##### 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, 2010
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 OR
 o
    
    SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 Date of event requiring this shell company report
 For the transition period from to
 Commission file number 1-15240
 JAMES HARDIE INDUSTRIES SE
 (Exact name of Registrant as specified in its charter)
 N/A
(Translation of Registrants name into English)
 Republic
of Ireland  (Jurisdiction of incorporation or organization)
 Europa House, Second Floor
Harcourt Center
Harcourt Street, Dublin 2, Republic of Ireland
(Address of principal executive offices)
 Marcin Firek
(Contact name)
 353 1411 6924 (Telephone)    353 1479 1128 (Facsimile)
 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
    
    New York Stock Exchangeof CHESS Units of Foreign Securities
 
 *
    
    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.    Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act.
  þ o
 o þ
  þ o
 o o
  Large accelerated
filer þ
Accelerated filer o
Non-accelerated filer o(Do not check if a smaller reporting company)
Smaller reporting company o  U.S. GAAP  þ
    
    International Financial Reporting Standards as issued
by the International Accounting Standards Board  o
    
    Other  o
  o o
 o þ




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##### 



TABLE OF CONTENTS
 PagePART I
    
    
    2Item 1. Identity of Directors, Senior Management and Advisers
    
    
    2Item 2. Offer Statistics and Expected Timetable
    
    
    2Item 3. Key Information
    
    
    2Item 4. Information on the Company
    
    
    28Item 4A. Unresolved Staff Comments
    
    
    53Item 5. Operating and Financial Review and Prospects
    
    
    53Item 6. Directors, Senior Management and Employees
    
    
    76Item 7. Major Shareholders and Related Party Transactions
    
    
    112Item 8. Financial Information
    
    
    114Item 9. Listing Details
    
    
    115Item 10. Additional Information
    
    
    117Item 11. Quantitative and Qualitative Disclosures About Market Risk
    
    
    134Item 12A.
Debt
Securities
    
    
    136Item 12B.
Warrants and Rights
    
    
    136Item 12C.
Other
Securities
    
    
    136Item 12D.
American Depository Shares
    
    
    136PART II
    
    
    137Item 13. Defaults, Dividend Arrearages and Delinquencies
    
    
    137Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds
    
    
    137Item 15. Controls and Procedures
    
    
    137Item 16A. Audit Committee Financial Expert
    
    
    139Item 16B. Code of Business Conduct and Ethics
    
    
    139Item 16C. Principal Accountant Fees and Services
    
    
    140Item 16D. Exemptions from the Listing Standards for Audit Committees
    
    
    140Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers
    
    
    141Item 16F. Change in Registrants Certifying Accountant
    
    
    141Item 16G. Corporate Governance
    
    
    141Item 17. Financial Statements
    
    
    141PART III
    
    
    141Item 18. Financial Statements
    
    
    141Item 19. Exhibits
    
    
    141EX-2.1EX-2.2EX-2.3EX-2.10EX-2.12EX-4.30EX-4.36EX-4.39EX-8.1EX-12.1EX-12.2EX-13.1EX-15.1EX-15.2EX-15.3
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PART I
 
 Item 1. Identity of Directors, Senior Management and Advisers
  
 Item 2. Offer Statistics and Expected Timetable
  
 Item 3. Key Information
 On August 21, 2009, our shareholders approved Stage 1 of a two-stage re-domicile proposal
(together, the Re-domicile) to move our corporate domicile from The Netherlands to the Republic
of Ireland (which we refer to as Ireland). Following this vote, on February 19, 2010, James Hardie
Industries SE completed its transformation from a public limited liability corporation registered
in The Netherlands (Naamloze Vennootschap (N.V.) to a European Company Societas Europaea (SE))
registered in The Netherlands (Stage 1). On June 2, 2010, our shareholders approved Stage 2 of the
Re-domicile to transform James Hardie Industries SE to an Irish SE by moving our corporate domicile
from The Netherlands to Ireland (Stage 2). Following this vote, on June 17, 2010, we moved our
corporate domicile to Ireland and are now subject to Irish law in addition to the Council of the
European Unions Regulation on the Statute for a European Company (SE Regulations). We became an
Irish tax resident on June 29, 2010.
 In this annual report, unless the context otherwise indicates, James Hardie Industries SE, a
Societas Europaea, or a European company incorporated and existing under the laws of Ireland, is
referred to as JHI SE. JHI SE together with its direct and indirect wholly owned subsidiaries as of
the time relevant to the applicable reference, are collectively referred to as the James Hardie
Group. JHI SE and its current direct and indirect wholly owned subsidiaries are collectively
referred to as we, us, our, JHI SE 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,
US$ or $ refers to U.S. dollars; the term A$ refers to Australian dollars; and the term NZ$
refers to New Zealand dollars. Unless otherwise stated, all amounts in A$ have been converted into
US$ at the March 31, 2010 exchange rate of A$1.0919 to $1.0000. 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 Ireland, we have listed our securities for trading on
the Australian Securities Exchange, or ASX, through the use of the Clearing House Electronic
Subregister System, or CHESS, via CHESS Units of Foreign Securities, or 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 SE, 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.
 We have also listed our securities for trading on the New York Stock Exchange, or NYSE. We sponsor
a program, whereby beneficial ownership of five CUFS is represented by one American Depositary
Share, or ADS, which is issued by The Bank of New York Mellon. These ADSs trade on the NYSE in the
form of American Depositary Receipts, or ADRs, under the symbol JHX. Unless the context indicates
otherwise, when we refer to ADSs, 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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Fiscal Year ended March 31,2010
    
    
    2009
    
    
    2008
    
    
    2007
    
    
    2006(In millions except sales price per unit and per share data)Consolidated Statements of Operations Data:Net SalesUSA and Europe Fiber Cement (1)
    
    $
    828.1
    
    
    $
    929.3
    
    
    $
    1,170.5
    
    
    $
    1,291.2
    
    
    $
    1,246.7Asia Pacific Fiber Cement (2)
    
    
    296.5
    
    
    
    273.3
    
    
    
    298.3
    
    
    
    251.7
    
    
    
    241.8Total net sales
    
    $
    1,124.6
    
    
    $
    1,202.6
    
    
    $
    1,468.8
    
    
    $
    1,542.9
    
    
    $
    1,488.5Operating (loss) income (3)
    
    $
    (21.0
    )
    
    $
    173.6
    
    
    $
    (36.6
    )
    
    $
    (86.6
    )
    
    $
    (434.9
    )Interest expense
    
    
    (7.7
    )
    
    
    (11.2
    )
    
    
    (11.1
    )
    
    
    (12.0
    )
    
    
    (7.2
    )Interest income
    
    
    3.7
    
    
    
    8.2
    
    
    
    12.2
    
    
    
    5.5
    
    
    
    7.0Other income (expense) (4)
    
    
    6.3
    
    
    
    (14.8
    )
    
    
    
    
    
    
    
    
    
    
    (Loss) income from operations before income
taxes
    
    
    (18.7
    )
    
    
    155.8
    
    
    
    (35.5
    )
    
    
    (93.1
    )
    
    
    (435.1
    )Income tax (expense) benefit
    
    
    (66.2
    )
    
    
    (19.5
    )
    
    
    (36.1
    )
    
    
    243.9
    
    
    
    (71.6
    )(Loss) income from operations
    
    $
    (84.9
    )
    
    $
    136.3
    
    
    $
    (71.6
    )
    
    $
    150.8
    
    
    $
    (506.7
    )Net (loss) income
    
    $
    (84.9
    )
    
    $
    136.3
    
    
    $
    (71.6
    )
    
    $
    151.7
    
    
    $
    (506.7
    )(Loss) income from operations per common
share  basic
    
    $
    (0.20
    )
    
    $
    0.32
    
    
    $
    (0.16
    )
    
    $
    0.32
    
    
    $
    (1.10
    )Net (loss) income per common share  basic
    
    $
    (0.20
    )
    
    $
    0.32
    
    
    $
    (0.16
    )
    
    $
    0.33
    
    
    $
    (1.10
    )(Loss) income from operations per common
share  diluted
    
    $
    (0.20
    )
    
    $
    0.31
    
    
    $
    (0.16
    )
    
    $
    0.32
    
    
    $
    (1.10
    )Net (loss) income per common share  diluted
    
    $
    (0.20
    )
    
    $
    0.31
    
    
    $
    (0.16
    )
    
    $
    0.33
    
    
    $
    (1.10
    )Dividends paid per share
    
    $
    
    
    
    $
    0.08
    
    
    $
    0.27
    
    
    $
    0.09
    
    
    $
    0.10Weighted average number of common shares
outstandingBasic
    
    
    433.1
    
    
    
    432.3
    
    
    
    455.0
    
    
    
    464.6
    
    
    
    461.7Diluted
    
    
    433.1
    
    
    
    434.5
    
    
    
    455.0
    
    
    
    466.4
    
    
    
    461.7Consolidated Cash Flow Information:Cash flows provided by (used in) operating
activities
    
    $
    183.1
    
    
    $
    (45.2
    )
    
    $
    319.3
    
    
    $
    (67.1
    )
    
    $
    238.4Cash flows used in investing activities
    
    $
    (50.5
    )
    
    $
    (26.1
    )
    
    $
    (38.5
    )
    
    $
    (92.6
    )
    
    $
    (154.0
    )Cash flows (used in) provided by financing
activities
    
    $
    (159.0
    )
    
    $
    25.0
    
    
    $
    (254.4
    )
    
    $
    (136.4
    )
    
    $
    118.7Other Data:Depreciation and amortization
    
    $
    61.7
    
    
    $
    56.4
    
    
    $
    56.5
    
    
    $
    50.7
    
    
    $
    45.3Adjusted EBITDA (5)
    
    $
    40.7
    
    
    $
    230.0
    
    
    $
    19.9
    
    
    $
    (35.9
    )
    
    $
    (389.6
    )Capital expenditures
    
    $
    50.5
    
    
    $
    26.1
    
    
    $
    38.5
    
    
    $
    92.1
    
    
    $
    162.8Volume (million square feet) (6)USA and Europe Fiber Cement (1)
    
    
    1,303.7
    
    
    
    1,526.6
    
    
    
    1,951.2
    
    
    
    2,216.2
    
    
    
    2,244.4Asia Pacific Fiber Cement (2)
    
    
    389.6
    
    
    
    390.6
    
    
    
    398.2
    
    
    
    390.8
    
    
    
    368.3Average sales price per unit (per thousand
square feet)USA and Europe Fiber Cement (1)
    
    $
    635
    
    
    $
    609
    
    
    $
    600
    
    
    $
    583
    
    
    $
    555Asia Pacific Fiber Cement (2)
    
    A$
    894
    
    
    A$
    879
    
    
    A$
    862
    
    
    A$
    842
    
    
    A$
    872
 3




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Fiscal Year ended March 31,2010
    
    
    2009
    
    
    2008
    
    
    2007
    
    
    2006(In millions except sales price per unit and per share data)Consolidated Balance Sheet Data:Net current assets (7)
    
    $
    50.4
    
    
    $
    137.7
    
    
    $
    183.7
    
    
    $
    259.0
    
    
    $
    150.8Total assets
    
    $
    2,178.8
    
    
    $
    1,891.7
    
    
    $
    2,179.9
    
    
    $
    2,128.1
    
    
    $
    1,445.4Total debt
    
    $
    154.0
    
    
    $
    324.0
    
    
    $
    264.5
    
    
    $
    188.0
    
    
    $
    302.7Common stock
    
    $
    221.1
    
    
    $
    219.2
    
    
    $
    219.7
    
    
    $
    251.8
    
    
    $
    253.2Shareholders (deficit) equity
    
    $
    (117.9
    )
    
    $
    (108.7
    )
    
    $
    (202.6
    )
    
    $
    258.7
    
    
    $
    94.9
 
 (1)
    
    On April 1, 2008, the Company realigned its operating segments by combining the previously
reported segments of USA Fiber Cement and Other into one operating segment, USA and Europe
Fiber Cement. USA and Europe Fiber Cement manufactures fiber cement interior linings, exterior
siding and related accessory products in the United States which are sold in the United
States, Canada and Europe.The segment also includes fiber cement manufactured and sold in Chile (through July 2005),
fiber reinforced concrete pipes manufactured and sold in the United States (through May
2008) and a roofing pilot plant in the United States (through fiscal year 2006). Our roofing
pilot plant was closed and the business ceased operations in April 2006. Our Plant City,
Florida Hardie Pipe Plant was closed and the business ceased operations in May 2008.(2)
    
    Asia Pacific Fiber Cement includes all fiber cement manufactured in Australia, New Zealand
and the Philippines and sold in Australia, New Zealand, Asia, the Middle East (Israel, Kuwait,
Qatar and United Arab Emirates) and various Pacific Islands.(3)
    
    Fiscal year 2010 operating loss includes $224.2 million of unfavorable asbestos adjustments;
$2.1 million of Asbestos Injuries Compensation Fund (which we refer to as the AICF) SG&A
expenses; and $3.4 million of expenses related to the Australian Securities and Investments
Commission (which we refer to as ASIC).Fiscal year 2009 operating income includes $17.4 million of favorable asbestos adjustments;
$0.7 million of AICF SG&A expenses; and $14.0 million of expenses related to the ASIC.Fiscal year 2008 operating loss includes $240.1 million of unfavorable asbestos adjustments;
$4.0 million of AICF SG&A expenses; $5.5 million of ASIC expenses; and $71.0 million of
impairment charges.Fiscal year 2007 operating loss includes Special Commission of Inquiry (which we refer to as
the SCI) and other related expenses of $13.6 million and $405.5 million related to
unfavorable asbestos adjustments.Fiscal year 2006 operating loss includes SCI and other related expenses of $17.4 million,
$715.6 million related to the establishment of an asbestos provision and $13.4 million
related to the impairment of our former roofing plant. In addition, fiscal year 2006
operating loss includes a $0.8 million loss related to the disposal of our Chilean fiber
cement business.For additional information on the asbestos adjustments, AICF SG&A expenses and expenses
related to ASIC, see Item 5, Operating and Financial Review and Prospects and Notes 11 and
13 to our consolidated financial statements in Item 18. For additional information on the
impairment charges for fiscal year 2008, see Item 5, Operating and Financial Review and
Prospects and Note 7 to our consolidated financial statements in Item 18.(4)
    
    Other income in fiscal year 2010 primarily includes a realized gain arising from the sale of
restricted short-term investments held by the AICF. Other expense in fiscal year 2009 consists
of an other-than-temporary impairment charge related to restricted short-term investments held
by the AICF of $14.8 million. For additional information see Item 5, Operating and Financial
Review and Prospects  Results of Operations. 4




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(5)
    
    Adjusted EBITDA represents income from operations before interest income, interest expense,
income taxes, other non-operating (income) expense, described in footnote four above,
cumulative effect of change in accounting principle, and depreciation and amortization
charges. The following table presents a reconciliation of Adjusted EBITDA to net cash provided
by (used in) operating activities, as this is the most directly comparable GAAP financial
measure to Adjusted EBITDA for each of the periods indicated. Fiscal Years Ended March 31,2010
    
    
    2009
    
    
    2008
    
    
    2007
    
    
    2006(In millions)Net cash provided by (used in) operating activities
    
    $
    183.1
    
    
    $
    (45.2
    )
    
    $
    319.3
    
    
    $
    (67.1
    )
    
    $
    238.4Adjustments to reconcile net (loss)
income to net cash provided by (used in)
operating activities
    
    
    (312.0
    )
    
    
    (3.5
    )
    
    
    (318.9
    )
    
    
    4.5
    
    
    
    (789.1
    )Change in operating assets and liabilities, net
    
    
    44.0
    
    
    
    185.0
    
    
    
    (72.0
    )
    
    
    214.3
    
    
    
    44.0Net income (loss)
    
    
    (84.9
    )
    
    
    136.3
    
    
    
    (71.6
    )
    
    
    151.7
    
    
    
    (506.7
    )Cumulative effect of change in accounting
principle
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (0.9
    )
    
    
    Income tax expense (benefit)
    
    
    66.2
    
    
    
    19.5
    
    
    
    36.1
    
    
    
    (243.9
    )
    
    
    71.6Interest expense
    
    
    7.7
    
    
    
    11.2
    
    
    
    11.1
    
    
    
    12.0
    
    
    
    7.2Interest income
    
    
    (3.7
    )
    
    
    (8.2
    )
    
    
    (12.2
    )
    
    
    (5.5
    )
    
    
    (7.0
    )Other (income) expense
    
    
    (6.3
    )
    
    
    14.8
    
    
    
    
    
    
    
    
    
    
    
    Depreciation and amortization
    
    
    61.7
    
    
    
    56.4
    
    
    
    56.5
    
    
    
    50.7
    
    
    
    45.3Adjusted EBITDA
    
    $
    40.7
    
    
    $
    230.0
    
    
    $
    19.9
    
    
    $
    (35.9
    )
    
    $
    (389.6
    )
 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, as well as non-operating income and expense items.(6)
    
    Fiber cement volume is measured in 5/16 thick square feet, which are referred to as standard
feet.(7)
    
    Total current assets less total current liabilities.
 5




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Risk Factors
  Our wholly owned Australian subsidiary, James Hardie 117 Pty Ltd (which we refer to as the
Performing Subsidiary), is required to make payments to a special purpose fund that provides
compensation for Australian asbestos-related personal injury and death claims for which certain
former companies of the James Hardie Group are found liable.
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Potential escalation in proven claims made against, and associated costs of, the AICF could
increase our annual funding payments required to be made under the Amended FFA, which may cause us
to have to increase our asbestos liability in the future.
     Even though the Amended FFA has been implemented, we may be subject to potential additional
liabilities (including claims for compensation or property remediation outside the arrangements
reflected in the Amended FFA) because certain current and former companies of the James Hardie
Group previously manufactured products that contained asbestos.
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Because our revenues are primarily derived from sales in U.S. dollars and payments pursuant to the
Amended FFA are made in Australian dollars, we may experience unpredictable volatility in our
reported results due to changes in the U.S. dollar (and other currencies from which we derive our
sales) compared to the Australian dollar.
    8




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The Amended FFA imposes certain non-monetary obligations.
  The Amended FFA does not eliminate the risk of adverse action being taken against us.
  The complexity and long-term nature of the Amended FFA and related legislation and agreements may
result in litigation as to their interpretation or one or more of the parties to the agreements may
seek to renegotiate their terms.
   Until the proposed NSW Government loan facility to the AICF is formally in place there remains a
risk of a short-term funding shortfall for the AICF.
   9




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There is no certainty that the proposed NSW Government loan facility to the AICF will remain in
place for the entire term of the facility.
   We may have insufficient Australian taxable income to utilize tax deductions.
  Certain Amended FFA tax conditions may not be satisfied.
   Regulatory
action and continued scrutiny may have an adverse effect on our business.
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We may be liable for defense costs and liabilities incurred in the ASIC proceedings and appeals by
current or former directors, officers or employees of the James Hardie Group to the extent that
those costs and liabilities are covered by indemnity arrangements granted by the James Hardie Group
to those persons.
     In connection with transforming the company to an Irish SE, we and certain of our subsidiaries were
required to negotiate the terms of future employee involvement in JHI SE and certain of its
subsidiaries with employees from the European Economic Area (which we refer to as the EEA) member
states in which we operate. These negotiations resulted in an agreement that requires us, among
other things, to provide information to employees annually and upon certain other events and for us
to consult with employees on these matters. There is a risk that our entry into the employee
involvement agreement may result in a material change to our governance or adversely affect our
decision making process.
  11




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The actual benefits that we realize as an Irish SE could be materially different from our current
expectations.
  Our business may be adversely affected as a result of adverse action against us and negative
publicity resulting from our transformation to an Irish SE, including the reduction of amounts
available for contributions under the Amended FFA resulting from the costs associated with the
Re-domicile and the possibility of the AICF later not having sufficient funding to meet future
obligations.
    12




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Our effective income tax rate could increase and materially adversely affect our business.
  Tax benefits are available under the U.S.-Netherlands Income Tax Treaty to U.S. and Dutch taxpayers
that qualify for those benefits. In spite of a favorable settlement with the Appeals Division of
the Internal Revenue Service (which we refer to as the IRS) for calendar years 2006 and 2007 (as
discussed below), our eligibility for continuing benefits under the U.S.-Netherlands Tax Treaty is
still undetermined for 2008 and subsequent years.
     13




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Tax benefits are available under the U.S.-Ireland Income Tax Treaty for certain intercompany
payments made by our U.S. subsidiaries to our Irish subsidiaries. Interest and royalty payments
paid by our U.S. subsidiaries to our Irish subsidiaries may not qualify for treaty benefits under
the derivative benefits clause.
  Revenue rulings received from Irish and Dutch Revenue authorities are based upon facts that may not
be met in the future, in which case there is a risk that the conclusions reached in the rulings
will not apply to us, including that JHI SE will not be treated as an Irish tax resident for
purposes of the U.S.-Ireland Treaty and The Netherlands-Ireland Treaty.
       14




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##### Table of Contents



Tax benefits are available under the U.S.-Ireland Income Tax Treaty to U.S. and Irish taxpayers
that qualify for those benefits. Our eligibility for benefits under the U.S.-Ireland Tax Treaty is
determined on an annual basis and we could be audited by the IRS for this issue. If during a
subsequent tax audit or related process, the IRS determines that we are not eligible for benefits
under the U.S.-Ireland Treaty, we may not qualify for treaty benefits. As a result, our effective
tax rate could significantly increase and we could be subject to a 30% U.S. withholding tax rate.
     Under Dutch tax law, from April 1, 2009 through October 15, 2009, we derived tax benefits from the
group finance operations of our Netherlands-based finance subsidiary, and changes in the laws
applicable to the finance subsidiary could have increased our effective tax rate and, as a result,
could materially adversely affect our business. As of October 16, 2009, our group treasury and
finance operations were transferred to Ireland.
  15




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##### Table of Contents



Under Irish tax law, our Irish subsidiaries are subject to tax at the trading rate of 12.5%.
Failure to meet the conditions required to qualify for this rate could increase our effective tax
rate and, as a result, could materially adversely affect our business.
    Our wholly-owned subsidiary, RCI Pty Ltd (which we refer to as RCI), has been required to post a
substantial cash deposit and may incur substantial expenses in order to pursue an appeal of an
assessment by the ATO. In addition, if the assessment is ultimately upheld this also would
materially and adversely affect our business.
   16




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##### Table of Contents



Exposure to additional income tax liabilities due to audits could materially adversely affect our
business.
  If we are classified by the United States tax authorities 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.
  Irish law contains provisions that could delay or prevent a change of control that may otherwise be
beneficial to shareholders.
  17




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##### Table of Contents



Because we are incorporated under Irish law, shareholders 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 materially adversely affect the price of our common
stock.
   Indemnification claims arising under certain indemnification agreements we have granted to third
parties could have a material adverse effect on our business.
    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 material
adverse effect on our business.
  18




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##### Table of Contents



Our business is dependent on the residential and commercial construction markets and we expect a
slow recovery in housing construction in the markets we serve, including the U.S., Australia and
New Zealand, over the short-to-medium term.
      19




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##### Table of Contents



Substantial and increasing competition in the building products industry could materially 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.
  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.
 -
 20




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##### Table of Contents



Warranty claims resulting from unforeseen defects in our products and exceeding our warranty
reserves could have a material adverse effect on our business.
  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
and could have a material adverse effect on our business.
    21




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##### Table of Contents



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 and energy supply
necessary to our business. A significant reduction, disruption or cessation of shipments from an
important supplier of raw materials or a significant increase in fuel and energy costs could have a
material adverse effect on our business.
     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 a
material adverse effect on our business. In addition we may incur substantial expenses related to
unsuccessful research and development efforts.
  22




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##### Table of Contents



Demand for our products is subject to changes in consumer preference.
   Our ability to sell our products into certain markets is influenced by building codes and
ordinances in effect in the related localities and states and may limit our ability to compete
effectively in certain markets and our ability to increase or maintain our current market share for
our products.
  We rely on only a few customers to buy our fiber cement products and the loss of any major customer
could materially adversely affect our business.
  Our financial performance could be impacted by a customers inability to pay amounts owed.
  Our reliance on third party distribution channels could impact our business.
  23




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##### Table of Contents



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.
  Because our intellectual property and other proprietary information may be or may become publicly
available, we are subject to the risk that competitors could copy our products or processes.
  Natural disasters or disruptions in power supply could have an adverse effect on our overall
business.
   24




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##### Table of Contents



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 may be materially adversely affected.
 1 ,
 In the future, we may be unable to renew our credit facilities on their current terms or terms that
are customary for other companies in our industry or who have similar credit ratings, or be able to
obtain any alternative or additional financing arrangements.
  Our ability to pay dividends is dependent on Irish law and may be limited in the future if we are
not able to maintain sufficient levels of Freely Distributable Reserves (which we refer to as
FDRs).
  Ineffective internal controls over financial reporting could impact our business and operating
results.
  
 1
    
    Under Australian law, we cannot keep
records of union members. The number quoted is the number of people who work in
our factories that have union participation and therefore may be represented by
a union. 25




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##### Table of Contents



Our use of accounting estimates involves judgment and could impact our financial results.
  Changes in our board structure and the composition of our board of directors may lead to a loss of
continuity of directors and adversely affect our decision-making and governance.
   We may acquire or divest businesses from time to time, and this may materially adversely affect our
results of operations and financial condition and may significantly change the nature of the
company in which you have invested.
  We are dependent upon our key management personnel for our future success.
  26




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##### Table of Contents



Forward-Looking Statements
   
    
    statements about our future performance;
    
    projections of our results of operations or financial condition;
    
    statements regarding our plans, objectives or goals, including those relating to
strategies, initiatives, competition, acquisitions, dispositions and/or our products;
    
    expectations concerning the costs associated with the suspension or closure of
operations at any of our plants and future plans with respect to any such plants;
    
    expectations that our credit facilities will be extended or renewed;
    
    expectations concerning dividend payments;
    
    statements concerning our corporate and tax domiciles and potential changes to them,
including potential tax charges;
    
    statements regarding tax liabilities and related audits, reviews and proceedings;
    
    statements as to the possible consequences of proceedings brought against us and
certain of our former directors and officers by the ASIC;
    
    expectations about the timing and amount of contributions to the AICF, a special
purpose fund for the compensation of proven Australian asbestos-related personal injury
and death claims;
    
    expectations concerning indemnification obligations;
    
    statements about product or environmental liabilities; and
    
    statements about economic conditions, such as the levels of new home construction,
unemployment levels, the availability of mortgages and other financing, mortgage and
other interest rates, housing affordability and supply, the levels of foreclosures and
home resales, currency exchange rates and consumer confidence.
   27




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##### Table of Contents



Item 4. Information on the Company
 History and Development of the Company
 besloten vennootschap met beperkte aansprakelijkheid
  rd
 Corporate Restructuring
   28




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##### Table of Contents




    
    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 listing of the shares of JHI NV represented by CUFS on the ASX and the listing
of ADSs, representing CUFS, which in turn represent shares of JHI NV, on the NYSE; and
    
    the establishment of a Dutch financing subsidiary, James Hardie International
Finance B.V. (which we refer to as JHIF BV).
   29




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##### Table of Contents



Before
 
 After
 
   
    
    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 of ABN 60, after due
consideration of ABN 60s financial position, determined that the reduction in capital
would not materially prejudice ABN 60s ability to pay its 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. 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. 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 the ABN 60 Foundation. ABN 60 Foundation was established
to be the sole shareholder of ABN 60. ABN 60 was managed by independent directors and
operated entirely independently of the Company.
 30




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##### Table of Contents



Current
 
 Consolidation of the AICF
    31




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##### Table of Contents



Recent Developments (events occurring after April 1, 2010)
 ASIC Proceedings
    Re-domicile
  Debt Facilities
  General Overview of Our Business
 ® TM   ® TM
 32




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##### Table of Contents



1
  Fiscal Year Ended March 31,2010
    
    
    2009
    
    
    2008(In millions)USA and Europe Fiber Cement
    
    $
    828.1
    
    
    $
    929.3
    
    
    $
    1,170.5Asia Pacific Fiber Cement
    
    
    296.5
    
    
    
    273.3
    
    
    
    298.3Total
    
    $
    1,124.6
    
    
    $
    1,202.6
    
    
    $
    1,468.8
 Industry Overview
 U.S. Housing Industry and Fiber Cement Industry
   
 1
    
    Actual repair and remodeling siding usage reports from NAHB for calendar year 2009 will not
be available until July 2010. 33




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##### Table of Contents



International Fiber Cement Industry
     Products
  34




---



##### Table of Contents



® ®
     
    
    During fiscal years 2005 and 2006, after considerable market research, we re-launched
the ColorPlusâ collection of products with additional colors, board
profiles, and pallet sizes. In addition, we expanded our manufacturing capacity and
capabilities to meet increasing demand for our siding, trim and soffit products with
ColorPlusâ Technology.
    
    During fiscal year 2006, we added Moldblock Technology to our EZGridâ
underlay and Hardiebackerâ sheets.
    
    During fiscal year 2008, we introduced Artisanâ Lap siding, Artisan
Accent Trim, HardieWrap weather barrier. Additionally, in the past five years, we launched
many new textures, styles and coatings in fiber cement siding products in the United States
to capitalize on demand for a variety of styles among homebuilders and homeowners.
 35




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##### Table of Contents




    
    During fiscal year 2009, we introduced two new siding profiles, Beaded Porch Panel and
Shingle Plank.
    
    During fiscal year 2010, we introduced HardieZone System siding products.
 â â â
 â
 Seasonality
  Raw Materials
  Cellulose Fiber.
 Silica.
 36




---



##### Table of Contents



Cement.
 Water.
 Sales, Marketing and Distribution
    ®
 37




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##### Table of Contents



Research and Development
  Fiscal Years Ended March 31,(In millions)
    
    2010
    
    2009
    
    2008Research and Development Expenditures (1)
    
    $
    30.4
    
    
    $
    28.3
    
    
    $
    27.4Research and Development Expenditures as
a percentage of total net sales
    
    
    2.7
    %
    
    
    2.4
    %
    
    
    1.9
    %
 
 (1)
    
    Included within research and development expenditures for fiscal years 2010, 2009 and 2008 is
$3.3 million, $4.5 million and $0.1 million, respectively, classified as selling, general and
administrative expenses. Dependence on Trade Secrets and Research and Development
   38




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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 Mine 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;
    
    the National Environmental Policy Act; and
    
    the Endangered Species Act,
    39




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##### Table of Contents



Organizational Structure
   Name of Company
    
    Jurisdiction of EstablishmentJames Hardie 117 Pty Ltd.
    
    AustraliaJames Hardie Aust Holdings Pty Ltd.
    
    AustraliaJames Hardie Austgroup Pty Ltd.
    
    AustraliaJames Hardie Australia Management Pty Ltd.
    
    AustraliaJames Hardie Australia Pty Ltd.
    
    AustraliaJames Hardie Building Products Inc.
    
    United StatesJames Hardie Europe B.V.
    
    NetherlandsJames Hardie Holdings Limited
    
    IrelandJames Hardie International Finance Limited
    
    IrelandJames Hardie International Holdings SE
    
    IrelandJames Hardie N.V.
    
    NetherlandsJames Hardie New Zealand Limited
    
    New ZealandJames Hardie Philippines Inc.
    
    PhilippinesJames Hardie Research (Holdings) Pty Ltd.
    
    AustraliaJames Hardie Research Pty Ltd.
    
    AustraliaJames Hardie Technology Limited
    
    BermudaJames Hardie U.S. Investments Sierra Inc.
    
    United StatesN.V. Technology Holdings A Limited Partnership
    
    AustraliaRCI Pty Ltd.
    
    Australia
 Capital Expenditures and Divestitures
  Fiscal Years Ended March 31,2010
    
    
    2009
    
    
    2008(In millions)USA and Europe Fiber Cement (1)
    
    $
    40.6
    
    
    $
    20.0
    
    
    $
    31.3Asia Pacific Fiber Cement
    
    
    6.7
    
    
    
    4.9
    
    
    
    5.6Research and Development and Corporate
    
    
    3.2
    
    
    
    1.2
    
    
    
    1.6Total Capital Expenditures
    
    $
    50.5
    
    
    $
    26.1
    
    
    $
    38.5
 
 (1)
    
    On April 1, 2008, the Company realigned its operating segments by combining the previously
reported segments of USA Fiber Cement and Other into one operating segment, USA and Europe
Fiber Cement. USA and Europe Fiber Cement includes all fiber cement manufactured in the United
States and sold in the United States, Canada and Europe.The segment also includes fiber reinforced concrete pipes manufactured and sold in the
United States at our Plant City, Florida Hardie Pipe Plant, which was closed and ceased
operations in May 2008.   40




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##### Table of Contents




    
    commencement of a new finishing capability on an existing product line in fiscal year
2009. As of March 31, 2010, we have incurred $18.9 million related to this project; and
    
    the implementation of our ColorPlus® strategy in fiscal year 2005. This
strategy included constructing additional ColorPlus® coating capacity inside our
existing plants. Over the last three fiscal years, we have incurred $14.1 million of
capital expenditures related to our ColorPlus® strategy.
    Property, Plant and Equipment
   41




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##### Table of Contents



Plants and Process
  Existing AnnualDesign CapacityLocation
    
    (1)Fiber Cement (in million square feet)United StatesFontana, California (2)
    
    
    180Plant City, Florida
    
    
    300Cleburne, Texas
    
    
    500Tacoma, Washington
    
    
    200Peru, Illinois
    
    
    560Waxahachie, Texas
    
    
    360Blandon, Pennsylvania (3)
    
    
    200Summerville, South Carolina (2)
    
    
    190Reno, Nevada
    
    
    300Pulaski, Virginia
    
    
    600Total United States
    
    
    3,390AustraliaSydney, New South Wales
    
    
    180Brisbane, Queensland (Carole Park) (4)
    
    
    120Total Australia
    
    
    300New ZealandAuckland
    
    
    75The PhilippinesManila
    
    
    145Total Fiber Cement Flat Sheet
    
    
    3,910Fiber Reinforced Concrete Pipes(in tons) (5)Plant City, Florida (pipes) (6)
    
    
    Brisbane, Queensland (Meeandah) (4)
    
    
    50,000Total Fiber Reinforced Concrete Pipes
    
    
    50,000
 
 (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. Annual design capacity is
not necessarily reflective of our actual capacity utilization at each plant. See below for a
description of average capacity utilization rates for our fiber cement plants by region.
Plants outside the United States produce a range of thicker 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.Beginning September 2010, annual design capacity will be calculated assuming approximate
current product mix and then adjusted for 5/16 thickness. This change in methodology will
be implemented to reflect changes in our product mix as we expect to increase production of
thicker products.(2)
    
    We suspended production at our Summerville, South Carolina and Fontana, California plants in
November 2008 and December 2008, respectively.(3)
    
    We suspended production at our Blandon, Pennsylvania plant in November 2007. See Note 7 to
the notes to our consolidated financial statements included in Item 18 for more information. 42




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##### Table of Contents



(4)
    
    There are two manufacturing plants in Brisbane. Carole Park produces only flat sheets and
Meeandah produces only pipes and columns.(5)
    
    Pipe and column capacity is measured in tons rather than million square feet.(6)
    
    Our Plant City, Florida Pipe plant ceased operations in May 2008. See Note 7 to the notes to
our consolidated financial statements included in Item 18 for more information.      CapacityRegion
    
    Utilization (1)United States
    
    
    40
    %Asia Pacific (2)
    
    
    69
    %
 
 (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.(2)
    
    Included in Asia Pacific capacity utilization are our fiber cement plants located in
Australia, New Zealand, and the Philippines. 43




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Mines
  Commitment to Provide Funding on a Long-Term Basis in Respect of Asbestos-Related Liabilities of
Former Subsidiaries
  Asbestos Adjustments
  Fiscal Years Ended March 31,(In millions)
    
    2010
    
    
    2009
    
    
    2008Change in estimates:Change in actuarial estimate  asbestos liability
    
    $
    (3.8
    )
    
    $
    (180.9
    )
    
    $
    (175.0
    )Change in actuarial estimate  insurance receivable
    
    
    1.9
    
    
    
    19.8
    
    
    
    27.4Change in estimate  AICF claims-handling costs
    
    
    (1.4
    )
    
    
    (1.2
    )
    
    
    (6.5
    )Change in estimate  other
    
    
    
    
    
    
    
    
    
    
    1.2Subtotal  Change in estimates
    
    
    (3.3
    )
    
    
    (162.3
    )
    
    
    (152.9
    )(Loss) gain on foreign currency exchange
    
    
    (220.9
    )
    
    
    179.7
    
    
    
    (87.2
    )Total Asbestos Adjustments
    
    $
    (224.2
    )
    
    $
    17.4
    
    
    $
    (240.1
    )
 44




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Asbestos-Related Assets and Liabilities
  March 31,(In millions)
    
    2010
    
    
    2009Asbestos liability  current
    
    $
    (106.7
    )
    
    $
    (78.2
    )Asbestos liability  non-current
    
    
    (1,512.5
    )
    
    
    (1,206.3
    )Asbestos liability  Total
    
    
    (1,619.2
    )
    
    
    (1,284.5
    )Insurance receivable  current
    
    
    16.7
    
    
    
    12.6Insurance receivable  non-current
    
    
    185.1
    
    
    
    149.0Insurance receivable  Total
    
    
    201.8
    
    
    
    161.6Workers compensation asset  current
    
    
    0.1
    
    
    
    0.6Workers compensation asset  non-current
    
    
    98.8
    
    
    
    73.8Workers compensation liability  current
    
    
    (0.1
    )
    
    
    (0.6
    )Workers compensation liability  non-current
    
    
    (98.8
    )
    
    
    (73.8
    )Workers compensation  Total
    
    
    
    
    
    
    Deferred income taxes  current
    
    
    16.4
    
    
    
    12.3Deferred income taxes  non-current
    
    
    420.0
    
    
    
    333.2Deferred income taxes  Total
    
    
    436.4
    
    
    
    345.5Income tax payable
    
    
    16.5
    
    
    
    22.8Other net liabilities
    
    
    (1.7
    )
    
    
    (2.0
    )Net Amended FFA liability
    
    
    (966.2
    )
    
    
    (756.6
    )Restricted cash and cash equivalents and
restricted short-term investment assets of
the AICF
    
    
    57.8
    
    
    
    98.3Unfunded Net Amended FFA liability
    
    $
    (908.4
    )
    
    $
    (658.3
    )
 Asbestos Liability
   A$
    
    A$ to
    
    US$Millions
    
    US$ rate
    
    MillionsAsbestos liability  March 31, 2009
    
    
    (1,869.2
    )
    
    
    1.4552
    
    
    
    (1,284.5
    )Asbestos claims paid (1)
    
    
    103.2
    
    
    
    1.1749
    
    
    
    87.8AICF claims-handling costs incurred (1)
    
    
    3.6
    
    
    
    1.1749
    
    
    
    3.1Change in actuarial estimate (2)
    
    
    (4.1
    )
    
    
    1.0919
    
    
    
    (3.8
    )Change in estimate of AICF claims-handling costs (2)
    
    
    (1.5
    )
    
    
    1.0919
    
    
    
    (1.4
    )Loss on foreign currency exchange
    
    
    
    
    
    
    
    
    
    
    (420.4
    )Asbestos liability  March 31, 2010
    
    
    (1,768.0
    )
    
    
    1.0919
    
    
    
    (1,619.2
    )
 45




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(1)
    
    The average exchange rate for the period is used to convert the Australian dollar amount to
U.S. dollars based on the assumption that these transactions occurred evenly throughout the
period.(2)
    
    The spot exchange rate at March 31, 2010 is used to convert the Australian dollar amount to
U.S. dollars as the adjustment to the estimate was made on that date. Insurance Receivable  Asbestos
  A$
    
    A$ to
    
    US$Millions
    
    US$ rate
    
    MillionsInsurance receivable  March 31, 2009
    
    
    235.2
    
    
    
    1.4552
    
    
    
    161.6Insurance recoveries (1)
    
    
    (16.9
    )
    
    
    1.1749
    
    
    
    (14.4
    )Change in actuarial estimate (2)
    
    
    2.0
    
    
    
    1.0919
    
    
    
    1.8Gain on foreign currency exchange
    
    
    
    
    
    
    
    
    
    
    52.8Insurance receivable  March 31, 2010
    
    
    220.3
    
    
    
    1.0919
    
    
    
    201.8
 
 (1)
    
    The average exchange rate for the period is used to convert the Australian dollar amount to
U.S. dollars based on the assumption that these transactions occurred evenly throughout the
period.(2)
    
    The spot exchange rate at March 31, 2010 is used to convert the Australian dollar amount to
U.S. dollars as the adjustment to the estimate was made on that date. Deferred Income Taxes  Asbestos
  A$
    
    A$ to US$
    
    US$Millions
    
    rate
    
    MillionsDeferred tax assets  March 31, 2009
    
    
    502.7
    
    
    
    1.4552
    
    
    
    345.5Amounts offset against income tax payable (1)
    
    
    (17.9
    )
    
    
    1.1749
    
    
    
    (15.3
    )Impact of other asbestos adjustments (1)
    
    
    (8.3
    )
    
    
    1.1749
    
    
    
    (7.0
    )Gain on foreign currency exchange
    
    
    
    
    
    
    
    
    
    
    113.2Deferred tax assets  March 31, 2010
    
    
    476.5
    
    
    
    1.0919
    
    
    
    436.4
 
 (1)
    
    The average exchange rate for the period is used to convert the Australian dollar amount to
U.S. dollars based on the assumption that these transactions occurred evenly throughout the
period. Income Tax Payable
  46




---



##### Table of Contents



Other Net Liabilities
   Restricted Cash and Short-term Investments of the AICF
 Other Income
 Other
Comprehensive Income
  A$
    
    A$ to US$
    
    US$Millions
    
    rate
    
    MillionsRestricted cash and cash equivalents and
restricted short-term investments  March 31, 2009
    
    
    143.1
    
    
    
    1.4552
    
    
    
    98.3Asbestos claims paid (1)
    
    
    (103.2
    )
    
    
    1.1749
    
    
    
    (87.8
    )AICF operating costs paid  claims handling (1)
    
    
    (3.6
    )
    
    
    1.1749
    
    
    
    (3.1
    )AICF operating costs paid  non-claims handling (1)
    
    
    (2.5
    )
    
    
    1.1749
    
    
    
    (2.1
    )Insurance recoveries (1)
    
    
    16.9
    
    
    
    1.1749
    
    
    
    14.4Interest and investment income (1)
    
    
    3.9
    
    
    
    1.1749
    
    
    
    3.3Unrealized gain on investments (1)
    
    
    1.4
    
    
    
    1.1749
    
    
    
    1.2Gain on investments (1)
    
    
    7.9
    
    
    
    1.1749
    
    
    
    6.7Other (1)
    
    
    (0.8
    )
    
    
    1.1749
    
    
    
    (0.7
    )Gain on foreign currency exchange
    
    
    
    
    
    
    
    
    
    
    27.6Restricted cash and cash equivalents and
restricted short-term investments  March 31,
2010
    
    
    63.1
    
    
    
    1.0919
    
    
    
    57.8
 
 (1)
    
    The average exchange rate for the period is used to convert the Australian dollar amount to
U.S. dollars based on the assumption that these transactions occurred evenly throughout the
period. Actuarial Study; Claims Estimate
  47




---



##### Table of Contents



Claims Data
  48




---



##### Table of Contents



Years Ended March 31,2010
    
    
    2009
    
    
    2008
    
    
    2007
    
    
    2006(1)Number of open
claims at beginning of
period
    
    
    534
    
    
    
    523
    
    
    
    490
    
    
    
    564
    
    
    
    712Number of new claims
    
    
    535
    
    
    
    607
    
    
    
    552
    
    
    
    463
    
    
    
    346Number of closed claims
    
    
    540
    
    
    
    596
    
    
    
    519
    
    
    
    537
    
    
    
    502Number of open claims
at end of period
    
    
    529
    
    
    
    534
    
    
    
    523
    
    
    
    490
    
    
    
    556Average settlement
amount per settled
claim
    
    A$
    190,627
    
    
    A$
    190,638
    
    
    A$
    147,349
    
    
    A$
    166,164
    
    
    A$
    151,883Average settlement
amount per settled
claim
    
    $
    162,250
    
    
    $
    151,300
    
    
    $
    128,096
    
    
    $
    127,163
    
    
    $
    114,318Average settlement
amount per case closed
    
    A$
    171,917
    
    
    A$
    168,248
    
    
    A$
    126,340
    
    
    A$
    128,723
    
    
    A$
    122,535Average settlement
amount per case closed
    
    $
    146,325
    
    
    $
    133,530
    
    
    $
    109,832
    
    
    $
    98,510
    
    
    $
    92,229
 
 (1)
    
    Information includes claims data for only 11 months ended February 28, 2006. Claims data
for the 12 months ended March 31, 2006 was not available at the time our financial statements
were prepared.   Legal Proceedings
   ASIC Proceedings
  49




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##### Table of Contents



Chile Litigation
       50




---



##### Table of Contents



Tax Contingencies
      IRS NOPA
  51




---



##### Table of Contents



ATO Settlement
  Amended Australian Taxation Office Assessment
       52




---



##### Table of Contents



Item 4A. Unresolved Staff Comments
  
 Item 5. Operating and Financial Review and Prospects
  Overview
   
    
    Operating income excluding asbestos, ASIC expenses and asset impairments
    
    Effective tax rate excluding asbestos, asset impairments and tax adjustments
    
    Net income excluding asbestos, ASIC expenses, asset impairments and tax adjustments
   The Company and the Building Product Markets
  53




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##### Table of Contents



Fiscal Year 2010 Key Results
       Critical Accounting Policies
  54




---



##### Table of Contents



Accounting for Contingencies
  Accounting for the Amended FFA
         55




---



##### Table of Contents



Sales Rebates and Discounts
  Accounts Receivable
  Inventory
  Accrued Warranty Reserve
  Accounting for Income Tax
  56




---



##### Table of Contents



57




---



##### Table of Contents



Results of Operations
  Fiscal Years Ended March 31,2010
    
    
    2009
    
    
    2008Net sales:USA and Europe Fiber
Cement (1)
    
    $
    828.1
    
    
    
    73.6
    %
    
    $
    929.3
    
    
    
    77.3
    %
    
    $
    1,170.5
    
    
    
    79.7
    %Asia Pacific Fiber Cement
    
    
    296.5
    
    
    
    26.4
    
    
    
    273.3
    
    
    
    22.7
    
    
    
    298.3
    
    
    
    20.3Total net sales
    
    
    1,124.6
    
    
    
    100.0
    
    
    
    1,202.6
    
    
    
    100.0
    
    
    
    1,468.8
    
    
    
    100.0Cost of goods sold
    
    
    (708.5
    )
    
    
    (63.0
    )
    
    
    (813.8
    )
    
    
    (67.7
    )
    
    
    (938.8
    )
    
    
    (63.9
    )Gross profit
    
    
    416.1
    
    
    
    37.0
    
    
    
    388.8
    
    
    
    32.3
    
    
    
    530.0
    
    
    
    36.1Selling, general and
administrative expenses
    
    
    (185.8
    )
    
    
    (16.5
    )
    
    
    (208.8
    )
    
    
    (17.4
    )
    
    
    (228.2
    )
    
    
    (15.5
    )Research and development
expenses
    
    
    (27.1
    )
    
    
    (2.4
    )
    
    
    (23.8
    )
    
    
    (2.0
    )
    
    
    (27.3
    )
    
    
    (1.9
    )Impairment charges
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (71.0
    )
    
    
    (4.8
    )Asbestos adjustments
    
    
    (224.2
    )
    
    
    (20.0
    )
    
    
    17.4
    
    
    
    1.5
    
    
    
    (240.1
    )
    
    
    (16.4
    )Operating (loss) income
    
    
    (21.0
    )
    
    
    (1.9
    )
    
    
    173.6
    
    
    
    14.4
    
    
    
    (36.6
    )
    
    
    (2.5
    )Interest expense
    
    
    (7.7
    )
    
    
    (0.7
    )
    
    
    (11.2
    )
    
    
    (0.9
    )
    
    
    (11.1
    )
    
    
    (0.7
    )Interest income
    
    
    3.7
    
    
    
    0.3
    
    
    
    8.2
    
    
    
    0.7
    
    
    
    12.2
    
    
    
    0.8Other income (expense)
    
    
    6.3
    
    
    
    0.6
    
    
    
    (14.8
    )
    
    
    (1.3
    )
    
    
    
    
    
    
    (Loss) income from
operations before income
taxes
    
    
    (18.7
    )
    
    
    (1.7
    )
    
    
    155.8
    
    
    
    12.9
    
    
    
    (35.5
    )
    
    
    (2.4
    )Income tax expense
    
    
    (66.2
    )
    
    
    (5.9
    )
    
    
    (19.5
    )
    
    
    (1.6
    )
    
    
    (36.1
    )
    
    
    (2.5
    )(Loss) income from
operations
    
    $
    (84.9
    )
    
    
    (7.6
    )%
    
    $
    136.3
    
    
    
    11.3
    %
    
    $
    (71.6
    )
    
    
    (4.9
    )%
 
 (1)
    
    On April 1, 2008, the Company realigned its operating segments by combining the
previously reported segments of USA Fiber Cement and Other into one operating segment, USA and
Europe Fiber Cement. USA and Europe Fiber Cement includes all fiber cement manufactured in the
United States and sold in the United States, Canada and Europe. The segment also includes fiber cement manufactured and sold in Chile (through July 2005),
fiber reinforced concrete pipes manufactured and sold in the United States (through May
2008) and a roofing pilot plant in the United States (through April 2006). Our Plant City,
Florida Hardie Pipe Plant was closed and the business ceased operations in May 2008. Our
roofing pilot plant was closed and the business ceased operations in April 2006.
 Year Ended March 31, 2010 Compared to Year Ended March 31, 2009
 Total Net Sales
 USA and Europe Fiber Cement Net Sales
  58




---



##### Table of Contents



®
  Asia Pacific Fiber Cement Net Sales
     Gross Profit
  59




---



##### Table of Contents



Selling, General and Administrative (SG&A) Expenses
 ASIC Proceedings
    Chile Litigation
     Research and Development Expenses
 60




---



##### Table of Contents



Asbestos Adjustments.
    Fiscal Years Ended March 31,(In millions)
    
    2010
    
    
    2009Change in estimates
    
    $
    (3.3
    )
    
    $
    (162.3
    )Effect of foreign exchange movements
    
    
    (220.9
    )
    
    
    179.7Asbestos adjustments
    
    $
    (224.2
    )
    
    $
    (17.4
    )
 Claims Data
       Operating Income (Loss).
 61




---



##### Table of Contents



General Corporate Costs
  Net Interest Expense.
 Other Income (Expense).
 Income Tax.
  Net Income (Loss).
 62




---



##### Table of Contents



Non-GAAP Financial Information Derived from GAAP Measures for Fiscal Year 2010
  Operating income (loss) excluding asbestos and ASIC
expenses
    
    Fiscal Years Ended March 31,(In millions)
    
    2010
    
    
    2009USA and Europe Fiber Cement
    
    $
    208.5
    
    
    $
    199.3Asia Pacific Fiber Cement
    
    
    58.7
    
    
    
    47.1Research and Development
    
    
    (19.0
    )
    
    
    (18.9
    )General Corporate:General corporate costs
    
    
    (42.9
    )
    
    
    (70.6
    )Asbestos adjustments
    
    
    (224.2
    )
    
    
    17.4AICF SG&A expenses
    
    
    (2.1
    )
    
    
    (0.7
    )Total operating (loss) income
    
    $
    (21.0
    )
    
    $
    173.6Excluding:Asbestos:Asbestos adjustments
    
    
    224.2
    
    
    
    (17.4
    )AICF SG&A expenses
    
    
    2.1
    
    
    
    0.7ASIC expenses
    
    
    3.4
    
    
    
    14.0Operating income excluding asbestos and ASIC
expenses
    
    $
    208.7
    
    
    $
    170.9
 Effective tax rate excluding asbestos and tax
adjustments
    
    Fiscal Years Ended March 31,(In millions)
    
    2010
    
    
    2009(Loss) income before income taxes
    
    $
    (18.7
    )
    
    $
    155.8Excluding:Asbestos:Asbestos adjustments
    
    
    224.2
    
    
    
    (17.4
    )AICF SG&A expenses
    
    
    2.1
    
    
    
    0.7AICF interest income
    
    
    (3.3
    )
    
    
    (6.4
    )(Gain) impairment on AICF investments
    
    
    (6.7
    )
    
    
    14.8Income before income taxes excluding asbestos
    
    $
    197.6
    
    
    $
    147.5Income tax expense
    
    
    (66.2
    )
    
    
    (19.5
    )Excluding:Tax benefit (expense) related to asbestos
adjustments
    
    
    1.1
    
    
    
    (48.7
    )Tax adjustments
    
    
    (2.9
    )
    
    
    7.2Income tax
expense excluding asbestos and tax adjustments
    
    $
    (68.0
    )
    
    $
    (61.0
    )
 63




---



##### Table of Contents



Fiscal Years Ended March 31,2010
    
    
    2009Effective tax rate
    
    
    354.0
    %
    
    
    12.5
    %Effective tax rate excluding asbestos and tax
adjustments
    
    
    34.4
    %
    
    
    41.4
    %
 Net income (loss) excluding asbestos, ASIC
expenses and tax adjustments
    
    Fiscal Years Ended March 31,(In millions)
    
    2010
    
    
    2009Net (loss) income
    
    $
    (84.9
    )
    
    $
    136.3Excluding:Asbestos adjustments
    
    
    224.2
    
    
    
    (17.4
    )AICF SG&A expenses
    
    
    2.1
    
    
    
    0.7AICF interest income
    
    
    (3.3
    )
    
    
    (6.4
    )(Gain) impairment on AICF investments
    
    
    (6.7
    )
    
    
    14.8Tax expense (benefit) related to asbestos
    
    
    1.1
    
    
    
    (48.7
    )ASIC expenses
    
    
    3.4
    
    
    
    14.0Tax adjustments
    
    
    (2.9
    )
    
    
    7.2Net income excluding asbestos, ASIC expenses
and tax adjustments
    
    $
    133.0
    
    
    $
    100.5
 Year Ended March 31, 2009 Compared to Year Ended March 31, 2008
 Total Net Sales
 USA and Europe Fiber Cement Net Sales
   â
 64




---



##### Table of Contents



1 2 1 4 1 2
 Asia Pacific Fiber Cement Net Sales
  Gross Profit
   Selling, General and Administrative (SG&A) Expenses
 65




---



##### Table of Contents



ASIC Proceedings
  Chile Litigation
  Research and Development Expenses
 Asbestos Adjustments.
   Fiscal Years Ended March 31,(In millions)
    
    2009
    
    
    2008Change in estimates
    
    $
    (162.3
    )
    
    $
    (152.9
    )Effect of foreign exchange movements
    
    
    179.7
    
    
    
    (87.2
    )Asbestos adjustments
    
    $
    (17.4
    )
    
    $
    (240.1
    )
 Operating Income (Loss).
    66




---



##### Table of Contents



General Corporate Costs
 Net Interest (Expense) Income.
 Other Expense.
  Other
Expense
 Income Tax Expense.
  Net Income (Loss).
  Non-GAAP Financial Information Derived from GAAP Measures for Fiscal Year 2009
  67




---



##### Table of Contents



Operating income (loss) excluding asbestos, ASIC
expenses and asset impairments
    
    Fiscal Years Ended March 31,(in millions)
    
    2009
    
    
    2008USA and Europe Fiber Cement (1)
    
    $
    199.3
    
    
    $
    306.2Asia Pacific Fiber Cement
    
    
    47.1
    
    
    
    50.3Research and Development
    
    
    (18.9
    )
    
    
    (18.1
    )General Corporate:General corporate costs
    
    
    (70.6
    )
    
    
    (59.9
    )Asbestos adjustments
    
    
    17.4
    
    
    
    (240.1
    )AICF SG&A expenses
    
    
    (0.7
    )
    
    
    (4.0
    )Impairment charges
    
    
    
    
    
    
    (71.0
    )Total operating income (loss)
    
    $
    173.6
    
    
    $
    (36.6
    )Excluding:Asbestos:Asbestos adjustments
    
    
    (17.4
    )
    
    
    240.1AICF SG&A expenses
    
    
    0.7
    
    
    
    4.0ASIC expenses
    
    
    14.0
    
    
    
    5.5Asset impairments:Impairment charges
    
    
    
    
    
    
    71.0Impairment related costs
    
    
    
    
    
    
    3.2Operating income excluding asbestos, ASIC
expenses and asset impairments
    
    $
    170.9
    
    
    $
    287.2
 
 (1)
    
    Excluded from USA and Europe Fiber Cement operating income in the table above is $71.0 million
of impairment charges for fiscal year 2008. 68




---



##### Table of Contents



Effective tax rate excluding asbestos, asset impairments and tax
adjustments
    
    Fiscal Years Ended March 31,(In millions)
    
    2009
    
    
    2008Income (loss) before income taxes
    
    $
    155.8
    
    
    $
    (35.5
    )Excluding:Asbestos:Asbestos adjustments
    
    
    (17.4
    )
    
    
    240.1AICF SG&A expenses
    
    
    0.7
    
    
    
    4.0AICF interest income
    
    
    (6.4
    )
    
    
    (9.4
    )Impairment on AICF investments
    
    
    14.8
    
    
    
    Asset impairments:Impairment charges
    
    
    
    
    
    
    71.0Impairment related costs
    
    
    
    
    
    
    3.2Income before income taxes excluding
asbestos and asset impairments
    
    $
    147.5
    
    
    $
    273.4Income tax expense
    
    $
    (19.5
    )
    
    $
    (36.1
    )Excluding:Tax benefit related to asbestos adjustments
    
    
    (48.7
    )
    
    
    (45.8
    )Tax benefit related to asset impairments
    
    
    
    
    
    
    (27.6
    )Tax adjustments
    
    
    7.2
    
    
    
    5.8Income tax
expense excluding asbestos, asset impairments and tax adjustments
    
    $
    (61.0
    )
    
    $
    (103.7
    )Effective tax rate
    
    
    12.5
    %
    
    
    101.7
    %Effective tax rate excluding asbestos and
tax adjustments
    
    
    41.4
    %
    
    
    37.9
    %
 69




---



##### Table of Contents



Net income (loss) excluding asbestos, ASIC expenses,
asset impairments and tax adjustments
    
    Fiscal Years Ended March 31,(In millions)
    
    2009
    
    
    2008Net income (loss)
    
    $
    136.3
    
    
    $
    (71.6
    )Excluding:Asbestos:Asbestos adjustments
    
    
    (17.4
    )
    
    
    240.1AICF SG&A expenses
    
    
    0.7
    
    
    
    4.0AICF interest income
    
    
    (6.4
    )
    
    
    (9.4
    )Impairment of AICF investments
    
    
    14.8
    
    
    
    Tax benefit related to asbestos adjustments
    
    
    (48.7
    )
    
    
    (45.8
    )ASIC expenses (net of tax)
    
    
    14.0
    
    
    
    5.5Asset impairments:Impairment charges (net of tax)
    
    
    
    
    
    
    44.6Impairment related costs (net of tax)
    
    
    
    
    
    
    2.0Tax adjustments
    
    
    7.2
    
    
    
    5.8Net income excluding asbestos, ASIC expenses,
asset impairments and tax adjustments
    
    $
    100.5
    
    
    $
    175.2
 Impact of Recent Accounting Pronouncements
 Disclosures about Derivative Instruments and Hedging Activities
  Share-Based Payment Awards as Participating Securities
  Disclosures about Fair Value of Financial Instruments for Interim Reporting Periods
  Hierarchy of Generally Accepted Accounting Principles
  70




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Liquidity and Capital Resources
    At March 31, 2010EffectiveDescription
    
    Interest Rate
    
    
    Total Facility
    
    
    Principal Drawn(In millions)Term facilities,
can be drawn in
US$, variable
interest rates
based on LIBOR plus
margin, can be
repaid and redrawn
until June 2010
    
    
    0.86
    %
    
    $
    161.7
    
    
    $
    95.0Term facilities,
can be drawn in
US$, variable
interest rates
based on LIBOR plus
margin, can be
repaid and redrawn
until February 2011
    
    
    
    
    
    
    45.0
    
    
    
    Term facilities,
can be drawn in
US$, variable
interest rates
based on LIBOR plus
margin, can be
repaid and redrawn
until December 2012
    
    
    
    
    
    
    130.0
    
    
    
    Term facilities,
can be drawn in
US$, variable
interest rates
based on LIBOR plus
margin, can be
repaid and redrawn
until February 2013
    
    
    1.01
    %
    
    
    90.0
    
    
    
    59.0Total
    
    
    
    
    
    $
    426.7
    
    
    $
    154.0
    71




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##### Table of Contents



Cash Flow  Year Ended March 31, 2010 compared to Year ended March 31, 2009
  72




---



##### Table of Contents



Capital Requirements and Resources
      73




---



##### Table of Contents



.
    Capital Expenditures
   74




---



##### Table of Contents



Contractual Obligations
  Payments DueDuring Fiscal Year Ending March 31,(In millions)
    
    Total
    
    
    2011
    
    
    2012 to 2013
    
    
    2014 to 2015
    
    
    ThereafterAsbestos Liability (1)
    
    $
    1,619.2
    
    
    $
    N/A
    
    
    $
    N/A
    
    
    $
    N/A
    
    
    $
    N/ALong-Term Debt
    
    
    154.0
    
    
    
    95.0
    
    
    
    59.0
    
    
    
    
    
    
    
    Estimated interest
payments on Long-Term Debt
(2)
    
    
    24.1
    
    
    
    5.7
    
    
    
    11.2
    
    
    
    5.7
    
    
    
    1.5Operating Leases
    
    
    114.4
    
    
    
    17.4
    
    
    
    31.5
    
    
    
    28.0
    
    
    
    37.5Purchase Obligations (3)
    
    
    0.7
    
    
    
    0.7
    
    
    
    
    
    
    
    
    
    
    
    Total
    
    $
    1,912.4
    
    
    $
    118.8
    
    
    $
    101.7
    
    
    $
    33.7
    
    
    $
    39.0
 
 (1)
    
    The amount of the asbestos liability reflects the terms of the Amended FFA, which has been
calculated by reference to (but is not exclusively based upon) the most recent actuarial
estimate of the projected future asbestos-related cash flows prepared by KPMG Actuaries. The
asbestos liability also includes an allowance for the future claims-handling costs of the
AICF. The table above does not include a break down of payments due each year as such amounts
are not reasonably estimable. See Item 3, Key Information  Risk Factors, Item 4,
Information on the Company  Commitment to Provide Funding on a Long-Term Basis in Respect
of Asbestos-Related Liabilities of Former Subsidiaries and Note 11 of our consolidated
financial statements in Item 18 for further information regarding our future obligations under
the Amended FFA.(2)
    
    Interest amounts are estimates based on gross debt remaining unchanged from the March 31,
2010 balance and interest rates remaining consistent with the rates at March 31, 2010.
Interest paid includes interest in relation to our debt facilities, as well as the net amount
paid relating to interest rate swap agreements. The interest on our debt facilities is
variable based on a market rate and includes margins agreed to with the various lending banks.
The interest on our interest rate swaps is set at a fixed rate. There are several variables
that can affect the amount of interest we may pay in future years, including: (i) new debt
facilities with rates or margins different from historical rates; (ii) expiration of existing
debt facilities resulting in a change in the average interest rate; (iii) fluctuations in the
market interest rate; (iv) new interest rate swap agreements; and (v) expiration of existing
interest rate swap agreements.(3)
    
    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.   Off-Balance Sheet Arrangements
  Inflation
  75




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##### Table of Contents



Seasonality and Quarterly Variability
  Research and Development
    Outlook
       
 Item 6. Directors, Senior Management and Employees
 Board Practices and Senior Management
 Board Structure
 Number of Boards
  76




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##### Table of Contents



Single Board
    
    
    appointing, removing and assessing the performance and remuneration of the CEO and CFO;
    
    succession planning for the Board and senior management and defining our management
structure and responsibilities;
    
    approving our overall strategy, including the three year business plan and annual
operating and capital expenditure budgets;
    
    convening and monitoring the operation of shareholder meetings and approving matters to
be submitted to shareholders for their consideration;
    
    approving annual and periodic reports, results announcements and related media releases
and notices of shareholder meetings;
    
    approving the dividend policy and interim dividends and making recommendations to
shareholders regarding the annual dividend;
    
    reviewing the authority levels of the CEO and management;
    
    approving our remuneration framework;
    
    overseeing our corporate governance matters;
    
    approving corporate-level company policies;
    
    considering managements recommendations on various matters which are above the
authority levels delegated to the CEO or management; and
    
    any other matter which the Board considers ought to be approved by the Board.
 www.jameshardie.com
  Supervisory Board
   77




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##### Table of Contents




    
    nominating Managing Board directors for election by shareholders;
    
    appointing and removing the CEO and the Chairman of the Managing Board;
    
    approving Managing Board decisions relating to specified matters or above agreed
thresholds;
    
    approving the strategic plan and annual budget proposed by the Managing Board;
    
    approving the annual financial accounts;
    
    supervising the policy and actions of the Managing Board;
    
    supervising the general course of our affairs and the business we operate; and
    
    approving issues of new shares.
  
    
    approving declaration of dividends;
    
    approving any share buy-back programs and cancelling the shares bought back;
    
    approving any significant changes in the identity or nature of our company;
    
    approving the strategy set by the Managing Board;
    
    monitoring company performance; and
    
    maintaining effective external disclosure policies and procedures.
 Managing Board
     
    
    administering our general affairs, operations and finance;
    
    preparing a strategic plan and budget setting out operational and financial objectives,
implementation strategy and parameters for us for the next three years, for approval by the
Joint and Supervisory Boards;
    
    ensuring the implementation of our strategic plan;
    
    preparing quarterly and annual accounts, management reports and media releases;
    
    monitoring our compliance with all relevant legislation and regulations and managing the
risks associated with our activities;
    
    reporting and discussing our internal risk management and control systems with the
Supervisory Board and the Audit Committee; and
    
    representing, entering into and performing agreements on our behalf.
 78




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##### Table of Contents



Joint Board
    
    
    supervising the general course of our affairs;
    
    approving declaration of dividends;
    
    approving any share buy-back programs and cancelling the shares bought back;
    
    approving issues of new shares;
    
    approving any significant changes in our identity or nature;
    
    approving the strategy set by the Managing Board;
    
    monitoring our performance; and
    
    maintaining effective external disclosure policies and procedures.
  Operation of the Board
 Board Meetings
     Director Qualifications
   79




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Succession Planning
    Retirement and Tenure Policy
   Board Evaluation
   Director Re-election
    80




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##### Table of Contents



Independence
     
    
    Mr. Brian Anderson is a director of Pulte Homes, a home builder in the United States.
Pulte Homes does not buy any of our products directly from us, although it does buy a small
amount of our products through our customers;
    
    Mr. Rudy van der Meer is a member of the Supervisory Board of ING Bank Nederland N.V.
and ING Verzekeringen (Insurance) Nederland N.V. Entities in the ING Group provide
financial services to us. In each case those entities were providing these services to us
prior to Mr. van der Meer becoming a Board director; and
    
    Mr. David Dilger is a director of a number of our subsidiaries and receives directors
fees for such service approved by the Board.
  Orientation
  Board Continuing Development
  81




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##### Table of Contents



Letter of Appointment
  Chairman
   
    
    provides leadership to the Board;
    
    chairs Board and shareholder meetings;
    
    facilitates Board discussion;
    
    monitors, evaluates and assesses the performance of our Board and Board Committees; and
    
    is a member of and attends meetings of all Board Committees.
  Indemnification
   Evaluation of Management
  Information for the Board
    82




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##### Table of Contents



Delegation to the CEO
  Board Committees
 www.jameshardie.com
  Audit Committee
      
    
    overseeing our financial reporting process and reports on the results of our activities
to the Board;
    
    reviewing with management and the external auditor our annual and quarterly financial
statements and reports to shareholders;
 83




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
    
    discussing earnings releases as well as information and earnings guidance provided to
analysts;
    
    reviewing and assessing our risk management policies and procedures;
    
    having general oversight of the appointment and provision of all our external audit
services, the remuneration paid to the external auditor, and the performance of our
internal audit function;
    
    reviewing the adequacy and effectiveness of our internal compliance and control
procedures;
    
    reviewing our compliance with legal and regulatory requirements; and
    
    establishing procedures for complaints regarding accounting, internal accounting
controls and auditing matters, including any complaints from our Ethics Hotline.
 Conflicts of Interest
  Reporting
  Nominating and Governance Committee
  
    
    identifying and recommending to the Board individuals qualified to become Board
directors;
    
    overseeing the evaluation of the Board and senior management;
    
    assessing the independence of each Board director;
    
    reviewing the conduct of the general meetings; and
    
    performing a leadership role in shaping our corporate governance policies.
  Remuneration Committee
  
    
    administers and makes recommendations on our incentive compensation and equity-based
remuneration plans;
    
    reviews the remuneration of Board directors;
    
    reviews our remuneration framework; and
    
    makes recommendations to the Board on our recruitment, retention and termination
policies and procedures for senior management.
   84




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##### Table of Contents



Due Diligence Committee
    Policies and Processes
  
    
    Code of Business Conduct and Ethics;
    
    Ethics Hotline;
    
    Continuous Disclosure and Market Communication; and
    
    Insider Trading.
 www.jameshardie.com
 Code of Business Conduct and Ethics and Ethics Hotline
  www.jameshardie.com
 Continuous Disclosure and Market Communication
   
    
    understand our strategy and assess the quality of our management;
    
    examine our financial position and the strength of our growth prospects; and
    
    receive any news or information that might reasonably be expected to materially affect
the price or market for our securities.
  85




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##### Table of Contents



Share Trading
   Risk Management
 Overall Responsibility
   Objective
  
    
    our risk management systems are effective;
    
    our 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.
  Policies for Management of Material Business Risks
  
    
    quarterly meetings of the Risk Management Committee to assess the key strategic,
operations, reporting and compliance risks we face, the level of risk and the processes
implemented to manage each of these key risks over the upcoming twelve months;
 86




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##### Table of Contents




    
    quarterly reporting to the Audit Committee of the Risk Management Committees
conclusions regarding the key strategic, operations, reporting and compliance risks we
face;
    
    an Enterprise Risk Management process, which involves developing contingency plans for
the key risks we face and our assumptions in its three year strategic plans and beyond;
    
    a planning process involving the preparation of three-year strategic plans and a rolling
twelve month forecast;
    
    annual budgeting and monthly reporting to monitor performance;
    
    an internal audit department with a reporting line direct to the Chairman of the Audit
Committee;
    
    increased monitoring of our liquidity and status of renewals of finance facilities;
    
    maintaining an appropriate insurance program;
    
    maintaining policies and procedures in relation to treasury operations, including the
use of financial derivatives;
    
    issuing and revising standards and procedures in relation to environmental and health
and safety matters;
    
    implementing and maintaining training programs in relation to legal issues such as trade
practices/antitrust, trade secrecy, and intellectual property protection;
    
    issuing procedures requiring significant capital and recurring expenditure to be
approved at the appropriate levels; and
    
    documenting detailed accounting policies, procedures and guidance for the group in a
single group finance manual.
 www.jameshardie.com
   Risk Management Committee
  Internal Audit
  External Audit
  87




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##### Table of Contents



Financial Statements Disclosure Committee
  Shareholders Participation
 Listing Information
  Annual Information Meeting
    www.jameshardie.com
 AGM
   
    
    attend the AGM either in person or by proxy;
    
    speak at the AGM; and
    
    exercise voting rights, including at the AGM subject to their instructions on the Voting
Instruction Form.
   88




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Communication
  
    
    making management briefings and presentations accessible via a live webcast and/or
teleconference following the release of quarterly and annual results;
    
    audio webcasts of other management briefings and webcasts of the annual shareholder
meeting;
    
    a comprehensive Investor Relations website that displays all company announcements and
notices (promptly after they have been cleared by the ASX), major management and investor
road show presentations;
    
    site visits and briefings on strategy for investment analysts;
    
    an email alert service to advise shareholders and other interested parties of
announcements and other events; and
    
    equality of access for shareholders and investment analysts to briefings, presentations
and meetings.
 Investor Website
 www.jameshardie.com
 Compliance with Corporate Governance Requirements
       
    
    In the U.S., an audit committee of a public company is required to be directly
responsible for appointing the companys independent registered public accounting firm.
Under Dutch law, the independent registered public accounting firm is appointed by the
shareholders or, in the absence of such an appointment, by the Supervisory Board and then
the Managing Board. Under Irish law, the independent registered public
 89




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accounting firm is appointed by the shareholders where there is a new appointment, otherwise
the appointment is deemed to continue unless the firm retires, is asked to retire or is
unable to perform their duties; and
 
    
    NYSE rules require each issuer to have an audit committee, a compensation committee
(equivalent to a remuneration committee) and a nominating committee composed entirely of
independent directors. As a foreign private issuer, we do not have to comply with this
requirement. In our case, the Board Committee charters reflect Australian and Irish
practices, in that we have a majority of independent directors on these committees, unless
a higher number is mandatory. Notwithstanding this difference, our Board has determined
that all of the current members of our Audit Committee, Remuneration Committee and
Nominating and Governance Committee presently qualify as independent in accordance with the
rules and regulations of the SEC and the NYSE.
  Current Directors and Executive Officers
    
    
    Louis Gries, Chief Executive Officer;
    
    Russell Chenu, Chief Financial Officer;
    
    Robert Cox, General Counsel;
    
    Mark Fisher, Executive General Manager  International;
    
    Nigel Rigby, Executive General Manager  USA; and
    
    Sean OSullivan, Vice President Investor and Media Relations.
  Name
    
    Age
    
    Position
    
    Last ElectedBoardMichael Hammes
    
    68
    
    Chairman of the Board
    
    2009Donald McGauchie AO
    
    60
    
    Deputy Chairman of the Board
    
    2009Brian Anderson
    
    59
    
    Member of the Board
    
    2009David Dilger (1)
    
    53
    
    Member of the Board
    
    Appointed September 2009David Harrison
    
    63
    
    Member of the Board
    
    2008James Osborne
    
    61
    
    Member of the Board
    
    2009Rudy van der Meer
    
    65
    
    Member of the Board
    
    2009Group Management TeamLouis Gries (2)
    
    56
    
    Chief Executive Officer and member of the BoardRussell Chenu (3)
    
    60
    
    Chief Financial Officer
 90




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##### Table of Contents



Name
    
    Age
    
    Position
    
    Last ElectedRobert Cox(4)
    
    56
    
    General CounselMark Fisher
    
    39
    
    Executive General Manager  InternationalSean OSullivan
    
    45
    
    Vice President  Investor and Media RelationsNigel Rigby
    
    43
    
    Executive General Manager  USA
 
 (1)
    
    Mr. Dilger was appointed as a non-executive director on September 2, 2009. As required by our
Articles of Association, Mr. Dilger will stand for re-election at the 2010 AGM.(2)
    
    Mr. Gries was also Chairman and member of the Managing Board until June 17, 2010.(3)
    
    Mr. Chenu ceased to be a member of the Managing Board on June 17, 2010 in connection with the
Re-domicile.(4)
    
    Mr. Cox ceased to be a member of the Managing Board and Company Secretary on June 17, 2010
and June 29, 2010, respectively, in connection with the Re-domicile. Directors
 Michael Hammes
 Donald McGauchie
 Brian Anderson
 91




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##### Table of Contents



David Dilger
 David Harrison
 James Osborne
 Rudy van der Meer
 Group Management Team Officers
 Louis Gries
 92




---



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Russell Chenu
 Robert Cox
 Mark Fisher
 Nigel Rigby
 Sean OSullivan
  93




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##### Table of Contents



Employees
  Fiscal Years Ended March 31,2010
    
    2009
    
    2008Fiber Cement United States and Canada
    
    
    1,605
    
    
    
    1,323
    
    
    
    1,809Fiber Cement Australia
    
    
    382
    
    
    
    396
    
    
    
    397Fiber Cement New Zealand
    
    
    137
    
    
    
    167
    
    
    
    188Fiber Cement Philippines
    
    
    150
    
    
    
    158
    
    
    
    167Pipes (United States and Australia)
    
    
    56
    
    
    
    63
    
    
    
    116Fiber Cement Europe
    
    
    42
    
    
    
    45
    
    
    
    46Research & Development, including Technology
    
    
    105
    
    
    
    106
    
    
    
    111General Corporate
    
    
    34
    
    
    
    48
    
    
    
    48Total Employees
    
    
    2,511
    
    
    
    2,306
    
    
    
    2,882
 1
 Compensation
 Remuneration
   Primary
    
    
    EquityDirectors
    
    
    JHI SE
    
    
    OtherName
    
    Fees (1)
    
    
    Stock (2)
    
    
    Benefits (3)
    
    
    TotalCurrent Non-Executive
DirectorsM. HammesFiscal year 2010
    
    $
    221,000
    
    
    $
    85,000
    
    
    $
    10,641
    
    
    $
    316,641Fiscal year 2009
    
    
    222,500
    
    
    
    21,250
    
    
    
    3,988
    
    
    
    247,738D. McGauchieFiscal year 2010
    
    
    185,000
    
    
    
    
    
    
    
    2,428
    
    
    
    187,428Fiscal year 2009
    
    
    185,000
    
    
    
    
    
    
    
    11,627
    
    
    
    196,627B. AndersonFiscal year 2010
    
    
    155,000
    
    
    
    10,000
    
    
    
    8,290
    
    
    
    173,290Fiscal year 2009
    
    
    155,000
    
    
    
    
    
    
    
    1,300
    
    
    
    156,300D. Dilger (4)Fiscal year 2010
    
    
    75,000
    
    
    
    
    
    
    
    1,784
    
    
    
    76,784Fiscal year 2009
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/A
 
 1
    
    Under Australian law, we cannot keep records
of union members. The number quoted is the number of people who work in our
factories that have union participation and therefore may be represented by a
union. 94




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##### Table of Contents



Primary
    
    
    EquityDirectors
    
    
    JHI SE
    
    
    OtherName
    
    Fees (1)
    
    
    Stock (2)
    
    
    Benefits (3)
    
    
    TotalD. Harrison (5)Fiscal year 2010
    
    
    130,000
    
    
    
    10,000
    
    
    
    10,000
    
    
    
    150,000Fiscal year 2009
    
    
    105,537
    
    
    
    
    
    
    
    4,178
    
    
    
    109,715J. Osborne (6)Fiscal year 2010
    
    
    127,500
    
    
    
    10,000
    
    
    
    990
    
    
    
    138,490Fiscal year 2009
    
    
    6,333
    
    
    
    
    
    
    
    
    
    
    
    6,333R. van der MeerFiscal year 2010
    
    
    120,000
    
    
    
    10,000
    
    
    
    
    
    
    
    130,000Fiscal year 2009
    
    
    60,000
    
    
    
    60,000
    
    
    
    14,407
    
    
    
    134,407Total Compensation
for Current
Non-Executive
DirectorsFiscal year 2010
    
    $
    1,013,500
    
    
    $
    125,000
    
    
    $
    34,133
    
    
    $
    1,172,633Fiscal year 2009
    
    
    734,370
    
    
    
    81,250
    
    
    
    35,500
    
    
    
    851,120
 
 (1)
    
    Amount includes base, Chairman, Deputy Chairman, Committee Chairman and Due Diligence
Committee attendance fees.(2)
    
    The actual amount spent by each Board member was determined after deducting applicable Dutch
taxes from this amount. The number of JHI SE shares acquired was determined by dividing the
amount of participation in the Supervisory Board Share Plan 2006 (which we refer to as SBSP)
by the market purchase price.(3)
    
    Other Benefits includes the cost of non-executive directors fiscal compliance in The
Netherlands.(4)
    
    Mr. Dilger was appointed to the Companys Joint and Supervisory Boards effective September 2,
2009.(5)
    
    Mr. Harrison was appointed to the Companys Joint and Supervisory Boards effective May 19,
2008.(6)
    
    Mr. Osborne was appointed to the Companys Joint and Supervisory Boards effective March 12, 2009. 95




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##### Table of Contents



OtherRelocationAllowances,Post-
    
    
    
    
    
    ExpatriatePrimary
    
    employment
    
    Equity
    
    Benefits, andNoncash
    
    Superannuation
    
    Equity
    
    Other Non-Bonuses
    
    Benefits
    
    and 401(k)
    
    Awards
    
    recurringName
    
    Base Pay
    
    (1)
    
    (2)
    
    Benefits
    
    (3)
    
    (4)
    
    TotalSenior Executives, including Managing BoardL. GriesFiscal year 2010
    
    $
    936,860
    
    
    $
    1,688,832
    
    
    $
    471,208
    
    
    $
    12,999
    
    
    $
    3,744,250
    
    
    $
    174,510
    
    
    $
    7,028,659Fiscal year 2009
    
    
    863,448
    
    
    
    1,215,876
    
    
    
    268,008
    
    
    
    19,872
    
    
    
    2,146,279
    
    
    
    171,674
    
    
    
    4,685,157R. ChenuFiscal year 2010
    
    
    738,463
    
    
    
    320,148
    
    
    
    83,728
    
    
    
    66,462
    
    
    
    607,122
    
    
    
    185,971
    
    
    
    2,001,894Fiscal year 2009
    
    
    676,719
    
    
    
    216,453
    
    
    
    40,983
    
    
    
    60,025
    
    
    
    296,514
    
    
    
    148,366
    
    
    
    1,439,060R. CoxFiscal year 2010
    
    
    450,000
    
    
    
    245,699
    
    
    
    74,721
    
    
    
    14,700
    
    
    
    606,351
    
    
    
    156,807
    
    
    
    1,548,278Fiscal year 2009
    
    
    444,808
    
    
    
    339,300
    
    
    
    14,354
    
    
    
    
    
    
    
    79,575
    
    
    
    308,583
    
    
    
    1,186,620M. FisherFiscal year 2010
    
    
    384,169
    
    
    
    382,303
    
    
    
    33,098
    
    
    
    12,842
    
    
    
    536,472
    
    
    
    
    
    
    
    1,348,884Fiscal year 2009
    
    
    340,433
    
    
    
    273,670
    
    
    
    35,961
    
    
    
    14,014
    
    
    
    328,408
    
    
    
    
    
    
    
    992,486N. RigbyFiscal year 2010
    
    
    397,558
    
    
    
    406,711
    
    
    
    24,228
    
    
    
    
    
    
    
    536,472
    
    
    
    
    
    
    
    1,364,969Fiscal year 2009
    
    
    340,433
    
    
    
    273,670
    
    
    
    24,967
    
    
    
    
    
    
    
    328,408
    
    
    
    
    
    
    
    967,478Total Compensation for Senior Executives, including Managing BoardFiscal year 2010
    
    $
    2,907,050
    
    
    $
    3,043,693
    
    
    $
    686,983
    
    
    $
    107,003
    
    
    $
    6,030,667
    
    
    $
    517,288
    
    
    $
    13,292,684Fiscal year 2009
    
    
    2,665,841
    
    
    
    2,318,969
    
    
    
    384,273
    
    
    
    93,911
    
    
    
    3,179,184
    
    
    
    628,623
    
    
    
    9,270,801
 
 (1)
    
    Bonuses in respect of each fiscal year are paid in June of the following fiscal year. The
amounts in fiscal years 2010 and 2009 include all incentive amounts accrued for in respect of
each fiscal year, pursuant to the terms of the applicable plans. In addition, since the amount
reported each year is an estimate, fiscal year 2010s bonus amounts include any adjustments to
the 2009 bonus amounts previously reported to the extent necessary to reflect the actual bonus
paid. The bonus for fiscal year 2010 was paid to senior executives in the form of performance
shares.See Other Compensation for a summary of the terms of our incentive plans. 96




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##### Table of Contents



(2)
    
    Includes the aggregate amount of all noncash benefits received by the executive in the year indicated.
Examples of noncash benefits that may be received by our executives include medical and life insurance benefits,
car allowances, membership in executive wellness programs, long service leave, and tax services.(3)
    
    Includes grants of Scorecard Long Term Incentive (LTI) awards
granted in fiscal year 2010 and Relative TSR and Executive Incentive
Program RSUs. Scorecard LTI awards are liability-classified awards
that are remeasured based on the Companys stock price at each
reporting period at an assumed scorecard rating.
Equity awards are valued using either the Black-Scholes pricing model or the Monte Carlo pricing method,
depending on the plan the equity awards were issued under, and the fair value of equity awards granted are
included in compensation during the period in which the equity awards vest.(4)
    
    Other non-recurring benefits include cash paid in lieu of vacation accrued, as permitted under our U.S. vacation policy and California law. 97




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Employment Contracts
  Chief Executive Officer
  Components
    
    DetailsLength of contract
    
    Initially a three year term, commencing
February 10, 2005. Term is automatically
extended on 9th day of each February for an
additional one year unless either party
notifies the other, 90 days in advance of the
automatic renewal date, that it does not want
the term to renew.Base salary (1)
    
    $950,000 for fiscal year 2010. Salary reviewed
annually by the Board and there will be no
base salary increase for fiscal year 2011.Short-term incentive
    
    Annual short-term incentive target is 125% of
annual base salary for fiscal year 2011. The
quantum of short-term incentive target is
reviewed annually by the Board in May.The Remuneration Committee recommends the
Companys and Chief Executive Officers
performance objectives, and the performance
against these objectives, to the Board for
approval. The Chief Executive Officers
short-term incentive is calculated under the
Executive Incentive Plan and the Individual
Performance Plan.Long-term incentive
    
    Upon the approval of the shareholders, stock
options or other equity incentive will be
granted each year. The recommended number of
options or other form of equity to be granted
will be appropriate for this level of
executive in the United States. For fiscal
year 2011, the LTI target will be $2.8
million.Defined Contribution Plan
    
    The Chief Executive Officer may participate in
the U.S. 401(k) defined contribution plan up
to the annual IRS limit. The Company will
match the Chief Executive Officers
contributions into the plan up to the annual
IRS limit.Resignation
    
    The Chief Executive Officer may cease
employment with the Company by providing
written notice. If the Chief Executive Officer
retires with the approval of the Board, then
the unvested restricted stock units and awards
will not be forfeited and will be held until
the next test date.Termination by James Hardie
    
    The Company may terminate the Chief Executive
Officers employment for cause or not for
cause. If the Company terminates the
employment, not for cause, or the Chief
Executive Officer terminates his employment
for good reason the Company will pay the
following:a.  amount equivalent to 1.5 times the Chief
Executive Officers annual base salary at the
time of termination; andb.  amount equivalent to 1.5 times the Chief
Executive Officers average short-term
incentive actually paid in up to the previous
three fiscal years as Chief Executive Officer;
andc.  continuation of health and medical benefits
at the Companys expense for the remaining
term of the agreement and consulting agreement
referenced below.
 98




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Components
    
    DetailsPost-termination Consulting
    
    The Company will request the Chief
Executive Officer, and the Chief
Executive Officer will agree, to consult
to the Company upon termination for a
minimum of two years, as long as the
Chief Executive Officer maintains the
Companys non-compete and confidentiality
agreements and executes a release of
claims following the effective date of
termination. Under the consulting
agreement, the Chief Executive Officer
will receive the annual base salary and
annual target incentive in exchange for
this consulting and non-compete. Under
the terms of equity incentive grants made
to the Chief Executive Officer under the
Managing Board Transitional Stock Option
Plan and Long-Term Incentive Plan, the
Chief Executive Officers outstanding
options will not expire during any
post-termination consulting period. This arrangement is a standard
arrangement for U.S. executives, and the Board considers that it is
an appropriate restraint for Mr. Gries given his intimate
involvement in developing the Companys fiber cement business in
the U.S. over the past 19 years.
 
 (1)
    
    See actual salary paid for fiscal year 2010 in this section under Compensation. Chief Financial Officer
  Components
    
    DetailsLength of contract
    
    Fixed concluding October 5, 2012.Base salary (1)
    
    A$874,058 for fiscal year 2010. Salary reviewed annually by the Board.Short-term incentive
    
    Annual short-term incentive target is 33% of annual base salary as
set out in his employment contract based on personal goals. The Chief
Financial Officer does not participate in the Executive Incentive
Plan for his short-term incentive, other than the arrangement where
some of the Chief Financial Officers long-term incentive target is
transferred to short-term incentive target in the form of Executive
Incentive Program restricted stock units (RSUs).Long-term incentive
    
    Stock options or other
long-term equity with performance hurdles will be granted each year.
The recommended value of equity to be granted will be equivalent to
at least $350,000. If the Chief Financial Officer ceases employment
with the Company then a pro-rata amount of each tranche of the Chief
Financial Officers unvested options or other form of equity will
expire on the date employment ceases, calculated based on the formula
D=Cx(A/B), where A is the number of months from the date employment
ceases to the first testing or vesting date, B is the number of
months from the date of grant until the first testing or vesting date
and C is the total number of options or other form of equity granted
in the relevant tranche. The remaining unvested/unexercised options
or other form of equity will continue as if the Chief Financial
Officer remained employed by the Company until the first testing or
vesting date, at which point any options or other form of equity that
do not vest at that time will also lapse.
 99




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Components
    
    DetailsSuperannuation/Pension
    
    The Company will contribute A$50,000 to the Chief Financial Officers nominated
superannuation/pension fund.Other
    
    The Chief Financial Officer
receives an additional benefit of approximately A$30,000.Resignation or Termination
    
    The Company or Chief Financial Officer may cease the Chief Financial
Officers employment with the Company by providing three months
notice in writing.Redundancy or diminution
of role
    
    If the position of Chief Financial Officer is determined to be
redundant or subject to a material diminution in status, duties or
responsibility of the role, the Company or the Chief Financial Officer may
terminate the Chief Financial Officers employment. The Company will
pay the Chief Financial Officer a severance payment equal to the
greater of 12 months pay or the remaining proportion of the term of
the contract.
 
 (1)
    
    See actual salary paid for fiscal year 2010 in this section under Compensation. General Counsel
  Components
    
    DetailsLength of contract
    
    Indefinite.Base salary (1)
    
    $450,000 for fiscal year 2010. Salary reviewed
annually by the Board and there will be no
base salary increase for fiscal year 2011.Short-term incentive
    
    Annual short-term incentive target is 65% of
annual base salary as set out in his
employment contract. The General Counsels
short-term incentive is calculated under the
Executive Incentive Plan (which includes the
Individual Performance Plan).Long-term incentive
    
    Stock
options or other long-term equity with
performance hurdles will be granted each year.
The recommended value of equity to be granted
will be equivalent to at least $500,000.Resignation
    
    The General Counsel may cease employment with
the Company by providing 30 days written
notice.Termination by James Hardie
    
    The Company may terminate the General
Counsels employment for cause or not for
cause. If the Company terminates the
employment, not for cause, or the General
Counsel terminates his employment for good
reason, the Company may request the General
Counsel to consult to the Company for two
years as set out below. No other termination
payment is payable.Post-termination Consulting
    
    Depending on the reasons for termination, the
Company may request the General Counsel, and
the General Counsel will agree, to consult to
the Company for two years upon termination, as
long as he signs and complies with 1) a
consulting agreement, which will require him
to maintain non-compete and confidentiality
obligations to the Company, and 2) a release
of claims in a form acceptable to the Company.
In exchange for the consulting agreement, the
Company shall pay the General Counsels annual
base salary as of the termination date for
each year of consulting.
 
 (1)
    
    See actual salary paid for fiscal year 2010 in this section under Compensation. 100




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Benefits Contained in Contracts for Chief Executive Officer, Chief Financial Officer and General
Counsel
  Components
    
    DetailsInternational Assignment
    
    Additional benefits due to international
assignment: housing allowance, expatriate
Goods and Services allowance, moving and
storage.Other
    
    Tax Equalization:The Company covers the
extra personal tax burden imposed by
residency in The Netherlands.Tax Advice:The Company will pay the costs
of filing income tax returns to the required
countries.Health, Welfare and Vacation Benefits:
Eligible to receive all health, welfare and
vacation benefits offered to all U.S.
employees, or similar benefits. Are also
eligible to participate in the Companys
Executive Health and Wellness program.Business Expenses:Entitled to receive
reimbursement for all reasonable and
necessary travel and other business expenses
incurred or paid for in connection with the
performance of their services under their
employment agreements.Automobile: The Company will either
purchase or lease an automobile for business
and personal use or, in the alternative,
they will be entitled to an automobile
equivalent to the level of vehicle they
could receive in the U.S.
 101




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Other Senior Executives Employment Contracts
  Components
    
    DetailsLength of contract
    
    Indefinite.Base salary
    
    Base salary is subject to
Remuneration Committee approval
and reviewed annually.Short-term incentive
    
    An annual short-term incentive
target is set at a percentage of
the senior executives salary.
The short-term target is between
55% and 65% and reviewed
annually.Long-term incentive
    
    Upon the approval of the Board,
grants of Scorecard LTI awards
and Relative
TSR and Executive Incentive
Plan RSUs have been made
under the LTIP plan.Defined Contribution Plan
    
    U.S. senior executives may
participate in the U.S. 401(k)
defined contribution plan up to
the annual IRS limit. The
Company will match the senior
executives contributions into
the plan up to the annual IRS
limit.Resignation
    
    The senior executive may cease
employment with the Company by
providing 30 days written
notice.Termination by James Hardie
    
    The Company may terminate the
senior executives employment
for cause or not for cause.
Other than the post-termination
consulting arrangement discussed
below for a termination without
cause or a resignation for good
reason, no other termination
payments are payable.Post-termination Consulting
    
    Depending on the senior
executives individual contract,
and the reasons for termination,
the Company may request the
senior executive, and the senior
executive will agree, to consult
to the Company for two years
upon termination, as long as
they sign and comply with 1) a
consulting agreement, which will
require them to maintain
non-compete and confidentiality
obligations to the Company, and
2) a release of claims in a form
acceptable to the Company. In
exchange for the consulting
agreement, the Company shall pay
the senior executives annual
base salary as of the
termination date for each year
of consulting.Other
    
    Health, Welfare and Vacation
Benefits:Eligible to receive
all health, welfare and vacation
benefits offered to all U.S.
employees and also eligible to
participate in the Companys
Executive Health and Wellness
program.Business Expenses:The senior
executives are entitled to
receive reimbursement for all
reasonable and necessary travel
and other business expenses
incurred or paid in connection
with the performance of services
under their employment.Automobile:The Company will
either lease an automobile for
business and personal use by the
senior executive, or, in the
alternative, the executive will
be entitled to an automobile
lease allowance not to exceed
$750 per month.
 102




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Share Ownership
  Number ofSharesBeneficially
    
    Percent of ClassName
    
    Owned
    
    (1)Current Directors and Executive OfficersMichael Hammes (2)
    
    
    32,847
    
    
    
    *Donald McGauchie (3)
    
    
    20,372
    
    
    
    *Brian Anderson
    
    
    7,635
    
    
    
    *David Harrison
    
    
    12,384
    
    
    
    *James Osborne
    
    
    2,551
    
    
    
    *Rudy van der Meer
    
    
    17,290
    
    
    
    *David Dilger (4)
    
    
    25,000
    
    
    
    *Louis Gries
    
    
    1,553,475
    
    
    
    *Russell Chenu
    
    
    229,000
    
    
    
    *Robert Cox
    
    
    
    
    
    
    Mark Fisher
    
    
    941,672
    
    
    
    *Nigel Rigby
    
    
    747,392
    
    
    
    *
 
 *
    
    Indicates that the individual beneficially owns less than 1% of our shares of common stock.(1)
    
    Based on 434,550,172 shares of common stock outstanding at May 31, 2010 (all of which are
subject to CUFS).(2)
    
    As of May 31, 2010, 27,847 shares were held in the name of Mr. and Mrs. Hammes.(3)
    
    As of May 31, 2010 6,000 shares were held for the McGauchie Superannuation Fund for which Mr.
McGauchie is a trustee.(4)
    
    As of May 31, 2010, 25,000 shares were held for the David Dilger Approved Retirement Fund for
which Mr. Dilger is a beneficiary.  103




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Option Ownership
  Number of Shares UnderlyingName
    
    Options Owned
    
    Exercise Price
    
    Expiration DateCurrent Executive OfficersLouis Gries
    
    
    325,000
    (1)
    
    A$6.4490/share(2)
    
    December 2012325,000
    (3)
    
    A$7.05/share
    
    December 20131,000,000
    (4)
    
    A$8.53/share
    
    November 2015381,000
    (5)
    
    A$8.40/share
    
    November 2016415,000
    (5)
    
    A$8.40/share
    
    November 2016437,000
    (5)
    
    A$7.83/share
    
    August 2017445,000
    (5)
    
    A$7.83/share
    
    August 2017Russell Chenu
    
    
    93,000
    (6)
    
    A$6.30/share
    
    February 201590,000
    (4)
    
    A$8.53/share
    
    November 201560,000
    (5)
    
    A$8.40/share
    
    November 201665,000
    (5)
    
    A$8.40/share
    
    November 201666,000
    (5)
    
    A$7.83/share
    
    August 201768,000
    (5)
    
    A$7.83/share
    
    August 2017Robert Cox
    
    
    Mark Fisher
    
    
    68,283
    (7)
    
    A$5.0586/share(8, 2)
    
    December 201174,000
    (1)
    
    A$6.4490/share(2)
    
    December 2012132,000
    (3)
    
    A$7.05/share
    
    December 2013180,000
    (9)
    
    A$5.99/share
    
    December 2014190,000
    (10)
    
    A$8.90/share
    
    December 2015158,500
    (11)
    
    A$8.40/share
    
    November 2016277,778
    (12)
    
    A$6.38/share
    
    December 2017Nigel Rigby
    
    
    20,003
    (7)
    
    A$5.0586/share(8, 2)
    
    December 201127,000
    (1)
    
    A$6.4490/share(2)
    
    December 201233,000
    (3)
    
    A$7.05/share
    
    December 2013180,000
    (9)
    
    A$5.99/share
    
    December 2014190,000
    (10)
    
    A$8.90/share
    
    December 2015158,500
    (11)
    
    A$8.40/share
    
    November 2016277,778
    (12)
    
    A$6.38/share
    
    December 2017
 
 (1)
    
    Granted under the 2001 Equity Incentive Plan. All options vested and became exercisable in
December 2005.(2)
    
    The exercise price reflects an A$0.2110 per share price reduction due to a capital return
paid to shareholders in November 2003.(3)
    
    Granted under the 2001 Equity Incentive Plan. All options vested and became exercisable in
December 2006.(4)
    
    Granted under the Managing Board Transitional Stock Option Plan. Option vesting is subject to
performance hurdles as outlined in the plan rules. 104




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(5)
    
    Granted under the Long Term Incentive Plan. Option vesting is subject to performance
hurdles as outlined in the plan rules.(6)
    
    Granted under the 2001 Equity Incentive Plan. All options vested and became exercisable in
February 2008.(7)
    
    Granted under the 2001 Equity Incentive Plan. All options vested and became exercisable in
December 2004.(8)
    
    The exercise price reflects an A$0.3804 per share price reduction due to a capital return
paid to shareholders in November 2002.(9)
    
    Granted under the 2001 Equity Incentive Plan. All options vested and became exercisable in December 2007.(10)
    
    Granted under the 2001 Equity Incentive Plan. All options vested and became exercisable in December 2008.(11)
    
    Granted under the 2001 Equity Incentive Plan. All options vested and became exercisable in November 2009.(12)
    
    Granted under the 2001 Equity Incentive Plan. Options vest and become exercisable in three
installments: 25% on December 10, 2008; 25% on December 10, 2009; and 50% on December 10,
2010. 105




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Restricted Stock Unit Ownership
  Number of RestrictedName
    
    Stock Units Owned
    
    UnvestedCurrent Executive OfficersLouis Gries
    
    
    201,324
    (1)
    
    
    201,324558,708
    (2)
    
    
    558,708487,446
    (3)
    
    
    487,446234,900
    (4)
    
    
    234,90081,746
    (5)
    
    
    81,746Russell Chenu
    
    
    108,637
    (2)
    
    
    108,63794,781
    (3)
    
    
    94,78145,675
    (4)
    
    
    45,67515,895
    (5)
    
    
    15,895Robert Cox
    
    
    155,196
    (2)
    
    
    155,196135,402
    (3)
    
    
    135,40265,250
    (4)
    
    
    65,25022,707
    (5)
    
    
    22,707Mark Fisher
    
    
    36,066
    (6)
    
    
    36,066116,948
    (7)
    
    
    116,94877,548
    (3)
    
    
    77,54839,150
    (4)
    
    
    39,15013,624
    (5)
    
    
    13,624Nigel Rigby
    
    
    36,066
    (6)
    
    
    36,066116,948
    (7)
    
    
    116,94877,548
    (3)
    
    
    77,54839,150
    (4)
    
    
    39,15013,624
    (5)
    
    
    13,624
 
 (1)
    
    Granted under the Long Term Incentive Plan and Deferred Bonus Program on September 15,
2008. Restricted stock units vest in one installment, 100% on September 15, 2010.(2)
    
    Granted under the Long Term Incentive Plan on September 15, 2008. Restricted stock units
vesting is subject to performance hurdles as outlined in the plan rules.(3)
    
    Granted under the Long Term Incentive Plan on May 29, 2009. Restricted stock units vesting is
subject to performance hurdles as outlined in the plan rules. 106




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(4)
    
    Granted under the Long Term Incentive Plan on September 15, 2009. Restricted stock units
vesting is subject to performance hurdles as outlined in the plan rules.(5)
    
    Granted under the Long Term Incentive Plan on December 11, 2009. Restricted stock units
vesting is subject to performance hurdles as outlined in the plan rules.(6)
    
    Granted under the 2001 Equity Incentive Plan and Deferred Bonus Program on June 17, 2008.
Restricted stock units vest in one installment, 100% on June 17, 2010.(7)
    
    Granted under the Long Term Incentive Plan on December 17, 2008. Restricted stock units
vesting is subject to performance hurdles as outlined in the plan rules. Stock-Based Compensation
  Executive Share Purchase Plan
  Managing Board Transitional Stock Option Plan
   Effect of Change in Control.
 107




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JHI SE 2001 Equity Incentive Plan
    Options Outstanding as ofShare Grant Date
    
    Number of Options Granted
    
    May 31, 2010October 2001 (1)
    
    
    5,468,829
    
    
    
    115,140December 2001
    
    
    4,248,417
    
    
    
    254,309December 2002
    
    
    4,037,000
    
    
    
    796,500December 2003
    
    
    6,179,583
    
    
    
    1,758,250December 2004
    
    
    5,391,100
    
    
    
    1,523,250February 2005
    
    
    273,000
    
    
    
    93,000December 2005
    
    
    5,224,100
    
    
    
    2,284,500March 2006
    
    
    40,200
    
    
    
    40,200November 2006
    
    
    3,499,490
    
    
    
    1,704,085March 2007
    
    
    330,900
    
    
    
    168,500December 2007
    
    
    5,031,310
    
    
    
    2,638,729Total outstanding
    
    
    
    
    
    
    11,376,463
 
 (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.  Number of Restricted Stock
    
    Restricted Stock UnitsShare Grant Date
    
    Units Granted
    
    vested as of May 31, 2010June 2008
    
    
    698,440
    
    
    
    13,685December 2008
    
    
    992,271
    
    
    
    237,595December 2009
    
    
    278,569
    
    
    
    Total
    
    
    1,969,280
    
    
    
    251,280
  108




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##### Table of Contents



Stock Options.
 Performance Awards.
 Restricted Stock Awards.
 Stock Appreciation Rights.
 Dividend Equivalent Rights.
 Restricted Stock Units
 Cash Settled Units.
 Other Stock-Based Benefits.
 109




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##### Table of Contents



Effect of Change in Control.
 Supervisory Board Share Plan 2006
     Long-Term Incentive Plan
   110




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##### Table of Contents



Effect of Change in Control, Takeover by Certain Organizations or Liquidation
 Other Compensation
 Deferred Bonus Program
      Executive Incentive Program and Individual Performance Plan
  
    
    an Individual Performance Plan (which we refer to as the IP Plan), and
    
    an Executive Incentive Program (which we refer to as EIP).
  111




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401(k) Plan
  James Hardie Australia Superannuation Plan
  
 Item 7. Major Shareholders and Related Party Transactions
 Major Shareholders
   112




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Shares
    
    Percentage ofBeneficially
    
    SharesShareholder
    
    Owned
    
    OutstandingSchroder Investment Management Australia Limited (1)
    
    
    31,024,755
    
    
    
    7.14
    %Commonwealth Bank of Australia (2)
    
    
    30,986,692
    
    
    
    7.13
    %FMR LLC and FIL Limited (3)
    
    
    29,347,020
    
    
    
    6.75
    %National Australia Bank Limited Group (4)
    
    
    28,198,184
    
    
    
    6.49
    %Concord Capital (5)
    
    
    26,255,160
    
    
    
    6.04
    %UBS Nominees Pty Ltd and its related bodies corporate (6)
    
    
    24,743,787
    
    
    
    5.70
    %Baillie Gifford & Co (7)
    
    
    22,325,859
    
    
    
    5.14
    %
 
 (1)
    
    Schroder Investment Management Australia Limited became a major shareholder on January 28,
2004, with a holding of 25,485,997 shares of our issued share capital and, through subsequent
purchases, increased its holding in of our issued share capital on April 6, 2004 to 39,835,741
shares. Schroder Investment Management Australia Limited reduced its holding to 31,024,755
shares on January 8, 2007 in the last notice received.(2)
    
    Commonwealth Bank of Australia became a major shareholder on November 12, 2009, with a
holding of 21,820,423 shares of our issued capital and, through subsequent purchases,
increased its holdings of our issued capital to 30,986,692 on February 26, 2010 in the last
notice received.(3)
    
    FMR LLC and FIL Limited became a major shareholder on July 23, 2009, with a holding of
34,119,335 shares of our issued share capital and through subsequent sales and purchases, FMR
LLC and FIL Limited reduced their holding to 29,347,020 shares of our issued share capital on
May 20, 2010 in the last notice received.(4)
    
    National Australia Bank Limited Group became a major shareholder on May 25, 2004, with
23,060,940 shares of our issued share capital and increased its holding to 28,198,184 shares
of our issued share capital on June 16, 2004 in the last notice received.(5)
    
    Concord Capital became a major shareholder on June 18, 2004, with 24,499,832 shares of our
issued share capital. Their substantial holding status ceased on August 6, 2004 when their
holdings in our issued share capital fell below 5%. On August 20, 2004, their holdings
increased to over 5% of our issued share capital but their substantial holding status again
ceased when their holding fell below 5% on April 8, 2005. On October 26, 2007, Concord Capital
became a substantial shareholder again with a holding of 23,723,697 shares of our issued share
capital and, through subsequent purchases, increased its holding of our issued share capital
to 26,255,160 shares on October 9, 2009 in the last notice received.(6)
    
    UBS Nominees Pty Ltd and its related bodies corporate became a major shareholder on February
22, 2010, with 24,743,787 shares of our issued capital in the last notice received.(7)
    
    Baillie Gifford & Co and its affiliated companies became a major shareholder on December 24,
2007, with a holding of 24,577,253 shares of our issued share capital. On June 26, 2009, their
holdings increased to over 5% of our issued share capital but their substantial holding status
again ceased when their holdings of our issued share capital fell below 5% on June 29, 2009.
On November 12, 2009, in the last notice received, Baillie Gifford & Co. became a major
shareholder again with a holding of 22,325,859 shares of our issued capital in the last notice
received.    113




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Other Security Ownership Information
  Related Party Transactions
 Existing Loans to our Directors and Directors of our Subsidiaries
  Payments Made to Directors and Director Related Entities of JHI SE during the Year
  
 Item 8. Financial Information
   114




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Item 9. Listing Details
 Price History
  High
    
    LowPeriod
    
    (A$)
    
    (US$)
    
    (A$)
    
    (US$)Fiscal year ended:March 31, 2010
    
    
    8.86
    
    
    
    7.54
    
    
    
    3.73
    
    
    
    3.17March 31, 2009
    
    
    7.04
    
    
    
    5.59
    
    
    
    2.89
    
    
    
    2.29March 31, 2008
    
    
    9.65
    
    
    
    8.39
    
    
    
    5.34
    
    
    
    4.64March 31, 2007
    
    
    10.24
    
    
    
    7.84
    
    
    
    6.31
    
    
    
    4.83March 31, 2006
    
    
    9.81
    
    
    
    7.38
    
    
    
    5.49
    
    
    
    4.13Fiscal quarter ended:March 31, 2010
    
    
    8.86
    
    
    
    8.04
    
    
    
    7.07
    
    
    
    6.41December 31, 2009
    
    
    8.59
    
    
    
    7.92
    
    
    
    6.73
    
    
    
    6.20September 30, 2009
    
    
    7.95
    
    
    
    6.66
    
    
    
    3.73
    
    
    
    3.12June 30, 2009
    
    
    5.15
    
    
    
    3.91
    
    
    
    3.86
    
    
    
    2.93March 31, 2009
    
    
    4.79
    
    
    
    3.31
    
    
    
    2.89
    
    
    
    2.00December 31, 2008
    
    
    5.49
    
    
    
    3.89
    
    
    
    3.20
    
    
    
    2.27September 30, 2008
    
    
    5.79
    
    
    
    5.16
    
    
    
    3.82
    
    
    
    3.40June 30, 2008
    
    
    7.04
    
    
    
    6.64
    
    
    
    4.13
    
    
    
    3.90Month ended:May 31, 2010
    
    
    8.05
    
    
    
    7.04
    
    
    
    6.98
    
    
    
    6.11April 30, 2010
    
    
    7.73
    
    
    
    7.16
    
    
    
    6.92
    
    
    
    6.41March 31, 2010
    
    
    7.93
    
    
    
    7.30
    
    
    
    7.07
    
    
    
    6.51February 28, 2010
    
    
    8.15
    
    
    
    7.21
    
    
    
    7.27
    
    
    
    6.43January 31, 2010
    
    
    8.86
    
    
    
    8.12
    
    
    
    7.50
    
    
    
    6.87December 31, 2009
    
    
    8.59
    
    
    
    7.84
    
    
    
    7.82
    
    
    
    7.14
  115




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High
    
    LowPeriod
    
    (US$)
    
    (US$)Fiscal year ended:March 31, 2010
    
    
    41.22
    
    
    
    14.50March 31, 2009
    
    
    31.55
    
    
    
    9.38March 31, 2008
    
    
    40.50
    
    
    
    23.00March 31, 2007
    
    
    41.70
    
    
    
    24.20March 31, 2006
    
    
    36.36
    
    
    
    21.54Fiscal quarter ended:March 31, 2010
    
    
    41.22
    
    
    
    31.90December 31, 2009
    
    
    39.91
    
    
    
    30.67September 30, 2009
    
    
    34.50
    
    
    
    14.50June 30, 2009
    
    
    18.99
    
    
    
    14.95March 31, 2009
    
    
    16.60
    
    
    
    9.38December 31, 2008
    
    
    22.53
    
    
    
    10.65September 30, 2008
    
    
    24.25
    
    
    
    18.10June 30, 2008
    
    
    31.55
    
    
    
    20.15Month ended:May 31, 2010
    
    
    36.96
    
    
    
    28.91April 30, 2010
    
    
    35.75
    
    
    
    31.96March 31, 2010
    
    
    36.04
    
    
    
    32.25February 28, 2010
    
    
    35.58
    
    
    
    31.90January 31, 2010
    
    
    41.22
    
    
    
    33.19December 31, 2009
    
    
    39.91
    
    
    
    34.67
 Trading Markets
  Common Stock (in the form of CUFS)
    
    Australian Securities ExchangeADSs
    
    New York Stock Exchange
  Trading on the Australian Securities Exchange
  Trading on the New York Stock Exchange
 shrrelations@bnymellon.com www.bnymellon.com/shareowner
 116




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##### Table of Contents



Item 10. Additional Information
 General
   Key Provisions of our Articles of Association
 Purpose of the Company
     Provisions of our Articles of Association Related to Directors
 General and borrowing powers
 
    
    the power to delegate their powers to the chief executive officer, any director, any
person or persons employed by us or any of our subsidiaries or to a committee of the Board;
    
    the power to appoint attorneys to act on our behalf;
    
    the power to borrow money on our behalf and to mortgage or charge our undertaking,
property, assets, and uncalled capital as security for such borrowings; and
    
    the power to do anything that is necessary or desirable for us to participate in any
computerized, electronic or other system for the facilitation of the transfer of CUFS or the
operation of our registers that may be owned, operated or sponsored by the ASX.
  117




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Power to vote on compensation
    Age Limit for Retirement or Non-Retirement:
 Number of shares for Directors qualification
 Issuance of Shares; Preemptive Rights
      
    
    in the case of the ASX, shareholder approval for the issue of equity securities which
exceed 15% of the number of equity securities on issue (as determined in accordance with the
ASX listing rules and subject to the various exemptions set out therein); and
    
    in the case of the NYSE, shareholder approval for the issuance of shares that have or
will have upon issuance voting power equal to or in excess of 20% of the voting power
outstanding before the issuance of such shares (subject to certain exceptions).
  118




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Repurchase of Shares and Reduction of Capital
       Shareholders Meetings and Voting Rights
   119




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
    
    by instructing CHESS Depository Nominees Pty Limited (who we refer to as CDN), as
legal owner of our shares represented by CUFS, how to vote the shares represented by the
holders CUFS;
    
    by directing CDN to appoint itself (or another person) as the Nominated Proxy pursuant
to a voting instruction form provided by the Company; or
    
    by converting the holders CUFS into our shares and voting the shares at the meeting,
which must be undertaken prior to the meeting. However, in order to sell their shares on
the ASX thereafter, it will be first necessary to convert them back to CUFS.
   Annual Report
   120




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Indemnification
   Dividends
     Amendment of Articles of Association
  Liquidation Rights
  121




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Limitations on Right to Hold Common Stock
    
    
    any person acquires, whether by a series of transactions over a period of time or not,
shares or other securities which (taken together with shares or other securities held or
acquired by persons acting in concert) carry 30% or more of the voting rights of a company;
or
    
    any person, who together with persons acting in concert, holds not less than 30% of the
voting rights and such person or any person acting in concert with them acquires, in any
period of twelve months, additional shares or other securities of more than 0.05% of the
total voting rights of the company,
     
    
    all holders of the securities of an offeree of the same class must be afforded
equivalent treatment; moreover, if a person acquires control of a company, the other
holders of securities must be protected;
    
    the holders of the securities of an offeree must have sufficient time and information to
enable them to reach a properly informed decision on the offer; where it advises the
holders of securities, the board of the offeree must give its views on the effects of
implementation of the offer on employment, conditions of employment and the locations of
the offerees places of business;
    
    the board of an offeree must act in the interests of the company as a whole and must not
deny the holders of securities the opportunity to decide on the merits of the offer;
    
    false markets must not be created in the securities of the offeree, of the offeror or of
any other company concerned by the offer in such a way that the rise or fall of the prices
of the securities becomes artificial and the normal functioning of the markets is
distorted;
    
    an offeror must announce an offer only after ensuring that he or she can fulfill in full
any cash consideration, if such is offered, and after taking all reasonable measures to
secure the implementation of any other type of consideration;
    
    an offeree must not be hindered in the conduct of its affairs for longer than is
reasonable by an offer for its securities; and
 122




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##### Table of Contents




    
    a substantial acquisition of securities (whether such acquisition is to be effected by
one transaction or a series of transactions) shall take place only at an acceptable speed
and shall be subject to adequate and timely disclosure.
   Disclosure of Holdings
  
    
    such persons interest was below 5% of our issued share capital prior to such
acquisition and equals or exceeds 5% after such acquisition;
    
    such persons interest was equal to or above 5% of our issued share capital before an
acquisition or disposition and increases or decreases through an integer of a percentage as
a result of such acquisition or disposition (e.g., from 5.8% to 6.3% or from 8.2% to 7.9%);
and
    
    where such persons interest was equal to or above 5% of our issued share capital before
a disposition and falls below 5% as a result of such disposition.
    123




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www.sec.gov
 Material Contracts
  U.S.
Dollar Cash Advance Facilities.
  Gypsum Indemnity. .
  124




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Exchange Controls
    Taxation
   PROSPECTIVE INVESTORS SHOULD CONSULT THEIR TAX ADVISERS REGARDING THE PARTICULAR TAX
CONSEQUENCES OF THEIR ACQUIRING, OWNING AND DISPOSING OF SHARES OF OUR COMMON STOCK, INCLUDING THE
EFFECT OF ANY FOREIGN, STATE OR LOCAL TAXES.
 United States Taxation
  125




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Treatment of ADSs.
 Taxation of Distributions.
   126




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Credit of Foreign T es Withheld.
  Sale or Other Disposition of Shares.
 Capital Gain Rates.
 Passive Foreign Investment Company Status.
  127




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Controlled Foreign Corporation Status.
   U.S. Federal Income Tax Provisions Applicable to Non-United States Holders.
 U.S. Information Reporting and Backup Withholding.
  128




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Dutch Taxation
  Treatment of ADSs
 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
The 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 The 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 The 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, or 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.
   129




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Dutch Taxes on Income and Capital Gains
 (1)
    
    such shareholder is neither tax resident nor deemed to be tax 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 our share
capital 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 Dutch business.
   130




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Other Taxes and Duties.
 Irish Taxation
 As discussed above, with effect from June 29, 2010 forward, we believe we should be considered to
be an Irish tax resident and should no longer be considered to be a Dutch tax resident.
Accordingly, we believe that the Irish tax implications set out below are relevant for shareholders
who invest in shares of our common stock and hold the shares as capital assets.
  Treatment of ADSs
 Irish Dividend Withholding Tax
   
    
    an individual shareholder resident for tax purposes in either a member state of the EU
(apart from Ireland) or in a country with which Ireland has a double tax treaty, and the
individual is neither resident nor ordinarily resident in Ireland;
    
    a corporate shareholder not resident for tax purposes in Ireland nor ultimately controlled,
directly or indirectly, by persons so resident and which is resident for tax purposes in
either a member state of the EU (apart from Ireland) or a country with which Ireland has a
double tax treaty;
 131




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
    
    a corporate shareholder that is not resident for tax purposes in Ireland and which is
ultimately controlled, directly or indirectly, by persons resident in either a member state of
the EU (apart from Ireland) or in a country with which Ireland has a double tax treaty;
    
    a corporate shareholder that is not resident for tax purposes in Ireland and whose
principal class of shares (or those of its 75% parent) is substantially and regularly traded
on a recognized stock exchange in either a member state of the EU (including Ireland where the
company trades only on the Irish stock exchange) or in a country with which Ireland has a
double tax treaty or on an exchange approved by the Irish Minister for Finance; or
    
    a corporate shareholder that is not resident for tax purposes in Ireland and is
wholly-owned, directly or indirectly, by two or more companies the principal class of shares
of each of which is substantially and regularly traded on a recognized stock exchange in
either a member state of the EU (including Ireland where the company trades only on the Irish
stock exchange) or in a country with which Ireland has a double tax treaty or on an exchange
approved by the Irish Minister for Finance, and provided that, in all cases noted above, the
shareholder has made the appropriate non-resident declaration to us prior to payment of the
dividend.
      Irish Taxes on Income and Capital Gains
 132




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##### Table of Contents



Capital Acquisitions Tax.
  
    
    to the extent that the property of which the gift or inheritance consists is situated in
Ireland at the date of the gift or inheritance;
    
    where the person making the gift or inheritance is or was resident or ordinarily resident
in Ireland at the date of the disposition under which the gift or inheritance is taken;
    
    in the case of an appointment from a discretionary trust where the person who settled the
assets on trust was resident or ordinarily resident in Ireland (i) at the date he made the
settlement, or (ii) at the date of the appointment of the property from the trust or, (iii) if
the appointment occurs after his death, at the date of his death; or
    
    where the person receiving the gift or inheritance is resident or ordinarily resident in
Ireland at the date of the gift or inheritance.
    Irish Stamp Duty
 Documents Available for Review
 www.sec.gov
 133




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##### Table of Contents




    
    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
    Foreign Currency Exchange Rate Risk
   US$
    
    A$
    
    NZ$
    
    Other (1)Net sales
    
    
    71.9
    %
    
    
    19.1
    %
    
    
    4.5
    %
    
    
    4.5
    %Cost of goods sold
    
    
    69.6
    %
    
    
    20.7
    %
    
    
    5.1
    %
    
    
    4.6
    %Expenses (2)
    
    
    33.7
    %
    
    
    62.1
    %
    
    
    1.3
    %
    
    
    2.9
    %Liabilities (excluding borrowings) (2)
    
    
    44.2
    %
    
    
    54.4
    %
    
    
    0.6
    %
    
    
    0.8
    %
  US$
    
    A$
    
    NZ$
    
    Other (1)Net sales
    
    
    75.9
    %
    
    
    16.1
    %
    
    
    4.2
    %
    
    
    3.8
    %Cost of goods sold
    
    
    74.9
    %
    
    
    16.7
    %
    
    
    4.2
    %
    
    
    4.2
    %Expenses (2)
    
    
    76.7
    %
    
    
    15.0
    %
    
    
    2.7
    %
    
    
    5.6
    %Liabilities (excluding borrowings) (2)
    
    
    17.7
    %
    
    
    79.8
    %
    
    
    0.9
    %
    
    
    1.6
    %
 
 (1)
    
    Comprised of Philippine Pesos and Euros.(2)
    
    Liabilities include A$ denominated asbestos liability, which was initially recorded in the
fourth quarter of fiscal year 2006. Expenses include adjustments to the liability. See Item 3,
Key Information  Risk Factors, Item 4, Information on the Company  Commitment to
Provide Funding on a Long-Term Basis in Respect of Asbestos-Related Liabilities of Former
Subsidiaries, and Note 11 of our consolidated financial statements in Item 18 for further
information regarding the asbestos liability. 134




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Funding Under the Amended FFA
   Interest Rate Risk
    Commodity Price Risk
   135




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Item 12A. Debt Securities
  
 Item 12B. Warrants and Rights
  
 Item 12C. Other Securities
  
 Item 12D. American Depositary Shares
   Persons depositing or withdrawing share orADS holders must pay:
    
    For:Taxes and other governmental charges
    
    As necessaryRegistration or transfer fees
    
    Transfer and registration of shares on our
share register to or from the name of the
depositary or its agent when you deposit
or withdraw sharesAny charges incurred by the depositary or
its agents for servicing the deposited
securities
    
    As necessaryExpenses of the depositary
    
    Converting foreign currency to U.S. dollars$5.00 (or less) per 100 ADSs (or portion of
100 ADSs)
    
    Execution and delivery of ADSs, including
issuances resulting from a distribution of
shares, rights, or other property$0.02 (or less) per ADS (or portion thereof)
    
    Cash distributions and depositary services
  shrrelations@bnymellon.com www.bnymellon.com/shareowner
 136




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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
 Evaluation of Disclosure Controls and Procedures
  Managements Report on Internal Control over Financial Reporting
  Internal Control  Integrated Framework
  Changes in Internal Control over Financial Reporting
  137




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Report of Independent Registered Public Accounting Firm
        /s/ Ernst & Young LLP 
 138




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Item 16A. Audit Committee Financial Expert
   
 Item 16B. Code of Business Conduct and Ethics
     www.jameshardie.com
 139




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##### Table of Contents



Item 16C. Principal Accountant Fees and Services
 Fees Paid to Our Independent Registered Public Accounting Firm
   Fiscal Years Ended March 31,(In millions)
    
    2010
    
    2009
    
    2008Audit Fees (1)
    
    $
    2.5
    
    
    $
    2.4
    
    
    $
    4.2Audit-Related Fees (2)
    
    
    
    
    
    
    
    
    
    
    Tax Fees (3)
    
    
    
    
    
    
    
    
    
    
    4.9
 
 (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 fiscal year ended March 31, 2008, total audit fees includes fees
for Sarbanes-Oxley compliance testing of $2.0 million, $0.8 million of which related to
Sarbanes-Oxley compliance testing performed for fiscal year 2007, but paid in fiscal year
2008. In addition, during fiscal year ended March 31, 2008, total audit fees includes fees for
statutory reporting of $0.8 million, $0.4 million of which related to statutory reporting fees
performed for fiscal year 2007, but paid in fiscal year 2008.(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 years ended March 31, 2010, 2009 and 2008.(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
   
 Item 16D. Exemptions from the Listing Standards for Audit Committees
  140




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Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers
  
 Item 16F. Change in Registrants Certifying Accountant
  
 Item 16G. Corporate Governance
  
 Item 17. Financial Statements
  
 PART III
 
 Item 18. Financial Statements
  
 Item 19. Exhibits
  ExhibitNumber
    
    Description of Exhibits1.1
    
    Articles of Association dated June 17, 2010 of James Hardie Industries SE, a European Company
registered in Ireland (13)2.1
    
    Deposit Agreement dated as of September 24, 2001, as amended and restated as of February 19,
2010 and as further amended on June 17, 2010, between James Hardie Industries SE and The Bank of New
York Mellon, as depositary2.2
    
    Amended and Restated Common Terms Deed Poll dated October 6, 2009 among James Hardie
International Finance B.V., James Hardie Building Products, Inc., James Hardie International Finance
Limited and James Hardie Industries N.V.2.3
    
    Amended and Restated Common Terms Deed Poll dated December 21, 2009 among James Hardie
International Finance Limited, James Hardie Building Products, Inc. and James Hardie Industries N.V.2.4
    
    Form of 3 Year Term (Bullet) Facility Agreement dated February 21, 2008 among James Hardie
International Finance B.V., James Hardie Building Products, Inc. and Financier (6)2.5
    
    Form of 5 Year Term (Bullet) Facility Agreement dated February 21, 2008 among James Hardie
International Finance B.V., James Hardie Building Products, Inc. and Financier (6)2.6
    
    Form of Guarantee Deed between James Hardie Industries N.V. and Financier (2)2.7
    
    Form of Lender Deeds of Confirmation dated June 23, 2009 between James Hardie International
Finance B.V., James Hardie Building Products, Inc., James Hardie Industries N.V. and Financier (7)2.8
    
    Form of Novation Deed dated October 9, 2009 between James Hardie International Finance Limited, James
Hardie International Finance B.V., James Hardie Building Products, Inc., James Hardie Industries N.V.
and Financier (14)
 141




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ExhibitNumber
    
    Description of Exhibits2.9
    
    AET Guarantee Trust Deed dated December 19, 2006 between James Hardie Industries N.V. and AET
Structured Finance Services Pty Limited (14)2.10
    
    Amending Deed to the AET Guarantee Trust Deed dated October 6, 2009 between James Hardie Industries
N.V. and AET Structured Finance Services Pty Limited2.11
    
    Performing Subsidiary Undertaking and Guarantee Trust Deed dated December 19, 2006 between James
Hardie 117 Pty Limited and AET Structured Finance Services Pty Limited (14)2.12
    
    Amending Deed to the Performing Subsidiary Undertaking and Guarantee Trust Deed dated October 6, 2009
between James Hardie 117 Pty Limited and AET Structured Finance Services Pty Limited2.13
    
    Form of Term Facility Agreement between James Hardie International Finance Limited and Financier (9)4.1
    
    Amended and Restated James Hardie Industries SE 2001 Equity Incentive Plan (10)4.2
    
    Executive Incentive Plan 2009 (7)4.3
    
    Amended and Restated James Hardie Industries SE Supervisory Board Share Plan 2006 (11)4.4
    
    Amended and Restated James Hardie Industries SE Managing Board Transitional Stock Option Plan 2005
(11)4.5
    
    Amended and Restated James Hardie Industries SE Long Term Incentive Plan 2006 (12)4.6
    
    Form of Joint and Several Indemnity Agreement among James Hardie N.V., James Hardie (USA) Inc. and
certain former executive officers and Managing Board directors thereto (2)4.7
    
    Form of Joint and Several Indemnity Agreement among James Hardie Industries N.V., James Hardie Inc.
and certain former Supervisory Board and Managing Board directors thereto (2)4.8
    
    Form of Deed of Access, Insurance and Indemnity between James Hardie Industries N.V. and Supervisory
Board directors and Managing Board directors (6)4.9
    
    Form of Indemnity Agreement between James Hardie Building Products, Inc. and Supervisory Board
directors, Managing Board directors and certain executive officers (6)4.10
    
    Form of Irish law-governed Deed of Access, Insurance and Indemnity between James Hardie Industries
SE, a European Company registered in Ireland, and its directors, company secretary and certain senior
employees (7)4.11
    
    Lease between Brookfield Multiplex Carole Park Landowner Pty Limited (f/k/a Multiplex Carole Park
Landowner Pty Limited), James Hardie Australia Pty Limited and James Hardie Industries N.V. dated
October 18, 2007 re Cobalt & Silica Street, Carole Park, Queensland, Australia (7)4.12
    
    Variation of Lease dated March 23, 2004, among Brookfield Multiplex Rosehill Landowner Pty Ltd (f/k/a
Multiplex Rosehill Landowner Pty Ltd) as successor in interest to 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 (1)4.13
    
    Lease dated April 3, 2009, between Welshpool Landowner Pty and James Hardie Australia Pty Limited re
premises at Rutland Avenue, Welshpool, Western Australia, Australia (7)4.14
    
    Lease Amendment dated March 23, 2004, among Brookfield Multiplex Meeandah Landowner Pty Ltd (f/k/a
Multiplex Meeandah Landowner Pty Ltd) as successor in interest to 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 (1)4.15
    
    Lease Agreement dated March 23, 2004 among Location Group Limited as successor in interest to 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 (1)4.16
    
    Lease Agreement dated March 23, 2004 among Location Group Limited as successor in interest to 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 (1)4.17
    
    Ownership transfer related to corner of ORorke and Station Roads, Penrose, Auckland, New Zealand and
44-74 ORorke Road, Penrose, Auckland, New Zealand effective June 30, 2005 (3)
 142




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ExhibitNumber
    
    Description of Exhibits4.18
    
    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 (2)4.19
    
    Asset Purchase Agreement by and between James Hardie Building Products, Inc. and Cemplank, Inc. dated
as of December 12, 2001 (2)4.20
    
    Amended and Restated Stock Purchase Agreement dated March 12, 2002, between BPB U.S. Holdings, Inc.
and James Hardie Inc. (2)4.21
    
    Amended and Restated Final Funding Agreement dated November 21, 2006 (4)4.22
    
    Amended FFA Amendment dated August 6, 2007 (6)4.23
    
    Amended FFA Amendment dated November 8, 2007 (6)4.24
    
    Amended FFA Amendment dated June 11, 2008 (6)4.25
    
    Address for Service of Notice on Trustee dated June 13, 2008 (6)4.26
    
    Amended FFA Amendment dated July 17, 2008 (7)4.27
    
    Asbestos Injuries Compensation Fund Amended and Restated Trust Deed by and between James Hardie
Industries N.V. and Asbestos Injuries Compensation Fund Limited dated December 14, 2006 (5)4.28
    
    Deed Poll dated June, 11, 2008  amendment of the Asbestos Injuries Compensation Fund Amended and
Restated Trust Deed (6)4.29
    
    Deed of Release by and among James Hardie Industries N.V., Australian Council of Trade Unions, Unions
New South Wales, and Bernard Douglas Banton dated December 21, 2005 (3)4.30
    
    Amending Agreement (Parent Guarantee) dated June 23, 2009 by and among Asbestos Injuries Compensation
Fund Limited, The State of New South Wales, and James Hardie Industries N.V.4.31
    
    Deed of Release by and between James Hardie Industries N.V. and The State of New South Wales dated
June 22, 2006 (3)4.32
    
    Second Irrevocable Power of Attorney by and between Asbestos Injuries Compensation Fund Limited and
The State of New South Wales dated December 14, 2006 (5)4.33
    
    Deed of Accession by and among Asbestos Injuries Compensation Fund Limited, James Hardie Industries
N.V., James Hardie 117 Pty Limited, and The State of New South Wales dated December 14, 2006 (5)4.34
    
    Intercreditor Deed dated December 19, 2006 between The State of New South Wales, James Hardie
Industries N.V., Asbestos Injuries Compensation Fund Limited and AET Structured Finance Services Pty
Limited (14)4.35
    
    Letter agreement dated March 21, 2007 amending Intercreditor Deed between The State of New South
Wales, James Hardie Industries N.V., Asbestos Injuries Compensation Fund Limited and AET Structured
Finance Services Pty Limited (14)4.36
    
    Amending Deed (Intercreditor Deed) dated June 23, 2009 between The State of New South Wales, James
Hardie Industries N.V., Asbestos Injuries Compensation Fund Limited and AET Structured Finance
Services Pty Limited4.37
    
    Performing Subsidiary Intercreditor Deed dated December 19, 2006 between The State of New South
Wales, James Hardie 117 Pty Limited, Asbestos Injuries Compensation Fund Limited and AET Structured
Finance Services Pty Limited (14)4.38
    
    Letter agreement dated March 21, 2007 amending Performing Subsidiary Intercreditor Deed between The
State of New South Wales, James Hardie 117 Pty Limited, Asbestos Injuries Compensation Fund Limited
and AET Structured Finance Services Pty Limited (14)4.39
    
    Amending Deed (Performing Subsidiary Intercreditor Deed) dated June 23, 2009 between The State of New
South Wales, James Hardie 117 Pty Limited, Asbestos Injuries Compensation Fund Limited and AET
Structured Finance Services Pty Limited
 143




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ExhibitNumber
    
    Description of Exhibits4.40
    
    Deed of Confirmation dated June 23, 2009 between James Hardie Industries N.V., James Hardie 117 Pty
Limited, The State of New South Wales and Asbestos Injuries Compensation Fund Limited in its capacity
as trustee of the Asbestos Injuries Compensation Fund (8)4.41
    
    Agreement on the Involvement of Employees dated February 10, 2010 between James Hardie Industries
N.V., JH CBM plc, James Hardie International Holdings N.V., JHIHCBM and the Special Negotiating
Bodies (9)8.1
    
    List of significant subsidiaries of James Hardie Industries SE12.1
    
    Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 200212.2
    
    Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 200213.1
    
    Certification of the Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of
the Sarbanes-Oxley Act of 200215.1
    
    Consent of Ernst & Young LLP, independent registered public accounting firm15.2
    
    Consent of PricewaterhouseCoopers, LLP, independent registered public accounting firm15.3
    
    Consent of KPMG Actuaries Pty Ltd99.1
    
    Excerpts of the ASTC Settlement Rules as of March 31, 2009 (7)99.2
    
    Subdivision B, Division 3 of Part 7.2 of the Corporations Act 2001 as of January 1, 2009 (7)99.3
    
    ASIC Class Order 02/311, dated November 3, 2002 (2)99.4
    
    ASIC Modification, dated March 7, 2002 (2)99.5
    
    ASIC Class Order 04/166, dated February 26, 2004 (3)
 
 (1)
    
    Previously filed as an exhibit to our Annual Report on Form 20-F dated November 22, 2004
and incorporated herein by reference.(2)
    
    Previously filed as an exhibit to our Annual Report on Form 20-F dated July 7, 2005 and
incorporated herein by reference.(3)
    
    Previously filed as an exhibit to our Annual Report on Form 20-F dated September 29, 2006 and
incorporated herein by reference.(4)
    
    Previously filed as an exhibit to our Current Report on Form 6-K dated January 5, 2007 and
incorporated herein by reference.(5)
    
    Previously filed as an exhibit to our Annual Report on Form 20-F dated July 6, 2007 and
incorporated herein by reference.(6)
    
    Previously filed as an exhibit to our Annual Report on Form 20-F dated July 8, 2008 and
incorporated herein by reference.(7)
    
    Previously filed as an exhibit to our Form F-4 dated June 23, 2009 and incorporated herein by
reference.(8)
    
    Previously filed as an exhibit to our Amendment No. 2 to Form F-4 dated July 10, 2009 and
incorporated herein by reference.(9)
    
    Previously filed as an exhibit to our Post Effective Amendment No. 1 to Form F-4 dated
February 19, 2010 and incorporated herein by reference.(10)
    
    Previously filed as an exhibit to our Post Effective Amendment No. 2 to Form S-8
(Registration No. 333-14036) dated June 17, 2010 and incorporated herein by reference.(11)
    
    Previously filed as an exhibit to our Post Effective Amendment No. 2 to Form S-8
(Registration No. 333-153446) dated June 17, 2010 and incorporated herein by reference. 144




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##### Table of Contents



(12)
    
    Previously filed as an exhibit to our Post Effective Amendment No. 2 to Form S-8
(Registration No. 333-161482) dated June 17, 2010 and incorporated herein by reference.(13)
    
    Previously filed as an exhibit to our Current Report on Form 6-K dated June 18, 2010 and
incorporated herein by reference.(14)
    
    Previously filed as an exhibit to our Post Effective Amendment No. 1 to Form F-4 dated June
17, 2010 and incorporated herein by reference. 145




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SIGNATURES
  JAMES HARDIE INDUSTRIES SEBy:
    /s/ Louis GriesLouis GriesDate: June 30, 2010
    
    Chief Executive Officer 146




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JAMES HARDIE INDUSTRIES SE
INDEX
 PageReport of Independent Registered Public Accounting Firm  Ernst & Young LLP
    
    
    F-2Report of Independent Registered Public Accounting Firm  PricewaterhouseCoopers LLP
    
    
    F-3Consolidated Balance Sheets as of March 31, 2010 and 2009
    
    
    F-4Consolidated Statements of Operations for the Years Ended March 31, 2010, 2009 and 2008
    
    
    F-5Consolidated Statements of Cash Flows for the Years Ended March 31, 2010, 2009 and 2008
    
    
    F-6Consolidated Statements of Changes in Shareholders Deficit for the Years Ended March 31, 2010, 2009 and 2008
    
    
    F-7Notes to Consolidated Financial Statements
    
    
    F-8Selected Quarterly Financial Data (Unaudited)
    
    
    F-47
 F-1




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Report of Independent Registered Public Accounting Firm
 
     /s/ Ernst & Young LLP 
 F-2




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Report of Independent Registered Public Accounting Firm
 
   
 F-3




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##### Table of Contents



James Hardie Industries SE and Subsidiaries
Consolidated Balance Sheets
 (Millions ofUS dollars)March 31
    
    
    March 312010
    
    
    2009AssetsCurrent assets:Cash and cash equivalents
    
    $
    19.2
    
    
    $
    42.4Restricted cash and cash equivalents
    
    
    0.6
    
    
    
    0.3Restricted cash and cash equivalents  Asbestos
    
    
    44.5
    
    
    
    45.4Restricted short-term investments  Asbestos
    
    
    13.3
    
    
    
    52.9Accounts and other receivables, net of allowance for
doubtful accounts of $2.3 million and $1.4 million as of
March 31, 2010 and March 31, 2009, respectively
    
    
    155.0
    
    
    
    111.4Inventories
    
    
    149.1
    
    
    
    128.9Prepaid expenses and other current assets
    
    
    25.6
    
    
    
    20.4Insurance receivable  Asbestos
    
    
    16.7
    
    
    
    12.6Workers compensation  Asbestos
    
    
    0.1
    
    
    
    0.6Deferred income taxes
    
    
    24.0
    
    
    
    25.5Deferred income taxes  Asbestos
    
    
    16.4
    
    
    
    12.3Total current assets
    
    
    464.5
    
    
    
    452.7Restricted cash and cash equivalents
    
    
    4.7
    
    
    
    5.0Property, plant and equipment, net
    
    
    710.6
    
    
    
    700.8Insurance receivable  Asbestos
    
    
    185.1
    
    
    
    149.0Workers compensation  Asbestos
    
    
    98.8
    
    
    
    73.8Deferred income taxes
    
    
    3.2
    
    
    
    2.1Deferred income taxes  Asbestos
    
    
    420.0
    
    
    
    333.2Deposit with Australian Taxation Office
    
    
    247.2
    
    
    
    173.5Other assets
    
    
    44.7
    
    
    
    1.6Total assets
    
    $
    2,178.8
    
    
    $
    1,891.7Liabilities and Shareholders DeficitCurrent liabilities:Accounts payable and accrued liabilities
    
    $
    100.9
    
    
    $
    89.1Short-term debt
    
    
    
    
    
    
    93.3Current portion of long-term debt
    
    
    95.0
    
    
    
    Accrued payroll and employee benefits
    
    
    42.1
    
    
    
    35.5Accrued product warranties
    
    
    6.7
    
    
    
    7.4Income taxes payable
    
    
    34.9
    
    
    
    1.4Asbestos liability
    
    
    106.7
    
    
    
    78.2Workers compensation  Asbestos
    
    
    0.1
    
    
    
    0.6Other liabilities
    
    
    27.7
    
    
    
    9.5Total current liabilities
    
    
    414.1
    
    
    
    315.0Long-term debt
    
    
    59.0
    
    
    
    230.7Deferred income taxes
    
    
    113.5
    
    
    
    93.8Accrued product warranties
    
    
    18.2
    
    
    
    17.5Asbestos liability
    
    
    1,512.5
    
    
    
    1,206.3Workers compensation  Asbestos
    
    
    98.8
    
    
    
    73.8Other liabilities
    
    
    80.6
    
    
    
    63.3Total liabilities
    
    
    2,296.7
    
    
    
    2,000.4Commitments and contingencies (Note 13)Shareholders deficit:Common stock, Euro 0.59 par value, 2.0 billion
shares authorized; 434,524,879 shares issued
at March 31, 2010 and 432,263,720 shares
issued at March 31, 2009
    
    
    221.1
    
    
    
    219.2Additional paid-in capital
    
    
    39.5
    
    
    
    22.7Accumulated deficit
    
    
    (437.7
    )
    
    
    (352.8
    )Accumulated other comprehensive income
    
    
    59.2
    
    
    
    2.2Total shareholders deficit
    
    
    (117.9
    )
    
    
    (108.7
    )Total liabilities and shareholders deficit
    
    $
    2,178.8
    
    
    $
    1,891.7
  F-4




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James Hardie Industries SE and Subsidiaries
Consolidated Statements of Operations
 Years Ended March 31(Millions of US dollars, except per share data)
    
    2010
    
    
    2009
    
    
    2008Net sales
    
    $
    1,124.6
    
    
    $
    1,202.6
    
    
    $
    1,468.8Cost of goods sold
    
    
    (708.5
    )
    
    
    (813.8
    )
    
    
    (938.8
    )Gross profit
    
    
    416.1
    
    
    
    388.8
    
    
    
    530.0Selling, general and administrative expenses
    
    
    (185.8
    )
    
    
    (208.8
    )
    
    
    (228.2
    )Research and development expenses
    
    
    (27.1
    )
    
    
    (23.8
    )
    
    
    (27.3
    )Impairment charges
    
    
    
    
    
    
    
    
    
    
    (71.0
    )Asbestos adjustments
    
    
    (224.2
    )
    
    
    17.4
    
    
    
    (240.1
    )Operating (loss) income
    
    
    (21.0
    )
    
    
    173.6
    
    
    
    (36.6
    )Interest expense
    
    
    (7.7
    )
    
    
    (11.2
    )
    
    
    (11.1
    )Interest income
    
    
    3.7
    
    
    
    8.2
    
    
    
    12.2Other income (expense)
    
    
    6.3
    
    
    
    (14.8
    )
    
    
    (Loss) income before income taxes
    
    
    (18.7
    )
    
    
    155.8
    
    
    
    (35.5
    )Income tax expense
    
    
    (66.2
    )
    
    
    (19.5
    )
    
    
    (36.1
    )Net (loss) income
    
    $
    (84.9
    )
    
    $
    136.3
    
    
    $
    (71.6
    )Net (loss) income per share  basic
    
    $
    (0.20
    )
    
    $
    0.32
    
    
    $
    (0.16
    )Net (loss) income per share  diluted
    
    $
    (0.20
    )
    
    $
    0.31
    
    
    $
    (0.16
    )Weighted average common shares outstanding(Millions):Basic
    
    
    433.1
    
    
    
    432.3
    
    
    
    455.0Diluted
    
    
    433.1
    
    
    
    434.5
    
    
    
    455.0
  F-5




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##### Table of Contents



James Hardie Industries SE and Subsidiaries
Consolidated Statements of Cash Flows
 Years ended March 31(Millions of US dollars)
    
    2010
    
    
    2009
    
    
    2008Cash Flows From Operating ActivitiesNet (loss) income
    
    $
    (84.9
    )
    
    $
    136.3
    
    
    $
    (71.6
    )Adjustments to reconcile net (loss) income to net cash
provided by (used in) operating activities:Depreciation and amortization
    
    
    61.7
    
    
    
    56.4
    
    
    
    56.5Deferred income taxes
    
    
    19.2
    
    
    
    (58.2
    )
    
    
    (54.0
    )Pension cost
    
    
    0.1
    
    
    
    0.7
    
    
    
    1.0Stock-based compensation
    
    
    7.7
    
    
    
    7.2
    
    
    
    7.7Asbestos adjustments
    
    
    224.2
    
    
    
    (17.4
    )
    
    
    240.1Tax benefit from stock options exercised
    
    
    (0.9
    )
    
    
    
    
    
    
    Other-than-temporary impairment on investments
    
    
    
    
    
    
    14.8
    
    
    
    Impairment charges
    
    
    
    
    
    
    
    
    
    
    71.0Other
    
    
    
    
    
    
    
    
    
    
    (3.4
    )Changes in operating assets and liabilities:Restricted cash and cash equivalents
    
    
    14.9
    
    
    
    69.0
    
    
    
    44.7Restricted short-term investments
    
    
    54.4
    
    
    
    
    
    
    
    Payment to the AICF
    
    
    
    
    
    
    (110.0
    )
    
    
    Accounts and other receivables
    
    
    (30.1
    )
    
    
    6.6
    
    
    
    39.6Inventories
    
    
    (12.2
    )
    
    
    40.3
    
    
    
    (26.6
    )Prepaid expenses and other assets
    
    
    (48.1
    )
    
    
    5.7
    
    
    
    4.9Insurance receivable  Asbestos
    
    
    14.4
    
    
    
    16.5
    
    
    
    16.7Accounts payable and accrued liabilities
    
    
    35.4
    
    
    
    (11.4
    )
    
    
    2.6Asbestos liability
    
    
    (91.0
    )
    
    
    (91.1
    )
    
    
    (67.0
    )Deposit with Australian Taxation Office
    
    
    (29.3
    )
    
    
    (9.9
    )
    
    
    (9.7
    )ATO settlement payment
    
    
    
    
    
    
    (101.6
    )
    
    
    Other accrued liabilities
    
    
    47.6
    
    
    
    0.9
    
    
    
    66.8Net cash provided by (used in) operating activities
    
    $
    183.1
    
    
    $
    (45.2
    )
    
    $
    319.3Cash Flows From Investing ActivitiesPurchases of property, plant and equipment
    
    $
    (50.5
    )
    
    $
    (26.1
    )
    
    $
    (38.5
    )Net cash used in investing activities
    
    $
    (50.5
    )
    
    $
    (26.1
    )
    
    $
    (38.5
    )Cash Flows From Financing ActivitiesProceeds from short-term borrowings
    
    $
    
    
    
    $
    128.8
    
    
    $
    7.0Repayments of short-term borrowings
    
    
    (93.3
    )
    
    
    (125.5
    )
    
    
    Proceeds from long-term borrowings
    
    
    274.0
    
    
    
    431.6
    
    
    
    69.5Repayments of long-term borrowings
    
    
    (350.7
    )
    
    
    (375.4
    )
    
    
    Proceeds from issuance of shares
    
    
    10.1
    
    
    
    0.1
    
    
    
    3.3Tax benefit from stock options exercised
    
    
    0.9
    
    
    
    
    
    
    
    Treasury stock purchased
    
    
    
    
    
    
    
    
    
    
    (208.0
    )Dividends paid
    
    
    
    
    
    
    (34.6
    )
    
    
    (126.2
    )Net cash (used in) provided by financing activities
    
    $
    (159.0
    )
    
    $
    25.0
    
    
    $
    (254.4
    )Effects of exchange rate changes on cash
    
    $
    3.2
    
    
    $
    53.3
    
    
    $
    (25.1
    )Net (decrease) increase in cash and cash equivalents
    
    
    (23.2
    )
    
    
    7.0
    
    
    
    1.3Cash and cash equivalents at beginning of period
    
    
    42.4
    
    
    
    35.4
    
    
    
    34.1Cash and cash equivalents at end of period
    
    $
    19.2
    
    
    $
    42.4
    
    
    $
    35.4Components of Cash and Cash EquivalentsCash at bank and on hand
    
    $
    13.1
    
    
    $
    8.9
    
    
    $
    21.6Short-term deposits
    
    
    6.1
    
    
    
    33.5
    
    
    
    13.8Cash and cash equivalents at end of period
    
    $
    19.2
    
    
    $
    42.4
    
    
    $
    35.4Supplemental Disclosure of Cash Flow ActivitiesCash paid during the year for interest, net of amounts
capitalised
    
    $
    7.4
    
    
    $
    7.8
    
    
    $
    12.8Cash paid during the year for income taxes, net
    
    $
    48.5
    
    
    $
    23.2
    
    
    $
    70.4
  F-6




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James Hardie Industries SE and Subsidiaries
Consolidated Statements of Changes in Shareholders Deficit
 AccumulatedAdditional
    
    
    
    
    
    
    
    
    
    
    OtherCommon
    
    
    Paid-in
    
    
    Accumulated
    
    
    Treasury
    
    
    Comprehensive(Millions of US dollars)
    
    Stock
    
    
    Capital
    
    
    Deficit
    
    
    Stock
    
    
    (Loss) Income
    
    
    TotalBalances as of March 31, 2007
    
    $
    251.8
    
    
    $
    180.2
    
    
    $
    (178.7
    )
    
    $
    
    
    
    $
    5.4
    
    
    $
    258.7Comprehensive loss:Net loss
    
    
    
    
    
    
    
    
    
    
    (71.6
    )
    
    
    
    
    
    
    
    
    
    
    (71.6
    )Pension and post-retirement benefit adjustments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    0.6
    
    
    
    0.6Unrealized loss on investments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4.4
    )
    
    
    (4.4
    )Foreign currency translation gain
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    15.3
    
    
    
    15.3Other comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11.5
    
    
    
    11.5Total comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (60.1
    )Adoption of uncertainty in income taxes
    
    
    
    
    
    
    
    
    
    
    (78.0
    )
    
    
    
    
    
    
    
    
    
    
    (78.0
    )Stock-based compensation
    
    
    
    
    
    
    7.7
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7.7Stock options exercised
    
    
    0.5
    
    
    
    2.8
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3.3Dividends paid
    
    
    
    
    
    
    
    
    
    
    (126.2
    )
    
    
    
    
    
    
    
    
    
    
    (126.2
    )Treasury stock purchased
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (208.0
    )
    
    
    
    
    
    
    (208.0
    )Treasury stock retired
    
    
    (32.6
    )
    
    
    (171.4
    )
    
    
    
    
    
    
    204.0
    
    
    
    
    
    
    
    Balances as of March 31, 2008
    
    $
    219.7
    
    
    $
    19.3
    
    
    $
    (454.5
    )
    
    $
    (4.0
    )
    
    $
    16.9
    
    
    $
    (202.6
    )Comprehensive income:Net income
    
    
    
    
    
    
    
    
    
    
    136.3
    
    
    
    
    
    
    
    
    
    
    
    136.3Pension and post-retirement benefit adjustments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    0.7
    
    
    
    0.7Unrealized gain on investments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4.4
    
    
    
    4.4Foreign currency translation loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (19.8
    )
    
    
    (19.8
    )Other comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (14.7
    )
    
    
    (14.7
    )Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    121.6Stock-based compensation
    
    
    
    
    
    
    7.2
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7.2Tax benefit from stock options exercised
    
    
    
    
    
    
    (0.4
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (0.4
    )Stock options exercised
    
    
    
    
    
    
    0.1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    0.1Dividends paid
    
    
    
    
    
    
    
    
    
    
    (34.6
    )
    
    
    
    
    
    
    
    
    
    
    (34.6
    )Treasury stock retired
    
    
    (0.5
    )
    
    
    (3.5
    )
    
    
    
    
    
    
    4.0
    
    
    
    
    
    
    
    Balances as of March 31, 2009
    
    $
    219.2
    
    
    $
    22.7
    
    
    $
    (352.8
    )
    
    $
    
    
    
    $
    2.2
    
    
    $
    (108.7
    )Comprehensive income:Net loss
    
    
    
    
    
    
    
    
    
    
    (84.9
    )
    
    
    
    
    
    
    
    
    
    
    (84.9
    )Pension and post-retirement benefit adjustments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (0.2
    )
    
    
    (0.2
    )Unrealized gain on investments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1.2
    
    
    
    1.2Foreign currency translation gain
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    56.0
    
    
    
    56.0Other comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    57.0
    
    
    
    57.0Total comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (27.9
    )Stock-based compensation
    
    
    
    
    
    
    7.7
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7.7Tax benefit from stock options exercised
    
    
    
    
    
    
    0.9
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    0.9Stock options exercised
    
    
    1.9
    
    
    
    8.2
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10.1Balances as of March 31, 2010
    
    $
    221.1
    
    
    $
    39.5
    
    
    $
    (437.7
    )
    
    $
    
    
    
    $
    59.2
    
    
    $
    (117.9
    )
  F-7




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##### Table of Contents



James Hardie Industries SE and Subsidiaries
Notes to Consolidated Financial Statements
 1. Background and Basis of Presentation
 Nature of Operations
  Background
      Basis of Presentation
  F-8




---



##### Table of Contents



James Hardie Industries SE and Subsidiaries
Notes to Consolidated Financial Statements
 2. Summary of Significant Accounting Policies
 Reclassifications
  Accounting Principles
  Use of Estimates
  Foreign Currency Translation
  Restricted Cash and Cash Equivalents
  Inventories
  Property, Plant and Equipment
  F-9




---



##### Table of Contents



James Hardie Industries SE and Subsidiaries
Notes to Consolidated Financial Statements
 YearsBuildings
    
    
    40Building improvements
    
    
    5 to 10Manufacturing machinery
    
    
    20General equipment
    
    
    5 to 10Computer equipment, software, and software development
    
    
    3 to 7Office furniture and equipment
    
    
    3 to 10
   Impairment of Long-Lived Assets
  Environmental Remediation Expenditures
  Revenue Recognition
  Depreciation and Amortization
  F-10




---



##### Table of Contents



James Hardie Industries SE and Subsidiaries
Notes to Consolidated Financial Statements
 Advertising
  Accrued Product Warranties
  Income Taxes
  Financial Instruments
   Stock-based Compensation
  Earnings Per Share
  F-11




---



##### Table of Contents



Years Ended March 31(Millions of shares)
    
    2010
    
    2009
    
    2008Basic common shares outstanding
    
    
    433.1
    
    
    
    432.3
    
    
    
    455.0Dilutive effect of stock awards
    
    
    
    
    
    
    2.2
    
    
    
    Diluted common shares outstanding
    
    
    433.1
    
    
    
    434.5
    
    
    
    455.0
 (US dollars)
    
    2010
    
    2009
    
    2008Net (loss) income per share  basic
    
    $
    (0.20
    )
    
    $
    0.32
    
    
    $
    (0.16
    )Net (loss) income per share  diluted
    
    $
    (0.20
    )
    
    $
    0.31
    
    
    $
    (0.16
    )
    Asbestos
    F-12




---



##### Table of Contents



James Hardie Industries SE and Subsidiaries
Notes to Consolidated Financial Statements
 AICF
      Selling, general and administrative
expenses Interest
income
  Asbestos-Related Assets and Liabilities
 Asbestos-Related Assets and Liabilities
 F-13




---



##### Table of Contents



James Hardie Industries SE and Subsidiaries
Notes to Consolidated Financial Statements
 Asbestos Liability
   Insurance Receivable
    Workers Compensation
  Asbestos Liability
  F-14




---



##### Table of Contents



James Hardie Industries SE and Subsidiaries
Notes to Consolidated Financial Statements
  Asbestos-Related Research and Education Contributions
  Restricted Cash and Cash Equivalents
  Restricted Short-Term Investments
 Other Income
 AICF  Other Assets and Liabilities
  Deferred Income Taxes
   Foreign Currency Translation
 Asbestos Adjustments
 Recent Accounting Pronouncements
  F-15




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##### Table of Contents



James Hardie Industries SE and Subsidiaries
Notes to Consolidated Financial Statements
     3. Cash and Cash Equivalents
   March 31(Millions of US dollars)
    
    2010
    
    
    2009Cash at bank and on hand
    
    $
    13.1
    
    
    $
    8.9Short-term deposits
    
    
    6.1
    
    
    
    33.5Total cash and cash equivalents
    
    $
    19.2
    
    
    $
    42.4
 4. Restricted Cash and Cash Equivalents
  5. Accounts and Other Receivables
  March 31(Millions of US dollars)
    
    2010
    
    
    2009Trade receivables
    
    $
    122.8
    
    
    $
    96.6Other receivables and advances
    
    
    34.5
    
    
    
    16.2Allowance for doubtful accounts
    
    
    (2.3
    )
    
    
    (1.4
    )Total accounts and other receivables
    
    $
    155.0
    
    
    $
    111.4
 F-16




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##### Table of Contents



James Hardie Industries SE and Subsidiaries
Notes to Consolidated Financial Statements
   March 31(Millions of US dollars)
    
    2010
    
    
    2009Balance at beginning of period
    
    $
    1.4
    
    
    $
    2.0Charged to expense
    
    
    0.9
    
    
    
    0.4Costs and deductions
    
    
    
    
    
    
    (1.0
    )Balance at end of period
    
    $
    2.3
    
    
    $
    1.4
 6. Inventories
  March 31(Millions of US dollars)
    
    2010
    
    
    2009Finished goods
    
    $
    99.8
    
    
    $
    82.5Work-in-process
    
    
    4.8
    
    
    
    4.7Raw materials and supplies
    
    
    52.0
    
    
    
    48.9Provision for obsolete finished goods and raw materials
    
    
    (7.5
    )
    
    
    (7.2
    )Total inventories
    
    $
    149.1
    
    
    $
    128.9
 F-17




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##### Table of Contents



James Hardie Industries SE and Subsidiaries
Notes to Consolidated Financial Statements
 7. Property, Plant and Equipment
  Machineryand
    
    
    Construction(Millions of US dollars)
    
    Land
    
    
    Buildings
    
    
    Equipment
    
    
    In Progress (1)
    
    
    TotalBalance at March 31, 2008:Cost
    
    $
    17.2
    
    
    $
    208.9
    
    
    $
    840.5
    
    
    $
    82.4
    
    
    $
    1,149.0Accumulated depreciation
    
    
    
    
    
    
    (52.0
    )
    
    
    (340.6
    )
    
    
    
    
    
    
    (392.6
    )Net book value
    
    
    17.2
    
    
    
    156.9
    
    
    
    499.9
    
    
    
    82.4
    
    
    
    756.4Changes in net book value:Capital expenditures
    
    
    0.8
    
    
    
    3.4
    
    
    
    52.7
    
    
    
    (30.8
    )
    
    
    26.1Depreciation
    
    
    
    
    
    
    (9.4
    )
    
    
    (47.0
    )
    
    
    
    
    
    
    (56.4
    )Other movements
    
    
    
    
    
    
    
    
    
    
    (0.2
    )
    
    
    
    
    
    
    (0.2
    )Foreign currency translation adjustments
    
    
    
    
    
    
    
    
    
    
    (25.1
    )
    
    
    
    
    
    
    (25.1
    )Total changes
    
    
    0.8
    
    
    
    (6.0
    )
    
    
    (19.6
    )
    
    
    (30.8
    )
    
    
    (55.6
    )Balance at March 31, 2009:Cost
    
    
    18.0
    
    
    
    212.3
    
    
    
    867.9
    
    
    
    51.6
    
    
    
    1,149.8Accumulated depreciation
    
    
    
    
    
    
    (61.4
    )
    
    
    (387.6
    )
    
    
    
    
    
    
    (449.0
    )Net book value
    
    $
    18.0
    
    
    $
    150.9
    
    
    $
    480.3
    
    
    $
    51.6
    
    
    $
    700.8Changes in net book value:Capital expenditures
    
    
    0.1
    
    
    
    3.6
    
    
    
    30.0
    
    
    
    16.8
    
    
    
    50.5Depreciation
    
    
    
    
    
    
    (9.7
    )
    
    
    (52.0
    )
    
    
    
    
    
    
    (61.7
    )Other movements
    
    
    
    
    
    
    
    
    
    
    20.7
    
    
    
    (20.7
    )
    
    
    Foreign currency translation adjustments
    
    
    
    
    
    
    
    
    
    
    21.0
    
    
    
    
    
    
    
    21.0Total changes
    
    
    0.1
    
    
    
    (6.1
    )
    
    
    19.7
    
    
    
    (3.9
    )
    
    
    9.8Balance at March 31, 2010:Cost
    
    
    18.1
    
    
    
    215.9
    
    
    
    939.6
    
    
    
    47.7
    
    
    
    1,221.3Accumulated depreciation
    
    
    
    
    
    
    (71.1
    )
    
    
    (439.6
    )
    
    
    
    
    
    
    (510.7
    )Net book value
    
    $
    18.1
    
    
    $
    144.8
    
    
    $
    500.0
    
    
    $
    47.7
    
    
    $
    710.6
 
 (1)
    
    Construction in progress consists of plant expansions and upgrades.    Asset Impairments
  F-18




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##### Table of Contents



James Hardie Industries SE and Subsidiaries
Notes to Consolidated Financial Statements
   8. Accounts Payable and Accrued Liabilities
  March 31(Millions of US dollars)
    
    2010
    
    
    2009Trade creditors
    
    $
    71.3
    
    
    $
    44.4Other creditors and accruals
    
    
    29.6
    
    
    
    44.7Total accounts payable and accrued liabilities
    
    $
    100.9
    
    
    $
    89.1
 9. Short and Long-Term Debt
  March 31(Millions of US dollars)
    
    2010
    
    
    2009Short-term debt
    
    $
    
    
    
    $
    93.3Current portion of long-term debt
    
    
    95.0
    
    
    
    Long-term debt
    
    
    59.0
    
    
    
    230.7Total debt
    
    $
    154.0
    
    
    $
    324.0
  F-19




---



##### Table of Contents



James Hardie Industries SE and Subsidiaries
Notes to Consolidated Financial Statements
  Effective
    
    
    Total
    
    
    PrincipalDescription
    
    Interest Rate
    
    
    Facility
    
    
    Drawn(US$ millions)Term facilities, can be drawn in US$, variable interest
rates based on LIBOR plus margin, can be repaid and
redrawn until June 2010
    
    
    0.86
    %
    
    $
    161.7
    
    
    $
    95.0Term facilities, can be drawn in US$, variable interest
rates based on LIBOR plus margin, can be repaid and
redrawn until February 2011
    
    
    
    
    
    
    45.0
    
    
    
    Term facilities, can be drawn in US$, variable interest
rates based on LIBOR plus margin, can be repaid and
redrawn until December 2012
    
    
    
    
    
    
    130.0
    
    
    
    Term facilities, can be drawn in US$, variable interest
rates based on LIBOR plus margin, can be repaid and
redrawn until February 2013
    
    
    1.01
    %
    
    
    90.0
    
    
    
    59.0Total
    
    
    
    
    
    $
    426.7
    
    
    $
    154.0
    F-20




---



##### Table of Contents



James Hardie Industries SE and Subsidiaries
Notes to Consolidated Financial Statements
 10. Product Warranties
    Years EndedMarch 31(Millions of US dollars)
    
    2010
    
    
    2009
    
    
    2008Balance at beginning of period
    
    $
    24.9
    
    
    $
    17.7
    
    
    
    15.2Accruals for product warranties
    
    
    8.1
    
    
    
    14.6
    
    
    
    10.2Settlements made in cash or in kind
    
    
    (8.4
    )
    
    
    (7.1
    )
    
    
    (7.9
    )Foreign currency translation adjustments
    
    
    0.3
    
    
    
    (0.3
    )
    
    
    0.2Balance at end of period
    
    $
    24.9
    
    
    $
    24.9
    
    
    $
    17.7
 11. Asbestos
 Summary of Significant Accounting Policies
 F-21




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##### Table of Contents



James Hardie Industries SE and Subsidiaries
Notes to Consolidated Financial Statements
 Asbestos Adjustments
  Years Ended March 31(Millions of US dollars)
    
    2010
    
    
    2009
    
    
    2008Change in estimates:Change in actuarial estimate  asbestos liability
    
    $
    (3.8
    )
    
    $
    (180.9
    )
    
    $
    (175.0
    )Change in actuarial estimate  insurance receivable
    
    
    1.9
    
    
    
    19.8
    
    
    
    27.4Change in estimate  AICF claims-handling costs
    
    
    (1.4
    )
    
    
    (1.2
    )
    
    
    (6.5
    )Change in estimate  other
    
    
    
    
    
    
    
    
    
    
    1.2Subtotal  Change in estimates
    
    
    (3.3
    )
    
    
    (162.3
    )
    
    
    (152.9
    )(Loss) gain on foreign currency exchange
    
    
    (220.9
    )
    
    
    179.7
    
    
    
    (87.2
    )Total Asbestos Adjustments
    
    $
    (224.2
    )
    
    $
    17.4
    
    
    $
    (240.1
    )
 Asbestos-Related Assets and Liabilities
  March 31(Millions of US dollars)
    
    2010
    
    
    2009Asbestos liability  current
    
    $
    (106.7
    )
    
    $
    (78.2
    )Asbestos liability  non-current
    
    
    (1,512.5
    )
    
    
    (1,206.3
    )Asbestos liability  Total
    
    
    (1,619.2
    )
    
    
    (1,284.5
    )Insurance receivable  current
    
    
    16.7
    
    
    
    12.6Insurance receivable  non-current
    
    
    185.1
    
    
    
    149.0Insurance receivable  Total
    
    
    201.8
    
    
    
    161.6Workers compensation asset  current
    
    
    0.1
    
    
    
    0.6Workers compensation asset  non-current
    
    
    98.8
    
    
    
    73.8Workers compensation liability  current
    
    
    (0.1
    )
    
    
    (0.6
    )Workers compensation liability  non-current
    
    
    (98.8
    )
    
    
    (73.8
    )Workers compensation  Total
    
    
    
    
    
    
    Deferred income taxes  current
    
    
    16.4
    
    
    
    12.3Deferred income taxes  non-current
    
    
    420.0
    
    
    
    333.2Deferred income taxes  Total
    
    
    436.4
    
    
    
    345.5Income tax payable
    
    
    16.5
    
    
    
    22.8Other net liabilities
    
    
    (1.7
    )
    
    
    (2.0
    )Net Amended FFA liability
    
    
    (966.2
    )
    
    
    (756.6
    )Restricted cash and cash equivalents and restricted
short-term investment assets of the AICF
    
    
    57.8
    
    
    
    98.3Unfunded Net Amended FFA liability
    
    $
    (908.4
    )
    
    $
    (658.3
    )
 F-22




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##### Table of Contents



James Hardie Industries SE and Subsidiaries
Notes to Consolidated Financial Statements
 Asbestos Liability
   A$
    
    
    A$ to US$
    
    
    US$Millions
    
    
    rate
    
    
    MillionsAsbestos liability  March 31, 2009
    
    
    A$(1,869.2
    )
    
    
    1.4552
    
    
    $
    (1,284.5
    )Asbestos claims paid (1)
    
    
    103.2
    
    
    
    1.1749
    
    
    
    87.8AICF claims-handling costs incurred (1)
    
    
    3.6
    
    
    
    1.1749
    
    
    
    3.1Change in actuarial estimate (2)
    
    
    (4.1
    )
    
    
    1.0919
    
    
    
    (3.8
    )Change in estimate of AICF claims-handling costs (2)
    
    
    (1.5
    )
    
    
    1.0919
    
    
    
    (1.4
    )Loss on foreign currency exchange
    
    
    
    
    
    
    
    
    
    
    (420.4
    )Asbestos liability  March 31, 2010
    
    
    A$(1,768.0
    )
    
    
    1.0919
    
    
    $
    (1,619.2
    )
 Insurance Receivable  Asbestos
  A$
    
    
    A$ to US$
    
    
    US$Millions
    
    
    rate
    
    
    MillionsInsurance receivable  March 31, 2009
    
    
    A$235.2
    
    
    
    1.4552
    
    
    $
    161.6Insurance recoveries (1)
    
    
    (16.9
    )
    
    
    1.1749
    
    
    
    (14.4
    )Change in actuarial estimate (2)
    
    
    2.0
    
    
    
    1.0919
    
    
    
    1.8Gain on foreign currency exchange
    
    
    
    
    
    
    
    
    
    
    52.8Insurance receivable  March 31, 2010
    
    
    A$220.3
    
    
    
    1.0919
    
    
    $
    201.8
 
 (1)
    
    The average exchange rate for the period is used to convert the Australian dollar
amount to US dollars based on the assumption that these transactions occurred evenly throughout the
period.(2)
    
    The spot exchange rate at March 31, 2010 is used to convert the Australian dollar
amount to US dollars as the adjustment to the estimate was made on that date. F-23




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##### Table of Contents



James Hardie Industries SE and Subsidiaries
Notes to Consolidated Financial Statements
 Deferred Income Taxes  Asbestos
  A$
    
    
    A$ to US$
    
    
    US$Millions
    
    
    rate
    
    
    MillionsDeferred tax assets  March 31, 2009
    
    
    A$502.7
    
    
    
    1.4552
    
    
    $
    345.5Amounts offset against income tax payable (1)
    
    
    (17.9
    )
    
    
    1.1749
    
    
    
    (15.3
    )Impact of other asbestos adjustments (1)
    
    
    (8.3
    )
    
    
    1.1749
    
    
    
    (7.0
    )Gain on foreign currency exchange
    
    
    
    
    
    
    
    
    
    
    113.2Deferred tax assets  March 31, 2010
    
    
    A$476.5
    
    
    
    1.0919
    
    
    $
    436.4
 
 (1)
    
    The average exchange rate for the period is used to convert the Australian dollar
amount to US dollars based on the assumption that these transactions occurred evenly throughout the
period. Income Taxes Payable
  Other Net Liabilities
   Restricted Cash and Short-term Investments of the AICF
 Other Income
 Other Comprehensive Income
 F-24




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##### Table of Contents



James Hardie Industries SE and Subsidiaries
Notes to Consolidated Financial Statements
  A$
    
    
    A$ to US$
    
    
    US$Millions
    
    
    rate
    
    
    MillionsRestricted cash and cash equivalents and restricted
short-term investments  March 31, 2009
    
    
    A$143.1
    
    
    
    1.4552
    
    
    $
    98.3Asbestos claims paid (1)
    
    
    (103.2
    )
    
    
    1.1749
    
    
    
    (87.8
    )AICF operating costs paid  claims-handling (1)
    
    
    (3.6
    )
    
    
    1.1749
    
    
    
    (3.1
    )AICF operating costs paid  non claims-handling (1)
    
    
    (2.5
    )
    
    
    1.1749
    
    
    
    (2.1
    )Insurance recoveries (1)
    
    
    16.9
    
    
    
    1.1749
    
    
    
    14.4Interest and investment income (1)
    
    
    3.9
    
    
    
    1.1749
    
    
    
    3.3Unrealized gain on investments (1)
    
    
    1.4
    
    
    
    1.1749
    
    
    
    1.2Gain on investments (1)
    
    
    7.9
    
    
    
    1.1749
    
    
    
    6.7Other (1)
    
    
    (0.8
    )
    
    
    1.1749
    
    
    
    (0.7
    )Gain on foreign currency exchange
    
    
    
    
    
    
    
    
    
    
    27.6Restricted cash and cash equivalents and restricted
short-term investments  March 31, 2010
    
    
    A$63.1
    
    
    
    1.0919
    
    
    $
    57.8
 
 (1)
    
    The average exchange rate for the period is used to convert the Australian dollar
amount to US dollars based on the assumption that these transactions occurred evenly throughout the
period. Actuarial Study; Claims Estimate
     F-25




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##### Table of Contents



James Hardie Industries SE and Subsidiaries
Notes to Consolidated Financial Statements
   Claims Data
   For the Years Ended March 312010
    
    
    2009
    
    
    2008
    
    
    2007
    
    
    2006(1)Number of open claims at beginning of period
    
    
    534
    
    
    
    523
    
    
    
    490
    
    
    
    564
    
    
    
    712Number of new claims
    
    
    535
    
    
    
    607
    
    
    
    552
    
    
    
    463
    
    
    
    346Number of closed claims
    
    
    540
    
    
    
    596
    
    
    
    519
    
    
    
    537
    
    
    
    502Number of open claims at end of period
    
    
    529
    
    
    
    534
    
    
    
    523
    
    
    
    490
    
    
    
    556Average settlement amount per settled claim
    
    
    A$190,627
    
    
    
    A$190,638
    
    
    
    A$147,349
    
    
    
    A$166,164
    
    
    
    A$151,883Average settlement amount per case closed
    
    
    A$171,917
    
    
    
    A$168,248
    
    
    
    A$126,340
    
    
    
    A$128,723
    
    
    
    A$122,535Average settlement amount per settled claim
    
    $
    162,250
    
    
    $
    151,300
    
    
    $
    128,096
    
    
    $
    127,163
    
    
    $
    114,318Average settlement amount per case closed
    
    $
    146,325
    
    
    $
    133,530
    
    
    $
    109,832
    
    
    $
    98,510
    
    
    $
    92,229
 
 (1)
    
    Information includes claims data for only 11 months ended February 28,
2006. Claims data for the 12 months ended March 31, 2006 were not available at the time the
Companys financial statements were prepared.  F-26




---



##### Table of Contents



James Hardie Industries SE and Subsidiaries
Notes to Consolidated Financial Statements
  12. Fair Value Measurements
  Level 1
    
    Quoted market prices in active markets for identical assets and
liabilities that the Company has the ability to access at the
measurement date;Level 2
    
    Observable market-based inputs or unobservable inputs that are
corroborated by market data for the asset or liability at the
measurement date;Level 3
    
    Unobservable inputs that are not corroborated by market data used
when there is minimal market activity for the asset or liability
at the measurement date.
   Cash and cash equivalents, Restricted cash and cash equivalents, Trade receivables and Trade
payables
 Restricted short-term investments
 Debt
 Interest Rate Swaps Other Income
 F-27




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##### Table of Contents



James Hardie Industries SE and Subsidiaries
Notes to Consolidated Financial Statements
  Accounts Payable Other Income Interest
Expense
  Fair Value MeasurementsFair Value at
    
    
    Using Inputs Considered as(Millions of US dollars)
    
    March 31, 2010
    
    
    Level 1
    
    
    Level 2
    
    
    Level 3AssetsCash and cash equivalents
    
    $
    19.2
    
    
    $
    19.2
    
    
    $
    
    
    
    $
    Restricted cash and cash equivalents
    
    
    49.8
    
    
    
    49.8
    
    
    
    
    
    
    
    Restricted short-term investments
    
    
    13.3
    
    
    
    13.3
    
    
    
    
    
    
    
    Total Assets
    
    $
    82.3
    
    
    $
    82.3
    
    
    $
    
    
    
    $
    LiabilitiesInterest rate swap contracts
    
    
    2.4
    
    
    
    
    
    
    
    2.4
    
    
    
    Total Liabilities
    
    $
    2.4
    
    
    $
    
    
    
    $
    2.4
    
    
    $
    
 13. Commitment and Contingencies
  ASIC Proceedings
    F-28




---



##### Table of Contents



James Hardie Industries SE and Subsidiaries
Notes to Consolidated Financial Statements
     Chile Litigation
       F-29




---



##### Table of Contents



James Hardie Industries SE and Subsidiaries
Notes to Consolidated Financial Statements
 Environmental and Legal
  Operating Leases
  Years ending March 31 (Millions of US dollars):2011
    
    $
    17.42012
    
    
    16.42013
    
    
    15.12014
    
    
    14.12015
    
    
    13.9Thereafter
    
    
    37.5Total
    
    $
    114.4
  Capital Commitments
  F-30




---



##### Table of Contents



James Hardie Industries SE and Subsidiaries
Notes to Consolidated Financial Statements
 14. Income Taxes
  Years Ended March 31(Millions of US dollars)
    
    2010
    
    
    2009
    
    
    2008(Loss) income from operations before income taxes:Domestic (1)
    
    $
    12.8
    
    
    $
    24.6
    
    
    $
    80.1Foreign
    
    
    (31.5
    )
    
    
    131.2
    
    
    
    (115.6
    )Total (loss) income before income taxes
    
    $
    (18.7
    )
    
    $
    155.8
    
    
    $
    (35.5
    )Income tax (expense) benefit:Current:Domestic (1)
    
    $
    0.6
    
    
    $
    (0.1
    )
    
    $
    (7.1
    )Foreign
    
    
    (137.7
    )
    
    
    37.4
    
    
    
    (102.1
    )Current income tax (expense) benefit
    
    
    (137.1
    )
    
    
    37.3
    
    
    
    (109.2
    )Deferred:Domestic (1)
    
    
    (0.9
    )
    
    
    (0.1
    )
    
    
    (0.2
    )Foreign
    
    
    71.8
    
    
    
    (56.7
    )
    
    
    73.3Deferred income tax benefit (expense)
    
    
    70.9
    
    
    
    (56.8
    )
    
    
    73.1Total income tax expense
    
    $
    (66.2
    )
    
    $
    (19.5
    )
    
    $
    (36.1
    )
 
 (1)
    
    Since JHI SE is a Dutch parent holding company, domestic represents The
Netherlands.  Years Ended March 31(Millions of US dollars)
    
    2010
    
    
    2009
    
    
    2008Income tax benefit (expense) at statutory tax rates
    
    $
    8.3
    
    
    $
    (47.0
    )
    
    $
    7.8US state income taxes, net of the federal benefit
    
    
    (3.7
    )
    
    
    (2.9
    )
    
    
    (1.9
    )Asbestos  effect of foreign exchange
    
    
    (66.4
    )
    
    
    51.2
    
    
    
    (27.5
    )Benefit from Dutch financial risk reserve regime
    
    
    3.2
    
    
    
    1.8
    
    
    
    7.3Expenses not deductible
    
    
    (3.7
    )
    
    
    (7.8
    )
    
    
    (3.2
    )Non-assessable items
    
    
    2.0
    
    
    
    1.6
    
    
    
    2.7Losses not available for carryforward
    
    
    (0.6
    )
    
    
    (4.1
    )
    
    
    (1.4
    )Change in reserves
    
    
    (2.2
    )
    
    
    (13.4
    )
    
    
    (18.5
    )Taxes on foreign income
    
    
    (1.6
    )
    
    
    (2.7
    )
    
    
    (2.1
    )State amended returns and audit
    
    
    (2.2
    )
    
    
    3.0
    
    
    
    Other permanent items
    
    
    0.7
    
    
    
    0.8
    
    
    
    0.7Total income tax (expense) benefit
    
    $
    (66.2
    )
    
    $
    (19.5
    )
    
    $
    (36.1
    )Effective tax rate
    
    
    354.0
    %
    
    
    12.5
    %
    
    
    101.7
    %
 F-31




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##### Table of Contents



James Hardie Industries SE and Subsidiaries
Notes to Consolidated Financial Statements
  March 31(Millions of US dollars)
    
    2010
    
    
    2009Deferred tax assets:Asbestos liability
    
    $
    436.6
    
    
    $
    345.5Other provisions and accruals
    
    
    37.4
    
    
    
    28.5Net operating loss carryforwards
    
    
    9.9
    
    
    
    10.8Capital loss carryforwards
    
    
    30.4
    
    
    
    22.8Taxes on intellectual property transfer
    
    
    
    
    
    
    3.6Prepayments
    
    
    2.8
    
    
    
    4.2Foreign currency movements
    
    
    
    
    
    
    6.6Other
    
    
    0.2
    
    
    
    2.1Total deferred tax assets
    
    
    517.3
    
    
    
    424.1Valuation allowance
    
    
    (39.2
    )
    
    
    (31.7
    )Total deferred tax assets, net of valuation
allowance
    
    
    478.1
    
    
    
    392.4Deferred tax liabilities:Property, plant and equipment
    
    
    (115.7
    )
    
    
    (105.7
    )Accrued interest income
    
    
    (12.0
    )
    
    
    (7.5
    )Foreign currency movements
    
    
    (0.3
    )
    
    
    Total deferred tax liabilities
    
    
    (128.0
    )
    
    
    (113.2
    )Net deferred tax assets
    
    $
    350.1
    
    
    $
    279.2
      F-32




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##### Table of Contents



James Hardie Industries SE and Subsidiaries
Notes to Consolidated Financial Statements
        ATO  1999 Disputed Amended Assessment
  F-33




---



##### Table of Contents



James Hardie Industries SE and Subsidiaries
Notes to Consolidated Financial Statements
       ATO Settlement
   Dutch Exit Tax
  Other Assets
 F-34




---



##### Table of Contents



James Hardie Industries SE and Subsidiaries
Notes to Consolidated Financial Statements
 Unrecognized Tax Benefits
  Unrecognized
    
    
    Interest and(US$ millions)
    
    tax benefits
    
    
    PenaltiesBalance at April 1, 2007
    
    $
    39.0
    
    
    $
    39.7Additions for tax positions of the current year
    
    
    1.3
    
    
    
    Additions for tax positions of prior year
    
    
    16.0
    
    
    
    1.8Foreign currency translation adjustment
    
    
    5.6
    
    
    
    5.5Balance at March 31, 2008
    
    $
    61.9
    
    
    $
    47.0Additions for tax positions of the current year
    
    
    1.7
    
    
    
    Additions (deletions) for tax positions of prior year
    
    
    37.3
    
    
    
    (14.3
    )Settlements paid during the current period
    
    
    (72.0
    )
    
    
    (39.6
    )Foreign currency translation adjustment
    
    
    (16.6
    )
    
    
    (9.1
    )Balance at March 31, 2009
    
    $
    12.3
    
    
    $
    (16.0
    )Additions for tax positions of the current year
    
    
    1.2
    
    
    
    Additions (deletions) for tax positions of prior year
    
    
    4.4
    
    
    
    (4.1
    )Other reductions for the tax positions of prior periods
    
    
    (10.2
    )
    
    
    (0.6
    )Foreign currency translation adjustment
    
    
    
    
    
    
    (6.2
    )Balance at March 31, 2010
    
    $
    7.7
    
    
    $
    (26.9
    )
      F-35




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##### Table of Contents



James Hardie Industries SE and Subsidiaries
Notes to Consolidated Financial Statements
 15. Stock-Based Compensation
   JHI SE 2001 Equity Incentive Plan
     Original
    
    Number
    
    OptionExercise
    
    of Options
    
    ExpirationShare Grant Date
    
    Price (A$)
    
    Granted
    
    DateDecember 2001
    
    
    5.65
    
    
    
    4,248,417
    
    
    December 2011December 2002
    
    
    6.66
    
    
    
    4,037,000
    
    
    December 2012December 2003
    
    
    7.05
    
    
    
    6,179,583
    
    
    December 2013December 2004
    
    
    5.99
    
    
    
    5,391,100
    
    
    December 2014February 2005
    
    
    6.30
    
    
    
    273,000
    
    
    February 2015December 2005
    
    
    8.90
    
    
    
    5,224,100
    
    
    December 2015March 2006
    
    
    9.50
    
    
    
    40,200
    
    
    March 2016November 2006
    
    
    8.40
    
    
    
    3,499,490
    
    
    November 2016March 2007
    
    
    8.90
    
    
    
    179,500
    
    
    March 2017March 2007
    
    
    8.35
    
    
    
    151,400
    
    
    March 2017December 2007
    
    
    6.38
    
    
    
    5,031,310
    
    
    December 2017
 F-36




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##### Table of Contents



James Hardie Industries SE and Subsidiaries
Notes to Consolidated Financial Statements
   Managing Board Transitional Stock Option Plan
   Long-Term Incentive Plan
    F-37




---



##### Table of Contents



James Hardie Industries SE and Subsidiaries
Notes to Consolidated Financial Statements
  Supervisory Board Share Plan 2006
  Stock Options
  Outstanding OptionsWeightedShares
    
    
    
    
    
    AverageAvailable for
    
    
    
    
    
    ExerciseGrant
    
    Number
    
    Price (A$)Balance at March 31, 2008
    
    
    15,564,294
    
    
    
    22,190,237
    
    
    
    7.29Newly Authorized
    
    
    4,291,230Exercised
    
    
    
    
    
    
    (25,000
    )
    
    
    5.99Forfeited
    
    
    
    
    
    
    (3,892,309
    )
    
    
    7.34Forfeitures available for re-grant
    
    
    3,892,309Balance at March 31, 2009
    
    
    23,747,833
    
    
    
    18,272,928
    
    
    
    7.28Exercised
    
    
    
    
    
    
    (2,058,275
    )
    
    
    5.51Forfeited
    
    
    
    
    
    
    (1,770,215
    )
    
    
    7.97Forfeitures available for re-grant
    
    
    1,540,215Balance at March 31, 2010
    
    
    25,288,048
    
    
    
    14,444,438
    
    
    
    7.44
    F-38




---



##### Table of Contents



James Hardie Industries SE and Subsidiaries
Notes to Consolidated Financial Statements
  Dividend yield
    
    
    5.0
    %Expected volatility
    
    
    30.0
    %Risk free interest rate
    
    
    3.4
    %Expected life in years
    
    
    4.4Weighted average fair value at grant date (A$)
    
    
    1.13Number of stock options
    
    
    5,031,310
  Dividend yield
    
    
    5.0
    %Expected volatility
    
    
    32.1
    %Risk free interest rate
    
    
    4.2
    %Weighted average fair value at grant date (A$)
    
    
    3.14Number of stock options
    
    
    1,016,000
     Options Outstanding
    
    Options ExercisableWeighted
    
    Weighted
    
    
    
    
    
    
    
    
    
    WeightedAverage
    
    Average
    
    Aggregate
    
    
    
    
    
    Average
    
    AggregateRemaining
    
    Exercise
    
    Intrinsic
    
    
    
    
    
    Exercise
    
    IntrinsicExercise Price (A$)
    
    Number
    
    Life (in Years)
    
    Price (A$)
    
    Value
    
    Number
    
    Price (A$)
    
    Value (A$)3.09
    
    
    115,140
    
    
    
    0.6
    
    
    
    3.09
    
    
    
    480,134
    
    
    
    115,140
    
    
    
    3.09
    
    
    
    480,1345.06
    
    
    254,309
    
    
    
    1.7
    
    
    
    5.06
    
    
    
    559,480
    
    
    
    254,309
    
    
    
    5.06
    
    
    
    559,8365.99
    
    
    1,523,250
    
    
    
    4.7
    
    
    
    5.99
    
    
    
    1,934,528
    
    
    
    1,523,250
    
    
    
    5.99
    
    
    
    1,934,5286.30
    
    
    93,000
    
    
    
    4.9
    
    
    
    6.30
    
    
    
    89,280
    
    
    
    93,000
    
    
    
    6.30
    
    
    
    89,2806.38
    
    
    2,638,729
    
    
    
    7.7
    
    
    
    6.38
    
    
    
    2,322,082
    
    
    
    1,103,462
    
    
    
    6.38
    
    
    
    971,0476.45
    
    
    796,500
    
    
    
    2.7
    
    
    
    6.45
    
    
    
    645,165
    
    
    
    796,500
    
    
    
    6.45
    
    
    
    645,1657.05
    
    
    1,758,250
    
    
    
    3.7
    
    
    
    7.05
    
    
    
    369,233
    
    
    
    1,758,250
    
    
    
    7.05
    
    
    
    369,2337.83
    
    
    1,016,000
    
    
    
    7.4
    
    
    
    7.83
    
    
    
    
    
    
    
    
    
    
    
    0.00
    
    
    
    8.35
    
    
    151,400
    
    
    
    7.0
    
    
    
    8.35
    
    
    
    
    
    
    
    151,400
    
    
    
    8.35
    
    
    
    8.40
    
    
    2,646,560
    
    
    
    6.6
    
    
    
    8.40
    
    
    
    
    
    
    
    2,470,160
    
    
    
    8.40
    
    
    
    8.53
    
    
    1,090,000
    
    
    
    5.7
    
    
    
    8.53
    
    
    
    
    
    
    
    
    
    
    
    0.00
    
    
    
    8.90
    
    
    2,321,100
    
    
    
    5.7
    
    
    
    8.90
    
    
    
    
    
    
    
    2,321,100
    
    
    
    8.90
    
    
    
    9.50
    
    
    40,200
    
    
    
    5.9
    
    
    
    9.50
    
    
    
    
    
    
    
    40,200
    
    
    
    9.50
    
    
    
    Total
    
    
    14,444,438
    
    
    
    6.6
    
    
    
    7.44
    
    
    
    6,399,902
    
    
    
    10,626,771
    
    
    
    6.83
    
    
    
    5,049,223
 F-39




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##### Table of Contents



James Hardie Industries SE and Subsidiaries
Notes to Consolidated Financial Statements
  Restricted Stock
   WeightedAverage FairValue at GrantShares
    
    Date (A$)Nonvested at March 31, 2008
    
    
    
    
    
    
    Granted
    
    
    3,260,333
    
    
    
    3.98Vested
    
    
    (24,052
    )
    
    
    3.85Forfeited
    
    
    (245,220
    )
    
    
    4.40Non-vested at March 31, 2009
    
    
    2,991,061
    
    
    
    3.95Granted
    
    
    2,048,820
    
    
    
    5.38Vested
    
    
    (208,884
    )
    
    
    3.85Forfeited
    
    
    (94,276
    )
    
    
    4.32Non-vested at March 31, 2010
    
    
    4,736,721
    
    
    
    4.57
 Restricted Stock  service vesting
  RestrictedStock UnitsGrant Date
    
    
    Equity Award Plan
    
    GrantedJune 17, 2008
    
    2001 Equity Incentive Plan
    
    
    698,440September 15, 2008
    
    Long-Term Incentive Plan
    
    
    201,324December 17, 2008
    
    2001 Equity Incentive Plan
    
    
    992,271May 29, 2009
    
    Long-Term Incentive Plan
    
    
    1,066,595December 7, 2009
    
    2001 Equity Incentive Plan
    
    
    278,5693,237,199
  F-40




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##### Table of Contents



James Hardie Industries SE and Subsidiaries
Notes to Consolidated Financial Statements
  2010
    
    2009Dec 7, 2009
    
    May 29, 2009
    
    Dec 17, 2008
    
    Sep 15, 2008
    
    Jun 17, 2008Dividend yield (per annum) (1)
    
    $
    0.00
    
    
    $
    0.00
    
    
    $
    0.10
    
    
    $
    0.20
    
    
    $
    0.20Risk free interest rate (1)
    
    
    n/a
    
    
    
    n/a
    
    
    
    1.3
    %
    
    
    1.8
    %
    
    
    2.9
    %Expected life in years
    
    
    3.0
    
    
    
    2.0
    
    
    
    3.0
    
    
    
    2.0
    
    
    
    2.0JHX stock price at grant date (A$)
    
    
    8.30
    
    
    
    4.31
    
    
    
    3.85
    
    
    
    4.98
    
    
    
    4.93Number of restricted stock units
    
    
    278,569
    
    
    
    1,066,595
    
    
    
    992,271
    
    
    
    201,324
    
    
    
    698,440
 
 (1)
    
    The risk free rate for the grants in fiscal year 2010 are not applicable as the
assumed dividend yield is nil. Restricted Stock  market condition
    2010
    
    2009Dec 11, 2009
    
    Sep 15, 2009
    
    Dec 17, 2008
    
    Sep 15, 2008Expected volatility
    
    
    49.9
    %
    
    
    42.1
    %
    
    
    37.6
    %
    
    
    34.9
    %Risk free interest rate
    
    
    2.1
    %
    
    
    2.5
    %
    
    
    1.3
    %
    
    
    2.6
    %Expected life in years
    
    
    3.0
    
    
    
    3.0
    
    
    
    3.0
    
    
    
    3.0JHX stock price at grant date (A$)
    
    
    8.20
    
    
    
    7.04
    
    
    
    3.85
    
    
    
    4.98Number of restricted stock units
    
    
    181,656
    
    
    
    522,000
    
    
    
    545,757
    
    
    
    822,541
 Scorecard LTI  Cash Settled Units
  Cash Settled Units
  F-41




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##### Table of Contents



James Hardie Industries SE and Subsidiaries
Notes to Consolidated Financial Statements
  16. Share Repurchase Program
  17. Operating Segment Information and Concentrations of Risk
   Operating Segments
  Net Sales to Customers (1)Years Ended March 31(Millions of US dollars)
    
    2010
    
    
    2009
    
    
    2008USA & Europe Fiber Cement
    
    $
    828.1
    
    
    $
    929.3
    
    
    $
    1,170.5Asia Pacific Fiber Cement
    
    
    296.5
    
    
    
    273.3
    
    
    
    298.3Worldwide total
    
    $
    1,124.6
    
    
    $
    1,202.6
    
    
    $
    1,468.8
 F-42




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##### Table of Contents



James Hardie Industries SE and Subsidiaries
Notes to Consolidated Financial Statements
 (Loss) Income Before Income TaxesYears Ended March 31(Millions of US dollars)
    
    2010
    
    
    2009
    
    
    2008USA & Europe Fiber Cement (2), (3)
    
    $
    208.5
    
    
    $
    199.3
    
    
    $
    235.2Asia Pacific Fiber Cement (2)
    
    
    58.7
    
    
    
    47.1
    
    
    
    50.3Research and Development (2)
    
    
    (19.0
    )
    
    
    (18.9
    )
    
    
    (18.1
    )Segments total
    
    
    248.2
    
    
    
    227.5
    
    
    
    267.4General Corporate (4)
    
    
    (269.2
    )
    
    
    (53.9
    )
    
    
    (304.0
    )Total operating (loss) income
    
    
    (21.0
    )
    
    
    173.6
    
    
    
    (36.6
    )Net interest (expense) income (5)
    
    
    (4.0
    )
    
    
    (3.0
    )
    
    
    1.1Other income (expense)
    
    
    6.3
    
    
    
    (14.8
    )
    
    
    Worldwide total
    
    $
    (18.7
    )
    
    $
    155.8
    
    
    $
    (35.5
    )
 Total Identifiable AssetsMarch 31(Millions of US dollars)
    
    2010
    
    
    2009USA & Europe Fiber Cement
    
    $
    780.8
    
    
    $
    765.6Asia Pacific Fiber Cement
    
    
    216.9
    
    
    
    167.9Research and Development
    
    
    14.2
    
    
    
    12.2Segments total
    
    
    1,011.9
    
    
    
    945.7General Corporate (6), (7)
    
    
    1,166.9
    
    
    
    946.0Worldwide total
    
    $
    2,178.8
    
    
    $
    1,891.7
  Net Sales to Customers (1)Years Ended March 31(Millions of US dollars)
    
    2010
    
    
    2009
    
    
    2008USA
    
    $
    808.9
    
    
    $
    912.2
    
    
    $
    1,153.1Australia
    
    
    214.3
    
    
    
    193.2
    
    
    
    198.6New Zealand
    
    
    50.6
    
    
    
    50.0
    
    
    
    67.3Other Countries
    
    
    50.8
    
    
    
    47.2
    
    
    
    49.8Worldwide total
    
    $
    1,124.6
    
    
    $
    1,202.6
    
    
    $
    1,468.8
 F-43




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##### Table of Contents



James Hardie Industries SE and Subsidiaries
Notes to Consolidated Financial Statements
 Total Identifiable AssetsMarch 31(Millions of US dollars)
    
    2010
    
    
    2009USA
    
    $
    783.6
    
    
    $
    767.4Australia
    
    
    131.6
    
    
    
    99.8New Zealand
    
    
    49.8
    
    
    
    27.1Other Countries
    
    
    46.9
    
    
    
    51.4Segments total
    
    
    1,011.9
    
    
    
    945.7General Corporate (6), (7)
    
    
    1,166.9
    
    
    
    946.0Worldwide total
    
    $
    2,178.8
    
    
    $
    1,891.7
 
 (1)
    
    Export sales and inter-segmental sales are not significant.(2)
    
    Research and development costs of $10.4 million, $8.0 million and $7.7 million in
fiscal years 2010, 2009 and 2008, respectively, were expensed in the USA and Europe Fiber Cement
segment. Research and development costs of $1.0 million, $1.2 million and $1.6 million in fiscal
years 2010, 2009 and 2008, respectively, were expensed in the Asia Pacific Fiber Cement segment.
Research and development costs of $15.7 million, $14.4 million and $18.0 million in fiscal years
2010, 2009 and 2008, respectively, were expensed in the Research and Development segment. The
Research and Development segment also included selling, general and administrative expenses of $3.3
million, $4.5 million and $0.1 million in fiscal years 2010, 2009 and 2008, respectively.Research and development expenditures are expensed as incurred and in total amounted to $27.1
million, $23.8 million and $27.3 million for the years ended March 31, 2010, 2009 and 2008,
respectively.(3)
    
    Included in USA and Europe Fiber Cement for the year ended March 31, 2008 are asset impairment
charges of $71.0 million.(4)
    
    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. Included in General Corporate for the year ended
March 31, 2010 are unfavorable asbestos adjustments of $224.2 million, AICF SG&A expenses of $2.1
million and ASIC expenses of $3.4 million. Included in General Corporate for the year ended March
31, 2009 are favorable asbestos adjustments of $17.4 million, AICF SG&A expenses of $0.7 million
and ASIC expenses of $14.0 million. Included in General Corporate for the year ended March 31, 2008
are unfavorable asbestos adjustments of $240.1 million, AICF SG&A expenses of $4.0 million and ASIC
expenses of $5.5 million.(5)
    
    The Company does not report net interest expense for each operating segment as
operating segments are not held directly accountable for interest expense. Included in net interest
(expense) income is AICF interest income of $3.3 million, $6.4 million and $9.4 million in fiscal
years 2010, 2009 and 2008, respectively. See Note 11.(6)
    
    The Company does not report deferred tax assets and liabilities for each operating
segment as operating segments are not held directly accountable for deferred income taxes. All
deferred income taxes are included in General Corporate.(7)
    
    Asbestos-related assets at March 31, 2010 and 2009 are $797.7 million and $681.0
million, respectively, and are included in the General Corporate segment. F-44




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##### Table of Contents



James Hardie Industries SE and Subsidiaries
Notes to Consolidated Financial Statements
 Concentrations of Risk
   Years Ended March 31(Millions of US dollars)
    
    2010
    
    
    
    
    
    
    2009
    
    
    
    
    
    
    2008%
    
    
    
    
    
    
    %
    
    
    
    
    
    
    %Customer A
    
    $
    224.4
    
    
    
    20.0
    
    
    $
    277.1
    
    
    
    23.0
    
    
    $
    431.3
    
    
    
    27.9Customer B
    
    
    144.5
    
    
    
    12.8
    
    
    
    149.6
    
    
    
    12.4
    
    
    
    167.3
    
    
    
    10.8Customer C
    
    
    93.2
    
    
    
    8.3
    
    
    
    46.8
    
    
    
    3.9
    
    
    
    108.2
    
    
    
    7.0$
    462.1
    
    
    
    
    
    
    $
    473.5
    
    
    
    
    
    
    $
    706.8
  18. Accumulated Other Comprehensive Income
  March 31(Millions of US dollars)
    
    2010
    
    
    2009Pension and post-retirement benefit adjustments
    
    $
    (1.6
    )
    
    $
    (1.4
    )Unrealized gain on restricted short-term investments
    
    
    1.2
    
    
    
    Foreign currency translation adjustments
    
    
    59.6
    
    
    
    3.6Total accumulated other comprehensive income
    
    $
    59.2
    
    
    $
    2.2
 19. Re-domicile
   F-45




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##### Table of Contents



James Hardie Industries SE and Subsidiaries
Notes to Consolidated Financial Statements
   F-46




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##### Table of Contents



James Hardie Industries SE and Subsidiaries
Selected Quarterly Financial Data  (unaudited, not forming part of the consolidated financial statements)
  Year Ended March 31, 2010
    
    
    
    Year Ended March 31, 2009By Quarter
    
    
    
    By Quarter(Millions of US dollars)
    
    First
    
    
    Second
    
    
    Third
    
    
    Fourth
    
    
    
    First
    
    
    Second
    
    
    Third
    
    
    FourthNet sales
    
    $
    284.5
    
    
    $
    304.2
    
    
    $
    261.0
    
    
    $
    274.9
    
    
    
    $
    365.0
    
    
    $
    341.9
    
    
    $
    254.4
    
    
    $
    241.3Cost of goods sold
    
    
    (174.1
    )
    
    
    (186.6
    )
    
    
    (164.3
    )
    
    
    (183.5
    )
    
    
    
    (241.0
    )
    
    
    (228.7
    )
    
    
    (172.0
    )
    
    
    (172.1
    )Gross profit
    
    
    110.4
    
    
    
    117.6
    
    
    
    96.7
    
    
    
    91.4
    
    
    
    
    124.0
    
    
    
    113.2
    
    
    
    82.4
    
    
    
    69.2Operating (loss) income
    
    
    (57.1
    )
    
    
    (0.8
    )
    
    
    25.1
    
    
    
    11.8
    
    
    
    
    22.9
    
    
    
    192.2
    
    
    
    118.9
    
    
    
    (160.4
    )Interest expense
    
    
    (1.5
    )
    
    
    (1.5
    )
    
    
    (1.8
    )
    
    
    (2.9
    )
    
    
    
    (2.6
    )
    
    
    (2.3
    )
    
    
    (2.5
    )
    
    
    (3.8
    )Interest income
    
    
    0.8
    
    
    
    1.1
    
    
    
    1.0
    
    
    
    0.8
    
    
    
    
    1.5
    
    
    
    2.6
    
    
    
    1.4
    
    
    
    2.7Other income (expense)
    
    
    4.8
    
    
    
    (1.0
    )
    
    
    2.2
    
    
    
    0.3
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (14.8
    )(Loss) income from operations before income taxes
    
    
    (53.0
    )
    
    
    (2.2
    )
    
    
    26.5
    
    
    
    10.0
    
    
    
    
    21.8
    
    
    
    192.5
    
    
    
    117.8
    
    
    
    (176.3
    )Income tax (expense) benefit
    
    
    (24.9
    )
    
    
    (17.4
    )
    
    
    (11.6
    )
    
    
    (12.3
    )
    
    
    
    (20.4
    )
    
    
    (39.0
    )
    
    
    (6.8
    )
    
    
    46.7Net (loss) income
    
    $
    (77.9
    )
    
    $
    (19.6
    )
    
    $
    14.9
    
    
    $
    (2.3
    )
    
    
    $
    1.4
    
    
    $
    153.5
    
    
    $
    111.0
    
    
    $
    (129.6
    )Net income per share  basic
    
    $
    (0.18
    )
    
    $
    (0.05
    )
    
    $
    0.03
    
    
    $
    0.01
    
    
    
    $
    
    
    
    $
    0.36
    
    
    $
    0.26
    
    
    $
    (0.30
    )Net income per share  diluted
    
    
    (0.18
    )
    
    
    (0.05
    )
    
    
    0.03
    
    
    
    0.01
    
    
    
    
    
    
    
    
    0.35
    
    
    
    0.26
    
    
    
    (0.30
    )
 F-47