##### Table of Contents



UNITED STATES SECURITIES AND
    EXCHANGE COMMISSIONWashington, D.C.
    20549
    Form 20-F
    (Mark One)o

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

ANNUAL REPORT PURSUANT TO
    SECTION 13 OR 15(d)  OF THE SECURITIES EXCHANGE ACT OF
    1934For the fiscal year ended
    March 31, 2007ORo

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

SHELL COMPANY REPORT PURSUANT
    TO SECTION 13 OR 15(d)  OF THE SECURITIES EXCHANGE ACT OF
    1934Date of event requiring this
    shell company report  For the transition period
    from          to   Commission file number 1-15240
  JAMES HARDIE INDUSTRIES
    N.V.
 (Exact name of Registrant as
    specified in its charter)
  N/A
 (Translation of
    Registrants name into English)
  The Netherlands
 (Jurisdiction of incorporation
    or organization)
  Atrium,
    8th
    floor
 Strawinskylaan 3077
 1077 ZX Amsterdam, The
    Netherlands
 (Address of principal executive
    offices)
 Securities registered or to be
    registered pursuant to Section 12(b) of the Act:
  Title of Each Class:

Name of Each Exchange on Which Registered:Common stock, represented by CHESS
    Units of Foreign Securities

New York Stock Exchange*CHESS Units of Foreign Securities

New York Stock Exchange*American Depositary Shares, each
    representing five units 
    of CHESS Units of Foreign Securities

New York Stock Exchange     *
    
    Listed, not for trading, but only
    in connection with the registered American Depositary Shares,
    pursuant to the requirements of the Securities and Exchange
    Commission  Securities registered or to be
    registered pursuant to Section 12(g) of the Act.
 None.
  Securities for which there is a
    reporting obligation pursuant to Section 15(d) of the
    Act.
 None.
    þ o
  o þ
    þ o
  Rule 12b-2
 Large accelerated
    filer  þ     Accelerated
    filer  o     Non-accelerated
    filer  o
  o þ
  Rule 12b-2 o þ




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##### 



TABLE OF
    CONTENTS
   
  PagePART I


3Item 1.

Identity of
    Directors, Senior Management and Advisers


3Item 2.

Offer Statistics
    and Expected Timetable


3Item 3.

Key
    Information


3Item 4.

Information on
    the Company


22Item 4A.

Unresolved Staff
    Comments


47Item 5.

Operating and
    Financial Review and Prospects


47Item 6.

Directors,
    Senior Management and Employees


67Item 7.

Major
    Shareholders and Related Party Transactions


98Item 8.

Financial
    Information


100Item 9.

Listing
    Details


101Item 10.

Additional
    Information


103Item 11.

Quantitative and
    Qualitative Disclosures About Market Risk


116Item 12.

Description of
    Securities Other Than Equity Securities


117PART II


118Item 13.

Defaults,
    Dividend Arrearages and Delinquencies


118Item 14.

Material
    Modifications to the Rights of Security Holders and Use of
    Proceeds


118Item 15.

Controls and
    Procedures


118Item 16A.

Audit Committee
    Financial Expert


118Item 16B.

Code of Business
    Conduct and Ethics


119Item 16C.

Principal
    Accountant Fees and Services


119Item 16D.

Exemptions from
    the Listing Standards for Audit Committees


120Item 16E.

Purchases of
    Equity Securities by the Issuer and Affiliated Purchasers


120Item 17.

Financial
    Statements


120PART III


120Item 18.

Financial
    Statements


120Item 19.

Exhibits


120EXHIBIT 2.9EXHIBIT 2.11EXHIBIT 4.22EXHIBIT 4.24EXHIBIT 4.26EXHIBIT 4.27EXHIBIT 4.28EXHIBIT 4.29EXHIBIT 8.1EXHIBIT 12.1EXHIBIT 12.2EXHIBIT 13.1EXHIBIT 15.1EXHIBIT 15.2EXHIBIT 99.1   2




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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  In this annual report, unless the context otherwise
    indicates, James Hardie Industries N.V., a naamloze
    vennootschap, or a Dutch public limited liability company
    incorporated and existing under the laws of The Netherlands, is
    referred to as JHI NV. JHI NV 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 NV and its current direct and indirect
    wholly owned subsidiaries are collectively referred to as
    we, us, our, JHI NV
    and its wholly owned subsidiaries or the
    Company.
  The term fiscal year refers to our fiscal year
    ended March 31 of such year; the term dollars or
    $ refers to U.S. dollars; the term
    A$ refers to Australian dollars; the term
    NZ$ refers to New Zealand dollars; the term
    PHP refers to Philippine pesos; and the term
    CLP refers to Chilean pesos. The term
    msf or thousand square feet refers to
    thousands of square feet, where a square foot is defined as a
    standard square foot of 5/16 thickness and the term
    mmsf or million square feet refers to
    millions of square feet, where a square foot is defined as a
    standard square foot of 5/16 thickness.
  As a company incorporated under the laws of The Netherlands,
    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, 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 NV, the
    legal ownership of which is held by CHESS Depositary Nominees
    Pty Ltd. The CUFS are listed and traded on the ASX under the
    symbol JHX.
  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. 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 ADRs,
    we are referring to ADRs or ADSs and when we refer to our common
    stock we are referring to the shares of our common stock that
    are represented by CUFS.
  Selected
    Financial Data
      3




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##### Table of Contents



Fiscal Years Ended March 31,2007


2006


2005


2004


2003(In millions, except sales price per unit and per share
    data)Consolidated Statements of
    Operations Data:Net SalesUSA Fiber Cement

$
1,262.3


$
1,218.4


$
939.2


$
738.6


$
599.7Asia Pacific Fiber Cement(1)


251.7



241.8



236.1



219.8



174.3Other(2)


28.9



28.3



35.1



23.5



9.6Total net sales

$
1,542.9


$
1,488.5


$
1,210.4


$
981.9


$
783.6Operating (loss) income(3)

$
(86.6
)

$
(434.9
)

$
196.2


$
172.2


$
128.8Interest expense


(12.0
)


(7.2
)


(7.3
)


(11.2
)


(23.8
)Interest income


5.5



7.0



2.2



1.2



3.9Other (expense) income(4)










(1.3
)


3.5



0.7(Loss) income from continuing
    operations before income taxes


(93.1
)


(435.1
)


189.8



165.7



109.6Income tax benefit (expense)


243.9



(71.6
)


(61.9
)


(40.4
)


(26.1
)Income (loss) from continuing
    operations

$
150.8


$
(506.7
)

$
127.9


$
125.3


$
83.5Net income (loss)

$
151.7


$
(506.7
)

$
126.9


$
129.6


$
170.5Income (loss) from continuing
    operations per common share  basic

$
0.32


$
(1.10
)

$
0.28


$
0.27


$
0.18Net income (loss) per common
    share  basic

$
0.33


$
(1.10
)

$
0.28


$
0.28


$
0.37Income (loss) from continuing
    operations per common share  diluted

$
0.32


$
(1.10
)

$
0.28


$
0.27


$
0.18Net income (loss) per common
    share  diluted

$
0.33


$
(1.10
)

$
0.28


$
0.28


$
0.37Dividends paid per share

$
0.09


$
0.10


$
0.03


$
0.05


$
0.08Return of capital per share

$



$



$



$
0.15


$
0.20Weighted average number of common
    shares outstandingBasic


464.6



461.7



458.9



458.1



456.7Diluted


466.4



461.7



461.0



461.4



459.4Consolidated Cash Flow
    Information:Cash flows (used in) provided by
    operating activities

$
(67.1
)

$
240.6


$
219.8


$
162.6


$
64.8Cash flows (used in) provided by
    investing activities

$
(92.6
)

$
(154.0
)

$
(149.8
)

$
(58.9
)

$
237.2Cash flows (used in) provided by
    financing activities

$
(136.4
)

$
116.5


$
(27.6
)

$
(87.0
)

$
(278.7
)Other Data:Depreciation and amortization(5)

$
50.7


$
45.3


$
36.3


$
36.4


$
27.4Adjusted EBITDA(6)

$
(35.9
)

$
(389.6
)

$
232.5


$
208.6


$
156.2Capital expenditures(7)

$
92.1


$
162.8


$
153.0


$
74.1


$
90.2Volume (million square feet)(8)USA Fiber Cement


2,148.0



2,182.8



1,855.1



1,519.9



1,273.6Asia Pacific Fiber Cement(1)


390.8



368.3



376.9



362.1



349.9Average sales price per unit (per
    thousand square feet)USA Fiber Cement

$
588


$
558


$
506


$
486


$
471Asia Pacific Fiber Cement(1)

A$
842


A$
872


A$
846


A$
862


A$
887Consolidated Balance Sheet
    Data:Net current assets(9)

$
259.0


$
150.8


$
180.2


$
195.9


$
159.4Total assets

$
2,128.1


$
1,445.4


$
1,088.9


$
971.2


$
851.8Long-term debt(10)

$
105.0


$
121.7


$
147.4


$
165.0


$
165.0Common stock

$
251.8


$
253.2


$
245.8


$
245.2


$
269.7Shareholders equity

$
258.7


$
94.9


$
624.7


$
504.7


$
434.7     (1)
    
    Asia Pacific Fiber Cement includes all fiber cement manufactured
    in Australia, New Zealand and the Philippines and sold in
    Australia, New Zealand, Asia and the Middle East (Israel, United
    Arab Emirates, Kuwait and Qatar). 4




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(2)
    
    Includes fiber cement manufactured and sold in Chile (for fiscal
    year 2002 to July 2005 only), fiber reinforced concrete pipes
    manufactured and sold in the United States, fiber cement
    operations in Europe and a roofing pilot plant in the United
    States. Our Chilean business was sold in July 2005. Our roofing
    pilot plant was closed and the business ceased operations in
    April 2006. See Note 15 to our consolidated financial
    statements in Item 18 for further information regarding the
    sale of our Chile Fiber Cement business.(3)
    
    For fiscal years 2007, 2006 and 2005, operating (loss) income
    includes Special Commission of Inquiry and other related
    expenses of $13.6 million, $17.4 million and
    $28.1 million, respectively. In addition, operating loss in
    fiscal year 2007 includes $405.5 million related to
    asbestos adjustments. For additional information on the asbestos
    adjustments see Item 5, Operating and Financial
    Review and Prospects. Operating loss in fiscal year 2006
    includes $715.6 million related to the establishment of an
    asbestos provision and $13.4 million related to the
    impairment of our former roofing plant.    (4)
    
    Consists primarily of the following: (i) for fiscal year
    2005, the $1.3 million expense consisted of a
    $2.1 million impairment charge that we recorded on an
    investment in a company that filed a voluntary petition for
    reorganization under Chapter 11 of the U.S. bankruptcy
    code, partly offset by a $0.8 million gain on a separate
    investment; (ii) for fiscal year 2004, the net gain
    achieved after accounting for income items, including a
    $4.5 million profit on the sale of our New Zealand
    property, was partially offset by expense items, including
    $3.2 million primarily due to a capital duty fee paid in
    conjunction with our Dutch corporate structure; and
    (iii) for fiscal year 2003, investment income of
    $0.7 million.(5)
    
    Information for depreciation and amortization is for continuing
    businesses only.(6)
    
    Adjusted EBITDA represents income from continuing operations
    before interest income, interest expense, income taxes, other
    nonoperating expenses, net, described in footnote four above,
    cumulative effect of change in accounting principle and
    depreciation and amortization charges as follows:  Fiscal Years Ended March 31,2007


2006


2005


2004


2003(In millions)Net cash (used in) provided by
    operating activities

$
(67.1
)

$
240.6


$
219.8


$
162.6


$
64.8Adjustments to reconcile net
    income (loss) to net cash (used in) provided by operating
    activities


4.5



(791.3
)


(61.2
)


(51.1
)


62.1Change in operating assets and
    liabilities, net


214.3



44.0



(31.7
)


18.1



43.6Net income (loss)


151.7



(506.7
)


126.9



129.6



170.5Loss (income) from discontinued
    operations










1.0



(4.3
)


(87.0
)Cumulative effect of change in
    accounting principle


(0.9
)














Income tax (benefit) expense


(243.9
)


71.6



61.9



40.4



26.1Interest expense


12.0



7.2



7.3



11.2



23.8Interest income


(5.5
)


(7.0
)


(2.2
)


(1.2
)


(3.9
)Other expense (income)










1.3



(3.5
)


(0.7
)Depreciation and amortization


50.7



45.3



36.3



36.4



27.4Adjusted EBITDA

$
(35.9
)

$
(389.6
)

$
232.5


$
208.6


$
156.2   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 5




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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 nonoperating income and expense items.  (7)
    
    Information for capital expenditures includes both cash and
    credit purchases, and is for continuing businesses only.(8)
    
    Fiber cement volume is measured in 5/16 thick square feet,
    which are referred to as standard feet.(9)
    
    Total current assets less total current liabilities.(10)
    
    Includes current portion of long-term debt.  Risk
    Factors
  Our
    wholly owned Australian subsidiary, James Hardie 117 Pty Ltd, is
    required to make payments to a special purpose fund that
    provides compensation for Australian asbestos-related personal
    injury claims against certain former companies of the James
    Hardie Group. Such payments have reduced, and future payments
    will reduce, our funds available for capital expenditures on
    existing and new business opportunities, repayments of debt,
    payments of dividends or other distributions and may restrict
    our ability to access equity or debt capital markets. Such
    payments have also adversely affected, and will adversely
    affect, our financial position, liquidity, results of operations
    and cash flows.
        Even
    though the Final Funding Agreement has been implemented, we may
    be subject to potential additional liabilities (including claims
    for compensation or property remediation outside the
    arrangements reflected in the Final Funding Agreement) because
    certain current and former companies of the James Hardie Group
    previously manufactured products that contained
    asbestos.
   6




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We
    have agreed to indemnify the buyer of our former Gypsum
    manufacturing facilities for certain asbestos-related
    claims.
    The
    Final Funding Agreement imposes certain non-monetary obligations
    which could materially adversely affect our financial position,
    results of operations, cash flows and outlook.
   7




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The
    Final Funding Agreement does not eliminate the risk of adverse
    action being taken against us.
    We
    incurred substantial costs in connection with the events leading
    up to the negotiation and implementation of the Final Funding
    Agreement and may in the future continue to incur substantial
    costs or be subject to further legal proceedings.
      If the
    Final Funding Agreement is terminated, the NSW Government may
    pass legislation that would seek to impose liability on us for
    asbestos claims.
     8




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Since
    our revenues are primarily derived from sales in U.S. dollars
    and payments pursuant to the Final Funding Agreement are made in
    Australian dollars, unfavorable fluctuations in the U.S. dollar
    (and other currencies from which we derive our sales) compared
    to the Australian dollar, will require us to pay more of our
    revenues to discharge our obligations under the Final Funding
    Agreement. In addition, since our results of operations are
    reported in U.S. dollars, unfavorable fluctuations in the U.S.
    dollar compared to the Australian dollar will require us to
    expense the difference in the reported period in order to
    increase the amount of our asbestos liability on our balance
    sheet.
        Regulatory
    action and continued scrutiny resulting from ongoing
    investigations may have an adverse effect on our
    business.
        
    declarations regarding the alleged contraventions;
    orders for pecuniary penalties in such amount as the Court
    thinks fit up to the limits specified in the Corporations Act;
    orders that Mr. Michael Brown, Mr. Michael Gillfillan,
    Ms. Meredith Hellicar, Mr. Martin Koffel,
    Mr. Peter Macdonald, Mr. Philip Morley,
    Mr. Geoffrey OBrien, Mr. Peter Shafron,
    Mr. Gregory Terry and Mr. Peter Willcox be prohibited
    from managing an Australian corporation for such period as the
    Court thinks fit; 9




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
    an order that the Company execute a deed of indemnity in favor
    of ABN 60 in the amount of A$1.9 billion or such amount as
    ABN 60 or its directors consider is necessary to ensure that ABN
    60 remains solvent; and
    its costs of the proceedings.      Our
    board of directors and senior management continue to devote
    significant attention to seeking to implement the Final Funding
    Agreement and associated issues.
    Negative
    publicity may continue to adversely affect our
    business.
    We may
    have insufficient Australian taxable income to utilize tax
    deductions.
    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 Final Funding Agreement, which may cause us
    to have to increase our asbestos liability in the
    future.
   10




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We
    have experienced product bans and boycotts and have been subject
    to other measures taken in response to the events investigated
    by the SCI and could continue to experience product bans and
    boycotts in the future.
      The
    complexity and long-term nature of the Final Funding Agreement
    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.
     11




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We may
    be liable for costs, penalties, fees or expenses incurred by
    current or former directors, officers or employees of the James
    Hardie Group to the extent that those costs are covered by
    indemnity arrangements granted by the James Hardie Group to
    those persons.
    Our
    subsidiary, RCI Pty Ltd, 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 Australian Taxation
    Office, which we refer to as the ATO, and, if it is unsuccessful
    in its appeal, our financial position, liquidity, and cash flow
    will be materially and adversely affected.
         12




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Exposure
    to additional income tax liabilities could materially adversely
    affect our financial position, results of operations, cash
    flows, and liquidity.
          Under
    the
    U.S.-Netherlands
    income tax treaty and Dutch tax law, we derive tax benefits from
    the group finance operations of our Netherlands-based finance
    subsidiary, and changes in either the treaty or laws applicable
    to the finance subsidiary, including the recent changes to the
    tax treaty, could increase our effective tax rate and, as a
    result, reduce our future profits and cash flows.
  U.S.-Netherlands U.S.-NL U.S.-NL U.S.-NL U.S.-NL U.S.-NL U.S.-NL U.S.-NL
  U.S.-NL U.S.-NL U.S.-NL U.S.-NL U.S.-NL U.S.-NL
   13




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Substantial
    and increasing competition in the building products industry
    could adversely affect our business.
         14




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If
    damages resulting from product defects exceed our insurance
    coverage, paying these damages could result in a material
    adverse effect on our business, results of operations and
    financial condition.
    If one
    or more of our fiber cement products fail to perform as expected
    or contain a design defect, such failure or defect, and any
    resulting negative publicity, could result in lower sales and
    may subject us to claims from purchasers or users of our fiber
    cement products.
  -
  Warranty
    claims resulting from unforeseen defects in our products and
    exceeding our warranty reserves could have a material adverse
    effect on our business, results of operations and financial
    condition.
  50-year
  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.
     15




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Our
    business is dependent on the residential and commercial
    construction markets and we expect a slow down in housing
    construction in the markets we serve, including the U.S.,
    Australia and New Zealand, over the short to medium
    term.
    Because
    demand for our products in our major markets is seasonal, our
    quarterly results of operations may vary throughout the
    year.
   16




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We may
    experience adverse fluctuations in the supply and cost of raw
    materials necessary to our business. A significant reduction or
    cessation of shipments from an important supplier could
    adversely affect our business if we are unable to secure
    alternative supplies within a short time or on reasonable
    terms.
    If our
    research and development efforts fail to generate new,
    innovative products or processes, our overall profit margins may
    decrease and demand for our products may fall, which would have
    an adverse effect on our results of operations and financial
    condition. In addition we may incur substantial expenses related
    to unsuccessful research and development efforts.
    Demand
    for our products is subject to changes in consumer
    preference.
    We
    rely on only a few distributors to distribute our fiber cement
    products and the loss of any distributor could adversely affect
    our business.
    Changes
    in, or failure to comply with, the laws, regulations, policies
    or conditions of any jurisdiction in which we conduct our
    business could result in, among other consequences, the loss of
    our assets in such jurisdiction, the elimination of certain
    rights that are critical to the operation of our business in
    such jurisdiction, a decrease in revenues or the imposition of
    additional taxes or other costs.
    
    changing political and economic conditions; 17




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
    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
    some of our intellectual property and other proprietary
    information may be publicly available, we are subject to the
    risk that competitors could copy our products or
    processes.
    Natural
    disasters could have an adverse effect on our overall business,
    results of operations and cash flows.
    We
    rely on a continuous power supply and availability of utilities
    to conduct our operations, and any shortages or interruptions
    could disrupt our operations and increase our
    expenses.
   18




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Because
    we have significant operations outside of the United States and
    report our earnings in U.S. dollars, unfavorable fluctuations in
    currency values and exchange rates could have a significant
    negative impact on our earnings.
  non-U.S. operations non-U.S. operations
  Information
    technology systems integration issues could disrupt our internal
    operations, which could have significant adverse effects on our
    profitability.
    Our
    Articles of Association and Dutch law contain provisions that
    could delay or prevent a change of control that may otherwise be
    beneficial to you.
   19




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Because
    we are incorporated under Dutch laws, you may not be able to
    effectively seek legal recourse against us or our management and
    you may have difficulty enforcing any U.S. judgments or rulings
    in a foreign jurisdiction.
      The
    issuance of shares of common stock or the grant of options to
    acquire shares of common stock could dilute the value of your
    shares and adversely affect the price of our common
    stock.
      If we
    experience labor disputes or interruptions, as we have from time
    to time in the past, our operations may be disrupted and our
    business, financial condition and results of operations may be
    adversely affected.
  1
    1
 20




---



##### Table of Contents



Our
    effective income tax rate could increase and adversely affect
    our operating results.
    If we
    are classified as a controlled foreign corporation
    or a passive foreign investment company, our
    shareholders could be subject to increased tax liability as a
    consequence of their investment in our securities.
    We may
    acquire or divest businesses from time to time, and this may
    adversely affect our results of operations and financial
    condition and may significantly change the nature of the company
    in which you have invested.
    Forward-Looking
    Statements
  Forms 20-F 6-K,
  
    expectations about the timing and amount of payments to the
    AICF, a special purpose fund for the compensation of proven
    asbestos-related personal injury and death claims;
    expectations with respect to the effect on our financial
    statements of those payments;
    statements as to the possible consequences of proceedings
    brought against us and certain of our former directors and
    officers by the ASIC;
    expectations that our credit facilities will be extended or
    renewed;
    projections of our results of operations or financial condition;
    statements regarding our plans, objectives or goals, including
    those relating to competition, acquisitions, dispositions and
    our products;
    statements about our future performance; and
    statements about product or environmental liabilities. 21




---



##### Table of Contents



Item 4.
    Information
    on the Company  History
    and Development of the Company
  besloten vennootschap met
    beperkte aansprakelijkheid naamloze
    vennootschap th
  Corporate
    Restructuring
      
    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 22




---



##### Table of Contents




    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
    Australian Securities Exchange and the listing of ADRs,
    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., or JHIF BV.     23




---



##### 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.   24




---



##### Table of Contents



Current
  
  Consolidation
    of the AICF
     25




---



##### Table of Contents



Recent
    Developments
  Board
    and Management Changes
        General
    Overview of Our Business
  ® ®
      2 2
    2
 26




---



##### Table of Contents



Fiscal Year Ended March 31,2007


2006


2005(In millions)USA Fiber Cement

$
1,262.3


$
1,218.4


$
939.2Asia Pacific Fiber Cement


251.7



241.8



236.1Other


28.9



28.3



35.1Total

$
1,542.9


$
1,488.5


$
1,210.4   Industry
    Overview
  U.S.
    Housing Industry, Fiber Cement Industry and Pipe
    Industry
          International
    Fiber Cement Industry
   27




---



##### Table of Contents



Products
      tm ®
   28




---



##### Table of Contents



tm tm
    ® ® ® ® ®
  ® ® ®
  ®
  ® ®
 29




---



##### Table of Contents



tm ® tm ® tm tm ® ® tm ® ®
  tm ® tm
  Seasonality
    Raw
    Materials
    Cellulose Fiber.
  Silica.
  Cement. just-in-time
 30




---



##### Table of Contents



Water.
  Sales,
    Marketing and Distribution
      on-site
    ®
   31




---



##### Table of Contents



Research
    and Development
    Dependence
    on Trade Secrets and Research and Development
    Governmental
    Regulation
  Environmental
    Regulation
   32




---



##### Table of Contents




    the Resource Conservation and Recovery Act;
    the Comprehensive Environmental Response, Compensation and
    Liability Act;
    the Clean Air Act;
    the Occupational Safety and Health Act;
    the Emergency Planning and Community Right to Know Act;
    the Clean Water Act;
    the Safe Drinking Water Act;
    the Surface Mining Control and Reclamation Act;
    the Toxic Substances Control Act;
    the National Environmental Policy Act; and
    the Endangered Species Act,    and/or clean-up
   33




---



##### Table of Contents



Organizational
    Structure
      Jurisdiction ofName of Company

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 Fibre Cement Pty
    Ltd.


AustraliaJames Hardie International Finance
    B.V


NetherlandsJames Hardie International Finance
    Holdings Sub I B.V


NetherlandsJames Hardie International Finance
    Holdings Sub II B.V


NetherlandsJames Hardie International
    Holdings B.V


NetherlandsJames Hardie N.V.


NetherlandsJames Hardie New Zealand Limited


New ZealandJames Hardie Philippines Inc.


PhilippinesJames Hardie Research (Holdings)
    Pty Ltd.


AustraliaJames Hardie U.S. Investments
    Sierra Inc.


United StatesN.V. Technology Holdings A Limited
    Partnership


AustraliaRCI Pty Ltd.


Australia   Capital
    Expenditures and Divestitures
  Capital
    Expenditures
    Fiscal Years Ended March 31,2007


2006


2005(In millions)USA Fiber Cement

$
80.3


$
154.5


$
144.8Asia Pacific Fiber Cement


10.5



6.6



4.1Chile, U.S. Pipes, U.S. Roofing
    and Europe(1)


1.3



1.7



4.1Total Capital Expenditures

$
92.1


$
162.8


$
153.0     (1)
    
    In July 2005, we sold our fiber cement business located in
    Chile. See Note 15 to our consolidated financial statements
    in Item 18. In April 2006, we closed our roofing pilot
    plant located in Fontana, California.    
    construction of a new fiber cement manufacturing plant in
    Pulaski, Virginia which began in March 2005. The plant includes
    two manufacturing lines, each with an annual design capacity of
    300 million square feet. At the end of fiscal year 2006, we
    completed construction on the first manufacturing line and, in
    April 2006, we 34




---



##### Table of Contents



commenced commercial production on this line. In May 2006, we
    completed construction on the second manufacturing line.
    However, we have not yet commissioned or commenced commercial
    production on this second manufacturing line. The plant produces
    external siding and interior backerboard products for new
    residential construction, repair and remodel and manufactured
    housing markets. As of March 31, 2007, we have incurred
    $104.8 million related to the construction of our Pulaski,
    Virginia plant;  
    the continued implementation of our
    ColorPlus®
    strategy. This strategy includes constructing additional
    ColorPlus®
    coating capacity inside our existing plants. In fiscal year
    2006, we completed construction of, and commenced production on,
    a new
    ColorPlus®
    line at our Blandon, Pennsylvania plant. In fiscal year 2007, we
    completed construction of, and commenced production on, new
    ColorPlus®
    lines at our Reno, Nevada and Pulaski, Virginia plants. As of
    March 31, 2007, we have incurred $51.0 million related
    to our
    ColorPlus®
    strategy;
    commencement of a new finishing capability on a new product line
    at a cost of $16.3 million in fiscal year 2007;
    the addition of a new fiber cement plant in Reno, Nevada at a
    cost of $58.0 million, which occurred during fiscal years
    2006, 2005 and 2004;
    the addition of a new trim line at our Peru, Illinois plant. As
    of March 31, 2005, we were in pre-production and in fiscal
    year 2006 we commenced the
    ramp-up of
    this new trim line. As of March 31, 2007, we incurred a
    total cost of $59.0 million related to the construction of
    this new trim line. These expenditures primarily occurred during
    fiscal years 2006, 2005 and 2004; and
    upgrades to our Blandon, Pennsylvania plant at a cost of
    approximately $17.1 million, which occurred during fiscal
    years 2005, 2004 and 2003.            Divestitures
  Disposal
    of Chile Business
   35




---



##### Table of Contents



Property,
    Plant and Equipment
      Plants
    and Process
    Existing Annual


Total PlannedLocation

Design Capacity(1)


Design Capacity(1)Fiber Cement (in million square
    feet)United StatesFontana, California


180



180Plant City, Florida


300



300Cleburne, Texas


500



500Tacoma, Washington


200



200Peru, Illinois


560



560Waxahachie, Texas


360



360Blandon, Pennsylvania


200



200Summerville, South Carolina


190



190Reno, Nevada


300



300Pulaski, Virginia(2)


600



600Total United States


3,390



3,390AustraliaSydney, New South Wales(3)


180



180Brisbane, Queensland (Carole
    Park)(3)(5)


120



120Total Australia


300



300New ZealandAuckland(4)


75



75The PhilippinesManila


145



145Total Fiber Cement Flat Sheet


3,910



3,910Fiber Reinforced Concrete Pipes(in tons)(6)Plant City, Florida (pipes)


100,000



100,000Brisbane, Queensland
    (Meeandah)(3)(5)


50,000



50,000Total Fiber Reinforced Concrete
    Pipes


150,000



150,000  36




---



##### Table of Contents



(1)
    
    Annual design capacity is based on managements historical
    experience with our production process and is calculated
    assuming continuous operation, 24 hours per day, seven days
    per week, producing 5/16 thickness siding at a target
    operating speed. Plants outside the United States produce a
    range of thicker products, which negatively affect their
    outputs. Actual production is affected by factors such as
    product mix, batch size, plant availability and production
    speeds and is usually less than annual design capacity.(2)
    
    Our plant in Pulaski, Virginia has two manufacturing lines with
    a total annual design capacity of 600 million square feet
    (300 million per line). Both manufacturing lines have been
    completed, however, currently only one line, with a capacity of
    300 million square feet, has commenced commercial
    production.(3)
    
    Prior to March 2004, the land and buildings on which these
    facilities are located were leased on a long-term basis from
    Amaca Pty Limited. In March 2004, various subsidiaries of
    Multiplex Property Trust (which we collectively refer to as
    Multiplex) an unrelated third party, acquired the land and
    buildings related to these three fiber cement manufacturing
    facilities from Amaca. The land and buildings on which these
    facilities are located are leased on a long-term basis from
    Multiplex.(4)
    
    Prior to March 2004, the land and buildings on which this
    facility is located were leased on a long-term basis from
    Studorp Limited or Studorp. In March 2004, Multiplex acquired
    the relevant land and buildings from Studorp. On June 30,
    2005, an unrelated third party, the Location Group Limited,
    acquired the relevant land and buildings from Multiplex. Penrose
    Land Limited, a company within the Location Group Limited, took
    over as landlord in respect of the lease of the land and
    buildings to James Hardie New Zealand Limited.(5)
    
    There are two manufacturing plants in Brisbane. Carole Park
    produces only flat sheets and Meeandah produces only pipes and
    columns.(6)
    
    Pipe and column capacity is measured in tons rather than million
    square feet.      CapacityCountry

Utilization(1)United States


74
%Australia


88
%New Zealand


86
%Philippines


86
%  37




---



##### Table of Contents



(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.    Mines
      Legal
    Proceedings
      Commitment
    to Provide Funding on a Long-Term Basis in Respect of
    Asbestos-Related Liabilities of Former
    Subsidiaries
      
    the establishment of the AICF to provide compensation to
    Australian asbestos-related personal injury claimants with
    proven claims against the Former James Hardie Companies; 38




---



##### Table of Contents




    initial funding of approximately A$184.3 million provided
    by the Performing Subsidiary to the AICF, calculated on the
    basis of an actuarial report prepared by KPMG Actuaries as of
    September 30, 2006. That report provided an estimate of the
    discounted net present value of all present and future
    Australian asbestos-related personal injury claims against the
    Former James Hardie Companies of A$1.55 billion
    ($1.25 billion);
    subject to the cap described below, an annual contribution in
    advance to top up the funds in the AICF to equal the actuarially
    calculated estimate of expected Australian asbestos-related
    personal injury claims against the Former James Hardie Companies
    for the following three years, to be revised annually (so as to
    create a rolling cash buffer in the AICF);
    a cap on the annual payments made by the Performing Subsidiary
    to the AICF, initially set at 35% of the Companys free
    cash flow (defined as cash from operations in accordance with
    U.S. GAAP in force at the date of the Original Final
    Funding Agreement) for the immediately preceding financial year,
    with provisions for the percentage to decline over time
    depending upon the Companys financial performance (and
    therefore the contributions already made to the AICF) and the
    claims outlook;
    an initial term to March 31, 2045, at the end of which time
    the parties may either agree upon a final payment to be made by
    the Company in satisfaction of any further funding obligations,
    or have the term automatically extended for further periods of
    10 years until such agreement is reached or the relevant
    asbestos-related liabilities cease to arise;
    the entry by the parties
    and/or
    others into agreements ancillary to or connected with the Final
    Funding Agreement, which we collectively refer to as the Related
    Agreements;
    no cap on individual payments to asbestos claimants;
    the Performing Subsidiarys payment obligations are
    guaranteed by JHI NV;
    the AICFs claims to the funding payments required under
    the Final Funding Agreement will be subordinated to the claims
    of the Companys lenders;
    the compensation arrangements will extend to members of the
    Baryulgil community for asbestos-related claims arising from the
    activities of a former subsidiary of ABN 60; and
    JHI NV will, for ten years, provide an annual sum of
    A$0.5 million for the purpose of medical research into the
    prevention, treatment and cure of asbestos disease and
    contribute an annual sum of A$0.075 million towards an
    education campaign for the benefit of the Australian public on
    the dangers of asbestos.      
    receipt of an independent experts report confirming that
    the funding proposal is in the best interests of the Company and
    its enterprise as a whole;
    approval of the Companys lenders and confirmation
    satisfactory to the Companys Board of Directors, acting
    reasonably, that the contributions to be made by JHI NV and the
    Performing Subsidiary under the Final Funding Agreement will be
    tax deductible;
    confirmation as to the expected tax consequences arising to the
    AICF and others from implementing the arrangements;
    approval of the Companys shareholders at an extraordinary
    general meeting held on February 7, 2007; and
    initial funding payment of A$184.3 million paid to the AICF
    on February 9, 2007.   39




---



##### Table of Contents



Actuarial
    Study; Claims Estimate
       40




---



##### Table of Contents



$ millions


A$ millionsAt March 31,
    2006

$
(715.6
)

A$
(1,000.0
)Effect of changes in foreign
    exchange rates


(94.5
)


Other adjustments to
    net Final Funding Agreement liability


24.0



25.7Net Final Funding Agreement
    liability at March 31, 2007

$
(786.1
)

A$
(974.3
)Components of the net Final
    Funding Agreement liability:Insurance receivables 
    current

$
9.4


A$
11.7Workers compensation
    (Asbestos )  current


2.7



3.4Deferred tax assets 
    current


7.8



9.7Income tax payable (reduction to
    income tax payable)


9.0



11.2Insurance receivables 
    non-current


165.1



204.6Workers compensation
    (Asbestos)  non-current


76.5



94.8Deferred tax assets 
    non-current


318.2



394.4Workers compensation
    liabilities  current


(2.7
)


(3.4
)Asbestos liability 
    current


(63.5
)


(78.7
)Asbestos liability 
    non-current


(1,225.8
)


(1,519.4
)Workers compensation
    liabilities  non-current


(76.5
)


(94.8
)Other net liabilities


(6.3
)


(7.8
)Net Final Funding Agreement
    liability at March 31, 2007

$
(786.1
)

A$
(974.3
)            41




---



##### Table of Contents



Claims
    Data
    Years Ended March 31,2007


2006(1)Australia


490



556Unknown-Court Not Identified


13



20USA


1



1     (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.    AustraliaYears Ended March 31,2007


2006(1)


2005Number of claims filed


463



346



489Number of claims dismissed


121



97



62Number of claims settled or
    otherwise resolved


416



405



402Average settlement amount per claim

A$
166,164


A$
151,883


A$
157,594Average settlement amount per claim

$
127,165


$
114,322


$
116,572   Unknown  Court Not IdentifiedYears Ended March 31,2007


2006(1)


2005Number of claims filed






6



7Number of claims dismissed


3



10



20Number of claims settled or
    otherwise resolved


5



12



2Average settlement amount per claim

A$
12,165


A$
198,892


A$
47,000Average settlement amount per claim

$
9,310


$
149,706


$
34,766   USAYears Ended March 31,2007


2006(1)


2005Number of claims filed


1







Number of claims dismissed


1







3Number of claims settled or
    otherwise resolved










1Average settlement amount per claim

A$



A$



A$
228,293Average settlement amount per claim

$



$



$
168,868     (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. 42




---



##### Table of Contents



As of March 31,2007


2006(1)


2005


2004


2003Number of open claims at beginning
    of year


586



749



743



814



671Number of new claims


464



352



496



380



409Number of closed claims


546



524



490



451



266Number of open claims at year-end


504



577



749



743



814Average settlement amount per
    settled claim

A$
164,335


A$
153,236


A$
157,223


A$
167,450


A$
201,200Average settlement amount per
    settled claim

$
125,766


$
115,341


$
116,298


$
116,127


$
112,974Average settlement amount per case
    closed

A$
126,713


A$
121,945


A$
129,949


A$
117,327


A$
177,752Average settlement amount per case
    closed

$
96,973


$
91,788


$
96,123


$
81,366


$
99,808     (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.        SCI
    and Other Related Expenses
   43




---



##### Table of Contents



Years Ended March 31,2007


2006


2005(In millions)SCI

$



$



$
6.8Internal investigation










4.9ASIC investigation


1.7



0.8



1.2Severance and consulting


0.2



0.1



6.0Resolution advisory fees


8.8



9.8



6.4Funding advice


0.7



2.9



0.6Other


2.2



3.8



2.2Total SCI and other related
    expenses

$
13.6


$
17.4


$
28.1     Australian
    Securities and Investments Commission Proceedings and
    Investigation
      
    declarations regarding the alleged contraventions;
    orders for pecuniary penalties in such amount as the Court
    thinks fit up to the limits specified in the Corporations Act;
    orders that Mr. Brown, Mr. Gillfillan,
    Ms. Hellicar, Mr. Koffel, Mr. Macdonald,
    Mr. Morley, Mr. OBrien, Mr. Shafron,
    Mr. Terry and Mr. Willcox be prohibited from managing
    an Australian corporation for such period as the Court thinks
    fit;
    an order that the Company execute a deed of indemnity in favor
    of ABN 60 Pty Limited in the amount of A$1.9 billion or
    such amount as ABN 60 or its directors consider is necessary to
    ensure that ABN 60 remains solvent; and
    its costs of the proceedings.   44




---



##### Table of Contents



Tax
    Contingencies
         45




---



##### Table of Contents



Amended
    Australian Taxation Office Assessment
    $(1)


A$(In millions)Primary tax after allowable credits

$
138.8


A$
172.0Penalties(2)


34.7



43.0General interest charges


123.4



153.0Total amended assessment

$
296.9


A$
368.0     (1)
    
    U.S. dollar amounts calculated using the Australian dollar to
    U.S. dollar foreign exchange spot rate at March 31, 2007.(2)
    
    Represents 25% of primary tax.      ,
   46




---



##### Table of Contents



Item 4A.
    Unresolved
    Staff Comments    Item 5.
    Operating
    and Financial Review and Prospects    Overview
      The
    Company and the Building Product Markets
       47




---



##### Table of Contents



Fiscal
    Year 2007 Key Results
              Critical
    Accounting Policies
    Accounting
    for Contingencies
    Accounting
    for the Asbestos Funding Agreement
   48




---



##### Table of Contents



Sales
    Accounts
    Receivable
   49




---



##### Table of Contents



Inventory
    Accrued
    Warranty Reserve
  50-year
  Accounting
    for Income Tax
        Results
    of Operations
   50




---



##### Table of Contents



Fiscal Years Ended March 31,2007


2006


2005Net sales:USA Fiber Cement

$
1,262.3



81.8
%

$
1,218.4



81.9
%

$
939.2



77.6
%Asia Pacific Fiber Cement


251.7



16.3



241.8



16.2



236.1



19.5Other(1)


28.9



1.9



28.3



1.9



35.1



2.9Total net sales


1,542.9



100.0



1,488.5



100.0



1,210.4



100.0Cost of goods sold


(969.9
)


(62.9
)


(937.7
)


(63.0
)


(784.0
)


(64.8
)Gross profit


573.0



37.1



550.8



37.0



426.4



35.2Selling, general and
    administrative expenses


(214.6
)


(13.9
)


(209.8
)


(14.1
)


(174.5
)


(14.4
)Research and development expenses


(25.9
)


(1.7
)


(28.7
)


(1.9
)


(21.6
)


(1.8
)SCI and other related expenses


(13.6
)


(0.8
)


(17.4
)


(1.2
)


(28.1
)


(2.3
)Impairment of roofing plant










(13.4
)


(0.9
)






Asbestos adjustments


(405.5
)


(26.3
)


(715.6
)


(48.1
)






Other operating expense










(0.8
)






(6.0
)


(0.5
)Operating (loss) income


(86.6
)


(5.6
)


(434.9
)


(29.2
)


196.2



16.2Interest expense


(12.0
)


(0.8
)


(7.2
)


(0.5
)


(7.3
)


(0.6
)Interest income


5.5



0.4



7.0



0.5



2.2



0.2Other expense


















(1.3
)


(0.1
)(Loss) income from continuing
    operations before income taxes


(93.1
)


(6.0
)


(435.1
)


(29.2
)


189.8



15.7Income tax benefit (expense)


243.9



15.8



(71.6
)


(4.8
)


(61.9
)


(5.1
)Income (loss) from continuing
    operations

$
150.8



9.8
%

$
(506.7
)


(34.0
)%

$
127.9



10.6
%     (1)
    
    Includes sales of fiber cement in Chile (fiscal year 2005
    through July 2005 only), fiber reinforced concrete pipes in the
    United States, a roofing pilot plant in the United States
    (fiscal year 2005 through April 2006 only) and fiber cement
    operations in Europe. Our Chilean business was sold in July
    2005. Our roofing pilot plant ceased operations in April 2006.
    See Note 15 to our consolidated financial statements in
    Item 18 for further information regarding the sale of our
    Chile Fiber Cement business.    Fiscal Years Ended March 31,2007


2006


2005(In millions)USA Fiber Cement

$
362.4


$
342.6


$
241.5Asia Pacific Fiber Cement


39.4



41.7



46.8Research and Development


(17.1
)


(15.7
)


(17.5
)Other(1)


(9.3
)


(26.5
)


(11.8
)Total segment operating income


375.4



342.1



259.0General Corporate


(56.5
)


(61.4
)


(62.8
)Asbestos adjustments


(405.5
)


(715.6
)


Total operating (loss) income

$
(86.6
)

$
(434.9
)

$
196.2     (1)
    
    Includes impairment charge of $13.4 million in fiscal year
    2006 related to the closure of our roofing pilot plant. 51




---



##### Table of Contents



Year
    Ended March 31, 2007 Compared to Year Ended March 31,
    2006
  Total Net Sales.
  USA Fiber Cement Net Sales.
      ® ®
  ® ®
  1 2 tm 1 4
    Asia Pacific Fiber Cement Net Sales.
 52




---



##### Table of Contents



tm tm
    Other Sales. tm
      Gross Profit.
    start-up
  Selling, General and Administrative (SG&A)
    Expenses. build-up
  Research and Development Expenses.
  SCI and Other Related Expenses.
  Asbestos Adjustments.
 53




---



##### Table of Contents



At March 31,2007


2006(In millions)Adjustments to the net Final
    Funding Agreement liability at September 30, 2006

$
(41.8
)

$
Adjustments to the net Final
    Funding Agreement liability at March 31, 2007


70.3



Tax impact related to the
    implementation of the Final Funding Agreement


(335.0
)


Effect of foreign exchange


(94.5
)


Contributions to asbestos research
    and education


(4.5
)


Initial recording of provision at
    March 31, 2006






(715.6
)Asbestos adjustments

$
(405.5
)

$
(715.6
)   Adjustments
    to the Net Final Funding Agreement liability
      September 30,


March 31,


Increase/2006


2006


(Decrease)(In millions, except exchange rate data)Discounted Central Estimate

A$
1,554.8


A$
1,517.0


A$
37.8U.S.
    GAAP AdjustmentsDiscounting and inflation allowance


(112.6
)


(113.2
)


0.6Uninflated and undiscounted
    central estimate


1,442.2



1,403.8



38.4Provision for claims handling
    costs of AICF


67.7



67.7



Other U.S. GAAP adjustments


31.5



28.7



2.8Net (assets) liabilities of AICF
    excluding funding payments


(33.0
)


(71.6
)


38.6Total net Final Funding
    Agreement liability pre-tax


1,508.4



1,428.6



79.8Total net Final Funding
    Agreement liability post-tax

A$
1,055.9


A$
1,000.0


A$
55.9Exchange rate - A$  to
    $ - September 30, 2006










1.3365Increase in the net Final
    Funding Agreement liability









$
41.8  54




---



##### Table of Contents



March 31,


September 30,


Increase/2007


2006


(Decrease)(In millions, except exchange rate data)Discounted Central Estimate

A$
1,355.1


A$
1,554.8


A$
(199.7
)U.S.
    GAAP AdjustmentsDiscounting and inflation allowance


(82.1
)


(112.6
)


30.5Uninflated and undiscounted
    central estimate


1,273.0



1,442.2



(169.2
)Provision for claims handling
    costs of AICF


69.2



67.7



1.5Other U.S. GAAP adjustments


39.6



31.5



8.1Net (assets) liabilities of AICF
    excluding funding payments


2.2



(33.0
)


35.2Total net Final Funding
    Agreement liability pre-tax


1,384.0



1,508.4



(124.4
)Total net Final Funding
    Agreement liability post-tax

A$
968.8


A$
1,055.9


A$
(87.1
)Exchange rate - A$ to
    $ - March 31, 2007










1.2395Decrease in the net Final
    Funding Agreement liability









$
(70.3
)     Tax
    Impact Related to the Implementation of the Final Funding
    Agreement
    Effect
    of Foreign Exchange
    Contributions
    to Asbestos Research and Education
   55




---



##### Table of Contents



Net
    Final Funding Agreement Liability
    In millionsInsurance receivables 
    current

$
9.4 non-current


165.1Workers compensation
    receivable  current


2.7 non-current


76.5Workers compensation
    liability  current


(2.7
) non-current


(76.5
)Asbestos liability 
    current


(63.5
) non-current


(1,225.8
)Deferred tax asset 
    current


7.8 non-current


318.2Income taxes payable (reduction to
    income tax payable)


9.0Other net liabilities


(6.3
)Net Final Funding Agreement
    liability at March 31, 2007

$
(786.1
)     Operating Loss.
           56




---



##### Table of Contents



Net Interest Expense.
  Income Tax Benefit (Expense).
  Net Income.
  Year
    Ended March 31, 2006 Compared to Year Ended March 31,
    2005
  Total Net Sales.
  USA Fiber Cement Net Sales.
      ® ® ®
 57




---



##### Table of Contents



®
    ®
  ramp-up ramp-up
  Asia Pacific Fiber Cement Net Sales.
  ® tm ® ®
    Other Sales. tm
     58




---



##### Table of Contents



Gross Profit.
      Selling, General and Administrative (SG&A)
    Expenses.
  Research and Development Expenses.
  SCI and Other Related Expenses.
  Asbestos Provision.
  Operating Income.
   59




---



##### Table of Contents



Net Interest Expense.
  Income Tax Expense.
  Income from Continuing Operations.
  Discontinued
    Operations
    Building
    Systems
   60




---



##### Table of Contents



Disposal
    of Chile Business
      Impact of
    Recent Accounting Pronouncement
  Uncertain
    Tax Positions
    Liquidity
    and Capital Resources
     61




---



##### Table of Contents



At March 31, 2007Effective


Total


PrincipalDescription

Interest Rate


Facility


Outstanding(In millions)US$364-day facilities, can be
    drawn in US$, variable interest rates based on LIBOR plus
    margin, can be repaid and redrawn until December 2007


5.82
%

$
110.0


$
83.0US$ term facilities, can be drawn
    in US$, variable interest rates based on LIBOR plus margin, can
    be repaid and redrawn until June 2010


5.98
%


245.0



105.0Total





$
355.0


$
188.0     364-day 364-day U.S.-dollar
           62




---



##### Table of Contents



Cash
    Flow  Year Ended March 31, 2007 compared to Year
    ended March 31, 2006
        Capital
    Requirements and Resources
               63




---



##### Table of Contents



and/or
  Capital
    Expenditures
    ® ® ® ® ®
 64




---



##### Table of Contents



Contractual
    Obligations
    Payments DueDuring Fiscal Year Ending March 31,Total


2008


2009 to 2010


2011 to 2012


Thereafter(In millions)Asbestos Liability(1)

$
1,289.3


$
N/A


$
N/A


$
N/A


$
N/ALong-Term Debt


105.0











105.0



Operating Leases


137.0



15.0



27.1



21.6



73.3Purchase Obligations(2)


12.2



12.2











Total

$
1,543.5


$
27.2


$
27.1


$
126.6


$
73.3     (1)
    
    The table above does not include any amounts related to the
    annual payment due to the AICF under the terms of the Final
    Funding Agreement. The amount of this annual payment is
    dependent on several factors, including our free cash flow
    (defined as cash from operations in accordance with GAAP in
    force at the date of the Original Final Funding Agreement),
    actuarial estimations, actual claims paid, operating expenses of
    the AICF and the annual cash flow cap. These amounts cannot be
    reasonably estimated for future periods and thus no amounts for
    such periods have been included for this contractual obligation
    in the table above. See Item 3, Key Information
    Risk Factors and Note 12 of
    our consolidated financial statements in Item 18 for
    further information regarding our future obligations under the
    Final Funding Agreement.(2)
    
    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
    Seasonality
    and Quarterly Variability
    Research
    and Development
   65




---



##### Table of Contents



Outlook
          flex-up
           66




---



##### Table of Contents



Item 6.
    Directors,
    Senior Management and Employees  Board
    Practices and Senior Management
  Board
    Structure
    www.jameshardie.com).
  Managing
    Board
          Responsibilities
    
    the general affairs, operations and finance of the Company;
    ensuring the implementation of our goals, strategy and policies,
    to achieve results;
    complying with all relevant legislation and regulations and for
    managing the risks associated with our activities; and
    reporting and discussing our internal risk management and
    control systems with the Supervisory Board and Audit Committee.    Supervisory
    Board
     67




---



##### Table of Contents



Responsibilities
    
    advising the Managing Board;
    supervising the policy and actions pursued by the Managing
    Board; and
    supervising the general course of our affairs and the business
    enterprise we operate.    Joint
    Board
      Responsibilities
    
    supervising the general course of our affairs;
    approving the strategy set by the Managing Board;
    monitoring Company performance; and
    putting in place effective external disclosure policies and
    procedures.    Board
    Meetings
     68




---



##### Table of Contents



Directors
  Qualifications
    Independence
        case-by-case case-by-case
  Chairman
      
    provides leadership to the Supervisory and Joint Boards;
    facilitates Supervisory and Joint Boards discussion; and
    monitors the performance of the Companys Boards and
    committees.  and/or
    Director
    Evaluation and Re-election
     69




---



##### Table of Contents



Director
    Orientation
    Indemnification
      Management
    Succession
    Supervisory
    Board Committees
  www.jameshardie.com
      Audit
    Committee
           70




---



##### Table of Contents




    Oversees the Companys financial reporting process and
    reports on the results of its activities to the Supervisory
    Board;
    Reviews with management and the external auditor the
    Companys annual and quarterly financial statements and
    reports to shareholders;
    Reviews the Companys policies and procedures with respect
    to risk management;
    General oversight of the appointment and provision of all
    external audit services to the Company and the Companys
    internal audit function;
    Reviews the adequacy and effectiveness of the Companys
    internal compliance and control procedures; and
    Establishes procedures for complaints regarding accounting,
    internal accounting controls and auditing matters.  Conflicts
    of Interest
    Reporting
    Risk
    Management Sub-Committee
    Nominating
    and Governance Committee
    
    identifying individuals qualified to become members of the
    Managing Board or Supervisory Board;
    recommending to the Supervisory Board candidates for the
    Managing Board or Supervisory Board (to be appointed by
    shareholders);
    recommending to the Supervisory Board a set of corporate
    governance principles; and
    performing a leadership role in shaping the Companys
    corporate governance policies.   71




---



##### Table of Contents



Remuneration
    Committee
    Rule 16b-3
    Special
    Matters Committee
      Policies
    and Programs
    
    Risk Management;
    Business Conduct and Ethics;
    Ethics Hotline (Whistleblower);
    Continuous Disclosure and Market Communication;
    Insider Trading; and
    Corporate Governance Principles.  www.jameshardie.com
  Risk
    Management
    
    our risk management systems are effective;
    the principal strategic, operational and financial risks are
    identified;
    effective systems are in place to monitor and manage
    risks; and
    reporting systems, internal controls and arrangements for
    monitoring compliance with laws and regulations are adequate. 72




---



##### Table of Contents




    establishing 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; and
    issuing procedures requiring that significant capital and
    recurring expenditure is approved at the appropriate levels.            Form 20-F.
  Business
    Conduct and Ethics
    www.jameshardie.com.
  Continuous
    Disclosure and Market Communication
    Disclosure
   73




---



##### Table of Contents



Communication
    
    management briefings and presentations to accompany quarterly
    results, which are accessible via a live webcast and
    teleconference;
    audio webcasts of other management briefings and webcasts of the
    shareholder information meeting;
    a comprehensive Investor Relations website that displays all
    Company announcements and notices as soon as they have been
    cleared by the ASX, as well as all major management and road
    show presentations;
    United States and Australian site visits and briefings on
    strategy for investment analysts;
    an e-mail
    alert service to advise investors and other interested parties
    of announcements and other events; and
    equality of access for shareholders and investment analysts to
    briefings, presentations and meetings and equality of media
    access to the Company on a reasonable basis.  Shareholders
    Participation
  Information
    Meeting
      www.jameshardie.com
    General
    Meeting
    
    attend the General Meeting either in person or by proxy;
    to address shareholder meetings; and
    in the case of shareholders and other persons entitled to vote
    (for instance, certain pledge holders), to exercise voting
    rights, subject to the provisions of our Articles of Association.    Insider
    Trading
   74




---



##### Table of Contents




    give prior notice to the designated compliance officer,
    currently our General Counsel;
    do not deal in securities for short swing profit (where a profit
    is realized, or expected to be realized from trading within any
    period of less than six months); and
    do not deal in securities as part of hedging transactions,
    (dealing in call or put options that limit the economic risk of
    Company securities).    Corporate
    Governance Principles
  www.jameshardie.com
  Updated
    Information
  www.jameshardie.com
 75




---



##### Table of Contents



Current
    and Former Directors and Executive Officers
    TermName

Age

Position

ExpiresSupervisory BoardDonald DeFosset(1)


58


Chairman of the Joint Board and
    Chairman of the Supervisory Board


2009Brian Anderson(1)


56


Member of the Joint Board and the
    Supervisory Board


2009John Barr


60


Member of the Joint Board and the
    Supervisory Board


2007Michael Hammes(2)


65


Member of the Joint Board and the
    Supervisory Board


2009James Loudon


64


Member of the Joint Board and the
    Supervisory Board


2008Donald McGauchie


57


Deputy Chairman of the Joint Board
    and Deputy Chairman of the Supervisory Board


2009Rudy van der Meer(2)


62


Member of the Joint Board and the
    Supervisory Board


2009Catherine Walter(3)


54


Member of the Joint Board and the
    Supervisory Board


2007Managing BoardLouis Gries


53


Chief Executive Officer, Member of
    the Joint Board and Chairman of the Managing BoardRussell Chenu


57


Chief Financial Officer and Member
    of the Managing BoardBenjamin Butterfield


47


General Counsel, Member of the
    Managing Board and Company Secretary     (1)
    
    Messrs. DeFosset and Anderson were appointed as independent
    non-executive directors on December 14, 2006.(2)
    
    Messrs. Hammes and van der Meer were appointed as
    independent non-executive directors at the Extraordinary General
    Meeting in February 2007.(3)
    
    Ms. Walter was appointed as a non-executive director
    effective July 1, 2007. As required by our Articles of
    Association, Ms. Walter will stand for re-election at the Annual
    General Meeting to be held in Amsterdam in August 2007.  76




---



##### Table of Contents



Other Senior Leadership Team Officers

Age

PositionSteve Ashe


47


Vice President 
    Investor RelationsPeter Baker


56


Executive Vice
    President  AustraliaJames Chilcoff


42


Vice President 
    Marketing and International BusinessMark Fisher


36


Vice President 
    Research and DevelopmentBrian Holte(1)


40


Vice President  General
    Manager Western DivisionGrant Gustafson(2)


44


Vice President 
    Interiors and Business DevelopmentNigel Rigby


40


Vice President  General
    Manager Northern DivisionJoel Rood(3)


49


Vice President  General
    Manager Southern DivisionRobert Russell


41


Vice President 
    Engineering and Process DevelopmentFormer Directors and Senior
    Leadership Team OfficersGregory Clark(4)


64


Former Member of the Joint Board
    and the Supervisory BoardMichael Brown(5)


61


Former Member of the Joint Board
    and the Supervisory BoardMeredith Hellicar(5)


53


Former Chairman of the Joint Board
    and Former Chairman of the Supervisory BoardMichael Gillfillan(5)


59


Former Member of the Joint Board
    and the Supervisory BoardDavid Merkley(6)


44


Former Executive Vice
    President  Engineering and Process DevelopmentCathy Wallace(7)


51


Former Vice President 
    Global Human Resources     (1)
    
    Mr. Holte joined us as a Vice President in March 2007.(2)
    
    Mr. Gustafson joined us as a Vice President in April 2006.(3)
    
    Mr. Rood joined us as a Vice President in February 2007.(4)
    
    On May 9, 2006, Dr. Clark resigned from our Joint
    Board and Supervisory Board.(5)
    
    On February 20, 2007, Chairman Ms. Hellicar and
    Messrs. Brown and Gillfillan resigned from our Joint Board
    and Supervisory Board.(6)
    
    On September 1, 2006, Mr. David Merkley resigned from
    his position as Executive Vice President  Engineering
    and Process Development and from the Company.(7)
    
    On June 29, 2007, Ms. Wallace resigned from her
    position as Vice President  Global Human Resources
    and from the Company.  Directors
  Donald DeFosset
 77




---



##### Table of Contents



Brian Anderson
  John Barr
  Michael Hammes
  James Loudon
  Donald McGauchie
  Rudy van der Meer
 78




---



##### Table of Contents



Catherine Walter
  Louis Gries
  Russell Chenu
  Benjamin Butterfield
  Senior
    Leadership Team Officers
  Steve Ashe
  Peter Baker
 79




---



##### Table of Contents



James Chilcoff
  Mark Fisher
  Grant Gustafson
  Brian Holte
  Nigel Rigby
  Joel Rood
 80




---



##### Table of Contents



Robert Russell
    Employees
    Fiscal Years Ended March 31,2007


2006


2005Fiber Cement United States and
    Canada


1,868



2,150



1,820Fiber Cement Australia


419



402



424Fiber Cement New Zealand


164



170



147Fiber Cement Philippines


170



202



211Pipes (United States and Australia)


131



129



162Fiber Cement Europe


41



58



31Roofing (United States)






24



19Fiber Cement Chile










139Research & Development,
    including Technology


101



118



131General Corporate


50



50



38Total Employees


2,944



3,303



3,122   3
  Compensation
  Remuneration
      3
 81




---



##### Table of Contents



Primary


Equity





OtherDirectors


JHI NV


Post-Employment


RetirementName

Fees


Stock(1)


Superannuation(2)


Benefits(3)


TotalNon-Executive
    DirectorsD. DeFossetFiscal year 2007

$
32,959


$



$



$



$
32,959Fiscal year 2006


N/A



N/A



N/A



N/A



N/AB. AndersonFiscal year 2007


33,685















33,685Fiscal year 2006


N/A



N/A



N/A



N/A



N/AJ. BarrFiscal year 2007


92,929



20,000











112,929Fiscal year 2006


51,100



10,000











61,100M. HammesFiscal year 2007


16,247















16,247Fiscal year 2006


N/A



N/A



N/A



N/A



N/AJ. LoudonFiscal year 2007


87,584















87,584Fiscal year 2006


47,767



10,000











57,767D. McGauchieFiscal year 2007


96,071







9,402







105,473Fiscal year 2006


50,598



10,000



5,454







66,052R. van der MeerFiscal year 2007


17,247















17,247Fiscal year 2006


N/A



N/A



N/A



N/A



N/AFormer Non-Executive
    DirectorsM. Brown(3)Fiscal year 2007


79,262







7,727



307,658



394,647Fiscal year 2006


50,598



10,000



5,454







66,052G. Clark(4)Fiscal year 2007


5,420















5,420Fiscal year 2006


51,100



10,000











61,100M. Gillfillan(3)Fiscal year 2007


75,899















75,899Fiscal year 2006


51,100



10,000











61,100M. Hellicar(3)Fiscal year 2007


166,015



50,000



21,227



833,979



1,071,221Fiscal year 2006


178,777



20,000



17,890







216,667Total Compensation for
    Non-Executive DirectorsFiscal year 2007

$
703,318


$
70,000


$
38,356


$
1,141,637


$
1,953,311Fiscal year 2006

$
481,040


$
80,000


$
28,798


$



$
598,838   82




---



##### Table of Contents



OtherRelocationEquity


Allowances,Post-Employment


Stock


ExpatriatePrimary


Superannuation


Appreciation


Benefits,Noncash


and 401(k)


Rights and


and OtherName

Base Pay


Bonuses(5)


Benefits(6)


Benefits


Options(7)


Non-recurring(8)


TotalExecutive DirectorsL. GriesFiscal year 2007

$
786,612


$
1,738,430


$
72,317


$
14,287


$
755,110


$
121,498


$
3,488,254Fiscal year 2006


740,385



1,890,363



42,657



10,478



717,218



110,774



3,511,875R. ChenuFiscal year 2007


596,181



200,161



57,628



57,776



101,282



79,849



1,092,877Fiscal year 2006


564,546



159,832



18,558



50,809



62,736



70,454



926,935B. ButterfieldFiscal year 2007


322,497



466,516



61,598



13,200



206,351



111,160



1,181,322Fiscal year 2006


311,250



450,450



30,410



9,913



128,369



215,717



1,146,109Total Compensation for
    Executive DirectorsFiscal year 2007

$
1,705,290


$
2,405,107


$
191,543


$
85,263


$
1,062,743


$
312,507


$
5,762,453Fiscal year 2006

$
1,616,181


$
2,500,645


$
91,625


$
71,200


$
908,323


$
396,945


$
5,584,919Current Key Management
    PersonnelJ. ChilcoffFiscal year 2007

$
310,961


$
373,192


$
44,136


$
12,842


$
277,998


$



$
1,019,129Fiscal year 2006


290,385



418,231



13,899



13,269



157,409



113,038



1,006,231M. FisherFiscal year 2007


301,538



346,849



24,044



13,408



295,748







981,587Fiscal year 2006


260,962



376,467



30,039



14,242



191,791







873,501G. Gustafson(9)Fiscal year 2007


254,808



142,914



18,896



11,619



55,046



104,913



588,196Fiscal year 2006


N/A



N/A



N/A



N/A



N/A



N/A



N/AN. RigbyFiscal year 2007


301,538



350,488



22,673







282,435







957,134Fiscal year 2006


260,962



356,419



32,919







159,020



1,257



810,577R. RussellFiscal year 2007


301,538



359,235



54,217



13,408



295,748







1,024,146Fiscal year 2006


260,962



374,403



35,100



14,338



195,253



10,192



890,248Former Key Management
    PersonnelD. Merkley (10)Fiscal year 2007


148,564



9,277



125,329



7,269











290,439Fiscal year 2006


323,826



761,679



24,315



14,372



258,299



7,306



1,389,797Total Compensation for
    Executive OfficersFiscal year 2007

$
1,618,947


$
1,581,955


$
289,295


$
58,546


$
1,206,975


$
104,913


$
4,860,631Fiscal year 2006

$
1,397,097


$
2,287,199


$
136,272


$
56,221


$
961,772


$
131,793


$
4,970,354     (1)
    
    For fiscal year 2007, amount represents JHI NV stock issued or
    acquired on market under the Supervisory Board Share Plan 2006
    under which a director can elect to receive some of their annual
    fees in the form of JHI NV stock. The number of shares issued
    was determined by dividing the amount which the director elects
    to apply under the Supervisory Board Share Plan 2006 (net of
    applicable taxes and broker fees) by the market of purchase
    price. 83




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##### Table of Contents



For fiscal year 2006, the annual allocation non-executive
    directors of JHI NV stock to the value of $10,000 was approved
    by shareholders at the Annual General Meeting held on
    July 19, 2002. The non-executive directors could also elect
    additional stock in lieu of fees.(2)
    
    The superannuation benefits include Australian 9% superannuation
    guarantee contributions which were paid on top of the Australian
    directors total fees until September 25, 2006.
    Beginning September 26, 2006, superannuation is withheld
    from the Australian directors fees.(3)
    
    On February, 20, 2007, Chairman Ms. Hellicar and Directors
    Messrs. Brown and Gillfillan resigned from our Joint and
    Supervisory Boards. We have determined that two of these
    directors, Ms. Hellicar and Mr. Brown, are entitled to
    benefits pursuant to a discontinued retirement plan in the gross
    amounts of $0.8 million and $0.3 million for
    Ms. Hellicar and Mr. Brown, respectively. We expect to
    pay these amounts in fiscal year 2008. See Other
    Compensation  Directors Retirement
    Benefits for further information.(4)
    
    On May 9, 2006, Dr. Clark resigned from our Joint
    Board and Supervisory Board.(5)
    
    Includes all incentive amounts paid in the year indicated,
    including the portion of any incentive awarded for performance
    in the indicated year that was paid in that year, as well as,
    any performance incentive amounts realized as a result of prior
    years performance and paid in the applicable year as a
    result of our achievement of predetermined financial targets
    pursuant to the terms of our Economic Profit Incentive Plan. See
    Other Compensation: Economic Profit Incentive Plan
    for a summary of the terms of our Economic Profit Incentive Plan.(6)
    
    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 leaves, and tax
    services.(7)
    
    Options are valued using either the Black-Scholes option-pricing
    model or the Monte Carlo option-pricing method, depending on the
    plan the options were issued under, and the fair value of
    options granted are included in compensation during the period
    in which the options vest. For the Black-Scholes model, the
    weighted average assumptions and weighted average fair value
    used for grants in fiscal year 2007 were as follows: 1.5%
    dividend yield; 28.1% expected volatility; 4.6% risk free
    interest rate; 5.1 years of expected life; and A$2.40
    weighted average fair value at grant date. For the Monte Carlo
    method, the weighted average assumptions and weighted average
    fair value used for grants in fiscal year 2007 were as follows:
    1.6% dividend yield; 28.1% expected volatility; 4.6% risk free
    interest rate; and A$3.30 weighted average fair value at grant
    date. The figures stated here for Mr. Gries include Stock
    Appreciation Rights.(8)
    
    Other non-recurring includes cash paid in lieu of vacation
    accrued, as permitted under our U.S. vacation policy and
    California law.(9)
    
    Mr. Gustafson was not an executive for whom the Company
    reported compensation for in fiscal year 2006.(10)
    
    On September 1, 2006, Mr. David Merkley resigned from
    the Company.    Employment
    Contracts
   84




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##### Table of Contents



Chief
    Executive Officer
    Components

DetailsLength of contract

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 renew date, that it does not want the term to renew.Base salary(1)

$750,000 per year. Salary will be
    reviewed annually by the JHI NV Board in April.Short-term incentive

Annual incentive target is 100% of
    annual base salary: 80% of this incentive
    target is based on the Company meeting or exceeding aggressive
    performance objectives; and 20% of this incentive
    target is based on the Chief Executive Officer meeting or
    exceeding personal performance objectives.The Remuneration Committee
    recommends the Companys and Chief Executive Officers
    performance objectives, and the performance against these
    objectives, to our Supervisory Board for approval. If the
    Companys performance exceeds the annual objective, the
    Chief Executive Officer realizes an incentive greater than his
    target incentive, but only one-third of the excess incentive is
    paid to the participant at the end of the fiscal year. The
    remaining two-thirds is then deposited with a notional bank and
    is paid to the Chief Executive Officer over the following two
    years if the Companys objectives are met in these years,
    or is reduced if the Companys objectives are not met.Long-term incentive

The banking mechanism of the
    annual incentive plan is considered a long-term incentive. Upon
    the approval of the shareholders, stock options with performance
    hurdles will be granted each year. The recommended number of
    options to be granted will be appropriate for this level of
    executive in the Unites States.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 his contributions
    into the plan up to the annual IRS limit.Resignation

The Chief Executive Officer may
    cease his employment with the Company by providing written
    notice.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 annual base salary at the time of termination; andb. amount equivalent to 1.5
    times the executives Average Annual 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.Post-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 he maintains the Companys non-compete
    and confidentiality agreements, and he will receive his annual
    base salary and annual target incentive in exchange for this
    consulting and non-compete.     (1)
    
    See actual salary paid for fiscal year 2007 in this section
    under Compensation. 85




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##### Table of Contents



Chief
    Financial Officer
    Components

DetailsLength of contract

Fixed period of two and a half
    (2.5) years concluding October 5, 2007.Base salary(1)

A$750,000 per year.Short-term incentive

Annual incentive target is 33% of
    annual base salary based on the Chief Financial Officer meeting
    or exceeding personal performance objectives.Long-term incentive

Upon the approval of the
    shareholders, stock options with performance hurdles will be
    granted each year. The recommended number of options to be
    granted will be a value equal to one-third of the
    executives base salary.Superannuation

The Company will contribute 9% of
    gross salary to Superannuation in the executives name.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 material
    change of role

If the position of Chief Financial
    Officer is determined to be redundant or subject to a material
    adverse change, 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)
    
    Actual salary rates are typically adjusted each year. Actual
    salary paid in fiscal year 2007 is shown in this section under
    Compensation. 86




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##### Table of Contents



Company
    Secretary and General Counsel
    Components

DetailsLength of contract

Indefinite.Base salary(1)

$315,000 per year.Short-term incentive

Annual incentive target is 65% of
    annual base salary: 80% of this incentive
    target is based on the Company meeting or exceeding aggressive
    performance objectives; and 20% of this incentive
    target is based on the General Counsel and Company Secretary
    meeting or exceeding personal performance objectives.The Chief Executive Officer
    recommends the General Counsel and Company Secretarys
    performance objectives and the performance against these
    objectives, to the Remuneration Committee and our Supervisory
    Board for approval. The Companys objectives are set by the
    Remuneration Committees recommendation to our Supervisory
    Board. If the Companys performance exceeds the annual
    objective, the executive realizes a incentive greater than his
    target incentive, but only one-third of the excess incentive is
    paid to the participant at the end of the fiscal year. The
    remaining two-thirds is then deposited with a notional bank and
    is paid to the General Counsel and Company Secretary over the
    following two years if the Companys objectives are met in
    these years, or is reduced if the Companys objectives are
    not met.Long-term incentive

The banking mechanism of the
    annual incentive plan is considered a long-term incentive. Upon
    the approval of the shareholders, stock options with performance
    hurdles will be granted each year. The recommended number of
    options to be granted will be appropriate for this level of
    executive in the United States.Defined Contribution Plan

Since the General Counsel and
    Company Secretary may not participate in the U.S. 401(k) defined
    contribution plan up to the annual IRS limit while he is on
    assignment to The Netherlands, the Company will provide a
    payment up to the annual IRS limit directly to the executive.Resignation or Termination

The General Counsel and Company
    Secretary may cease his employment with the Company by providing
    written notice.Termination by James Hardie

The Company may terminate the
    General Counsel and Company Secretarys employment for
    cause or not for cause.Post-termination Consulting

The Company will request the
    General Counsel and Company Secretary, and he will agree, to
    consult to the Company upon termination for a minimum of two
    years, as long as he maintains the Companys non-compete
    and confidentiality agreements, and he will receive his annual
    base salary in exchange for this consulting and non-compete.     (1)
    
    Actual salary rates are typically adjusted each year. Actual
    salary paid in fiscal year 2007 is shown in this section under
    Compensation. 87




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##### Table of Contents



Benefits
    Contained in Contracts for Chief Executive Officer, Chief
    Financial Officer and Company Secretary and General
    Counsel
    Components

DetailsInternational Assignment

The executives receive 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 for Managing Board
    Directors based in The Netherlands.Tax
    Advice:  The
    Company will pay the costs of filing the executives income
    tax returns to the required countries.Health, Welfare and Vacation
    Benefits:  The
    executives are eligible to receive all health, welfare and
    vacation benefits offered to all U.S. employees. They are also
    eligible to participate in the Companys Executive Health
    and Wellness program.Business
    Expenses:  The
    executives are entitled to receive reimbursement for all
    reasonable and necessary travel and other business expenses they
    incur or pay for in connection with the performance of their
    services under this Agreement.Automobile:  The
    Company will either purchase or lease an automobile for business
    and personal use by the executives, or, in the alternative, the
    executives will be entitled to an automobile lease allowance not
    to exceed $750 per month. Unused allowance or part thereof will
    be paid to the executives.   Key
    Management Personnel Employment Contracts
    Components

DetailsLength of contract

Indefinite.Base salary

Base salary is subject to
    Remuneration Committee approval and reviewed annually in May for
    increase effective July 1.Short-term incentive

An annual incentive target is set
    at a percentage of the executives salary. Target is 55%;
    80% of this incentive target is based on the Company meeting or
    exceeding aggressive performance objectives; 20% of this
    incentive target is based on the executive meeting or exceeding
    personal performance objectives.The Chief Executive Officer
    recommends the executives performance objectives and the
    performance against these objectives, to the Remuneration
    Committee and our Supervisory Board for approval. The
    Companys objectives are set by the Remuneration
    Committees recommendation to our Supervisory Board. If the
    Companys performance exceeds the annual objective, the
    executive realizes an incentive greater than his target
    incentive, but only one-third of the excess incentive is paid to
    the participant at the end of the fiscal year. The remaining
    two-thirds is then deposited with a notional bank and is paid to
    the executive over the following two years if the Companys
    objectives are met in these years, or is reduced if the
    Companys objectives are not met.Long-term incentive

The banking mechanism of the
    annual incentive plan is considered a long-term incentive. Upon
    the approval of our Supervisory Board, stock options have been
    granted each year under the JHI NV 2001 Equity Incentive Plan.
    It is anticipated that upon the approval of our Supervisory
    Board, equity will be granted under a new plan in the future.Defined Contribution Plan

The executive may participate in
    the U.S. 401(k) defined contribution plan up to the annual IRS
    limit. The Company will match the executives contributions
    into the plan up to the annual IRS limit. 88




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##### Table of Contents



Components

DetailsResignation

The executive may cease his
    employment with the Company by providing written notice.Termination by James Hardie

The Company may terminate the
    executives employment for cause or not for cause.Post-termination Consulting

Depending on the executives
    individual contract, and the reasons for termination, the
    Company may, or may be required to, request the executive, and
    the executive will agree, to consult to the Company for two
    years upon termination, as long as the executive maintains the
    Companys non-compete and confidentiality agreements. In
    exchange for the consulting agreement, the Company shall pay the
    executives annual base salary as of the termination date
    for each year of consulting.Other

Health, Welfare and Vacation
    Benefits:  The
    executive is eligible to receive all health, welfare and
    vacation benefits offered to all U.S. employees. The executive
    is also eligible to participate in the Companys Executive
    Health and Wellness program.Business
    Expenses:  The
    executive is entitled to receive reimbursement for all
    reasonable and necessary travel and other business expenses he
    or she incurs or pays in connection with the performance of his
    or her services under this agreement.Automobile:  The
    Company will either lease an automobile for business and
    personal use by the executive, or, in the alternative, the
    executive will be entitled to an automobile lease allowance not
    to exceed $750 per month. Unused allowance or part of this will
    be paid to the executive.International Assignment

Executives who are on assignment
    in countries other than their own receive additional benefits
    which may include tax equalization payment and tax advice, a car
    in the country they are assigned to, and financial assistance
    with housing, moving and storage.  89




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##### Table of Contents



Share
    Ownership
    Number of SharesBeneficially


Percent ofName

Owned(1)


Class(2)Current Directors and Executive
    OfficersDonald DeFosset


15,500




*Brian Anderson







*John Barr(3)


24,477




*Michael Hammes







*James Loudon


6,355




*Donald McGauchie(4)


9,569




*Rudy van der Meer







*Louis Gries


1,317,219




*Russell Chenu


61,500




*Benjamin Butterfield


90,000




*James Chilcoff


92,500




*Mark Fisher


503,896




*Grant Gustafson


Nigel Rigby


217,503




*Robert Russell


158,500




*Former Directors and Executive
    OfficersMichael Brown


14,727




*Gregory Clark


1,826




*Michael Gillfillan(5)


54,727




*Meredith Hellicar(6)


14,954




*David Merkley







*     *
    
    Indicates that the individual beneficially owns less than 1% of
    our shares of common stock.(1)
    
    Since the Supervisory Board Share Plan, or SBSP, was approved at
    the 2002 Annual General Meeting, four general allotments have
    been made to non-executive directors. The number of beneficial
    shares includes the following SBSP allotments:  Shares
    Allotted under SBSP
  November 22,


December 3,


August 22,


August 27,Name

2005(a)


2004(b)


2003(c)


2002(d)John Barr


758



1,068







James Loudon


758



2,117



1,839



1,641Donald McGauchie


758



1,068



1,743



Former DirectorsMichael Brown


758



1,068



1,260



1,641Peter Cameron


1,894



2,117



5,602



Gregory Clark


758



1,068



5,602



6,688Michael Gillfillan


758



1,068



1,260



1,641Meredith Hellicar


1,515



2,117



2,225



2,948Alan McGregor










1,260



1,641   (a)
    
    Each participants November 22, 2005 mandatory
    participation of 758 shares is subject to a two-year escrow
    period ending November 22, 2007. In the case of Peter
    Cameron, the escrow was released after he died in February 2006. 90




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##### Table of Contents



(b)
    
    Each participants December 3, 2004 mandatory
    participation of 1,068 shares were subject to a two-year
    escrow period until they were released on December 4, 2006.
    In the case of Peter Cameron, the escrow was released after he
    died in February 2006.(c)
    
    Each participants August 22, 2003 mandatory
    participation of 1,260 shares were subject to a two-year
    escrow period until they were released on August 22, 2005.(d)
    
    Each participants August 27, 2002 mandatory
    participation of 1,641 shares were subject to a two-year
    escrow period until they were released on August 27, 2004.      Number ofName

SharesDonald DeFosset


Brian Anderson


John Barr


1,651Michael Hammes


James Loudon


Donald McGauchie(4)


Rudy van der Meer


Former DirectorsMichael Brown


Gregory Clark


Michael Gillfillan


Meredith Hellicar(6)


3,388   (2)
    
    Based on 467,512,566 shares of common stock outstanding at
    May 31, 2007 (all of which are subject to CUFS).(3)
    
    As of May 31, 2007, 21,000 shares were held in a
    trust, of which Mr. Barr and his wife are trustees.(4)
    
    As of May 31, 2007, 6,000 shares were held for the
    McGauchie Superannuation Fund for which Mr. McGauchie is a
    trustee.(5)
    
    As of February 20, 2007, the date of
    Mr. Gillfillans resignation, 50,000 shares were
    held in a trust, of which Mr. Gillfillan and his wife are
    trustees.(6)
    
    As of May 31, 2007, 3,388 shares were held in a trust,
    of which David Latrobe Foster and Ms. Hellicar are trustees.   91




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##### Table of Contents



Option
    Ownership
    Number of SharesUnderlyingName

Options Owned


Exercise Price

Expiration DateCurrent Executive
    OfficersLouis Gries


40,174
(1, 2)

A$3.1321/share(3, 4, 5)

November 2009175,023
(1, 6)

A$3.0921/share(3, 4, 5)

November 2010324,347
(7)

A$5.0586/share(4, 5)

December 2011325,000
(8)

A$6.4490/share(5)

December 2012325,000
(9)

A$7.05/share

December 20131,000,000
(10)

A$8.53/share

November 2015381,000
(15)

A$8.40/share

November 2016415,000
(15)

A$8.40/share

November 2016Russell Chenu


93,000
(11)

A$6.30/share

February 201590,000
(10)

A$8.53/share

November 201560,000
(15)

A$8.40/share

November 201665,000
(15)

A$8.40/share

November 2016Benjamin Butterfield


180,000
(11)

A$6.30/share

February 2015230,000
(10)

A$8.53/share

November 2015101,000
(15)

A$8.40/share

November 2016110,000
(15)

A$8.40/share

November 2016James Chilcoff


135,000
(13)

A$5.99/share

December 2014190,000
(12)

A$8.90/share

December 2015158,500
(14)

A$8.40/share

November 2016Mark Fisher


92,113
(1, 6)

A$3.0921/share(3, 4, 5)

November 201068,283
(7)

A$5.0586/share(4, 5)

December 201174,000
(8)

A$6.4490/share(5)

December 2012132,000
(9)

A$7.05/share

December 2013180,000
(13)

A$5.99/share

December 2014190,000
(12)

A$8.90/share

December 2015158,500
(14)

A$8.40/share

November 2016Nigel Rigby


20,003
(7)

A$5.0586/share(4, 5)

December 201127,000
(8)

A$6.4490/share(5)

December 201233,000
(9)

A$7.05/share

December 2013180,000
(13)

A$5.99/share

December 2014190,000
(12)

A$8.90/share

December 2015158,500
(14)

A$8.40/share

November 2016Robert Russell


66,000
(9)

A$7.05/share

December 2013135,000
(13)

A$5.99/share

December 2014190,000
(12)

A$8.90/share

December 2015158,500
(14)

A$8.40/share

November 2016Grant Gustafson


158,500
(14)

A$8.40/share

November 2016Former Executive
    OfficerDavid Merkley


     (1)
    
    This nonqualified stock option to purchase shares of our common
    stock was granted on October 19, 2001 under our 2001 Equity
    Incentive Plan in exchange for the termination of an award of
    shadow stock covering an equal number of shares of JHIL common
    stock. See Equity Plans  2001 Equity Incentive
    Plan under Item 6.(2)
    
    All options vested and became exercisable in November 2004. 92




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##### Table of Contents



(3)
    
    The exercise price reflects an A$0.0965 per share price
    reduction due to a capital return paid to shareholders in
    December 2001.(4)
    
    The exercise price reflects an A$0.3804 per share price
    reduction due to a capital return paid to shareholders in
    November 2002.(5)
    
    The exercise price reflects an A$0.2110 per share price
    reduction due to a capital return paid to shareholders in
    November 2003.(6)
    
    All options vested and became exercisable in November 2005.(7)
    
    Granted under the 2001 Equity Incentive Plan. All options vested
    and became exercisable in December 2004.(8)
    
    Granted under the 2001 Equity Incentive Plan. All options vested
    and became exercisable in December 2005.(9)
    
    Granted under the 2001 Equity Incentive Plan. All options vested
    and became exercisable in December 2006.(10)
    
    Granted under the Managing Board Transitional Stock Option Plan.
    Options vest and become exercisable on the first business day on
    or after November 22, 2008 if the following conditions are
    met: 50% vest if our total shareholder return, or TSR, is equal
    to or above the Median TSR and an additional 2% of the options
    shall vest for each 1% increment that the Companys TSR is
    above the Median TSR. If any options remain unvested on the last
    business day of each six month period between November 22,
    2008 and November 22, 2010, we will reapply the vesting
    criteria to those options on that business day.(11)
    
    Granted under the 2001 Equity Incentive Plan. Options vest and
    become exercisable in three installments: 25% on
    February 22, 2006; 25% on February 22, 2007; and 50%
    on February 22, 2008.(12)
    
    Granted under the 2001 Equity Incentive Plan. Options vest and
    become exercisable in three installments: 25% on
    December 1, 2006; 25% on December 1, 2007; and 50% on
    December 1, 2008.(13)
    
    Granted under the 2001 Equity Incentive Plan. Options vest and
    become exercisable in three installments: 25% on
    December 14, 2005; 25% on December 14, 2006; and 50%
    on December 14, 2007.(14)
    
    Granted under the 2001 Equity Incentive Plan. Options vest and
    become exercisable in three installments: 25% on
    November 21, 2007; 25% on November 21, 2008; and 50%
    on November 21, 2009.(15)
    
    Granted under the Long Term Incentive Plan. Option vesting is
    subject to performance hurdles as outlined in the
    plan rules.  Stock-Based
    Compensation
    Executive
    Share Purchase Plan
   93




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##### Table of Contents



2001
    Equity Incentive Plan
        OptionsOutstandingNumber of


as of May 31,Share Grant Date

Options Granted


2007October 2001(1)


5,468,829



524,158December 2001


4,248,417



712,419December 2002


4,037,000



997,500December 2003


6,179,583



2,372,250December 2004


5,391,100



3,164,125February 2005


273,000



273,000December 2005


5,224,100



4,386,100March 2006


40,200



40,200November 2006


3,499,490



3,147,640March 2007


330,900



330,900Total outstanding






15,948,292     (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.     94




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##### Table of Contents



Stock Options.
  Performance Awards.
  Restricted Stock Awards.
  Stock Appreciation Rights.
  Dividend Equivalent Rights.
  Other Stock-Based Benefits.
  Effect of Change in Control.
  Stock
    Appreciation Rights Plans
   95




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##### Table of Contents



Effect of Liquidation, Merger or Sale.
  Supervisory
    Board Share Plan
    Supervisory
    Board Share Plan 2006
         96




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##### Table of Contents



Managing
    Board Transitional Stock Option Plan
      Effect of Change in Control.
  Long-Term
    Incentive Plan
  and/or
  Effect of Change in Control, Takeover by Certain
    Organizations or Liquidation.
  Other
    Compensation
  Economic
    Profit Incentive Plan
   97




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##### Table of Contents



401(k)
    Plan
    James
    Hardie Australia Superannuation Plan
    Director
    Retirement Benefits
        Item 7.
    Major
    Shareholders and Related Party Transactions  Major
    Shareholders
     98




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##### Table of Contents



Shares


Percentage ofBeneficially


SharesShareholder

Owned


OutstandingCommonwealth Bank of Australia
    (and subsidiaries)


54,916,592



11.90
%Lazard Asset Management Pacific
    Co.


52,157,165



11.17
%The Capital Group Companies,
    Inc.


32,960,346



7.12
%Schroder Investment Management
    Australia Limited


31,024,755



6.65
%National Australia Bank Limited
    Group


28,198,184



6.15
%Perpetual Limited and subsidiaries


28,017,563



5.99
%                 Other
    Security Ownership Information
   99




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##### Table of Contents



Related
    Party Transactions
  Existing
    Loans to our Directors and Directors of our
    Subsidiaries
      Payments
    Made to Directors and Director Related Entities of JHI NV during
    the Year
        Item 8.
    Financial
    Information  F-44.
   100




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##### Table of Contents



Item 9.
    Listing
    Details  Price
    History
    High


LowPeriod

(A$)


(US$)


(A$)


(US$)Fiscal year ended:March 31, 2007


10.24



7.84



6.31



4.83March 31, 2006


9.81



7.38



5.49



4.13March 31, 2005


7.23



5.35



4.95



3.66March 31, 2004


8.04



5.58



5.84



4.05March 31, 2003


7.06



3.96



5.56



3.12Fiscal quarter ended:March 31, 2007


10.24



8.06



8.05



6.34December 31, 2006


9.70



7.47



7.23



5.57September 30, 2006


7.85



5.95



6.31



4.78June 30, 2006


9.95



7.43



7.12



5.32March 31, 2006


9.81



7.25



8.11



6.00December 31, 2005


9.03



6.72



7.65



5.69September 30, 2005


9.44



7.17



7.40



5.62June 30, 2005


7.75



5.96



5.49



4.22Month ended:May 31, 2007


9.50



8.40



8.64



7.64April 30, 2007


9.40



7.28



8.13



6.30March 31, 2007


9.70



7.71



8.05



6.40February 28, 2007


10.24



8.01



9.02



7.05January 31, 2007


10.10



7.94



9.35



7.35December 31, 2006


9.70



7.61



8.13



6.38    101




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##### Table of Contents



High


LowPeriod

(US$)


(US$)Fiscal year ended:March 31, 2007


41.70



24.20March 31, 2006


36.36



21.54March 31, 2005


27.21



18.10March 31, 2004


28.50



18.25March 31, 2003


19.95



15.29Fiscal quarter ended:March 31, 2007


41.70



32.70December 31, 2006


37.88



26.98September 30, 2006


28.85



24.20June 30, 2006


36.80



25.90March 31, 2006


35.59



30.51December 31, 2005


34.80



29.60September 30, 2005


36.36



27.70June 30, 2005


30.00



21.54Month ended:May 31, 2007


39.25



35.50April 30, 2007


39.14



33.30March 31, 2007


36.94



32.70February 28, 2007


41.70



36.60January 31, 2007


39.00



35.97December 31, 2006


37.88



32.35   Trading
    Markets
    Common Stock (in the form of CUFS)

Australian Securities ExchangeADRs

New York Stock Exchange     Trading
    on the Australian Securities Exchange
   102




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##### Table of Contents



Trading
    on the New York Stock Exchange
  www.adrbny.com 10286-1258, non-U.S. callers call: 212-815-3700
  Item 10.
    Additional
    Information  General
  besloten vennootschap met
    beperkte aansprakelijkheid naamloze vennootschap
    Key
    Provisions of our Articles of Association of JHI NV
  Purpose
    of the Company
    
    to participate in, to take an interest in any other way in and
    to conduct the management of business enterprises of whatever
    nature;
    to raise funds through the issuance of debt or equity or in any
    other way and to finance third parties;
    to provide guarantees, including guarantees for the debts of
    third parties; and
    to perform all activities which are incidental to or which may
    be conducive to, or connected with, any of the foregoing.  Provisions
    of our Articles of Association or Charter Related to
    Directors
  Power to vote when director is materially
    interested.
     103




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##### Table of Contents



Power to vote compensation.
    Borrowing Powers.
  Age Limit Requirement for Retirement or
    Non-Retirement.
  Number of shares for directors
    qualification.
  Issuance
    of Shares; Preemptive Rights
          Repurchase
    of Shares
   104




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##### Table of Contents



Reduction
    of Share Capital
  pro rata pro rata
  Shareholders
    Meetings and Voting Rights
     105




---



##### Table of Contents



Form 20-F,
    Annual
    Report
    Indemnification
    Dividends
     106




---



##### Table of Contents



Amendment
    of Articles of Association
    Liquidation
    Rights
  pro rata
  Limitations
    on Right to Hold Common Stock
   107




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##### Table of Contents




    acquisitions that result from acceptances under a takeover bid,
    which complies with the Articles of Association, including the
    principles set forth above;
    acquisitions which result in a persons voting power
    increasing by not more than 3% in a six-month period;
    acquisitions which are consistent with the principles set forth
    above, conform to the other takeover principles set out in the
    Articles of Association (adjusting those principles as
    appropriate to meet the particular circumstances of the
    acquisitions) and have received the prior approval of the
    Supervisory Board; and
    acquisitions approved at a general meeting of shareholders,
    subject to certain requirements being satisfied in relation to
    voting and the provision of information.                Disclosure
    of Holdings
   108




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##### Table of Contents



www.sec.gov.
  Material
    Contracts
  Form 20-F, Form 20-F
  U.S. Dollar Cash Advance Facilities. 364-day 364-day U.S.-dollar
  Gypsum Indemnity.
    ABN 60 Indemnities.
 109




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##### Table of Contents



Exchange
    Controls
      Taxation
    U.S.-
  PROSPECTIVE
    INVESTORS SHOULD CONSULT THEIR TAX ADVISORS REGARDING THE
    PARTICULAR TAX CONSEQUENCES OF THEIR ACQUIRING, OWNING AND
    DISPOSING OF OUR COMMON SHARES, INCLUDING THE EFFECT OF ANY
    FOREIGN, STATE OR LOCAL TAXES.
  United
    States Taxation
     110




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##### Table of Contents



Treatment of ADRs.
  Taxation of Distributions.
  121-day
     111




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##### Table of Contents



Credit of Foreign Taxes Withheld.
    Sale or Other Disposition of Shares.
  Capital Gains Rates.
  Controlled Foreign Corporation Status.
   112




---



##### Table of Contents



Passive Foreign Investment Company
    Status.
    U.S. Federal Income Tax Provisions Applicable to
    Non-United
    States Holders. Non-U.S. Shareholders, Non-U.S. Shareholder Non-U.S. Shareholder Non-U.S. Shareholder Non-U.S. Shareholder Non-U.S. Shareholder Non-U.S. Shareholder
  U.S. Information Reporting and Backup
    Withholding. Form W-9 Non-U.S. shareholders non-U.S. status
    Netherlands
    Taxation
   113




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##### Table of Contents



Treatment of ADRs.
  Dutch Dividend Withholding Tax.
        zuivere winst
    U.S.-NL U.S.-NL U.S.-NL U.S.-NL
     114




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##### Table of Contents



U.S.-NL
  Taxes on Income and Capital Gains.
          and/or and/or
    U.S.-NL U.S.-NL
  U.S.-NL U.S.-NL
  Other Taxes and Duties.
  Documents
    Available for Review
   115




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##### Table of Contents



www.sec.gov th
  
    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


82.9
%


11.0
%


3.5
%


2.6
%Cost of goods sold


83.0
%


11.4
%


3.2
%


2.4
%Expenses(2)


25.7
%


71.4
%


0.7
%


2.2
%Liabilities (excluding
    borrowings)(2)


11.9
%


86.3
%


1.1
%


0.7
%     US$


A$


NZ$


Other(1)Net sales


82.9
%


11.0
%


3.6
%


2.5
%Cost of goods sold


84.2
%


10.7
%


2.9
%


2.2
%Expenses(2)


18.7
%


79.4
%


0.4
%


1.5
%Liabilities (excluding
    borrowings)(2)


25.6
%


72.4
%


1.6
%


0.4
%  116




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##### Table of Contents



(1)
    
    Comprises Philippine Pesos, Euros and Chilean Pesos.(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  Legal
    Proceedings and Note 12 of our consolidated financial
    statements in Item 18 for further information regarding the
    asbestos liability.    Funding
    Under the Final Funding Agreement
    Interest
    Rate Risk
      Commodity
    Price Risk
      Item 12.
    Description
    of Securities Other Than Equity Securities   117




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##### Table of Contents



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
  Rule 13a-15(e)
  Managements
    Annual Report on Internal Control over Financial
    Reporting
  Rules 13a-15(f) Internal
    Control-Integrated Framework
    page F-2 Form 20-F.
  Changes
    in Internal Control over Financial Reporting
  Form 20-F
  Item 16A.
    Audit
    Committee Financial Expert   118




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##### Table of Contents



Item 16B.
    Code
    of Business Conduct and Ethics                Item 16C.
    Principal
    Accountant Fees and Services  Fees Paid
    to Our Independent Registered Public Accounting Firm
    Fiscal Years Ended March 31,2007


2006


2005(In millions)Audit Fees(1)

$
1.3


$
1.6


$
3.1Audit-Related Fees(2)


0.9



0.1



0.2Tax Fees(3)


3.7



5.2



4.2     (1)
    
    Audit Fees include the aggregate fees for professional services
    rendered by our independent registered public accounting firm.
    Professional services include the audit of our annual financial
    statements and services that are normally provided in connection
    with statutory and regulatory filings. During the fiscal year
    ended March 31, 2005, total audit fees also included
    internal investigation fees of $1.9 million.(2)
    
    Audit-Related Fees include the aggregate fees billed for
    assurance and related services rendered by our independent
    registered public accounting firm. Our independent registered
    public accounting firm did not engage any temporary employees to
    conduct any portion of the audit of our financial statements for
    the fiscal year ended March 31, 2007. 119




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##### Table of Contents



(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    Item 16E.
    Purchases
    of Equity Securities by the Issuer and Affiliated
    Purchasers    Item 17.
    Financial
    Statements   PART III  Item 18.
    Financial
    Statements  F-44
  Item 19.
    Exhibits    ExhibitNumber

Description of Exhibits1
.1

Articles of Association, as
    amended on September 1, 2005 of James Hardie Industries
    N.V. (English Translation)(4)2
.1

Letter Agreement of
    September 6, 2001 by and between James Hardie Industries
    N.V. and CHESS Depositary Nominees Pty Limited, as the
    depositary for CHESS Units of Foreign Securities(3)2
.2

Deposit Agreement dated as of
    September 24, 2001 between The Bank of New York, as
    depositary, and James Hardie Industries N.V.(3)2
.7

Common Terms Deed Poll dated
    June 15, 2005 between James Hardie International Finance
    B.V. and James Hardie Industries N.V.(3)2
.8

Form of Term Facility Agreement
    between James Hardie International Finance B.V. and Financier(3)2
.9

Form of Term Facility
    Agreement  Occurrence of Extension Event among James
    Hardie International Finance B.V., James Hardie Building
    Products, Inc. and Financier2
.10

Form of
    364-day
    Facility Agreement between James Hardie International Finance
    B.V. and Financier(3) 120




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##### Table of Contents



ExhibitNumber

Description of Exhibits2
.11

Form of Extension Request for
    364-day
    Facility Agreement between James Hardie International Finance
    B.V. and Financier2
.12

Form of Guarantee Deed between
    James Hardie Industries N.V. and Financier(3)4
.1

James Hardie Industries N.V. 2001
    Equity Incentive Plan(3)4
.2

Economic Profit and Individual
    Performance Incentive Plans(3)4
.3

JHI NV Stock Appreciation Rights
    Incentive Plan(3)4
.4

Supervisory Board Share Plan
    2006(4)4
.5

James Hardie Industries N.V. Long
    Term Incentive Plan 2006(4)4
.6

2005 Managing Board Transitional
    Stock Option Plan(4)4
.7

Form of Joint and Several
    Indemnity Agreement among James Hardie N.V., James Hardie (USA)
    Inc. and certain indemnities thereto(3)4
.8

Form of Joint and Several
    Indemnity Agreement among James Hardie Industries N.V., James
    Hardie Inc. and certain indemnities thereto(3)4
.9

Form of Deed of Access to
    Documents, Indemnity and Insurance among James Hardie Industries
    N.V. and certain indemnitees thereto(3)4
.10

Form of Joint and Several
    Indemnity Agreement among James Hardie Industries N.V., James
    Hardie Building Products Inc. and certain indemnities thereto(3)4
.11

Lease Amendment, dated
    March 23, 2004, among Amaca Pty Limited (f/k/a/ James
    Hardie & Coy Pty Limited), James Hardie Australia Pty
    Limited and James Hardie Industries N.V. re premises at the
    corner of Cobalt & Silica Street, Carole Park,
    Queensland, Australia(2)4
.12

Variation of Lease dated
    March 23, 2004, among Amaca Pty Limited (f/k/a/ James
    Hardie & Coy Pty Limited), James Hardie Australia Pty
    Limited and James Hardie Industries N.V. re premises at the
    corner of Colquhoun & Devon Streets, Rosehill, New
    South Wales, Australia(2)4
.13

Extension of Lease dated
    March 23, 2004, among Amaca Pty Limited (f/k/a/ James
    Hardie & Coy Pty Limited), James Hardie Australia Pty
    Limited and James Hardie Industries N.V. re premises at Rutland,
    Avenue, Welshpool, Western Australia, Australia(2)4
.14

Lease Amendment dated
    March 23, 2004, among Amaca Pty Limited (f/k/a/ James
    Hardie & Coy Pty Limited), James Hardie Australia Pty
    Limited and James Hardie Industries N.V. re premises at 46
    Randle Road, Meeandah, Queensland, Australia(2)4
.15

Lease Agreement dated
    March 23, 2004 among Studorp Limited, James Hardie New
    Zealand Limited and James Hardie Industries N.V. re premises at
    the corner of ORorke and Station Roads, Penrose, Auckland,
    New Zealand(2)4
.16

Lease Agreement dated
    March 23, 2004 among Studorp Limited, James Hardie New
    Zealand Limited and James Hardie Industries N.V. re premises at
    44-74
    ORorke Road, Penrose, Auckland, New Zealand(2)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(4)4
.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(3)4
.19

Asset Purchase Agreement by and
    between James Hardie Building Products, Inc. and Cemplank, Inc.
    dated as of December 12, 2001(3)4
.20

Amended and Restated Stock
    Purchase Agreement dated March 12, 2002, between BPB U.S.
    Holdings, Inc. and James Hardie Inc.(3)4
.21

Amended and Restated Final Funding
    Agreement dated November 21, 2006(5)4
.22

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, 20064
.23

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(4) 121




---



##### Table of Contents



ExhibitNumber

Description of Exhibits4
.24

Parent Guarantee by and among
    Asbestos Injuries Compensation Fund Limited, The State of
    New South Wales and James Hardie Industries N.V. dated
    December 14, 20064
.25

Deed of Release by and between
    James Hardie Industries N.V. and The State of New South Wales
    dated June 22, 2006(4)4
.26

Second Irrevocable Power of
    Attorney by and between Asbestos Injuries Compensation
    Fund Limited and The State of New South Wales dated
    December 14, 20064
.27

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, 20064
.28

Agreement for the Extraction and
    Sale of Silica dated November 1, 2002(6)4
.29

Contract for the Sale of Mineral
    Materials dated March 16, 2006 between Bureau of Land
    Management and James Hardie Building Products, Inc.(6)8
.1

List of significant subsidiaries
    of James Hardie Industries N.V.12
.1

Certification of the Chief
    Executive Officer pursuant to Section 302 of the
    Sarbanes-Oxley Act of 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 independent registered
    public accounting firm15
.2

Consent of KPMG Actuaries Pty Ltd99
.1

Excerpts of the ASX Settlement and
    Transfer Corporation Pty Ltd as of June 7, 200799
.2

Excerpts of the Financial Services
    Reform Act 2001, as of March 11, 2002(3)99
.3

ASIC Class Order 02/311,
    dated November 3, 2002(3)99
.4

ASIC Modification, dated
    March 7, 2002(3)99
.5

ASIC Modification, dated
    February 26, 2004(4)     (1)
    
    Previously filed as an exhibit to our Annual Report on
    Form 20-F
    dated July 2, 2003 and incorporated herein by reference.(2)
    
    Previously filed as an exhibit to our Annual Report on
    Form 20-F
    dated November 22, 2004 and incorporated herein by
    reference.(3)
    
    Previously filed as an exhibit to our Annual Report on
    Form 20-F
    dated July 7, 2005 and incorporated herein by reference.(4)
    
    Previously filed as an exhibit to our Annual report on
    Form 20-F
    dated September 29, 2006 and incorporated herein by
    reference.(5)
    
    Previously filed as an exhibit to our Current Report on
    Form 6-K
    dated January 5, 2007 and incorporated herein by reference.(6)
    
    Certain portions of the exhibit have been omitted and submitted
    to the SEC pursuant to a confidential treatment request filed on
    July 6, 2007. 122




---



##### Table of Contents



SIGNATURES
  Form 20-F
    By:
    /s/  Louis
    Gries   Chief Executive Officer
   123




---



##### Table of Contents



JAMES
    HARDIE INDUSTRIES N.V.
  INDEX
  PageReport of
    Independent Registered Public Accounting Firm


F-2Consolidated
    Balance Sheets as of March 31, 2007 and 2006


F-4Consolidated
    Statements of Operations for the Years Ended March 31,
    2007, 2006 and 2005


F-5Consolidated
    Statements of Cash Flows for the Years Ended March 31,
    2007, 2006 and 2005


F-6Consolidated
    Statements of Changes in Shareholders Equity for the Years
    Ended March 31, 2007, 2006 and 2005


F-7Notes to
    Consolidated Financial Statements


F-8Selected Quarterly
    Financial Data (Unaudited)


F-44  F-1




---



##### Table of Contents



Report of
    Independent Registered Public Accounting Firm



To the Board of Directors and Shareholders of

James Hardie Industries N.V.:



We have completed an integrated audit of James Hardie Industries
    N.V.s 2007 consolidated financial statements and of its
    internal control over financial reporting as of March 31,
    2007 and audits of its 2006 and 2005 consolidated financial
    statements in accordance with the standards of the Public
    Company Accounting Oversight Board (United States). Our
    opinions, based on our audits, are presented below.



Consolidated
    financial statements



In our opinion, the accompanying consolidated balance sheets and
    the related consolidated statements of operations, cash flows
    and changes in shareholders equity present fairly, in all
    material respects, the financial position of James Hardie
    Industries N.V. and its subsidiaries at March 31, 2007 and
    March 31, 2006, and the results of their operations and
    their cash flows for each of the three years in the period ended
    March 31, 2007 in conformity with accounting principles
    generally accepted in the United States of America. These
    financial statements are the responsibility of the
    Companys management. Our responsibility is to express an
    opinion on these financial statements based on our audits. We
    conducted our audits of these statements in accordance with the
    standards of the Public Company Accounting Oversight Board
    (United States). Those standards require that we plan and
    perform the audit to obtain reasonable assurance about whether
    the financial statements are free of material misstatement. An
    audit of financial statements includes examining, on a test
    basis, evidence supporting the amounts and disclosures in the
    financial statements, assessing the accounting principles used
    and significant estimates made by management, and evaluating the
    overall financial statement presentation. We believe that our
    audits provide a reasonable basis for our opinion.



As discussed in Note 2 to the consolidated financial
    statements, the Company changed its method of accounting for
    stock-based compensation and defined benefit pension plans.



Internal
    control over financial reporting



Also, in our opinion, managements assessment, included in
    Managements Annual Report on Internal Control Over
    Financial Reporting appearing under Item 15, that the
    Company maintained effective internal control over financial
    reporting as of March 31, 2007 based on criteria
    established in Internal Control  Integrated
    Frameworkissued by the Committee of Sponsoring
    Organizations of the Treadway Commission (COSO), is fairly
    stated, in all material respects, based on those criteria.
    Furthermore, in our opinion, the Company maintained, in all
    material respects, effective internal control over financial
    reporting as of March 31, 2007, based on criteria
    established in Internal Control  Integrated
    Frameworkissued by the COSO. The Companys management
    is responsible for maintaining effective internal control over
    financial reporting and for its assessment of the effectiveness
    of internal control over financial reporting. Our responsibility
    is to express opinions on managements assessment and on
    the effectiveness of the Companys internal control over
    financial reporting based on our audit. We conducted our audit
    of internal control over financial reporting in accordance with
    the standards of the Public Company Accounting Oversight Board
    (United States). Those standards require that we plan and
    perform the audit to obtain reasonable assurance about whether
    effective internal control over financial reporting was
    maintained in all material respects. An audit of internal
    control over financial reporting includes obtaining an
    understanding of internal control over financial reporting,
    evaluating managements assessment, testing and evaluating
    the design and operating effectiveness of internal control, and
    performing such other procedures as we consider necessary in the
    circumstances. We believe that our audit provides a reasonable
    basis for our opinions.



A companys internal control over financial reporting is a
    process designed to provide reasonable assurance regarding the
    reliability of financial reporting and the preparation of
    financial statements for external purposes in accordance with
    generally accepted accounting principles. A companys
    internal control over financial reporting includes those
    policies and procedures that (i) pertain to the maintenance
    of records that, in reasonable detail, accurately and fairly
    reflect the transactions and dispositions of the assets of the
    company; (ii) provide reasonable assurance that
    transactions are recorded as necessary to permit preparation of
    financial statements in accordance

F-2




---



##### Table of Contents



/s/  PricewaterhouseCoopers
    LLP PricewaterhouseCoopers
    LLP
  
 F-3




---



##### Table of Contents



James
    Hardie Industries N.V. and Subsidiaries



Consolidated
    Balance Sheets  March 31


March 31Notes


2007


2006(Millions of US dollars)ASSETSCurrent assets:Cash and cash equivalents


3


$
34.1


$
315.1Restricted cash and cash equivalents


4



151.9



Accounts and notes receivable, net
    of allowance for doubtful accounts of $1.5 million and
    $1.3 million as of March 31, 2007 and March 31,
    2006, respectively


5



163.4



153.2Inventories


6



147.6



124.0Prepaid expenses and other current
    assets






32.4



33.8Insurance receivable 
    Asbestos


12



9.4



Workers
    compensation  Asbestos


12



2.7



Deferred income taxes


13



27.3



30.7Deferred income taxes 
    Asbestos


12



7.8



Total current assets






576.6



656.8Property, plant and equipment, net


7



827.7



775.6Insurance receivable 
    Asbestos


12



165.1



Workers
    compensation  Asbestos


12



76.5



Deferred income taxes


13



6.9



4.8Deferred income taxes 
    Asbestos


12



318.2



Deposit with Australian Taxation
    Office


14



154.8



Other assets






2.3



8.2Total assets





$
2,128.1


$
1,445.4LIABILITIES AND
    SHAREHOLDERS EQUITYCurrent liabilities:Accounts payable and accrued
    liabilities


8


$
100.8


$
117.8Short-term debt


9



83.0



181.0Current portion of long-term debt


9







121.7Accrued payroll and employee
    benefits






42.0



46.3Accrued product warranties


11



5.7



11.4Income taxes payable


13



10.6



24.5Asbestos liability


12



63.5



Workers
    compensation  Asbestos


12



2.7



Other liabilities






9.3



3.3Total current liabilities






317.6



506.0Long-term debt


9



105.0



Deferred income taxes


13



93.8



79.8Accrued product warranties


11



9.5



4.1Asbestos liability


12



1,225.8



715.6Workers
    compensation  Asbestos


12



76.5



Other liabilities


10



41.2



45.0Total liabilities






1,869.4



1,350.5Commitments and contingencies
    (Note 12)Shareholders equity:Common stock, Euro 0.59 par
    value, 2.0 billion shares authorised;
    467,295,391 shares issued and outstanding at March 31,
    2007 and 463,306,511 shares issued and outstanding at
    March 31, 2006


15



251.8



253.2Additional paid-in capital


15



180.2



158.4Accumulated deficit






(178.7
)


(288.3
)Accumulated other comprehensive
    income (loss)


19



5.4



(28.4
)Total shareholders equity






258.7



94.9Total liabilities and
    shareholders equity





$
2,128.1


$
1,445.4    F-4




---



##### Table of Contents



James
    Hardie Industries N.V. and Subsidiaries



Consolidated
    Statements of Operations  Years Ended March 31Notes


2007


2006


2005(Millions of US dollars, except pershare data)Net sales


18


$
1,542.9


$
1,488.5


$
1,210.4Cost of goods sold






(969.9
)


(937.7
)


(784.0
)Gross profit






573.0



550.8



426.4Selling, general and
    administrative expenses






(214.6
)


(209.8
)


(174.5
)Research and development expenses






(25.9
)


(28.7
)


(21.6
)SCI and other related expenses


12



(13.6
)


(17.4
)


(28.1
)Impairment of roofing plant










(13.4
)


Asbestos adjustments


12



(405.5
)


(715.6
)


Other operating expense










(0.8
)


(6.0
)Operating (loss) income






(86.6
)


(434.9
)


196.2Interest expense






(12.0
)


(7.2
)


(7.3
)Interest income






5.5



7.0



2.2Other expense














(1.3
)(Loss) income from continuing
    operations before income taxes


18



(93.1
)


(435.1
)


189.8Income tax benefit (expense)


13



243.9



(71.6
)


(61.9
)Income (loss) from continuing
    operations






150.8



(506.7
)


127.9Discontinued operations:Loss from discontinued operations,
    net of income tax benefit of nil, nil and $0.2 million,
    respectively


15











(0.3
)Loss on disposal of discontinued
    operations














(0.7
)Loss from discontinued operations














(1.0
)Income (loss) before cumulative
    effect of change in accounting principle






150.8



(506.7
)


126.9Cumulative effect of change in
    accounting principle for stock-based compensation, net of income
    tax expense of $0.4 million, nil and nil, respectively






0.9







Net income (loss)





$
151.7


$
(506.7
)

$
126.9Net income (loss) per
    share  basic





$
0.33


$
(1.10
)

$
0.28Net income (loss) per
    share  diluted





$
0.33


$
(1.10
)

$
0.28Weighted average common shares
    outstanding (Millions):Basic


2



464.6



461.7



458.9Diluted


2



466.4



461.7



461.0    F-5




---



##### Table of Contents



James
    Hardie Industries N.V. and Subsidiaries



Consolidated
    Statements of Cash Flows  Years Ended March 312007


2006


2005(Millions of US dollars)Cash Flows From Operating
    ActivitiesNet income (loss)

$
151.7


$
(506.7
)

$
126.9Adjustments to reconcile net income
    (loss) to net cash (used in) provided by operating activities:Loss on sale of land and buildings










0.7Loss on disposal of subsidiaries
    and businesses










2.1Depreciation and amortization


50.7



45.3



36.3Deferred income taxes


(310.4
)


4.3



11.1Prepaid pension cost


(0.4
)


2.9



7.6Tax benefit from stock options
    exercised






2.2



0.4Stock-based compensation


4.5



5.9



3.0Asbestos adjustments


405.5



715.6



Impairment of roofing plant






13.4



Cumulative effect of change in
    accounting principle


(0.9
)






Deposit with Australian Taxation
    Office


(154.8
)






Other


1.3



1.7



Changes in operating assets and
    liabilities:Restricted cash and cash equivalents


(151.9
)






Accounts and notes receivable


(4.8
)


(24.0
)


(3.7
)Inventories


(19.5
)


(26.6
)


4.3Prepaid expenses and other current
    assets


(0.1
)


(24.8
)


32.6Accounts payable and accrued
    liabilities


(18.4
)


24.4



15.0Other accrued liabilities and other
    liabilities


(19.6
)


7.0



(16.5
)Net cash (used in) provided by
    operating activities


(67.1
)


240.6



219.8Cash Flows From Investing
    ActivitiesPurchases of property, plant and
    equipment


(92.6
)


(162.0
)


(153.2
)Proceeds from sale of property,
    plant and equipment










3.4Proceeds from disposal of
    subsidiaries and businesses, net of cash divested






8.0



Net cash used in investing
    activities


(92.6
)


(154.0
)


(149.8
)Cash Flows From Financing
    ActivitiesNet proceeds from line of credit










0.5Proceeds from short-term borrowings






181.0



Repayments of short-term borrowings


(98.0
)






Proceeds from long-term borrowings


105.0







Repayments of long-term borrowings


(121.7
)


(37.6
)


(17.6
)Proceeds from issuance of shares


18.5



18.7



2.6Tax benefit from stock options
    exercised


1.8







Dividends paid


(42.1
)


(45.9
)


(13.7
)Collections on loans receivable


0.1



0.3



0.6Net cash (used in) provided by
    financing activities


(136.4
)


116.5



(27.6
)Effects of exchange rate changes on
    cash


15.1



(1.5
)


(1.2
)Net (decrease) increase in cash and
    cash equivalents


(281.0
)


201.6



41.2Cash and cash equivalents at
    beginning of period


315.1



113.5



72.3Cash and cash equivalents at end
    of period

$
34.1


$
315.1


$
113.5Components of Cash and Cash
    EquivalentsCash at bank and on hand

$
26.1


$
24.9


$
28.6Short-term deposits


8.0



290.2



84.9Cash and cash equivalents at end of
    period

$
34.1


$
315.1


$
113.5Supplemental Disclosure of Cash
    Flow ActivitiesCash paid during the year for
    interest, net of amounts capitalized

$
3.9


$
3.5


$
10.7Cash paid during the year for
    income taxes, net

$
80.8


$
93.4


$
15.7    F-6




---



##### Table of Contents



James
    Hardie Industries N.V. and Subsidiaries



Consolidated
    Statements of Changes in Shareholders Equity  AccumulatedAdditional


Accumulated


OtherCommon


Paid-In


Earnings


ComprehensiveStock


Capital


(Deficit)


(Loss) Income


Total(Millions of US dollars)Balances as of March 31,
    2004

$
245.2


$
132.7


$
151.1


$
(24.3
)

$
504.7Comprehensive income:Net income










126.9







126.9Other comprehensive income (loss):Amortization of unrealized
    transition loss on derivative instruments














1.1



1.1Foreign currency translation loss














(0.9
)


(0.9
)Other comprehensive income














0.2



0.2Total comprehensive income


















127.1Dividends paid










(13.7
)






(13.7
)Stock-based compensation






3.0











3.0Tax benefit from stock options
    exercised






0.4











0.4Employee loans repaid






0.6











0.6Stock options exercised


0.6



2.0











2.6Balances as of March 31,
    2005


245.8



138.7



264.3



(24.1
)


624.7Comprehensive loss:Net loss










(506.7
)






(506.7
)Other comprehensive income (loss):Amortization of unrealized
    transition loss on derivative instruments














0.5



0.5Foreign currency translation loss














(4.8
)


(4.8
)Other comprehensive loss














(4.3
)


(4.3
)Total comprehensive loss


















(511.0
)Dividends paid










(45.9
)






(45.9
)Stock-based compensation






5.9











5.9Tax benefit from stock options
    exercised






2.2











2.2Employee loans repaid






0.3











0.3Stock options exercised


7.4



11.3











18.7Balances as of March 31,
    2006


253.2



158.4



(288.3
)


(28.4
)


94.9Comprehensive income:Net income










151.7







151.7Unrecognised pension losses














(2.7
)


(2.7
)Foreign currency translation gain














36.5



36.5Other comprehensive income














33.8



33.8Total comprehensive income


















185.5Dividends paid










(42.1
)






(42.1
)Stock-based compensation






4.5











4.5Tax benefit from stock options
    exercised






1.8











1.8Employee loans repaid






0.1











0.1Stock options exercised


3.1



15.4











18.5Other


(4.5
)














(4.5
)Balances as of March 31,
    2007

$
251.8


$
180.2


$
(178.7
)

$
5.4


$
258.7    F-7




---



##### Table of Contents



James
    Hardie Industries N.V. and Subsidiaries



Notes to
    Consolidated Financial Statements  1.
    Background
    and Basis of Presentation  Nature
    of Operations
    Background
          Basis
    of Presentation
    2.
    Summary
    of Significant Accounting Policies  Accounting
    Principles
    Use of
    Estimates
   F-8




---



##### Table of Contents



James
    Hardie Industries N.V. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
    Reclassifications
    Foreign
    Currency Translation
    Cash
    and Cash Equivalents
    Restricted
    Cash and Cash Equivalents
    Accounts
    Receivable
    Inventories
  first-in,
  Property,
    Plant and Equipment
    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  F-9




---



##### Table of Contents



James
    Hardie Industries N.V. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
    Impairment
    of Long-Lived Assets
    Environmental
  and/or
  Revenue
    Recognition
    Cost
    of Goods Sold
    Shipping
    and Handling
    Selling,
    General and Administrative
   F-10




---



##### Table of Contents



James
    Hardie Industries N.V. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
    Advertising
    Research
    and Development
    Accrued
    Product Warranties
    Income
    Taxes
    Financial
    Instruments
  and/or
   F-11




---



##### Table of Contents



James
    Hardie Industries N.V. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
  Stock-Based
    Compensation
  
        U.S.-based
  Employee
    Retirement Benefit Plans
     F-12




---



##### Table of Contents



James
    Hardie Industries N.V. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
    Dividends
    Earnings
    Per Share
    Years Ended March 312007


2006


2005(Millions of Shares)Basic common shares outstanding


464.6



461.7



458.9Dilutive effect of stock options


1.8







2.1Diluted common shares outstanding


466.4



461.7



461.0   2007


2006


2005(US dollars)Net income (loss) per
    share  basic

$
0.33


$
(1.10
)

$
0.28Net income (loss) per
    share  diluted

$
0.33


$
(1.10
)

$
0.28     Accumulated
    Other Comprehensive Income (Loss)
    Accounting
    for the Asbestos Funding Agreement
       F-13




---



##### Table of Contents



James
    Hardie Industries N.V. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
              Quantifying
    Financial Statement Misstatements
      Recent
    Accounting Pronouncements
  Uncertain
    Tax Positions
     F-14




---



##### Table of Contents



James
    Hardie Industries N.V. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
    3.
    Cash and
    Cash Equivalents    Cash
    and cash equivalents consist of the following
    components:
  March 312007


2006(Millions ofUS dollars)Cash at bank and on hand

$
26.1


$
24.9Short-term deposits


8.0



290.2Total cash and cash equivalents

$
34.1


$
315.1     4.
    Restricted
    Cash and Cash Equivalents    5.
    Accounts
    and Notes Receivable    March 312007


2006(Millions ofUS dollars)Trade receivables

$
152.4


$
146.5Other receivables and advances


12.5



8.0Allowance for doubtful accounts


(1.5
)


(1.3
)Total accounts and notes receivable

$
163.4


$
153.2     March 312007


2006(Millions ofUS dollars)Balance at beginning of period

$
1.3


$
1.5Charged to expense


0.5



0.3Costs and deductions


(0.3
)


(0.5
)Balance at end of period

$
1.5


$
1.3  F-15




---



##### Table of Contents



James
    Hardie Industries N.V. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
  6.
    Inventories  Inventories
    consist of the following components:
  March 312007


2006(Millions ofUS dollars)Finished goods

$
101.5


$
84.1Work-in-process


12.3



9.2Raw materials and supplies


37.8



33.0Provision for obsolete finished
    goods and raw materials


(4.0
)


(2.3
)Total inventories

$
147.6


$
124.0   7.
    Property,
    Plant and Equipment  Property,
    plant and equipment consist of the following
    components:
  Machineryand


ConstructionLand


Buildings


Equipment


in Progress


Total(Millions of US dollars)Balance at April 1,
    2005:Cost

$
11.5


$
131.1


$
606.6


$
176.6


$
925.8Accumulated depreciation






(24.4
)


(215.7
)






(240.1
)Net book value


11.5



106.7



390.9



176.6



685.7Changes in net book
    value:Capital expenditures


4.1



16.4



90.8



51.5



162.8Retirements and sales










(8.9
)






(8.9
)Depreciation






(7.3
)


(38.0
)






(45.3
)Impairment










(13.4
)






(13.4
)Other movements










(0.9
)






(0.9
)Foreign currency translation
    adjustments










(4.4
)






(4.4
)Total changes


4.1



9.1



25.2



51.5



89.9Balance at March 31,
    2006:Cost


15.6



147.5



669.8



228.1



1,061.0Accumulated depreciation






(31.7
)


(253.7
)






(285.4
)Net book value

$
15.6


$
115.8


$
416.1


$
228.1


$
775.6   F-16




---



##### Table of Contents



James
    Hardie Industries N.V. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
  Machineryand


ConstructionLand


Buildings


Equipment


in Progress


Total(Millions of US dollars)Balance at April 1,
    2006:Cost

$
15.6


$
147.5


$
669.8


$
228.1


$
1,061.0Accumulated depreciation






(31.7
)


(253.7
)






(285.4
)Net book value


15.6



115.8



416.1



228.1



775.6Changes in net book
    value:Capital expenditures


1.3



70.8



131.3



(110.8
)


92.6Retirements and sales










(0.6
)






(0.6
)Depreciation






(8.3
)


(42.4
)






(50.7
)Other movements










0.6







0.6Foreign currency translation
    adjustments










10.2







10.2Total changes


1.3



62.5



99.1



(110.8
)


52.1Balance at March 31,
    2007:Cost


16.9



218.3



811.3



117.3



1,163.8Accumulated depreciation






(40.0
)


(296.1
)






(336.1
)Net book value

$
16.9


$
178.3


$
515.2


$
117.3


$
827.7         8.
    Accounts
    Payable and Accrued Liabilities    March 312007


2006(Millions ofUS dollars)Trade creditors

$
57.7


$
66.0Other creditors and accruals


43.1



51.8Total accounts payable and accrued
    liabilities

$
100.8


$
117.8  F-17




---



##### Table of Contents



James
    Hardie Industries N.V. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
  9.
    Short and
    Long-Term Debt    March 312007


2006(Millions ofUS dollars)Short-term debt

$
83.0


$
302.7Long-term debt


105.0



$
188.0


$
302.7     364-day
  364-day
           F-18




---



##### Table of Contents



James
    Hardie Industries N.V. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
  10.
    Non-Current
    Other Liabilities    March 312007


2006(Millions ofUS dollars)Employee entitlements

$
11.9


$
17.0Other


29.3



28.0Total non-current other liabilities

$
41.2


$
45.0   11.
    Product
    Warranties  50-year
      Years EndedMarch 312007


2006(Millions ofUS dollars)Balance at beginning of period

$
15.5


$
12.9Accruals for product warranties


4.4



6.2Settlements made in cash or in kind


(4.9
)


(3.4
)Foreign currency translation
    adjustments


0.2



(0.2
)Balance at end of period

$
15.2


$
15.5    F-19




---



##### Table of Contents



James
    Hardie Industries N.V. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
  12.
    Commitments
    and Contingencies  Commitment
    to provide funding on a long-term basis in respect of
    asbestos-related liabilities of former
    subsidiaries
      
    the establishment of the AICF to provide compensation to
    Australian asbestos-related personal injury claimants with
    proven claims against the Former James Hardie Companies;
    initial funding of approximately A$184.3 million provided
    by the Performing Subsidiary to the AICF, calculated on the
    basis of an actuarial report prepared by KPMG Actuaries as of
    September 30, 2006. That report provided an estimate of the
    discounted net present value of all present and future
    Australian asbestos-related personal injury claims against the
    Former James Hardie Companies of A$1.55 billion
    ($1.25 billion);
    subject to the cap described below, an annual contribution in
    advance to top up the funds in the AICF to equal the actuarially
    calculated estimate of expected Australian asbestos-related
    personal injury claims against the Former James Hardie Companies
    for the following three years, to be revised annually (so as to
    create a rolling cash buffer in the AICF);
    a cap on the annual payments made by the Performing Subsidiary
    to the AICF, initially set at 35% of the Companys free
    cash flow (defined as cash from operations in accordance with
    U.S. GAAP in force at the date of the Original FFA) for the
    immediately preceding financial year, with provisions for the
    percentage to decline over time depending upon the
    Companys financial performance (and therefore the
    contributions already made to the AICF) and the claims outlook;
    an initial term to March 31, 2045, at the end of which time
    the parties may either agree upon a final payment to be made by
    the Company in satisfaction of any further funding obligations,
    or have the term automatically extended for further periods of
    10 years until such agreement is reached or the relevant
    asbestos-related liabilities cease to arise;
    the entry by the parties
    and/or
    others into agreements ancillary to or connected with the
    Amended FFA (the Related Agreements);
    no cap on individual payments to asbestos claimants;
    the Performing Subsidiarys payment obligations are
    guaranteed by James Hardie Industries N.V.;
    the AICFs claims to the funding payments required under
    the Amended FFA will be subordinated to the claims of the
    Companys lenders;
    the compensation arrangements will extend to members of the
    Baryulgil community for asbestos-related claims arising from the
    activities of a former subsidiary of ABN 60; and
    James Hardie Industries N.V. will, for ten years, provide an
    annual sum of A$0.5 million for the purpose of medical
    research into the prevention, treatment and cure of asbestos
    disease and contribute an annual sum of F-20




---



##### Table of Contents



James
    Hardie Industries N.V. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
  A$0.075 million towards an education campaign for the
    benefit of the Australian public on the dangers of asbestos.      
    receipt of an independent experts report confirming that
    the funding proposal is in the best interests of the Company and
    its enterprise as a whole;
    approval of the Companys lenders and confirmation
    satisfactory to the Companys Board of Directors, acting
    reasonably, that the contributions to be made by JHI NV and the
    Performing Subsidiary under the Amended FFA will be tax
    deductible;
    confirmation as to the expected tax consequences arising to the
    AICF and others from implementing the arrangements;
    approval of the Companys shareholders at the Extraordinary
    General Meeting held on February 7, 2007; and
    initial funding payment of A$184.3 million paid to the AICF
    on February 9, 2007.      Actuarial
    Study; Claims Estimate
   F-21




---



##### Table of Contents



James
    Hardie Industries N.V. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
        US$ millions


A$ millionsAt March 31, 2006

$
(715.6
)

A$
(1,000.0
)Effect of changes in foreign
    exchange rates


(94.5
)


Other adjustments to
    net Amended FFA liability


24.0



25.7Net Amended FFA liability at
    March 31, 2007

$
(786.1
)

A$
(974.3
)Components of the net Amended
    FFA liability:Insurance receivables 
    current

$
9.4


A$
11.7Workers
    compensation  Asbestos  current


2.7



3.4Deferred tax assets 
    current


7.8



9.7Income tax payable (reduction to
    income tax payable)


9.0



11.2Insurance receivables 
    non-current


165.1



204.6Workers
    compensation  Asbestos  non-current


76.5



94.8Deferred tax assets 
    non-current


318.2



394.4Workers compensation
    liabilities  current


(2.7
)


(3.4
)Asbestos liability 
    current


(63.5
)


(78.7
)Asbestos liability 
    non-current


(1,225.8
)


(1,519.4
)Workers compensation
    liabilities  non-current


(76.5
)


(94.8
)Other net liabilities


(6.3
)


(7.8
)Net Amended FFA liability at
    March 31, 2007

$
(786.1
)

A$
(974.3
)          F-22




---



##### Table of Contents



James
    Hardie Industries N.V. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
      Claims
    Data
    March 312007


2006(1)Australia


490



556New Zealand






Unknown  Court Not
    Identified


13



20USA


1



1     (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.    AustraliaYears Ended March 312007


2006(1)


2005Number of claims filed


463



346



489Number of claims dismissed


121



97



62Number of claims settled or
    otherwise resolved


416



405



402Average settlement amount per
    settled claim

A$
166,164


A$
151,883


A$
157,594Average settlement amount per
    settled claim

US$
127,165


US$
114,322


US$
116,572   F-23




---



##### Table of Contents



James
    Hardie Industries N.V. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
  Unknown  Court Not IdentifiedYears Ended March 312007


2006(1)


2005Number of claims filed






6



7Number of claims dismissed


3



10



20Number of claims settled or
    otherwise resolved


5



12



2Average settlement amount per
    settled claim

A$
12,165


A$
198,892


A$
47,000Average settlement amount per
    settled claim

US$
9,310


US$
149,706


US$
34,766   USAYears Ended March 312007


2006(1)


2005Number of claims filed


1







Number of claims dismissed


1







3Number of claims settled or
    otherwise resolved










1Average settlement amount per
    settled claim

A$



A$



A$
228,293Average settlement amount per
    settled claim

US$



US$



US$
168,868     (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.    As of March 312007


2006(1)


2005


2004


2003Number of open claims at beginning
    of year


586



749



743



814



671Number of new claims


464



352



496



380



409Number of closed claims


546



524



490



451



266Number of open claims at year-end


504



577



749



743



814Average settlement amount per
    settled claim

A$
164,335


A$
153,236


A$
157,223


A$
167,450


A$
201,200Average settlement amount per case
    closed

A$
126,713


A$
121,945


A$
129,949


A$
117,327


A$
177,752Average settlement amount per
    settled claim

US$
125,766


US$
115,341


US$
116,298


US$
116,127


US$
112,974Average settlement amount per case
    closed

US$
96,973


US$
91,788


US$
96,123


US$
81,366


US$
99,808    (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.   F-24




---



##### Table of Contents



James
    Hardie Industries N.V. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
    SCI and
    Other Related Expenses
      Years Ended March 312007


2006


2005(Millions of US dollars)SCI

$



$



$
6.8Internal investigation










4.9ASIC investigation


1.7



0.8



1.2Severance and consulting


0.2



0.1



6.0Resolution advisory fees


8.8



9.8



6.4Funding advice


0.7



2.9



0.6Other


2.2



3.8



2.2Total SCI and other related
    expenses

$
13.6


$
17.4


$
28.1     Australian
    Securities and Investments Commission (ASIC)
    Proceedings and Investigation
      
    declarations regarding the alleged contraventions;
    orders for pecuniary penalties in such amount as the Court
    thinks fit up to the limits specified in the Corporations Act; F-25




---



##### Table of Contents



James
    Hardie Industries N.V. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
   
    orders that Michael Brown, Michael Gillfillan, Meredith
    Hellicar, Martin Koffel, Peter Macdonald, Philip Morley,
    Geoffrey OBrien, Peter Shafron, Gregory Terry and Peter
    Willcox be prohibited from managing an Australian corporation
    for such period as the Court thinks fit;
    an order that the Company execute a deed of indemnity in favor
    of ABN 60 Pty Limited in the amount of A$1.9 billion or
    such amount as ABN 60 or its directors consider is necessary to
    ensure that ABN 60 remains solvent; and
    its costs of the proceedings.            Environmental
    and Legal
     F-26




---



##### Table of Contents



James
    Hardie Industries N.V. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
  Operating
    Leases
    (Millions ofYears Ending March 31:

US dollars)2008

$
15.02009


14.62010


12.52011


12.62012


9.0Thereafter


73.3Total

$
137.0     Capital
    Commitments
    13.
    Income
    Taxes    Years Ended March 312007


2006


2005(Millions of US dollars)(Loss) income from continuing
    operations before income taxes:Domestic(1)

$
110.9


$
113.7


$
90.5Foreign


(204.0
)


(548.8
)


99.3(Loss) income from continuing
    operations before income taxes

$
(93.1
)

$
(435.1
)

$
189.8Income tax expense (benefit):Current:Domestic(1)

$
0.4


$
(9.0
)

$
(14.1
)Foreign


(63.7
)


(91.5
)


(37.1
)Current income tax benefit


(63.3
)


(100.5
)


(51.2
)Deferred:Domestic(1)


0.1



(0.3
)


5.0Foreign


307.1



29.2



(15.7
)Deferred income tax benefit
    (expense)


307.2



28.9



(10.7
)Total income tax benefit (expense)
    for continuing operations

$
243.9


$
(71.6
)

$
(61.9
)     (1)
    
    Since JHI NV is the Dutch parent holding company, domestic
    represents The Netherlands. F-27




---



##### Table of Contents



James
    Hardie Industries N.V. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
     Years Ended March 312007


2006


2005(Millions of US dollars)Income tax benefit (expense)
    computed at statutory tax rates

$
16.2


$
121.0


$
(65.3
)U.S. state income taxes, net of
    the federal benefit


(6.5
)


(7.1
)


(5.3
)Asbestos adjustment


242.0



(214.7
)


Asbestos  effect of
    foreign exchange


(24.1
)






Benefit from Dutch financial risk
    reserve regime


8.1



12.7



18.1Expenses not deductible


(1.7
)


(3.4
)


(2.3
)Non-assessable items


1.8



1.4



Losses not available for
    carryforward


(3.2
)


(2.6
)


(2.4
)Change in reserves


10.4



20.7



(3.7
)Change in tax law


3.0







Other items


(2.1
)


0.4



(1.0
)Total income tax benefit (expense)

$
243.9


$
(71.6
)

$
(61.9
)Effective tax rate


262.0
%


16.5
%


32.6
%   Deferred
    tax balances consist of the following components:
  March 312007


2006(Millions ofUS dollars)Deferred tax assets:Asbestos liability

$
326.0


$
Other provisions and accruals


33.3



33.2Net operating loss carryforwards


7.8



8.9Capital loss carryforwards


35.2



31.2Taxes on intellectual property
    transfer


6.5



6.0Other


7.5



2.3Total deferred tax assets


416.3



81.6Valuation allowance


(39.7
)


(35.2
)Total deferred tax assets, net of
    valuation allowance


376.6



46.4Deferred tax liabilities:Property, plant and equipment


(108.4
)


(91.7
)Prepaid pension cost






(1.8
)Foreign currency movements


(5.2
)


2.8Other


(0.1
)


Total deferred tax liabilities


(113.7
)


(90.7
)Net deferred tax liabilities

$
262.9


$
(44.3
)  F-28




---



##### Table of Contents



James
    Hardie Industries N.V. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
                  U.S.-Netherlands
 F-29




---



##### Table of Contents



James
    Hardie Industries N.V. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
  14.
    Amended
    ATO Assessment    US$(1)


A$(Millions of dollars)Primary tax after allowable credits

$
138.8


A$
172.0Penalties(2)


34.7



43.0General interest charges


123.4



153.0Total amended assessment

$
296.9


A$
368.0     (1)
    
    $ amounts calculated using the A$/$ foreign exchange spot rate
    at March 31, 2007.(2)
    
    Represents 25% of primary tax.      ,
 F-30




---



##### Table of Contents



James
    Hardie Industries N.V. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
    15.
    Discontinued
    Operations  Chile
    Fibre Cement
      Years Ended March 312006


2005Chile Fibre CementNet sales

$
5.1


$
13.3Cost of goods sold


(3.5
)


(10.1
)Gross profit


1.6



3.2Selling, general and
    administrative expenses


(1.2
)


(2.0
)Loss on disposal of business


(0.8
)


Operating (loss) income


(0.4
)


1.2Interest expense


(0.2
)


(0.4
)Net (loss) income

$
(0.6
)

$
0.8     Year EndedMarch 31 2005(Millions ofUS dollars)Building ServicesLoss before income taxes

$
(0.5
)Income tax benefit


0.2Loss before discontinued operations


(0.3
)Loss on disposal, net of income
    taxes


(0.7
)Loss from discontinued operations

$
(1.0
)   16.
    Stock-Based
    Compensation   F-31




---



##### Table of Contents



James
    Hardie Industries N.V. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
    Executive
    Share Purchase Plan
    Managing
    Board Transitional Stock Option Plan
      JHI NV
    2001 Equity Incentive Plan
    October 2001Original


Number ofOriginal Shadow Share

Exercise


OptionsGrant Date

Price


Granted


Option Expiration DateNovember 1999

A$
3.82



1,968,544


November 2009November 2000

A$
3.78



3,500,285


November 2010  F-32




---



##### Table of Contents



James
    Hardie Industries N.V. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
        Original


Number


OptionExercise


of Options


ExpirationShare Grant Date

Price


Granted


DateDecember 2001

A$
5.65



4,248,417



December 2011December 2002

A$
6.66



4,037,000



December 2012December 2003

A$
7.05



6,179,583



December 2013December 2004

A$
5.99



5,391,100



December 2014February 2005

A$
6.30



273,000



February 2015December 2005

A$
8.90



5,224,100



December 2015March 2006

A$
9.50



40,200



March 2016November 2006

A$
8.40



3,499,490



November 2016March 2007

A$
8.90



179,500



March 2017March 2007

A$
8.35



151,400



March 2017       JHI NV
    Stock Appreciation Rights Incentive Plan
    Supervisory
    Board Share Plan
   F-33




---



##### Table of Contents



James
    Hardie Industries N.V. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
    Supervisory
    Board Share Plan 2006
    Long-Term
    Incentive Plan
  and/or
  Peter
    Donald Macdonald Share Option Plans
    Valuation
    and Expense Information Under
    SFAS No. 123R
     F-34




---



##### Table of Contents



James
    Hardie Industries N.V. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
      2007


2006


2005Dividend yield


1.5
%


0.9
%


1.1
%Expected volatility


28.1
%


27.9
%


29.1
%Risk-free interest rate


4.6
%


4.5
%


3.2
%Expected life in years


5.1



5.6



3.3Weighted average fair value at
    grant date

A$
2.40


A$
2.78


A$
1.35Number of stock options


3,830,390



6,584,300



5,664,100     2007


2006


2005Dividend yield


1.6
%


N/A



N/AExpected volatility


28.1
%


N/A



N/ARisk-free interest rate


4.6
%


N/A



N/AWeighted average fair value at
    grant date

A$
3.30



N/A



N/ANumber of stock options


1,132,000



N/A



N/A    F-35




---



##### Table of Contents



James
    Hardie Industries N.V. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
  General
    Share-Based Award Information
    Outstanding OptionsShares Available





Weighted Averagefor Grant


Number


Exercise PriceBalance at April 1, 2005


24,340,258



20,128,610


A$
5.75Newly Authorized


1,380,000



Granted


(6,584,300
)


6,584,300


A$
8.83Exercised






(3,925,378
)

A$
4.79Forfeited


3,274,275



(3,274,275
)

A$
5.68Expired


(2,574,000
)


Balance at April 1, 2006


19,836,233



19,513,257


A$
6.99Newly Authorized


3,000,000



Granted


(4,962,390
)


4,962,390


A$
8.42Exercised






(3,988,880
)

A$
5.96Forfeited


1,546,950



(1,546,950
)

A$
7.70Balance at March 31,
    2007


19,420,793



18,939,817


A$
7.52        F-36




---



##### Table of Contents



James
    Hardie Industries N.V. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
    Options Outstanding


Options ExercisableWeighted


Weighted








WeightedAverage


Average


Aggregate





Average


AggregateRemaining


Exercise


Intrinsic





Exercise


IntrinsicExercise Price

Number


Life (in Years)


Price


Value


Number


Price


ValueA$3.09


423,723



3.6


A$
3.09


A$
2,233,020



423,723


A$
3.09


A$
2,233,0203.13


100,435



2.6



3.13



525,275



100,435



3.13



525,2755.06


712,419



4.7



5.06



2,350,983



712,419



5.06



2,350,9835.99


3,367,425



7.7



5.99



7,980,797



1,344,125



5.99



3,185,5766.30


273,000



7.9



6.30



562,380



136,500



6.30



281,1906.45


1,012,000



5.7



6.45



1,932,920



1,012,000



6.45



1,932,9207.05


2,461,000



6.7



7.05



3,223,910



2,461,000



7.05



3,223,9108.35


151,400



9.9



8.35



1,514







8.35



8.40


4,365,615



9.6



8.40







7,025



8.40



8.53


1,320,000



8.7



8.53











8.53



8.90


4,712,600



8.7



8.90







1,139,650



8.90



A$9.50


40,200



8.9



9.50







10,050



9.50



Total


18,939,817



8.2


A$
7.52


A$
18,810,799



7,346,927


A$
6.56


A$
13,732,874     17.
    Financial
    Instruments  Foreign
    Currency
      Credit
    Risk
     F-37




---



##### Table of Contents



James
    Hardie Industries N.V. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
        Fair
    Values
    March 312007


2006Carrying


Fair


Carrying


FairValue


Value


Value


Value(Millions of US dollars)Long-term debt:Floating

$
105.0


$
105.0


$



$
Fixed










121.7



133.8Total

$
105.0


$
105.0



121.7



133.8     18.
    Operating
    Segment Information and Concentrations of Risk  and/or
 F-38




---



##### Table of Contents



James
    Hardie Industries N.V. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
  Operating
    Segments
    Net Sales to Customers(1)Years Ended March 312007


2006


2005(Millions of US dollars)USA Fibre Cement

$
1,262.3


$
1,218.4


$
939.2Asia Pacific Fibre Cement


251.7



241.8



236.1Other


28.9



28.3



35.1Worldwide total from continuing
    operations

$
1,542.9


$
1,488.5


$
1,210.4   (Loss) Income from Continuing OperationsBefore Income TaxesYears Ended March 312007


2006


2005(Millions of US dollars)USA Fibre Cement(2)

$
362.4


$
342.6


$
241.5Asia Pacific Fibre Cement(2)


39.4



41.7



46.8Research and Development(2)


(17.1
)


(15.7
)


(17.5
)Other


(9.3
)


(26.5
)


(11.8
)Segments total


375.4



342.1



259.0General Corporate(3),(4),(8)


(462.0
)


(777.0
)


(62.8
)Total operating (loss) income


(86.6
)


(434.9
)


196.2Net interest expense(5)


(6.5
)


(0.2
)


(5.1
)Other expense










(1.3
)Worldwide total from continuing
    operations

$
(93.1
)

$
(435.1
)

$
189.8   Total Identifiable Assets March 312007


2006(Millions of US dollars)USA Fibre Cement

$
893.0


$
826.0Asia Pacific Fibre Cement


199.3



170.4Other


52.5



54.8Segments total


1,144.8



1,051.2General Corporate(6),(8)


983.3



394.2Worldwide total

$
2,128.1


$
1,445.4   F-39




---



##### Table of Contents



James
    Hardie Industries N.V. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
  Additions to Property,Plant and Equipment(7)Years Ended March 312007


2006


2005(Millions of US dollars)USA Fibre Cement

$
80.3


$
154.5


$
144.8Asia Pacific Fibre Cement


10.5



6.6



4.1Other


1.3



1.7



4.1Worldwide total

$
92.1


$
162.8


$
153.0   Depreciation and AmortizationYears Ended March 312007


2006


2005(Millions of US dollars)USA Fibre Cement

$
37.8


$
32.4


$
23.1Asia Pacific Fibre Cement


10.1



10.0



10.1Other


2.8



2.9



3.1Worldwide total

$
50.7


$
45.3


$
36.3   Net Sales to Customers(1)Years Ended March 312007


2006


2005(Millions of US dollars)Geographic
    AreasUSA

$
1,279.4


$
1,233.7


$
955.7Australia


169.0



164.5



160.5New Zealand


54.4



53.6



49.6Other Countries


40.1



36.7



44.6Worldwide total from continuing
    operations

$
1,542.9


$
1,488.5


$
1,210.4   Total Identifiable AssetsMarch 312007


2006(Millions of US dollars)USA

$
935.7


$
870.3Australia


127.1



108.5New Zealand


23.1



18.7Other Countries


58.9



53.7Segments total


1,144.8



1,051.2General Corporate(6),(8)


983.3



394.2Worldwide total

$
2,128.1


$
1,445.4     (1)
    
    Export sales and inter-segmental sales are not significant.(2)
    
    Research and development costs of $10.8 million,
    $13.2 million and $7.6 million in fiscal years 2007,
    2006 and 2005, respectively, were expensed in the USA Fiber
    Cement operating segment. Research and development F-40




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##### Table of Contents



James
    Hardie Industries N.V. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
  costs of $1.8 million, $2.3 million and
    $1.9 million in fiscal years 2007, 2006 and 2005,
    respectively, were expensed in the Asia Pacific Fiber Cement
    segment. Research and development costs of $13.0 million,
    $12.3 million and $12.0 million in fiscal year 2007,
    2006 and 2005, respectively, were expensed in the Research and
    Development segment. Research and Development costs of
    $0.3 million, $0.9 million and $0.1 million in
    fiscal year 2007, 2006 and 2005, respectively, were expensed in
    other segment. The Research and Development segment also
    included selling, general and administrative expenses of
    $4.1 million, $3.4 million and $5.5 million in
    fiscal year 2007, 2006 and 2005, respectively.Research and development expenditures are expensed as incurred
    and in total amounted to $25.9 million, $28.7 million
    and $21.6 million for the years ended March 31, 2007,
    2006 and 2005, respectively.(3)
    
    The principal components of General Corporate are officer and
    employee compensation and related benefits, professional and
    legal fees, administrative costs and rental expense, net of
    rental income, on the Companys corporate offices.(4)
    
    Includes costs of $13.6 million, $17.4 million and
    $28.1 million for SCI and other related expenses in fiscal
    years 2007, 2006 and 2005, respectively. See Note 12.(5)
    
    The Company does not report net interest expense for each
    operating segment as operating segments are not held directly
    accountable for interest expense.(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)
    
    Additions to property, plant and equipment are calculated on an
    accrual basis, and therefore differ from property, plant and
    equipment in the consolidated statements of cash flows.(8)
    
    Included in General Corporate are asbestos adjustments of
    $405.5 million and $715.6 million for the years ended
    March 31, 2007 and 2006, respectively. Asbestos related
    assets at March 31, 2007 are $727.6 million and are
    included in the General Corporate segment. See Note 12.  Concentrations
    of Risk
      Years Ended March 312007


%


2006


%


2005


%(Millions of US dollars)Customer A

$
446.3



26.7


$
426.2



35.0


$
295.4



31.4Customer B


172.3



10.3



168.5



13.8



131.8



14.0Customer C


168.9



10.1



156.6



12.9



131.7



14.0Total

$
787.5






$
751.3






$
558.9   non-U.S. operations
 F-41




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##### Table of Contents



James
    Hardie Industries N.V. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
  19.
    Accumulated
    Other Comprehensive Income (Loss)    20.
    Related
    Party Transactions  JHI NV
    Directors and Former Directors Securities
    Transactions
      SharesIssued/AcquiredDirectorD. DeFosset


B. Anderson


D. G. McGauchie AO


J. Barr(1)


1,651J. R. H. Loudon


M. Hammes


R. van der Meer


Former DirectorsM. Hellicar(2)


3,388G. J. Clark


M. J. Gillfillan


M. R. Brown


Total


5,039     (1)
    
    779 shares at A$8.39 and 872 shares at A$8.50(2)
    
    3,388 shares at A$8.39    Existing
    Loans to the Companys Directors and Directors of James
    Hardie Subsidiaries
   F-42




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##### Table of Contents



James
    Hardie Industries N.V. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
      Payments
    Made to Directors and Director Related Entities of JHI NV during
    the Year
        Payments
    made to Director and Director Related Entities of Subsidiaries
    of JHI NV
         F-43




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##### Table of Contents



James
    Hardie Industries N.V. and Subsidiaries



Selected
    Quarterly Financial Data

(unaudited,
    not forming part of the consolidated financial
    statements)    Year Ended March 31, 2007


Year Ended March 31, 2006By Quarter


By QuarterFirst


Second


Third


Fourth


First


Second


Third


Fourth(Millions of US dollars)Net sales

$
415.5


$
411.4


$
355.1


$
360.9


$
359.4


$
376.6


$
362.7


$
389.8Cost of goods sold


(257.8
)


(256.2
)


(228.8
)


(227.1
)


(214.1
)


(239.3
)


(234.0
)


(250.3
)Gross profit


157.7



155.2



126.3



133.8



145.3



137.3



128.7



139.5Operating income (loss)


68.9



41.0



19.3



(215.8
)


86.9



76.4



64.4



(662.6
)Interest expense


(5.6
)


(0.2
)


(1.5
)


(4.7
)


(1.7
)


(2.2
)


(1.1
)


(2.2
)Interest income


3.6



1.2



0.2



0.5



1.0



1.2



1.9



2.9Income (loss) from continuing
    operations before income taxes


66.9



42.0



18.0



(220.0
)


86.2



75.4



65.2



(661.9
)Income tax (expense) benefit


(32.3
)


(20.9
)


(26.0
)


323.1



(30.3
)


(27.8
)


(24.5
)


11.0Income (loss) from continuing
    operations


34.6



21.1



(8.0
)


103.1



55.9



47.6



40.7



(650.9
)Cumulative effect of change in
    accounting principle for stock-based compensation (net of
    $0.4 million of tax)


0.9



























Net income (loss)

$
35.5


$
21.1


$
(8.0
)

$
103.1


$
55.9


$
47.6


$
40.7


$
(650.9
)  F-44




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##### Table of Contents



EXHIBIT
    INDEX
  ExhibitNumber

Description of Exhibits1
.1

Articles of Association, as
    amended on September 1, 2005 of James Hardie Industries
    N.V. (English Translation)(4)2
.1

Letter Agreement of
    September 6, 2001 by and between James Hardie Industries
    N.V. and CHESS Depositary Nominees Pty Limited, as the
    depositary for CHESS Units of Foreign Securities(3)2
.2

Deposit Agreement dated as of
    September 24, 2001 between The Bank of New York, as
    depositary, and James Hardie Industries N.V.(3)2
.7

Common Terms Deed Poll dated
    June 15, 2005 between James Hardie International Finance
    B.V. and James Hardie Industries N.V.(3)2
.8

Form of Term Facility Agreement
    between James Hardie International Finance B.V. and Financier(3)2
.9

Form of Term Facility
    Agreement  Occurrence of Extension Event among James
    Hardie International Finance B.V., James Hardie Building
    Products, Inc. and Financier2
.10

Form of
    364-day
    Facility Agreement between James Hardie International Finance
    B.V. and Financier(3)2
.11

Form of Extension Request for
    364-day
    Facility Agreement between James Hardie International Finance
    B.V. and Financier2
.12

Form of Guarantee Deed between
    James Hardie Industries N.V. and Financier(3)4
.1

James Hardie Industries N.V. 2001
    Equity Incentive Plan(3)4
.2

Economic Profit and Individual
    Performance Incentive Plans(3)4
.3

JHI NV Stock Appreciation Rights
    Incentive Plan(3)4
.4

Supervisory Board Share Plan
    2006(4)4
.5

James Hardie Industries N.V. Long
    Term Incentive Plan 2006(4)4
.6

2005 Managing Board Transitional
    Stock Option Plan(4)4
.7

Form of Joint and Several
    Indemnity Agreement among James Hardie N.V., James Hardie (USA)
    Inc. and certain indemnities thereto(3)4
.8

Form of Joint and Several
    Indemnity Agreement among James Hardie Industries N.V., James
    Hardie Inc. and certain indemnities thereto(3)4
.9

Form of Deed of Access to
    Documents, Indemnity and Insurance among James Hardie Industries
    N.V. and certain indemnitees thereto(3)4
.10

Form of Joint and Several
    Indemnity Agreement among James Hardie Industries N.V., James
    Hardie Building Products Inc. and certain indemnities thereto(3)4
.11

Lease Amendment, dated
    March 23, 2004, among Amaca Pty Limited (f/k/a/ James
    Hardie & Coy Pty Limited), James Hardie Australia Pty
    Limited and James Hardie Industries N.V. re premises at the
    corner of Cobalt & Silica Street, Carole Park,
    Queensland, Australia(2)4
.12

Variation of Lease dated
    March 23, 2004, among Amaca Pty Limited (f/k/a/ James
    Hardie & Coy Pty Limited), James Hardie Australia Pty
    Limited and James Hardie Industries N.V. re premises at the
    corner of Colquhoun & Devon Streets, Rosehill, New
    South Wales, Australia(2)4
.13

Extension of Lease dated
    March 23, 2004, among Amaca Pty Limited (f/k/a/ James
    Hardie & Coy Pty Limited), James Hardie Australia Pty
    Limited and James Hardie Industries N.V. re premises at Rutland,
    Avenue, Welshpool, Western Australia, Australia(2)4
.14

Lease Amendment dated
    March 23, 2004, among Amaca Pty Limited (f/k/a/ James
    Hardie & Coy Pty Limited), James Hardie Australia Pty
    Limited and James Hardie Industries N.V. re premises at 46
    Randle Road, Meeandah, Queensland, Australia(2)4
.15

Lease Agreement dated
    March 23, 2004 among Studorp Limited, James Hardie New
    Zealand Limited and James Hardie Industries N.V. re premises at
    the corner of ORorke and Station Roads, Penrose, Auckland,
    New Zealand(2)4
.16

Lease Agreement dated
    March 23, 2004 among Studorp Limited, James Hardie New
    Zealand Limited and James Hardie Industries N.V. re premises at
    44-74
    ORorke Road, Penrose, Auckland, New Zealand(2)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(4)4
.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(3)




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##### Table of Contents



ExhibitNumber

Description of Exhibits4
.19

Asset Purchase Agreement by and
    between James Hardie Building Products, Inc. and Cemplank, Inc.
    dated as of December 12, 2001(3)4
.20

Amended and Restated Stock
    Purchase Agreement dated March 12, 2002, between BPB U.S.
    Holdings, Inc. and James Hardie Inc.(3)4
.21

Amended and Restated Final Funding
    Agreement dated November 21, 2006(5)4
.22

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, 20064
.23

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(4)4
.24

Parent Guarantee by and among
    Asbestos Injuries Compensation Fund Limited, The State of
    New South Wales, and James Hardie Industries N.V. dated
    December 14, 20064
.25

Deed of Release by and between
    James Hardie Industries N.V. and The State of New South Wales
    dated June 22, 2006(4)4
.26

Second Irrevocable Power of
    Attorney by and between Asbestos Injuries Compensation
    Fund Limited and The State of New South Wales dated
    December 14, 20064
.27

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, 20064
.28

Agreement for the Extraction and
    Sale of Silica dated November 1, 2002(6)4
.29

Contract for the Sale of Mineral
    Materials dated March 16, 2006 between Bureau of Land
    Management and James Hardie Building Products, Inc.(6)8
.1

List of significant subsidiaries
    of James Hardie Industries N.V.12
.1

Certification of the Chief
    Executive Officer pursuant to Section 302 of the
    Sarbanes-Oxley Act of 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 independent registered
    public accounting firm15
.2

Consent of KPMG Actuaries Pty Ltd99
.1

Excerpts of the ASX Settlement and
    Transfer Corporation Pty Ltd as of June 7, 200799
.2

Excerpts of the Financial Services
    Reform Act 2001, as of March 11, 2002(3)99
.3

ASIC Class Order 02/311,
    dated November 3, 2002(3)99
.4

ASIC Modification, dated
    March 7, 2002(3)99
.5

ASIC Modification, dated
    February 26, 2004(4)     (1)
    
    Previously filed as an exhibit to our Annual Report on
    Form 20-F
    dated July 2, 2003 and incorporated herein by reference.(2)
    
    Previously filed as an exhibit to our Annual Report on
    Form 20-F
    dated November 22, 2004 and incorporated herein by
    reference.(3)
    
    Previously filed as an exhibit to our Annual Report on
    Form 20-F
    dated July 7, 2005 and incorporated herein by reference.(4)
    
    Previously filed as an exhibit to our Annual report on
    Form 20-F
    dated September 29, 2006 and incorporated herein by
    reference.(5)
    
    Previously filed as an exhibit to our Current Report on
    Form 6-K
    dated January 5, 2007 and incorporated herein by reference.(6)
    
    Certain portions of the exhibit have been omitted and submitted
    to the SEC pursuant to a confidential treatment request filed on
    July 6, 2007.