1  |   |       |   |     |       |  |   | 0.1  |  
|                                         |  |                          |      |   |       |   |      |       | 
|Total changes                            |  |                          | 0.1  |   |       |   |     |       |  |   | 0.1  |  
|Balance at March 31, 2005:               |  |                          |      |   |       |   |      |       |  |   |      |  
|Cost                                     |  |                          | 2.4  |   |       |   | 2.1  |       |  |   | 4.5  |  
|Accumulated amortization                 |  |                          | (0.2 | ) |       |   | (1.2 | )     |  |   | (1.4 | )
|                                         |  |                          |      |   |       |   |      |       | 
|Net book value                           |  | $                        | 2.2  |   |       | $ | 0.9  |       |  | $ | 3.1  |  
|                                         |  |                          |      |   |       |   |      |       | 





|   |                 
|-- | ----------------
|8. | Retirement Plans





F-17



---



##### Table of Contents



JAMES HARDIE INDUSTRIES N.V. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






| |   |                                                                                                                                                                         
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | to achieve a rate of return (net of tax and investment expenses)
    that exceeds inflation (CPI) increases by at least
    3% per annum over a moving five year period;
|
| |  | to achieve a rate of return (net of tax and investment expenses)
    above the median result for the Mercer Pooled Fund Survey
    over a rolling three year period; and
|
| |  | over shorter periods, outperform the notional return of the
    benchmark mix of investments.                                                                           





|                  |  |  |        | 
|----------------- |  |  | ------ | 
|Equity securities |  |  | 40-75% | 
|Debt securities   |  |  | 15-60% | 
|Real Estate       |  |  | 0-20%  | 



|                  |  |             |       |   |      |  |       |  
|----------------- |  | ----------- | ----- | - | ---- |  | ----- | -
|                  |  | Years Ended |      
|                  |  | March 31    |      
|                  |  |             |      
|                  |  | 2005        |       |   | 2004 | 
|                  |  |             |       |   |      | 
|Equity securities |  |             | 62.5  | % |      |  | 61.5  | %
|Debt securities   |  |             | 30.3  | % |      |  | 30.1  | %
|Real Estate       |  |             | 7.2   | % |      |  | 8.4   | %
|                  |  |             |       |   |      | 
|Total             |  |             | 100.0 | % |      |  | 100.0 | %
|                  |  |             |       |   |      | 



|                                              |  |                          |      |   |      |   |      |      |  |   |      |  
|--------------------------------------------- |  | ------------------------ | ---- | - | ---- | - | ---- | ---- |  | - | ---- | -
|                                              |  | Years Ended March 31     |     
|                                              |  |                          |     
|                                              |  | 2005                     |      |   | 2004 |   |      | 2003 | 
|                                              |  |                          |      |   |      |   |      |      | 
|                                              |  | (Millions of US dollars) |     
|Service cost                                  |  | $                        | 2.5  |   |      | $ | 2.9  |      |  | $ | 2.7  |  
|Interest cost                                 |  |                          | 2.5  |   |      |   | 2.9  |      |  |   | 2.9  |  
|Expected return on plan assets                |  |                          | (3.2 | ) |      |   | (3.6 | )    |  |   | (3.2 | )
|Amortization of unrecognized transition asset |  |                          |     |   |      |   | (0.9 | )    |  |   | (0.8 | )
|Amortization of prior service costs           |  |                          | 0.1  |   |      |   | 0.1  |      |  |   |     |  
|Recognized net actuarial loss                 |  |                          | 0.4  |   |      |   | 0.4  |      |  |   | 0.7  |  
|                                              |  |                          |      |   |      |   |      |      | 
|Net periodic pension cost                     |  |                          | 2.3  |   |      |   | 1.8  |      |  |   | 2.3  |  
|Settlement loss                               |  |                          | 5.3  |   |      |   |     |      |  |   |     |  
|                                              |  |                          |      |   |      |   |      |      | 
|Net pension cost                              |  | $                        | 7.6  |   |      | $ | 1.8  |      |  | $ | 2.3  |  
|                                              |  |                          |      |   |      |   |      |      | 

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JAMES HARDIE INDUSTRIES N.V. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






|                                          |  |          |      |  |      |  |      |      |  |  |      | 
|----------------------------------------- |  | -------- | ---- |  | ---- |  | ---- | ---- |  |  | ---- | 
|                                          |  | March 31 |     
|                                          |  |          |     
|                                          |  | 2005     |      |  | 2004 |  |      | 2003 | 
|                                          |  |          |      |  |      |  |      |      | 
|Net Periodic Benefit Cost Assumptions:    |  |          |      |  |      |  |      |      |  |  |      | 
|Discount rate                             |  |          | 6.5% |  |      |  | 6.8% |      |  |  | 7.0% | 
|Rate of increase in compensation          |  |          | 4.0% |  |      |  | 3.5% |      |  |  | 3.5% | 
|Expected return on plan assets            |  |          | 6.5% |  |      |  | 6.8% |      |  |  | 7.0% | 
|Projected Benefit Obligation Assumptions: |  |          |      |  |      |  |      |      |  |  |      | 
|Discount rate                             |  |          | 6.5% |  |      |  | 6.5% |      |  |  | 6.8% | 
|Rate of increase in compensation          |  |          | 4.0% |  |      |  | 4.0% |      |  |  | 3.5% | 



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JAMES HARDIE INDUSTRIES N.V. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                                      |  |              |       |   |      |   |       |  
|------------------------------------- |  | ------------ | ----- | - | ---- | - | ----- | -
|                                      |  | Years Ended  |      
|                                      |  | March 31     |      
|                                      |  |              |      
|                                      |  | 2005         |       |   | 2004 |  
|                                      |  |              |       |   |      |  
|                                      |  | (Millions of |      
|                                      |  | US dollars)  |      
|Changes in benefit obligation:        |  |              |       |   |      |   |       |  
|Benefit obligation at April 1         |  | $            | 40.7  |   |      | $ | 38.5  |  
|Service cost                          |  |              | 2.5   |   |      |   | 2.9   |  
|Interest cost                         |  |              | 2.5   |   |      |   | 2.9   |  
|Plan participants contributions      |  |              | 0.9   |   |      |   | 0.3   |  
|Actuarial loss (gain)                 |  |              | 2.0   |   |      |   | (1.5  | )
|Benefits paid                         |  |              | (11.4 | ) |      |   | (11.8 | )
|Foreign currency translation          |  |              | 0.4   |   |      |   | 9.4   |  
|                                      |  |              |       |   |      |  
|Benefit obligation at March 31        |  | $            | 37.6  |   |      | $ | 40.7  |  
|                                      |  |              |       |   |      |  
|Changes in plan assets:               |  |              |       |   |      |   |       |  
|Fair value of plan assets at April 1  |  | $            | 41.2  |   |      | $ | 37.7  |  
|Actual return on plan assets          |  |              | 4.7   |   |      |   | 3.0   |  
|Employer contributions                |  |              | 1.8   |   |      |   | 2.8   |  
|Participant contributions             |  |              | 0.9   |   |      |   | 0.3   |  
|Benefits paid                         |  |              | (11.4 | ) |      |   | (11.8 | )
|Foreign currency translation          |  |              | 0.5   |   |      |   | 9.2   |  
|                                      |  |              |       |   |      |  
|Fair value of plan assets at March 31 |  | $            | 37.7  |   |      | $ | 41.2  |  
|                                      |  |              |       |   |      |  
|Funded status                         |  | $            | 0.1   |   |      | $ | 0.5   |  
|Unamortized prior service cost        |  |              |      |   |      |   | 0.1   |  
|Unrecognized actuarial loss           |  |              | 8.3   |   |      |   | 13.5  |  
|                                      |  |              |       |   |      |  
|Net asset                             |  | $            | 8.4   |   |      | $ | 14.1  |  
|                                      |  |              |       |   |      |  



|                                 |  |              |      |  |      |   |      | 
|-------------------------------- |  | ------------ | ---- |  | ---- | - | ---- | 
|                                 |  | Years Ended  |     
|                                 |  | March 31     |     
|                                 |  |              |     
|                                 |  | 2005         |      |  | 2004 |  
|                                 |  |              |      |  |      |  
|                                 |  | (Millions of |     
|                                 |  | US dollars)  |     
|Projected benefit obligation     |  | $            | 37.6 |  |      | $ | 40.7 | 
|Accumulated benefit obligation   |  |              | 37.6 |  |      |   | 40.6 | 
|Fair market value of plan assets |  |              | 37.7 |  |      |   | 41.2 | 



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JAMES HARDIE INDUSTRIES N.V. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                       |                                   |              |      |      | 
|---------------------- | --------------------------------- | ------------ | ---- | ---- | 
|                       |                                   | (Millions of |     
|                       |                                   | US dollars)  |     
|                       |                                   |              |     
|Years Ending March 31: |                                   |              |      |     
|2006                   |                                   | $            | 2.5  |     
|2007                   |                                   |              | 2.6  |     
|2008                   |                                   |              | 2.3  |     
|2009                   |                                   |              | 2.3  |     
|2010                   |                                   |              | 2.4  |     
|2011 - 2015            |                                   |              | 12.0 |     
|                       |                                   |              |     
|                       | Estimated future benefit payments |              | $    | 24.1 | 
|                       |                                   |              |     



|   |                                         
|-- | ----------------------------------------
|9. | Accounts Payable and Accrued Liabilities



|                                               |  |              |      |  |      |   |      | 
|---------------------------------------------- |  | ------------ | ---- |  | ---- | - | ---- | 
|                                               |  | March 31     |     
|                                               |  |              |     
|                                               |  | 2005         |      |  | 2004 |  
|                                               |  |              |      |  |      |  
|                                               |  | (Millions of |     
|                                               |  | US dollars)  |     
|Trade creditors                                |  | $            | 65.3 |  |      | $ | 54.7 | 
|Other creditors and accruals                   |  |              | 28.7 |  |      |   | 23.8 | 
|                                               |  |              |      |  |      |  
|Total accounts payable and accrued liabilities |  | $            | 94.0 |  |      | $ | 78.5 | 
|                                               |  |              |      |  |      |  



|    |                         
|--- | ------------------------
|10. | Short and Long-Term Debt



|                                                |  |              |       |  |      |   |       | 
|----------------------------------------------- |  | ------------ | ----- |  | ---- | - | ----- | 
|                                                |  | March 31     |      
|                                                |  |              |      
|                                                |  | 2005         |       |  | 2004 |  
|                                                |  |              |       |  |      |  
|                                                |  | (Millions of |      
|                                                |  | US dollars)  |      
|US$ noncollateralized notes  current portion   |  | $            | 25.7  |  |      | $ | 17.6  | 
|US$ noncollateralized notes  long-term portion |  |              | 121.7 |  |      |   | 147.4 | 
|                                                |  |              |       |  |      |  
|Total debt at 7.12% average rate                |  | $            | 147.4 |  |      | $ | 165.0 | 
|                                                |  |              |       |  |      |  



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JAMES HARDIE INDUSTRIES N.V. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                       |  |              |       | 
|---------------------- |  | ------------ | ----- | 
|                       |  | (Millions of |      
|                       |  | US dollars)  |      
|                       |  |              |      
|Years Ending March 31: |  |              |       | 
|2006                   |  | $            | 25.7  | 
|2007                   |  |              | 27.1  | 
|2008                   |  |              | 8.1   | 
|2009                   |  |              | 46.2  | 
|2010                   |  |              |      | 
|Thereafter             |  |              | 40.3  | 
|                       |  |              |      
|Total                  |  | $            | 147.4 | 
|                       |  |              |      











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JAMES HARDIE INDUSTRIES N.V. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)








|    |                              
|--- | -----------------------------
|11. | Non-Current Other Liabilities



|                               |                                     |              |   |      |      |  |   |      | 
|------------------------------ | ----------------------------------- | ------------ | - | ---- | ---- |  | - | ---- | 
|                               |                                     | March 31     |  
|                               |                                     |              |  
|                               |                                     | 2005         |   |      | 2004 | 
|                               |                                     |              |   |      |      | 
|                               |                                     | (Millions of |  
|                               |                                     | US dollars)  |  
|Non-current other liabilities: |                                     |              |   |      |      |  |   |     
|                               | Employee entitlements               |              | $ | 5.3  |      |  | $ | 13.5 | 
|                               | Product liability                   |              |   | 4.7  |      |  |   | 5.6  | 
|                               | Other                               |              |   | 51.7 |      |  |   | 63.2 | 
|                               |                                     |              |   |      |      | 
|                               | Total non-current other liabilities |              | $ | 61.7 |      |  | $ | 82.3 | 
|                               |                                     |              |   |      |      | 



|    |                   
|--- | ------------------
|12. | Product Warranties





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JAMES HARDIE INDUSTRIES N.V. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






|                                         |  |              |      |   |      |   |      |  
|---------------------------------------- |  | ------------ | ---- | - | ---- | - | ---- | -
|                                         |  | March 31     |     
|                                         |  |              |     
|                                         |  | 2005         |      |   | 2004 |  
|                                         |  |              |      |   |      |  
|                                         |  | (Millions of |     
|                                         |  | US dollars)  |     
|Balance at beginning of period           |  | $            | 12.0 |   |      | $ | 14.8 |  
|Accruals for product warranties          |  |              | 4.3  |   |      |   | 2.2  |  
|Settlements made in cash or in kind      |  |              | (3.4 | ) |      |   | (5.7 | )
|Foreign currency translation adjustments |  |              |     |   |      |   | 0.7  |  
|                                         |  |              |      |   |      |  
|Balance at end of period                 |  | $            | 12.9 |   |      | $ | 12.0 |  
|                                         |  |              |      |   |      |  





|    |                              
|--- | -----------------------------
|13. | Commitments and Contingencies



| |                                   
| | ----------------------------------
| | Claims Against Former Subsidiaries



| |                                        
| | ---------------------------------------
| | Amaca Pty Ltd, Amaba Pty Ltd and ABN 60







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JAMES HARDIE INDUSTRIES N.V. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)










| |                              
| | -----------------------------
| | Special Commission of Inquiry



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JAMES HARDIE INDUSTRIES N.V. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)
















F-26



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JAMES HARDIE INDUSTRIES N.V. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


Interim Funding and ABN 60 Indemnity








| |                   
| | ------------------
| | Heads of Agreement







| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | the establishment of the SPF to compensate asbestos claimants;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|
| |  | initial funding of the SPF by the Company on the basis of a
    November 2004 KPMG report (which provided a net present value
    central estimate of A$1.536 billion ($1.03 billion)
    for all present and future claims at June 30, 2004). The
    undiscounted value of the central estimate of the asbestos
    liabilities of Amaca and Amaba as determined by KPMG was
    approximately A$3.586 billion ($2.471 billion). At
    December 21, 2004, the initial funding for the first three
    years was expected to be A$239 million (based on
    KPMGs estimate of liabilities as of June 30, 2004)
    less the assets to be contributed by the Foundation which were
    expected to be approximately A$125 million. The actuarial
    assessment is to be updated annually;

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##### Table of Contents



JAMES HARDIE INDUSTRIES N.V. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




| |   |                                                                                                                                                                                                                                                                                                                                                                              
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | a two year rolling cash buffer in the SPF and an annual
    contribution in advance based on actuarial assessments of
    expected claims for the next three years, to be revised
    annually;                                                                                                                                                                              
|
| |  | a cap on the annual payments made by the Company to the SPF,
    initially set at 35% of annual net operating cash flow (defined
    as cash from operations in accordance with U.S. GAAP) for
    the immediately preceding year, with provisions for the
    percentage to decline over time depending upon the
    Companys financial performance and claims outlook; and
|
| |  | no cap on individual payments to Claimants.                                                                                                                                                                                                                                                                                                                                  















| |                                         
| | ----------------------------------------
| | Updated Actuarial Study; Claims Estimate



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JAMES HARDIE INDUSTRIES N.V. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)
















F-29



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JAMES HARDIE INDUSTRIES N.V. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)








| |            
| | -----------
| | Claims Data



|                                |  |          |     |  |      |  |     | 
|------------------------------- |  | -------- | --- |  | ---- |  | --- | 
|                                |  | March 31 |    
|                                |  |          |    
|                                |  | 2005     |     |  | 2004 | 
|                                |  |          |     |  |      | 
|Australia                       |  |          | 712 |  |      |  | 687 | 
|New Zealand                     |  |          |    |  |      |  |    | 
|Unknown-Court Not Identified(1) |  |          | 36  |  |      |  | 51  | 
|USA                             |  |          | 1   |  |      |  | 5   | 






|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | The Unknown  Court Not Identified
    designation reflects that the information for such claims had
    not been, as of the date of publication, entered into the
    database which the Foundation maintains. Over time, as the
    details of unknown claims are provided to the
    Foundation, the Company believes the database is updated to
    reflect where such claims originate. Accordingly, the Company
    understands the number of unknown claims pending fluctuates due
    to the resolution of claims as well as the reclassification of
    such claims.



Australia


|                                               |  |                      |          |  |      |    |         |      |  |    |         | 
|---------------------------------------------- |  | -------------------- | -------- |  | ---- | -- | ------- | ---- |  | -- | ------- | 
|                                               |  | Years Ended March 31 |         
|                                               |  |                      |         
|                                               |  | 2005                 |          |  | 2004 |    |         | 2003 | 
|                                               |  |                      |          |  |      |    |         |      | 
|Number of claims filed                         |  |                      | 489      |  |      |    | 379     |      |  |    | 402     | 
|Number of claims dismissed                     |  |                      | 62       |  |      |    | 119     |      |  |    | 29      | 
|Number of claims settled or otherwise resolved |  |                      | 402      |  |      |    | 316     |      |  |    | 231     | 
|Average settlement amount per claim            |  | A                    | $157,594 |  |      | A$ | 167,450 |      |  | A$ | 204,194 | 

New Zealand


|                                               |  |                      |   |  |      |  |   |      |  |   |        | 
|---------------------------------------------- |  | -------------------- | - |  | ---- |  | - | ---- |  | - | ------ | 
|                                               |  | Years Ended March 31 |  
|                                               |  |                      |  
|                                               |  | 2005                 |   |  | 2004 |  |   | 2003 | 
|                                               |  |                      |   |  |      |  |   |      | 
|Number of claims filed                         |  |                      |  |  |      |  |  |      |  |   |       | 
|Number of claims dismissed                     |  |                      |  |  |      |  |  |      |  |   | 2      | 
|Number of claims settled or otherwise resolved |  |                      |  |  |      |  |  |      |  |   | 1      | 
|Average settlement amount per claim            |  |                      |  |  |      |  |  |      |  | A | $2,000 | 

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JAMES HARDIE INDUSTRIES N.V. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


Unknown  Court Not Identified


|                                               |  |                      |         |  |      |  |    |      |  |   |         | 
|---------------------------------------------- |  | -------------------- | ------- |  | ---- |  | -- | ---- |  | - | ------- | 
|                                               |  | Years Ended March 31 |        
|                                               |  |                      |        
|                                               |  | 2005                 |         |  | 2004 |  |    | 2003 | 
|                                               |  |                      |         |  |      |  |    |      | 
|Number of claims filed                         |  |                      | 7       |  |      |  | 1  |      |  |   | 7       | 
|Number of claims dismissed                     |  |                      | 20      |  |      |  | 15 |      |  |   |        | 
|Number of claims settled or otherwise resolved |  |                      | 2       |  |      |  |   |      |  |   | 3       | 
|Average settlement amount per claim            |  | A                    | $47,000 |  |      |  |   |      |  | A | $37,090 | 

USA


|                                               |  |                      |          |  |      |  |   |      |  |  |   | 
|---------------------------------------------- |  | -------------------- | -------- |  | ---- |  | - | ---- |  |  | - | 
|                                               |  | Years Ended March 31 |         
|                                               |  |                      |         
|                                               |  | 2005                 |          |  | 2004 |  |   | 2003 | 
|                                               |  |                      |          |  |      |  |   |      | 
|Number of claims filed                         |  |                      |         |  |      |  |  |      |  |  |  | 
|Number of claims dismissed                     |  |                      | 3        |  |      |  | 1 |      |  |  |  | 
|Number of claims settled or otherwise resolved |  |                      | 1        |  |      |  |  |      |  |  |  | 
|Average settlement amount per claim            |  | A                    | $228,293 |  |      |  |  |      |  |  |  | 



|                                            |  |                |         |  |      |    |         |      |  |    |         |  |  |      |         |  |  |    |         | 
|------------------------------------------- |  | -------------- | ------- |  | ---- | -- | ------- | ---- |  | -- | ------- |  |  | ---- | ------- |  |  | -- | ------- | 
|                                            |  | As of March 31 |        
|                                            |  |                |        
|                                            |  | 2005           |         |  | 2004 |    |         | 2003 |  |    | 2002    |  |  | 2001 |        
|                                            |  |                |         |  |      |    |         |      |  |    |         |  |  |      |        
|Number of open claims at beginning of year  |  |                | 743     |  |      |    | 814     |      |  |    | 671     |  |  |      | 569     |  |  |    | 507     | 
|Number of new claims                        |  |                | 496     |  |      |    | 380     |      |  |    | 409     |  |  |      | 375     |  |  |    | 284     | 
|Number of closed claims                     |  |                | 490     |  |      |    | 451     |      |  |    | 266     |  |  |      | 273     |  |  |    | 222     | 
|Number of open claims at year-end           |  |                | 749     |  |      |    | 743     |      |  |    | 814     |  |  |      | 671     |  |  |    | 569     | 
|Average settlement amount per settled claim |  | A$             | 157,223 |  |      | A$ | 167,450 |      |  | A$ | 201,200 |  |  | A$   | 197,941 |  |  | A$ | 179,629 | 
|Average settlement amount per case closed   |  | A$             | 129,949 |  |      | A$ | 117,327 |      |  | A$ | 177,752 |  |  | A$   | 125,435 |  |  | A$ | 128,653 | 





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JAMES HARDIE INDUSTRIES N.V. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)








| |                               
| | ------------------------------
| | SCI and Other Related Expenses



|                                     |  |              |      | 
|------------------------------------ |  | ------------ | ---- | 
|                                     |  | Year Ended   |     
|                                     |  | March 31     |     
|                                     |  | 2005         |     
|                                     |  |              |     
|                                     |  | (Millions of |     
|                                     |  | US dollars)  |     
|SCI                                  |  | $            | 6.8  | 
|Internal investigation               |  |              | 4.9  | 
|ASIC investigation                   |  |              | 1.2  | 
|Severance and consulting             |  |              | 6.0  | 
|Resolution advisory fees             |  |              | 6.4  | 
|Funding advice and other             |  |              | 2.8  | 
|                                     |  |              |     
|Total SCI and other related expenses |  | $            | 28.1 | 
|                                     |  |              |     





| |                                                                   
| | ------------------------------------------------------------------
| | Australian Securities and Investments Commission
    Investigation



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JAMES HARDIE INDUSTRIES N.V. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)










| |                     
| | --------------------
| | Severance Agreements





| |                                     
| | ------------------------------------
| | Interim Funding and ABN 60 Indemnity









F-33



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JAMES HARDIE INDUSTRIES N.V. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)








| |                                     
| | ------------------------------------
| | Financial Position of the Foundation





| |                        
| | -----------------------
| | Environmental and Legal









| |                
| | ---------------
| | Gypsum Business





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JAMES HARDIE INDUSTRIES N.V. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






| |                 
| | ----------------
| | Operating Leases



|                       |  |              |       | 
|---------------------- |  | ------------ | ----- | 
|                       |  | (Millions of |      
|                       |  | US dollars)  |      
|                       |  |              |      
|Years Ending March 31: |  |              |       | 
|2006                   |  | $            | 11.7  | 
|2007                   |  |              | 10.8  | 
|2008                   |  |              | 10.6  | 
|2009                   |  |              | 9.7   | 
|2010                   |  |              | 9.7   | 
|Thereafter             |  |              | 81.3  | 
|                       |  |              |      
|Total                  |  | $            | 133.8 | 
|                       |  |              |      





| |                    
| | -------------------
| | Capital Commitments



F-35



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JAMES HARDIE INDUSTRIES N.V. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|    |             
|--- | ------------
|14. | Income Taxes



|                                                       |  |                          |       |   |      |   |       |      |  |   |       |  
|------------------------------------------------------ |  | ------------------------ | ----- | - | ---- | - | ----- | ---- |  | - | ----- | -
|                                                       |  | Years Ended March 31     |      
|                                                       |  |                          |      
|                                                       |  | 2005                     |       |   | 2004 |   |       | 2003 | 
|                                                       |  |                          |       |   |      |   |       |      | 
|                                                       |  | (Millions of US dollars) |      
|Income from continuing operations before income taxes: |  |                          |       |   |      |   |       |      |  |   |       |  
|Domestic(1)                                            |  | $                        | 90.5  |   |      | $ | 103.5 |      |  | $ | 38.6  |  
|Foreign                                                |  |                          | 99.3  |   |      |   | 62.2  |      |  |   | 71.0  |  
|                                                       |  |                          |       |   |      |   |       |      | 
|Income from continuing operations before income taxes: |  | $                        | 189.8 |   |      | $ | 165.7 |      |  | $ | 109.6 |  
|                                                       |  |                          |       |   |      |   |       |      | 
|Income tax (expense) benefit:                          |  |                          |       |   |      |   |       |      |  |   |       |  
|Current:                                               |  |                          |       |   |      |   |       |      |  |   |       |  
|Domestic(1)                                            |  | $                        | (14.1 | ) |      | $ | (6.7  | )    |  | $ | (7.0  | )
|Foreign                                                |  |                          | (37.1 | ) |      |   | (20.4 | )    |  |   | 1.3   |  
|                                                       |  |                          |       |   |      |   |       |      | 
|Current income tax expense                             |  |                          | (51.2 | ) |      |   | (27.1 | )    |  |   | (5.7  | )
|                                                       |  |                          |       |   |      |   |       |      | 
|Deferred:                                              |  |                          |       |   |      |   |       |      |  |   |       |  
|Domestic(1)                                            |  |                          | 5.0   |   |      |   | (3.9  | )    |  |   | 0.1   |  
|Foreign                                                |  |                          | (15.7 | ) |      |   | (9.4  | )    |  |   | (20.5 | )
|                                                       |  |                          |       |   |      |   |       |      | 
|Deferred income tax expense                            |  |                          | (10.7 | ) |      |   | (13.3 | )    |  |   | (20.4 | )
|                                                       |  |                          |       |   |      |   |       |      | 
|Total income tax expense for continuing operations     |  | $                        | (61.9 | ) |      | $ | (40.4 | )    |  | $ | (26.1 | )
|                                                       |  |                          |       |   |      |   |       |      | 






|    |                                                                                           
|--- | ------------------------------------------------------------------------------------------
|(1) | Since JHI NV is the Dutch parent holding company, domestic
    represents The Netherlands.

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JAMES HARDIE INDUSTRIES N.V. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                                                    |  |                          |       |   |      |   |       |      |  |   |       |  
|--------------------------------------------------- |  | ------------------------ | ----- | - | ---- | - | ----- | ---- |  | - | ----- | -
|                                                    |  | Years Ended March 31     |      
|                                                    |  |                          |      
|                                                    |  | 2005                     |       |   | 2004 |   |       | 2003 | 
|                                                    |  |                          |       |   |      |   |       |      | 
|                                                    |  | (Millions of US dollars) |      
|Income tax expense computed at statutory tax rates  |  | $                        | (65.3 | ) |      | $ | (60.7 | )    |  | $ | (37.2 | )
|U.S. state income taxes, net of the federal benefit |  |                          | (5.3  | ) |      |   | (0.2  | )    |  |   | (1.2  | )
|Benefit from Dutch financial risk reserve regime    |  |                          | 18.1  |   |      |   | 24.8  |      |  |   | 11.9  |  
|Expenses not deductible                             |  |                          | (2.3  | ) |      |   | (2.5  | )    |  |   | (4.7  | )
|Non-assessable items                                |  |                          |      |   |      |   | 1.3   |      |  |   |      |  
|Losses not available for carryforward               |  |                          | (2.4  | ) |      |   |      |      |  |   | (1.4  | )
|Taxes related to 2001 Reorganization                |  |                          |      |   |      |   |      |      |  |   | 3.5   |  
|Net operating losses brought back to account        |  |                          |      |   |      |   |      |      |  |   | 13.0  |  
|Increase in reserves                                |  |                          | (3.7  | ) |      |   |      |      |  |   | (10.0 | )
|Result of tax audits                                |  |                          |      |   |      |   | (3.9  | )    |  |   |      |  
|Other items                                         |  |                          | (1.0  | ) |      |   | 0.8   |      |  |   |      |  
|                                                    |  |                          |       |   |      |   |       |      | 
|Total income tax expense                            |  | $                        | (61.9 | ) |      | $ | (40.4 | )    |  | $ | (26.1 | )
|                                                    |  |                          |       |   |      |   |       |      | 
|Effective tax rate                                  |  |                          | 32.6  | % |      |   | 24.4  | %    |  |   | 23.8  | %
|                                                    |  |                          |       |   |      |   |       |      | 

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JAMES HARDIE INDUSTRIES N.V. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                                                     |  |              |       |   |      |   |       |  
|---------------------------------------------------- |  | ------------ | ----- | - | ---- | - | ----- | -
|                                                     |  | March 31     |      
|                                                     |  |              |      
|                                                     |  | 2005         |       |   | 2004 |  
|                                                     |  |              |       |   |      |  
|                                                     |  | (Millions of |      
|                                                     |  | US dollars)  |      
|Deferred tax assets:                                 |  |              |       |   |      |   |       |  
|Provisions and accruals                              |  | $            | 29.0  |   |      | $ | 18.3  |  
|Net operating loss carryforwards                     |  |              | 12.8  |   |      |   | 14.6  |  
|Capital loss carryforwards                           |  |              | 33.7  |   |      |   | 33.2  |  
|Prepaid interest                                     |  |              |      |   |      |   | 16.6  |  
|Taxes on intellectual property transfer              |  |              | 7.5   |   |      |   | 8.7   |  
|Other                                                |  |              |      |   |      |   | 0.3   |  
|                                                     |  |              |       |   |      |  
|Total deferred tax assets                            |  |              | 83.0  |   |      |   | 91.7  |  
|Valuation allowance                                  |  |              | (38.1 | ) |      |   | (37.7 | )
|                                                     |  |              |       |   |      |  
|Total deferred tax assets net of valuation allowance |  |              | 44.9  |   |      |   | 54.0  |  
|                                                     |  |              |       |   |      |  
|Deferred tax liabilities:                            |  |              |       |   |      |   |       |  
|Property, plant and equipment                        |  |              | (86.9 | ) |      |   | (76.3 | )
|Prepaid pension cost                                 |  |              | (2.5  | ) |      |   | (4.2  | )
|Foreign currency movements                           |  |              | 2.8   |   |      |   | (1.1  | )
|Prepayments                                          |  |              | 2.5   |   |      |   |      |  
|                                                     |  |              |       |   |      |  
|Other                                                |  |              |      |   |      |   | (0.9  | )
|Total deferred tax liabilities                       |  |              | (84.1 | ) |      |   | (82.5 | )
|                                                     |  |              |       |   |      |  
|Total deferred taxes, net                            |  | $            | (39.2 | ) |      | $ | (28.5 | )
|                                                     |  |              |       |   |      |  









F-38



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JAMES HARDIE INDUSTRIES N.V. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)














|    |                        
|--- | -----------------------
|15. | Discontinued Operations



| |                 
| | ----------------
| | Building Systems





| |       
| | ------
| | Gypsum



F-39



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##### Table of Contents



JAMES HARDIE INDUSTRIES N.V. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)








| |                  
| | -----------------
| | Building Services





| |       
| | ------
| | ABN 60









F-40



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##### Table of Contents



JAMES HARDIE INDUSTRIES N.V. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                  |                                                   |                          |   |      |      |  |   |      |   |  |   |      |  
|----------------- | ------------------------------------------------- | ------------------------ | - | ---- | ---- |  | - | ---- | - |  | - | ---- | -
|                  |                                                   | Years Ended March 31     |  
|                  |                                                   |                          |  
|                  |                                                   | 2005                     |   |      | 2004 |  |   | 2003 |  
|                  |                                                   |                          |   |      |      |  |   |      |  
|                  |                                                   | (Millions of US dollars) |  
|Building Systems  |                                                   |                          |   |      |      |  |   |      |   |  |   |     
|                  | Net sales                                         |                          | $ |     |      |  | $ | 2.9  |   |  | $ | 20.1 |  
|                  | Income before income tax expense                  |                          |   |     |      |  |   | 0.3  |   |  |   | 2.8  |  
|                  | Income tax expense                                |                          |   |     |      |  |   | (0.1 | ) |  |   | (0.9 | )
|                  |                                                   |                          |   |      |      |  |   |      |  
|                  | Net income                                        |                          |   |     |      |  |   | 0.2  |   |  |   | 1.9  |  
|                  |                                                   |                          |   |      |      |  |   |      |  
|Building Services |                                                   |                          |   |      |      |  |   |      |   |  |   |     
|                  | Net sales                                         |                          |   |     |      |  |   |     |   |  |   |     |  
|                  | Loss before income tax benefit                    |                          |   | (0.5 | )    |  |   |     |   |  |   |     |  
|                  | Income tax benefit                                |                          |   | 0.2  |      |  |   |     |   |  |   |     |  
|                  |                                                   |                          |   |      |      |  |   |      |  
|                  | Net loss                                          |                          |   | (0.3 | )    |  |   |     |   |  |   |     |  
|                  |                                                   |                          |   |      |      |  |   |      |  
|Gypsum            |                                                   |                          |   |      |      |  |   |      |   |  |   |     
|                  | Net sales                                         |                          |   |     |      |  |   |     |   |  |   | 18.7 |  
|                  | Income before income tax expense                  |                          |   |     |      |  |   |     |   |  |   | 1.8  |  
|                  | Income tax expense                                |                          |   |     |      |  |   |     |   |  |   | (0.7 | )
|                  |                                                   |                          |   |      |      |  |   |      |  
|                  | Net income                                        |                          |   |     |      |  |   |     |   |  |   | 1.1  |  
|                  |                                                   |                          |   |      |      |  |   |      |  
|Total             |                                                   |                          |   |      |      |  |   |      |   |  |   |     
|                  | Net sales                                         |                          |   |     |      |  |   | 2.9  |   |  |   | 38.8 |  
|                  | (Loss) income before income tax benefit (expense) |                          |   | (0.5 | )    |  |   | 0.3  |   |  |   | 4.6  |  
|                  | Income tax benefit (expense)                      |                          |   | 0.2  |      |  |   | (0.1 | ) |  |   | (1.6 | )
|                  |                                                   |                          |   |      |      |  |   |      |  
|                  | Net (loss) income                                 |                          |   | (0.3 | )    |  |   | 0.2  |   |  |   | 3.0  |  
|                  |                                                   |                          |   |      |      |  |   |      |  
|                  | (Loss) gain on disposal, net of income taxes      |                          |   | (0.7 | )    |  |   | 4.1  |   |  |   | 84.0 |  
|                  |                                                   |                          |   |      |      |  |   |      |  
|                  | (Loss) income from discontinued operations        |                          | $ | (1.0 | )    |  | $ | 4.3  |   |  | $ | 87.0 |  
|                  |                                                   |                          |   |      |      |  |   |      |  



|    |                         
|--- | ------------------------
|16. | Stock-Based Compensation





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##### Table of Contents



JAMES HARDIE INDUSTRIES N.V. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                                          |  |                      |      |   |      |    |      |      |  |    |      |  
|----------------------------------------- |  | -------------------- | ---- | - | ---- | -- | ---- | ---- |  | -- | ---- | -
|                                          |  | Years Ended March 31 |     
|                                          |  |                      |     
|                                          |  | 2005                 |      |   | 2004 |    |      | 2003 | 
|                                          |  |                      |      |   |      |    |      |      | 
|Dividend yield                            |  |                      | 1.1  | % |      |    | 1.0  | %    |  |    | 2.9  | %
|Expected volatility                       |  |                      | 29.1 | % |      |    | 26.0 | %    |  |    | 27.0 | %
|Risk free interest rate                   |  |                      | 3.2  | % |      |    | 2.7  | %    |  |    | 2.9  | %
|Expected life in years                    |  |                      | 3.3  |   |      |    | 3.3  |      |  |    | 4.6  |  
|Weighted average fair value at grant date |  | A$                   | 1.35 |   |      | A$ | 1.42 |      |  | A$ | 1.12 |  





| |                                          
| | -----------------------------------------
| | Peter Donald Macdonald Share Option Plans



| |                                         
| | ----------------------------------------
| | Peter Donald Macdonald Share Option Plan





| |                                              
| | ---------------------------------------------
| | Peter Donald Macdonald Share Option Plan 2001



F-42



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##### Table of Contents



JAMES HARDIE INDUSTRIES N.V. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




| |                                              
| | ---------------------------------------------
| | Peter Donald Macdonald Share Option Plan 2002





| |                              
| | -----------------------------
| | Executive Share Purchase Plan





| |                           
| | --------------------------
| | 2001 Equity Incentive Plan



|                                 |  |                |      |           |         |  |           |                        |  |  |               | 
|-------------------------------- |  | -------------- | ---- | --------- | ------- |  | --------- | ---------------------- |  |  | ------------- | 
|                                 |  |                |      | October   |         |  |          
|                                 |  |                |      | 2001      |         |  |          
|                                 |  |                |      | Number of |         |  |          
|                                 |  | Original       |      |           | Options |  |           |                       
|Original Shadow Share Grant Date |  | Exercise Price |      |           | Granted |  |           | Option Expiration Date | 
|                                 |  |                |      |           |         |  |           |                        | 
|November 1999                    |  | A$             | 3.82 |           |         |  | 1,968,544 |                        |  |  | November 2009 | 
|November 2000                    |  | A$             | 3.78 |           |         |  | 3,500,285 |                        |  |  | November 2010 | 



F-43



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JAMES HARDIE INDUSTRIES N.V. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






|                 |  |                |      |           |         |  |           |                        |  |  |               | 
|---------------- |  | -------------- | ---- | --------- | ------- |  | --------- | ---------------------- |  |  | ------------- | 
|                 |  |                |      | Number of |         |  |          
|                 |  | Original       |      |           | Options |  |           |                       
|Share Grant Date |  | Exercise Price |      |           | Granted |  |           | Option Expiration Date | 
|                 |  |                |      |           |         |  |           |                        | 
|December 2001    |  | A$             | 5.65 |           |         |  | 4,248,417 |                        |  |  | December 2011 | 
|December 2002    |  | A$             | 6.66 |           |         |  | 4,037,000 |                        |  |  | December 2012 | 
|December 2003    |  | A$             | 7.05 |           |         |  | 6,179,583 |                        |  |  | December 2013 | 
|December 2004    |  | A$             | 5.99 |           |         |  | 5,391,100 |                        |  |  | December 2014 | 
|February 2005    |  | A$             | 6.30 |           |         |  | 273,000   |                        |  |  | February 2015 | 





|                             |  |                      |            |   |      |  |            |      |  |  |            |  
|---------------------------- |  | -------------------- | ---------- | - | ---- |  | ---------- | ---- |  |  | ---------- | -
|                             |  | Years Ended March 31 |           
|                             |  |                      |           
|Shares Available for Grant   |  | 2005                 |            |   | 2004 |  |            | 2003 | 
|                             |  |                      |            |   |      |  |            |      | 
|Shares available at April 1  |  |                      | 27,293,210 |   |      |  | 32,884,940 |      |  |  | 35,435,281 |  
|Awards granted               |  |                      | (5,664,100 | ) |      |  | (6,179,583 | )    |  |  | (4,037,000 | )
|Options forfeited            |  |                      | 2,711,148  |   |      |  | 587,853    |      |  |  | 1,486,659  |  
|                             |  |                      |            |   |      |  |            |      | 
|Shares available at March 31 |  |                      | 24,340,258 |   |      |  | 27,293,210 |      |  |  | 32,884,940 |  
|                             |  |                      |            |   |      |  |            |      | 



|                                |  |                         |            |          |          |    |      |           |          |  |            |   |  |           |      |  |          |  |            |   |  |    |      | 
|------------------------------- |  | ----------------------- | ---------- | -------- | -------- | -- | ---- | --------- | -------- |  | ---------- | - |  | --------- | ---- |  | -------- |  | ---------- | - |  | -- | ---- | 
|                                |  | 2005                    |            |          | 2004     |    |      | 2003      |         
|                                |  |                         |            |          |          |    |      |           |         
|                                |  |                         |            | Weighted |          |    |      |           | Weighted |  |            |   |  | Weighted  |     
|                                |  |                         |            | Average  |          |    |      |           | Average  |  |            |   |  | Average   |     
|                                |  | Number of               |            |          | Exercise |    |      | Number of |          |  | Exercise   |   |  | Number of |      |  | Exercise | 
|                                |  | Shares                  |            |          | Price    |    |      | Shares    |          |  | Price      |   |  | Shares    |      |  | Price    | 
|                                |  |                         |            |          |          |    |      |           |          |  |            |   |  |           |      |  |          | 
|                                |  | (In Australian dollars) |           
|Outstanding at
    April 1      |  |                         | 17,978,707 |          |          | A$ | 5.72 |           |          |  | 13,410,024 |   |  | A$        | 5.20 |  |          |  | 10,969,562 |   |  | A$ | 4.54 | 
|Granted                         |  |                         | 5,664,100  |          |          |    | 6.00 |           |          |  | 6,179,583  |   |  |           | 7.05 |  |          |  | 5,987,000  |   |  |    | 6.42 | 
|Exercised                       |  |                         | (803,049   | )        |          |    | 4.13 |           |          |  | (1,023,047 | ) |  |           | 4.38 |  |          |  | (2,059,879 | ) |  |    | 3.57 | 
|Forfeited                       |  |                         | (2,711,148 | )        |          |    | 6.56 |           |          |  | (587,853   | ) |  |           | 5.79 |  |          |  | (1,486,659 | ) |  |    | 4.95 | 
|                                |  |                         |            |          |          |    |      |           |          |  |            |   |  |           |      |  |          | 
|Outstanding at March 31         |  |                         | 20,128,610 |          |          | A$ | 5.75 |           |          |  | 17,978,707 |   |  | A$        | 5.72 |  |          |  | 13,410,024 |   |  | A$ | 5.20 | 
|                                |  |                         |            |          |          |    |      |           |          |  |            |   |  |           |      |  |          | 
|Options exercisable at March 31 |  |                         | 7,155,625  |          |          | A$ | 5.08 |           |          |  | 3,858,736  |   |  | A$        | 4.54 |  |          |  | 1,948,346  |   |  | A$ | 4.17 | 
|                                |  |                         |            |          |          |    |      |           |          |  |            |   |  |           |      |  |          | 

F-44



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##### Table of Contents



JAMES HARDIE INDUSTRIES N.V. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


|                         |  |                         |            |          |                     |  |     |          |  |    |                |  |  |          |           |  |  |    |      | 
|------------------------ |  | ----------------------- | ---------- | -------- | ------------------- |  | --- | -------- |  | -- | -------------- |  |  | -------- | --------- |  |  | -- | ---- | 
|                         |  | Options Outstanding     |            |          | Options Exercisable | 
|                         |  |                         |            |          |                     | 
|                         |  |                         |            | Weighted |                     |  |     |          | 
|                         |  | Number                  |            |          | Average             |  |     | Weighted |  |    | Number         |  |  | Weighted |          
|                         |  | Outstanding at          |            |          | Remaining           |  |     | Average  |  |    | Exercisable at |  |  | Average  |          
|                         |  | March 31,               |            |          | Contractual Life    |  |     | Exercise |  |    | March 31,      |  |  | Exercise |          
|Range of Exercise Prices |  | 2005                    |            |          | (in years)          |  |     | Price    |  |    | 2005           |  |  | Price    |          
|                         |  |                         |            |          |                     |  |     |          |  |    |                |  |  |          |          
|                         |  | (In Australian dollars) |           
|A$3.09                   |  |                         | 1,114,562  |          |                     |  | 5.6 |          |  | A$ | 3.09           |  |  |          | 718,489   |  |  | A$ | 3.09 | 
|3.13                     |  |                         | 369,598    |          |                     |  | 4.6 |          |  |    | 3.13           |  |  |          | 369,598   |  |  |    | 3.13 | 
|3.18                     |  |                         | 1,200,000  |          |                     |  | 4.6 |          |  |    | 3.18           |  |  |          | 1,200,000 |  |  |    | 3.18 | 
|4.76                     |  |                         | 624,000    |          |                     |  | 6.3 |          |  |    | 4.76           |  |  |          |          |  |  |    |     | 
|5.06                     |  |                         | 2,153,525  |          |                     |  | 6.7 |          |  |    | 5.06           |  |  |          | 2,153,525 |  |  |    | 5.06 | 
|5.71                     |  |                         | 1,950,000  |          |                     |  | 7.3 |          |  |    | 5.71           |  |  |          |          |  |  |    |     | 
|5.99                     |  |                         | 5,193,100  |          |                     |  | 9.7 |          |  |    | 5.99           |  |  |          | 25,000    |  |  |    | 5.99 | 
|6.30                     |  |                         | 273,000    |          |                     |  | 9.9 |          |  |    | 6.30           |  |  |          |          |  |  |    |     | 
|6.45                     |  |                         | 2,696,575  |          |                     |  | 7.7 |          |  |    | 6.45           |  |  |          | 1,435,975 |  |  |    | 6.45 | 
|7.05                     |  |                         | 4,554,250  |          |                     |  | 8.7 |          |  |    | 7.05           |  |  |          | 1,253,038 |  |  |    | 7.05 | 
|                         |  |                         |            |          |                     |  |     |          |  |    |                |  |  |          |          
|A$3.09 to A$7.05         |  |                         | 20,128,610 |          |                     |  | 7.9 |          |  | A$ | 5.75           |  |  |          | 7,155,625 |  |  | A$ | 5.08 | 
|                         |  |                         |            |          |                     |  |     |          |  |    |                |  |  |          |          



| |                                                 
| | ------------------------------------------------
| | Shadow Stock and Stock Appreciation Rights Plans













F-45



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##### Table of Contents



JAMES HARDIE INDUSTRIES N.V. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|    |                      
|--- | ---------------------
|17. | Financial Instruments



| |                 
| | ----------------
| | Foreign Currency







| |            
| | -----------
| | Credit Risk













| |               
| | --------------
| | Interest Rates



F-46



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##### Table of Contents



JAMES HARDIE INDUSTRIES N.V. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




| |            
| | -----------
| | Fair Values



|                |          |                          |   |       |            |  |   |                |       |  |            |       |       |  |   |       |       | 
|--------------- | -------- | ------------------------ | - | ----- | ---------- |  | - | -------------- | ----- |  | ---------- | ----- | ----- |  | - | ----- | ----- | 
|                |          | March 31                 |  
|                |          |                          |  
|                |          | 2005                     |   |       | 2004       | 
|                |          |                          |   |       |            | 
|                |          | Carrying Value           |   |       | Fair Value |  |   | Carrying Value |       |  | Fair Value |      
|                |          |                          |   |       |            |  |   |                |       |  |            |      
|                |          | (Millions of US dollars) |  
|Long-term debt: |          |                          |   |       |            |  |   |                |       |  |            |       |       |  |   |      
|                | Floating |                          | $ |      |            |  | $ |               |       |  | $          |      |       |  | $ |      |      
|                | Fixed    |                          |   | 147.4 |            |  |   | 173.6          |       |  |            | 165.0 |       |  |   | 186.8 |      
|                |          |                          |   |       |            |  |   |                |       |  |            |      
|                |          | Total                    |   | $     | 147.4      |  |   | $              | 173.6 |  |            | $     | 165.0 |  |   | $     | 186.8 | 
|                |          |                          |   |       |            |  |   |                |       |  |            |      





|    |                                                         
|--- | --------------------------------------------------------
|18. | Operating Segment Information and Concentrations of Risk





| |                   
| | ------------------
| | Operating Segments



|                          |                                            |                           |       |         |      |   |       |       |  |   |       |       | 
|------------------------- | ------------------------------------------ | ------------------------- | ----- | ------- | ---- | - | ----- | ----- |  | - | ----- | ----- | 
|                          |                                            | Net Sales to Customers(1) |      
|                          |                                            | Years Ended March 31      |      
|                          |                                            |                           |      
|                          |                                            | 2005                      |       |         | 2004 |   |       | 2003  | 
|                          |                                            |                           |       |         |      |   |       |       | 
|                          |                                            | (Millions of US dollars)  |      
|USA Fiber Cement          |                                            | $                         | 939.2 |         |      | $ | 738.6 |       |  | $ | 599.7 |      
|Asia Pacific Fiber Cement |                                            |                           | 236.1 |         |      |   | 219.8 |       |  |   | 174.3 |      
|Other Fiber Cement        |                                            |                           | 35.1  |         |      |   | 23.5  |       |  |   | 9.6   |      
|                          |                                            |                           |       |         |      |   |       |       | 
|                          | Worldwide total from continuing operations |                           | $     | 1,210.4 |      |   | $     | 981.9 |  |   | $     | 783.6 | 
|                          |                                            |                           |       |         |      |   |       |       | 

F-47



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##### Table of Contents



JAMES HARDIE INDUSTRIES N.V. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


|                             |                                            |                          |       |       |      |   |       |       |  |   |       |       | 
|---------------------------- | ------------------------------------------ | ------------------------ | ----- | ----- | ---- | - | ----- | ----- |  | - | ----- | ----- | 
|                             |                                            | Income from              |      
|                             |                                            | Continuing Operations    |      
|                             |                                            | Before Income Taxes      |      
|                             |                                            | Years Ended March 31     |      
|                             |                                            |                          |      
|                             |                                            | 2005                     |       |       | 2004 |   |       | 2003  | 
|                             |                                            |                          |       |       |      |   |       |       | 
|                             |                                            | (Millions of US dollars) |      
|USA Fiber Cement(2)          |                                            | $                        | 241.5 |       |      | $ | 195.6 |       |  | $ | 155.1 |      
|Asia Pacific Fiber Cement(2) |                                            |                          | 46.8  |       |      |   | 37.6  |       |  |   | 27.3  |      
|Research and Development(2)  |                                            |                          | (17.5 | )     |      |   | (17.6 | )     |  |   | (13.0 | )    
|Other Fiber Cement           |                                            |                          | (11.8 | )     |      |   | (15.9 | )     |  |   | (10.7 | )    
|                             |                                            |                          |       |       |      |   |       |       | 
|                             | Segments total                             |                          |       | 259.0 |      |   |       | 199.7 |  |   |       | 158.7 | 
|General Corporate(3),(4)     |                                            |                          | (62.8 | )     |      |   | (27.5 | )     |  |   | (29.9 | )    
|                             |                                            |                          |       |       |      |   |       |       | 
|Total operating income       |                                            |                          | 196.2 |       |      |   | 172.2 |       |  |   | 128.8 |      
|Net interest expense(5)      |                                            |                          | (5.1  | )     |      |   | (10.0 | )     |  |   | (19.9 | )    
|Other (expense) income, net  |                                            |                          | (1.3  | )     |      |   | 3.5   |       |  |   | 0.7   |      
|                             |                                            |                          |       |       |      |   |       |       | 
|                             | Worldwide total from continuing operations |                          | $     | 189.8 |      |   | $     | 165.7 |  |   | $     | 109.6 | 
|                             |                                            |                          |       |       |      |   |       |       | 

|                          |                 |                    |       |         |      |   |       |       | 
|------------------------- | --------------- | ------------------ | ----- | ------- | ---- | - | ----- | ----- | 
|                          |                 | Total Identifiable |      
|                          |                 | Assets March 31    |      
|                          |                 |                    |      
|                          |                 | 2005               |       |         | 2004 |  
|                          |                 |                    |       |         |      |  
|                          |                 | (Millions of       |      
|                          |                 | US dollars)        |      
|USA Fiber Cement          |                 | $                  | 670.1 |         |      | $ | 554.9 |      
|Asia Pacific Fiber Cement |                 |                    | 181.4 |         |      |   | 175.9 |      
|Other Fiber Cement        |                 |                    | 81.6  |         |      |   | 74.7  |      
|                          |                 |                    |       |         |      |  
|                          | Segments total  |                    |       | 933.1   |      |   |       | 805.5 | 
|General Corporate(6)      |                 |                    | 155.8 |         |      |   | 165.7 |      
|                          |                 |                    |       |         |      |  
|                          | Worldwide total |                    | $     | 1,088.9 |      |   | $     | 971.2 | 
|                          |                 |                    |       |         |      |  

|                          |                 |                          |       |       |      |   |      |      |  |   |      |      | 
|------------------------- | --------------- | ------------------------ | ----- | ----- | ---- | - | ---- | ---- |  | - | ---- | ---- | 
|                          |                 | Additions to Property,   |      
|                          |                 | Plant and Equipment(7)   |      
|                          |                 | Years Ended March 31     |      
|                          |                 |                          |      
|                          |                 | 2005                     |       |       | 2004 |   |      | 2003 | 
|                          |                 |                          |       |       |      |   |      |      | 
|                          |                 | (Millions of US dollars) |      
|USA Fiber Cement          |                 | $                        | 144.8 |       |      | $ | 56.2 |      |  | $ | 81.0 |     
|Asia Pacific Fiber Cement |                 |                          | 4.1   |       |      |   | 8.4  |      |  |   | 6.6  |     
|Other Fiber Cement        |                 |                          | 4.1   |       |      |   | 9.5  |      |  |   | 2.5  |     
|                          |                 |                          |       |       |      |   |      |      | 
|                          | Segments total  |                          |       | 153.0 |      |   |      | 74.1 |  |   |      | 90.1 | 
|General Corporate         |                 |                          |      |       |      |   |     |      |  |   | 0.1  |     
|                          |                 |                          |       |       |      |   |      |      | 
|                          | Worldwide total |                          | $     | 153.0 |      |   | $    | 74.1 |  |   | $    | 90.2 | 
|                          |                 |                          |       |       |      |   |      |      | 

F-48



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JAMES HARDIE INDUSTRIES N.V. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


|                          |                 |                          |      |      |      |   |      |      |  |   |      |      | 
|------------------------- | --------------- | ------------------------ | ---- | ---- | ---- | - | ---- | ---- |  | - | ---- | ---- | 
|                          |                 | Depreciation and         |     
|                          |                 | Amortization             |     
|                          |                 | Years Ended March 31     |     
|                          |                 |                          |     
|                          |                 | 2005                     |      |      | 2004 |   |      | 2003 | 
|                          |                 |                          |      |      |      |   |      |      | 
|                          |                 | (Millions of US dollars) |     
|USA Fiber Cement          |                 | $                        | 23.1 |      |      | $ | 25.1 |      |  | $ | 18.2 |     
|Asia Pacific Fiber Cement |                 |                          | 10.1 |      |      |   | 9.7  |      |  |   | 8.7  |     
|Other Fiber Cement        |                 |                          | 3.1  |      |      |   | 1.5  |      |  |   | 0.3  |     
|                          |                 |                          |      |      |      |   |      |      | 
|                          | Segments total  |                          |      | 36.3 |      |   |      | 36.3 |  |   |      | 27.2 | 
|General Corporate         |                 |                          |     |      |      |   | 0.1  |      |  |   | 0.2  |     
|Discontinued operations   |                 |                          |     |      |      |   |     |      |  |   | 1.3  |     
|                          |                 |                          |      |      |      |   |      |      | 
|                          | Worldwide total |                          | $    | 36.3 |      |   | $    | 36.4 |  |   | $    | 28.7 | 
|                          |                 |                          |      |      |      |   |      |      | 



| |                 
| | ----------------
| | Geographic Areas

|                |                                            |                           |       |         |      |   |       |       |  |   |       |       | 
|--------------- | ------------------------------------------ | ------------------------- | ----- | ------- | ---- | - | ----- | ----- |  | - | ----- | ----- | 
|                |                                            | Net Sales to Customers(1) |      
|                |                                            | Years Ended March 31      |      
|                |                                            |                           |      
|                |                                            | 2005                      |       |         | 2004 |   |       | 2003  | 
|                |                                            |                           |       |         |      |   |       |       | 
|                |                                            | (Millions of US dollars)  |      
|USA             |                                            | $                         | 955.7 |         |      | $ | 748.9 |       |  | $ | 605.0 |      
|Australia       |                                            |                           | 160.5 |         |      |   | 154.9 |       |  |   | 124.7 |      
|New Zealand     |                                            |                           | 49.6  |         |      |   | 40.6  |       |  |   | 31.6  |      
|Other Countries |                                            |                           | 44.6  |         |      |   | 37.5  |       |  |   | 22.3  |      
|                |                                            |                           |       |         |      |   |       |       | 
|                | Worldwide total from continuing operations |                           | $     | 1,210.4 |      |   | $     | 981.9 |  |   | $     | 783.6 | 
|                |                                            |                           |       |         |      |   |       |       | 

|                     |                 |                    |       |         |      |   |       |       | 
|-------------------- | --------------- | ------------------ | ----- | ------- | ---- | - | ----- | ----- | 
|                     |                 | Total Identifiable |      
|                     |                 | Assets March 31    |      
|                     |                 |                    |      
|                     |                 | 2005               |       |         | 2004 |  
|                     |                 |                    |       |         |      |  
|                     |                 | (Millions of       |      
|                     |                 | US dollars)        |      
|USA                  |                 | $                  | 729.2 |         |      | $ | 609.8 |      
|Australia            |                 |                    | 118.8 |         |      |   | 119.1 |      
|New Zealand          |                 |                    | 21.4  |         |      |   | 19.7  |      
|Other Countries      |                 |                    | 63.7  |         |      |   | 56.9  |      
|                     |                 |                    |       |         |      |  
|                     | Segments total  |                    |       | 933.1   |      |   |       | 805.5 | 
|General Corporate(6) |                 |                    | 155.8 |         |      |   | 165.7 |      
|                     |                 |                    |       |         |      |  
|                     | Worldwide total |                    | $     | 1,088.9 |      |   | $     | 971.2 | 
|                     |                 |                    |       |         |      |  






|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Export sales and inter-segmental sales are not significant.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   
|(2) | Research and development costs of $7.6 million,
    $6.3 million and $5.3 million in fiscal years 2005,
    2004 and 2003, respectively, were expensed in the USA Fiber
    Cement operating segment. Research and development costs of
    $1.9 million, $2.2 million and $2.4 million in
    fiscal years 2005, 2004 and 2003, respectively, were expensed in
    the Asia Pacific Fiber Cement segment. Research and development
    costs of $12.0 million, $14.1 million and
    $10.4 million in fiscal years 2005, 2004 and 2003,
    respectively, were expensed in the Research and Development
    segment. The Research and Development segment also included
    selling, general and administrative expenses of
    $5.5 million, $3.5 million and $2.7 million in
    fiscal years 2005, 2004 and 2003 respectively.

F-49



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JAMES HARDIE INDUSTRIES N.V. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




| |                                                                                                                                                                                                                    
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Research and development expenditures are expensed as incurred
    and in total amounted to $21.6 million, $22.6 million
    and $18.1 million for the years ended March 31, 2005,
    2004 and 2003, respectively.



|    |                                                                                                                                                                                                                                                      
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(3) | The principal components of General Corporate are officer and
    employee compensation and related benefits, professional and
    legal fees, administrative costs and rental expense, net of
    rental income, on the Companys corporate offices.



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Net periodic pension cost related to the Australian Defined
    Benefit Plan for the Asia Pacific Fiber Cement segment totaling
    $2.3 million, $1.8 million and $2.3 million in
    fiscal years 2005, 2004 and 2003, respectively, has been
    included in the General Corporate segment. Also a settlement
    loss of $5.3 million on the Defined Benefit Plan in fiscal
    year 2005 has been included in the General Corporate segment.



|    |                                                                                                                                                                                                                                           
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(4) | Includes costs of $28.1 million for SCI and other related
    expenses. See Note 13.                                                                                                                                                      
|   
|(5) | The Company does not report net interest expense for each
    reportable segment as reportable segments are not held directly
    accountable for interest expense.                                                                       
|   
|(6) | The Company does not report deferred tax assets and liabilities
    for each reportable segment as reportable segments are not held
    directly accountable for deferred taxes. All deferred taxes are
    included in General Corporate.
|   
|(7) | Additions to property, plant and equipment are calculated on an
    accrual basis, and therefore differ from property, plant and
    equipment in the consolidated statements of cash flows.                                              



| |                       
| | ----------------------
| | Concentrations of Risk





|           |       |                          |       |       |      |   |       |       |  |   |       |       | 
|---------- | ----- | ------------------------ | ----- | ----- | ---- | - | ----- | ----- |  | - | ----- | ----- | 
|           |       | Years Ended March 31     |      
|           |       |                          |      
|           |       | 2005                     |       |       | 2004 |   |       | 2003  | 
|           |       |                          |       |       |      |   |       |       | 
|           |       | (Millions of US dollars) |      
|Customer A |       | $                        | 131.8 |       |      | $ | 111.3 |       |  | $ | 125.1 |      
|Customer B |       |                          | 295.4 |       |      |   | 252.2 |       |  |   | 211.4 |      
|Customer C |       |                          | 131.7 |       |      |   | 112.9 |       |  |   | 84.3  |      
|           |       |                          |       |       |      |   |       |       | 
|           | Total |                          | $     | 558.9 |      |   | $     | 476.4 |  |   | $     | 420.8 | 
|           |       |                          |       |       |      |   |       |       | 



F-50



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##### Table of Contents



JAMES HARDIE INDUSTRIES N.V. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|    |                         
|--- | ------------------------
|19. | Other Comprehensive Loss



|                                                                                        |                                            |              |       |       |      |   |       |       |  
|--------------------------------------------------------------------------------------- | ------------------------------------------ | ------------ | ----- | ----- | ---- | - | ----- | ----- | -
|                                                                                        |                                            | March 31     |      
|                                                                                        |                                            |              |      
|                                                                                        |                                            | 2005         |       |       | 2004 |  
|                                                                                        |                                            |              |       |       |      |  
|                                                                                        |                                            | (Millions of |      
|                                                                                        |                                            | US dollars)  |      
|Unrealized transition loss on derivative instruments classified
    as cash flow hedges |                                            | $            | (4.9  | )     |      | $ | (4.9  | )    
|Accumulated amortization of unrealized transition loss on
    derivative instruments    |                                            |              | 4.4   |       |      |   | 3.3   |      
|Foreign currency translation adjustments                                                |                                            |              | (23.6 | )     |      |   | (22.7 | )    
|                                                                                        |                                            |              |       |       |      |  
|                                                                                        | Total accumulated other comprehensive loss |              | $     | (24.1 | )    |   | $     | (24.3 | )
|                                                                                        |                                            |              |       |       |      |  







|    |                     
|--- | --------------------
|20. | Shareholders Equity





F-51



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JAMES HARDIE INDUSTRIES N.V. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|    |                           
|--- | --------------------------
|21. | Related Party Transactions



| |                                          
| | -----------------------------------------
| | JHI NV Directors Securities Transactions





|                |  |                 |        | 
|--------------- |  | --------------- | ------ | 
|Director        |  | Shares Allotted |       
|                |  |                 |       
|M. Hellicar     |  |                 | 2,117  | 
|J. Barr         |  |                 | 1,068  | 
|M.R. Brown      |  |                 | 1,068  | 
|P.S. Cameron    |  |                 | 2,117  | 
|G.J. Clark      |  |                 | 1,068  | 
|M.J. Gillfillan |  |                 | 1,068  | 
|J.R.H. Loudon   |  |                 | 2,117  | 
|D.G. McGauchie  |  |                 | 1,068  | 
|                |  |                 |       
|Total           |  |                 | 11,691 | 
|                |  |                 |       





| |                                                                                         
| | ----------------------------------------------------------------------------------------
| | Existing Loans to the Companys Directors and
    Directors of James Hardie Subsidiaries







| |                                                                                           
| | ------------------------------------------------------------------------------------------
| | Payments Made to Directors and Director Related Entities
    of the Companys Subsidiaries

During the Year






F-52



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JAMES HARDIE INDUSTRIES N.V. AND SUBSIDIARIES


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)
















F-53



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##### Table of Contents



JAMES HARDIE INDUSTRIES N.V. AND SUBSIDIARIES


Remuneration Disclosures









| |                          
| | -------------------------
| | Remuneration of Directors







| |                           
| | --------------------------
| | Remuneration of Executives





|                   |  |              |    |  |      |  |    | 
|------------------ |  | ------------ | -- |  | ---- |  | -- | 
|                   |  | March 31     |   
|                   |  |              |   
|Range starting at: |  | 2005         |    |  | 2004 | 
|                   |  |              |    |  |      | 
|                   |  | (US dollars) |   
|$320,000           |  |              | 1  |  |      |  |   | 
|$340,000           |  |              |   |  |      |  |   | 
|$370,000           |  |              |   |  |      |  | 2  | 
|$430,000           |  |              | 1  |  |      |  | 1  | 
|$440,000           |  |              | 1  |  |      |  |   | 
|$460,000           |  |              |   |  |      |  | 1  | 
|$480,000           |  |              |   |  |      |  |   | 
|$530,000           |  |              | 1  |  |      |  | 2  | 
|$620,000           |  |              | 2  |  |      |  |   | 
|$630,000           |  |              |   |  |      |  | 1  | 
|$660,000           |  |              | 2  |  |      |  | 1  | 
|$710,000           |  |              |   |  |      |  |   | 
|$770,000           |  |              |   |  |      |  |   | 
|$850,000           |  |              |   |  |      |  | 1  | 
|$930,000           |  |              | 1  |  |      |  | 1  | 
|$1,070,000         |  |              |   |  |      |  | 1  | 
|$1,120,000         |  |              | 1  |  |      |  |   | 
|$1,140,000         |  |              | 1  |  |      |  |   | 
|$1,390,000         |  |              |   |  |      |  | 2  | 
|$1,500,000         |  |              | 1  |  |      |  |   | 
|$2,030,000         |  |              | 1  |  |      |  |   | 
|$3,189,000         |  |              |   |  |      |  | 1  | 
|$7,153,000         |  |              | 1  |  |      |  |   | 
|                   |  |              |    |  |      | 
|                   |  |              | 14 |  |      |  | 14 | 
|                   |  |              |    |  |      | 

F-54



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JAMES HARDIE INDUSTRIES N.V. AND SUBSIDIARIES


Remuneration Disclosures












| |                                                                  
| | -----------------------------------------------------------------
| | Remuneration of Independent Registered Public Accounting
    Firm





| |           
| | ----------
| | Audit Fees





| |                   
| | ------------------
| | Audit Related Fees





| |         
| | --------
| | Tax Fees





| |               
| | --------------
| | All Other Fees



F-55



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##### Table of Contents



JAMES HARDIE INDUSTRIES N.V. AND SUBSIDIARIES





SELECTED QUARTERLY FINANCIAL DATA


(Unaudited, not forming part of the consolidated financial
statements)




|                                                                         |  |                           |        |   |                           |   |        |       |  |   |        |   |  |       |        |   |        |   |        |       |  |   |        |   |  |   |        |   |  |   |        |  
|------------------------------------------------------------------------ |  | ------------------------- | ------ | - | ------------------------- | - | ------ | ----- |  | - | ------ | - |  | ----- | ------ | - | ------ | - | ------ | ----- |  | - | ------ | - |  | - | ------ | - |  | - | ------ | -
|                                                                         |  | Year Ended March 31, 2005 |        |   | Year Ended March 31, 2004 |  
|                                                                         |  | By Quarter                |        |   | By Quarter                |  
|                                                                         |  |                           |        |   |                           |  
|                                                                         |  | First                     |        |   | Second                    |   |        | Third |  |   | Fourth |   |  | First |        |   | Second |   |        | Third |  |   | Fourth |  
|                                                                         |  |                           |        |   |                           |   |        |       |  |   |        |   |  |       |        |   |        |   |        |       |  |   |        |  
|                                                                         |  | (Millions of US dollars)  |       
|Net sales                                                                |  | $                         | 306.1  |   |                           | $ | 300.9  |       |  | $ | 287.0  |   |  | $     | 316.4  |   |        | $ | 241.5  |       |  | $ | 251.6  |   |  | $ | 237.5  |   |  | $ | 251.3  |  
|Cost of goods sold                                                       |  |                           | (194.8 | ) |                           |   | (203.8 | )     |  |   | (190.3 | ) |  |       | (195.1 | ) |        |   | (152.2 | )     |  |   | (159.2 | ) |  |   | (150.0 | ) |  |   | (161.6 | )
|                                                                         |  |                           |        |   |                           |   |        |       |  |   |        |   |  |       |        |   |        |   |        |       |  |   |        |  
|Gross profit                                                             |  |                           | 111.3  |   |                           |   | 97.1   |       |  |   | 96.7   |   |  |       | 121.3  |   |        |   | 89.3   |       |  |   | 92.4   |   |  |   | 87.5   |   |  |   | 89.7   |  
|Operating income                                                         |  |                           | 58.3   |   |                           |   | 40.0   |       |  |   | 33.3   |   |  |       | 64.6   |   |        |   | 48.3   |       |  |   | 47.9   |   |  |   | 41.2   |   |  |   | 34.8   |  
|Interest expense                                                         |  |                           | (2.8   | ) |                           |   | (1.9   | )     |  |   | (1.3   | ) |  |       | (1.3   | ) |        |   | (2.5   | )     |  |   | (2.8   | ) |  |   | (3.0   | ) |  |   | (2.9   | )
|Interest income                                                          |  |                           | 0.3    |   |                           |   | 0.6    |       |  |   | 0.6    |   |  |       | 0.7    |   |        |   | 0.2    |       |  |   | 0.4    |   |  |   | 0.2    |   |  |   | 0.4    |  
|Other (expense) income, net                                              |  |                           |       |   |                           |   | (1.9   | )     |  |   | 0.4    |   |  |       | 0.2    |   |        |   |       |       |  |   | (3.3   | ) |  |   | (0.1   | ) |  |   | 6.9    |  
|                                                                         |  |                           |        |   |                           |   |        |       |  |   |        |   |  |       |        |   |        |   |        |       |  |   |        |  
|Income from continuing operations before income taxes                    |  |                           | 55.8   |   |                           |   | 36.8   |       |  |   | 33.0   |   |  |       | 64.2   |   |        |   | 46.0   |       |  |   | 42.2   |   |  |   | 38.3   |   |  |   | 39.2   |  
|Income tax expense                                                       |  |                           | (18.7  | ) |                           |   | (12.1  | )     |  |   | (13.2  | ) |  |       | (17.9  | ) |        |   | (13.1  | )     |  |   | (9.4   | ) |  |   | (10.0  | ) |  |   | (7.9   | )
|                                                                         |  |                           |        |   |                           |   |        |       |  |   |        |   |  |       |        |   |        |   |        |       |  |   |        |  
|Income from continuing operations                                        |  |                           | 37.1   |   |                           |   | 24.7   |       |  |   | 19.8   |   |  |       | 46.3   |   |        |   | 32.9   |       |  |   | 32.8   |   |  |   | 28.3   |   |  |   | 31.3   |  
|Discontinued operations:                                                 |  |                           |        |   |                           |   |        |       |  |   |        |   |  |       |        |   |        |   |        |       |  |   |        |   |  |   |        |   |  |   |        |  
|(Loss) income from discontinued operations net of income tax             |  |                           |       |   |                           |   |       |       |  |   | (0.3   | ) |  |       |       |   |        |   | 0.2    |       |  |   |       |   |  |   |       |   |  |   |       |  
|(Loss) gain on disposal of discontinued operations net of income
    tax |  |                           | (0.8   | ) |                           |   | 0.1    |       |  |   |       |   |  |       |       |   |        |   | 1.6    |       |  |   |       |   |  |   | 1.8    |   |  |   | 0.7    |  
|                                                                         |  |                           |        |   |                           |   |        |       |  |   |        |   |  |       |        |   |        |   |        |       |  |   |        |  
|(Loss) income from discontinued operations                               |  |                           | (0.8   | ) |                           |   | 0.1    |       |  |   | (0.3   | ) |  |       |       |   |        |   | 1.8    |       |  |   |       |   |  |   | 1.8    |   |  |   | 0.7    |  
|                                                                         |  |                           |        |   |                           |   |        |       |  |   |        |   |  |       |        |   |        |   |        |       |  |   |        |  
|Net income                                                               |  | $                         | 36.3   |   |                           | $ | 24.8   |       |  | $ | 19.5   |   |  | $     | 46.3   |   |        | $ | 34.7   |       |  | $ | 32.8   |   |  | $ | 30.1   |   |  | $ | 32.0   |  
|                                                                         |  |                           |        |   |                           |   |        |       |  |   |        |   |  |       |        |   |        |   |        |       |  |   |        |  

F-56



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##### Table of Contents






EXHIBIT INDEX


|        |   |     |                         |                                                                                                                                                                                                                                                                                                                                    
|------- | - | --- | ----------------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |   |     |                        
|Number  |   |     | Description of Exhibits
|        |   |     |                        
|        | 1 | .1  |                         | Articles of Association, as amended on November 5, 2003 of
    James Hardie Industries N.V. (English Translation)(4)                                                                                                                                                                                                               
|       
|        | 2 | .1  |                         | Letter Agreement of September 6, 2001 by and between James
    Hardie Industries N.V. and CHESS Depositary Nominees Pty
    Limited, as the depositary for CHESS Units of Foreign
    Securities(1)                                                                                                                                
|       
|        | 2 | .2  |                         | Deposit Agreement dated as of September 24, 2001 between
    The Bank of New York, as depositary, and James Hardie Industries
    N.V.(1)                                                                                                                                                                                          
|       
|        | 2 | .3  |                         | Note Purchase Agreement, dated as of November 5, 1998,
    among James Hardie Finance B.V., James Hardie N.V. and certain
    purchasers thereto re: $225,000,000 Guaranteed Senior Notes(1)                                                                                                                                       
|       
|        | 2 | .4  |                         | Assignment and Assumption Agreement and First Amendment to Note
    Purchase Agreement, dated as of January 24, 2000, by and
    among James Hardie Finance B.V., James Hardie U.S. Funding,
    Inc., James Hardie N.V., James Hardie Aust Investco Pty Limited
    and certain noteholders thereto(1)                            
|       
|        | 2 | .5  |                         | Second Amendment to the Note Purchase Agreement dated as of
    October 22, 2001, by and among, James Hardie
    U.S. Funding, Inc., James Hardie N.V., James Hardie Aust
    Investco Pty Limited, James Hardie Australia Finance Pty
    Limited, James Hardie International Finance B. V. and certain
    noteholders thereto(1)
|       
|        | 2 | .6  |                         | Novation Agreement, dated August 27, 2001, relating to
    Amended and Restated Revolving Loan Agreement among James Hardie
    International Finance B.V., James Hardie N.V., James Hardie
    U.S. Funding Inc. and Australia and New Zealand Banking
    Group Limited(2)                                                       
|       
|        | 2 | .7  |                         | Novation Agreement, dated August 27, 2001, relating to
    Amended and Restated Revolving Loan Agreement among James Hardie
    International Finance B.V., James Hardie N.V., James Hardie
    U.S. Funding Inc. and Bank One, NA(2)                                                                                              
|       
|        | 2 | .8  |                         | Novation Agreement, dated August 27, 2001, relating to
    Amended and Restated Revolving Loan Agreement among James Hardie
    International Finance B.V., James Hardie N.V., James Hardie
    U.S. Funding Inc. and BNP Paribas(2)                                                                                               
|       
|        | 2 | .9  |                         | Novation Agreement, dated August 27, 2001, relating to
    Amended and Restated Revolving Loan Agreement among James Hardie
    International Finance B.V., James Hardie N.V., James Hardie
    U.S. Funding Inc. and Australia and Westdeutsche Landesbank
    Girozentrale, Sydney Branch(2)                                     
|       
|        | 2 | .10 |                         | Novation Agreement, dated August 27, 2001, relating to
    Amended and Restated Standby Loan Agreement among James Hardie
    International Finance B.V., James Hardie N.V., James Hardie
    U.S. Funding Inc. and Australia and New Zealand Banking
    Group Limited(2)                                                         
|       
|        | 2 | .11 |                         | Novation Agreement, dated August 27, 2001, relating to
    Amended and Restated Standby Loan Agreement among James Hardie
    International Finance B.V., James Hardie N.V., James Hardie
    U.S. Funding Inc. and Bank One, NA(2)                                                                                                
|       
|        | 2 | .12 |                         | Novation Agreement, dated August 27, 2001, relating to
    Amended and Restated Standby Loan Agreement among James Hardie
    International Finance B.V., James Hardie N.V., James Hardie
    U.S. Funding Inc. and BBL Australia Limited(2)                                                                                       
|       
|        | 2 | .13 |                         | Novation Agreement, dated August 27, 2001, relating to
    Amended and Restated Standby Loan Agreement among James Hardie
    International Finance B.V., James Hardie N.V., James Hardie
    U.S. Funding Inc. and BNP Paribas(2)                                                                                                 
|       
|        | 2 | .14 |                         | Novation Agreement, dated August 27, 2001, relating to
    Amended and Restated 364 Day Standby Loan Agreement among James
    Hardie International Finance B.V., James Hardie N.V., James
    Hardie U.S. Funding Inc. and Wells Fargo HSBC Trade Bank,
    National Association(2)                                               
|       
|        | 2 | .15 |                         | Novation Agreement, dated August 27, 2001, relating to
    Amended and Restated 364 Day Standby Loan Agreement among James
    Hardie International Finance B.V., James Hardie N.V., James
    Hardie U.S. Funding Inc. and Westdeutsche Landesbank
    Girozentrale, Sydney Branch(2)                                             



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##### Table of Contents



|        |   |     |                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|------- | - | --- | ----------------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |   |     |                        
|Number  |   |     | Description of Exhibits
|        |   |     |                        
|       
|        | 2 | .16 |                         | Form of Novation Agreement, dated December 16, 2002,
    relating to Amended and Restated Revolving Loan Agreement among
    James Hardie International Finance B.V., James Hardie N.V.,
    James Hardie U.S. Funding Inc., James Hardie Industries
    N.V., and each of the following banks: Australia and New Zealand
    Banking Group Limited; Bank One, NA; BNP Paribas; and WestLB AG,
    Sydney Branch(3)                                                                                  
|       
|        | 2 | .17 |                         | Form of Novation Agreement, dated December 16, 2002,
    relating to Amended and Restated Standby Loan Agreement among
    James Hardie International Finance B.V., James Hardie N.V.,
    James Hardie U.S. Funding Inc., James Hardie Industries
    N.V. and each of the following banks: Australia and New Zealand
    Banking Group Limited; Bank One, NA; ING Bank N.V., Sydney
    Branch; BNP Paribas; Wells Fargo HSBC Trade Bank, National
    Association; and WestLB AG, Sydney Branch(3)
|       
|        | 2 | .18 |                         | Amendment Agreement to Amended and Restated Standby Loan
    Agreement, effective April 30, 2004, among James Hardie
    International Finance B.V., James Hardie Industries N.V. and
    Wells Fargo HSBC Trade Bank, National Association(4)                                                                                                                                                                                                                                                       
|       
|        | 2 | .19 |                         | Form of Extension Letter, relating to 364 Day Standby Loan
    Agreement among James Hardie International Finance B.V., James
    Hardie Industries N.V. and each of the following banks:
    Australia and New Zealand Banking Group Limited; Bank One, NA;
    ING Bank NV, Sydney Branch; BNP Paribas; and WestLB AG, Sydney
    Branch(4)                                                                                                                                                        
|       
|        | 2 | .20 |                         | Extension Letter relating to 364 Day Standby Loan Agreement
    among James Hardie International Finance B.V., James Hardie
    Industries N.V. and Wells Fargo HSBC Trade Bank N.A.(4)                                                                                                                                                                                                                                                                                                              
|       
|        | 2 | .21 |                         | Assignment and Assumption Agreement and Third Amendment to Note
    Purchase Agreement, dated as of November 18, 2002, among
    James Hardie U.S. Funding Inc, James Hardie International
    Finance B.V., James Hardie Industries N.V., James Hardie N.V.
    and certain noteholders thereto(3)                                                                                                                                                                                                  
|       
|        | 2 | .22 |                         | Common Terms Deed Poll dated June 15, 2005 between James
    Hardie International Finance B.V. and James Hardie Industries
    N.V.                                                                                                                                                                                                                                                                                                                                                                  
|       
|        | 2 | .23 |                         | Form of Term Facility Agreement between James Hardie
    International Finance B.V. and Financier                                                                                                                                                                                                                                                                                                                                                                                                    
|       
|        | 2 | .24 |                         | Form of 364-day Facility Agreement between James Hardie
    International Finance B.V. and Financier                                                                                                                                                                                                                                                                                                                                                                                                 
|       
|        | 2 | .25 |                         | Form of Guarantee Deed between James Hardie Industries N.V. and
    Financier                                                                                                                                                                                                                                                                                                                                                                                                                        
|       
|        | 4 | .1  |                         | James Hardie Industries N.V. 2001 Equity Incentive Plan                                                                                                                                                                                                                                                                                                                                                                                                                                              
|       
|        | 4 | .2  |                         | James Hardie Industries N.V. Peter Donald Macdonald Share Option
    Plan 2002(1)                                                                                                                                                                                                                                                                                                                                                                                                                    
|       
|        | 4 | .3  |                         | Economic Profit and Individual Performance Incentive Plans                                                                                                                                                                                                                                                                                                                                                                                                                                           
|       
|        | 4 | .4  |                         | JHI NV Stock Appreciation Rights Incentive Plan                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|       
|        | 4 | .5  |                         | Supervisory Board Share Plan, dated July 19, 2002(1)                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|       
|        | 4 | .6  |                         | Letter of Resignation, dated October 21, 2004, between
    James Hardie Industries N.V. and Peter Donald Macdonald(4)                                                                                                                                                                                                                                                                                                                                                                                
|       
|        | 4 | .7  |                         | Consulting agreement, dated November 15, 2004, between
    James Hardie Industries N.V. and Peter Shafron(4)                                                                                                                                                                                                                                                                                                                                                                                         
|       
|        | 4 | .8  |                         | Employment Agreement effective as of February 10, 2005,
    among James Hardie Building Products, Inc., James Hardie
    Industries N.V. and Louis Gries                                                                                                                                                                                                                                                                                                                                             
|       
|        | 4 | .9  |                         | Summary of Employment Terms between James Hardie Industries N.V.
    and Russell Chenu                                                                                                                                                                                                                                                                                                                                                                                                               
|       
|        | 4 | .10 |                         | International Assignment Agreement dated May 10, 2005,
    between James Hardie Industries N.V. and Benjamin Butterfield                                                                                                                                                                                                                                                                                                                                                                             
|       
|        | 4 | .11 |                         | Employment Agreement, effective September 1, 2004, between
    James Hardie Buildings Products, Inc. and David Merkley                                                                                                                                                                                                                                                                                                                                                                               



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##### Table of Contents



|        |    |     |                         |                                                                                                                                                                                                                                                                                              
|------- | -- | --- | ----------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |     |                        
|Number  |    |     | Description of Exhibits
|        |    |     |                        
|       
|        | 4  | .12 |                         | Employment Agreement, effective September 1, 2004, between
    James Hardie Building Products and Donald Merkley                                                                                                                                                                             
|       
|        | 4  | .13 |                         | Amended Secondment dated October 8, 2004 between James
    Hardie Building Products Inc. and James Chilcoff(4)                                                                                                                                                                               
|       
|        | 4  | .14 |                         | Final Settlement Agreement between James Hardie International
    Finance B.V. and Folkert Zwinkels dated March 24, 2005                                                                                                                                                                     
|       
|        | 4  | .15 |                         | Form of Joint and Several Indemnity Agreement among James Hardie
    N.V., James Hardie (USA) Inc. and certain indemnitees thereto(1)                                                                                                                                                        
|       
|        | 4  | .16 |                         | Form of Joint and Several Indemnity Agreement among James Hardie
    Industries N.V., James Hardie Inc. and certain indemnitees
    thereto(1)                                                                                                                                               
|       
|        | 4  | .17 |                         | Form of Deed of Access to Documents, Indemnity and Insurance
    among James Hardie Industries N.V. and certain indemnitees
    thereto(1)                                                                                                                                                   
|       
|        | 4  | .18 |                         | Form of Joint and Several Indemnity Agreement among James Hardie
    Industries N.V., James Hardie Building Products Inc. and certain
    indemnities thereto                                                                                                                                
|       
|        | 4  | .19 |                         | Lease Amendment, dated March 23, 2004, among Amaca Pty
    Limited (f/k/a/ James Hardie & Coy Pty Limited), James
    Hardie Australia Pty Limited and James Hardie Industries N.V. re
    premises at the corner of Cobalt & Silica Street,
    Carole Park, Queensland, Australia(4)       
|       
|        | 4  | .20 |                         | Variation of Lease dated March 23, 2004, among Amaca Pty
    Limited (f/k/a/ James Hardie & Coy Pty Limited), James
    Hardie Australia Pty Limited and James Hardie Industries N.V. re
    premises at the corner of Colquhoun & Devon Streets,
    Rosehill, New South Wales, Australia(4)
|       
|        | 4  | .21 |                         | Extension of Lease dated March 23, 2004, among Amaca Pty
    Limited (f/k/a/ James Hardie & Coy Pty Limited), James
    Hardie Australia Pty Limited and James Hardie Industries N.V. re
    premises at Rutland, Avenue, Welshpool, Western Australia,
    Australia(4)                     
|       
|        | 4  | .22 |                         | Lease Amendment dated March 23, 2004, among Amaca Pty
    Limited (f/k/a/ James Hardie & Coy Pty Limited), James
    Hardie Australia Pty Limited and James Hardie Industries N.V. re
    premises at 46 Randle Road, Meeandah, Queensland, Australia (4)                                    
|       
|        | 4  | .23 |                         | Lease Agreement dated March 23, 2004 among Studorp Limited,
    James Hardie New Zealand Limited and James Hardie Industries
    N.V. re premises at the corner of ORorke and Station
    Roads, Penrose, Auckland, New Zealand(4)                                                          
|       
|        | 4  | .24 |                         | Lease Agreement dated March 23, 2004 among Studorp Limited,
    James Hardie New Zealand Limited and James Hardie Industries
    N.V. re premises at 44-74 ORorke Road, Penrose, Auckland,
    New Zealand(4)                                                                               
|       
|        | 4  | .25 |                         | Industrial Building Lease Agreement, effective October 6,
    2000, between James Hardie Building Products, Inc. and Fortra
    Fiber-Cement L.L.C., re premises at Waxahachie, Ellis County,
    Texas(1)                                                                                   
|       
|        | 4  | .26 |                         | Asset Purchase Agreement by and between James Hardie Building
    Products, Inc. and Cemplank, Inc. dated as of December 12,
    2001(1)                                                                                                                                                     
|       
|        | 4  | .27 |                         | Amended and Restated Stock Purchase Agreement dated
    March 12, 2002, between BPB U.S. Holdings, Inc. and
    James Hardie Inc.(1)                                                                                                                                                         
|       
|        | 8  | .1  |                         | List of significant subsidiaries of James Hardie Industries N.V.                                                                                                                                                                                                                             
|       
|        | 12 | .1  |                         | Certification of the Chief Executive Officer pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                                   
|       
|        | 12 | .2  |                         | Certification of the Chief Financial Officer pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                                   
|       
|        | 13 | .1  |                         | Certification of the Chief Executive Officer and Chief Financial
    Officer pursuant to Section 906 of the Sarbanes-Oxley Act
    of 2002                                                                                                                                                   
|       
|        | 15 | .1  |                         | Consent of independent registered public accounting firm                                                                                                                                                                                                                                     
|       
|        | 15 | .2  |                         | Consent of KPMG Actuaries Pty Ltd                                                                                                                                                                                                                                                            



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##### Table of Contents



|        |    |    |                         |                                                                                   
|------- | -- | -- | ----------------------- | ----------------------------------------------------------------------------------
|Exhibit |    |    |                        
|Number  |    |    | Description of Exhibits
|        |    |    |                        
|       
|        | 99 | .1 |                         | Excerpts of the ASX Settlement and Transfer Corporation Pty Ltd
    as of May 2005
|       
|        | 99 | .2 |                         | Excerpts of the Financial Services Reform Act 2001, as of
    March 11, 2002      
|       
|        | 99 | .3 |                         | ASIC Class Order 02/311, dated November 3, 2002                                   
|       
|        | 99 | .4 |                         | ASIC Modification, dated March 7, 2002(1)                                         






|    |                                                                                                                                               
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------
|(1) | This document was previously filed on paper as an exhibit to a
    prior Form 20-F. It is being re-filed herewith
    electronically.         
|   
|(2) | Previously filed as an exhibit to our Registration Statement on
    Form 20-F dated September 7, 2001 and incorporate
    herein by reference.
|   
|(3) | Previously filed as an exhibit to our Annual Report on
    Form 20-F dated July 2, 2003 and incorporated herein
    by reference.             
|   
|(4) | Previously filed as an exhibit to our Annual Report on
    Form 20-F dated November 22, 2004 and incorporated
    herein by reference.