AMCOR PLC — Annual Report 2007

Sep 19, 2007

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Annual Report 2007
Movingforward
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Amcor Limited ABN 62 000 017 372

Annual General Meeting The Annual General Meeting of Amcor Limited will be held at the Hotel Sofi tel, 25 Collins Street, Melbourne at 11.00am on Wednesday 24 October 2007. Formal notice of the meeting is enclosed with this report. Julie McPherson Company Secretary and Group General Counsel Amcor Limited

Amcor Limited 1

Two years into ‘The Way Forward’ agenda improved performance is being realised as a result of:

• a more focused portfolio of businesses;

• enhancing our sales and marketing capability;

a more disciplined approach to capital expenditure and cash management; and

improving the skills of our people.

The Company is well positioned to build on these foundations and deliver ongoing improvement in returns to shareholders.

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Ken MacKenzie Managing Director and Chief Executive Offi cer

2 Amcor Limited

Moving Forward

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Ken MacKenzie

‘The Way Forward’ – Key Announcements

August 2005

• Announcement of ‘The Way Forward’ agenda.

• Growth markets nominated as custom PET in North America, fl exibles and tobacco packaging in emerging markets and some select segments in Australasia.

December 2005

• Increased investment in AMVIG, the Hong Kong publicly listed tobacco packaging company, from 16.7% to 44%.

February 2006

May 2006

• Sale of the White Cap > New US$80 million Closures and Asian plant dedicated Corrugated businesses to PepsiCo for the for $420 million. production and supply of PET

• Expansion of the Gatorade[®] bottles. fl exibles operations in Russia.

August 2006

• $300 million Australasian Fibre turnaround plan with benefi ts of $70 million per annum once completed.

• Turnaround plan for the Mexican PET operations to deliver a US$16 million improvement over a two year period.

• Strong Operating cash fl ow for the 2005/06 year of $522 million.

December 2006

New €12 million tobacco packaging plant in the Ukraine.

February 2007

• New €30 million fl exibles plant in Poland dedicated to PepsiCo for the snack food market.

April 2007

• Comprehensive restructuring of the European Flexibles operations costing €60 million with benefi ts of €30 million per annum.

July 2007

• Sale of the European PET business for approximately €425 million.

August 2007

• Operating cash fl ow of $644 million.

• Share buy back of up to $350 million.

• Subsequent to the fi nalisation of the year end accounts the Australasian Food Can and Aerosol business was sold for $150 million.

4 Amcor Limited

Profi t after tax and before signifi cant items was $397 million.

Signifi cant items for the year were a profi t of $136.7 million.

The profi t after tax and signifi cant items was $533.7 million.

The operating cash fl ow after movement in working capital, the cash component of signifi cant items and base capital expenditure was $643.9 million.

After payment of $319.2 million in dividends, the free cash fl ow was $324.7 million.

Key Results Year to 30 June 2007

	2007	2006	% change
Sales ($ million)	10,875.2	11,439.3	(4.9)
Prof t before interest, tax, depreciation and amortisation (PBITDA) ($ million)	1,198.9	1,249.1	(4.0)
Prof t before interest and tax (PBIT) ($ million)	731.9	775.7	(5.6)
Prof t after tax (PAT)(2)($ million)	397.0	405.9	(2.2)
Signif cant items(1)($ million)	136.7	(54.6)	350.4
Prof t after tax after signif cant items ($ million)	533.7	351.3	51.9
Earnings per share(2)(cents)	44.2	46.1	(4.1)
Operating cash f ow(3)($ million)	643.9	522.3	23.3
Dividend (cents)	34.0	34.0	-

(1) Signifi cant items for the current year relate mainly to the gain on disposal of the European PET Packaging business, partially offset by the Fibre Packaging Australasia recovery plan, the Flexible market sector rationalisation and asset impairments.

(2) Before signifi cant items.

(3) After signifi cant items.

Amcor Limited 5

Cash Flow from Operations

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643.9
522.3
345.8
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Balance Sheet

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13.3
12.4
9.9
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Commentary from the CFO
The highlight for the year was the excellent Following the receipt of the proceeds from elected to undertake a share buy back
performance in cash management, with the the sale of the European PET Packaging of up to $350 million.
operating cash fl ow up 23% to $644 million. and the Australasian Food Can and Aerosol
businesses for $870 million, the later After this buy back, it is anticipated that
Working capital for the year reduced by announced subsequent to the fi nalisation gearing will be below the target range of
$257 million and the working capital to of the full year accounts, gearing will reduce 50% to 55%.
sales ratio decreased from 12.4% to 9.9%. to approximately 36%.
During the past two years $380 million has
been released from working capital to fund With the outlook for ongoing strong operating
growth opportunities and improve returns cash fl ow and improved earnings on a
for shareholders. continuing business basis, the Company has Leslie Desjardins
Executive General Manager Finance
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Earnings Per Share Profit After Tax Before Significant Items Dividend Per Share
cents $ million cents
52.2 458.8 34.0 34.0 34.0
46.1 44.2 405.9 397.0
2005 2006 2007 2005 2006 2007 2005 2006 2007
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Report from the Chairman

Amcor continued to move forward across all aspects of ‘The Way Forward’ agenda. This progress was refl ected in improved earnings during the second half of the year.

Amcor Limited 7

Earnings for the 2007 year were $397 million, down 2.2% on the previous year’s amount of $406 million.

Although earnings were lower on a full year basis, the earnings in the second half of the year were 10.7% higher than in the 2005/06 year, refl ecting the benefi ts of improvements undertaken over the past two years.

The Company generated an excellent operating cash fl ow of $644 million. This follows a similarly strong performance in the 2005/06 fi nancial year of $522 million.

The key factors contributing to this strong cash fl ow performance were a $257 million reduction in working capital, continued discipline in capital expenditure and stable underlying earnings.

The improvement of the businesses in the second half of the year, combined with the strong operating cash fl ow, has enabled the Board to declare a fi nal dividend of 17 cents per share, giving a full year dividend of 34 cents per share.

Signifi cant Items

Signifi cant items for the year were a profi t of $137 million, comprising a $248 million profi t on the sale of the European PET Packaging business, partially offset by restructuring expenses in the Australasian Fibre, European Flexibles and Latin American PET Packaging businesses.

‘The Way Forward’

This program was outlined to shareholders in August 2005 and involves a three-year agenda focusing on improving execution in a number of key disciplines.

It is pleasing to report there has been substantial progress across all aspects of this program over the past 12 months and this has been refl ected in improved earnings and returns in the second half of the 2006/07 year.

The main components of ‘The Way Forward’ are:

• a portfolio review to ensure the Company only remains in those businesses that have strong market positions;

• building excellence in sales and marketing to help develop a customer facing organisation;

• relentlessly driving costs out of the business;

• improving all aspects of capital discipline;

• developing talent management processes; and

• changing the culture of the Company.

Throughout the year, a number of decisions were taken with regard to the business portfolio with the objective of only remaining in those segments and regions where Amcor has strong market positions and sustainable competitive advantages that will deliver shareholder value over the long term.

PET Packaging in Europe was sold for $720 million and in August 2007 subsequent to the fi nalisation of the year end accounts, the Australasian food can and aerosol business was sold for $150 million. Asset sales over the past two years have totalled $1.25 billion. The proceeds from these asset sales are being reinvested in those markets which exhibit the highest growth and return opportunities.

Specifi cally these include:

• custom PET containers in the North American market;

• fl exible and tobacco packaging in emerging and attractive markets; and

• select market segments in Australasia.

To date, $335 million has been allocated for reinvestment with the main projects being:

• a new US$80 million plant focused on the production of Gatorade[®] containers for PepsiCo in the USA and located adjacent to the PepsiCo fi lling plant. This facility started production in March 2007;

• a new €30 million fl exibles plant in Poland, dedicated to PepsiCo for snack food products, a market segment that is growing at more than 20% per annum in Central Europe. Production is anticipated to commence in May 2008;

• expansion of the fl exibles plant in Russia with an additional press that will double the manufacturing capacity at this site; and

• construction of a tobacco carton plant in the Ukraine that will leverage the skills and manufacturing knowledge of operations in Russia and Poland.

Across the Group, there are a number of opportunities for further expansion in these market segments with further announcements relating to new investments expected in the coming year.

8 Amcor Limited

Report from the Chairman (continued)

A second component of building strong market positions is to undertake turnaround programs for those business that are well positioned in their market but have poor operational performance. There are three business segments in this category.

The Mexican PET business is undertaking a two-year program to improve profi tability by US$16 million. In March 2005, a new management team commenced a substantial change program that included closing three blow molding sites, improving manufacturing effi ciencies and stabilising the workforce. In the 2006/07 year, the business achieved an improvement of US$9 million which is substantial progress against the twoyear objective.

The Australasian Fibre business is undertaking a $300 million restructuring program to deliver benefi ts of $70 million per annum and, during the past twelve months, there has been substantial activity to rationalise the number of sites and recapitalise the operations. This has included closing four plants, with equipment from these plants relocated to other sites, installing new machinery to improve manufacturing effi ciencies and reducing staffi ng by 335.

The size of this program and the pace of its implementation negatively impacted operating performance and customer service, resulting in higher costs in the short term and some loss of volume with smaller customers. These issues are being addressed and, from the second half of the 2007/08 year, the business is anticipating a strong improvement in profi tability.

The fl exibles business in Western Europe has also commenced a comprehensive repositioning program aimed at:

• strengthening market positions through better leverage of technology and manufacturing capabilities;

• increasing the weighting of production in lower cost regions, particularly in Southern and Eastern Europe;

• improving alignment to customer needs and market trends; and

• creating a strong platform for innovation and continued growth.

Upon completion, the business will have a smaller number of larger plants with improved technology or market segment focus. The project will deliver improved annual profi tability of $50 million for a net cash cost of $100 million, with full benefi ts realised in the 2009/10 fi nancial year.

Another component of ‘The Way Forward’ program is to improve customer and market focus through building excellence in sales and marketing. To achieve this, core capabilities are being developed around key account management, sales force effectiveness and customer and product profi tability. It is already evident that as this new culture of customer and market focus is embedded into the organisation, long term sustainable benefi ts are being created.

The third component of the agenda is capital discipline. This involves a focus around all

Amcor Limited 9

aspects of the generation and use of cash. An example of this has been the substantial improvement in the management of working capital. During the last two years, working capital has reduced by $380 million and the average working capital to sales ratio reduced from 13.3% to 9.9%. This has been an outstanding result with all business units contributing to the improvement.

The operating cash fl ow of $644 million is a 23% improvement on the 2005/06 result of $522 million, demonstrating that the disciplines relating to cash management are now embedded in the culture of the Company.

After the payment of the dividend, the free cash fl ow for the 2006/07 year was $325 million, a 52% increase on $214 million in 2005/06.

The fi nal element of ‘The Way Forward’ agenda involves people and culture. Over the past two years there has been substantial change to the processes involving the talent and performance management of Amcor’s people. The focus has been on strengthening the senior management team and improving the performance metrics.

ACCC

The Australian Competition and Consumer Commission (ACCC) prosecution of the Visy Group companies is scheduled to commence in October 2007 and Amcor continues to assist and cooperate with the ACCC as part of its grant of immunity. We are committed to operating with integrity and in a manner in which its shareholders, employees and customers can have full trust and confi dence.

Future

The Amcor Board is confi dent that changes undertaken over the past two years will deliver sustainable benefi ts and that the focus on developing implementation capabilities has been the appropriate program for the Company over that period.

For the current year, there will be ongoing improvements across all businesses and, on a continuing business basis, earnings are expected to improve.

The Amcor Board would like to thank all of the stakeholders, including customers, shareholders, employees and suppliers, for their continued support and encouragement over the past 12 months.

Corporate Governance

Capital Management

Over the past two years, the Company has divested businesses for $1.25 billion and generated an aggregate free cash fl ow of $538 million.

On completion of these divestments, the balance sheet gearing will be approximately 36%.

There are commitments for funding the balance of $335 million in growth projects and a proposed new $225 million recycled paper machine for Botany, NSW.

After funding these projects, the balance sheet gearing will still be below the target gearing of 50% to 55%, and given this strong balance sheet position, the Board has decided to undertake a share buy back of up to $350 million.

As part of the ongoing commitment to continuous improvement in corporate governance, two initiatives were introduced this year. The fi rst was an enhanced approach to risk management, moving the business from a business risk management framework to an enterprise risk management. The key objective of this new framework is to ensure risks are properly managed and to identify opportunities that will drive shareholder value.

The second initiative further enhances the commitment to sustainability through a global reduction in energy, water and emissions and is in addition to reductions already achieved. This will benefi t the environment and create increased shareholder value through a reduction in costs.

Chris Roberts Chairman

“ Amcor has a focused portfolio of businesses, with strong market positions and sound growth opportunities, ensuring further growth as the Company moves forward.”

10 Amcor Limited

Review of Operations Amcor PET Packaging

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Results

A$ 2007 Net sales (mill) 3,980 Change (%) (1.7) PBIT (mill) 261.4 Change (%) 6.7 Operating Margin (%) 6.6 Average funds employed (mill)2,404 PBIT/AFE (%) 10.9 US$ Net sales (mill) 3,131 Change (%) 3.6 PBIT (mill) 205.6 Change (%) 12.4 Operating Margin (%) 6.6 Average funds employed (mill)1,892 PBIT/AFE (%) 10.9 Average exchange rate A$/US$0.79 Cash Flow US$ million 2007 PBITDA 366.5 Base Capital Expenditure (120.2) Movement in Working Capital 139.5 Signif cant items (2.9) Operating Cash Flow 382.9 Growth Capital Expenditure (101.4)

2006 4,049 245.0 6.1 2,613 9.4 3,023 182.9 6.1 1,951 9.4 0.75

(All operations)

William Long President

Amcor PET packaging is headquartered in Ann Arbor, Michigan (United States) and employs 5,297 people at 46 sites – comprising of 35 manufacturing locations and 11 on-site injection and blowing facilities in 13 countries.

Amcor PET Packaging is the world’s largest producer of PET (polyethylene terephthalate) containers. It produces PET containers and preforms for a wide variety of food and beverage applications, and supplies PET containers to the personal care, household chemical and agro-chemical industries.

PET Packaging Group

Amcor PET Packaging had a strong year with improved earnings across all regions. Profi t before interest and tax (PBIT) was up 12.4% to US$205.6 million. Returns, measured as PBIT to average funds employed, increased from 9.4% to 10.9%.

The performance in the second half of the year was particularly strong with PBIT up 35.2% refl ecting the benefi ts of the turnaround in Mexico, a strong second half in Europe and growth in custom containers in North America.

Volumes for the year were up 2% to 36.9 billion units. After a decline of 1.4% in the fi rst half, volumes grew by 5.5% in the second half of the year. Custom containers, which account for 21.3% of the total volumes, grew by 7.4% for the year, with second half growth of 15.7%. There was also strong growth across all product segments in Europe.

Signifi cant items before tax was a loss of US$30.1 million, of which, US$25.9 million related to the non-cash write-off of fi xed assets. These costs are mainly associated with restructuring projects in Latin America, particularly Mexico and Brazil.

Capital expenditure was US$221.6 million comprising US$120.2 million in base capital spending and US$101.4 million in growth capital. The growth capital expenditure included US$61.6 million for the new plant at Wytheville, Virginia (USA) and the balance was for additional capacity to support growth in the custom business, including PowerFlex[TM] in North America.

Working capital reduced by US$139.5 million. This was an outstanding result refl ecting improvements across all regions, including a particularly strong performance in Europe. Although there is opportunity for further reductions, with a focus on Latin America, there will not be the same magnitude of improvement going forward.

Overall, the business generated an operating cash fl ow of US$382.9 million.

On June 29, 2007, the business reached agreement to sell the European PET business to La Seda de Barcelona S.A. for a consideration of approximately €425 million. This sale is expected to be completed in October 2007.

The tables on the left show the earnings and returns for the Amcor PET Packaging business with the European PET business included. The cash fl ow statement is for all operations including the European PET business.

Energy

Over the past 18 months, the business has moved to include clauses to recover energy cost increases in new contracts and going forward around 70% of volumes, and a higher percentage of sales, are covered for rise and fall in energy costs. Given the contracted volume now covered for movements in energy prices and the outlook for more stable prices in the current market, energy price movements are not anticipated to have a material impact on earnings in 2007/08.

North America

In North America, volumes for the year were steady. This was a strong second half performance given that volumes in the fi rst half were 7% lower.

In the carbonated soft drink (CSD) and water segment, the decision made by a major customer in calendar 2005 to selfmanufacture PET containers from January 2006 resulted in a year-on-year reduction of around 350 million units.

Across the remaining CSD and water businesses, volumes for the year were down slightly, refl ecting the ongoing strategy to realign the Group’s portfolio towards higher margin business.

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Wytheville Plant opens on time and on budget

When construction began in May 2006, it was hard to imagine the Amcor PET facility would be manufacturing high quality bottles just ten months later.

But in March 2007, Amcor’s newest PET container plant commenced operations in Wytheville, Virginia, USA. The 67,000 square metre plant is capable of producing more than 1 billion containers per year.

Left

Gatorade[®] Propel Fitness Water drink containers are made at the Wytheville plant.

Wytheville’s PET containers are designed for hot fi lling conditions and are utilized by PepsiCo at its Blue Ridge manufacturing and distribution facility adjacent, which produces Gatorade[®] , Thirst Quencher and Propel Fitness Water. Containers are conveyed to the PepsiCo facility via an automated delivery system.

Amcor Limited 11

In the custom beverage segment, volumes were up 7% for the year and 18% in the second half. This increase was predominately due to the benefi ts of recent capital investment supporting growth in this market segment.

The new facility in Wytheville, Virginia (USA) supplying hot fi ll Gatorade[®] containers to PepsiCo, commenced operations in March 2007. The plant, with a capacity of over one billion units annually, had an excellent start-up and is meeting operational and capacity expectations.

A number of other capital investment projects have been completed throughout the year to support targeted segments in the custom market. These include investments to support growth in the new panel-less heat-set container, PowerFlex™. Currently there are 23 customers using this container for a range of applications, including iced teas and functional waters. Additional capacity is being added to meet the ongoing growth in demand for this patented container.

An important component of the higher earnings has been an ongoing improvement in operational performance, evidenced via enhanced asset utilisation and a continuing focus on operating costs.

The outlook for North America is for substantial growth in the custom hot fi ll business, driven predominately from the full year benefi t of recent capital expenditure. A major component of this growth will come from the new plant at Wytheville, Virginia (USA).

The business will continue to be selective in the opportunities it pursues in the CSD and water markets. Going forward, it is likely that volumes in this segment will decrease as contracts relating to poor returning business will not be renewed and the manufacturing capacity will redeployed.

Latin America

In Latin America, overall volumes were up 4.1% with custom containers up 8.3% and CSD and water 3.5% higher.

Within the custom segment there was good growth in isotonic beverages across the region and solid growth in diversifi ed products, particularly in Brazil for the food and healthcare markets.

In Mexico, the turnaround program has made excellent progress, including the rationalisation of three facilities, signifi cant headcount reduction, lower work force turnover and improved morale, reduced reliance on third party sourcing and implementation of a disciplined cost management system. The improvement in the 2006/07 profi t of US$9.5 million was a strong performance and, given the full year benefi t from the initiatives already undertaken, combined with new programs for improvement, it is anticipated the target of US$16 million increase in profi t over two years, will be achieved.

Volumes in Mexico were slightly lower due to a combination of a cooler start to the summer and some weakness in demand with major customers. It is anticipated that volumes will be modestly higher in the current year.

In Brazil, the business experienced a transitional year as it has undertaken a major restructuring to relocate blowmolding capacity onsite to the Coca-Cola facility in the Sao Paulo area. This project is expected to be completed in October 2007. Earnings in Brazil for the year were substantially lower and it is not anticipated that there will be any material improvements in earnings until the second half of the 2007/08 year.

Elsewhere in Latin America, the business delivered solid results with generally improved volumes and earnings.

The outlook for Latin America is for a substantial increase in profi t in 2007/08, driven predominately by ongoing improvements in Mexico and second half improvement in Brazil.

Europe

The European operations had a particularly strong year with profi t, in euro terms, up 34% from €29.5 million to €39.4 million. In US dollar terms, the increase was 43%.

Volumes for the business were up 7.3% with strong performances across most of the plants.

The business was sold, effective 30 June 2007 to La Seda de Barcelona S.A. for an estimated price of €425 million. The book value of the net assets sold was approximately €278 million.

Outlook

In the 2007/08 year, the business will benefi t from:

• the new plant at Wytheville, Virginia (USA);

• other investments in the custom PET market in North America;

• ongoing improvements in Mexico; and

• improvement in Brazil, particularly in the second half of the year.

The continuing operations of the PET packaging business are expected to deliver a strong improvement in profi t, in local currency terms.

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PET continues to diversify its product offering

Over the past year, Amcor PET Packaging’s strategic initiative to diversify its product offering has yielded signifi cant benefi ts.

In the fourth quarter of the 2007 fi scal year, Amcor manufactured and sold a record number of PET containers for personal and health care applications.

Successful diversifi cation programs are in place in Brazil, Colombia, Venezuela and the US.

Alcon, a leading supplier of eye care products, sought out a relationship with Amcor PET Packaging in North America following the high quality and service they experienced in Brazil.

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Right An example of PET containers supplied to Alcon which led to Amcor being named its supplier of the year.

12 Amcor Limited

Review of Operations Amcor Australasia

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Results

Results
A$ Net Sales (mill) Change (%) PBIT (mill)	2007 2,524 (1.4) 221.9	2006 2,561 262.4
Change (%) Operating Margin (%) Average Funds Emp (mill) PBIT/AFE (%) Cash Flow A$ million PBITDA	(15.4) 8.8 1,859 11.9 2007 361.6	10.2 1,843 14.2
Base Capital Expenditure Movement in Working Capital Signif cant items Operating Cash Flow Growth Capital Expenditure	(54.9) 9.1 (60.3) 255.5 -

(All operations)

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Louis J Lachal Managing Director

Amcor Australasia is the most diverse of the Group’s business units and supplies a broad range of packaging items. Its products include corrugated boxes, cartons and folding cartons, aluminium cans for beverages, fl exible packaging, plastic and metal closures, glass wine bottles, multiwall sacks, paper, cartonboard and paper recycling. With headquarters in Camberwell, Victoria (Australia), it has 61 plants throughout Australia and New Zealand and approximately 5,795 employees.

Australasian Group

Amcor Australasia had a mixed year with profi t before interest and tax (PBIT) 15.4% lower at $221.9 million. Improved earnings in the nonfi bre businesses were more than offset by a reduction in earnings in the fi bre operations.

After the fi rst half, profi t was down 20.9%, but there was improvement in the second half with the profi t down 7.7% and the fourth quarter profi t only slightly behind the same period last year.

Returns, measured as PBIT over average funds employed, were lower at 11.9%.

Signifi cant items for the year were $72.8 million, of which $60.3 million was cash payments and the balance relating to asset writedowns. The signifi cant items predominately related to the turnaround plan in fi bre packaging, announced in August 2006.

Base capital expenditure for the year was $54.9 million. This comprised gross expenditure of $174 million and proceeds from disposals of $119.1 million. Capital expenditure in the fi bre operations was $114 million, of which $75 million was directly attributable to the turnaround plan.

Working capital was $9 million lower, giving an operating cash fl ow for the business of $255.5 million.

Fibre

The fi bre business experienced a challenging year undertaking a major restructuring program in an environment of general market softness and rising costs. These cost increases were not recovered in the market and earnings for the year were considerably lower.

New wine carry pack

A unique and innovative six-bottle wine pack developed by Amcor delivers enhanced functionality for brand owners, retailers and consumers.

Amcor’s new VinPorter™ corrugated carton uses a patented one-piece design and perforation system to quickly and safely transform into a six-bottle consumer carry pack.

Left

Amcor’s new corrugated carton which has been well received in the market.

Turnaround Plan

In August 2006, a comprehensive program was announced to recapitalise and rationalise the fi bre business in Australasia. Over the past 12 months, there has been substantial progress in all aspects of this agenda, however the execution of the plan is behind schedule and it is now anticipated that all the plant closures and capital reinvestment will be completed during the second quarter of 2007/08. Notwithstanding that the project is slightly behind schedule, the pace of implementation has been aggressive and in the short term, this has negatively impacted operational effi ciencies and service levels, resulting in higher operating costs and a modest loss of volume with smaller customers.

Corrugated

The corrugated business has undergone substantial footprint and operational changes that will result in a signifi cantly lower cost base and a more effi cient and customerfocused business.

In Queensland, three sites have been reduced to two, with the closure of a site in Brisbane and equipment relocated to the plant at Rocklea. There was also reinvestment in conversion equipment at the Rocklea site and a substantial upgrade to the plant in Northern Queensland with the installation of a Xitex[®] single facer corrugator scheduled to be completed by December 2007.

In Victoria, there was also rationalisation from three sites to two, with the Box Hill site closed and equipment relocated to the Scoresby and Brooklyn plants. The Smithfi eld operation in New South Wales has been downsized and excess equipment relocated to the nearby plant at Revesby.

Across the retained sites there has been capital expenditure in new conversion equipment as well as substantial improvements in work practices. The combined benefi t of these initiatives will be improved operating effi ciencies and lower costs.

Cartons

In New South Wales, the cartons business is consolidating from two sites to one and reinvesting at the remaining site at Botany. A large format printing machine and conversion equipment have been installed to improve the operating cost base.

VinPorter™ was specially developed for wine makers who want to offer a six-bottle wine carton that provides enhanced branding and improved retail display effectiveness.

The innovative design enables it to function as a shipper, point-of-sale display and consumer carry pack all-in-one.

Amcor Limited 13

Paper and Board

The Spearwood recycled paper mill in Western Australia closed in September 2006 and the Petrie cartonboard mill in Queensland successfully absorbed some of this volume. The restructuring of the fi nishing section at the Petrie Mill is on target to be completed by the end of the fi rst quarter of the 2007/08 year.

The feasibility study for a new recycled paper machine at Botany, New South Wales, is near completion with approval to proceed anticipated in the fi rst half of 2007/08. The target completion date remains 2009/10.

Turnaround Plan Summary

In summary, four sites have been closed, the corrugated and conversion operations recapitalised and the headcount reduced by 335. The net cash cost in 2006/07, including capital expenditure, restructuring expenses and excess property sale proceeds, was $27 million and the cost reduction benefi ts, forecast at $40 million per annum, will be fully realised from the end of the fi rst half of 2007/08.

Sales

The corrugated box business in Australia experienced diffi cult market conditions with volumes down 4%. Approximately half of this reduction was in the fruit and produce segment, predominately due to the impact of Cyclone Larry in Queensland and severe frosts in the Goulburn Valley in Victoria. The business also made a conscious decision to exit some unprofi table volume and experienced a modest loss of share with smaller customers due to service issues created by implementation of the turnaround plan. New Zealand volumes were down 15% due entirely to the loss of a major customer towards the end of 2005/06. Carton converting volumes were up 7.5%, principally in the Australian fast food and beverage segments.

Earnings

In the corrugated business earnings were lower due to the combination of reduced volumes, unrecovered cost increases, continued pressure on prices and operating ineffi ciencies at some sites, partially offset by the initial benefi ts from the turnaround program. Price increases in Australia and New Zealand, announced in the fi rst half to uncontracted accounts, were successfully implemented.

Queensland fi bre plant extension

Amcor’s $41 million expansion of its corrugated box plant operation at Rocklea, Queensland makes it one of the largest corrugated box operations in the world.

Major redevelopment of the site (existing buildings were expanded by 40 per cent to accommodate two corrugators, additional converting equipment and expanded paper storage) was a critical part of the major restructuring and reinvestment plan for the Australian fi bre packaging business.

The carton converting business incurred one-off costs, particularly in the fi rst half, in obtaining new business in the fast food segment. The closure of the Enfi eld site in New South Wales and extensive reinvestment at the Botany plant had a negative impact on performance during the last quarter. This project, which will increase capacity and lower costs, is expected to be completed by September 2007.

The recycled paper mills, which predominately supply corrugated board to the box operations, had a 4% reduction in domestic volumes which was in line with the reduction in the corrugated business. The operational performance of the mills was good, however higher wastepaper costs were not recovered in the market, and export margins were eroded by the rising Australian dollar.

The cartonboard mill volumes were slightly lower. Volumes to domestic customers were up 9%, refl ecting growth in the converting business but export volumes were lower. The higher Australian dollar had the dual impact of lowering export margins and reducing prices for imported board. Cost reduction initiatives and the benefi t of increased domestic volumes offset these negative impacts and earnings were slightly higher.

Flexibles

The fl exibles business, which consists of four operating units polyethylene, laminations, New Zealand fl exibles and multiwall sacks, had a mixed year with earnings lower.

The polyethylene business had lower overall volumes after exiting some segments of printed and commodity fi lms and experienced import price pressure on industrial fi lms. New capacity has been installed in Queensland and Victoria targeting growth in the food and beverage segments.

In the laminations business the rationalisation in New South Wales from two sites to one and the installation of a new gravure press were successfully completed.

In June, it was decided to close the fl exibles plant at East Tamaki, New Zealand, and relocate key machinery to sites in Australia. Over 85% of volumes from this plant will be retained, mostly supplied from Australia.

In addition, Amcor cut its overall water consumption at the plant by 20 per cent and has established a project team to identify additional reductions.

Completion of this project is a signifi cant milestone and consolidates Amcor’s position as the leading supplier of fi bre packaging in Queensland.

Right Queensland Premier Peter Beattie on a plant tour following the offi cial commissioning of the new facilities at the Rocklea plant.

The multiwall sacks business had a solid year. Volumes were 9% lower, due largely to the impact of the drought. Operationally, the restructuring of the business has been completed, resulting in an improved cost base.

In summary, although 2006/07 was a particularly diffi cult year, the business has implemented a number of improvement programs and completed its reinvestment agenda. Profi t is anticipated to improve in 2007/08.

Rigids

The aluminium can business had a good year with increased earnings. Volumes were up 6%, mainly due to growth in the carbonated soft drink multi-packs and the ready-to-drink alcohol segment. The business is investing $33 million to satisfy ongoing market growth, as well as providing new can sizes and designs.

The glass wine bottle business had a strong year with volumes substantially higher due to the full year operation of the second furnace. The business continued to develop new premium bottles, including the new diamond shaped bottle for Rosemount. With both furnaces at full capacity, volumes and profi t in 2007/08 will be broadly in line with 2006/07.

Outlook

The outlook for the Australasian business is for solid improvements in the fi bre and fl exibles operations with modest gains expected for the remaining operations.

==> picture [161 x 150] intentionally omitted <==

14 Amcor Limited

Review of Operations Amcor Flexibles

==> picture [74 x 74] intentionally omitted <==

==> picture [75 x 74] intentionally omitted <==

Amcor Flexibles Food Gérard Blatrix Managing Director

Amcor Flexibles Healthcare Peter Brues President

Results
A$	2007	2006
Net Sales (mill)	3,009	2,979
Change (%)	1.0
PBIT (mill)	198.5	191.6
Change (%)	3.6
Operating Margin (%)	6.6	6.4
Average Funds Emp (mill)	1,501	1,524
PBIT/AFE (%)	13.2	12.6
€
Net Sales (mill)	1,809	1,827
Change (%)	(1.0)
PBIT (mill)	119.3	117.5
Change (%)	1.5
Operating Margin (%)	6.6	6.4
Average Funds Emp (mill)	902	935
PBIT/AFE (%)	13.2	12.6
Average Exchange Rate A$/€	0.60	0.61
(Continuing operations)
Cash Flow
€million	2007
PBITDA	181.3
Base Capital Expenditure	(45.9)
Movement in Working Capital	27.3
Signif cant items	(24.6)
Operating Cash Flow Growth Capital Expenditure	138.1 (6.3)
(All operations)

Amcor Flexibles is a market leader and one of the world’s largest suppliers of fl exible and tobacco packaging. It has three operating divisions: Amcor Flexibles Food, Amcor Flexibles Healthcare and Amcor Rentsch.

The business has 8,185 employees, 41 plants and supplies a wide range of products to the food, beverage and healthcare markets. These products include packaging for fresh foods such as meat, fi sh, bread, produce and dairy; processed foods such as confectionery, snack foods, coffee and ready meals, as well as tobacco and high value added medical applications, hospital supplies, pharmaceuticals and personal care products. In addition, it also supplies tobacco packaging.

Flexibles Group

Amcor Flexibles had a solid year with profi t before interest and tax (PBIT) up 1.5% to €119.3 million. During the fi rst half of the year, rising raw material costs negatively impacted sections of the business and PBIT in the fi rst half was down 8.8%. In the second half of the year, profi t was up 10.8%, driven predominantly by improved operating performance at a number of the plants.

Returns, measured as PBIT over average funds employed, increased from 12.6% to 13.2%.

Working capital decreased by €27.3 million, with sound contributions across all the operating divisions. As the fl exibles repositioning program in Europe is implemented over the next two years, there will be opportunities for further improvements in working capital.

Base capital expenditure at €45.9 million, was below depreciation of €57.5 million.

==> picture [595 x 199] intentionally omitted <==

Amcor Limited 15

==> picture [74 x 74] intentionally omitted <==

Amcor Rentsch and Amcor Flexibles Eastern Europe Jerzy Czubak Managing Director

Growth capital expenditure was €6.3 million, comprising the initial investment in the new tobacco plant in the Ukraine, expansion of the fl exibles plant in Russia and the initial investment in the new fl exibles plant in Poland.

Signifi cant items were €39.5 million, of which €24.6 million was cash. This related primarily to the redundancy payments and costs associated with closing the plants in the United Kingdom and Germany.

The operating cash fl ow for the year was a positive €138.1 million.

Food

Amcor Flexibles Food consists of a produce and bakery division which has plants in the United Kingdom and Portugal, and a processed and chilled food division with operations across Europe, including Central and Eastern Europe. The business also coordinates the wider strategy for food packaging across the fl exibles operations in other regions.

Volumes for the year were 3% lower, with good growth in some segments offset by the selective withdrawal from unprofi table business, especially through the process of closing two plants.

Earnings were in line with the prior year, with the focus on improved product profi tability refl ected in higher gross margins, however this benefi t was not fully refl ected in earnings due to a signifi cant reduction in inventory, which negatively impacted overhead absorptions.

For the third consecutive year, raw material input costs increased. During the fi rst half of the year,

the rising input costs were against a backdrop of falling oil prices and were particularly diffi cult to recover in the marketplace. The environment was more favourable in the second half and there was only a modest impact on earnings due to unrecovered increases in input costs.

For the current year, input costs remain at record highs and the outlook is for these levels to continue to gradually increase through the remainder of the year. The business has continued to improve its commercial skills and is well prepared for the forecast increases.

In the produce and bakery division, sales volumes were higher, with improvements to product mix and good cost management ensuring the division delivered higher earnings. In the processed and chilled food division, volumes were lower, primarily due to a conscious decision not to retain the unprofi table business from the two plants closed. An improved product mix and greater focus on managing input price increases enabled the division to deliver higher earnings.

A key component for ongoing improvement is an extensive repositioning program being undertaken by the business. This program commenced during the 2006/07 year with the successful closure of two plants, one in the United Kingdom and one in Germany. These closures were achieved ahead of schedule, with costs below budget and more than 70% of the volumes retained and transferred to other sites.

In April 2007, the remaining component of the program was outlined with the main objectives being to:

• strengthen market positions through better leverage of technology and manufacturing capabilities;

• increase weighting in lower cost regions, particularly in Southern and Eastern Europe;

• improve alignment to customer needs and market trends; and

• create a strong platform for innovation and continued growth.

The project will deliver an estimated PBIT benefi t of €30 million per annum from the 2009/10 year, for an estimated net cash cost of €60 million. The overall headcount reduction, excluding divested sites, will be around 900 out of a total workforce of 7,600.

There are substantial opportunities to improve operating effi ciencies, including reduction in waste and better management of plant loadings and overtime. The repositioning project will assist in realising these benefi ts as well as lowering the sales and general administration costs.

An important component of the growth of the Amcor Flexibles Food business is the ongoing expansion into Central and Eastern Europe. During the year there were a number of important developments in this region.

The fl exibles plant in Novgorod, Russia, successfully commissioned a second printing press, effectively doubling its capacity in this high growth market. With the increasing number of multinational customers building capacity in Russia, the objective is to fully utilise this new machine over the next two years.

Coffee packaging

In a joint development project between Sara Lee Douwe Egberts and two Amcor Flexibles sites, Raackmann and Schüpbach, a new pack type has been launched into the market.

The innovation delivers an easy-opening feature through a specially-developed laser perforated laminate that maintains the required barrier protection for the coffee.

This innovation has supported Sara Lee Douwe Egberts in growing its market and underpins Amcor’s capabilities as a market leader within coffee packaging.

==> picture [166 x 121] intentionally omitted <==

Right The new easy opening coffee pack type adding convenience for consumers.

16 Amcor Limited

Review of Operations Amcor Flexibles (continued)

==> picture [182 x 128] intentionally omitted <==

The new €30 million plant in Poland, dedicated to PepsiCo for snack food products, has commenced construction and is anticipated to be operational in May 2008. This plant will be a global leader in extrusion lamination and is ideally located in a high growth, low cost region.

The outlook for the Amcor Flexibles Food business is positive, with most plants currently experiencing good loadings and a solid forward order book. The business is undertaking a major repositioning project and the challenge for the current year is to maintain commercial and operational focus during a period of substantial change for a number of sites.

It is anticipated that if the current conditions prevail for the remainder of the year, Amcor Flexibles Food should deliver a solid increase in profi t.

Healthcare

Amcor Flexibles Healthcare comprises Amcor’s fl exible packaging activities in the Americas and healthcare packaging plants in Europe. Amcor Flexibles Healthcare is a global leader in fl exible packaging for the medical, personal care and pharmaceutical markets. Headquartered in Chicago, USA, it has over 2,200 employees at 16 manufacturing facilities in 10 countries. In addition, the Group coordinates strategy and commercial activity with the fl exible healthcare activities in Asia.

The business is well positioned in attractive market segments and leverages its strong regional positions and product portfolio to focus growth on the more technically demanding, high-performance products.

First commercial launch of Amcor NaturePlus heat-seal Mater-Bi[®] VFFS fi lm for fresh produce

Major UK retailer, Sainsbury’s, and its potato packer, Greenvale, became the fi rst companies to commercially launch the Amcor NaturePlus heat-seal Mater-Bi[®] VFFS fi lm in the fresh produce sector on organic baby salad potatoes.

This launch was part of the environmental plan set out by Sainsbury’s to change traditional packaging across its organic food lines towards the use of more environmentally friendly packaging.

Left

The innovative, compostable Amcor packaging used by major UK retailer Sainsbury’s.

There has been extensive development of customer and market facing capabilities over the past two years including the appointment of external recruits to key positions. These improvements, combined with substantial improvements in the manufacturing performance at some sites, enabled the business to achieve a solid improvement in earnings.

Raw material costs increased during the year. In particular the cost of aluminium foil, which is used extensively in healthcare applications, was substantially higher for the year. These increased costs were successfully recovered in a timely manner with a minimal impact on earnings.

In the Americas, sales were 2% higher, with a larger increase in earnings due to an improved operational performance and enhanced product mix.

The US$13 million new press and laminator at the Madison, Wisconsin, facility was commissioned in March 2007. This press creates the opportunity to pursue growth in the high-decoration markets, particularly personal care and pharmaceutical applications. The strategy is to leverage off the strong technical know-how and established customer relationships in Europe to grow sales in North America.

The European business increased sales by 2%. Earnings increased by a larger percentage due to a combination of improved operating performance and increasing prices for low margin business.

The Amcor NaturePlus heat-seal Mater-Bi[®] VFFS fi lm is manufactured from renewable materials and is fully compostable.

The fi lm complements the growing range of environmental fi lms supplied by Amcor Flexibles under the Amcor NaturePlus umbrella and enhances Amcor’s position as a leading supplier in this growing market.

Amcor Limited 17

The European team has achieved a similar level of success to the Americas business in improving sales and marketing capability and this has been a key element in improving the product mix through a better understanding of the customer value proposition.

As part of the joint European repositioning project undertaken with Amcor Flexibles Food, the business is planning for signifi cant investments at key sites during the coming year. These investments will improve plant effi ciencies, lower overhead costs and strengthen technical capabilities. The benefi ts of these investments will be evident in the 2008/09 fi nancial year.

The outlook for Amcor Flexibles Healthcare is for improved profi t and higher returns, driven by continued improvements in customer focus, benefi ts from innovation to create differentiated products and enhanced cost positions through the European restructuring program.

In the tobacco carton segment, although volumes were lower, there was an improvement in product mix with more technically demanding packaging designs that required a range of value-added features. This trend has been driven by changing consumer preference to higher value brands. The increase in complexity is a substantial opportunity for the business, especially in Eastern Europe, as it enables the business to leverage its superior technological capabilities and improve the value proposition to the customer.

The business continues to prepare for the introduction of graphical health warnings that will be progressively introduced across the EU. Belgium moved to graphical health warnings in 2007 and Switzerland and Romania have indicated that they will implement them from 1 January 2008.

Construction of the new plant in Kharkiv, Ukraine, continues on schedule. Production is planned to begin in November 2007.

Amcor Rentsch

Amcor Rentsch has leadership of Amcor’s global tobacco packaging business and operational responsibility for the plants in Europe. The business has seven plants, with six focused on tobacco cartons and one dedicated to the specialty cartons business for hair colorants, cosmetics and confectionery markets.

The outlook for the business is good and profi t is expected to be higher. The business will benefi t from the closure of the loss-making plant in Switzerland, increased volumes of higher valueadded cartons and from additional business opportunities in Ukraine after production begins.

Outlook

Sales for the year were down 1.9 % to €341.5 million. Earnings were lower, predominately due to losses at the specialty cartons plant in Switzerland. This plant is in the process of being closed and the business is exiting the specialty markets as they are no longer considered core.

The outlook for the Flexibles business is for improved profi t in all divisions, expressed in local currency terms. The magnitude of the improvement depends upon the continued recovery in earnings at the underperforming plants, the ability to pass on increasing costs in a timely manner and ongoing solid capacity utilisation.

Amcor Rentsch – packaging pioneer

Amcor Rentsch is the pioneer of the round corner pack for the cigarette industry. In partnership with board supplier Iggesund the original shape, which had seven crease lines has been further developed to create a new pack with 14 creasing lines to give the box an hourglass look and diamond-shaped crease lines. The geometry of the crease lines is what gives the package its unique shape.

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Right The round corner cigarette pack pioneered by Amcor.

18 Amcor Limited

Review of Operations Amcor Sunclipse

==> picture [74 x 74] intentionally omitted <==

Results

A$ Net Sales (mill) Change (%) PBIT (mill) Change (%) Operating Margin (%) Average Funds Emp (mill) PBIT/AFE (%) US$ Net Sales (mill) Change (%) PBIT (mill) Change (%) Operating Margin (%) Average Funds Emp (mill) PBIT/AFE (%) Average Exchange Rate A$/US$ Cash Flow US$ million PBITDA Base Capital Expenditure Movement in Working Capital Signif cant items Operating Cash Flow Growth Capital Expenditure	2007 1,251 (3.2) 63.3 (2.8) 5.1 306 20.7 984 2.0 49.8 2.5 5.1 240 20.7 0.79 2007 60.3 (4.2) 17.0 - 73.1 -	2006 1,292 65.1 5.0 344 18.9 965 48.6 5.0 257 18.9 0.75

(All operations)

Eric Bloom President and Chief Executive Offi cer

Amcor Sunclipse, based in California, is Amcor’s North American distribution and corrugated manufacturing unit. It produces packaging products to complement its distribution services and has over 2,173 co-workers at 40 distribution and redistribution centres throughout the United States and Mexico.

The distribution unit is a major supplier to businesses in North America and purchases, warehouses, sells and delivers a wide variety of packaging products and equipment and industrial and janitorial supplies. The manufacturing division produces corrugated sheets and converts these into boxes for use throughout the business. In addition, it designs and produces specialty packaging products including ‘Point of Purchase’ displays and specialty items tailored to customers’ requirements.

Sunclipse Group

Amcor Sunclipse had a solid year with profi t before interest and tax (PBIT) up 2.5% to US$49.8 million. Returns, measured as PBIT over average funds employed, increased from 18.9% to 20.7%.

Sales for the year were up 2.0% to US$984 million, predominately due to increased volumes in the fi rst half of the fi nancial year.

Base capital expenditure for the year was US$4.2 million, compared to depreciation of US$10.5 million.

Working capital reduced by US$17.0 million. This improvement was, in part, driven by the increased focus from the new Business Services Centre that was established in Tempe, Arizona.

The full year result refl ected a strong performance in the fi rst half of the year, however operating conditions in the second half were more diffi cult. This was due to a number of factors, including:

• weaker economic conditions negatively impacting volumes across a wide range of industries and regions; and

• prolonged frosts in Northern California which damaged large portions of the citrus crop. This market is supplied by the large integrated paper manufacturers. With lower volumes in one of their key markets, they moved aggressively into smaller accounts, which represent a substantial percentage of Amcor Sunclipse’s volumes.

Although linerboard costs remained steady during the year, the average was higher than in 2006/07. There were a number of attempts to increase linerboard prices over the past six months, however with weaker economic conditions these attempts have not been successful.

A number of costs that increased sharply in the prior year, including freight and distribution, stabilised in 2006/07. Consequently, there was minimal impact on margins from under-recovery of rising input costs.

Group Outlook

The outlook for Amcor Sunclipse is positive. The economy in the United States remains uncertain amid increasing concerns about home and automobile sales and poor performance in some parts of the mortgage industry.

Should the current level of economic activity be maintained for the balance of the year, profi t for Amcor Sunclipse is anticipated to improve.

The operating cash fl ow, after the movement in working capital and capital expenditure, was US$73.1 million.

==> picture [161 x 150] intentionally omitted <==

Kent H Landsberg Company celebrates 60 years

December 2007 marks the 60th anniversary of the Kent H Landsberg Company.

The industrial supply distribution company was started in a Los Angeles garage in 1947 by its founder and namesake. Encouraged by the rapid growth of the Company he quickly hired sales and support staff and added more locations.

In 1986, Mr Landsberg created an umbrella corporation, Sunclipse Incorporated, which included several manufacturing locations.

Sunclipse joined the Amcor family of businesses in 1989. Shortly afterwards the Company was renamed Amcor Sunclipse North America.

Amcor Limited 19

Review of Operations Amcor Asia

Billy Chan Managing Director

Amcor Asia has fi ve plants in three countries. Its head offi ce is located in Singapore. The business produces tobacco packaging and fl exible packaging, including high value added medical packaging. The business has responsibility for Amcor’s 41.05% ownership of the Hong Kong publicly listed company AMVIG Holdings Limited (AMVIG).

Asian Group

Amcor Asia consists of:

• two wholly-owned tobacco packaging plants (one in Singapore and one in Malaysia);

• three wholly-owned fl exible packaging plants (two in China and one in Singapore); and

• a 41.05% investment in the Hong Kong publicly-listed company, AMVIG.

The profi ts, shown in the tables at right, are for the consolidated entities and the equity accounted profi t after tax from investments.

The equity accounted profi t after tax for the year increased 119% from SG$12.1 million to SG$26.5 million due to a combination of a 56% increase in the profi t after tax for AMVIG and an increase in Amcor’s share of that profi t from 25.9% to 41.05%.

For the controlled entities, profi t before interest and tax (PBIT) for the year was SG$16.1 million, down from SG$25.5 million in 2005/06 due to the sale of the two Chinese tobacco carton plants to AMVIG in February 2006. Returns, measured as PBIT to average funds employed, were 19.4%.

Consolidated entities

The tobacco packaging operations had a solid year. Sales were higher as new business was secured across the region and the plant in Malaysia has upgraded its print capabilities in preparation for that country’s move to implement graphical health warnings on tobacco packaging from 2008.

The three fl exibles plants also delivered a sound performance. The plant in Southern China has successfully relocated its operations to a new site to better enable future expansion, while the

Relocation to purpose-built facilities

The Amcor Flexibles plant in the southern province of Guandong, China, is being relocated from the commercial/residential district of Zhongshan City to the suburban area.

Due to commence operations in September 2007 following the installation of new machinery and the relocation of existing machinery, the facility will feature two additional production lines that include one 10-colour and one six-colour gravure printer, two dry laminators and two extruder laminators.

plant in Beijing achieved solid growth in sales and higher earnings.

AMVIG Holdings Limited

On 16 August 2007, AMVIG announced its half year unaudited profi t for the six months to June 2007 of HK$139.3 million. For the 12 months to June 2007, AMVIG’s reported profi t was HK$306.1 million.

Amcor’s share of this profi t for the 2006/07 year was HK$123.8 million (SG$24.5 million). At 30 June 2007, Amcor owned 41.05% of AMVIG.

On 13 June 2007, AMVIG entered into an agreement to purchase the assets of one of the largest cigarette packaging printers in China, Brilliant Circle Group Co, Ltd (Brilliant Circle). The consideration for this acquisition is HK$1.55 billion, made up of the allotment of 200 million shares and a cash payment of HK$155 million.

Approval for the acquisition will be put to shareholders of AMVIG at an Extraordinary General Meeting. Should the acquisition be approved by shareholders, Amcor’s holding in AMVIG will reduce to around 32.8%.

AMVIG has established a broad manufacturing footprint in China, with fi ve plants located in key production regions. The proposed acquisition of Brilliant Circle will double this footprint to 11 plants and AMVIG will be the largest tobacco carton manufacturer in China, with an estimated market share of 17%.

This acquisition will create the opportunity for AMVIG to leverage its manufacturing skills and technical know-how to become the most cost effi cient and innovative producer of tobacco cartons in China.

Further details regarding AMVIG’s results are available on its website, www.amvig.com

Outlook

The wholly-owned tobacco carton and fl exible packaging operations are expected to deliver improved profi ts in the 2007/08 year.

AMVIG is expected to increase its profi t substantially following the anticipated completion of the Brilliant Circle acquisition. Amcor’s equity accounted profi t will not increase at the same rate due to the resulting dilution in Amcor’s shareholding from 41% to around 33%.

The relocation and the introduction of new equipment will allow the plant to increase capacity by as much as 40 per cent compared to the previous operation.

Uniquely designed and purpose built, the new 16,000 square metre plant will employ 200 people and continue to serve existing customers including Nestlé, Danone, Kraft, MeadJohnson, McCormick and Heinz.

==> picture [74 x 74] intentionally omitted <==

Results

	Results
	A$	2007	2006
	Net Sales (mill)	122	175
	Change (%)	(30.3)
	PBIT (mill)	35.0	30.5
	Change (%)	14.8
	Operating Margin (%)	28.6	17.5
	Average Funds Emp (mill)	352	190
	PBIT/AFE (%)	9.9	16.1
	SG$
	Net Sales (mill)	149	215
	Change (%)	(30.7)
	PBIT (mill)	42.6	37.6
	Change (%)	13.3
	Operating Margin (%)	28.6	17.5
	Average Funds Emp (mill)	429	234
	PBIT/AFE (%)	9.9	16.1
	Average Exchange Rate
	A$/SG$	1.22	1.23
	(Continuing operations)
	Cash Flow
	SG$ million	2007
	PBITDA	21.1
	Dividends	6.4
	Base Capital Expenditure Signif cant Items	(13.5) -
	Movement in Working Capital	8.4
	Operating Cash Flow	22.4
	Growth Capital Expenditure	(32.2)
	(All operations)

Footnote

The funds invested in AMVIG in Amcor’s accounts consist of cash payments of SG$117 million to purchase shares in the publicly-listed company at an average price of HK$2.74 per share, together with the injection of the two tobacco packaging operations in China (Beijing and Qingdao), which had a carrying value of SG$69 million.

The carrying value of AMVIG, at 30 June 2007, in Amcor’s accounts is SG$358.5 million, with the difference between this amount and the invested funds being predominately an accounting adjustment for “fair value market up-lift” at the time of exercising options to acquire additional shares.

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Right The new plant has the capacity to increase production by 40 per cent.

20 Amcor Limited

Review of Operations Sustainability

==> picture [162 x 135] intentionally omitted <==

----- Start of picture text -----

Amcor Australasia Water Use
Total water (ML)
3,680
3,275
3,098
2005 2006 2007
----- End of picture text -----

Sustainability

Amcor’s approach to sustainability is to create shareholder value by taking advantage of opportunities and managing risks using environmental, economic and social lenses.

Amcor is continually seeking to improve its risk and crisis management, its investor relations and customer relationship management. We recognise that the long-term economic performance of Amcor is in part dependent on a balanced and focused approach to social and environmental responsibility.

Leadership in environment and sustainability has already led to a number of business opportunities such as:

Customer Services

1. Life cycle assessment (LCA) for new developments showing alternative environmental packaging solutions for customer products.

2. LCA on customers’ existing products to engage customers and to help indicate potential improvements in their environmental performance.

3. Customer support for new materials, many of which are radically different from existing material, such as the emerging bio-based fi lms. Amcor provides technical support to customers to make informed decisions relating to the environmental and product performance of these materials.

Product Innovation

1. Reducing the greenhouse gas emissions associated with Amcor’s processes by making process improvements that help reduce energy associated with a product’s lifecycle. For example, the Maxipak[®] sack has enabled one Australian exporter of milk powder to pack 10% to 18% more product per shipping container using 20% to 30% less packaging materials. This has reduced emissions associated with transportation and reduced resources associated with the packaging materials.

Amcor Australasia water usage – a success story Amcor Australasia has signifi cantly reduced its water usage. Water purchased this fi nancial year has decreased by nearly 5.5% compared to 2005/06.

Petrie Cartonboard as a major user of water has played an important part in achieving these results.

In 2004/05 Petrie Mill purchased 2,070 ML of water. In 2005/06 this had decreased by 16% to 1,739 ML. This fi nancial year the plant achieved a further reduction of 20% to 1,383 ML.

1. Amcor is conducting research and development of bio-based and biodegradable materials such as Amcor’s NaturePlus Mater-Bi[®] VFFS heat seal fi lm and the AmcorPlantic joint development of starch-based fi lms. Through life cycle analysis, we have ensured that these products have the best possible environmental footprint for their target applications.

Process Innovations

1. Water savings: Innovations that reduce both Amcor’s and its customers’ reliance on water have been a major focus in the Australasian business units. Amcor Australasia’s Water Action Plans and innovative products such as the TrayBon[®] baking trays have greatly reduced Amcor’s and Amcor’s customers’ reliance on water.

2. Energy effi ciency: Amcor is a large user of energy. Major energy users have resource effi ciency programs and reduction targets to improve their performance through process innovations. Amcor is actively involved in several emissions trading schemes and these developments can also be used as carbon offsets against greenhouse gas emissions where applicable.

3. Transport/Logistics: Transport is an important cost of business for Amcor and its customers and is a large source of greenhouse gas emissions. Amcor is already taking steps to reduce transportrelated emissions by situating plants near the regions they service. Amcor will continue to look for innovative ways to make further reductions.

The water saving initiatives introduced at Petrie Mill, that include increased use of water recycling through the water treatment ponds and eliminating the use of town water for cooling, have been an outstanding success in the important area of water conservation.

Amcor Limited 21

Review of Operations Safety and Environment

Amcor is committed to the goals of ‘No Injuries’ and environmental responsibility.

These goals apply equally to all operations and are supported by comprehensive policies and procedures that are based on internationallyrecognised standards.

Amcor’s safety programs apply equally to employees, contractors and visitors to the Company’s sites.

It is important that everybody is involved in the continual development of a safety culture within Amcor that builds on its experiences and positively improves safety behaviour.

Amcor’s safety performance is measured by two criteria – Lost Time Injury Frequency Rate (LTIFR) and Recordable Case Frequency Rate (RCFR).

The LTIFR (number of injuries resulting in at least one full work day lost, per million man hours worked) was 1.9, a reduction of 21% compared to last fi nancial year. The RCFR (number of medical treatments and lost time injuries per million hours worked) was 8.4, down 18% compared to last year.

These improvements are important, particularly when the performance is put into context as they were achieved within the implementation phase of a substantial change agenda.

A number of the individual businesses recorded excellent results – Australasia, for example, delivered an improvement of approximately 25% on both LTIFR and RCFR, Flexibles Food 65% and 33% respectively, and Flexibles Health Care 30% and 50%.

Amcor is continuing to look for ways to improve the safety of facilities and will not be satisfi ed until it has reached and maintained the goal of ‘No Injuries’. It is well understood within the organisation that all Amcor employees and contractors have a role to play in this and understand that role.

Compliance with the Amcor Safety Standards is continuing to improve across the Group and the businesses are progressively improving their safety systems. These standards have also been signifi cantly revised to better address key risk areas.

It is clear that, in order to reach the safety goal, there has to be an holistic approach to safety management.

Amcor’s systems and procedures are supported by a strong focus on providing a safe place of work through engineering control of risk and improved safety behaviours.

Strong leadership is critical to driving improved safety behaviour and the businesses are developing programs that require effective safety leadership from all levels of management.

The overall safety performance of Amcor provides a good example within the organisation of a positive cultural attribute that has been embedded into the Company.

Moving forward, Amcor is striving to achieve the same type of cultural alignment with customer focus, talent and capital discipline.

Amcor is committed to managing its operations in an environmentally-responsible manner.

This commitment is supported by policies, systems, resources and monitoring.

Many of these are outlined in more detail in the Sustainability Report which can be found on the Company’s website.

During the past year there were two incidents. The EPA has been conducting an investigation into the release of oil into the Yarra River since early June from the Amcor Australasia Fairfi eld Mill. Following an investigation by Amcor it now appears that the activities of contractors at the Fairfi eld Mill may be associated with the matter. Amcor is assisting the authority with its enquiries.

At Amcor Flexibles Food Raackmann, approximately 5,000 litres of solvent was discharged due to a leak in an above ground pipe. Approximately 4,000 litres was pumped out of the spill area and soil was also removed under the supervision of local regulatory authorities. Underground electrical wiring was damaged during the clean up activity. Danish authorities have been advised of the spill and at this stage legal action is unlikely.

Annual Lost Time Injuries

Annual Recordable Cases

Number of full work days lost per million hours worked

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----- Start of picture text -----

Number of full work days lost per million hours worked Number of full work days lost per million hours worked
15.1 21.9
13.8
8.9
11.2
10.2
6.3 8.4
4.0 [4.7] 3.8 3.3
2.5 2.2 2.4 1.9
’97 ’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 2003 2004 2005 2006 2007
Excludes new businesses which have been acquired less
than one year.
----- End of picture text -----

22 Amcor Limited

The Board of Directors and Company Secretary

Committees of the Board

Executive Committee Chris Roberts, Chairman Ken MacKenzie Keith Barton John Pizzey

Audit & Compliance Committee John Thorn, Chairman Keith Barton Geoff Tomlinson

Human Resources Committee Geoff Tomlinson, Chairman Chris Roberts Ken MacKenzie John Pizzey Ern Pope

Nomination Committee Chris Roberts, Chairman John Pizzey Ern Pope

Superannuation Committee Geoff Tomlinson, Chairman Chris Roberts John Thorn

C I (Chris) Roberts

Independent Non-Executive Director and Chairman BCom.

Mr Roberts has substantial knowledge of fast-moving consumer products, where the packaging component is signifi cant, gained through executive roles in Australia, New Zealand, the United Kingdom and Indonesia. Currently a director of Australian Agricultural Company Ltd (since June 2001), Director of The Centre for Independent Studies (since August 2004) and Deputy Chairman (since March 2006). Director of Control Risks Group Ltd (since September 2006).

Former roles include Chairman and Managing Director of Arnotts Ltd (January 1996-January 1999), Managing Director of Orlando Wyndham Wines Ltd (October 1987-December 1990), Chairman of Email Ltd (June 1999-February 2001), Director of Telstra Corporation Ltd (December 1991-November 2000), Chairman of Winifred West Schools Ltd (February 2003March 2004) and director of MLC Life Ltd (August 1992-February 1995).

K N (Ken) MacKenzie

Managing Director and Chief Executive Offi cer BEng.

Mr MacKenzie has extensive experience across all of Amcor’s major packaging business segments in the Americas, Australia, Asia and Europe. Joined Amcor 1992.

Former positions: Group Managing Director, Amcor Rentsch and Closures 2001-2005; Group General Manager Amcor Flexibles Australasia 1999-2001; General Manager Corporate Sales and Marketing, Amcor Containers Packaging 1997-1999; Senior fi nance and operational roles, Amcor PET Packaging North America 1992-1997; Prior to joining Amcor, Manager Manufacturing Strategy Practice, Accenture 1987-1992. Member of Executive and Human Resources Committees. Appointed Managing Director and CEO July 2005.

Former director of Petaluma Wines (February 1999-December 2001) and Cockatoo Ridge Wines Ltd (January 2002-May 2006). Chairman of Executive and Nomination Committees, member of the Human Resources Committee and Superannuation Committee. Previously a member of the Audit & Compliance Committee from 1 July 2004 to 7 December 2005. Director since February 1999 – appointed Chairman 2000.

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Amcor Limited 23

R K (Keith) Barton

Independent Non-Executive Director BSc, PhD, FTSE, FAICD.

As a former Managing Director of James Hardie Industries Ltd (April 1993-October 1999) and Executive Director CSR Ltd (January 1990March 1993), Dr Barton has gained broad management experience in manufacturing in Australia and internationally.

Currently director of Air Liquide Australia Ltd (since December 2004), Coles Group Ltd (since July 2003), Tower Australia Group Limited (Chairman) (since December 2006) and Vision Australia (since November 2004). Previously director of Goodman Fielder Ltd (Chairman) (March 2002-April 2003) and Tower Ltd (Chairman) (July 2006-December 2006).

Member of Executive and Audit & Compliance Committees. Director since November 1999.

G J (John) Pizzey

Independent Non-Executive Director BE (Chem), Dip. Mgt.

Extensive knowledge of the international resources industry and general management gained during 33 years with Alcoa in Australia and the United States. Formerly Executive Vice President and Group President Primary Products for Alcoa Inc. and Chairman of London Metal Exchange.

Currently a director of Alumina Limited (since June 2007), Iluka Resources Ltd (since November 2005), St Vincent’s Institute of Medical Research (since April 2004) and Ivanhoe Grammar School (since November 2003). Previous directorships held; WMC Resources Ltd (November 2003-June 2005), Alcoa of Australia (April 1999-December 2003), ION Limited (in administration) (October 1999-August 2005), Chairman 2004-2005, Range River Gold Limited Chairman 2004April 2006, London Metal Exchange Limited (UK) (1997-December 2003), London Metal Exchange Holdings Limited (UK) (December 2002-December 2003), International Aluminium Institute Ltd (UK) (1998-December 2003), and various subsidiaries of Alcoa Inc (USA) (1994-2003).

E J J (Ern) Pope

Independent Non-Executive Director BSc.

Broad international experience with over 38 years in the food and beverage manufacturing industries, including senior executive positions based in Australia, the Philippines, USA, New Zealand and Switzerland.

This includes 22 years with the Nestlé Group (1983-2005) and 16 years with Kraft Foods Limited (1967-1982) including roles as Managing Director Nestlé Australia, Senior Vice-President Nestle S.A. and President and CEO Nestlé Purina Asia-Pacifi c, Africa and the Middle East region.

Currently Chairman of Golden Circle Limited (since May 2005), a director of Alesco Corporation Limited (since December 2004) and director of Foodbank NSW Ltd (since February 2006), Chairman (since April 2007).

Member of Human Resources and Nomination Committees. Director since October 2005.

Member of Executive, Human Resources, and Nomination Committees. Chairman of the Amcor Superannuation Fund. Director since September 2003.

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24 Amcor Limited

The Board of Directors and Company Secretary

J G (John) Thorn

Independent Non-Executive Director FCA.

A partner with PricewaterhouseCoopers (PwC) for over 20 years, serving major local and international companies. National Managing Partner of the Australian fi rm of PwC from 2001 until retiring from that position in September 2003. Extensive global experience, in particular in the Asia Pacifi c region, in audit, accounting, corporate governance and international management groups. Director of Caltex Australia Limited (since June 2004), National Australia Bank Limited (since October 2003) (Audit Committee Chairman) and Salmat Limited (since September 2003).

Chairman Audit & Compliance Committee (since February 2005) and member of the Superannuation Committee. Director since December 2004.

G A (Geoff) Tomlinson Independent Non-Executive Director BEcon.

With extensive experience in, and exposure to, the fi nancial services industry in Australia and internationally, Mr Tomlinson is a former Group Managing Director of National Mutual Holdings Ltd (October 1992-September 1998).

Currently Chairman of Programmed Maintenance Services Limited (since August 1999) and Dyno Nobel Ltd (since February 2006), Director of National Australia Bank Ltd (since March 2000).

Formerly Chairman of Neverfail Spring Water Ltd (April 1999-September 2003), director of Pineapplehead Ltd (March 2000-June 2002), Chairman of Reckon Ltd (June 1999-August 2004) and Chairman of Funtastic Ltd (May 2000-May 2006), Deputy Chairman of Hansen Technologies Ltd (March 2000-May 2006) and director of Mirrabooka Investments Ltd (February 1999-April 2006).

J F (Julie) McPherson

Company Secretary and Group General Counsel Dip Law SAB, M AppFin, LLM.

As both a lawyer and investment banker, Mrs McPherson has broad experience in corporate governance, fi nance and commerce. Prior to joining Amcor, she has held executive, legal and commercial positions, including Company Secretary and General Counsel at Goodman Fielder, and Deputy Managing Director of Dresdner Kleinwort Bensen.

Admitted as a solicitor in Victoria and NSW and admitted to practice in the High Court. Formerly a partner of a major national law fi rm. Member of the Law Committee of Australian Institute of Company Directors since July 2006. Company Secretary since April 2005.

Chairman of the Human Resources and Superannuation Committees and member of the Audit & Compliance Committee. Director since March 1999.

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Amcor Limited 25

Directors’ Report

Your directors present their report together with the fi nancial report of Amcor Limited (the Company) and of the consolidated entity, being the Company and its controlled entities for the year ended 30 June 2007 and the independent audit report thereon.

Contents of Directors’ Report

26 Board of Directors

• 26 Company Secretary

• 26 Directors’ Meetings

• 26 Principal Activities

• 26 Operating and Financial Review

• 26 State Of Affairs

• 27 Dividends

• 27 Events Subsequent to the End of the Financial Year

• 27 Likely Developments

• 27 Environmental Performance

• 28 Directors’ Interests

• 28 Unissued Shares Under Option

• 28 Shares Issued on Exercise of Options

• 29 Indemnifi cation and Insurance of Offi cers

• 29 Non-audit Services

• 29 Rounding Off

• 29 Loans to Directors and Executives

• 29 Share Options and Performance Rights/Shares Granted to Directors and the Most Highly Remunerated Offi cers

• 30 Remuneration Report

• 41 Corporate Governance Statement

• Board of Directors

• Term of Offi ce Held by Each Director

• Committees of the Board

• Risk Management

• Ethical Standards

• Communication with Shareholders

• MD/CEO and EGMF Certifi cations

• 45 Declaration

• 46 Declaration by Independent Auditors

26 Amcor Limited

Directors’ Report Statutory Matters

Board of Directors

The following persons were directors of Amcor Limited during the whole of the fi nancial year and up to the date of this report:

The qualifi cations, experience and special responsibilities of directors are set out on pages 22 to 24 of this report.

Company Secretary

C I (Chris) Roberts R K (Keith) Barton K N (Ken) MacKenzie G J (John) Pizzey E J J (Ern) Pope J G (John) Thorn G A (Geoff) Tomlinson

J F (Julie) McPherson was the Company Secretary of Amcor Limited during the whole of the fi nancial year and up to the date of this report. The qualifi cations of the Company Secretary are set out on page 24 of this report.

Table 1: Directors’ Meetings

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Audit & Human
Executive Compliance Resources Superannuation Nomination
Board Committee Committee Committee Committee Committee
Scheduled Meetings 12 3 5 4 4 -
Unscheduled Meetings 2 5 1 2 - 1
A B A B A B A B A B A B
C I Roberts 14 14 8 8 6 - 6 6 4 4 1 1
R K Barton 13 14 7 8 5 6 1 - 1 - - -
K N MacKenzie 13 14 8 8 5 - 5 6 - - - -
G J Pizzey 14 14 6 8 - - 6 6 - - 1 1
E J J Pope 14 14 - - - - 6 6 1 - 1 1
J G Thorn 13 14 3 - 6 6 1 - 4 4 - -
G A Tomlinson 14 14 1 - 6 6 6 6 4 4 - -
----- End of picture text -----

A Number of meetings attended

B Number of meetings held during the time the director held offi ce or was a member of the committee during the year

• indicates that a director is not a member of a specifi c committee and attended by invitation.

Principal Activities

The general activities of the consolidated entity (comprising Amcor Limited and its controlled entities) are set out on pages 2 to 21 of this report. There were no signifi cant changes in the nature of the principal activities of the consolidated entity during the year under review.

Operating and Financial Review

A review of operations of the consolidated entity during the fi nancial year and the results of these operations is contained in pages 2 to 21 of this report.

State of Affairs

Signifi cant changes in the state of affairs of the consolidated entity that occurred during the fi nancial year ended 30 June 2007 were as follows:

• The Company has undertaken a thorough review of its portfolio of businesses with the stated objective of remaining only in those businesses that have strong market positions and can deliver value for shareholders. This review has resulted in asset sales, plant closures and some substantial improvement programs being implemented in underperforming businesses.

In August 2006, Amcor announced a substantial restructuring to the fi bre packaging business in Australasia that is targeted to deliver cost savings of $60 to $80 million per annum. This program will take four years to complete, will have a net cost of approximately $300 million and involve operational restructuring and plant closures.

In April 2007, Amcor announced a substantial repositioning of the Flexibles business in Europe. The project will deliver an estimated PBIT benefi t of €30 million per annum for an estimated net cash cost of €60 million. The primary objectives of this program are to strengthen market positions through better leverage of manufacturing capabilities and to increase manufacturing capacity in lower cost regions, particularly in southern and eastern Europe.

In July 2007, Amcor announced that it had reached agreement to sell the European PET business to La Seda de Barcelona S.A. for an estimated €425 million. Settlement is expected during the third quarter of the 2007 calendar year.

Amcor acquired a 16.67% interest in K Laser China Group Co in July 2006 for US$10 million and sold the interest in June 2007 for US$29 million.

• In November 2006, Amcor re-purchased the remainder of the PRIDES convertible bonds after noteholders had earlier converted to equity approximately 94.5% of the US$230 million issue. In April 2007, Amcor repurchased approximately 91% of the $210 million issues of PACRS2 convertible bonds with the remainder converting to shares in Amcor. The Company subsequently undertook an on-market buy-back of 45.8 million shares, equivalent to the number arising from the conversion of the convertible bonds. The average price of shares bought back by completion of the program in June 2007 was $7.27.

• In June 2007, Amcor delisted its American Depositary Receipts (ADR) from the NASDAQ Stock Market and applied to de-register its shares and ADRs at the US Securities and Exchange Commission (SEC). The registration is expected to be terminated by early September 2007. The directors determined to take this action based on several factors, including the ongoing expense of preparing additional periodic reports for fi ling with the SEC, the substantial increase in costs to meet the requirements of the Sarbanes-Oxley Act and the strong corporate governance principles operative in Australia. Amcor expects that its ADRs will be traded in the US over-the-counter market.

• Please see pages 43 to 45 under Corporate Governance for a summary of Amcor’s activities relating to oversight of the internal control regime.

• On 21 December 2005, the Australian Competition and Consumer Commission (ACCC) commenced legal proceedings in the Federal Court against certain Visy Group companies and executives. The proceedings are in respect of alleged cartel conduct between Amcor Group and Visy Group companies in the Australian corrugated box industry.

The ACCC also announced it had granted immunity to Amcor in accordance with the terms of its leniency policy for cartel conduct. Accordingly, no Amcor Group company or executive is a party to the ACCC’s Federal Court proceedings and Amcor does not expect to be the subject of any other proceedings by the ACCC for a pecuniary penalty or otherwise. As part of being provided with immunity, Amcor will continue to assist the ACCC in relation to its investigation and proceedings.

Amcor Limited 27

The new Amcor Australasia management team appointed in July 2005 introduced signifi cant change in the corrugated box operations, including an organisational change from a national structure to a regional structure to improve market focus and deliver enhanced quality and service to customers. Amcor is committed to operating with integrity and in a manner in which its shareholders, employees and customers can have full trust and confi dence.

• Jarra Creek Central Packing Shed Pty Ltd fi led a class action in the Federal Court of Australia on 11 April 2006 against Amcor Limited and two of its subsidiaries alleging cartel behaviour. The allegations made in the class action are broadly similar to the allegations made in the ACCC’s proceedings against the Visy Group: it is alleged that certain Amcor Group and Visy Group companies engaged in anti-competitive conduct in the corrugated fi breboard industry. The class members seek, amongst other things, compensation in respect of the effect that the alleged conduct had on the prices they paid for corrugated fi breboard products between 1 May 2000 and 5 May 2005.

Amcor has lodged a defence to this claim and has also cross-claimed against Visy Group companies claiming contribution in the event that Amcor is held to be liable. The class action is still in the interlocutory stages and it is too early for Amcor to form any reliable assessment as to the likely outcome of the litigation. No date has been set for any substantive hearing of the allegations.

• On 15 December 2006, Cadbury Schweppes Pty Ltd issued an Application and Statement of Claim in the Federal Court of Australia, Victorian Registry against Amcor Limited and Amcor Packaging (Australia) Pty Ltd, alleging cartel behaviour between those Amcor companies and certain Visy Group companies and related breaches of contract. Cadbury Schweppes is seeking damages of approximately $120 million, although certain of the damages claims overlap.

The proceeding contains allegations of cartel conduct in the corrugated fi breboard container industry that are broadly similar to the allegations made in the Jarra Creek class action. However, it also contains allegations that the cartel conduct extended beyond the corrugated business and affected other product lines.

Amcor has lodged a defence to this claim and has also cross-claimed against Visy Group companies claiming contribution in the event that Amcor is held to be liable to Cadbury Schweppes. The proceeding is in the early interlocutory stages and it is too early for Amcor to form any reliable estimate as to the likely outcome of the proceeding. No date has been set for any substantive hearing of the allegations.

• Amcor appointed Ms Leslie Desjardins as Executive General Manager Finance in June 2007 in conjunction with the planned retirement of Mr Peter Day.

• The Company announced in June 2007 that PricewaterhouseCoopers will be proposed as the new external auditor of Amcor Limited and its consolidated entities commencing from the 2007/08 fi nancial year. The Audit & Compliance Committee recommended PricewaterhouseCoopers to the Board following a competitive tender process. Shareholders will be asked to approve the new auditor at the Annual General Meeting to be held on 24 October 2007.

Table 2: Dividends

Dividends paid or declared by the Company to members during the fi nancial year were as follows:

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Type Cents Total amount Conduit Foreign
per share $ million Franked Income Date of payment
Declared and paid during the year:
- Final 2006 17 153.4 15% 75% 29 September 2006
- Interim 2007 17 152.3 - 75% 30 March 2007
Declared after end of year:
- Final 2007 17 150.1 - 75% 5 October 2007
Dealt with in the Annual Report as:
- Dividends (Note 27) 305.7
- Noted as a subsequent event (Note 27) 150.1
----- End of picture text -----*

• 75% of the fi nal dividend for 2006/07, payable 5 October 2007, will be sourced from the Conduit Foreign Income Account. This is of benefi t to foreign shareholders as Australian Withholding Tax on the dividend will not be payable on any franked portion or the portion sourced from the Conduit Foreign Income Account.

** Approximate amount dependent on variations in share numbers prior to record date.

Events Subsequent to the End of the Financial Year

Dividend

Since the end of the fi nancial year, the directors declared a fi nal dividend of 17 cents per share payable on 5 October 2007. The forecast total amount of this dividend is $150.1 million. The fi nancial effect of this dividend has not been brought to account in the Financial Statements for the year ended 30 June 2007 and will be recognised in subsequent fi nancial reports.

Capital Management – Share Buy-Back On 29 August 2007, the Company announced that, after considering the forecast cash requirements for new growth projects in the context of the strong balance sheet, it would undertake an on-market share buy-back of up to $350 million.

Likely Developments

Likely developments in the operations of the Company and the entities it controls that were not fi nalised at the date of this report include the settlement of the sale of Amcor’s PET business in Europe and the termination of the Company’s registration at the US Securities and Exchange Commission.

Further information on likely developments in the operations of the consolidated entity and the expected results of operations have not been included in this report because the directors believe it would be likely to result in unreasonable prejudice to the consolidated entity.

Environmental Performance

Commentary regarding the Company’s performance on environmental regulations is outlined in the Corporate Governance Statement on page 43 and also in the Review of Operations section on pages 20 and 21.

28 Amcor Limited

Directors’ Report Statutory Matters

Table 3: Directors’ Interests

The relevant interest of each director in the share capital of the Company as notifi ed by the directors to the Australian Securities Exchange in accordance with S205G(1) of the Corporations Act 2001 at the date of this report is as follows:

with S205G(1) of the_Corporations Act 2001_at the date of this report is as follows:
Name Balance at the beginning of the year Received during the year on the exercise of options Other changes during the year	Balance at the end of the year
Directors of Amcor Limited
C I Roberts 160,674 - 3,996	164,670
K N MacKenzie 11,703 - 520	12,223
R K Barton 33,899 - -	33,899
G J Pizzey 18,181 - -	18,181
E J J Pope 5,731 - -	5,731
J G Thorn 10,380 - -	10,380
G A Tomlinson 43,068 - 414	43,482

Table 4: Unissued Shares Under Option

Unissued ordinary shares of Amcor Limited under option at the date of this report are as follows:

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----- Start of picture text -----

Exercise price of Number under
Date options Granted Expiry Date shares ($) Options
1 October 2002 1 October 2007 7.25 40,000
1 October 2003 1 October 2007 7.25 40,000
1 November 2002 1 November 2012 8.20 2,898,280
13 October 2003 1 November 2012 8.20 79,200
20 October 2003 1 November 2012 8.20 13,200
23 March 2004 23 March 2010 7.87 192,240
24 March 2004 24 March 2010 7.87 3,491,915
31 May 2004 24 March 2010 7.87 17,800
2 August 2004 2 August 2010 6.84 3,716,662
2 May 2005 2 August 2010 6.84 25,800
27 October 2005 31 December 2010 6.78 250,000
27 October 2005 30 June 2011 6.78 250,000
27 October 2005 31 December 2011 6.78 250,000
4 August 2006 31 December 2010 6.78 4,199,150
4 August 2006 30 June 2011 6.78 370,000
4 August 2006 31 December 2011 6.78 370,000
22 September 2006 31 December 2010 6.78 131,950
1 February 2007 31 December 2011 7.19 5,024,900
5 March 2007 31 December 2011 7.19 122,600
Total 21,483,697
----- End of picture text -----*

• Certain overseas plans are at fi xed exchange rates

Table 5: Shares Issued on Exercise of Options

The following ordinary shares of Amcor Limited were issued during the year ended 30 June 2007 on the exercise of options granted.

Date options granted Issue price of shares ($)	Number of shares issued
13 September 2001 6.02	492,500
1 October 2001 6.03	100,000
1 October 2002 6.03	100,000
1 October 2003 6.03	100,000
1 November 2002 7.30*	300,000
1 November 2002 7.40*	1,050,000
2 August 2004 6.84	534,060
2 May 2005 6.84	25,800
Total	2,702,360

• At fi xed exchange rates

Amcor Limited 29

Indemnifi cation and Insurance of Offi cers

The Company has agreements with each of the directors of the Company in offi ce at the date of this report, all former directors and certain present and former offi cers of the Company, indemnifying these offi cers against any liability to any person other than the Company or a related body corporate that may arise from their acting as offi cers of the Company notwithstanding that they may have ceased to hold offi ce. There is an exception where the liability arises out of conduct involving a lack of good faith or otherwise prohibited by law.

The directors have not included details of the nature of the liabilities covered or the amount of the premium paid in respect of the directors’ and offi cers’ liability and legal expenses and insurance contracts as such disclosure is prohibited under the terms of the contracts.

The Company provided indemnities to Mr Peter Sutton, Mr Peter Brown and Mr Russell Jones for reasonable legal expenses incurred by them in their personal capacity in respect of investigations by the ACCC and the New Zealand Commerce Commission and by the Company into possible breaches of competition law. The indemnities granted to Mr Sutton and Mr Brown are each limited to $100,000. As at 30 June 2007, Mr Sutton has been reimbursed

$92,465 for legal fees, Mr Brown $14,597 for legal fees and Mr Jones $11,220 for legal fees. Mr Sutton, Mr Brown and Mr Jones are continuing to provide assistance to the ACCC, the New Zealand Competition Commission and the Company.

Non-audit Services

During the year, KPMG, the Company’s auditors, performed certain other services in addition to their statutory duties. The Board has considered the non-audit services provided during the year by the auditor and, in accordance with written advice provided by resolution of the Audit & Compliance Committee, is satisfi ed that the provision of those non-audit services during the year by the auditor is compatible with, and did not compromise, the auditor independence requirements of the Corporations Act 2001 for the following reasons:

• All non-audit services were subject to the corporate governance procedures adopted by the Company and have been reviewed by the Audit & Compliance Committee to ensure they do not impact the integrity and objectivity of the auditor; and

• The non-audit services provided do not undermine the general principles relating to auditor independence as set out in

Professional Statement F1 Professional Independence, as they did not involve reviewing or auditing the auditor’s own work, acting in a management or decision making capacity for the Company, acting as an advocate for the Company or jointly sharing risks and rewards. A copy of the auditors’ independence declaration as required under Section 307C of the Corporations Act is included in the Directors’ Report on page 46.

Details of the amounts paid to the auditors of the Company, KPMG, and its related practices for audit and non-audit services provided during the year are set out in Note 9 on page 71 to the Financial Statements.

Rounding Off

The Company is of a kind referred to in the ASIC Class Order 98/100 dated 10 July 1998. In accordance with that Class Order, amounts in the Financial Statements and the Directors’ Report have been rounded off to the nearest $100,000 or, where the amount is $50,000 or less, to zero, unless specifi cally stated.

Loans to Directors and Executives

Information on loans to directors and executives, including amounts, interest rates and repayment terms are set out in Note 30 to the Financial Statements.

Table 6: Share Options and Performance Rights/Shares Granted to Directors and the Most Highly Remunerated Offi cers

Options and performance rights over unissued ordinary shares of Amcor Limited granted during or since the end of the fi nancial year to the fi ve most highly remunerated offi cers of the Company and of the consolidated entity as part of their remuneration were as follows:

Company and Group Executives Options Granted Performance Rights and Shares	Company and Group Executives Options Granted Performance Rights and Shares
G Blatrix 270,000 90,000
W P Day 200,000 70,000
S M Keogh 270,000 90,000
L J Lachal 360,000 120,000
W J Long 360,000 120,000
K N MacKenzie	- -
J V Murray 180,000 60,000
I G Wilson 300,000 105,000

30 Amcor Limited

Directors’ Report Remuneration Report

Dear Shareholder,

I am delighted to present to you this year’s Remuneration Report. As I mentioned at the 2006 Annual General Meeting and as outlined in last year’s Remuneration Report, the Board’s Human Resources Committee endorsed a comprehensive review of Amcor’s global remuneration strategy.

Why did we commit to such a review? Quite simply, we must be able to continue to attract, motivate and retain talented individuals and teams in all the locations in which Amcor operates globally. Ultimately these people drive the Company’s performance and, therefore, value to you as a shareholder.

I can assure you that the review has been comprehensive, involving considerable time and effort from my colleagues on the Human Resources Committee, Amcor’s management and independent consultants. This review has, however, not focused purely on remuneration. Rather, in accordance with ‘The Way Forward’ strategy, the review has been fully integrated with Amcor’s performance management and talent management programs. Indeed, signifi cant improvements in these programs were recommended and have now been implemented.

I am very pleased with the outcomes of this review. While reinforcing our commitment to deliver improving results, I believe we have developed a remuneration approach that:

• creates greater transparency between performance and reward for Amcor, our executives and our shareholders;

• allows the Company to provide greater differentiation of reward based on performance outcomes;

• enables the Company greater fl exibility in its approach to incentivise executives by applying more meaningful incentive structures to individuals and teams; and

• is ultimately designed in such a way that these improvements are self-funding from a cost perspective.

I commend this Report to you.

Yours sincerely,

Chris Roberts Chairman

Introduction and summary of contents

The directors of Amcor Limited (Amcor) present the Remuneration Report prepared in accordance with Accounting Standard AASB 124 Related Party Disclosures ; the Corporations Act 2001 and the Corporations Regulations 2001 .

Key Management Personnel

For the purpose of this report, Key Management Personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the consolidated entity of Amcor Limited either directly or indirectly. They include all directors (executive and non-executive) and selected members of the Global Executive Team reporting to the CEO who have authority and responsibility for planning, directing and controlling the activities of the Company. The combined group of these selected executives and additional individuals representing the fi ve highest paid executives of the Company and the consolidated Group are referred to as senior executives in this report.

Human Resources Committee

The Human Resources Committee (the “Committee”), which operates under the delegated authority of the Board, is responsible for ensuring that Amcor’s remuneration strategy and frameworks refl ect the remuneration philosophy and contribute to the achievement of the Company’s goals.

The duties and responsibilities of the Committee are documented in a formal charter, which can be found on the Company’s website as part of the Board Charter under Corporate Governance. The Committee:

• oversees remuneration policy, including fi xed and “at risk” remuneration frameworks;

• determines pay, benefi ts and bonuses for the Chief Executive Offi cer and Managing Director (“CEO”);

• approves pay, benefi ts and bonuses of senior executives; and

• oversees, with the support of independent external advice, Non-Executive Directors’ remuneration.

Details regarding the Committee’s membership and attendance at meetings may be found on page 26 of the Directors’ Report.

Remuneration philosophy and review of Amcor’s executive remuneration strategy

As announced in the 2006 Annual Report, a comprehensive review of Amcor’s global executive remuneration strategy has been undertaken during the year ended 30 June 2007 (referred to in this report as the 2007 fi nancial year). The objective of this review was to ensure that Amcor’s remuneration strategy drives the following:

• achievement of the Company’s business and human resource goals;

• strong alignment with the interests of Amcor’s global shareholder community; and

• equitable and competitive rewards for executives.

This review has created an opportunity to introduce a high quality and rigorous

approach to executive remuneration that emphasises individual and team performance. The Committee was closely involved in the development of the strategy and has endorsed the principles and policies. The new program utilises new approaches to “at risk” remuneration, including the introduction of new short and long term incentive arrangements, as well as minimum shareholding requirements for the CEO and his direct reports.

Further details can be found at page 31 and within the Explanatory Notes to the Notice of Meeting in relation to the proposed Long Term Incentive (LTI) awards to the CEO, which are subject to shareholder approval.

Structure of this Report

Given the recent review of executive remuneration strategy and the introduction of a new global approach, Amcor’s 2007 Remuneration Report has been divided into the following sections:

• A. New global executive remuneration strategy from 1 July 2007

• B. Executive remuneration for the 2007 fi nancial year

• C. CEO remuneration for the 2007 fi nancial year

• D. Company performance – the link to reward

• E. Details of remuneration for the 2007 fi nancial year

• F. Executive service agreements

• G. Non-Executive Directors’ Remuneration

Amcor Limited 31

A. New global executive remuneration strategy from 1 July 2007

The new global executive remuneration strategy has been developed as a comprehensive framework which will apply across all geographic locations. The new strategy has been designed to:

• focus all executives on the delivery of business results;

• drive the development of a high performance culture by recognising and rewarding high performing individuals;

• link participation in incentive frameworks more closely to executives’ level of control and infl uence;

• provide greater retention in the remuneration arrangements through the increased use of deferred equity;

• match rewards to business outcomes which deliver value to shareholders; and

• create greater alignment between executives and Amcor’s shareholders by introducing a minimum shareholding requirement for the CEO and the CEO’s direct reports by incorporating a longer long term incentive performance period and deferral of other equity awards.

Each executive’s total reward opportunity will continue to comprise fi xed remuneration and a signifi cant proportion of variable performancerelated or “at risk” remuneration.

Eligibility to participate in the new incentive frameworks will be dependent on both position (the degree to which an individual can impact corporate performance) and performance, as described below.

Amcor’s global executive remuneration strategy aims to reward performance achieved by each executive by positioning the total reward received to that executive’s regional market as follows:

follows:
	Remuneration
Level of	position
performance	(to regional market)
Target	Median
Maximum/Stretch	Upper quartile
Threshold	Lower quartile

Total Fixed Remuneration (TFR)

TFR for each executive is positioned against the median of the relevant local salary market for comparable roles and level of responsibility. TFR will also refl ect each individual’s qualifi cations, experience and performance.

Each role is graded and the TFR compared to similar sized roles in similar sized businesses and geographies on an annual basis.

“At Risk” Remuneration Short Term Incentive (STI)

A new STI framework has been developed which

retains the current cash payment element but adds an equity or share-based component. The new framework has been designed as the primary equity incentive arrangement for Amcor’s “general” executive population; participation in Amcor’s new Long Term Incentive program is being signifi cantly reduced (see below).

Eligibility to participate in the equity component and the quantum of any awards to be made will be determined based on both Company and individual executive’s performance assessed using a scorecard approach. As such, the STI framework will enable greater differentiation of equity-based reward based on performance.

Further, the STI framework will provide for greater retention in Amcor’s remuneration arrangements. By way of explanation, equity awards (allocation of rights to Amcor Limited shares or cash entitlements for those individuals employed in countries that prohibit the use of share rights) will be determined following the end of the performance year. Executives will then be required to remain in Amcor employment for at least two years before awards vest and are converted into Amcor Limited shares.

The new program involves rigorous goal setting, greater focus on fi nancial outcomes and continuing emphasis on living Amcor’s values.

Long Term Incentive (LTI)

The new LTI program is a fl exible plan under which the Board retains the discretion as to whether to make awards in each fi nancial year, the award vehicle to be used and the performance measures to be applied.

The number of executives who will participate in the LTI will be reduced signifi cantly compared to the previous arrangements. As such, participation will be limited to those executives whose individual performance will directly impact Amcor’s overall performance, plus a limited number of high-potential individuals identifi ed as future leaders of Amcor’s businesses.

For the coming year, LTI awards will be made up of both share options and performance rights, with an associated performance period of four years. Performance rights will vest subject to the achievement of relative TSR hurdles against a comparator group, which combines companies of a similar size and international nature in the ASX 100 and global companies within a similar industry. Share options will vest subject to a Return On Average Funds Employed on a continuing basis (ROAFE) improvement target. There will be no re-testing of performance if the hurdles have not been met at the end of the four year period.

Further details of the new LTI arrangements are provided in the Notes to the Explanatory Memorandum which addresses the proposed award for the CEO.

Minimum shareholding requirement

A policy has been introduced such that the CEO and all direct reports to the CEO must build and maintain a minimum shareholding of Amcor shares. The shareholding requirement will be introduced in a phased manner over a period of six years. By the end of this period, the minimum shareholdings will be expected to be:

	Minimum
Position	shareholding value
CEO	100% of base salary
Direct reports to the CEO	50% of base salary

The CEO and his direct reports will be required to achieve and maintain the minimum shareholding value before they may dispose of Amcor Limited shares obtained from Amcor’s share based incentive plans from 1 July 2007. Detailed guidelines have been established by the Board to administer the operation of the shareholding requirement.

32 Amcor Limited

Directors’ Report Remuneration Report

B. Executive remuneration for the 2007 fi nancial year

Remuneration provided to the CEO and executives including the senior executives, comprised TFR and “at risk” rewards. “At risk” rewards formed a signifi cant proportion of the total reward opportunity and were paid subject to the satisfaction of pre-determined performance measures.

The proportion of the total reward opportunity which was ‘at risk’ varied depending on individuals’ roles and responsibilities. The CEO had the largest proportion of ‘at risk’ remuneration.

The following table sets out the remuneration mix (i.e. proportion out of a total 100%) for the CEO and senior executives (expressed as an average) for the 2007 fi nancial year, including an assumed accounting value of annual grant of Long Term Incentives.

LTI – 20%	LTI – 12%
STI – 29%	STI – 29%
Fixed Remuneration	Fixed Remuneration
51%	59%
CEO	Senior Executives

TFR

TFR levels were set with reference to the market conditions and general salary levels in the regions in which the executives were located. They also refl ected the scope and nature of each individual’s role, their qualifi cations, experience and performance in that role. Each role was benchmarked and compared to similar roles in similar sized businesses in their relevant region/local market.

TFR was structured as a total employment cost package, so executives could choose whether to receive cash only or to receive a proportion in the form of certain non-monetary benefi ts, including superannuation/pension, health insurance and company car or car allowances. External remuneration consultants provided analysis and advice to ensure TFR was set to refl ect the local market for a comparable role.

NB: With regards to superannuation/pension plans, noting regulatory requirements in some countries, all defi ned benefi t arrangements which can be closed to new members have been closed or are in the process of being closed.

At risk remuneration

This section provides details of “at risk” arrangements applicable to the 2007 fi nancial year. “At risk” remuneration comprised of both short and long term incentives delivered through formal plans.

A number of plans which were operated in previous years are still available for use and carry existing entitlements. Details of these ‘legacy’ plans must still be disclosed and an outline of these plans can be found at page 33.

STI

STI awards for executives, including the CEO and senior executives, were based on the performance over the 12 months ended 30 June 2007 assessed using a scorecard approach. The scorecard approach was used to ensure transparency of assessment and consistency across the senior executives.

At the start of the year, scorecards were set and agreed by the Board for the CEO and senior executives based on the business objectives for the year. The scorecards included clear business goals and specifi ed the levels of performance required to generate payments.

The scorecards were structured as per the table below:

Table 7: STI Scorecard

Performance area Weighting Financial (Profi t Before Interest and Tax and Return On Average Funds Employed) 50% Safety 5% to 10% Other (including strategic goals or Business Group specifi c measures) 40% to 45% NB. STI opportunity ranges for individual executives can be found in table 13 at section D.

Following the end of the year, the Committee considered and, at its discretion, endorsed the CEO’s recommendations for performance achieved against each executive’s scorecard and the resulting level of payment thereon. In order for STI awards to have been paid, a minimum behaviour/ethical standard had to be achieved. This was determined through the use of a peer review “Values Gateway” that provided an assessment of each Senior Executive’s performance against Amcor’s Values. STI awards will be paid in cash in September 2007.

LTI 2006 and 2007 awards

As reported in the 2006 Annual Report, a number of executives, including senior executives, received LTI awards in respect of the 2006 fi nancial year. These effectively mirrored the awards granted to the CEO following approval by shareholders at the 2005 Annual General Meeting, but were not granted until the beginning of the 2007 fi nancial year. Details of the terms of these awards are provided in table 17. In addition, a number of executives received LTI awards in relation to the 2007 fi nancial year.

For both the 2006 and 2007 fi nancial years, awards comprised of both share options and performance rights. The quanta of awards were determined based on relative market positioning of executives’ total rewards to their local markets. The awards are subject to relative Total Shareholder Return (TSR) performance hurdles details of which are provided below.

The periods over which performance will be measured and the vesting periods (during which performance is tested on a monthly basis) are as follows:

Table 8: Vesting Periods

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Financial Year TSR Base Date Tranche Vesting Period Expiry Date
2006 1 July 2005 1 1 Jan 2008 to 31 Dec 2009 31 Dec 2010
2 1 Jul 2008 to 30 Jun 2010 30 Jun 2011
3 1 Jan 2009 to 31 Dec 2010 31 Dec 2011
2007 1 July 2006 1 1 Jan 2009 to 31 Dec 2010 31 Dec 2011
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• NB: Executives who participated in all three tranches of the 2006 award were not eligible to participate in the 2007 award. This included the CEO and a limited number of senior executives.

Amcor Limited 33

The share options and performance rights vest depending on the highest percentile reached by the average Amcor Total Shareholder Return (TSR) relative to the average comparator TSR for each of the relevant stocks in the comparator group during the vesting period. The comparator group of companies for awards granted in relation to 2006 and 2007 fi nancial years under the LTI plan comprised the S&P/ASX100 Index as at the relevant base date for the awards (see table 8) excluding Amcor and companies in the following industry categories:

• Financial ex-Property Trusts

• Property Trusts

• Resources

• Telecommunications Services

• Media sectors

The vesting schedule, which applies to all grants to date under this program, is as follows:

Table 9: Vesting Schedule

Level of performance (relative to comparator group) Level of vesting Less than 50th percentile Nil 50th percentile 50% Between 50th and 75th percentile Straight line between 50% and 100% 75th percentile and above 100%

This performance hurdle was chosen after extensive consultation with a number of shareholders and governance advisory groups on the basis that it is transparent and measurable against objective data. Being an independent measure, the level of performance achieved is calculated by external consultants and the result will then be assessed by the Board in determining the resulting level of vesting.

In addition to the performance hurdle, forfeiture conditions and provisions relating to termination of employment exist. In the event of termination of employment of plan participants, the Board retains overall discretion to determine the level of vesting which is appropriate. In the event of

a change in control, the Board will determine in its discretion whether, and if appropriate, the extent to which outstanding awards will vest.

Hedging of Long Term Incentives In accordance with Amcor’s general share trading policy and the LTI plan rules, participants are prohibited from engaging in hedging arrangements over unvested securities issued pursuant to any employee or director share plan.

Legacy Share Based Plans

Outlined below are a number of share based plans (“Legacy Plans”) previously operated by Amcor. Due to the nature of these plans, time vesting requirements are still in place for

a number of executives and consequently the plans are included for completeness. Further, unless formally closed, Legacy Plans may be reactivated at any time.

Whilst awards under Legacy Plans may or may not have required satisfaction of performance hurdles, in accordance with market practice at the time, all remaining vesting requirements are solely time-related assuming continuing employment.

Table 10: Legacy Share Based Plans

Plan Titles Purpose Short Term Plans Senior Executive Share Plan Bonus conversion into shares Senior Executive Payment Plan Bonus conversion into share equivalents (used in countries where Amcor is not able to issue options or shares)

Long Term Plans Employee Share/Option Plan “Umbrella” share/option plan designed to grant options at full market value (or cash equivalents) based on achievement of fi nancial performance. Once granted, awards vest subject to time restrictions. Employee Share Purchase Plan “Umbrella” plan designed to award shares (or share equivalents) Sub-plans include: • Senior Executive Retention Share Plan* Shares issued with time restrictions on disposal • Senior Executive Retention Payment Plan Share equivalents issued with time restrictions on disposal • Employee Incentive Share Plan Share plan for all employees

• NB: During the 2007 fi nancial year, 40,000 fully paid Amcor Limited ordinary shares were awarded to Ms L A Desjardins under the Senior Executive Retention Share Plan on appointment as Amcor’s Executive General Manager Finance. These were awarded in consideration for foregoing entitlements from her previous employment and are subject to a three year disposal restriction. Forfeiture conditions and provisions relating to termination of employment apply to this award.

34 Amcor Limited

Directors’ Report Remuneration Report

C. CEO remuneration for the 2007 fi nancial year

TFR

The CEO’s TFR was reviewed during the 2007 fi nancial year and was increased with effect from 1 October 2006 to $1,975,000. The increase in TFR was less than 4% recognising the previous increase to TFR applied from March 2006.

Other benefi ts

The CEO has been an Amcor employee since 1992. He was originally recruited in North America and has since also worked in Europe and Australia. Over this time, his superannuation arrangements have been changed on numerous occasions, due to both legal and regulatory requirements as well as Company policy.

STI

As reported in the 2006 Remuneration Report, the CEO’s range of STI opportunity was revised for the 2007 fi nancial year: STI being payable at target and maximum performance of 80% and 120% of TFR respectively. For the 2007 fi nancial year, the Human Resources Committee assessed the CEO’s performance against his pre-determined scorecard (as discussed above) and determined that the CEO’s performance was above the target level. Accordingly, a payment of 84% of TFR was paid.

Equity-based incentive awards No award was granted to the CEO during the 2007 fi nancial year under the existing LTI Plan.

This Plan will act as a performance driver and forms an effective link between the LTI awards made in the 2006 fi nancial year and the proposed new LTI arrangements which would be available only after 30 June 2011.

The level of share-based payment disclosed for the CEO during the 2007 fi nancial year has, therefore, increased signifi cantly from that disclosed in the 2006 fi nancial year, due to the inclusion of:

• 12 months ‘expensing’ of the LTI granted in the previous fi nancial year. The value disclosed in the 2006 Remuneration Report represented only the period from grant date to the end of the fi nancial year; and

As a result of the transition to the newly

During the year, the Human Resources Committee requested a review of the CEO’s retirement provisions and determined to pay a one-off payment of $820,000 to the Amcor Australian Defi ned Contribution Fund, of which the CEO is a member. This payment was made to rectify anomalies and potential losses caused by the numerous changes to the CEO’s retirement programs over his continuous period of employment with Amcor. The quantum of this payment was determined based on an independent actuarial assessment.

designed LTI structure (as outlined in Section A), there would have been a period of 30 months during which the CEO would not have been incentivised under any LTI arrangement, other than through the re-testing provisions applicable to the existing LTI Plan.

The Board, therefore, considered it necessary to address this gap during a critical period when the CEO’s key focus is to drive and consolidate the outcomes of Amcor’s ‘Way Forward’ strategy. As a result, the Board put in place a Medium Term Incentive Plan (MTIP) of which the CEO is the only participant.

• commencement of ‘expensing’ of the MTIP award granted during the 2007 fi nancial year.

MTIP structure

The award is currently structured as a cashbased award. Vesting will be subject to the satisfaction of a set of challenging performance measures achieved over the two years ending on 31 December 2008. The performance measures focus on the sustained delivery of ‘The Way Forward’ strategy and creating the platform for excellent Company performance in the longer term. Targets have been set in the following areas:

Table 11: MTIP Structure

Table 11: MTIP Structure
Performance area	Weighting
Financial performance (Return On Average Funds Employed and Average Working Capital)	25%
Business Unit Portfolio & Market Positions (focusing on business improvement, restructuring and growth)	25%
Customers, Cost, Capital and Culture	50%

Performance expectations have been set by the Board in respect of threshold, target and maximum performance levels. The quantum of the award which may vest are detailed below:

Table 12: MTIP Award Quantum

Table 12: MTIP Award Quantum
Level of performance	Value of award (% of average TFR over the performance period)
Threshold	50% of TFR
Target	100% of TFR
Maximum	150% of TFR

Where an award is made, the vested award will be subject to further deferral periods – 50% to be received after a further 12 months (31 December 2009) and the remaining 50% after 24 months (31 December 2010). Awards will be forfeited if the CEO resigns during either the performance period or the relevant deferral periods.

Capping mechanism

The MTIP also incorporates a capping mechanism to ensure that, should tranches of the 2006 fi nancial year LTI awards vest under the applicable re-testing provisions, any MTIP payable will be reduced on a “dollar for dollar basis”. The Board considered that this mechanism was appropriate to avoid the situation of both the existing LTI and MTIP awards vesting at the same time.

2007 AGM resolution

The Board wishes for some or all of any MTIP incentive payable to be awarded in the form of Amcor Limited ordinary shares purchased on market. Legislation provides that formal shareholder approval is not required for such an arrangement. Nevertheless, the Board will be seeking shareholder approval by way of a specifi c resolution addressing the proposed award to the CEO at the 2007 Annual General Meeting. More detail regarding the structure of the MTIP award can be found in the Explanatory Notes to the Notice of Meeting.

Amcor Limited 35

D. Company performance – the link to reward

All “at risk” remuneration received by the CEO and executives, including senior executives, during the 2007 fi nancial year was subject to the achievement of specifi ed performance measures. The STI and LTI programs rely on different performance criteria relevant to the shorter and longer term objectives of the Company.

STI awards Details of the range of potential STI payments, proportion to be received “at target” performance, actual STI awards paid and the amounts forfeited by the CEO and senior executives in respect of the 2007 fi nancial year are shown in Table 13 below:

Table 13: STI Award Payments

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Name STI % Range STI % Target Bonus ($) % Vested in Year % Forfeited in Year
Directors
K N MacKenzie 0% to 120% of TFR 80% 1,659,000 84.00% 36.00%
Senior Executives
G Blatrix 0% to 100% of Base Salary 50% 332,626 47.50% 52.50%
W P Day 0% to 100% of Base Salary 50% 384,200 56.50% 43.50%
L A Desjardins 0% to 100% of Base Salary 50% 67,708 50.00% 50.00%
S M Keogh 0% to 100% of Base Salary 50% 370,730 65.50% 34.50%
L J Lachal 0% to 100% of Base Salary 50% 250,425 33.75% 66.25%
W J Long 0% to 100% of Base Salary 50% 563,861 75.45% 24.55%
J V Murray 0% to 100% of Base Salary 50% 317,550 55.40% 44.60%
I G Wilson 0% to 100% of Base Salary 50% 718,778 75.50% 24.50%
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• Pro-rated from commencement of employment

In relation to the disclosures for the 2007 LTI awards For awards made in earlier fi nancial years fi nancial year, the main fi nancial performance LTI awards granted in the 2006 and 2007 (2003 to 2005), Return On Average Funds measures for STI were Profi t Before Interest and fi nancial years vest subject to Total Shareholder Invested (ROAFI) applied to determine individual Taxation (PBIT) and Return On Average Funds Return performance against a pre-determined allocations of awards. As was typical market Employed on a continuing basis (ROAFE). Other comparator group (details have been provided practice at that time, no further performance performance measures included safety, Groupon page 33). Testing of the 2006 LTI grants will measures were applied to awards following wide initiatives and individual Business Group commence from January 2008. allocation. specifi c initiatives for the year.

Table 14: Shareholder Return Information over the Past Five Financial Years

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2003 [(1)] 2004 [(1)] 2005 2006 2007
Net profi t before signifi cant items ($ million) 431.4 440.3 458.8 405.9 397.0
Basic EPS (cents) 45.3 44.7 52.2 46.1 44.2
Dividend paid ($ million) 252.7 280.3 290.2 298.8 305.7
Dividends per share (cents) 30 32 34 34 34
Change in share price (cents) (12) (115) (27) (2) 79
Opening share price at 1 July ($) 8.24 8.12 6.97 6.70 6.68
Return on capital employed (%) 2.2 (10.2) 1.0 4.8 16.9
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(1) Years 2003 and 2004 have not been restated for the change in adopting AIFRS and are therefore based on AGAAP.

Table 17 in section E provides details of the number of LTI awards which vested during the 2007 fi nancial year. The LTI awards were options granted under the Employee Share Option Plan on 24 March 2004 and were tested against performance hurdles as at 31 October 2004. Eleven per cent of options were forfeited, relating to non-achievement of stretch targets for return on average funds invested. The options were subject to time-based vesting over a three year period and have an exercise price of $7.87 per option.

36 Amcor Limited

Directors’ Report Remuneration Report

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Total employee compensation 5,589,664 2,899,716 1,443,124 1,452,381 1,276,237 332,873 1,297,199 1,475,001 1,533,501 1,928,817 1,570,091 1,294,767 1,175,782 1,999,848 1,377,078 1,257,333 1,218,089 2,083,086 1,873,821 16,813,674 16,264,734
% of total employee compensation received as options Equity settled 19.9%489,801 13.2%382,293 9.4%135,175 16.8% 243,704 13.2%168,009 0.0%- 11.2%145,569 252,896 17.1% 7.8%119,643 13.0%250,854 9.2%144,184 13.2%171,478 8.6%100,805 8.3% 166,553 0.0%- 6.1%76,982 6.3%76,982 5.3%110,583 2.7%50,403 14.8%1,856,030 7.6%1,229,884
- - - - - - - - - - - - - - - - - - -
Options and rights
Cash settled 625,000 625,000
Shares - - - - 8,728 - - - 141,128 - - - 108,028 - 8,728 - - - 58,378 - 324,990
- - - - - - - - - - - - - - - - - -
Share based payments
Share appreciation rights 82,500 9,437 91,937
Termination benefi t - - - - - - - - - - - - - - - - - 372,678 1,219,510 -
benefi ts 67,250 64,000 15,296 40,000 - - 16,073 4,009 90,315
Post- employment Superannuation 1,053,438 195,000 111,444 230,400 241,691 305,657 149,700 183,015 156,798 117,977 2,006,500 1,035,563 1,592,188
- - - (3) (4) - - - - - -
.
Special incentive 170,000 97,500 100,000 108,900 105,000 105,478 83,475 107,041 85,889 139,153 208,900 893,536
Bonus 1,659,000 646,000 332,626 384,200 214,500 67,708 370,730 250,425 227,500 563,861 318,778 317,550 122,430 718,778 338,963 391,274 478,760 250,476 - 4,664,878 2,988,681
Related Party Disclosures
Short term employee benefi ts Non monetary benefi ts 206,175 206,423 144,168 84,727 83,500 13,163 120,000 66,245 63,539 70,011 31,104 53,703 53,121 173,251 211,196 50,897 60,547 173,451 91,164 931,443 1,024,942 AASB 124
Base salary 1,556,250 1,300,000 719,711 672,500 640,000 136,706 512,000 675,035 635,000 738,434 738,347 569,021 551,125 941,266 701,713 636,218 597,791 918,768 364,051 6,520,923 7,083,013
2007 2006 2007 2007 2006 2007 2007 2007 2006 2007 2006 2007 2006 2007 2006 2006 2006 2006 2006 2007 2006
Position Chief Executive Offi cer and Managing Director Managing Director, Amcor Flexibles Food Executive General Manager Finance Executive General Manager Finance Executive General Manager Human Resources Managing Director, Amcor Australasia President and CEO, Amcor PET Packaging Executive General Manager Corporate Affairs Strategic Development Director President and CEO, Amcor Sunclipse Managing Director, Amcor Asia Managing Director, Amcor Flexibles Executive General Manager Human Resources
Key management personnel Name Executive Directors K N MacKenzie Other Key Management Personnel (2)G Blatrix ^ W P Day ^ (retired as EGM Finance 1 June 2007) L A Desjardins (appointed EGM Finance 1 June 2007) S M Keogh * L J Lachal ^ W J Long ^ J V Murray * I G Wilson ^ (1)E E Bloom (1)C K Chan Former Senior Executives (1)G S James (Retired 30 June 2006) (5)P S Wilson (Retired 31 December 2005) TOTAL ^ Represents the fi ve highest paid executives of the consolidated Group * Represents the fi ve highest paid executives of the Company (1) Represents remuneration during designation as key management personnel in accordance with (2) Represents highest paid in the current fi nancial year, prior year information not disclosed. (3) On 15 April 2007, a $100,000 cash bonus was awarded to Ms L A Desjardins as a sign-on incentive and in consideration of her foregoing entitlements from her previous employment. (4) On 1 February 2007, a $108,900 cash bonus was awarded to Mr S M Keogh as a sign-on incentive and in consideration of him foregoing entitlements from his previous employment. (5) Mr P S Wilson was one of the Company’s and Consolidated Group’s highest paid executives in 2005/2006 fi nancial year.
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Amcor Limited 37

Table 16: Terms and Conditions of each Grant of Options and Rights Affecting Remuneration

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Fair value Exercise Price of shares Estimated Risk free
Grant date Expiry date per option ($) price ($) at grant date ($) volatility interest rate Date exercisable
24/03/2004 24/03/2010 1.27 7.87 7.87 20.00% 5.12% 24/03/2007
02/08/2004 02/08/2010 1.03 6.84 6.84 20.00% 5.62% 02/08/2007
27/10/2005 31/12/2010 0.98 6.78 6.69 22.00% 5.40% 01/01/2008
27/10/2005 30/06/2011 1.01 6.78 6.69 22.00% 5.40% 01/07/2008
27/10/2005 31/12/2011 1.03 6.78 6.69 22.00% 5.40% 01/01/2009
04/08/2006 31/12/2010 0.89 6.78 6.55 22.00% 5.80% 31/12/2009
04/08/2006 30/06/2011 0.92 6.78 6.55 22.00% 5.80% 30/06/2010
04/08/2006 31/12/2011 0.97 6.78 6.55 22.00% 5.80% 31/12/2010
22/09/2006 31/12/2010 0.89 6.78 7.13 22.00% 5.80% 31/12/2009
01/02/2007 31/12/2011 1.07 7.19 7.38 20.00% 6.04% 31/12/2010
05/03/2007 31/12/2011 1.07 7.19 7.05 20.00% 6.04% 31/12/2010
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Details of LTI awards granted, vested and exercised

The following tables provide further information and analysis relating to LTI awards, as required by the Corporations Act 2001 :

Table 17: LTI Awards Granted, Vested and Exercised

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Number of options and Rights Number of options and rights
Name granted during the year Vested during the year
2007 2006 2007 2006
Executive Directors of Amcor Ltd
K N MacKenzie - 1,050,000 89,000 88,000
Senior Executives
G Blatrix 360,000 - 31,150 35,200
E E Bloom [(1)] n/a - n/a 44,000
C K Chan [(1)] n/a - n/a 44,000
W P Day 270,000 - 222,500 -
S Keogh 360,000 - - -
L J Lachal 480,000 - 178,000 -
W J Long 480,000 - 178,000 44,000
J V Murray 240,000 - 133,500 -
I G Wilson 405,000 - - -
Former Senior Executive
G S James [(1)] - - - 44,000
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(1) Represents remuneration during designation as key management personnel in accordance with AASB 124 Related Party Disclosures .

Details of ordinary shares in the Company provided as a result of the exercise of remuneration options to the CEO and senior executives, together with the amounts paid per ordinary share at the date of exercise, are set out below:

Table 18: Details of Ordinary Shares Provided

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Number of ordinary shares
Date of exercise Amount paid per issued on exercise of options
Name of options share ($) during the year
2007 2006
Senior Executives
G Blatrix 07 September 2006 6.02 25,000 -
L J Lachal 14 September 2005 5.16 - 24,000
W J Long 29 March 2007 5.06 120,000 -
W J Long 05 April 2007 4.98 140,000 -
W J Long 13 April 2007 4.91 40,000 -
J V Murray 14 September 2005 5.16 - 16,000
J V Murray 03 October 2005 5.10 - 200,000
E E Bloom [(1)] 12 September 2005 5.16 n/a 20,000
E E Bloom [(1)] 29 September 2005 5.10 n/a 125,000
C K Chan [(1)] 08 September 2005 5.16 n/a 32,000
C K Chan [(1)] 21 September 2005 5.10 n/a 100,000
C K Chan [(1)] 21 September 2005 6.02 n/a 20,000
Former Senior Executives
G S James [(1)] 07 June 2006 6.02 - 20,000
P S Wilson [(2)] 13 September 2005 5.16 - 40,000
P S Wilson [(2)] 28 September 2005 5.10 - 200,000
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(1) Represents remuneration during designation as key management personnel in accordance with AASB 124 Related Party Disclosures .

(2) Mr P S Wilson was one of the Company’s and consolidated Group’s highest paid executives in the 2005/06 fi nancial year.

38 Amcor Limited

Directors’ Report Remuneration Report

Details of the vesting profi le of the options granted as remuneration to the CEO and senior executives are detailed below:

Table 19: Vesting Profi le of Options Granted

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Financial year Minimum total Maximum total
in which options value of grant value of grant
Name Number Date granted Vested % Lapsed % may vest yet to vest ($) yet to vest ($)
Executive Directors of Amcor Ltd
K N MacKenzie 100,000 24 March 2004 89% 11% 30 June 2007 nil 113,030
100,000 02 August 2004 - 14% 30 June 2008 nil 88,580
250,000 27 October 2005 - - 30 June 2010 nil 245,000
250,000 27 October 2005 - - 30 June 2010 nil 252,500
250,000 27 October 2005 - - 30 June 2011 nil 257,500
Senior Executives
G Blatrix 35,000 24 March 2004 89% 11% 30 June 2007 nil 39,561
35,000 02 August 2004 - 14% 30 June 2008 nil 31,003
90,000 04 August 2006 - - 30 June 2010 nil 80,100
180,000 01 February 2007 - - 30 June 2011 nil 192,600
W P Day 250,000 24 March 2004 89% 11% 30 June 2007 nil 282,575
250,000 02 August 2004 - 14% 30 June 2008 nil 221,450
100,000 04 August 2006 - - 30 June 2010 nil 89,000
100,000 01 February 2007 - - 30 June 2011 nil 107,000
S Keogh 90,000 04 August 2006 - - 30 June 2010 nil 80,100
90,000 04 August 2006 - - 30 June 2010 nil 80,100
90,000 04 August 2006 - - 30 June 2011 nil 82,800
L Lachal 200,000 24 March 2004 89% 11% 30 June 2007 nil 226,060
150,000 02 August 2004 - 14% 30 June 2008 nil 132,870
120,000 04 August 2006 - - 30 June 2010 nil 106,800
240,000 01 February 2007 - - 30 June 2011 nil 256,800
W J Long 200,000 24 March 2004 89% 11% 30 June 2007 nil 226,060
200,000 02 August 2004 - 14% 30 June 2008 nil 177,160
120,000 04 August 2006 - - 30 June 2010 nil 106,800
240,000 01 February 2007 - - 30 June 2011 nil 256,800
J Murray 150,000 24 March 2004 89% 11% 30 June 2007 nil 169,545
150,000 02 August 2004 - 14% 30 June 2008 nil 132,870
90,000 04 August 2006 - - 30 June 2010 nil 80,100
90,000 01 February 2007 - - 30 June 2011 nil 96,300
I G Wilson 100,000 04 August 2006 - - 30 June 2010 nil 89,000
100,000 04 August 2006 - - 30 June 2010 nil 89,000
100,000 04 August 2006 - - 30 June 2011 nil 92,000
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Table 20: Value of Options Granted, Exercised or Lapsed During the Year

Table 20: Value of Options Granted, Exercised or Lapsed During the Year	Table 20: Value of Options Granted, Exercised or Lapsed During the Year
A B C D Name Value at grant date ($) Value at exercise date ($) Value at lapse date ($) Total of columns A–C ($)
Senior Executives
G Blatrix 272,700 -	- 272,700
W P Day 196,000 -	- 196,000
S Keogh 243,000 -	- 243,000
L J Lachal 363,600 -	- 363,600
W J Long 363,600 540,000	- 903,600
J V Murray 176,400 -	- 176,400
I G Wilson 270,000 -	- 270,000

Amcor Limited 39

F. Executive service agreements

Remuneration and other terms of employment for the CEO and senior executives are formalised in service agreements. Specifi c information relating to the terms of the service agreements of the current CEO and senior executives is set out in the table below.

Table 21: Summary of Specifi c Terms of Executive Service Agreements

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Term of
Name agreement Notice period Redundancy termination payment
K N MacKenzie Open 12 months Greater of amount payable required by law and 12 months Total Remuneration. Total Remuneration
includes Total Fixed Reward plus target STI bonus (currently 80% of TFR), plus the annual actuarial
value of long term incentive as reported in Amcor’s Annual Report.
G Blatrix Open 12 months Greater of amount payable required by law and payment in lieu of notice (12 months’ base salary).
W P Day Open 6 months Greater of amount payable required by law and payment in lieu of notice (6 months’ base salary).
L A Desjardins Open 12 months Greater of amount payable required by law and payment in lieu of notice (12 months’ base salary).
S M Keogh Open 12 months Greater of amount payable required by law and payment in lieu of notice (12 months’ base salary).
L J Lachal Open 12 months Greater of amount payable required by law and payment in lieu of notice (12 months’ Total Fixed
Reward).
W J Long Open 12 months Greater of amount payable required by law and payment in lieu of notice (12 months’ base salary).
J V Murray Open 6 months Greater of amount payable required by law and payment in lieu of notice (6 months’ base salary).
I G Wilson Open 12 months Greater of amount payable required by law and payment in lieu of notice (12 months’ base salary).
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40 Amcor Limited

Directors’ Report Remuneration Report

G. Non-Executive Directors’ Remuneration

Fee policy

The Non-Executive Director fee policy enables the Company to attract and retain high quality directors with relevant experience. At the same time, the cost to the Company is managed in relation to the maximum aggregate fee limit. The current fee limit of $2,000,000 was approved by shareholders at the 2003 Annual General Meeting.

Non-Executive Directors receive a fi xed “base fee” for their role as Board members, plus additional fees for members’ or chairman’s roles on Board sub-committees. The Chairman receives fees of up three times the base fee, but does not receive additional fees for his involvement with Board sub-committees.

The fee policy is reviewed annually by the Human Resources Committee, which obtains

advice on market practice from independent remuneration consultants. Any changes, including suggested changes to the maximum aggregate fee limit, are determined by the Board and proposed to shareholders for approval.

Following review, the Board has determined that both the current fee structure and the aggregate fee limit remain appropriate for the coming fi nancial year.

Performance based remuneration and minimum shareholding

In order to maintain independence and impartiality, non-executive directors do not receive performance based remuneration. They are also required, under the Company’s Constitution, to hold or be the benefi cial owner of a minimum of 1,000 shares in the Company during their period of offi ce.

Retirement allowances

The 2006 Annual Report advised of the Board’s decision to discontinue the provision of retirement allowances to those directors who were still participants of the Amcor Limited NonExecutive Director Retirement Plan. With effect from 30 June 2006, existing entitlements under the Plan were “frozen” and no further accruals will be made to the Plan other than CPI indexed adjustments.

2006/07 Non-Executive Directors’ Remuneration

Table 22: Details of Non-Executive Directors’ Remuneration

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Short term Post-Employment
employee benefi ts
Salary and fees Non-monetary Superannuation Retirement Total
benefi ts benefi ts benefi t compensation
Non-Executive Directors
C I Roberts 2007 604,504 5,202 54,405 - 664,111
2006 304,500 135,582 27,405 231,795 699,282
R K Barton 2007 216,500 1,500 19,485 - 237,485
2006 128,000 35,049 11,520 68,033 242,602
G J Pizzey 2007 192,919 1,500 59,418 - 253,837
2006 168,578 45,193 15,172 - 228,943
J G Thorn 2007 171,749 1,500 105,113 - 278,362
2006 182,800 48,749 16,452 - 248,001
G A Tomlinson 2007 195,618 1,500 89,421 - 286,539
2006 142,000 38,549 12,780 102,316 295,645
E J J Pope (appointed 27 October 2005) 2007 124,252 2,488 106,283 - 233,023
2006 107,449 28,935 9,670 - 146,054
E A Alexander (retired 27 October 2005) 2006 49,032 13,244 4,413 41,265 107,954
D C K Allen (retired 27 October 2005) 2006 41,290 11,309 - 34,074 86,673
TOTAL 2007 1,505,542 13,690 434,125 - 1,953,357
2006 1,123,649 356,610 97,412 477,483 2,055,154
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Amcor Limited 41

Directors’ Report Corporate Governance Statement

The Board is committed to achieving and demonstrating the highest standards of corporate governance. This report complies with the ASX Corporate Governance Council’s Principles of Good Corporate Governance and Best Practice Recommendations. Amcor’s corporate governance practices were in place throughout the year ended 30 June 2007 and were compliant with the Council’s best practice recommendations. The Board continues to review the framework and practices in place to ensure they meet the interests of shareholders. A description of the Company’s main corporate governance practices are set out below. All these practices, unless otherwise stated, were in place for the full fi nancial year.

The Board of Directors

Role of the Board

The Board of Directors of Amcor Limited is responsible for the corporate governance of the Company. The Board guides and monitors the business and affairs of Amcor Limited on behalf of the shareholders by whom they are elected and to whom they are accountable. The directors are responsible to the shareholders for the performance of the Company in both the short and the longer term and seek to balance sometimes competing objectives in the best interests of the Amcor Group as a whole. Their focus is to enhance the interests of shareholders and other key stakeholders and to ensure the Group is properly managed. The Board operates in accordance with the broad principles set out in its charter which is available from the corporate governance information section of the Company website.

Day to day management of the Group’s affairs and the implementation of the corporate strategy and policy initiatives are formally delegated by the Board to the Chief Executive Offi cer and executive management. Responsibilities are set out in the Group’s delegated authority policy and these delegations are reviewed on an annual basis.

Responsibilities The responsibilities of the Board include:

• oversight of the management of the Company and direction of its business strategy with the aim of increasing value for shareholders;

• providing strategic direction for, and approving, the Company’s business strategies and objectives;

• monitoring the operational and fi nancial position and performance of the Company;

• oversight of identifi cations of the principal risks faced by the Company and taking reasonable steps designed to ensure that appropriate internal controls and monitoring systems are in place to manage and, to the extent possible, reduce the impact of these risks;

• ensuring that fi nancial and other reporting mechanisms are put in place by the Chief Executive Offi cer which result in adequate, accurate and timely information being provided to the Board and the Company’s shareholders and the fi nancial market as

a whole being fully informed of all material developments relating to the Company;

• appointing and, where appropriate, removing the Managing Director, approving other key executive appointments and planning for executive succession;

• overseeing and evaluating the performance of the Managing Director, and other senior executives, having regard to the Company’s business strategies and objectives;

• reviewing and approving remuneration for the senior executives of the Company;

• approving the Company’s budgets and business plans and monitoring the management of the Company’s capital, including the progress of any major capital expenditures, acquisitions or divestitures;

• establishing procedures to ensure that fi nancial results are appropriately and accurately reported on a timely basis in accordance with all legal and regulatory requirements;

• adopting appropriate procedures to ensure compliance with all laws, governmental regulations and accounting standards;

• approving, and reviewing, the Company’s internal compliance procedures, including any codes of conduct and taking all reasonable steps to ensure that the business of the Company is conducted in an open and ethical manner; and

• reviewing and amending the Board and committee charters.

Board Processes

To ensure that these responsibilities are upheld and executed to the highest level, the Board has established the following Board committees:

• Audit & Compliance

• Executive

• Human Resources

• Nomination

• Superannuation

Each of these committees has written mandates and operating procedures in place which are reviewed on a regular basis. The Board has also established a framework for the management of the consolidated entity including a system of internal control, a business risk management process and the establishment of appropriate ethical standards.

The full Board currently holds up to 12 scheduled meetings during the year plus strategy meetings and any extraordinary meetings that may be necessary to address any signifi cant matters that may arise. The agenda for meetings is prepared in conjunction with the Chairman, the Managing Director and Chief Executive Offi cer and the Company Secretary.

Standing items include the Managing Director’s report, Business Group Managing Directors’ reports, fi nancial reports, strategic matters

and governance and compliance issues. All submissions are circulated in advance to allow the Board time to review and give due consideration to each report. Executives are regularly involved in Board discussions and directors have other opportunities to interact with management and employees during visits to business units and plants both locally and overseas. However, the non-executive directors have a private session at each Board meeting at which management is not present.

Director Education

Amcor Limited has in place a formal process to educate new directors about the nature of the business, current issues, the corporate strategy and the expectations of the consolidated entity concerning performance of directors. Directors also have the opportunity to visit Amcor facilities and meet with management to gain a better understanding of business operations. Directors are given access to continuing education opportunities to update and enhance their skills and knowledge.

Independent Professional Advice and Access to Company Information Each director has the right of access to all relevant company information and to the Company’s executives and, subject to prior consultation with and approval from the Chairman, may seek independent professional advice from a suitably qualifi ed advisor at the Company’s expense.

The director must consult with an advisor suitably qualifi ed in the relevant fi eld and obtain the Chairman’s approval of the fee payable for the advice before proceeding with the consultation. A copy of the advice received by the director is made available for all other members of the Board.

Composition of the Board

Details of the members of the Board, their experience, expertise, qualifi cations, term of offi ce and independence status are set out in the Directors’ Report on pages 22 to 24. The composition of the Board is determined using the following principles:

• a minimum of seven directors, with a broad range of expertise both nationally and internationally;

• a majority of independent non-executive directors;

• a majority of directors having extensive knowledge of the Company’s industries, and those who do not, having extensive expertise in signifi cant aspects of fi nancial reporting and risk management of large companies;

• a non-executive independent director as Chairman;

• enough directors to serve on Board committees without overburdening the directors or making it diffi cult for them to fully discharge their responsibilities; and

• directors are subject to re-election by shareholders at least every three years (except for the Managing Director and Chief Executive Offi cer).

42 Amcor Limited

Directors’ Report Corporate Governance Statement

The Board seeks to ensure that:

• at any point in time, its membership represents an appropriate balance between directors with experience and knowledge of the Group and directors with an external or fresh perspective; and

• the size of the Board is appropriate to facilitate effective discussion and effi cient decision-making.

Directors’ Independence

The Board has adopted specifi c principles in relation to directors’ independence. These state that to be deemed as independent, a director must not be a member of management and who:

• holds more than 5% of the voting shares of the Company or is an offi cer of, or otherwise associated, directly or indirectly, with a shareholder of more than 5% of the voting shares of the Company;

• has not within the past three years been employed in an executive capacity by the Company or another Group member, or been a director after ceasing to hold any such employment;

• has not within the past three years been a principal or employee of a material* professional adviser or a material consultant to the Company or another Group member;

• is not a material supplier or customer of the Company or another Group member, or an offi cer of or otherwise associated, directly or indirectly, with a material supplier or customer;

• has no material contractual relationship with the Company or another Group member other than as a director of the Company;

• is free from any interest and any business or other relationship which could, or could reasonably be perceived to, materially interfere with the director’s ability to act in the best interests of the Company; and

• has the ability to devote the necessary time to the important tasks entrusted to him/her as a director of the consolidated entity.

In accordance with recent developments in corporate governance, the Board has agreed to limit the tenure for directors to 10 years, to ensure directors remain demonstrably independent, with a view to the best representation of the interests of shareholders.

Commitment

The directors held 14 Board meetings and 25 committee meetings during the year. Directors visited operational sites of the Company in addition to those meetings this year.

Non-executive directors are expected to spend a reasonable time each year preparing for and attending Board and committee meetings and associated activities.

The number of meetings of the Company’s Board of directors and of each Board committee held during the year ended 30 June 2007,

and the number of meetings attended by each director is disclosed on page 26.

It is the Company’s practice to allow its executive directors to accept appointments outside the Company with prior written approval of the Board. No appointments of this nature were accepted during the year ended 30 June 2007.

The commitments of non-executive directors are considered by the Nomination Committee prior to the directors’ appointment to the Board of the Company and are reviewed each year as part of the annual performance assessment. Prior to appointment or being submitted for reelection, each non-executive director is required to specifi cally acknowledge that they have and will continue to have the time available to discharge their responsibilities to the Company.

Term of Offi ce Held by Each Director

The term of offi ce held by each director in offi ce at the date of this report is outlined in the directors’ profi les on pages 22 to 24.

Committees of the Board

Nomination Committee

The Nomination Committee oversees the appointment and induction process for directors and committee members, and the selection, appointment and succession planning process of the Company’s Managing Director and Chief Executive Offi cer.

The Committee makes recommendations to the Board on the appropriate skill mix, personal qualities, expertise and diversity of each position. When a vacancy exists or there is a need for particular skills, the Committee, in consultation with the Board, determines the selection criteria based on the skills deemed necessary. The Committee identifi es potential candidates with advice from an external consultant where appropriate. The Board then appoints the most suitable candidate. Appointees must stand for election at the next Annual General Meeting of shareholders.

A number of initiatives were implemented during the year following a formal review of the effectiveness of the Board, its committees, individual directors and senior executives conducted in the previous year by the Chairman in conjunction with the Nomination Committee.

From August 2006, the Committee has operated with only three members to encourage effi cient decision making in relation to the detailed examination of selection and appointment practices of the organisation in accordance with Principle 2 of the ASX’s Good Corporate Governance Recommendations.

The names of the members as at the date of this report are set out below and further details of their profi les are set out on pages 22 to 24.

Nomination Committee:

C I Roberts (Chairman) – Independent Non-Executive Director

G J Pizzey – Independent Non-Executive Director

E J J Pope – Independent Non-Executive Director

The Nomination Committee met once during the year. Attendance at meetings is disclosed on page 26.

The terms and conditions of the appointment and retirement of non-executive directors are set out in correspondence to the relevant party, including expectations for attendance and preparation for all Board meetings, appointments to other Boards, the procedures for dealing with confl icts of interest, and the availability of independent professional advice. Further details of the Nomination Committee’s charter and policies, including those for appointing directors, are available on the Company’s website.

Executive Committee

The Executive Committee deals with matters referred to it by the Board or with urgent matters which may not be deferred until the next meeting of the Board. The Board confi rms the actions of this Committee at its next meeting. A majority of the Committee must be independent. As at the date of this report, the names of the members are set out below and further details of their profi les are set out on pages 22 to 24.

Executive Committee:

C I Roberts (Chairman) – Independent Non-Executive Director

R K Barton – Independent Non-Executive Director

G J Pizzey – Independent Non-Executive Director

K N MacKenzie – Executive Director

All other non-executive directors of the Executive Committee receive the agendas and papers and are encouraged to attend meetings of the Executive Committee as available. The Committee met eight times during the year and members’ attendance at these meetings is disclosed in the table of directors’ meetings on page 26.

Human Resources Committee

The Human Resources Committee reviews and makes recommendations to the Board on remuneration packages and policies applicable to the Managing Director and Chief Executive Offi cer, senior executives and directors themselves. It is also responsible for the Company’s policies and procedures for retention of senior management, incentive performance schemes, reviewing executive development leadership and succession plans, and reviewing human resource plans for each business. The majority of members must be independent. The Human Resources Committee’s charter is available on the Company’s website. The Remuneration Report, which includes references to retirement benefi ts and superannuation for non-executive directors, is set out on pages 30 to 40 and forms part of the Directors’ Report for the fi nancial year ended 30 June 2007.

As at the date of this report, the names of the members of the Committee are set out below and further details of their profi les are set out on pages 22 to 24.

• The Board considers as ‘material’ in this context, where any director related business relationship has represented, or is likely in future to represent the lesser of at least 5% of the relevant segment’s or the director-related business’ revenue. The Board considered the nature of the relevant industries’ competition and the size and nature of each director related business relationship, in arriving at this threshold.

Amcor Limited 43

Human Resources Committee:

G A Tomlinson (Chairman) – Independent Non-Executive Director

K N MacKenzie – Managing Director and Chief Executive Offi cer

G J Pizzey – Independent Non-Executive Director

E J J Pope – Independent Non-Executive Director

C I Roberts – Independent Non-Executive Director

Although the Managing Director and Chief Executive Offi cer is a member of this Committee, he will not:

• (a) vote on matters relating to the remuneration of executive offi cers of the Company; and

• (b) attend meetings or vote on matters regarding the remuneration of the Managing Director and Chief Executive Offi cer.

The Human Resources Committee meets as and when required. The Committee met six times during the year and committee members’ attendance records are disclosed in the table of directors’ meetings on page 26.

Audit & Compliance Committee The Audit & Compliance Committee has a documented charter approved by the Board.

All members must be independent nonexecutive directors. The Chairman may not be the Chairman of the Board. The Committee advises on the establishment and maintenance of a framework of internal control and appropriate ethical standards for the management of the Company.

As at the date of this report, the names of the members of the Committee are set out below and further details of their profi les are set out on pages 22 to 24.

Audit & Compliance Committee:

J G Thorn (Chairman) – Independent Non-Executive Director

R K Barton – Independent Non-Executive Director

G A Tomlinson – Independent Non-Executive Director

The internal and external auditors, the Managing Director and Chief Executive Offi cer and the Executive General Manager Finance, are invited to Audit & Compliance Committee meetings at the discretion of the Committee.

The Audit & Compliance Committee is required under the charter to meet quarterly and otherwise as necessary. This year, the Committee met 6 times during the year and Committee members’ attendance records are disclosed in the table of directors’ meetings on page 26. The external auditor met with the Audit & Compliance Committee six times during the year without management being present.

During the year, the Audit & Compliance Committee considered the role of the external auditor and recommended to the Board the appointment of a new auditor for 2007/08. A resolution to appoint PricewaterhouseCoopers will be put to the Annual General Meeting of the Company on 24 October 2007.

The Audit & Compliance Committee’s charter is available with the Board Charter in the Corporate Governance section of the Company’s website.

Superannuation Committee

In April 2006, a Superannuation Committee of the Board was formed for a limited period to assist the Board in fulfi lling its responsibility for oversight of superannuation and pension matters affecting the Company. The Committee has a documented Charter to oversee any defi cit and related asset and liability issues regarding superannuation obligations of the Company in each relevant jurisdiction in which the Company operates. The Committee has encouraged a common global approach to the management of superannuation and pension funds.

The Committee consists of three Independent Non-Executive directors who met four times during the year. Attendances are shown on page 26.

As at the date of this report, the names of the members of the Committee are set out below and further details of their profi les are set out on pages 22 to 24.

Superannuation Committee:

G A Tomlinson (Chairman) – Independent Non-Executive Director

J G Thorn – Independent Non-Executive Director

C I Roberts – Independent Non-Executive Director

Risk Management

Oversight of the Risk Management System The Board oversees the establishment, implementation, and annual review of the Company’s risk management. A formalised Risk Assessment and Management Framework for assessing, monitoring and managing strategic operational and fi nancial risks for the consolidated entity is in place to ensure that Amcor is undertaking appropriate risk management of its operations. In 2007, Amcor introduced an Enterprise Risk Management framework to further enhance the existing risk management processes. A further review will take place having regard to Revised Principle 7 of the ASX Corporate Governance Principles to be introduced in 2008 for the 2009 fi nancial year.

Major risks arise from such matters as actions by competitors, government policy changes, the impact of exchange rate movements on the price of raw materials and sales, diffi culties in sourcing raw materials, environment, occupational health and safety, property, fi nancial reporting, fi nancial markets and the purchase, development and use of information systems.

The Audit & Compliance Committee reports to the Board on the status of the risk management system, which is aimed at ensuring risks are identifi ed, assessed and appropriately managed.

Risk Management and Compliance and Control The Board is responsible for oversight of the overall internal control framework, but recognises that no cost-effective internal control system will preclude all errors and irregularities. The Board’s policies on internal governance control are comprehensive and include, in addition to fi nancial planning and reporting procedures and the use of internal and external auditors: a Code of Conduct and Ethics, a Delegated Authority Policy, a Fraud Policy and a Whistleblower Policy. Details of these are available on the Company’s website. The Company strives to ensure that its products are of the highest standard. Towards this aim, each of its business segments has highly developed quality control systems which are based on the internationally accepted ISO 9000 series and meet all the extensive customer requirements.

Financial reporting

The Chief Executive Offi cer and the Executive General Manager Finance have declared in writing to the Board that the Company’s fi nancial records have been properly maintained and the fi nancial reports present a true and fair view, in all material respects, of the Company’s fi nancial condition and operational results and are in accordance with the relevant accounting standards. The declarations are based on a sound system of risk management and internal compliance and control which implements the policies adopted by the Board in accordance with Principles 4 and 7 of the ASX Principles of Good Corporate Governance.

The consolidated entity has fully complied with the reporting requirements of International Financial Reporting Standards for the fi nancial year ended 30 June 2007.

Environmental Regulation

The consolidated entity is committed to achieving a high standard of environmental performance. Its operations are subject to signifi cant environmental regulation in all countries in which it maintains a presence. The Board is responsible for the regular monitoring of environmental exposures and compliance with environmental regulations. As part of this process, the Board is responsible for overseeing:

• implementation of environmental management plans in operating areas which may have a signifi cant environmental impact;

• identifying where remedial actions are required and implementing action plans to remedy problems, reduce the risks of adverse environmental impact, and to improve environmental performance; and

• regular monitoring of regulatory requirements.

To enable it to meet its responsibilities of oversight, the Board has established an internal reporting process. Environmental performance is reported from each site up through management to the Board on a regular basis. Compliance with the requirements of

44 Amcor Limited

Directors’ Report Corporate Governance Statement

environmental regulations and with specifi c requirements of site environmental licences was substantially achieved across all operations. The sustainability report on page 20 also addresses environmental performance.

During the fi nancial year, two penalty infringement notices for minor spills of waste were received in Australia. One was at St Regis Bates at Keon Park, Victoria and the other was at the Fairfi eld Paper Mill at Fairfi eld, Victoria. It is anticipated that prosecutions may arise regarding these incidents.

Internal Control

Amcor’s directors accept the responsibility for oversight of the effectiveness of the Group’s internal control environment. In order to effectively discharge these responsibilities they have long established a number of assurance functions (including the internal audit function) to independently review the control environment and provide regular reports to directors’ and management committees. These reports and associated recommendations are considered and acted upon to maintain or strengthen the control environment.

Amcor has a Group-wide internal audit function to assist the Board in ensuring compliance with the internal controls and risk management programs by regularly reviewing the effectiveness of the Company’s compliance and control systems. The Audit & Compliance Committee is responsible for approving the scope of internal audit’s work and for overseeing the performance of the internal audit function.

Assessment of Effectiveness of Risk Management

The control environment includes processes for identifying, evaluating and managing the signifi cant risks faced by the Group. The objectives are:

• the coordination of risk assessment and risk management activities;

• ensuring risk exposures are escalated to the Board effectively and consistently and provide the Board with a comprehensive view of the risks faced;

• helping management better understand barriers to the success of initiatives for growth and sustainable development; and

• improving corporate fl exibility in preparation for increased complexity and diversity in the Group.

Amcor is committed to the proactive recognition and anticipation of risks to ensure that the threats posed to achieving corporate objectives are minimised, thus ensuring that effective advantage is taken of business opportunities.

In recent years, the international business community has seen an escalation in regulation designed to strengthen corporate governance and expand management accountability. One such piece of legislation is the US SarbanesOxley Act 2002. Section 404 of the Act required Amcor management to formally assert the adequacy of internal controls over fi nancial reporting each year.

To comply with the requirements of the Sarbanes-Oxley Act , management initiated a project in 2003 to document and test controls over fi nancial reporting systems throughout the Group. These efforts resulted in a strengthening of the control environment.

The processes and testing established by the project have been evaluated in order to ensure that they continue to evolve to address the changing environment and to effectively focus on risk areas while minimising the fi nancial burden.

Directors expect that the Sarbanes-Oxley Act will no longer apply to Amcor following the application in June 2007 to deregister at the US Securities and Exchange Commission. This is expected to be effective from early September 2007. However, the maintenance and improvement of the control environment will continue to be a key objective of the directors and management.

Ethical Standards

All directors, managers and employees are expected to act with the utmost integrity and objectivity, striving at all times to enhance the reputation and performance of the Company. Every employee has a nominated supervisor to whom they may refer any issues arising from their employment. Alternatively, employees may use the Whistleblower procedures in place. The Board reviews the Code of Conduct and Ethics Policy regularly and processes are in place to promote and communicate these policies.

Confl ict of Interest

Directors must keep the Board advised, on an ongoing basis, of any interest that could potentially confl ict with those of the Company. The Board has developed procedures to assist directors to disclose potential confl icts of interest and, each year, all independent directors complete independence declarations. Where the Board believes that a signifi cant confl ict exists for a director on a Board matter, the director concerned does not receive the relevant Board papers and is not present at the meeting whilst the item is considered.

Details of director-related entity transactions with the Company are set out in Note 30 to the Financial Statements.

Code of Conduct and Whistleblower Policy The Company has advised each director, manager and employee that they must comply with the Corporate Code of Conduct and Ethics Policy. The Policy may be viewed on the Company’s website and includes a Whistleblower Policy. Under this policy, an Amcor Whistleblower Service was introduced in 2004 to facilitate reporting of potential misconduct within the Company.

This facility enables employees to report potential misconduct in the form of theft, fraud, dishonesty, illegal activity, harassment, unethical behaviour and workplace safety hazards, to a third party who is responsible for coordinating the investigation of issues raised on behalf of the Company and the whistleblower. Employees who report suspected inappropriate conduct are protected from bullying, harassment or discrimination when they make reports in good faith. There were 51 reports recorded during the fi nancial year.

These reports revolve around human resources, fi nancial, procedural and criminal issues. Each report is investigated thoroughly and appropriate action taken as necessary.

In addition, a Third Party Complaints email and free post facility has been set up on the Company’s website to enable third parties such as suppliers, consumers, contractors and customers to report potential misconduct within the organisation.

The Code of Conduct and Ethics also reiterates that bribery of any form is unacceptable. This has been reinforced to employees via articles published in the global staff publications.

Fraud Policy

The Company has a Fraud Policy covering responsibilities and strategies to identify fraud within the Amcor Group, reporting of fraud and recovering losses. This policy applies to all activities, employees and other representatives of Amcor globally.

Trading in General Company Securities by Directors and Employees Amcor has a Share Trading Policy to control trading by directors and employees in securities of Amcor Limited. Key elements of the policy are outlined below:

• Any director and employee who has price sensitive information relating to Amcor which has not been published or which is not otherwise generally available, may not deal in Amcor securities, advise, procure or encourage another person to deal in Amcor securities, or pass on information to any other person who may use the information to deal in Amcor securities.

• Amcor has limited the times when directors and employees may buy or sell securities. These periods are limited to a period of four weeks after the release of the half year results, full year results and the holding of the Annual General Meeting.

• Directors and employees must not engage in hedging arrangements (including, for example, the use of put and call options or derivative instruments) over unvested securities issued pursuant to any employee or director option or share plan. In addition, hedging over vested securities must comply with this policy.

• It is recognised that individual circumstances may require a person to dispose of securities outside the specifi ed windows. In such cases, any director or employee is required to seek the prior approval of the Company Secretary who may approve the transaction or, in certain circumstances, seek approval from the Executive General Manager Human Resources or the Chairman of the Board.

The Share Trading Policy is reproduced in full on the Company’s website.

Communication with Shareholders

Timely and Balanced disclosure The Board provides shareholders with information using a comprehensive Continuous Disclosure Policy, which includes identifying matters that may have a material effect on the

Amcor Limited 45

price of the Company’s securities, notifying them to the ASX, posting relevant information on the Company’s website, and issuing media releases. The policy is available on the Company’s website. Additional communications with shareholders include:

Australia and New Zealand. Amcor has already helped to facilitate the planting of more than 19,000 native trees via this initiative.

MD/CEO and EGMF Certifi cations

The directors have received and considered the certifi cation from the Managing Director and Chief Executive Offi cer and the Executive General Manager Finance in accordance with ASX Corporate Governance Council’s “Principles of Good Corporate Governance and Best Practice Recommendations” (the Principles) and the Corporations Act 2001 .

• The Annual Report, which is distributed to those shareholders who request it, includes relevant information about the operations of the consolidated entity during the year, changes in the state of affairs and indications of future developments.

• The half-year fi nancial results are lodged with the Australian Securities and Investments Commission and the ASX.

The certifi cation is as follows:

• (a) With regard to the integrity of the Financial Statements of Amcor Limited for the full year, being the year ended 30 June 2007, that having made appropriate enquiries, in our opinion:

• All announcements made to the market, and related information (including information provided to analysts or the media during briefi ngs), are placed on the Company’s website after they are released to the ASX.

• (i) the fi nancial records of the Company and of the entities whose fi nancial statements are required to be included in its consolidated fi nancial statements (the Consolidated Entity) for the fi nancial year have been properly maintained in accordance with section 286 of the Corporations Act 2001 ; and

• Analyst briefi ngs and general meetings are webcast and recordings placed on the Company’s website.

• Any proposed major changes in the in accordance with section 286 of the consolidated entity which may impact Corporations Act 2001 ; and on share ownership rights are submitted to a vote of shareholders. (ii) the fi nancial reports of the Company and of the Consolidated Entity, being

• • Notices of meetings and associated the Financial Statements and notes, explanatory material are placed on the present a true and fair view of the Company’s website; and fi nancial position and performance of the Company and of the Consolidated

• • The external auditors attend the Annual Entity in accordance with section 297 of General Meeting to answer any questions the Corporations Act 2001 and comply concerning the audit and the content of with relevant accounting standards. the auditors’ report.

• (b) With regard to the risk management and

• All of the above information, including that internal compliance and control systems of the previous three years, is made available of the Consolidated Entity in operation on the consolidated entity’s website within as at 30 June 2007, that having made one day of public release, and is emailed to appropriate enquiries, within the context all shareholders who lodge their email contact described in (c) below, to the best of our details with the Company. Information on knowledge and belief: lodging email addresses with the Company is available on the Company’s website. (i) the statements made in (a)(ii) above regarding the fi nancial reports are

• The Board encourages full participation of founded on sound risk management shareholders at the Annual General Meeting, and internal compliance and control to ensure a high level of accountability and systems which in all material aspects, identifi cation with the Company’s strategy and implement the policies which have been goals. Important issues are presented to the adopted by the Board of Directors of shareholders as single resolutions. the Company either directly or through delegation to senior executives; and

• The shareholders are requested to vote on matters such as the appointment and aggregate (ii) the risk management and internal remuneration of directors, the granting of compliance and control systems options and shares to directors and changes adopted by the Company are to the Constitution. A copy of the Constitution operating effectively and effi ciently, is available to any shareholder who requests it. in all material respects. eTree (c) The statements made in (b) above In March 2006, Amcor joined with many other regarding the risk management and major Australian corporations and commenced internal compliance and control systems its support of the environmental initiative eTree. of the Consolidated Entity in operation Under this program, Amcor shareholders can as at 30 June 2007 are made within help reduce paper usage and company costs by the following context: electing to receive all shareholder information (including the Annual Report) online. For every (i) these statements provide a reasonable, email address registered on www.eTree.com. but not absolute, level of assurance; au/amcor, $2 is donated to Landcare Australia on the shareholder’s behalf to support native (ii) the risk management and internal reforestation and restoration projects in compliance and control systems of

the Consolidated Entity were enhanced during the current reporting period. The design, operation and testing of controls has been assessed primarily through the use of declarations by process owners who are responsible for the operation of those controls. This assessment will continue to evolve and be enhanced in the future as the risk management and internal compliance and control systems are further developed; and

• (iii) while a number of control defi ciencies were identifi ed during the year, in all such cases additional tests of procedures or tests of applicable account balances included in the Financial Statements have confi rmed that there has been no material impact on the Financial Statements.

There are inherent limitations to the effectiveness of any system of disclosures and internal controls, including the possibility of faulty judgements or mistakes by management, fraud, or the intentional circumvention of controls by individual acts or the collusion of two or more people.

Accordingly, even an effective disclosures and internal control system can provide only reasonable assurance with respect to disclosures and fi nancial statement preparation.

Declaration

This Directors’ Report is made in accordance with a resolution of the directors, dated at Melbourne, in the State of Victoria, on 29 August, 2007.

Chris Roberts Chairman

==> picture [88 x 43] intentionally omitted <==

Ken MacKenzie Managing Director and Chief Executive Offi cer

46 Amcor Limited

Declaration by Independent Auditors

Lead auditor’s independence declaration under Section 307C of the Corporations Act 2001 To the directors of Amcor Limited

I declare that, to the best of my knowledge and belief, in relation to the audit for the fi nancial year ended 30 June 2007 there have been:

• no contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in relation to the audit; and

• no contraventions of any applicable code of professional conduct in relation to the audit.

==> picture [88 x 43] intentionally omitted <==

KPMG

==> picture [88 x 43] intentionally omitted <==

P M Shannon Partner

Melbourne 29 August 2007

Amcor Limited 47

Financial Report

Contents of Financial Report	Contents of Financial Report	Page
	Income Statements	48
	Balance Sheets	49
	Statements of Recognised Income and Expense	50
	Cash Flow Statements	51
Notes to the Financial Statements
1	Summary of Signif cant Accounting Policies	53
2	Correction of Prior Period Errors	62
3	Segment Information	62
4	Discontinued Operations	66
5	Revenue, Other Income and Financial Income	67
6	Expenses	68
7	Signif cant Items	69
8	Income Tax Expense	70
9	Auditors’ Remuneration	71
10	Earnings per Share	72
11	Cash and Cash Equivalents	73
12	Trade and Other Receivables	73
13	Inventories	73
14	Other Financial Assets	74
15	Equity Accounted Investments	75
16	Property, Plant and Equipment	77
17	Deferred Tax Assets and Liabilities	79
18	Intangible Assets	81
19	Other Non-Current Assets	83
20	Trade and Other Payables	83
21	Interest-Bearing Liabilities	83
22	Subordinated Convertible Securities	85
23	Other Financial Liabilities	86
24	Provisions	87
25	Retirement Benef t Obligations	88
26	Contributed Equity and Reserves	93
27	Dividends	95
28	Additional Financial Instruments Disclosures	96
29	Share-Based Payments	102
30	Key Management Personnel Disclosures	110
31	Other Related Party Disclosures	114
32	Contingencies	115
33	Commitments	117
34	Particulars in Relation to Controlled Entities and Businesses	118
35	Deed of Cross Guarantee	119
36	Events Subsequent to Balance Date	121

48 Amcor Limited

Income Statements

For the fi nancial year ended 30 June 2007

		Consolidated	Consolidated	Amcor Limited	Amcor Limited
		2007	2006	2007	2006
$million	Note		Restated*		Restated*
Sales revenue from continuing operations	3, 5	9,960.1	10,222.8	–	–
Cost of sales		(8,331.5)	(8,586.7)	–	–
Gross prof t		1,628.6	1,636.1	–	–
Other income	3, 5	63.5	164.4	481.2	30.7
Sales and marketing expenses		(316.9)	(309.6)	–	–
General and administration expenses		(860.7)	(748.8)	(43.2)	(287.7)
Research costs		(32.2)	(31.5)	(0.1)	(0.1)
Share of net prof t of equity accounted investments	15	22.0	9.8	–	–
Prof t/(loss)from operations		504.3	720.4	437.9	(257.1)
Financial income	5	23.4	19.6	393.6	360.9
Financial expenses	6	(233.8)	(254.6)	(338.3)	(286.9)
Net f nance costs		(210.4)	(235.0)	55.3	74.0
Prof t/(loss) before related income tax expense		293.9	485.4	493.2	(183.1)
Income tax (expense)/benef t	8	(43.0)	(82.0)	(4.1)	106.0
Prof t/(loss) from continuing operations		250.9	403.4	489.1	(77.1)
Prof t/(loss)from discontinued operations,net of tax	4	294.2	(24.2)	(0.6)	2.8
Prof t/(loss)for the f nancialperiod		545.1	379.2	488.5	(74.3)
Prof t/(loss) attributable to:
Members of Amcor Limited		533.7	351.3	488.5	(74.3)
Minorityinterest		11.4	27.9	–	–
		545.1	379.2	488.5	(74.3)
Earnings per share for prof t from continuing operations
attributable to the ordinary equity holders of Amcor Limited		Cents	Cents
Basic earnings per share	10	26.7	42.7
Diluted earnings per share	10	26.2	41.8
Earnings per share for prof t attributable to the ordinary equity
holders of Amcor Limited
Basic earnings per share	10	59.5	39.9
Diluted earnings per share	10	58.4	39.4

• See changes in accounting policies – notes 1(q) and 1(s) and discontinued operations – note 4.

The above income statements should be read in conjunction with the accompanying notes on pages 53 to 121.

Amcor Limited 49

Balance Sheets

As at 30 June 2007

		Consolidated	Consolidated	Amcor Limited	Amcor Limited
		2007	2006	2007	2006
$million	Note		Restated*		Restated*
Current assets
Cash and cash equivalents	11	114.7	113.9	0.1	–
Trade and other receivables	12	2,087.3	1,691.9	6,568.8	6,519.3
Inventories	13	1,189.1	1,380.3	–	–
Other f nancial assets	14	3.4	10.8	1.2	4.1
Total current assets		3,394.5	3,196.9	6,570.1	6,523.4
Non-current assets
Investments accounted for using the equity method	15	279.3	283.1	–	–
Other f nancial assets	14	43.0	19.1	4,705.4	4,692.8
Property, plant and equipment	16	3,835.4	4,296.8	0.3	0.6
Deferred tax assets	17	56.7	133.4	–	36.4
Intangible assets	18	1,458.7	1,888.4	14.7	16.2
Other non-current assets	19	74.7	80.5	3.2	5.1
Total non-current assets		5,747.8	6,701.3	4,723.6	4,751.1
Total assets		9,142.3	9,898.2	11,293.7	11,274.5
Current liabilities
Trade and other payables	20	1,853.5	2,076.6	53.7	53.0
Interest-bearing liabilities	21	1,378.6	690.4	4,787.8	4,570.2
Subordinated convertible securities	22	–	464.2	–	246.0
Other f nancial liabilities	23	11.6	3.2	2.6	–
Current tax liabilities		36.1	54.7	14.4	28.2
Provisions	24	241.8	290.0	1.5	1.6
Total current liabilities		3,521.6	3,579.1	4,860.0	4,899.0
Non-current liabilities
Trade and other payables	20	27.9	31.1	–	–
Interest-bearing liabilities	21	1,620.5	2,084.9	1,395.4	1,509.8
Other f nancial liabilities	23	0.4	–	2.9	–
Deferred tax liabilities	17	196.5	249.9	59.5	–
Provisions	24	92.7	100.6	6.2	5.9
Retirement benef t obligations	25	101.4	246.6	7.6	35.8
Total non-current liabilities		2,039.4	2,713.1	1,471.6	1,551.5
Total liabilities		5,561.0	6,292.2	6,331.6	6,450.5
Net assets		3,581.3	3,606.0	4,962.1	4,824.0
Equity
Contributed equity	26	2,742.8	2,810.3	2,742.8	2,810.3
Reserves	26	(313.5)	(84.5)	(4.4)	(13.4)
Retained prof ts	26	1,099.8	828.6	2,223.7	2,027.1
Total equity attributable to equity holders of Amcor Limited		3,529.1	3,554.4	4,962.1	4,824.0
Minority interest	26	52.2	51.6	–	–
Total equity		3,581.3	3,606.0	4,962.1	4,824.0

• See changes in accounting policies – notes 1(q) and 1(s) and correction of prior period error – note 2.

The above balance sheets should be read in conjunction with the accompanying notes on pages 53 to 121.

50 Amcor Limited

Statements of Recognised Income and Expense

For the fi nancial year ended 30 June 2007

		Consolidated	Consolidated	Amcor Limited	Amcor Limited
		2007	2006	2007	2006
$million	Note		Restated*		Restated*
Net change in fair value of available-for-sale f nancial assets		7.5	(0.1)	–	–
Effective portion of changes in fair value of cash f ow hedges		(13.1)	3.5	(1.4)	3.9
Net change in fair value of cash f ow hedges transferred to
prof t or loss		7.5	7.9	5.2	–
Net change in fair value of cash f ow hedges transferred to
non-f nancial assets		(1.5)	0.2	–	–
Exchange differences on translation of foreign operations		(210.6)	69.2	–	–
Actuarial gains and (losses) on def ned benef t plans	25(vi)	58.7	22.3	19.6	(4.6)
Income tax on income and expense recognised directly in equity	8(c)	(44.4)	4.3	(7.0)	0.3
Income and expense recognised directly in equity		(195.9)	107.3	16.4	(0.4)
Prof t/(loss) for the f nancial period		545.1	379.2	488.5	(74.3)
Total recognised income and expense for the f nancialperiod	26	349.2	486.5	504.9	(74.7)
Total recognised income and expense for the f nancial period
is attributable to:
Members of Amcor Limited	26	341.5	452.5	504.9	(74.7)
Minorityinterest	26	7.7	34.0	–	–
		349.2	486.5	504.9	(74.7)
Effects of changes in accounting policy, net of tax:
Attributable to members of Amcor Limited
– decrease in contributed equity at the beginning of the f nancial period 26		–	(596.6)	–	–
– increase in retained earnings at the beginning of the f nancial period	26	–	3.2	–	(8.3)
– decrease in reserves at the beginning of the f nancial period	26	–	(28.1)	–	(24.1)
		–	(621.5)	–	(32.4)
Attributable to minority interest	26	–	–	–	–
		–	(621.5)	–	(32.4)
Effects of corrections of prior period errors, net of tax:
Attributable to members of Amcor Limited
– increase in retained earnings at the beginning of the period	2	–	34.0	–	–
Attributable to minorityinterest		–	–	–	–
	26	–	34.0	–	–

Other movements in equity arising from transactions with owners as owners are set out in note 26.

• See changes in accounting policies – notes 1(q) and 1(s) and correction of prior period error – note 2.

The above statements of recognised income and expense should be read in conjunction with the accompanying notes on pages 53 to 121.

Amcor Limited 51

Cash Flow Statements

For the fi nancial year ended 30 June 2007

			Consolidated	Consolidated	Amcor Limited	Amcor Limited
$million	Note		2007	2006	2007	2006
Cash f ows from operating activities
Prof t/(loss) for the f nancial period			545.1	379.2	488.5	(74.3)
Depreciation	16		440.3	452.0	0.2	0.6
Amortisation of intangible assets	18		26.6	21.4	1.9	0.8
Amortisation of f nancial guarantee contracts		5	–	–	(0.9)	–
Impairment losses on property, plant and equipment	16		63.1	66.8	–	–
Reversal of impairment losses on property, plant and equipment	16		–	(7.1)	–	–
Impairment losses on intangible assets	18		2.2	(1.1)	–	–
Non-cash retirement benef t expense	25		35.0	41.7	(0.1)	1.5
Net f nance costs			214.9	246.6	(55.3)	(74.0)
Grant income recognised			(2.7)	(2.4)	–	–
Net gain on disposal of non-current assets			(4.0)	(4.3)	(0.2)	–
Net gain on disposal of businesses/controlled entities			(0.9)	(0.4)	–	–
Net gain on disposal of equity accounted investment	15		(0.5)	–	–	–
Fair value (gains)/losses on other f nancial assets at fair value
through income statement	5,	6	0.1	(11.4)	(0.6)	(10.2)
Share of net prof ts of associates not received as dividends	15		(22.0)	(9.8)	–	–
Net foreign exchange (gain)/loss	5,	6	(1.9)	(4.3)	(254.4)	237.8
Dividends from controlled and other entities		5	(0.5)	(0.4)	(222.9)	(18.9)
Non-cash signif cant item			(261.0)	20.0	0.8	(18.6)
Other sundry items			3.0	11.4	(6.8)	(5.1)
Income tax expense/(benef t)		8	62.8	85.8	4.1	(106.0)
Operating prof t before changes in working capital and provisions			1,099.6	1,283.7	(45.7)	(66.4)
– (Increase)/decrease in prepayments and other operating assets			(1.0)	26.4	4.6	3.8
– (Decrease)/increase in employee benef ts and other operating liabilities			(72.0)	(98.4)	(5.0)	(21.9)
– (Decrease)/increase in provisions			(59.0)	(39.1)	1.7	(0.1)
– Decrease/(increase) in trade and other receivables			52.3	26.7	(3.2)	(0.6)
– Decrease/(increase) in inventories			13.2	(2.0)	–	–
– Increase/(decrease) in trade and other payables			191.0	85.0	4.3	(4.9)
			1,224.1	1,282.3	(43.3)	(90.1)
Dividends received			5.8	0.4	119.5	18.9
Interest (paid)/received			(203.5)	(239.5)	29.8	93.8
Income tax paid			(80.1)	(79.1)	(11.0)	(26.1)
Net cash from operating activities			946.3	964.1	95.0	(3.5)
Cash f ows from investing activities
(Granting)/repayment of loans relating to associated companies and
other persons			(1.8)	0.1	–	0.1
Payments for controlled entities, businesses and associates, net of cash			(31.0)	(66.8)	–	(5.9)
Payments for property, plant and equipment and intangible assets			(606.8)	(486.4)	(1.6)	(3.1)
Proceeds on disposal of associates, controlled entities and businesses(1)			70.4	(24.8)	–	–
Proceeds on disposal of controlled entities and business treated as
discontinued operations, net of cash(2)		4	(154.4)	297.5	(4.5)	21.2
Proceeds on disposal of property, plant and equipment			156.8	33.4	1.5	–
Net cash from investingactivities			(566.8)	(247.0)	(4.6)	12.3
Cash f ows from f nancing activities
Proceeds from share issues and calls on partly-paid shares			23.1	22.0	23.1	22.0
Payments for shares bought back	26		(332.9)	(57.8)	(332.9)	(57.8)
Share issue and buy-back transaction costs			(0.8)	(0.9)	(0.8)	(0.9)
Proceeds from borrowings			6,098.2	6,327.5	6,076.2	6,291.8
Repayment of borrowings			(5,966.5)	(6,833.3)	(5,556.6)	(5,974.6)
Principal lease repayments			(10.6)	(19.4)	–	–
Dividends and other equity distributions paid			(319.2)	(308.8)	(305.7)	(298.8)
Net cash from f nancing activities			(508.7)	(870.7)	(96.7)	(18.3)
Net decrease in cash held			(129.2)	(153.6)	(6.3)	(9.5)
Cash and cash equivalents at the beginning of the f nancial period			65.0	213.8	(5.8)	3.7
Effects of exchange rate changes on cash and cash equivalents			(5.6)	4.8	–	–
Cash and cash equivalents at the end of the f nancialperiod(3)			(69.8)	65.0	(12.1)	(5.8)

(1) Proceeds on disposal of associates, controlled entities and businesses in 2006 are net of $39.6 million cash transferred in respect of the Asian tobacco packaging business.

(2) Proceeds on disposal of controlled entities and business for the year ended 30 June 2007 is net of $176.8 million cash transferred in respect of the disposal of the PET European business, refer note 4.

(3) Refer to notes 11 and 21 for details of the fi nancing arrangements of the consolidated entity and the Company.

The above cash fl ow statements should be read in conjunction with the accompanying notes on pages 53 to 121.

52 Amcor Limited

Cash Flow Statements

For the fi nancial year ended 30 June 2007

Reconciliation of cash and cash equivalents

For purposes of the Cash Flow Statements, cash and cash equivalents includes cash on hand and at bank and short-term money market investments, net of outstanding bank overdrafts. Cash and cash equivalents as at the end of the fi nancial year as shown in the Cash Flow Statements is reconciled to the related items in the Balance Sheet as follows:

		Consolidated	Consolidated	Amcor Limited	Amcor Limited
$million	Note	2007	2006	2007	2006
Cash assets and cash equivalents	11	114.7	113.9	0.1	–
Bank overdrafts	21	(184.5)	(48.9)	(12.2)	(5.8)
		(69.8)	65.0	(12.1)	(5.8)

Non-cash fi nancing and investing activities

During the year ended 30 June 2007 non-cash activities of the consolidated entity and the Company included the conversion of $242.5 million (2006: $121.5 million) convertible securities into 35,700,223 (2006: 18,203,363) fullly paid ordinary shares.

The above cash fl ow statements should be read in conjunction with the accompanying notes on pages 53 to 121.

Amcor Limited 53

Notes to the Financial Statements

30 June 2007

Note 1 Summary of Signifi cant Accounting Policies

Amcor Limited (‘the Company’) is a company domiciled in Australia. The fi nancial report includes separate fi nancial statements for Amcor Limited and the consolidated fi nancial statements of the Company and its subsidiaries (together referred to as ‘the consolidated entity’) and the consolidated entity’s interest in associates.

The principal accounting policies adopted in the preparation of this fi nancial report are set out below. These policies have been consistently applied to all the periods presented in these consolidated fi nancial statements by the consolidated entity, except as described in notes 1(q) and 1(s).

(a) Basis of preparation Statement of compliance

This general purpose fi nancial report for the year ended 30 June 2007 has been prepared in accordance with Australian Accounting Standards (‘AASBs’), including Australian Accounting Interpretations, adopted by the Australian Accounting Standards Board (‘AASB’), and with the Corporations Act 2001 . The fi nancial report of the consolidated entity and the Company also complies with the International Financial Reporting Standards (‘IFRSs’) and Interpretations adopted by the International Accounting Standards Board, except that an election has been made to apply the relief provided to parent entities in respect of certain disclosure requirements contained in AASB 132 Financial Instruments: Presentation and Disclosure .

The Company is of the kind referred to in the Australian Securities and Investments Commission Class Order 98/0100 dated 10 July 1998. In accordance with that Class Order, amounts in this fi nancial report have been rounded to the nearest $100,000 or, where the amount is $50,000 or less, zero, unless specifi cally stated otherwise.

The fi nancial statements were approved by the Board of Directors on 29 August 2007.

Early adoption of standards

In the prior fi nancial period, the consolidated entity adopted AASB 132 Financial Instruments: Presentation and Disclosure and AASB 139 Financial Instruments: Recognition and Measurement in accordance with the transition rules of AASB 1 First-time Adoption of Australian Equivalents to International Financial Reporting Standards . This change was accounted for by adjusting the opening balance of retained earnings and reserves at 1 July 2005, as disclosed in the reconciliation of movements in contributed equity and reserves (note 26).

In the current fi nancial period, the consolidated entity has early adopted the following new and revised Standards and Interpretations issued by the AASB that are relevant to its operations:

• Revised AASB 123 Borrowing Costs (June 2007);

• AASB 2007-6 Amendments to Australian Accounting Standards arising from AASB 123 (June 2007);

• AASB 2007-7 Amendments to Australian Accounting Standards (June 2007);

• AASB 2007-4 Amendments to Australian Accounting Standards arising from ED 151 and Other Amendments (April 2007);

• Interpretation 11 AASB 2 Group and Treasury Share Transactions (February 2007);

• AASB 2007-1 Amendments to Australian Accounting Standards arising from AASB Interpretation 11 (February 2007);

• AASB 101 Presentation of Financial Statements (October 2006); and

• Interpretation 10 Interim Financial Reporting and Impairment (September 2006);

This includes applying the pronouncements to the fi gures in the comparative reporting period in accordance with AASB 108 Accounting Policies, Changes in Accounting Estimates and Errors .

• Note 18 – Intangible assets

• Note 24 – Provisions

• Note 25 – Retirement benefi t obligations

• Note 26 – Contributed equity and reserves

• Note 27 – Dividends

• Note 28 – Additional fi nancial instruments disclosures

• Note 34 – Particulars in relation to controlled entities and businesses

In addition, the cash fl ow statement has been restated to the alternative presentational method introduced by AASB 2007-4 adopted by the consolidated entity and the Company (refer above). The comparative income statement has also been restated as if those operations discontinued during the current period had been discontinued from the beginning of the comparative period (refer note 4).

Critical accounting estimates and assumptions

The preparation of fi nancial statements requires management to exercise its judgement and make estimates and assumptions in applying the consolidated entity’s accounting policies which impact the reported amounts of assets, liabilities, income and expenses.

Estimates and judgements are evaluated on an ongoing basis and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The actual result may differ from these accounting estimates. Revisions to accounting estimates are recognised in the period in which the estimate is revised and in any future periods affected.

Management believes the following are the critical accounting policies that involve a high degree of judgement or complexity, or where assumptions and estimation uncertainties are signifi cant in the preparation of the fi nancial statements:

Basis of measurement

The consolidated fi nancial statements have been prepared under the historical cost convention except for available-for-sale fi nancial assets, derivative fi nancial instruments and fi nancial instruments at fair value through profi t or loss which are measured at fair value (refer note 1(j)).

Comparative presentation

In the preparation of this fi nancial report, the following statements, notes and their comparative amounts have been restated to conform to the current period presentation:

• Cash Flow Statements

• Note 16 – Property, plant and equipment

• Note 17 – Deferred tax assets and liabilities

• the testing for impairment of assets – refer note 1(p), notes 16 and 18;

• the testing for impairment of goodwill – refer notes 1(o), 1(p) and note 18;

• income tax related assumptions and estimates – refer note 1(i) and note 17;

• the calculation of annual pension costs and related assets and liabilities – refer note 1(t) and note 25.

54 Amcor Limited

Notes to the Financial Statements

30 June 2007

Note 1 Summary of Signifi cant Accounting Policies (continued) (b) Principles of consolidation Subsidiaries

Subsidiaries are all those entities that are controlled by the consolidated entity. Control exists where the consolidated entity has the power to govern the fi nancial and operating policies of an entity so as to obtain benefi ts from its activities, generally accompanying a shareholding of more than 50% of the voting rights. In assessing control, the existence and effect of potential voting rights that are presently exercisable or convertible are considered.

The fi nancial statements of subsidiaries are included in the consolidated fi nancial statements from the date that the consolidated entity obtains control until the date that control ceases. All balances and transactions between entities included within the consolidated entity are eliminated. Minority interests in the results and equity of subsidiaries are shown separately in the consolidated income statement and balance sheet respectively.

In the company’s fi nancial statements, investments in subsidiaries are carried at cost less, where applicable, accumulated impairment losses.

Associates

Associates are those entities over which the consolidated entity has signifi cant infl uence, but not control, to govern the fi nancial and operating policies.

After initially being recognised at cost, the consolidated entity accounts for investments in associates using the equity method. From the date that signifi cant infl uence commences, the consolidated entity recognises its share of the associates’ profi ts or losses in the income statement, and its share of movements in reserves is recognised in reserves, until the date that signifi cant infl uence ceases. These cumulative movements are adjusted against the carrying amount of the investment. Dividends receivable from associates are recognised as a reduction in the carrying amount of the investment.

Changes in the consolidated entity’s share of net worth of associates, caused by an issue of equity by the associate, are recognised in the income statement as a gain or loss. The consolidated entity’s investment in associates includes goodwill (net of any accumulated impairment loss) identifi ed on acquisition.

(c) Foreign currency translation Items included in the fi nancial statements of each of the entities included within the consolidated entity are measured using the

currency of the economic environment in which the entity primarily generates and expends cash (‘the functional currency’). These consolidated fi nancial statements are presented in Australian dollars, which is the functional currency of the Company, Amcor Limited.

Foreign currency transactions

Transactions in foreign currencies are translated into the respective functional currency of the entity using exchange rates prevailing at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the reporting date are retranslated to the functional currency of the entity holding the monetary assets and liabilities at the foreign exchange rate at that date. Foreign exchange gains and losses arising from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies are recognised in the income statement, except when deferred in equity as qualifying cash fl ow hedges and qualifying net investment hedges, refer note 1(j).

Translation differences on non-monetary items, such as equities held at fair value through profi t or loss, are reported as part of the fair value gain or loss. Translation differences on non-monetary items, such as equities classifi ed as available-for-sale fi nancial assets, are included in the available-for-sale investments revaluation reserve in equity.

Foreign operations

The results and fi nancial position of all entities within the consolidated entity that have a functional currency different from the presentation currency are translated into Australian dollars as follows:

• assets and liabilities for each balance sheet presented are translated at the closing exchange rate at the date of that balance sheet;

• income and expenses for each income statement are translated at average exchange rates, which approximate the exchange rates at the dates of the transactions; and

• goodwill and fair value adjustments arising on the acquisition of a foreign operation are treated as asset and liabilities of the foreign operation and are translated at the closing exchange rate.

On consolidation, all the resulting exchange differences arising from the translation are recognised in the Exchange Fluctuation Reserve (‘EFR’). When a foreign operation is disposed of, in part or in full, the amount that has been recognised in equity in relation to the foreign operation is transferred to the income

statement as an adjustment to the profi t or loss on disposal.

Hedge of net investment in foreign operation

Foreign currency differences arising on the retranslation of fi nancial liabilities designated as net investment hedges of a foreign operation are recognised directly in the EFR, to the extent that the hedge is effective. To the extent that the hedge is ineffective, the foreign currency differences arising on the retranslation are recognised in the income statement. When the hedged net investment is disposed of, the cumulative amount that has been recognised in equity in relation to the hedged net investment is transferred to the income statement as an adjustment to the profi t or loss on disposal.

(d) Acquisition of assets

The purchase method of accounting is used to account for all acquisitions of assets (including business combinations) regardless of whether equity instruments or other assets are acquired. Cost is measured as the fair value of the assets given, shares issued or liabilities incurred or assumed at the date of exchange plus costs directly attributable to the acquisition. Where equity instruments are issued in an acquisition, the value of the instruments is their published price at the date of exchange unless it can be demonstrated that the published price at the date of exchange is an unreliable indicator of fair value and that other evidence and valuation methods provide a more reliable measure of fair value.

Identifi able assets acquired and liabilities and contingent liabilities assumed in a business combination are measured at fair values at the acquisition date. The excess of the cost of acquisition over the fair value of the consolidated entity’s share of the identifi able net assets acquired is recorded as goodwill, refer note 1(o). If the cost of acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference is recognised directly in the income statement.

(e) Revenue Sale of goods

Revenue from the sale of goods is measured at the fair value of the consideration received or receivable, net of returns, allowances and discounts. Revenue is recognised when the risks and rewards of ownership have transferred to the customer. No revenue is recognised if there are signifi cant uncertainties regarding recovery of the consideration due, the costs incurred or to be incurred cannot be measured reliably, there is risk of return of goods or there is continuing management involvement with the goods.

Amcor Limited 55

Dividend income

Dividend income is recognised on the date that the consolidated entity’s right to receive payment is established.

(f) Government grants

Grants from governments are recognised at their fair value where there is a reasonable assurance that the grant will be received and the consolidated entity will comply with all attached conditions.

Grants are received in relation to the purchase and construction of items of property, plant and equipment. The grants are included in non-current liabilities as deferred income and are credited to the income statement on a straight line basis over the expected lives of the related assets.

(g) Lease payments

Payments made under operating leases are recognised in the income statement on a straight-line basis over the term of the lease, while any lease incentive is recognised as an integral part of the total lease expense, over the term of the lease.

Minimum lease payments made under fi nance leases are apportioned between the fi nance expense and the reduction of the outstanding lease liability. The interest element of the fi nance cost is recognised in the income statement over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.

(h) Net fi nance costs

Net fi nance costs include interest income and expense, amortisation of discounts or premiums relating to borrowings, interest costs related to defi ned benefi t pension plans, amortisation of ancillary costs incurred in connection with the arrangement of borrowings, lease fi nance charges and the unwinding discount on provision balances.

Interest income and borrowing costs are recognised as they accrue using the effective interest rate method.

Financing costs are brought to account in determining profi t for the year, except to the extent the fi nancing costs are directly attributable to the acquisition, construction or production of a qualifying asset. Such fi nancing costs are capitalised as part of the cost of the asset up to the time it is ready for its intended use and are then amortised over the expected useful economic life.

(i) Income tax General

Income tax expense comprises current and deferred tax. Income tax expense is recognised in profi t or loss except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity.

Current tax is the expected tax payable on the taxable income for the period, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous periods, adjusted by changes in deferred tax assets and liabilities attributable to temporary differences between the tax bases of assets and liabilities and their carrying amounts in the fi nancial statements, and by the availability of unused tax losses.

Deferred tax is recognised using the balance sheet method in which temporary differences are calculated based on the carrying amounts of assets and liabilities for fi nancial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for the following temporary timing differences: the initial recognition of goodwill; the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profi t; and differences relating to investments in subsidiaries to the extent that it is probable that they will not reverse in the foreseeable future. Deferred tax is measured at the tax rates that are expected to be applied when the temporary difference reverses, that is, when the asset is realised or the liability is settled, based on the laws that have been enacted or substantively enacted at the reporting date.

Deferred tax assets are recognised only to the extent that it is probable that future taxable profi ts will be available against which the assets can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefi t will be realised.

Current tax assets and liabilities are offset where the consolidated entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously. Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset and when the deferred tax balances relate to the same taxation authority.

Use of estimates and judgements

The consolidated entity is subject to income taxes in Australia and foreign jurisdictions and as a result signifi cant judgement is required in determining the consolidated entity’s provision for income tax. There are many transactions and calculations relating to the ordinary course

of business for which the ultimate tax determination is uncertain. The consolidated entity recognises liabilities for anticipated tax audit issues based on management’s estimate of whether additional taxes will be due. Where the fi nal tax outcome of these matters is different from the amounts that were initially recorded, these differences impact the current and deferred tax provisions in the period in which such determination is made.

The consolidated entity’s accounting policy is to only recognise deferred tax assets to the extent it is probable that future taxable profi ts will be available against which the assets can be utilised. The assumptions regarding future realisation, and therefore the recognition of deferred tax assets, may change due to future operating performance and other factors.

Tax consolidation

The Company and its wholly-owned Australian resident entities have formed a tax-consolidation group and are therefore taxed as a single entity. The head entity within the tax-consolidated group is Amcor Limited.

The Company, and the members of the tax-consolidated group, recognise their own current tax expense/income and deferred tax assets and liabilities arising from temporary differences using the “separate taxpayer” approach by reference to the carrying amounts of assets and liabilities in the separate fi nancial statements of each entity and the tax values applying under tax consolidation.

In addition to its current and deferred tax balances, the Company also recognises the current tax liabilities (or assets), and the deferred tax assets arising from unused tax losses and unused tax credits assumed from members of the tax-consolidated group, as part of the tax-consolidation arrangement. Assets or liabilities arising under tax sharing agreements with members of the tax-consolidated group are recognised as amounts receivable or payable from the other entities within the tax-consolidated group.

Nature of tax sharing agreement

The Company, as the head entity of the tax-consolidated group, in conjunction with the other members of the tax-consolidated group has entered into a tax sharing agreement which sets out the funding obligations of members of the tax-consolidated group in respect of tax amounts. The tax sharing agreement requires payment to/from the head entity equal to the current tax liability/asset assumed by the head entity, resulting in the head entity recognising an intercompany receivable/payable equal to the amount of the tax liability/asset assumed.

56 Amcor Limited

Notes to the Financial Statements

30 June 2007

Note 1 Summary of Signifi cant Accounting Policies (continued) (i) Income tax (continued) The agreement requires wholly-owned subsidiaries to make contributions to the Company for tax liabilities arising from external transactions during the year. The contributions are calculated as if each subsidiary continued to be a stand-alone taxpayer in its own right. The contributions are payable annually and refl ect the timing of the head entity’s obligation to make payments for tax liabilities to the relevant tax authority.

Capital gains tax

Capital gains tax, expected to be paid, is provided for in the period in which an asset is sold.

Goods and Services Tax/Value Added Tax

Revenues, expenses and assets are recognised net of the amount of goods and services tax and valued added tax (‘GST/VAT’) and other sales related taxes, except where the amount of GST/VAT incurred is not recoverable from the relevant taxation authority. In these circumstances the GST/VAT is recognised as part of the cost of acquisition of the asset or as part of the expense.

Receivables and payables are stated with the amount of GST/VAT included. The net amount of GST/VAT recoverable from, or payable to, taxing authorities is included as a current asset or liability in the balance sheet.

Cash fl ows are included in the cash fl ow statements on a gross basis. The GST/VAT component of cash fl ows arising from investing and fi nancing activities which are recoverable from, or payable to, taxing authorities are classifi ed as operating cash fl ows.

(j) Financial instruments Non-derivative fi nancial instruments

The consolidated entity classifi es its investments and other fi nancial assets into the following categories: fi nancial assets at fair value through the income statement; loans and receivables; held-to-maturity investments; and available-for-sale fi nancial assets. The fi nancial instrument classifi cation depends on the purpose for which the investments and other fi nancial assets were acquired.

A non-derivative fi nancial instrument is recognised when the consolidated entity becomes a party to the contractual provisions of the instrument. The purchase of investments and other fi nancial assets that are available-for-sale are recognised on trade-date, the date on which the consolidated entity commits to purchase the asset. Financial assets are derecognised when the rights to receive cash fl ows from the fi nancial asset

have expired or have been transferred and the consolidated entity has transferred substantially all the risks and rewards of ownership. Financial liabilities are derecognised if the consolidated entity’s obligations specifi ed in the contract expire or are discharged or cancelled.

The consolidated entity’s accounting policies on accounting for fi nance income and expense and on impairment of fi nancial assets are described in note 1(h) and 1(p) respectively. Refer to note 1(w) regarding fair value estimation in the measurement of fi nancial instruments.

Non-derivative fi nancial instruments comprise cash and cash equivalents, trade receivables, loans and other receivables, investments in equity and debt securities, trade and other payables and interest-bearing liabilities.

(i) Cash and cash equivalents

Cash and cash equivalents include cash on hand and at bank, short-term deposits and short-term money market investments. Bank overdrafts are shown within interest-bearing liabilities in current liabilities on the balance sheet (refer notes 11 and 21).

Bank overdrafts that are repayable on demand and form an integral part of the consolidated entity’s cash management are included as a component of cash and cash equivalents for the purpose of the statement of cash fl ows.

(ii) Trade receivables, loans and other receivables

Trade and other receivables are initially recognised at fair value and subsequently measured at amortised cost using the effective interest rate method, less any impairment losses and are non-interest bearing (refer note 12).

The collectibility of trade and other receivables is reviewed on an ongoing basis. Debts which are known to be uncollectible are written off. An impairment loss is recognised when there is objective evidence that the consolidated entity will not be able to collect amounts due according to the original terms of the receivables.

Loans are non-derivative fi nancial assets with fi xed or determinable payments and are measured at their amortised cost using the effective interest rate method. They are included in current assets, except for those with maturities greater than 12 months after the balance sheet date which are classifi ed as non-current assets (refer notes 12 and 14).

(iii) Investments in equity securities

Investments in listed equity securities are available-for-sale fi nancial assets (refer note 14). Investments in listed equity securities

are initially recognised at fair value plus transaction costs and are subsequently carried at fair value. The fair value of the quoted investments is based on current bid prices. Unrealised gains and losses arising from changes in the fair value are recognised in equity in the available-for-sale fair value reserve. When securities classifi ed as available-for-sale are sold or impaired, the accumulated fair value adjustments within equity are transferred to the income statement.

Investments in equity instruments that do not have a quoted market price in an active market are measured at cost, less any impairment losses.

(iv) Trade and other payables

These amounts represent liabilities for goods and services provided to the consolidated entity prior to the end of the fi nancial year which were unpaid at the end of the fi nancial year. These amounts are unsecured.

Trade and other payables are stated at their amortised cost and are non-interest bearing (refer note 20).

(v) Interest-bearing liabilities

Bank overdrafts, bank loans, commercial paper, mortgage loans and other loans are initially recognised at their fair value, net of transaction costs incurred. Subsequent to initial recognition interest-bearing liabilities are measured at amortised cost with any difference between the net proceeds and the maturity amount recognised in the income statement over the period of the borrowings using the effective interest rate method (refer note 21).

Eurobond notes and US$ notes are carried at amortised cost, translated at exchange rates ruling at reporting date. Any difference between amortised cost and their amount at maturity is recognised in the income statement over the period of the borrowing using the effective interest rate method.

Undated subordinated convertible securities are carried at amortised cost. These securities have been translated at the exchange rate ruling at reporting date. Any difference between amortised cost and their amount at maturity is recognised in the income statement over the period of the borrowing using the effective interest rate method. The terms and conditions of undated subordinated convertible securities outstanding are set out in note 22.

Derivative fi nancial instruments

The consolidated entity uses derivative fi nancial instruments to hedge its exposure to foreign exchange, interest rate, commodity price and employee share plan risk arising from

Amcor Limited 57

operational, fi nancing and investment activities (refer notes 14 and 23).

Derivative fi nancial instruments are recognised initially at fair value on the date the instrument is entered into. Subsequent to initial recognition, derivative fi nancial instruments are remeasured to fair value. The gain or loss on remeasurement to fair value is recognised immediately in the income statement unless the derivative is designated and is effective as a hedging instrument, in which event, the timing and the recognition of profi t or loss depends on the nature of the hedging relationship. The consolidated entity designates certain derivatives either as: hedges of the exposure to fair value changes in recognised assets or liabilities or fi rm commitments (fair value hedges); hedges of the exposure to variability in cash fl ows attributable to a recognised asset or liability or highly probable forecast transaction (cash fl ow hedges); or hedges of net investments in foreign operations. Refer to note 28 for further details.

The consolidated entity documents, at the inception of the transaction, the relationship between hedging instruments and hedged items, as well as its risk management objective and strategy for undertaking various hedge transactions. The consolidated entity also documents its assessment, both at hedge inception and on an ongoing basis, as to whether the derivatives that are used in hedging transactions have been and will continue to be highly effective in offsetting changes in fair values or cash fl ows of hedged items.

Certain derivative instruments do not qualify for hedge accounting. Changes in the fair value of any derivative instrument that does not qualify for hedge accounting are recognised immediately in the income statement.

(i) Fair value hedge

Where a derivative fi nancial instrument is designated as a hedge of exposure to changes in fair value of a recognised asset or liability, the changes in the fair value of the derivative are recognised in the income statement, together with the changes in fair value of the hedged asset or liability attributable to the hedged risk.

(ii) Cash fl ow hedge

Where a derivative fi nancial instrument is designated as a hedge of the variability in cash fl ows of a recognised asset or liability, or a highly probable forecast transaction, the effective part of any gain or loss on the derivative fi nancial instrument is recognised directly in equity. The change in the fair value that is identifi ed as ineffective is recognised immediately in the income statement.

Amounts accumulated in equity are transferred to the income statement in the periods when the hedged item affects profi t or loss (for instance when the forecast sale that is hedged takes place). However, when the forecast transaction that is hedged results in the recognition of a non-fi nancial asset (for example, inventory) or a non-fi nancial liability, the gains and losses previously deferred in equity are transferred from equity and included in the measurement of the initial cost or carrying amount of the asset or liability.

When a hedging instrument expires or is sold, terminated or exercised, or when a hedge no longer meets the criteria for hedge accounting, any cumulative gain or loss existing in equity at that time remains in equity and is recognised when the forecast transaction is ultimately recognised in the income statement. When a forecast transaction is no longer expected to occur, the cumulative gain or loss that was reported in equity is immediately transferred to the income statement.

(iii) Net investment in a foreign operation

Where effective, foreign exchange differences relating to foreign currency transactions hedging a net investment in a foreign operation, together with any related income tax, are transferred to the exchange fl uctuations reserve on consolidation. The ineffective portion is recognised in the income statement.

Upon disposal of the foreign operation the cumulative amount of any gain or loss existing in equity is transferred to the income statement and recognised as part of the gain or loss on disposal of the foreign operation.

Embedded derivatives

Embedded derivatives are separated from the host contract and accounted for separately if the economic characteristics and risks of the host contract and the embedded derivative are not closely related. Changes in the fair value of separable embedded derivatives are recognised immediately in profi t or loss.

(k) Contributed equity

(i) Ordinary shares

Ordinary shares are classifi ed as equity. Incremental costs directly attributable to the issue of new shares or the exercise of options are recognised as a deduction from equity, net of any related income tax benefi t.

(ii) Repurchase of share capital

If the entity reacquires its own equity instruments, for example as the result of a share buy-back, those instruments are deducted from equity and the associated

shares are cancelled. The amount of the consideration paid, including directly attributable costs, is recognised as a deduction from contributed equity.

(l) Inventories

Inventories are valued at the lower of cost and net realisable value. The cost of inventories is based on the fi rst-in, fi rst-out principle or weighted average cost formula and includes expenditure incurred in acquiring the inventories and bringing them to their existing location and condition. In respect of manufacturing inventories and work in progress, cost includes an appropriate proportion of production fi xed and variable overheads incurred in the normal course of business.

Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses.

(m) Property, plant and equipment

Property, plant and equipment is stated at cost less accumulated depreciation and impairment. Cost includes expenditure that is directly attributable to the acquisition of the item.

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefi ts associated with the item will fl ow to the consolidated entity and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the income statement during the fi nancial period in which they are incurred.

Property, plant and equipment, excluding freehold land, is depreciated at rates based upon their expected useful lives using the straight line method. Depreciation rates used for each class of asset for the current and comparative periods are as follows:

• leasehold land between 1% – 3%

• land improvements between 1% – 3%

• buildings between 1% – 5%

• plant and equipment between 3% – 25%

• fi nance leased assets between 4% – 20%

Depreciation methods, residual values and useful lives are reassessed, and adjusted if appropriate, at each reporting date.

Gains and losses on disposals are determined by comparing proceeds with the carrying amount of the disposed asset and are included in the income statement in the period the disposal occurs.

58 Amcor Limited

Notes to the Financial Statements

30 June 2007

Note 1 Summary of Signifi cant Accounting Policies (continued)

(n) Leased assets

Leases under which the consolidated entity assumes substantially all the risks and benefi ts of ownership are classifi ed as fi nance leases. Upon initial recognition, the leased asset is measured at an amount equal to the lower of the fair value of the leased asset and the present value of the minimum lease payments. Subsequent to initial recognition, the asset is depreciated over the shorter of the asset’s useful life and the lease term, unless it is reasonably certain that ownership will be obtained by the end of the lease term where it is depreciated over the period of the expected use which is the useful life of the asset.

Other leases are operating leases and are not recognised on the consolidated entity’s balance sheet.

(o) Intangible assets Goodwill

Goodwill arises on the acquisition of subsidiaries and associates and represents the difference between the cost of a business combination over the net fair value of the identifi able assets, liabilities and contingent liabilities acquired. When deferred tax assets relating to income tax losses not previously recognised in relation to a business combination are subsequently recognised, in accordance with the consolidated entity’s accounting policy Income Tax (note 1(i)), goodwill relating to that business combination is consequently reduced to refl ect the deferred tax assets that have been recognised.

Goodwill is measured at cost less any accumulated impairment losses. In respect of equity accounted investees, the carrying amount of goodwill is included in the carrying amount of the investment.

Other intangible assets

Other intangible assets are measured at cost less accumulated amortisation and accumulated impairment losses, except for those identifi ed as having indefi nite useful lives which are not amortised.

(i) Product development

Expenditure on product research activities is recognised in the income statement in the period in which the expenditure is incurred.

Expenditure on development activities associated with product development and innovation is capitalised if the product is technically and commercially feasible, future economic benefi ts are probable and the consolidated entity intends to and has

adequate resources available to complete the development.

Capitalised development expenditure is amortised on a straight-line basis over the period of time during which the benefi ts are expected to arise, typically not exceeding ten years.

(ii) Computer software

Expenditure on signifi cant commercial development, including major software applications and associated systems, is capitalised and amortised over the period of time during which the benefi ts are expected to arise, typically between three to eight years.

Software costs are capitalised as intangible assets if they are separable or arise from contractual or other legal rights and it is probable that the expected future economic benefi ts attributable to the asset will fl ow to the consolidated entity, and the cost of the asset can be measured reliably.

Where software is internally generated, only the costs incurred in the development phase are capitalised and these are amortised on a straight-line basis over the period of time during which the benefi ts are expected to arise, typically a period not exceeding ten years. Software costs which are incurred in the research phase are expensed.

Impairment

The consolidated entity’s accounting policy on impairment of intangible assets is discussed in note 1(p) below.

(p) Impairment Non-fi nancial assets

The recoverable amount of the consolidated entity’s non-fi nancial assets, excluding inventories, deferred tax assets, defi ned benefi t assets, and goodwill are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, the asset is tested for impairment by comparing its recoverable amount to its carrying amount.

In relation to goodwill and intangible assets that have indefi nite useful lives or are not ready for use, impairment testing is completed at each reporting date, or more frequently if events or changes in circumstances indicate that there might be impairment.

In testing for impairment the recoverable amount is estimated for an individual asset or, if it is not possible to estimate the recoverable amount for the individual asset, the recoverable amount of the cash generating unit (CGU) to which the asset belongs. CGUs are the smallest identifi able group of assets that generate cash

fl ows that are largely independent from the cash fl ows of other assets or group of assets. Each CGU is no larger than a segment.

The recoverable amount of an asset or a CGU is the greater of fair value less costs to sell and value in use. An impairment loss is recognised in the income statement if the carrying amount of an asset or its CGU exceeds its recoverable amount. Impairment losses recognised in respect of CGUs are allocated fi rst to reduce the carrying amount of any goodwill allocated to the CGU (group of CGUs) and then, to reduce the carrying amount of the other assets in the CGU (group of CGUs) on a pro rata basis.

Impairment losses recognised in respect of goodwill are not reversed. Impairment losses recognised in prior periods in respect of other assets are assessed at each reporting date for any indications that the impairment loss has decreased or may no longer exist. The impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount of the asset and is reversed only to the extent that the carrying amount of the asset does not exceed the carrying amount that would have been determined, net of amortisation or depreciation, had no impairment loss been recognised.

Financial assets

Financial assets are considered to be impaired if there is objective evidence which indicates that there has been a negative effect on the estimated future cash fl ows of that asset. Individually signifi cant fi nancial assets are tested for impairment on an individual basis. The remaining fi nancial assets are assessed in groups which share similar credit risk characteristics.

Impairment losses in respect of a fi nancial asset measured at amortised cost are calculated as the difference between the carrying amount and the present value of the estimated future cash fl ows discounted at the original effective interest rate. An impairment loss in respect of an available-for-sale fi nancial asset is calculated by reference to its fair value.

Impairment losses are recognised in the income statement. Any cumulative loss in respect of an available-for-sale fi nancial asset recognised previously in equity is transferred to the income statement when the impairment is recognised.

Impairment losses are only reversed if the reversal can be objectively related to an event occurring after the impairment loss was recognised. For fi nancial assets that are measured at amortised cost and available-for-sale fi nancial assets that are debt securities, the reversal is recognised in the income statement. For available-for-sale

Amcor Limited 59

fi nancial assets that are equity securities, the reversal is recognised directly in equity.

Use of estimates and judgements

The determination of impairment for non-fi nancial assets, fi nancial assets, goodwill and other intangible assets involves the use of judgements and estimates that include, but are not limited to, the cause, timing and measurement of the impairment.

Management is required to make signifi cant judgements concerning the identifi cation of impairment indicators, such as changes in competitive positions, expectations of growth, increased costs of capital, and other factors that may indicate impairment such as business restructuring. In addition, management is also required to make signifi cant estimates regarding future cash fl ows and the determination of fair values when assessing the recoverable amount of an asset (or groups of assets). Inputs into these valuations require assumptions and estimations to be made about forecast earnings before interest and tax and related future cash fl ows, growth rates, applicable discount rates, useful lives and residual values.

The judgements, estimates and assumptions used by management in assessing impairment are management’s best estimates based on current and forecast market conditions. Changes in economic and operating conditions impacting these assumptions could result in changes in the recognition of impairment charges in future periods.

Change in accounting policy

The policy of recognising fi nancial guarantee contracts as fi nancial liabilities was adopted for the fi rst time in the current fi nancial year. In previous reporting periods, a liability for fi nancial guarantee contracts was only recognised if it was probable that the debtor would default and a payment would be required under the contract.

The change in policy was necessary following the change to AASB 139 Financial Instruments: Recognition and Measurement made by AASB 2005-9 Amendments to Australian Accounting Standards in September 2005. The new policy has been applied retrospectively and, where appropriate, comparative information in relation to the 2006 fi nancial year has been restated.

The change in accounting policy has no impact upon the fi nancial statements of the consolidated entity or the earnings per share disclosed in note 10.

In the fi nancial statements of the Company no adjustments were made to comparative periods. However, in the current period, the Company recognised an increase in investments in controlled entities of $3.8 million relating to fi nancial guarantees provided to third parties on behalf of the controlled entities of the Company. A corresponding fi nancial guarantee liability of $2.9 million was recognised with $0.9 million income also being recognised in the income statement of the Company refl ecting the amortisation of the fi nancial guarantee liability.

increase to the related item of property, plant and equipment.

At each reporting date, the liability is remeasured in line with changes in discount rates, estimated cash fl ows and the timing of those cash fl ows. Any changes in the liability are added or deducted from the related asset, other than the unwinding of the discount, which is recognised as a fi nancing cost in the income statement.

Dividends

A provision for dividends payable is recognised in the reporting period in which the dividends are declared on or before the end of the fi nancial period but not distributed at balance date.

Insurance and other claims

The consolidated entity self-insures for risks associated with workers’ compensation. Provisions for workers’ compensation, insurance and other claims are recognised for claims received and claims expected to be received in relation to incidents occurring prior to reporting date, measured based upon historical claim rates.

Estimated net future cash fl ows are based on the assumption that all claims will be settled and the weighted average cost of historical claims adjusted for infl ation will continue to approximate future costs.

Onerous contracts

(r) Provisions

(q) Financial guarantee contracts

Financial guarantee contracts are recognised as fi nancial liabilities at the date the guarantee is issued. Liabilities arising from fi nancial guarantee contracts, including company guarantees of subsidiaries through deeds of cross guarantee, are initially recognised at fair value and subsequently at the higher of the amount determined in accordance with the consolidated entity’s provisions accounting policy (refer note 1(r)) and the amount initially recognised less cumulative amortisation.

The fair value of the fi nancial guarantee is determined as the present value of the difference in net cash fl ows between the contractual payments under the debt instrument and the payments that would be required without the guarantee, or the estimated amount that would be payable to a third party for assuming the obligation.

Where guarantees in relation to loans or other payables of subsidiaries or associates are provided for no compensation, the fair values are accounted for as contributions and recognised as part of the cost of the investment in the fi nancial statements of the Company.

A provision is recognised when there is a legal or constructive obligation as a result of a past event and it is probable that a future sacrifi ce of economic benefi ts will be required to settle the obligation, and the amount can be reliably estimated.

Provisions are determined by discounting the expected future cash fl ows at a pre-tax rate that refl ects the current market assessments of the time value of money and the risks specifi c to the liability.

When some or all of the economic benefi ts required to settle a provision are expected to be recovered from a third party, the recovery receivable is recognised as an asset when it is virtually certain that the recovery will be received.

Asset restoration and decommissioning

Where the consolidated entity has a legal or constructive obligation to restore a site on which an asset is located, the present value of the estimated costs of dismantling and removing the asset and restoring the site is recognised as a provision with a corresponding

A provision for onerous contracts is recognised when the expected benefi ts to be derived by the consolidated entity from a contract are lower than the unavoidable costs of meeting the obligations under the contract. The provision is measured as the lower of the cost of fulfi lling the contract and any compensation or penalties arising from the failure to fulfi l it and is recognised only in respect of the onerous element of the contract. Where the effect of discounting is material, the provision is discounted to its present value.

Restructuring

A provision for restructuring is recognised when the consolidated entity has a detailed formal restructuring plan and the restructuring has either commenced or has been publicly announced. Future operating costs in relation to the restructuring are not provided for.

(s) Employee benefi ts

Wages, salaries, annual leave and sick leave

Liabilities for employee benefi ts such as wages, salaries, annual leave, sick leave and other current employee entitlements represent present obligations resulting from employees’

60 Amcor Limited

Notes to the Financial Statements

30 June 2007

Note 1 Summary of Signifi cant Accounting Policies (continued) (s) Employee benefi ts (continued) services provided to the reporting date and are calculated at undiscounted amounts based on remuneration wage and salary rates, including related on-costs, such as workers compensation insurance and payroll tax, that the consolidated entity expects to pay.

Long service leave

Liabilities relating to long service leave are measured as the present value of estimated future cash outfl ows to be made in respect of services provided by employees up to the reporting date. Consideration is given to expected future wage and salary levels, experience of employee departures and periods of service.

Liabilities which are not expected to be settled within 12 months are discounted using market yields at the reporting date of high quality corporate bonds. In countries where there is no deep market for corporate bonds (such as Australia), the market yields on government bonds at the reporting date are used. The rates used refl ect the terms to maturity and currency that match, as closely as possible, the estimated future cash outfl ows.

Profi t sharing and bonus plans

A liability and an expense is recognised for profi t sharing and bonus plans, including benefi ts based on the future value of equity instruments and benefi ts under plans allowing the consolidated entity to settle in either cash or shares. Entitlements under the Employee Bonus Payment Plan (‘EBPP’) are estimated and accrued at the end of the fi nancial reporting period.

Share-based payments

The Company provides benefi ts to employees (including senior executives) of the consolidated entity in the form of share-based payments, whereby employees render services in exchange for shares or rights over shares.

The Company maintains two Employee Share Schemes: the Employee Share Purchase Plan (‘ESPP’) and the Employee Share/Option Plan (‘ESOP’). Both schemes were introduced in 1985, and have been subsequently amended and approved by shareholders at Annual General Meetings. A number of sub-plans exist under the ESPP, including the Employee Incentive Share Plan (‘EISP’) and the Senior Executive Retention Share Plan (‘SERSP’).

Where loans are made to assist in the purchase of shares under a sub-plan, they are treated as a reduction in equity and not recognised as a receivable and the repayments are recorded as contributions to share capital. Shares are held in trust until the loan is settled.

Share options granted before 7 November 2002 which have vested before 1 January 2005

No expense is recognised in respect of these options. The shares are recognised when the options are exercised and the proceeds received allocated to share capital.

Share options granted after 7 November 2002 which have vested after 1 January 2005

The fair value of options granted is recognised as an employee benefi t expense in the income statement with a corresponding increase in the share-based payments reserve in equity. The fair value is measured at grant date taking into account market performance conditions only, and spread over the vesting period during which the employees become unconditionally entitled to the options. The fair value of options granted is measured using the Black Scholes model. The amount recognised as an expense is adjusted to refl ect the actual number of options that vest, except where forfeiture is due to market related conditions.

Upon exercise of the options, the balance of the share-based payments reserve relating to those options is transferred to share capital.

The dilutive effect, if any, of outstanding options is refl ected as additional share dilution in the computation of earnings per share (see note 10).

Change in accounting policy

The consolidated entity and the Company have elected to early adopt and apply Interpretation 11 AASB 2 Group and Treasury Share Transactions (February 2007) and AASB 2007-1 Amendments to Australian Accounting Standards arising from AASB Interpretation 11 [AASB 2] (February 2007). Under Interpretation 11, when the Company grants options over its shares to employees of a subsidiary, the fair value of the options granted, at grant date, is recognised as an increase in the investment in that subsidiary, with a corresponding increase recognised in the share-based payments reserve in equity over the vesting period of the grant. Previously, the fair value of options granted was recognised as an employee benefi t expense in the income statement of the Company.

The change in accounting policy has been applied retrospectively to share-based payment transactions that were granted after 7 November 2002, with a vesting date on or after 1 January 2005, in accordance with the transitional provisions contained in AASB 2

Share-based Payment upon the application of AASB 2007-1.

The change in accounting policy has no impact upon the fi nancial statements of the consolidated entity or the earnings per share disclosed in note 10.

In the fi nancial statements of the Company no adjustments were made to comparative reporting periods. However, in the current period, the Company recognised an increase in the investments in controlled entities of $8.2 million with a corresponding adjustment made to the share-based payments expense in the income statement upon adoption of this accounting policy.

(t) Retirement benefi t obligations Defi ned contribution plans

Obligations for contributions by the Company or the consolidated entity to defi ned contribution funds are recognised as an expense in the income statement as they become payable.

Defi ned benefi t plans

The consolidated entity’s liability or asset in respect of defi ned benefi t pension plans and other post-retirement plans is recognised in the balance sheet, and is measured as the present value of the defi ned benefi t obligation at the reporting date less the fair value of plan assets, together with adjustments for unrecognised actuarial gains and any unrecognised actuarial past service cost.

Past service costs are recognised immediately in the income statement, unless the changes to the pension plan are conditional on the employees remaining in service for a specifi ed period of time (the vesting period). In this case, the past service costs are amortised on a straight-line basis over the vesting period. Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited directly to equity.

Future taxes that are funded by the entity and are part of the provision of the existing benefi t obligation (e.g. taxes on investment income and employer contributions) are taken into account in measuring the net liability or asset.

The present value of the defi ned benefi t obligation is based on expected future payments which arise from membership of the fund to the reporting date, calculated annually by independent actuaries using the projected unit credit method. Consideration is given to expected future wage and salary levels, experience of employee departures and periods of service. Expected future payments are discounted using market yields on national government bonds at the reporting date, whose

Amcor Limited 61

terms to maturity and currency match, as closely as possible, the estimated future cash outfl ows.

Use of estimates and judgements

In determining the liability or asset that the consolidated entity recognises in the balance sheet in respect of defi ned benefi t pension and other post-retirement plans, the main categories of assumptions used in the valuations include: discount rate; rate of infl ation; expected return on plan assets; future salary increases; and medical cost trend rates (in the case of the post-retirement health plans). Refer to note 25 for details of the key assumptions used this fi nancial period in accounting for these plans. The assumptions made have a signifi cant impact on the calculations and any adjustments arising thereon.

If the discount rate were to differ by 10% from management’s estimates, the carrying amount of pension obligations would be an estimated $41.3 million lower or $105.4 million higher. A one-half percentage point change in the actuarial assumption regarding the expected return on plan assets would result in a change of approximately $4.1 million in pre-tax pension expense for the year ended 30 June 2007. In addition, changes in external factors, including fair values of plan assets could result in possible future changes to the amount of the pension obligations recognised in the balance sheet.

(u) Discontinued operations

A discontinued operation is a component of the consolidated entity’s business that represents a separate major line of business or geographical area of operations that has been disposed of or is held for sale. Classifi cation as a discontinued operation occurs upon disposal or when the operation meets the criteria to be classifi ed as held for sale, if earlier. When an operation is classifi ed as discontinued the comparative income statement is restated as if the operation had been discontinued from the start of the comparative period.

(v) Earnings per share (EPS)

The consolidated entity presents basic and diluted earnings per share (‘EPS’) data for its ordinary shares.

Basic earnings per share

Basic EPS is calculated by dividing the net profi t attributable to ordinary shareholders of the Company for the reporting period, by the weighted average number of ordinary shares of the Company for the reporting period, adjusted for any bonus issue.

Diluted earnings per share

Diluted EPS is calculated by adjusting the basic EPS for the after tax effect of fi nancing costs and the effect of conversion to ordinary shares

associated with dilutive potential ordinary shares, which comprise convertible notes and share options granted to employees.

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

The identifi cation of dilutive potential ordinary shares is based on net profi t or loss from continuing ordinary operations and is applied on a cumulative basis, taking into account the incremental earnings and incremental number of shares for each series of potential ordinary shares.

(w) Fair value estimation

The fair value of fi nancial assets and fi nancial liabilities must be estimated for recognition, measurement and disclosure purposes.

The fair value of fi nancial instruments traded in active markets (such as publicly traded derivatives, and trading and available-for-sale securities) is based on quoted market prices at the balance sheet date. The quoted market price used for fi nancial assets held by the consolidated entity is the current bid price. The quoted market price used for fi nancial liabilities is the current ask price.

The fair value of fi nancial instruments that are not traded in an active market (for example, over-the-counter derivatives) is determined using valuation techniques. The consolidated entity uses a variety of methods, including discounted cash fl ows to calculate the fair value of fi nancial instruments. These calculations are performed using current market inputs which may include the use of interest and forward exchange rates ruling at balance date. The consolidated entity makes assumptions concerning these valuations that are based on market conditions existing at each balance date. Quoted market prices or dealer quotes for similar instruments are used for long-term debt instruments held.

The carrying value of trade receivables and payables are assumed to approximate their fair values. The fair value of fi nancial liabilities for disclosure purposes is estimated by discounting the future contractual cash fl ows at the current market interest rate that is available to the consolidated entity for similar fi nancial instruments.

(x) New accounting standards and interpretations not yet adopted The following new or amended accounting standards and interpretations adopted by the AASB have been identifi ed as those which may

impact the consolidated entity in the period of initial application. They are available for early adoption at 30 June 2007, but have not been applied in preparing this fi nancial report:

• Interpretation 14 AASB 119 The Limit on a Defi ned Benefi t Assets, Minimum Funding Requirements and their Interaction (August 2007). Interpretation 14 is applicable to annual reporting periods beginning on or after 1 January 2008, with early adoption permitted. This interpretation provides guidance in a number of areas of defi ned benefi t pension accounting including when refunds or reductions in future contributions can be recognised as a gain in accordance with AASB 119 Employee Benefi ts ; how minimum funding requirements might impact the availability of reductions in future contributions; and when minimum funding requirements might give rise to the recognition of a liability. An assessment of the impact of Interpretation 14 is currently being performed, and as yet it is not possible to make a reliable measurement of the fi nancial impact upon the consolidated entity.

• AASB 8 Operating Segments (February 2007) replaces the presentation requirements of segment reporting in AASB 114 Segmental Reporting . AASB 8 is applicable for annual reporting periods beginning on or after 1 January 2009 and is not expected to have a impact on the fi nancial results of the Company and the consolidated entity as the standard is only concerned with disclosures.

• AASB 2007-3 Amendments to Australian Accounting Standards arising from AASB 8 (February 2007) makes amendments to AASB 5 Non-current Assets Held for Sale and Discontinued Operations , AASB 6 Exploration for and Evaluation of Mineral Resources , AASB 102 Inventories , AASB 107 Cash Flow Statements , AASB 119 Employee Benefi ts , AASB 127 Consolidated and Separate Financial Statements , AASB 134 Interim Financial Reporting , AASB 136 Impairment of Assets , AASB 1023 General Insurance Contracts and AASB 1038 Life Insurance Contracts . AASB 2007-3 is applicable for annual reporting periods beginning on or after 1 January 2009 and must be adopted in conjunction with AASB 8 Operating Segments . This standard is only expected to impact disclosures contained within the fi nancial report.

• AASB 2005-10 Amendments to Australian Accounting Standards (September 2005) makes consequential amendments to AASB 132 Financial Instruments: Disclosure and Presentation , AASB 101 Presentation of Financial Statements , AASB 114 Segmental Reporting , AASB 117 Leases , AASB 133 Earnings Per Share , AASB 139 Financial Instruments: Recognition and Measurement ,

62 Amcor Limited

Notes to the Financial Statements

30 June 2007

Note 1 Summary of Signifi cant Accounting Policies (continued)

• (x) New accounting standards and

• interpretations not yet adopted (continued) AASB 1 First-time Adoption of Australian Equivalents to International Financial Reporting Standards , AASB 4 Insurance Contracts , AASB 1023 General Insurance Contracts and AASB 1038 Life Insurance Contracts arising from the release of AASB 7. AASB 2005-10 is applicable for annual reporting periods beginning on or after 1 January 2007 and is expected to only impact disclosures contained within the consolidated fi nancial report.

• AASB 7 Financial Instruments: Disclosures (August 2005) replaces the presentation requirements of fi nancial instruments in AASB 132 Financial Instruments: Disclosure and Presentation . AASB 7 is applicable to annual reporting periods beginning on or after 1 January 2007, and will require extensive additional disclosures with respect to the consolidated entity’s fi nancial instruments and share capital.

Note 2 Correction of Prior Period Errors

Deferred tax asset and liability set off As at 30 June 2006, the consolidated entity did not appropriately set off assets and liabilities in respect of entities holding both deferred tax assets and deferred tax liabilities within the same tax jurisdiction, as required by AASB 112 Income Taxes . This error had the effect of overstating total assets and total liabilities in the consolidated fi nancial statements by $257.3 million. The error had no impact on the amounts reported in the income statement, statement of recognised income and expense or the cash fl ow statement of the consolidated entity for the year ended 30 June 2006.

The error has been corrected in this fi nancial report by restating each of the affected fi nancial statement line items for the prior period of the consolidated entity. The deferred tax assets and deferred tax liabilities previously reported in the consolidated fi nancial statements at 30 June 2006 of $390.7 million and $541.2 million respectively have been adjusted by $257.3 million.

Recognition of deferred tax balances on transition to Australian Equivalents to International Financial Reporting Standards Due to a misinterpretation of the facts surrounding the tax values of certain items of property, plant and equipment within the consolidated entity on transition to Australian Equivalents to International Financial Reporting Standards at 1 July 2004, the consolidated deferred tax liabilities were overstated by $34.0 million and the consolidated retained earnings and consolidated equity understated by $34.0 million.

The error has been corrected by restating each of the affected fi nancial statement line items for the prior year, as described above.

Note 3 Segment Information

Segment information is presented in the fi nancial statements in respect of business segments, which are the primary reporting segments of the consolidated entity as they refl ect the management and internal reporting structure of the consolidated entity during the fi nancial period. The secondary reporting segments have been classifi ed based on the geographical location of the consolidated entity’s business segments.

(a) Description of segments Business segments

The consolidated entity is organised on a global basis into the following business segments:

Amcor PET

Polyethylene Terephthalate (PET) packaging for a broad range of predominantly beverage and food products, including carbonated soft drinks, water, juices, sports drinks, milk-based beverages, spirits and beer, sauces, dressings, spreads and personal care items and plastic caps for a wide variety of applications.

Amcor Australasia

Corrugated boxes, cartons, folding cartons; steel and aluminium cans for foods, beverages and household products; fl exible packaging; plastic and metal closures; glass wine bottles; multi-wall sacks; cartonboard; paper and paper recycling.

Amcor Flexibles

Flexible and fi lm packaging in the food and beverage and pharmaceutical sectors, including confectionery, coffee, fresh food and dairy, as well as high-value-added medical applications. Specialty folding cartons for tobacco, confectionery and cosmetics.

Amcor Sunclipse

The distribution unit purchases, warehouses, sells and delivers a wide variety of products. The business also manufactures corrugated and other, mostly fi bre-based, specialty product packaging including ‘point of sale’ displays.

Amcor Asia

Tobacco carton packaging; fl exible plastic packaging for the food and industrial markets.

Geographic segments

Although the consolidated entity’s operations are managed on a global basis, they operate in fi ve main geographical areas:

Australia and New Zealand

Comprises operations carried on in Australia and New Zealand which are largely managed together. The areas of operations are principally corrugated boxes, cartons, folding cartons; steel and aluminium cans for foods, beverages and household products; fl exible packaging; plastic and metal closures; glass wine bottles; multiwall sacks; cartonboard; paper and paper recycling.

Europe

Comprises operations carried on in the United Kingdom, Germany, France, Spain, Netherlands, Belgium, Italy, Sweden, Norway, Finland, Ireland, Russia, Poland, Hungary, Czech Republic, Denmark, Ukraine, Switzerland, Portugal and Morocco. The Flexibles business operates manufacturing facilities in these countries.

North America

Comprises operations carried on in the United States of America and Canada. The PET, Sunclipse and Flexibles businesses operate manufacturing or distribution facilities in these countries.

Latin America

Comprises operations carried on in Brazil, Argentina, Venezuela, Colombia, Peru, Ecuador, Mexico, Honduras, El Salvador and Puerto Rico. The PET and Flexibles businesses operate manufacturing facilities in these countries. Sunclipse distributes products in Mexico.

Asia

Comprises operations carried out in Malaysia, China, Indonesia, India and Singapore. The PET and Asian businesses operate manufacturing facilities in these countries.

Amcor Limited 63

(b) Notes to and forming part of the segment information

The segment information is prepared in conformity with the accounting policies of the consolidated entity as disclosed in note 1 and Accounting Standard AASB 114 Segment Reporting .

Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Unallocated items mainly comprise interest-bearing loans and borrowings, corporate assets and head offi ce expenses. Segment result is profi t before unallocated fi nance costs and income tax. Segment assets and liabilities do not include investments in associates accounted for using the equity method and deferred taxes.

Segment capital expenditure is the total cost incurred during the period to acquire segment assets that are expected to be used for more than one period.

Inter-segment transfers

Segment revenues, expenses and results include transfers between segments. Such transfers are generally priced on an ‘arm’s length’ basis and eliminated on consolidation.

Changes in Reported Segments

30 June 2007

On 2 July 2007, the consolidated entity announced the sale of its PET European operations for $711.6 million with effect from 29 June 2007. This business has been classifi ed as a discontinued operation and has therefore been excluded from the Amcor PET business segment for 30 June 2007 reporting purposes. Comparative period information has also been restated to refl ect this change. Refer to note 4 for further information regarding the disposal.

30 June 2006

On 1 June 2006, the consolidated entity disposed of the White Cap Metal Closures business for $333.0 million. This disposal has been recognised as a discontinued operation and as such the Flexibles segment for 30 June 2006 reporting purposes only includes the previously reported Flexibles and Rentsch business segments.

On 28 February 2006, the consolidated entity disposed of the Asian Corrugated, Closures and Sacks businesses for $12.9 million. This disposal has been recognised as a discontinued operation and as such has been excluded from the Asian business segment for 30 June 2006 reporting purposes.

64 Amcor Limited

Notes to the Financial Statements

30 June 2007

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----- Start of picture text -----

2006 11,439.3 – 11,439.3 9.8 183.7 11,632.8 1,249.1 (473.4) 775.7 (246.6) 529.1 (64.1) 465.0 (85.8) 379.2
–
Consolidated 2007 10,875.2 10,875.2 22.0 72.2 10,969.4 1,198.9 (467.0) 731.9 (214.9) 517.0 90.9 607.9 (62.8) 545.1
2006 1,216.5 – 1,216.5 – 19.3 1,235.8 133.4 (61.8) 71.6 (11.6) 60.0 (80.4) (20.4) (3.8) (24.2)
– –
Discontinued operations 2007 915.1 915.1 8.7 923.8 104.7 (38.7) 66.0 (4.5) 61.5 252.5 314.0 (19.8) 294.2
2006 10,222.8 – 10,222.8 9.8 164.4 10,397.0 1,115.7 (411.6) 704.1 (235.0) 469.1 16.3 485.4 (82.0) 403.4
Consolidated continuing operations 2007 9,960.1 – 9,960.1 22.0 63.5 10,045.6 1,094.2 (428.3) 665.9 (210.4) 455.5 (161.6) 293.9 (43.0) 250.9
2006 – (21.7) (21.7) – – (21.7) – – – –
– – – – – – –
Unallocated/ Inter-segment eliminations (9.9) (9.9) (9.9)
2007
2006 8.6 – 8.6 – 13.5 22.1 (40.5) (1.9) (42.4) (0.4)
Other 2007 – – – – (1.4) (1.4) (45.8) (2.4) (48.2) –
2006 173.4 1.1 174.5 9.8 99.4 283.7 37.4 (6.9) 30.5 96.0
Amcor Asia 2007 120.8 1.1 121.9 21.8 15.1 158.8 39.0 (4.0) 35.0 15.1
2006 1,287.7 4.4 1,292.1 – 0.6 1,292.7 78.4 (13.3) 65.1 –
Amcor Sunclipse 2007 1,248.7 1.9 1,250.6 – 1.0 1,251.6 76.6 (13.3) 63.3 –
2006 2,965.6 13.0 2,978.6 – 20.1 2,998.7 292.8 (101.2) 191.6 (71.9)
Amcor Flexibles 2007 3,002.6 6.2 3,008.8 – 21.4 3,030.2 301.6 (103.1) 198.5 (65.7)
2006 2,557.7 3.2 2,560.9 – 12.7 2,573.6 384.2 (121.8) 262.4 –
Amcor –
Australasia 2007 2,523.5 0.7 2,524.2 15.7 2,539.9 361.6 (139.7) 221.9 (72.8)
2006 3,229.8 – 3,229.8 – 18.1 3,247.9 363.4 (166.5) 196.9 (7.4)
Amcor PET 2007 3,064.5 – 3,064.5 0.2 11.7 3,076.4 361.2 (165.8) 195.4 (38.2)
Asian corrugated businesses (previously reported in the Amcor Asia segment) that were announced as sold on 23 February 2006, refer note 4.
For the year ended 30 June $ million Segment revenue Revenue from external customers Inter-segment revenue Total sales revenue Share of net profi ts of associates Other income Total segment revenue Segment result Profi t/(loss) before depreciation, amortisation, interest, related income tax expense and signifi cant items Depreciation and amortisation Profi t/(loss) before interest, related income tax expense and signifi cant items Net fi nance costs Profi t from ordinary activities before related income tax expense and signifi cant items Signifi cant items before related income tax expense Profi t before related income tax expense Income tax expense Profi t/(loss) for the fi nancial period * Discontinued operations include the PET European business (previously reported in Amcor PET segment) that was sold on 29 June 2007, White Cap Metal Closures (previously reported in the Amcor Flexibles segment) and the
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Amcor Limited 65

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----- Start of picture text -----

2006 9,481.8 283.1 133.3 9,898.2 2,748.2 3,239.6 304.4 6,292.2 553.2 (65.7) (17.8) (4.0) (7.1) 168.1
–
Consolidated 2007 8,806.3 279.3 56.7 9,142.3 2,329.3 2,999.1 232.6 5,561.0 637.8 (65.3) (5.9) (20.9) 179.3
2006 821.5 – 14.5 836.0 301.4 143.4 11.2 456.0 34.0 (41.9) (4.8) (2.0) – 24.4
– – – – – – – – – –
Discontinued operations 2007 32.6 1.6 6.8 9.5
2006 8,660.3 283.1 118.8 9,062.2 2,446.8 3,096.2 293.2 5,836.2 519.2 (23.8) (13.0) (2.0) (7.1) 143.7
Consolidated continuing operations 2007 8,806.3 279.3 56.7 9,142.3 2,329.3 2,999.1 232.6 5,561.0 605.2 (65.3) (7.5) (27.7) – 169.8
2006 (9.3) – (9.3) – – – – – –
– – – – – – –
Unallocated/ Inter-segment eliminations 2007 (11.2) (11.2)
2006 98.1 – 179.7 1.8 1.1 – (4.7) – (35.3) 2006 10,222.8 8,943.4 519.2
Other – – – –
2007 412.0 131.2 1.6 (18.7) 2.3 Consolidated 2007 9,960.1 9,085.6 605.2
2006 126.7 283.1 33.3 64.1 (2.1) (1.8) (1.0) – 1.5 2006 205.0 449.3 64.1
Asia
Amcor Asia 2007 126.3 275.6 43.0 45.3 (0.3) (0.9) 0.5 – 2.3 2007 137.0 418.0 46.4
2006 548.5 – 144.8 15.2 – – (3.4) – (0.4) 2006 1,024.5 1,011.2 80.8
– – –
Amcor Sunclipse 2007 446.5 121.3 5.5 (0.1) (3.4) (1.9) Latin America 2007 975.1 932.2 62.7
2006 2,312.3 – 889.6 107.4 (18.2) (2.7) 6.1 – 60.1 2006 3,806.4 2,781.3 133.3
– –
Amcor Flexibles 2007 2,586.5 755.8 110.2 (18.6) (2.5) 3.1 18.2 North America 2007 3,599.5 2,467.5 226.1
2006 2,552.4 – 536.2 123.2 – (8.4) 1.9 (7.1) 55.6 2006 2,629.2 2,523.2 116.0
Amcor – – Europe
Australasia 2007 2,491.5 569.8 173.8 (13.5) (1.4) (0.8) 136.8 2007 2,725.0 2,940.3 141.0
2006 3,031.6 – 672.5 207.5 (4.6) (0.1) (0.9) – 62.2 2006 2,557.7 2,178.4 125.0
–
Amcor PET 2007 2,754.7 3.7 719.4 268.8 (32.9) (2.6) (8.4) 12.1 Australia and New Zealand 2007 2,523.5 2,327.6 129.0
Asian corrugated businesses (previously reported in the Amcor Asia segment) that were announced as sold on 23 February 2006, refer note 4.
For the year ended 30 June $ million Segment assets Investment in associates accounted for using the equity method Unallocated assets Total assets Segment liabilities Unallocated corporate borrowings Unallocated liabilities Total liabilities Acquisition of property, plant and equipment, intangibles and other non-current assets Impairment losses of property, plant and equipment, intangibles and other non-current assets Impairment losses – inventories Impairment losses – trade receivables Reversal of previous impairment losses on property, plant and equipment, intangible and other non-current assets Other non-cash (income)/expenses * Discontinued operations include the PET European business (previously reported in Amcor PET segment) that was sold on 29 June 2007, White Cap Metal Closures (previously reported in the Amcor Flexibles segment) and the (d) Geographic segments The geographic segments have been prepared for continuing operations only. For the year ended 30 June $ million Revenue from external customers Segment assets Acquisition of property, plant and equipment, intangibles and other non-current assets
----- End of picture text -----

66 Amcor Limited

Notes to the Financial Statements

30 June 2007

Note 4 Discontinued Operations

(a) Description of events 30 June 2007

On 2 July 2007, the consolidated entity announced the sale of its PET European operations to La Seda de Barcelona S.A. for $711.6 million ( € 427.8 million) with effect from 29 June 2007. This business has been presented as a discontinued operation in this fi nancial report.

30 June 2006

On 23 February 2006, the consolidated entity announced the disposal of the White Cap Metal Closures business for $333.0 million with effect from 1 June 2006. On that same date, it was also announced that the Asian Corrugated business had also been disposed of for consideration of $12.9 million with effect from 28 February 2006. These businesses have been presented as discontinued operations in this fi nancial report.

The fi nancial information related to these discontinued operations for the period to the date of disposal is set out below. Further information is also provided in note 3.

	Discontinued operations	Discontinued operations
$million	2007	2006
(b) Financial performance and cash f ow information
Prof ts attributable to the discontinued operations were as follows:
Revenue (refer note 3)(1)	923.8	1,235.8
Expenses	(862.3)	(1,236.8)
Operating prof t before related income tax expense	61.5	(1.0)
Income tax expense	(16.9)	(5.2)
Operating prof t after related income tax expense of discontinued operations	44.6	(6.2)
Prof t/(loss) on sale of discontinued operations before related income tax (expense)/benef t	252.5	(19.4)
Income tax (expense)/benef t	(2.9)	1.4
Prof t/(loss) on sale of discontinued operations after related income tax benef t/(expense)	249.6	(18.0)
Prof t/(loss) from discontinued operations	294.2	(24.2)
cents
Basic earnings prof t/(loss) per share	32.8	(2.8)
Diluted earnings prof t/(loss) per share	32.2	(2.4)
(c) Cash f ows from discontinued operations
$ million	2007	2006
Net cash from operating activities	(142.0)	52.5
Net cash from investing activities(2)	(233.9)	266.3
Net cash from f nancingactivities	247.1	(8.5)
Net cash from discontinued operations	(128.8)	310.3
(d) Carrying amounts of assets and liabilities
$ million	2007	2006
Cash and cash equivalents	176.8	11.1
Trade and other receivables	178.2	152.3
Inventories	80.3	98.4
Property, plant and equipment	230.3	141.3
Deferred tax assets	17.6	16.4
Intangible assets	217.2	189.4
Other	0.1	4.5
Total assets	900.5	613.4
Trade and other payables	323.9	110.6
Interest-bearing liabilities	82.1	49.8
Current tax liabilities	9.3	–
Deferred tax liabilities	10.5	10.0
Provisions	6.2	27.8
Retirement benef t obligations	26.3	45.4
Other	–	2.0
Total liabilities	458.3	245.6
Net assets	442.2	367.8

(1) As inter-segment revenue is eliminated for the consolidated results, revenue from discontinued operations shown above is inclusive of revenue from external customers and other revenue only.

(2) Net cash from investing activities in 2006 includes an infl ow of $297.5 million from the sale of discontinued operations.

Amcor Limited 67

	Discontinued operations	Discontinued operations
$million	2007	2006
(e) Details of the sale of operations
Consideration received or receivable:
Cash and short-term deposits	–	308.6
Present value of deferred sales proceeds, net of transaction costs	711.6	37.3
Total disposal consideration	711.6	345.9
Less carrying amounts of net assets disposed of	(442.2)	(367.8)
Less share of exchange f uctuation reserve and foreign exchange translation	(21.9)	2.5
Prof t/(loss) on sale before related income tax benef t	247.5	(19.4)
Income tax(expense)/benef t	(2.1)	1.4
Prof t/(loss) on sale after related income tax benef t of disposed operations	245.4	(18.0)
Settlement adjustments onprioryear disposal,net of tax	4.2	–
Prof t/(loss)on sale of discontinued operations after related income tax benef t	249.6	(18.0)
Net cash (outf ow)/inf ow on disposal
Cash and cash equivalents consideration	–	308.6
Cash received from prior period disposals	22.4	–
Less cash and cash equivalents balance disposed of	(176.8)	(11.1)
Reported in the cash f ow statement	(154.4)	297.5

Note 5 Revenue, Other Income and Financial Income

Note 5 Revenue, Other Income and Financial Income
		Consolidated		Amcor Limited
	2007		2006	2007	2006
$ million			Restated*		Restated*
Revenue from continuing operations
Sales Revenue
Revenue from sale of goods	9,960.1		10,222.8	–	–
Other income
Dividend received/receivable
– Controlled entities	–		–	222.9	18.9
– Other	0.5		0.4	–	–
Sub-lease rentals	3.1		1.0	–	–
Net prof t on disposal of property, plant and equipment	3.7		2.0	0.2	–
Net prof t on disposal of businesses	1.3		0.4	–	–
Net foreign exchange gains (refer note 6 for net losses)	1.9		4.3	254.4	–
Fair value gains on other f nancial assets designated at fair value through
income statement (refer note 6 for net losses)	–		11.4	0.6	10.2
Government grants	2.4		1.5	–	–
Amortisation of f nancial guarantee contracts	–		–	0.9	–
Other	35.5		46.6	2.2	1.6
Signif cant items (refer note 7)
– Gain arising on disposal of equity investment – K Laser	15.1		–	–	–
– Fair value gains on derivatives related to AMVIG acquisition	–		32.0	–	–
– Gain arising from associate’s equity issue – AMVIG	–		12.5	–	–
– Gain arisingon disposal of controlled entities to AMVIG	–		52.3	–	–
Total other income	63.5		164.4	481.2	30.7
Financial income
Interest received/receivable
– Controlled entities	–		–	393.3	359.2
– Other	23.4		19.6	0.3	1.7
Total f nancial income	23.4		19.6	393.6	360.9

• Restated for discontinued operations, refer to notes 3 and 4 for details of revenue and other income related to discontinued operations.

68 Amcor Limited

Notes to the Financial Statements

30 June 2007

Note 6 Expenses

Note 6 Expenses
	Consolidated		Amcor Limited
	2007	2006	2007	2006
$million		Restated*		Restated*
Prof t before related income tax includes the following specif c expenses:
Depreciation:
– Property, plant and equipment	394.1	382.9	0.2	0.6
– Leased assets	8.2	8.7	–	–
Amortisation:
– Other intangibles	26.0	20.0	1.9	0.8
Total depreciation and amortisation	428.3	411.6	2.1	1.4
Financial expenses
Interest paid/payable:
– Controlled entities	–	–	218.0	181.3
– Finance charges on leased assets	4.4	3.3	–	–
– Interest expense on f nancial liabilities measured at amortised cost	2.2	2.4	–	–
– External	220.9	243.2	117.4	104.9
Amount capitalised	(0.2)	(2.1)	–	–
	227.3	246.8	335.4	286.2
Borrowingcosts	6.5	7.8	2.9	0.7
Total f nancial expenses	233.8	254.6	338.3	286.9
Impairment of trade receivables	27.7	2.0	–	–
Write-downs of inventories	7.5	13.0	–	–
Provisions:
– Insurance/workers’ compensation and other claims	12.4	30.9	–	–
– Onerous contracts	0.6	23.9	–	–
– Asset restoration expense	3.2	5.6	–	1.5
– Restructuring	103.5	66.6	–	–
Employee benef ts expense:
– Wages and salaries	1,620.5	1,647.5	27.5	22.7
– Workers’ compensation and other on-costs	162.2	162.1	–	–
– Superannuation costs – def ned benef t funds	32.3	45.4	(0.1)	1.5
– Superannuation costs – accumulation funds	42.6	45.9	2.5	1.4
– Other employment benef ts expense	14.1	15.2	4.2	4.0
– Share-basedpayments expense(refer note 29)	6.2	2.8	2.2	2.8
Total employee benef ts expense	1,877.9	1,918.9	36.3	32.4
Rental expense relating to operating leases
– Minimum lease payments	92.8	88.0	1.0	1.0
– Contingent rentals	9.3	8.6	–	–
Total rental expense relating to operating leases	102.1	96.6	1.0	1.0
Asset impairment reversal	–	(7.1)	–	–
Asset impairments	65.3	23.8	–	–
Net loss on sale of receivables	0.6	4.3	–	–
Fair value losses on other f nancial assets designated at fair value through
income statement (refer note 5 for net gains)	0.1	–	–	–
Net foreign exchange losses (refer note 5 for net gains)	–	–	–	237.8

• Restated for discontinued operations, refer to notes 3 and 4 for details of expenses related to discontinued operations.

Amcor Limited 69

Note 7 Signifi cant Items

Note 7 Signif cant Items
	Consolidated		Amcor Limited
$million	2007	2006	2007	2006
Signif cant items before related income tax expense
Income
Gain arising on disposal of PET Europe business (refer note 4)	247.5	–	–		–
Gain arising on disposal of equity investment (refer note 15)	15.1	–	–		–
Fair value gains on derivatives related to AMVIG acquisition	–	32.0	–		–
Gain arising from associate’s equity issue – AMVIG(1)	–	12.5	–		–
Gain arising on disposal of controlled entities to AMVIG(2)	–	52.3	–		–
	262.6	96.8	–		–
Expense
PET business integration and restructure	(5.3)	(7.9)	–		–
Australasia restructuring	(60.3)	–	–		–
Flexibles market sector rationalisation	(47.1)	(53.7)	(0.2)		–
Disposal of Asian corrugated, sacks and closures businesses(3)	(4.0)	(7.2)	–		–
Closures business restructure and loss on disposal(3)	9.0	(20.8)	(0.6)		2.8
Asset impairments	(64.0)	(66.8)	–		–
Onerous leases and curtailment of pension funds	–	(4.5)	–		–
	(171.7)	(160.9)	(0.8)		2.8
Signif cant items before related income tax(expense)/benef t	90.9	(64.1)	(0.8)		2.8
Related income tax (expense)/benef t on signif cant items (where applicable)
Income tax expense on disposal of PET Europe business	(2.1)	–	–		–
Income tax expense on disposal of equity investment	(6.3)	–	(6.3)		–
Income tax benef t on PET business integration and restructure	1.8	0.2	–		–
Income tax benef t on Australasia restructuring	33.8	–	19.1		–
Income tax benef t on Flexibles market sector rationalisation	10.4	14.8	–		–
Income tax (expense)/benef t on Closures business restructure and loss
on disposal(3)	(0.8)	4.9	–		–
Income tax benef t on asset impairments	9.0	3.4	–		–
Income tax benef t on onerous leases and curtailment ofpension funds	–	2.0	–		–
Income tax benef t on signif cant items	45.8	25.3	12.8		–
Signif cant items after related tax income expense	136.7	(38.8)	12.0		2.8
Signif cant items attributable to:
Members of Amcor Limited	136.7	(54.6)	12.0		2.8
Minorityinterest	–	15.8	–		–
	136.7	(38.8)	12.0		2.8
Signif cant items before related income tax expense:
Continuing operations	(161.6)	16.3	(0.2)		–
Discontinued operations	252.5	(80.4)	(0.6)		2.8
	90.9	(64.1)	(0.8)		2.8
Related income tax (expense)/benef t on signif cant items:
Continuing operations	48.7	11.7	12.8		–
Discontinued operations	(2.9)	13.6	–		–
	45.8	25.3	12.8		–
Signif cant items after related income tax (expense)/benef t attributed to:
Continuing operations	(112.9)	28.0	12.6		–
Discontinued operations	249.6	(66.8)	(0.6)		2.8
	136.7	(38.8)	12.0		2.8

(1) The amount represents the increase in Amcor’s share of the associate’s net worth, as a result of an equity issue by the associate.

(2) During 2006, the consolidated entity’s China based tobacco packaging plants were sold to an associate – AMVIG.

(3) The amounts recognised in the current reporting period represent settlement adjustments in relation to prior year disposals (refer note 4).

70 Amcor Limited

Notes to the Financial Statements

30 June 2007

Note 7 Signifi cant Items (continued)

The following table represents a segmental analysis of signifi cant items before income tax (expense)/benefi t, refer note 3:

	Restructuring
						Disposal of
		Plant	Onerous	Pension	Impairment	controlled
$million	Redundancy	closure	lease	curtailment	of assets	entities	Other	Total
2007
PET	(0.3)	(5.0)	–	–	(32.9)	247.5	–	209.3
Flexibles	(15.3)	(31.8)	–	–	(18.6)	–	–	(65.7)
Australasia	(43.5)	(16.8)	–	–	(12.5)	–	–	(72.8)
Closures	–	–	–	–	–	9.0	–	9.0
Asia	–	–	–	–	–	(4.0)	15.1	11.1
Total	(59.1)	(53.6)	–	–	(64.0)	252.5	15.1	90.9
2006
PET	(1.8)	(6.1)	(6.0)	1.9	(8.3)	–	–	(20.3)
Flexibles	(3.0)	(47.9)	–	–	(18.2)	–	(2.8)	(71.9)
Closures	(7.7)	–	–	–	(15.5)	(13.1)	–	(36.3)
Asia	(0.4)	–	–	–	(24.8)	45.5	44.5(1)	64.8
Corporate	–	–	(1.8)	1.4	–	–	–	(0.4)
Total	(12.9)	(54.0)	(7.8)	3.3	(66.8)	32.4	41.7	(64.1)

(1) Comprises fair value gains on derivatives related to the AMVIG acquisition ($32.0 million) and gains arising from AMVIG’s equity issue ($12.5 million).

Note 8 Income Tax Expense

Note 8 Income Tax Expense
	Consolidated			Amcor Limited
$ million	2007		2006	2007	2006
(a) Recognised in the income statement
Current tax expense
Current period	(67.0)		(92.6)	77.4	42.3
Adjustments relating to current tax expense of prior periods	(0.5)		0.3	7.4	6.4
Tax losses, tax credits and temporary differences not recognised
for book in prior years now recouped	12.6		12.3	–	–
Total current tax (expense)/benef t	(54.9)		(80.0)	84.8	48.7
Deferred tax expense
Origination and reversal of temporary differences	(9.4)		(5.8)	(88.9)	57.3
Change in applicable tax rates	1.5		–	–	–
Total deferred tax expense	(7.9)		(5.8)	(88.9)	57.3
Total income tax (expense)/benef t	(62.8)		(85.8)	(4.1)	106.0
Less income tax expense attributable to discontinued operations	(19.8)		(3.8)	–	–
Total income tax(expense)/benef t attributable to continuingoperations	(43.0)		(82.0)	(4.1)	106.0
Deferred income tax (expense)/benef t included in income tax
expenses comprises:
(Decrease)/increase in deferred tax assets	(61.6)		48.6	(78.0)	54.2
Decrease/(increase)in deferred tax liabilities	53.7		(54.4)	(10.9)	3.1
Deferred income tax(expense)/benef t included in income tax(note 17)	(7.9)		(5.8)	(88.9)	57.3

Amcor Limited 71

	Consolidated	Consolidated	Amcor Limited	Amcor Limited
$million	2007	2006	2007	2006
(b) Numerical reconciliation of income tax (expense)/benef t to prima facie
tax payable
Prof t/(loss) from continuing operations	293.9	485.4	493.2	(183.1)
Prof t/(loss) from discontinued operations	314.0	(20.4)	(0.6)	2.8
Prof t/(loss) before related income tax expense	607.9	465.0	492.6	(180.3)
Tax at the Australian tax rate of 30% (2006: 30%)	(182.4)	(139.5)	(147.8)	54.1
Tax effect of amounts which are not deductible/(taxable) in calculating
taxable income:
Net operating items non-deductible/non-assessable for tax	(12.2)	(10.3)	(4.7)	(12.3)
Goodwill tax adjustments	0.8	1.7	–	–
Net signif cant items non-deductible/non-assessable for tax	69.4	(10.4)	12.5	0.8
Tax rebate on dividends from investments	–	–	66.9	5.7
Capital structures	46.5	60.3	–	–
Tax losses, tax credits and temporary differences not recognised for book
in prior years now recouped	12.6	12.3	–	–
Effect of local tax rate change	1.5	–	–	–
Income tax benef t related to tax losses of the wholly-owned subsidiaries
in the tax-consolidated group	–	–	61.6	51.3
	(63.8)	(85.9)	(11.5)	99.6
Over provision in prior period	0.5	11.9	7.4	6.4
Foreign tax rate differential	0.5	(11.8)	–	–
Total income tax (expense)/benef t	(62.8)	(85.8)	(4.1)	106.0
Less income tax expense attributable to discontinued operations	(19.8)	(3.8)	–	–
Total income tax (expense)/benef t attributable to continuing operations	(43.0)	(82.0)	(4.1)	106.0
(c) Amounts recognised directly in equity
Total income tax (expense)/benef t recognised directly in equity	(44.4)	4.3	(7.0)	0.3
Note 9 Auditors’ Remuneration
	Consolidated		Amcor Limited
$ thousands	2007	2006	2007	2006
Audit services:
KPMG Australian f rm:
Audit and review of f nancial reports	2,472	3,062	1,572	1,884
Overseas KPMG f rms:
Audit and review of f nancial reports	3,406	5,209	–	–
Other regulatory audit services	2,115	2,655	–	–
Total remuneration for audit services	7,993	10,926	1,572	1,884
Other services:
KPMG Australian f rm:
Taxation services	400	400	400	400
Other assurance services	1,099	515	949	515
Overseas KPMG f rms:
Taxation services	659	728	–	–
Other assurance services	1,010	46	–	–
Total remuneration for other services	3,168	1,689	1,349	915
Total auditors’ remuneration	11,161	12,615	2,921	2,799

72 Amcor Limited

Notes to the Financial Statements

30 June 2007

Note 10 Earnings per Share
cents	2007	2006
Basic earnings per share
From continuing operations attributable to the ordinary equity holders of the Company	26.7	42.7
From discontinued operations	32.8	(2.8)
Attributable to the ordinaryequityholders of the Company	59.5	39.9
Diluted earnings per share
From continuing operations attributable to the ordinary equity holders of the Company	26.2	41.8
From discontinued operations	32.2	(2.4)
Attributable to the ordinary equity holders of the Company	58.4	39.4
$ million
(a) Reconciliation of earnings used in calculating earnings per share
Basic earnings per share
Prof t from continuing operations	250.9	403.4
Prof t from continuing operations attributable to minority interests	(11.4)	(27.9)
Prof t from continuing operations attributable to the ordinary equity holders of the Company used in calculating
basic earnings per share	239.5	375.5
Prof t/(loss) from discontinued operations	294.2	(24.2)
Prof t attributable to the ordinaryequityholders of the Companyused in calculatingbasic earningsper share	533.7	351.3
Diluted earnings per share
Prof t from continuing operations attributable to the ordinary equity holders of the Company used in calculating
basic earnings per share	239.5	375.5
Interest savings on convertible securities, after tax	–	48.1
Prof t from continuing operations attributable to the ordinary equity holders of the Company used in calculating
diluted earnings per share	239.5	423.6
Prof t/(loss) from discontinued operations	294.2	(24.2)
Prof t attributable to the ordinary equity holders of the Company used in calculating diluted earnings per share	533.7	399.4
Number million
(b) Weighted average number of shares used as denominator
Weighted average number of ordinary shares for basic EPS	897.7	879.7
Effect of partly-paid shares	0.1	0.1
Effect of employee options	3.3	0.3
Effect of convertible securities	13.0	134.0
Weighted average number of ordinaryshares andpotential ordinaryshares for diluted EPS	914.1	1,014.1

(c) Information concerning classifi cation of securities

In the calculation of basic earnings per share, only ordinary shares have been included in the calculation. The following securities have been classifi ed as potential ordinary shares and included in diluted earnings per share as at 30 June 2007:

• ordinary shares

• partly paid shares

• employee options

• convertible securities

(d) Details of securities

(i) Partly paid ordinary shares

Partly paid ordinary shares do not carry the right to participate in dividends and have not been recognised in ordinary share equivalents in the determination of basic earnings per share. Amounts uncalled on partly paid shares and calls in arrears are treated as the equivalent of options to acquire ordinary shares and are included as potential ordinary shares in the determination of diluted earnings per share.

(ii) Options

Options granted to employees under the Amcor Limited employee share/option plans are considered to be potential ordinary shares and have been included in the determination of diluted earnings per share to the extent to which they are dilutive. The options have not been included in the determination of basic earnings per share. Details relating to the options are set out in note 29.

(iii) Convertible notes

Convertible notes issued are considered to be potential ordinary shares and have been included in the determination of diluted earnings per share. Details relating to the convertible notes are set out in note 22.

Amcor Limited 73

Note 11 Cash and Cash Equivalents

Note 11 Cash and Cash Equivalents
		Consolidated		Amcor Limited
$million	2007		2006	2007	2006
Cash on hand and at bank	78.3		81.2	0.1	–
Short-term deposits	9.5		17.3	–	–
Deposits at call	26.9		15.4	–	–
Total cash and cash equivalents	114.7		113.9	0.1	–

Short-term deposits and deposits at call for the consolidated entity bear fl oating interest rates between 1.9% and 6.3% (2006: 1.5% and 6.0%). Details regarding the fair value of cash and cash equivalents are disclosed in note 28(e).

Note 12 Trade and Other Receivables

Note 12 Trade and Other Receivables
	Consolidated		Amcor Limited
$ million	2007	2006	2007	2006
Trade receivables(1)	1,144.4	1,411.5	–	1.1
Less provision for impairment losses	(31.1)	(45.3)	–	–
	1,113.3	1,366.2	–	1.1
Amounts owing by controlled entities	–	–	6,565.7	6,517.0
Other receivables(2)	826.6	239.1	2.7	1.1
Other loans	78.4	22.4	–	–
Prepayments	69.0	64.2	0.4	0.1
Total current trade and other receivables	2,087.3	1,691.9	6,568.8	6,519.3

Details regarding the effective interest rate, credit risk and fair values of receivables are disclosed in note 28.

• (1) Impaired trade receivables

The consolidated entity has recognised a loss of $27.7 million (2006: $2.0 million) in respect of impaired trade receivables during the fi nancial year ended 30 June 2007. The loss has been included in ‘general and administration’ expenses in the income statement.

(2) Other receivables

These amounts generally arise from transactions outside the usual operating activities of the consolidated entity. Interest may be charged at commercial rates where the terms of repayment exceed six months. Collateral is not normally obtained. As at 30 June 2007, other receivables includes $711.6 million deferred consideration relating to the sale of the PET European businesses on 29 June 2007, refer note 4.

Note 13 Inventories

Note 13 Inventories
		Consolidated	Amcor Limited
$ million	2007	2006	2007	2006
Raw materials and stores at cost	417.8	449.6	–	–
Work in progress at cost	85.3	133.6	–	–
Finished goods at cost	555.3	650.4	–	–
	1,058.4	1,233.6	–	–
Inventories stated at the lower of cost and net realisable value	130.7	146.7	–	–
Total inventories	1,189.1	1,380.3	–	–

Write-downs of inventories to net realisable value recognised as an expense during the fi nancial year ended 30 June 2007 amounted to $7.5 million (2006: $13.0 million). The expense has been included in ‘cost of sales’ expenses in the income statement. As at 30 June 2007 no inventory of the consolidated entity is pledged as security over any borrowing (2006: $1.8 million was pledged for a working capital loan from a local bank).

74 Amcor Limited

Notes to the Financial Statements

30 June 2007

Note 14 Other Financial Assets
		Consolidated			Amcor Limited
$million	2007			2006	2007	2006
Current
Derivative f nancial instruments:
Forward exchange contracts	–			2.5	–	1.3
Commodity contracts	–			0.1	–	–
Contracts for cash settled employee share plan options (‘American’ contracts)	0.1			2.6	0.1	2.6
Hedge contracts for cash settled bonus and retention payment plans
(‘Equity Share Swap contracts’)	1.1			–	1.1	–
	1.2			5.2	1.2	3.9
Derivative f nancial instruments – cash f ow hedges:
Forward exchange contracts	1.9			5.2	–	0.2
Commodity contracts	0.3			0.4	–	–
	2.2			5.6	–	0.2
Total current other f nancial assets	3.4			10.8	1.2	4.1
Non-current
Shares in controlled entities at cost (refer note 34)	–			–	4,697.4	4,685.2
Investments in companies listed on stock exchanges	15.6			4.0	–	–
Investments in companies not listed on stock exchanges	0.2			0.3	–	–
	15.8			4.3	4,697.4	4,685.2
Derivative f nancial instruments:
Contracts for cash settled employee share plan options (‘American contracts’)	0.7			0.5	0.7	0.5
Contracts for cash settled bonus and retention payment plans
(‘Equity Share Swap contracts’)	0.7			0.8	0.7	0.8
	1.4			1.3	1.4	1.3
Derivative f nancial instruments – cash f ow hedges:
Forward exchange contracts	–			0.8	–	–
Commodity contracts	0.4			–	–	–
	0.4			0.8	–	–
Loans and other receivables	25.4			12.7	6.6	6.3
Total non-current other f nancial assets	43.0			19.1	4,705.4	4,692.8

Details regarding the effective interest rate, credit risk and fair values of the other fi nancial assets are disclosed in note 28.

In relation to the cash settled Employee Share Plan Options, the Employee Bonus Payment Plan and the Senior Executive Retention Payment Plan, the consolidated entity is exposed to movements in the value of the underlying ordinary shares of Amcor Limited. The consolidated entity has hedged its exposure by entering into cash settled equity share option or equity share swap contracts that mirror the terms and conditions of the employee benefi t. Refer to note 28(a) for details of the expiry or vesting date (if applicable), the outstanding option/share hedged contract positions and the hedged price of the contracts as at 30 June 2007.

Amcor Limited 75

Note 15 Equity Accounted Investments

The consolidated entity accounts for investments in associates using the equity method and has no investments in joint ventures. The Company does not hold any equity accounted investments.

The consolidated entity has the following equity accounted investments:

				Ordinary share	Ordinary share
				ownership interest
				2007	2006
Name of associate	Principal activity	Incorporated	Reporting date	%	%
AMVIG Holdings Limited(1)	Tobacco packaging	Cayman Islands	31 December	41.1	40.1
Silgan White Cap de Venezuela S.A.	Metal and plastic closures	Venezuela	31 December	37.0	–
Tien Wah Press (M) Sdn Bhd	Print packaging	Malaysia	31 December	–	25.0

(1) AMVIG Holdings Limited (‘AMVIG’) is listed on the Hong Kong Stock Exchange. At 30 June 2007, the fair value of the consolidated entity’s investment in this associate is $515.1 million (2006: $410.5 million). On 13 June 2007, AMVIG entered into a conditional sale and purchase agreement to acquire 100% of Brilliant Circle Holdings International Limited. AMVIG will settle the purchase by way of a cash payment and share issue. Upon completion of this acquisition, the consolidated entity’s ownership interest in the equity accounted investment will reduce from 41.1% to 32.7% as a result of the share issue.

Financial information related to equity accounted investments

	Consolidated	Consolidated
$ million	2007	2006
Revenues (100%)	282.5	145.9
Expenses(100%)	(228.5)	(106.8)
Prof t(100%)	54.0	39.1
Current assets (100%)	205.0	201.3
Non-current assets (100%)	324.6	394.7
Total assets (100%)	529.6	596.0
Current liabilities (100%)	70.2	101.7
Non-current liabilities (100%)	94.4	11.5
Total liabilities (100%)	164.6	113.2
Net assets reported by equity accounted investments	365.0	482.8
Consolidated entity’s share of net assets equity accounted	279.3	283.1
Results of equity accounted investments
Consolidated entity share of prof ts before taxes	23.8	10.7
Consolidated entityshare of income tax expense	(1.8)	(0.9)
Consolidated entityshare ofprof ts after tax	22.0	9.8
Commitments
Share of capital commitments contracted but not provided for or payable:
Within one year	5.9	0.9
Between one and f ve years	–	–
More than f veyears	–	–
	5.9	0.9
Share of other expenditure commitments contracted but not provided for or payable
(including operating lease commitments):
Within one year	0.4	0.2
Between one and f ve years	0.8	0.3
More than f veyears	0.1	–
	1.3	0.5

76 Amcor Limited

Notes to the Financial Statements

30 June 2007

Note 15 Equity Accounted Investments (continued)

Acquisitions and disposals K Laser China Group Co. Limited

On 3 July 2006, the consolidated entity announced that it had entered into an agreement to subscribe for new shares to purchase a 16.67% holding in K Laser China Group Co. Limited (‘K Laser China’) for $13.4 million (US$10.0 million). K Laser China is a subsidiary of a the publicly listed Taiwan company K Laser Technology Inc. (K Laser Technology), in which the consolidated entity also acquired a 4.2% interest in (refer note 14), for consideration of $4.5 million (US$3.5 million) during the period.

The consolidated entity had options to invest a further $20.1 million (US$15.0 million) in new shares and acquire existing shares for $16.9 million (US$12.6 million) to increase its shareholding in K Laser China to 50.1% over the next two years. However, on 25 June 2007, the consolidated entity disposed of its 16.67% ownership interest in K Laser China for total consideration of $36.9 million (US$29.0 million). During the period, the consolidated entity recognised a share in associate profi ts of K Laser China of $1.7 million. In addition, $15.1 million profi t on sale relating to the disposal of the investment has been recognised in other income in the income statement (refer note 5).

Silgan White Cap de Venezuela S.A.

On 21 March 2007, the consolidated entity acquired a 37.0% interest in Silgan White Cap de Venezuela S.A. for consideration of $3.7 million. From the date of acquisition to 30 June 2007, the consolidated entity recognised $0.2 million share in the profi ts of this equity accounted investment.

AMVIG Holdings Limited (formerly Vision Grande Group Holdings Limited)

On 1 February 2007, the consolidated entity acquired 7.8 million shares in AMVIG Holdings Limited for consideration of $6.7 million increasing the consolidated entity’s holding in the entity to 41.1% from 40.1%.

Tien Wah Press (M) Sdn

On 1 September 2006, the consolidated entity disposed of its 25.0% interest in Tien Wah Press (M) Sdn for $7.6 million. During the current period, the consolidated entity recognised a share in associate profi ts of Tien Wah Press (M) Sdn, up to the date of disposal, of $0.1 million loss (2006: $1.0 million profi t). The gain on the sale of the associate investment of $0.5 million has been recognised in other income in the income statement.

Reporting date

The balance dates for AMVIG Holdings Limited and Silgan White Cap de Venezuela S.A. are both 31 December.

The balance date of AMVIG Holdings Limited (‘AMVIG’) is different to that of the consolidated entity due to commercial reasons and the listing requirements of this entity on the Hong Kong Stock Exchange. In determining the consolidated entity’s share of profi ts of AMVIG for the fi nancial year ending 30 June 2007, the consolidated entity has used the latest publicly available fi nancial information, being the unaudited interim results announcement for the six months to 30 June 2007 which was made to the Hong Kong Stock Exchange on 15 August 2007. This result, in conjunction with the audited results for the 12 months to 31 December 2006, has formed the basis for the consolidated entity’s share of profi ts recognised for the 12 months ended 30 June 2007.

Silgan White Cap de Venezuela S.A. (‘Silgan White Cap’) balance date is different to that of the consolidated entity due to commercial reasons in aligning its balance date to its ultimate controlling parent company Silgan Holdings Inc, which is listed on NASDAQ. The 30 June 2007 unaudited management accounts of Silgan White Cap have formed the basis of the fi nancial information used in determining the consolidated entity’s share of profi ts for the period from the date of acquisition of this entity to 30 June 2007.

The Company does not have any equity accounted investments.

Amcor Limited 77

Note 16 Property, Plant and Equipment
Consolidated
		Land		Plant and	Assets under	Finance
$million	Land	improvements	Buildings	equipment	construction	leases	Total
Cost
Balance at 1 July 2006	260.4	32.7	891.7	7,177.8	13.0	130.6	8,506.2
Additions for the period	1.8	0.1	49.5	542.7	26.3	–	620.4
Disposals during the period	(13.8)	(1.5)	(22.7)	(463.4)	–	–	(501.4)
Disposal of business and controlled entities	(7.6)	(0.1)	(57.3)	(580.3)	–	(16.9)	(662.2)
Other transfers	–	0.1	4.1	26.8	(31.0)	–	–
Effect of movements in foreign exchange rates	(9.3)	(0.9)	(54.6)	(361.7)	1.1	(13.5)	(438.9)
Balance at 30 June 2007	231.5	30.4	810.7	6,341.9	9.4	100.2	7,524.1
Balance at 1 July 2005	270.6	30.6	890.3	7,092.7	33.5	126.6	8,444.3
Additions for the period	0.9	1.6	40.6	409.5	9.3	0.6	462.5
Disposals during the period	(5.7)	(0.3)	(29.4)	(156.3)	–	(0.4)	(192.1)
Additions through business acquisitions	–	–	–	0.6	–	–	0.6
Disposal of business and controlled entities	(6.1)	(0.1)	(64.5)	(420.1)	–	–	(490.8)
Other transfers	(6.0)	–	21.5	17.2	(31.1)	(1.6)	–
Effect of movements in foreign exchange rates	6.7	0.9	33.2	234.2	1.3	5.4	281.7
Balance at 30 June 2006	260.4	32.7	891.7	7,177.8	13.0	130.6	8,506.2
Accumulated depreciation
Balance at 1 July 2006	(0.1)	(6.5)	(191.4)	(3,960.6)	–	(50.8)	(4,209.4)
Depreciation charge	–	(0.7)	(39.7)	(391.1)	–	(8.8)	(440.3)
Disposals during the period	–	0.1	2.2	421.4	–	–	423.7
Disposal of business and controlled entities	–	–	21.8	368.3	–	4.5	394.6
Impairment loss	–	–	(3.8)	(59.3)	–	–	(63.1)
Reversal of impairment loss	–	–	–	–	–	–	–
Other transfers	–	–	–	–	–	–	–
Effect of movements in foreign exchange rates	–	0.3	14.0	186.8	–	4.7	205.8
Balance at 30 June 2007	(0.1)	(6.8)	(196.9)	(3,434.5)	–	(50.4)	(3,688.7)
Balance at 1 July 2005	(1.8)	(4.9)	(180.1)	(3,791.4)	–	(39.3)	(4,017.5)
Depreciation charge	–	(0.9)	(40.2)	(401.4)	–	(9.5)	(452.0)
Disposals during the period	–	(0.3)	12.2	151.2	–	(0.3)	162.8
Disposal of business and controlled entities	1.8	–	31.1	270.5	–	–	303.4
Impairment loss	–	–	–	(66.8)	–	–	(66.8)
Reversal of impairment loss	–	–	–	7.1	–	–	7.1
Other transfers	(0.1)	–	(6.1)	6.2	–	–	–
Effect of movements in foreign exchange rates	–	(0.4)	(8.3)	(136.0)	–	(1.7)	(146.4)
Balance at 30 June 2006	(0.1)	(6.5)	(191.4)	(3,960.6)	–	(50.8)	(4,209.4)
Carrying amounts
Balance at 30 June 2007	231.4	23.6	613.8	2,907.4	9.4	49.8	3,835.4
Balance at 30 June 2006	260.3	26.2	700.3	3,217.2	13.0	79.8	4,296.8

Amcor Limited

The only class of property, plant and equipment held by the Company are items of plant and equipment.

As at 30 June 2007, the carrying value of plant and equipment held by the Company amounted to $0.3 million (2006: $0.6 million), representing a cost value of $3.2 million (2006: $3.3 million) and accumulated depreciation of $2.9 million (2006: $2.7 million).

For the 12 months to 30 June 2007, the Company did not purchase or dispose of any items of plant and equipment (2006: acquired $0.4 million, disposed $3.3 million). A depreciation charge of $0.2 million (2006: $0.6 million) was recognised in general and administration expenses in the income statement.

(a) Non-current assets pledged as security

At 30 June 2007, property, plant and equipment with a carrying value of $153.7 million (2006: $199.9 million) was provided as security for certain interest-bearing borrowings. Refer to note 21 for more information on non-current assets pledged as security by the consolidated entity and the Company.

78 Amcor Limited

Notes to the Financial Statements

30 June 2007

Note 16 Property, Plant and Equipment (continued)

• (b) Non-current asset impairments

30 June 2007

During the year ended 30 June 2007, the consolidated entity recorded impairments of property, plant and equipment totalling $63.1 million in the following segments:

• Amcor PET recorded an impairment of $11.3 million relating to equipment used in the business’s North American operations and $21.6 million in Latin America. The impairments recognised were the result of plant closures and the identifi cation of changes in the business environment and market conditions, which resulted in a number of items of equipment becoming idle or technically obsolete. The recoverable amount of the equipment was determined using fair value less estimated costs of sale.

• Amcor Australasia recognised impairments for items of property, plant and equipment of $5.8 million relating to plant closures and $7.7 million relating to the ‘Fibre Turnaround’ restructuring plan. The recoverable amount of these items of property, plant and equipment were determined using fair value less estimated costs to sell.

• On the announcement of the closure of the Laupen plant in Switzerland, Amcor Flexibles recognised an impairment loss of $13.5 million. The recoverable amount of the plant was assessed using fair value, based on valuations provided by external independent valuers, less estimated costs to sell. The closure of the plant is anticipated to be fi nalised by December 2007.

• Other asset impairments of $3.2 million were also recorded in the current year.

30 June 2006

• During the year ended 30 June 2006, the consolidated entity recorded impairments of property, plant and equipment totalling $66.8 million in the following segments:

• Amcor Flexibles recorded the impairment of the White Cap Metal Closures business of $15.5 million. The recoverable amount of these plants was determined using the fair value less costs to sell method which was based on a profi t before interest, tax, depreciation and amortisation (PBITDA) multiple of six times. The White Cap Metal Closures business was disposed of on 1 June 2006 (refer note 4).

• Amcor Flexibles recorded an impairment of a UK-based plant in the Processed Foods Cash Generating Unit (CGU) of $16.4 million due to poor performance. The recoverable amount of this CGU was determined using value in use calculations which used a post tax discount rate of 5.58% and tax effected the sum of the resulting discounted cash fl ows.

• Amcor Asia recorded a further $22.6 million impairment of the corrugated business due to continued poor performance. The recoverable amount of these plants was determined using value in use calculations which used a discount rate of 8.9%. The Asian corrugated business was disposed of on 28 February 2006 (refer note 4).

• Amcor PET recorded an impairment of $8.3 million relating to the closure of plants in PET Mexico and Poland. The recoverable amount of these plants was determined using fair value less costs to sell of the particular assets available for sale.

• Other asset impairments of $4.0 million were also recorded.

• (c) Non-current asset impairment reversals

30 June 2007

During the year ended 30 June 2007, the consolidated entity did not reverse any impairment that had previously been recognised.

30 June 2006

During the year ended 30 June 2006, an impairment reversal of $7.1 million was recognised within Amcor Australasia, relating to the plant and equipment at the Botany paper mill, due to a re-assessment of estimates used in the value in use calculation. The discount rate of 15% used in 2005 was not changed. The impairment reversal is shown in the general and administration expenses in the income statement.

Amcor Limited 79

Note 17 Deferred Tax Assets and Liabilities

(a) Recognised deferred tax assets and liabilities Deferred tax assets and liabilities are attributable to the following:

		2007			2006
$million	Assets	Liabilities	Net	Assets	Liabilities	Net
Consolidated
Property, plant and equipment	–	(346.5)	(346.5)	–	(436.8)	(436.8)
Impairment of trade receivables	7.6	–	7.6	7.9	–	7.9
Valuation of inventories	50.9	(4.9)	46.0	17.7	(0.1)	17.6
Employee benef ts	60.2	2.9	63.1	99.6	(0.1)	99.5
Provisions	55.4	–	55.4	46.1	–	46.1
Financial instruments at fair value	0.7	–	0.7	16.1	(1.2)	14.9
Tax losses carry-forward(1)	33.8	–	33.8	78.6	–	78.6
Accruals and other items	143.5	(143.4)	0.1	164.5	(108.8)	55.7
Tax assets/(liabilities)	352.1	(491.9)	(139.8)	430.5	(547.0)	(116.5)
Set off of tax	(295.4)	295.4	–	(297.1)	297.1	–
Net deferred tax asset/(liability)	56.7	(196.5)	(139.8)	133.4	(249.9)	(116.5)
Amcor Limited
Property, plant and equipment	0.3	–	0.3	1.1	–	1.1
Employee benef ts	4.0	–	4.0	12.8	–	12.8
Provisions	0.1	–	0.1	0.1	–	0.1
Financial instruments at fair value	0.7	–	0.7	9.1	–	9.1
Accruals and other items	(4.7)	(59.9)	(64.6)	20.8	(7.5)	13.3
Tax assets/(liabilities)	0.4	(59.9)	(59.5)	43.9	(7.5)	36.4
Set off of tax	(0.4)	0.4	–	(7.5)	7.5	–
Net deferred tax asset/(liability)	–	(59.5)	(59.5)	36.4	–	36.4

(1) The deferred tax asset attributable to tax losses does not exceed taxable amounts arising from the reversal of existing assessable temporary differences.

(b) Movement in temporary differences during the year

	Net asset/	Adoption	Recognised		Included		Net asset/
	(liability)	AASB 132	in income	Recognised	in disposal	Exchange	(liability)
$ million	at 1 July	and 139	statement	in equity	group	difference	at 30 June
Consolidated
2007
Property, plant and equipment	(436.8)	–	18.6	–	(11.0)	82.7	(346.5)
Impairment of trade receivables	7.9	–	(0.2)	–	0.4	(0.5)	7.6
Valuation of inventories	17.6	–	0.6	–	–	27.8	46.0
Employee benef ts	99.5	–	(11.9)	(15.4)	8.7	(17.8)	63.1
Provisions	46.1	–	6.1	–	0.8	2.4	55.4
Financial instruments at fair value	14.9	–	(5.1)	1.9	–	(11.0)	0.7
Tax losses carry-forward	78.6	–	(23.0)	–	4.8	(26.6)	33.8
Accruals and other items	55.7	–	7.0	(30.9)	3.6	(35.3)	0.1
	(116.5)	–	(7.9)	(44.4)	7.3	21.7	(139.8)
2006
Property, plant and equipment	(369.4)	–	(17.7)	–	0.7	(50.4)	(436.8)
Impairment of trade receivables	5.9	–	(3.9)	–	–	5.9	7.9
Valuation of inventories	12.2	–	(1.9)	–	–	7.3	17.6
Employee benef ts	119.4	–	(21.0)	(9.4)	(4.0)	14.5	99.5
Provisions	35.9	–	37.5	–	(2.0)	(25.3)	46.1
Financial instruments at fair value	–	23.0	(47.0)	(2.6)	(1.3)	42.8	14.9
Tax losses carry-forward	52.9	–	17.9	–	1.3	6.5	78.6
Accruals and other items	9.7	–	30.3	16.3	(1.1)	0.5	55.7
	(133.4)	23.0	(5.8)	4.3	(6.4)	1.8	(116.5)

80 Amcor Limited

Notes to the Financial Statements

30 June 2007

Note 17 Deferred Tax Assets and Liabilities (continued)

(b) Movement in temporary differences during the year (continued) Amcor Limited

	Net asset/	Adoption			Net asset/
	(liability)	AASB 132	Recognised	Recognised	(liability)
$million	at 1 July	and 139	in income	in equity	at 30 June
2007
Property, plant and equipment	1.1	–	(0.8)	–	0.3
Employee benef ts	12.8	–	(2.9)	(5.9)	4.0
Provisions	0.1	–	–	–	0.1
Financial instruments at fair value	9.1	–	(7.3)	(1.1)	0.7
Accruals and other items	13.3	–	(77.9)	–	(64.6)
	36.4	–	(88.9)	(7.0)	(59.5)
2006
Property, plant and equipment	–	–	1.1	–	1.1
Employee benef ts	19.9	–	(8.5)	1.4	12.8
Provisions	–	–	0.1	–	0.1
Financial instruments at fair value	–	14.6	(4.4)	(1.1)	9.1
Accruals and other items	(55.7)	–	69.0	–	13.3
	(35.8)	14.6	57.3	0.3	36.4

(c) Unrecognised deferred tax assets and liabilities

(i) Unrecognised deferred tax assets

Deferred tax assets have not been recognised in respect of the following items:

		Consolidated	Amcor Limited	Amcor Limited
$ million	2007	2006	2007	2006
Unused tax losses for which no deferred tax asset has been recognised	598.2	635.2	–	–
Potential tax benef ts at applicable rates of tax losses	186.2	211.3	–	–
Deductible temporarydifferences	17.7	29.4	–	–
Total unrecognised deferred tax assets	203.9	240.7	–	–

Unused tax losses have been incurred by entities in foreign jurisdictions.

Deferred tax assets have not been recognised in respect of these items because it is not probable that future taxable profi t will be available against which the consolidated entity can utilise the benefi ts there from.

(ii) Unrecognised deferred tax liabilities

Deferred tax liabilities have not been recognised in respect of temporary differences arising as a result of the translation of the fi nancial statements of the consolidated entity’s investments in subsidiaries and associates. The deferred tax liability will only arise in the event of disposal of the subsidiary or associate, and no such disposal is expected in the foreseeable future.

Unremitted earnings of Amcor’s international operations are considered to be re-invested indefi nitely and relate to the ongoing operations. Upon distribution of any earnings in the form of dividends or otherwise, Amcor may be subject to withholding taxes payable to various foreign countries; however such amounts are not considered to be signifi cant. As Amcor controls when the deferred tax liability will be incurred and is satisfi ed that it will not be incurred in the foreseeable future, the deferred tax liability has not been recognised.

Amcor Limited 81

Note 18 Intangible Assets Consolidated

Note 18 Intangible Assets Consolidated
				Other
	Product	Computer		intangible
$million	development	software	Goodwill	assets	Total
Cost
Balance at 1 July 2006	11.3	209.8	1,759.8	25.2	2,006.1
Additions through internal activities	0.1	13.4	–	–	13.5
Additions for the period	–	9.9	–	0.1	10.0
Disposals during the period	–	(3.7)	–	(1.4)	(5.1)
Disposal of business and controlled entities	–	(8.1)	(217.8)	–	(225.9)
Other transfers	–	–	–	–	–
Subsequent recognition of acquired tax losses	–	–	(9.6)	–	(9.6)
Effect of movements in foreign exchange rates	(0.9)	(12.5)	(187.9)	(1.6)	(202.9)
Balance at 30 June 2007	10.5	208.8	1,344.5	22.3	1,586.1
Balance at 1 July 2005	9.9	157.2	1,877.0	57.4	2,101.5
Additions through internal activities	0.5	16.2	–	–	16.7
Additions for the period	–	9.4	6.1	–	15.5
Disposals during the period	–	(3.3)	–	(0.9)	(4.2)
Disposal of business and controlled entities	–	(11.7)	(191.7)	–	(203.4)
Other transfers	–	33.0	–	(33.0)	–
Subsequent recognition of acquired tax losses	–	–	(10.1)	–	(10.1)
Effect of movements in foreign exchange rates	0.9	9.0	78.5	1.7	90.1
Balance at 30 June 2006	11.3	209.8	1,759.8	25.2	2,006.1
Accumulated amortisation and impairment
Balance at 1 July 2006	(3.8)	(83.8)	(16.2)	(13.9)	(117.7)
Amortisation charge	(2.0)	(22.2)	–	(2.4)	(26.6)
Disposals during the period	–	2.4	–	1.0	3.4
Disposal of business and controlled entities	–	7.1	–	–	7.1
Impairment loss	–	(2.2)	–	–	(2.2)
Other transfers	–	–	–	–	–
Effect of movements in foreign exchange rates	0.4	6.4	0.5	1.3	8.6
Balance at 30 June 2007	(5.4)	(92.3)	(15.7)	(14.0)	(127.4)
Balance at 1 July 2005	(2.1)	(57.9)	(17.8)	(25.7)	(103.5)
Amortisation charge	(1.4)	(20.1)	–	0.1	(21.4)
Disposals during the period	–	2.1	–	1.1	3.2
Disposal of business and controlled entities	–	9.1	1.7	–	10.8
Impairment loss	–	–	–	1.1	1.1
Other transfers	–	(10.5)	–	10.5	–
Effect of movements in foreign exchange rates	(0.3)	(6.5)	(0.1)	(1.0)	(7.9)
Balance at 30 June 2006	(3.8)	(83.8)	(16.2)	(13.9)	(117.7)
Carrying amounts
Balance at 30 June 2007	5.1	116.5	1,328.8	8.3	1,458.7
Balance at 30 June 2006	7.5	126.0	1,743.6	11.3	1,888.4

Amcor Limited

Amcor Limited
$million	2007 2006
	Other Other Computer intangible Computer intangible software assets Total software assets Total
Cost Balance at 1 July Additions through internal activities Additions for the period Disposals duringtheperiod	9.3 8.2 17.5 5.7 5.3 11.0 0.9 – 0.9 0.7 – 0.7 0.7 – 0.7 3.4 2.9 6.3 (1.2) – (1.2) (0.5) – (0.5
Balance at 30 June	9.7 8.2 17.9 9.3 8.2 17.5
Accumulated amortisation and impairment Balance at 1 July Amortisation charge Disposals duringtheperiod	(0.6) (0.7) (1.3) – (0.5) (0.5 (0.6) (1.3) (1.9) (0.6) (0.2) (0.8 – – – – – –
Balance at 30 June	(1.2) (2.0) (3.2) (0.6) (0.7) (1.3
Carrying amounts Balance at 30 June	8.5 6.2 14.7 8.7 7.5 16.2

82 Amcor Limited

Notes to the Financial Statements

30 June 2007

Note 18 Intangible Assets (continued)

Amcor Limited (continued)

The parent entity’s external software costs includes $5.9 million (2006: $7.1 million) for SAP licences. These are perpetual licences that are not currently being amortised as they are not yet in use. Within the next two years, as SAP software is progressively implemented across the Business Groups, these licences will be transferred to entities within the consolidated entity and, at that time, they will be in use and amortised in accordance with the consolidated entity’s accounting policies (refer note 1(o)(ii)).

There are no other indefi nite life intangible assets for the parent and the consolidated Group.

Amortisation and impairment charge

The amortisation and impairment charge is recognised in ‘general and administration’ expense in the income statement.

(a) Impairment tests for goodwill

For the purpose of impairment testing, goodwill acquired in a business combination is allocated to groups of cash-generating units (‘CGUs’) according to the level at which management monitors goodwill.

A CGU summary of the goodwill allocation is presented below:

A CGU summary of the goodwill allocation is presented below:
	Consolidated
$million	2007	2006
PET
North America	579.2	663.6
Europe	–	248.1
Latin America	197.7	226.8
Australasia
Flexibles packaging division	42.9	42.2
Fibre packaging division	52.2	51.7
Beverage can group	16.6	15.0
Other	0.8	2.1
Flexibles
Healthcare	183.9	192.2
Food	156.7	175.1
Rentsch	12.8	14.6
Sunclipse
North America Distribution	77.9	89.3
North America Corrugator	9.4	10.8
North America Multi Purpose Packaging	23.1	26.4
Other(includingutilisation of acquired tax losses)	(24.4)	(14.3)
	1,328.8	1,743.6

The goodwill amounts allocated above are tested annually or semi-annually if there are indicators of impairment, by comparison with the recoverable amount of each CGU’s assets. Recoverable amounts for CGUs are based on value in use, which is calculated from cash fl ow projections for ten years using data from the consolidated entity’s latest internal forecasts. The key assumptions for the value in use calculations are those regarding discount rates, growth rates and expected changes in margins. Management estimates discount rates for each CGU using pre-tax rates that refl ect the current market assessment of the time value of money and the risks specifi c to the countries in which the CGUs operate for which the future cash fl ow estimates have not been adjusted. Changes in selling prices and direct costs are based on past experience and management’s expectation of future changes in the markets in which the consolidated entity operates. Management believe that the forecast period of ten years is justifi ed due to the nature of the packaging industry.

The forecasts are extrapolated beyond four years based on growth rates representing a maximum of 7% in specifi c high growth sectors to negative 24% in particular low growth sectors. Generally the average growth rates applied were prudent at between 2% positive and 2% negative.

The pre-tax discount rates used to calculate value in use range from 7% to 16%. These discount rates are derived from the consolidated entity’s post-tax weighted average cost of capital, as adjusted for the specifi c risks relating to each geographical region.

(b) Impairment charge

30 June 2007

In June 2007, impairment reviews were performed by comparing the carrying value of assets and goodwill with the recoverable amount of the CGUs to which goodwill has been allocated. Management determined that there has been no impairment for the fi nancial year ending 30 June 2007.

30 June 2006

During the year ended 30 June 2006, indicators of impairment were identifi ed in the White Cap Metal Closures business in Europe and Asia and the Corrugated business in Asia. An assessment was carried out on each business using the value in use methodology and the carrying amounts of the businesses were reduced to their recoverable amounts through recognition of impairment losses against goodwill of $15.5 million and $22.6 million respectively. These impairments have been disclosed as part of the loss from discontinued operations in the income statement. On 1 June 2006, the White Cap Closures business was sold and, on 28 February, the Asia Corrugated business was disposed of (refer to note 4).

Amcor Limited 83

Note 19 Other Non-Current Assets

Note 19 Other Non-Current Assets
		Consolidated		Amcor Limited
$million	2007		2006	2007	2006
Supply contract deposits	34.8		36.2	–	–
Other non-current f nancial assets	–		–	–	1.3
Retirement benef t assets (refer note 25)	3.2		2.9	–	–
Other non-current assets	36.7		41.4	3.2	3.8
	74.7		80.5	3.2	5.1
Note 20 Trade and Other Payables
		Consolidated		Amcor Limited
$ million	2007		2006	2007	2006
Current
Trade creditors	1,350.9		1,544.0	8.6	1.1
Deferred grant income	1.9		1.8	–	–
Other creditors and accruals	500.7		530.8	45.1	51.9
	1,853.5		2,076.6	53.7	53.0
Non-current
Deferred grant income	24.0		26.5	–	–
Other unsecured creditors	3.9		4.6	–	–
	27.9		31.1	–	–

Note 21 Interest-Bearing Liabilities

Note 21 Interest-Bearing Liabilities
		Consolidated		Amcor Limited
$ million	Note	2007	2006	2007	2006
Current
Secured borrowings:
Bank loans	(3)	5.3	5.9	–	–
Other loans	(2)	5.3	–	–	–
Lease liabilities (refer note 33)	(7)	45.5	6.9	–	–
		56.1	12.8	–	–
Unsecured borrowings:
Bank overdrafts	(1)	184.5	48.9	12.2	5.8
Commercial paper	(4)	450.4	211.0	380.4	130.2
Bank loans	(5), (6)	682.0	405.5	575.9	325.1
Other loans	(6)	5.6	12.2	–	–
Amounts owing to controlled entities		–	–	3,819.3	4,109.1
		1,322.5	677.6	4,787.8	4,570.2
Total current interest-bearingliabilities		1,378.6	690.4	4,787.8	4,570.2
Non-current
Secured borrowings:
Other loans	(8)	135.8	165.2	–	–
Lease liabilities (refer note 33)	(7)	5.2	57.8	–	–
		141.0	223.0	–	–
Unsecured borrowings:
Bank loans	(9)	334.0	586.7	253.4	239.2
US$ notes	(10)	589.0	675.1	589.0	675.1
Eurobond	(11)	553.0	595.5	553.0	595.5
Other loans	(6)	3.5	4.6	–	–
		1,479.5	1,861.9	1,395.4	1,509.8
Total non-current interest-bearing liabilities		1,620.5	2,084.9	1,395.4	1,509.8
$ million		2007	2006
Reconciliation of consolidated net debt
– Current		1,378.6	690.4
– Current subordinated convertible securities (refer note 22)		–	464.2
– Non-current		1,620.5	2,084.9
Total interest-bearing liabilities		2,999.1	3,239.5
– Cash and cash equivalents (refer note 11)		(114.7)	(113.9)
Net debt		2,884.4	3,125.6

84 Amcor Limited

Notes to the Financial Statements

30 June 2007

Note 21 Interest-Bearing Liabilities (continued)

Adequate committed facilities exist to refi nance the current interest-bearing liabilities of the consolidated entity, if required (refer footnotes below). Details of the interest rate risk and fair value of interest-bearing liabilities for the consolidated entity are set out in note 28(d) and 28(e).

• (1) The consolidated entity has committed bank overdraft facilities (both secured and unsecured) to a maximum of $184.8 million (2006: $109.8 million). As at 30 June 2007, the unused portions of the facilities were $0.3 million (2006: $60.9 million). The bank overdrafts are payable on demand and are subject to annual review.

• (2) These other current secured loans are secured by a charge over assets of certain controlled entities.

• (3) Comprises loans secured over property, plant and equipment in overseas controlled entities to the extent of $7.2 million (2006: $6.6 million). The carrying value of the pledged property is $17.9 million (2006: $19.8 million).

• (4) Borrowings in commercial paper markets include:

• Promissory Note Facility – $380.4 million (2006: $89.7 million)

• This is an uncommitted promissory note facility of $600.0 million (2006: $600.0 million). This facility continues indefi nitely until terminated by giving written notice to the dealer panel members. As at 30 June 2007, there were $380.4 million in promissory notes outstanding with an average maturity of 50 days (2006: $89.7 million).

• Euro-Commercial Paper Program – nil (2006: nil)

• A US$200.0 million non-underwritten facility under which commercial paper can be issued into the Asian and European capital markets. As at 30 June 2007, there were nil Euro notes outstanding (2006: nil).

• US Commercial Paper Program – $70.0 million (2006: $121.3 million)

• This is an uncommitted commercial paper program of US$400.0 million (2006: US$400.0 million). As at 30 June 2007, $70.0 million of commercial paper was outstanding with an average maturity of 32 days (2006: $121.3 million).

• (5) Various bank borrowings including:

• Amcor Limited – $300.0 million multi-currency facility maturing in December 2007. $278.0 million (2006: $300.0 million) drawn under this facility bears interest at BBSY or LIBOR plus an applicable credit margin.

• Amcor Limited – $320.0 million multi-currency facility maturing in September 2007. $276.0 million (2006: nil) drawn under this facility bears interest at BBSY or LIBOR plus an applicable credit margin.

• Amcor Finance (New Zealand) Limited – $46.4 million (2006: $47.0 million) drawn under NZ$100.0 million revolving cash advance facility maturing in April 2008. This facility bears interest at the bank bill rate plus an applicable credit margin.

• Amcor Limited – $21.5 million (2006: $25.0 million) drawn under uncommitted at call facilities. Amounts borrowed under these facilities bear interest at the overnight cash rate plus an applicable margin.

• (6) Comprises various funding facilities made available to subsidiary companies predominantly in Europe and North America.

• (7) Lease liabilities (other than liabilities recognised in relation to surplus space under non-cancellable operating leases) are effectively secured as the rights to the leased assets recognised in the fi nancial statements revert to the lessor in the event of default.

• (8) Comprises loans secured over property, plant and equipment in Australian and overseas controlled entities to the extent of $135.8 million (2006: $177.4 million). The carrying value of the pledged property is $135.8 million (2006: $180.1 million).

• (9) Principally relates to bank borrowings in:

• Amcor Limited/Amcor UK Finance Limited/Amcor Finance (USA) Inc. – $330.3 million (2006: $534.2 million) drawn under a US$1,250.0 million (2006: US$1,250.0 million) global syndicated multi-currency facility term-tranche of US$750.0 million (2006: US$750.0 million) maturing June 2011. Drawings are in various currencies and bear interest at the applicable BBSY or LIBOR rate plus a credit margin.

• (10) Represents US$500.0 million Amcor Limited senior unsecured guaranteed notes issued in the United States Private Placement market. The notes have fi nal bullet maturities between 2009 and 2017. Interest on these notes is payable semi-annually.

• (11) Represents € 350.0 million Amcor Limited unsecured notes issued in the Eurobond market. The notes mature in March 2011 and pay an annual coupon of 4.25%.

Amcor Limited 85

Note 22 Subordinated Convertible Securities

Note 22 Subordinated Convertible Securities
		Consolidated	Amcor Limited
$million	2007	2006	2007	2006
1996 issue of 7.25% Undated Subordinated Convertible Unsecured Notes	–	246.0	–	246.0
PACRS2	–	218.2	–	–
	–	464.2	–	246.0

Undated Subordinated Convertible Unsecured Notes

The Undated Subordinated Convertible Unsecured Notes (PRIDES) were convertible subordinated debt securities that paid a semi-annual coupon of 7.25% per annum and gave note holders a right to convert into American Depositary Receipts (ADRs) of the Company, Amcor Limited, at a prescribed conversion rate any time prior to 19 November 2006. Each ADR represents four ordinary shares in the Company.

On 18 November 2006, the conversion period for the US$230.0 million PRIDES concluded with 94.5% of the notes converted to equity and the remaining notes being redeemed by the Company at their face value of $16.7 million (US$12.6 million).

During the year ended 30 June 2007, 3,379,303 (2006: 959,699 notes) were converted to 32,925,676 (2006: 10,016,192) ordinary shares of the Company increasing capital by $221.8 million (2006: $65.0 million). The Company subsequently bought back the equivalent number of shares via an on-market share buy-back program. The Amcor PRIDES are no longer listed on the NASDAQ Exchange.

Perpetual Amcor Convertible Reset Securities Second Tranche (PACRS2)

PACRS2 were fully paid perpetual, non-cumulative, subordinated, convertible, reset, unsecured notes issued in 2002. Non-cumulative interest was paid semi-annually on PACRS2 at a coupon rate of 8.57% per annum fi xed until the fi rst reset date being 30 April 2007.

On 30 April 2007, the consolidated entity announced the successful completion of the repurchase offer for PACRS2. A total of 1,901,814 notes, representing 91% of the 2,099,087 outstanding notes, were repurchased and cancelled for a repurchase amount of $105.2632 per note.

The remaining 197,273 notes converted to ordinary shares in Amcor Limited. Each converted note was redeemed for its $100 face value and the proceeds applied to the subscription of 14.0670 ordinary shares per note. The conversion resulted in the issue of 2,774,547 ordinary shares in the Company increasing capital by $20.7 million. The Company subsequently bought back the equivalent number of shares via an on-market share buy-back program. PACRS2 are no longer listed on the Australian Securities Exchange (‘ASX’).

Perpetual Amcor Convertible Reset Securities First Tranche (PACRS1)

PACRS1 were fully paid perpetual, non-cumulative, subordinated, convertible, reset, unsecured notes. Non-cumulative interest was paid semi-annually on PACRS1 at a coupon rate of 8.5733% per annum, fi xed until the fi rst reset date on 30 April 2006. On 25 January 2006, Amcor announced that PACRS1 would be converted to equity on 30 April 2006. Prior to the conversion, Amcor offered to repurchase the PACRS1 notes off-market to provide holders with a cash alternative to receiving ordinary shares.

The offer price for the repurchase of PACRS1 notes was $105.2632 per note with settlement of the repurchase occurring on 28 April 2006. Holders accepting the repurchase offer received the full amount of interest for the fi nal interest period up to the conversion date of 30 April 2006. The offer price, together with the fi nal interest payment of $4.2514 per note, refl ected the full value of the conversion terms.

Acceptances were received in relation to 3,434,736 PACRS1 notes. The remaining 565,264 PACRS1 notes were converted into 8,187,171 ordinary shares in Amcor Limited increasing the share capital by $56.5 million. The Company subsequently bought back the equivalent number of shares via an on-market share buy-back program. PACRS1 are no longer listed on the ASX.

86 Amcor Limited

Notes to the Financial Statements

30 June 2007

Note 23 Other Financial Liabilities

Note 23 Other Financial Liabilities
		Consolidated			Amcor Limited
$million	2007			2006	2007	2006
Current
Liabilities for f nancial guarantees	–			–	0.1	–
Derivative f nancial instruments:
Forward exchange contracts	2.1			0.3	1.9	–
Commodity contracts	1.1			–	–	–
	3.2			0.3	2.0	–
Derivative f nancial instruments – cash f ow hedges:
Forward exchange contracts	8.4			1.2	0.6	–
Commodity contracts	–			1.7	–	–
	8.4			2.9	0.6	–
Total current other f nancial liabilities	11.6			3.2	2.6	–
Non-current
Liabilities for f nancial guarantees	–			–	2.9	–
Derivative f nancial instruments – cash f ow hedges:
Forward exchange contracts	0.4			–	–	–
Total non-current other f nancial liabilities	0.4			–	2.9	–

Financial guarantees

The Company has guaranteed the bank overdrafts, operating leases and fi nance leases of a number of subsidiaries. Under the terms of the fi nancial guarantee contracts, the Company will make payments to reimburse the lenders upon failure of the guaranteed entity to make payments when due.

Terms and face values of the liabilities guaranteed were as follows:

		30 June	30 June
		2007	2006
$ million	Year of maturity	Face value	Face value
Bank term loans of controlled entities	2008–2009	32.6	46.8
Operating leases of controlled entities	2008–2020	67.9	83.7
Finance leases of controlled entities	2010–2018	53.5	54.3

The Company has also entered into a Deed of Cross Guarantee with certain subsidiaries. Under the terms of the deed, the Company has provided certain guarantees regarding the repayment of relevant current and future creditors in the event that any of the entities party to the deed are wound up. Details of the deed and the consolidated fi nancial position of the Company and the subsidiaries party to the deed are set out in note 35.

The method used in determining the fair value of these guarantees has been disclosed the consolidated entity’s accounting policy Financial Guarantee Contracts (refer note 1(q)).

Amcor Limited 87

Note 24 Provisions
Consolidated
		Insurance
	Employee	and other	Onerous	Asset
$million	entitlements	claims	contracts	restoration	Restructuring	Other	Total
Balance at 1 July 2006	157.0	79.5	27.7	52.1	74.0	0.3	390.6
Provisions made during the period	56.9	12.4	6.9	4.2	105.8	0.9	187.1
Payments made during the period	(65.6)	(17.7)	(12.2)	(1.1)	(110.7)	(1.2)	(208.5)
Released during the period	(0.7)	(1.4)	(0.1)	(3.3)	(13.1)	–	(18.6)
Disposal of business and controlled entities	(3.0)	(1.9)	(0.1)	(1.8)	(1.4)	–	(8.2)
Unwinding of discount	–	0.4	–	2.7	–	–	3.1
Effect of movement in foreign exchange rate	(3.2)	(1.0)	(1.9)	(2.3)	(2.6)	–	(11.0)
Balance at 30 June 2007	141.4	70.3	20.3	50.5	52.0	–	334.5
Current	120.5	48.2	20.0	1.3	51.8	–	241.8
Non-current	20.9	22.1	0.3	49.2	0.2	–	92.7
Balance at 1 July 2005	164.9	67.0	22.4	52.3	73.6	0.3	380.5
Provisions made during the period	65.8	34.8	27.2	5.6	82.3	1.0	216.7
Payments made during the period	(65.7)	(19.8)	(23.9)	(0.3)	(81.3)	(0.6)	(191.6)
Released during the period	(0.8)	(1.3)	(0.1)	(3.4)	(0.3)	(0.7)	(6.6)
Disposal of business and controlled entities	(9.5)	(3.9)	–	(5.3)	(5.3)	–	(24.0)
Unwinding of discount	–	0.7	–	1.4	–	0.3	2.4
Effect of movement in foreign exchange rate	2.3	2.0	2.1	1.8	5.0	–	13.2
Balance at 30 June 2006	157.0	79.5	27.7	52.1	74.0	0.3	390.6
Current	135.5	58.0	23.2	0.4	72.9	–	290.0
Non-current	21.5	21.5	4.5	51.7	1.1	0.3	100.6

Amcor Limited

As at 30 June 2007, the Company held an employee entitlements provision of $5.9 million (2006: $5.7 million) of which $1.5 million (2006: $1.6 million) is current and $4.4 million (2006: $4.1 million) is non-current. The Company also carries a provision relating to asset restoration costs totalling $1.8 million (2006: $1.8 million), all of which is non-current.

For the 12 months to 30 June 2007, the Company recognised an increase in the employee entitlements provision of $1.4 million (2006: $1.6 million), there was no change to the asset restoration provision during the period (2006: increase of $1.5 million). In addition, payments totalling $1.2 million (2006: $2.5 million) were made and during the comparative period, $0.7 million was transferred to a subsidiary entity by the Company relating to employee entitlements. No such transfer occurred in the current period.

Description of provisions Employee entitlements

Employee entitlements include the liability for annual leave and long service leave of employees as well as any directors’ retirement allowances.

Insurance and other claims

Insurance and other claims provisions include provisions for workers’ compensation, insurance and other claims and are made for claims received and claims expected to be received in relation to incidents occurring prior to 30 June 2007, based on historical claim rates.

Estimated net future cash fl ows are based on the assumption that all claims will be settled and the weighted average cost of historical claims adjusted for infl ation will continue to approximate future costs.

Onerous contracts

Onerous contract provisions relate to rental of land and buildings by Amcor Flexibles and PET Business Groups which are not able to be fully used or sublet by the consolidated entity. The provision refl ects only the onerous element of these commitments.

Asset restoration

Provisions for asset restoration or decommissioning relate to either make-good provisions included in lease agreements or decommissioning costs associated with environmental risks for which the consolidated entity has a legal or constructive obligation.

Where lease agreements include requirements to return the property to its original condition, the consolidated entity has made a provision based on an estimate of these costs.

On a number of sites, there are areas of contamination caused by past practice, many of which relate to operations prior to Amcor’s ownership. The provision includes costs associated with the clean-up of sites it owns, or contamination that it caused, to enable on-going use of the land as an industrial property.

In addition, the consolidated entity recognises the environmental risks associated with underground storage tanks. The provision includes costs associated with the decommissioning, removal or repair of any tanks which may fail integrity tests.

88 Amcor Limited

Notes to the Financial Statements

30 June 2007

Note 24 Provisions (continued)

Restructuring provisions

The following tables provides a segmental analysis of the restructuring provision at the end of the reporting period:

Consolidated
	Amcor	Amcor
$million	Flexibles	PET	Australasia	Other	Total
Balance at 1 July 2006	44.1	8.9	15.5	5.5	74.0
Provisions made during the period	14.9	6.1	84.8	–	105.8
Payments made during the period	(37.3)	(9.7)	(59.3)	(4.4)	(110.7)
Released during the period	(1.3)	(1.2)	(10.0)	(0.6)	(13.1)
Disposal of business and controlled entities	–	(1.4)	–	–	(1.4)
Other transfers	(0.2)	–	–	0.2	–
Effect of movement in foreign exchange rate	(2.0)	(0.5)	–	(0.1)	(2.6)
Balance at 30 June 2007	18.2	2.2	31.0	0.6	52.0
Current	18.0	2.2	31.0	0.6	51.8
Non-current	0.2	–	–	–	0.2
Balance at 1 July 2005	15.4	9.1	19.2	29.9	73.6
Provisions made during the period	45.7	28.0	7.8	0.8	82.3
Payments made during the period	(14.9)	(28.5)	(11.2)	(26.7)	(81.3)
Released during the period	–	–	(0.3)	–	(0.3)
Disposal of business and controlled entities	(5.3)	–	–	–	(5.3)
Other transfers	0.6	–	–	(0.6)	–
Effect of movement in foreign exchange rate	2.6	0.3	–	2.1	5.0
Balance at 30 June 2006	44.1	8.9	15.5	5.5	74.0
Current	43.2	8.7	15.5	5.5	72.9
Non-current	0.9	0.2	–	–	1.1

The Amcor Flexibles restructuring provisions include the costs relating to the closure of Hochheim, Colodense and Envi plants.

The Amcor PET restructuring provisions include the costs of closing the Vancouver, Calgary and Dorval facilities. The consolidated entity has provided for redundancies, other employee costs and site clearance costs.

The Australasia restructuring provision includes the costs related to the closures of the West End corrugated plant in Queensland, the Box Hill corrugated plant in Victoria and the recycling paper mills at Spearwood in Western Australia.

The Company did not have any restructuring provisions as at 30 June 2007 (2006: nil).

Note 25 Retirement Benefi t Obligations

Note 25 Retirement Benef t Obligations
		Consolidated	Amcor Limited
$ million	2007	2006	2007	2006
Def ned benef t pension plans	78.4	216.8	7.6	35.8
Def ned benef tpost-retirementplans	23.0	29.8	–	–
	101.4	246.6	7.6	35.8

Description of plans

The consolidated entity participates in a number of pension plans which have been established to provide benefi ts for employees and their dependants. The funds include Company sponsored plans, industry/union plans and government plans.

Company Sponsored Plans

Company sponsored plans include both defi ned contribution and defi ned benefi t plans. The principal benefi ts of these plans are pensions or lump sums for members on resignation, retirement, death or total permanent disablement. These benefi ts are determined on either a defi ned benefi t or accumulation benefi t basis.

Employee contribution rates are either determined by the rules of the fund or selected by members from a specifi ed range of rates. In addition to legislative requirements, employer companies contribute to defi ned benefi t funds as described below or, in the case of defi ned contribution funds, the amounts set out in the appropriate fund rules.

Amcor Limited 89

Industry/Union Plans

Employer companies participate in industry and union plans on behalf of certain employees. These plans operate on an accumulation basis and provide lump sum benefi ts for members on resignation, retirement or death. The employer entity has a legally enforceable obligation to contribute at varying rates to these plans.

Government Plans

Employer companies participate in government plans, on behalf of certain employees, which provide pension benefi ts. There exists a legally enforceable obligation on employer companies to contribute as required by legislation.

Defi ned Benefi t Plans

The consolidated entity maintains several defi ned benefi t superannuation arrangements internationally. On a vested benefi t basis, some arrangements are in actuarial surplus, others are in a position of actuarial defi ciency. Surpluses and defi ciencies depend on many diverse factors and can vary signifi cantly over time having regard, for example, to movements in the investment markets, future salary increases and changes in employment patterns. This note sets out the consolidated entity’s position and funding policy in relation to its defi ned benefi t arrangements.

The consolidated entity has no legal obligation to settle any unfunded defi ned benefi t obligation with an immediate contribution or additional one-off contributions. The objective of funding is to ensure that the benefi t entitlements of members and other benefi ciaries are fully funded by the time they become payable.

The consolidated entity’s current intention is to make annual contributions to defi ned benefi t funds at a rate determined from time to time, following discussions with the funds’ actuaries or other competent authorities and advisers. The consolidated entity expects that the contribution rates will be determined after taking into account sound actuarial principles and would be designed to enable all consolidated entity defi ned benefi t funds to meet retirement expectations and relevant regulatory requirements. The consolidated entity’s current intention is based on these assumptions. The consolidated entity reserves the right to increase, reduce or suspend its contributions to the funds as it sees fi t.

The following tables set out fi nancial information in relation to both defi ned benefi t pension plans and defi ned benefi t post-retirement plans. The Company does not participate in any defi ned benefi t post-retirement plans (2006: nil).

(i) Amounts recognised in the balance sheet

	Consolidated	Consolidated	Amcor Limited	Amcor Limited
$million	2007	2006	2007	2006
Present value of the unfunded def ned benef t obligation	47.6	57.2	–	–
Present value of the funded def ned benef t obligation	933.3	1,034.6	317.1	290.4
Liabilities for def ned benef t obligations	980.9	1,091.8	317.1	290.4
Fair value of def ned benef t plan assets	(890.7)	(848.8)	(309.5)	(254.6)
Net liability for def ned benef t obligations	90.2	243.0	7.6	35.8
Amounts not recognised as an asset	8.0	0.7	–	–
Net liabilityin the balance sheet	98.2	243.7	7.6	35.8
Net liability in the balance sheet comprises:
Retirement benef t assets (note 19)	(3.2)	(2.9)	–	–
Retirement benef t obligations	101.4	246.6	7.6	35.8
	98.2	243.7	7.6	35.8

(ii) Proportion of the fair value of total plan assets

		Consolidated	Consolidated	Amcor Limited	Amcor Limited
	2007		2006	2007	2006
	%		%	%	%
Equity securities	55.7		53.3	70.0	69.0
Real estate	3.4		4.2	–	–
Debt securities	34.5		34.6	21.0	21.0
Other assets	6.4		7.9	9.0	10.0
	100.0		100.0	100.0	100.0

The defi ned benefi t plan assets of the parent entity may include Amcor Limited securities at various times throughout the year. At 30 June 2007, the plan did not hold any Amcor Limited securities (2006: nil).

90 Amcor Limited

Notes to the Financial Statements

30 June 2007

Note 25 Retirement Benefi t Obligations (continued)

Description of plans (continued)

(iii) Movement in the liability for defi ned obligations

	Consolidated	Consolidated	Amcor Limited	Amcor Limited
$million	2007	2006	2007	2006
Def ned benef t obligation at 1 July	1,091.8	983.2	290.4	265.6
Current service cost	42.4	50.5	18.0	21.0
Interest cost on benef t obligation	49.9	44.8	13.8	11.1
Actuarial (gain)/loss on plan liabilities	(4.6)	14.6	16.2	16.6
Contributions by plan participants	12.3	13.2	2.4	2.6
Benef ts paid by the plan	(55.4)	(50.9)	(19.5)	(19.5)
Past service cost	(1.6)	1.0	–	–
Disposal of businesses and controlled entities	(70.5)	(44.9)	–	–
Gains on curtailment	(5.7)	(3.8)	–	–
Gains on settlement	(19.4)	(0.1)	–	–
Expenses, taxes, premiums paid	(8.1)	(10.0)	(4.2)	(7.0)
Plan converted from def ned contribution to def ned benef t	–	57.5	–	–
Exchange differences on foreignplans	(50.2)	36.7	–	–
Def ned benef t obligations at 30 June	980.9	1,091.8	317.1	290.4
(iv) Movement in plan assets
Fair value of plan assets at 1 July	848.8	624.9	254.6	206.8
Contributions by employer	77.3	104.2	20.1	44.2
Contributions by plan participants	12.3	13.2	2.4	2.6
Benef ts paid by the plan	(55.4)	(50.9)	(19.5)	(19.5)
Disposal of businesses and controlled entities	(43.2)	–	–	–
Expenses, taxes, premiums paid	(8.1)	(10.0)	(4.2)	(7.0)
Losses on curtailment	–	(0.2)	–	–
Losses on settlement	(14.8)	(0.1)	–	–
Expected return on assets	55.8	42.7	20.3	15.5
Actuarial gain on plan assets	56.9	36.9	35.8	12.0
Plan converted from def ned contribution to def ned benef t	1.1	64.2	–	–
Exchange differences on foreignplans	(40.0)	23.9	–	–
Fair value ofplan assets at 30 June	890.7	848.8	309.5	254.6
(v) Amounts recognised in the income statement
Current service cost	42.4	50.5	18.0	21.0
Interest cost on benef t obligation	49.9	44.8	13.8	11.1
Expected return on plan assets	(55.8)	(42.7)	(20.3)	(15.5)
Past service cost	(1.6)	1.0	–	–
Gains on curtailments and settlements	(10.3)	(9.8)	–	–
Impact of asset ceilingrecognised in the income statement	4.5	–	–	–
	29.1	43.8	11.5	16.6
Actual return on plan assets	112.7	79.6	56.1	27.5
(vi) Actuarial gains and losses recognised directly in equity
Cumulative amount at 1 July	(24.1)	(46.4)	13.0	17.6
Recognised in equity during the period
Movement in plan liabilities	4.6	(14.6)	(16.2)	(16.6)
Movement in plan assets	56.9	36.9	35.8	12.0
Impact of asset ceiling recognised directly in equity	(2.8)	–	–	–
	58.7	22.3	19.6	(4.6)
Cumulative amount at 30 June	34.6	(24.1)	32.6	13.0

Amcor Limited 91

(vii) Principal actuarial assumptions

The principal actuarial assumptions (expressed as weighted averages) used for the purposes of reporting under AASB 119 Employee Benefi ts for the consolidated entity’s and company’s defi ned benefi t plans are as follows:

		Consolidated	Consolidated		Amcor Limited	Amcor Limited
	2007			2006	2007	2006
	%			%	%		%
Discount rate	4.9			4.7	5.0		5.0
Expected return on plan assets	6.8			6.5	8.0		8.0
Future salary increases	4.0			3.8	4.5		4.5
Medical cost trend rates	8.4			7.4	–		–

Expected return on asset assumption

The expected rate of return on assets assumption is determined by weighting the expected long-term return for each asset class by the benchmark allocation of assets to each class. The returns used for each class are net of tax and investment fees.

Investment strategy

The investment strategies for the consolidated entity’s defi ned benefi t plans are varied, with the plans seeking to achieve moderate to high returns within a given risk profi le. Investment target strategies for the material defi ned benefi t plans include:

• high returns in the long term, while tolerating a reasonably high degree of volatility of returns over the short period;

• a balance of equity, debt securities and fi xed income securities, which would be expected to produce a moderately high return over the long term, with only a moderate degree of variability of returns over short periods;

• where investments are made in equity securities, ensuring there is an appropriate mix of domestic and international securities;

• to achieve returns greater than a predetermined percentage above the prevailing infl ation rate; and

• to ensure all legal obligations are met.

Effects of changes in assumed medical cost trend rates

A 1.0% decrease in medical cost trend rates would be expected to reduce service and interest cost components and the value of the defi ned benefi t obligation by $0.1 million and $0.2 million respectively. A 1.0% increase in medical cost trend rates would be expected to increase service and interest cost components and the value of the defi ned benefi t obligation by $0.1 million and $0.2 million respectively.

(viii) Estimated future contributions

Employer contributions to the defi ned benefi t pension plans and defi ned benefi t post-retirement plans are based on recommendations by the plans’ actuaries. Actuarial assessments are made periodically.

Employer contributions to defi ned benefi t funds and defi ned benefi t post-retirement plans for the consolidated entity during the fi nancial year ending 30 June 2008 are expected to total $53.5 million. Employer contributions to defi ned benefi t plans for the parent entity during the fi nancial year ending 30 June 2008 are expected to total $19.9 million.

92 Amcor Limited

Notes to the Financial Statements

30 June 2007

Note 25 Retirement Benefi t Obligations (continued)

Description of plans (continued) (ix) Historical summary

$million	2007	2006	2005
Consolidated
Present value of the def ned benef t obligation	988.9	1,092.5	983.2
Fair value ofplan assets	890.7	848.8	624.9
Def cit in the plans	98.2	243.7	358.3
Experience adjustments arising on plan liabilities	2.5	(42.1)	(29.5)
Experience adjustments arising on plan assets	(57.3)	37.9	38.6
Amcor Limited
Present value of the def ned benef t obligation	317.1	290.4	265.6
Fair value ofplan assets	309.5	254.6	206.8
Def cit in the plans	7.6	35.8	58.8
Experience adjustments arising on plan liabilities	22.3	(26.2)	(2.1)
Experience adjustments arising on plan assets	(35.8)	12.0	15.4

The consolidated entity and the Company have used the AASB 1 First-time Adoption of Australian Equivalents to International Financial Reporting Standards paragraph 20A exemption and disclosed amounts under AASB 1 paragraph 20A(p) above for each annual reporting period prospectively from transition date.

(x) Defi ned benefi t expense

The expense for both defi ned benefi t plans and defi ned benefi t post-retirement plans were recognised in the following line items in the income statement.

	Consolidated	Consolidated		Amcor Limited(1)	Amcor Limited(1)
$ million	2007		2006	2007	2006
Cost of sales	7.5		11.3	–	–
Sales and marketing expenses	2.3		0.5	–	–
General and administration expenses	25.0		29.6	18.0	21.0
Research and development costs	0.2		0.3	–	–
Net f nancingcosts	(5.9)		2.1	(6.5)	(4.4)
	29.1		43.8	11.5	16.6

(1) Included within the above defi ned benefi t expense for Amcor Limited are $18.1 million (2006: $19.5 million) of costs incurred by wholly-owned subsidiaries of the Company.

Amcor Limited 93

		Total	equity	3,606.0	349.2	264.8	7.0		(332.9)	(305.7)			(5.8)	(1.3)	3,581.3	3,978.0	(621.5)	34.0		3,390.5	486.5	142.5	3.5		(57.8)	(298.8)	(5.7)			(8.0)	(46.7)	3,606.0
		Minority	interest	51.6	7.7	–	–		–	–			(5.8)	(1.3)	52.2	78.0	–	–		78.0	34.0	–	–		–	–	(5.7)			(8.0)	(46.7)	51.6
Total	Attributable	Retained to Members	prof ts of Amcor	828.6 3,554.4	576.9 341.5	– 264.8	– 7.0		– (332.9)	(305.7) (305.7)			– –	– –	1,099.8 3,529.1	726.1 3,900.0	3.2 (621.5)	34.0 34.0		763.3 3,312.5	364.1 452.5	– 142.5	– 3.5		– (57.8)	(298.8) (298.8)	– –			– –	– –	828.6 3,554.4
	Exchange	f uctuation	reserve	(71.5)	(237.7)	–	–		–	–			–	–	(309.2)	(152.6)	1.6	–		(151.0)	79.5	–	–		–	–	–			–	–	(71.5)
	Cash f ow Share-based	hedge payments	reserve reserve	(19.0) 7.8	(5.2) –	– (0.6)	– 7.0		– –	– –			– –	– –	(24.2) 14.2	– 4.4	(28.0) –	– –		(28.0) 4.4	9.0 –	– (0.1)	– 3.5		– –	– –	– –			– –	– –	(19.0) 7.8
Available-	for-sale	Contributed revaluation	$million equity reserve	Balance at 1 July 2006 2,810.3 (1.8)	Total recognised income and expense – 7.5	Contributions of equity, net of transaction costs 265.4 –	Share-based payments option expense – –		Share buy-back (332.9) –	Dividends paid (refer note 27) – –	Dividends paid to minority interests in		subsidiaries – –	Disposals of controlled entities and businesses – –	Balance at 30 June 2007 2,742.8 5.7	Balance at 1 July 2005 3,322.1 –	Adoption of AASB 132 and 139, net of tax (596.6) (1.7)	Correction of error (refer note 2) – –		Balance at 1 July 2005 restated 2,725.5 (1.7)	Total recognised income and expense – (0.1)	Contributions of equity, net of transaction costs 142.6 –	Share-based payments option expense – –		Share buy-back (57.8) –	Dividends paid (refer note 27) – –	Minority interest buy-out – –	Dividends paid to minority interests in		subsidiaries – –	Disposals of controlled entities and businesses – –	Balance at 30 June 2006 2,810.3 (1.8)

94 Amcor Limited

Notes to the Financial Statements

30 June 2007

Note 26 Contributed Equity and Reserves (continued)

(a) Reconciliation of movement in contributed equity and reserves (continued) Amcor Limited

(a) Reconciliation of movement in contributed equity and res Amcor Limited	erves (continued)
			Share-based
	Contributed	Cash f ow	payments	Retained
$million	equity	hedge reserve	reserve	earnings	Total equity
Balance at 1 July 2006	2,810.3	(21.2)	7.8	2,027.1	4,824.0
Total recognised income and expense	–	2.6	–	502.3	504.9
Contributions of equity, net of transaction costs	265.4	–	(0.6)	–	264.8
Share-based payments option expense	–	–	7.0	–	7.0
Share buy-back	(332.9)	–	–	–	(332.9)
Dividendspaid(refer note 27)	–	–	–	(305.7)	(305.7)
Balance at 30 June 2007	2,742.8	(18.6)	14.2	2,223.7	4,962.1
Balance at 1 July 2005	2,725.5	–	4.4	2,411.8	5,141.7
Adoption of AASB 132 and 139, net of tax	–	(24.1)	–	(8.3)	(32.4)
Balance at 1 July 2005 restated	2,725.5	(24.1)	4.4	2,403.5	5,109.3
Total recognised income and expense	–	2.9	–	(77.6)	(74.7)
Contributions of equity, net of transaction costs	142.6	–	(0.1)	–	142.5
Share-based payments option expense	–	–	3.5	–	3.5
Share buy-back	(57.8)	–	–	–	(57.8)
Dividends paid (refer note 27)	–	–	–	(298.8)	(298.8)
Balance at 30 June 2006	2,810.3	(21.2)	7.8	2,027.1	4,824.0

Available-for-sale revaluation reserve

Changes in the fair value of investments, such as equities and available-for-sale fi nancial assets, are taken to the revaluation reserve, as described in note 1(j)(iii). Amounts are recognised in the income statement when the associated asset is disposed of or impaired.

Cash fl ow hedge reserve

The hedging reserve comprises the effective portion of the cumulative net change in the fair value of cash fl ow hedging instruments related to hedged transactions that have not yet occurred.

Share-based payment reserve

The share-based payments reserve is used to recognise the fair value of options recognised as an expense.

Exchange fl uctuation reserve

Exchange differences arising on translation of foreign controlled operations are taken to the exchange fl uctuation reserve, as described in note 1(c). The relevant position of the reserve is recognised in the income statement when a foreign operation is disposed of.

Amcor Limited 95

(b) Contributed equity

(b) Contributed equity
		Consolidated		Amcor Limited
$million	2007		2006	2007	2006
Issued and paid-up:
883,119,239 ordinary shares with no par value (2006: 890,252,026)(1)	2,742.7		2,810.2	2,742.7	2,810.2
1,084,000partly paid ordinaryshares with nopar value(2006: 1,317,000)(2)	0.1		0.1	0.1	0.1
	2,742.8		2,810.3	2,742.8	2,810.3

(1) Fully paid ordinary shares carry one vote per share and carry the right to dividends.

(2) The partly paid ordinary shares comprise 800,000 (2006: 915,000) shares paid to fi ve cents and 284,000 (2006: 402,000) shares paid to one cent under Employee Share/Option Plans. The aggregate uncalled capital of $7.5 million (2006: $8.9 million) will be brought to account when these shares are fully paid.

(i) Reconciliation of fully paid ordinary shares

Consolidated	2007 2006
	No. ’000 $million No. ’000 $million
Balance at beginning of period Calls on partly paid shares Issue of shares under the employee share purchase plan (refer note 29(a)(ii)) Exercise of options and loan repayments under the Employee Share/Option Plan (refer note 29(b)) Conversion of convertible securities (refer note 22) Share buy-back(1) Transaction costs associated with the issue of capital	890,252 2,810.3 878,183 2,725.5 233 1.5 150 1.1 40 – – – 2,702 22.2 1,903 20.9 35,700 242.5 18,203 121.5 (45,808) (332.9) (8,187) (57.8 – (0.8) – (0.9
Balance at end ofperiod	883,119 2,742.8 890,252 2,810.3

(1) On 13 June 2007 (2006: 25 May 2006), the Company completed the on market buy-back of 45,808,370 (2006: 8,187,171) fully paid ordinary shares, representing 5.2% (2006: 0.93%) of ordinary shares on that date. The total consideration of shares bought back on market was $332,896,005 (2006: $57,836,513) being an average, including incidental costs, of $7.27 (2006: $7.06) per share.

(ii) Reconciliation of partly paid ordinary shares

Balance at beginning of period	1,317	0.1	1,467	0.1
Converted to fully paid ordinaryshares	(233)	–	(150)	–
Balance at end of period	1,084	0.1	1,317	0.1

Note 27 Dividends

Dividends recognised in the current period by the consolidated entity are:

		Cents	Total amount	Franked/
		per share	$ million	unfranked(1)	Day of payment
2007
2007	Interim dividend per fully paid share	17.0	152.3	Unfranked	30 March 2007
2006	Final dividendper fully paid share	17.0	153.4	Franked at 15%	29 September 2006
			305.7
2006
2006	Interim dividend per fully paid share	17.0	149.5	Franked at 15%	31 March 2006
2005	Final dividendper fully paid share	17.0	149.3	Franked at 22%	28 September 2005
			298.8

In addition to the above dividends, since the end of the fi nancial year, the directors have declared the following fi nal dividend. The fi nancial effect of this dividend has not been brought to account in the fi nancial statements for the year ended 30 June 2007 and will be recognised in subsequent fi nancial reports.

		Cents	Total amount	Franked/
		per share	$ million	unfranked(1)	Date of payment
2007
2007	Final dividend per fully paid share(2)	17.0	150.1	Unfranked	5 October 2007
2006
2006	Final dividend per fully paid share	17.0	153.4	Franked at 15%	29 September 2006

(1) 75% is sourced from the Conduit Foreign Income Account.

(2) Estimated fi nal dividend payable, subject to variations in number of shares up to record date.

96 Amcor Limited

Notes to the Financial Statements

30 June 2007

Note 27 Dividends (continued)

Franking Account

There are no franking credits available for distribution from the franking account. Accordingly, the fi nal dividend for 2007 is unfranked. Franking credits that will arise from payment of income tax in the year ending 30 June 2007 have been factored into the franking account balance.

Conduit Foreign Income Account

For non-resident shareholders for Australian tax purposes, future dividends will not be subject to Australian withholding tax to the extent that they are franked or sourced from the parent entity’s Conduit Foreign Income Account. For the dividend payable in October 2007, 75% of the dividend is sourced from the parent entity’s Conduit Foreign Income Account. As a result, 75% of the dividend paid to a non-resident will not be subject to Australian withholding tax.

The balance of the Conduit Foreign Income Account as at 30 June 2007 is $1,349.2 million (2006: $788.4 million). This will reduce to $1,236.6 million (2006: $673.6 million) after payment of the October 2007 dividend.

Note 28 Additional Financial Instruments Disclosures

Included below are details of forward exchange contracts, commodity price swap contracts, equity related derivative instruments, interest rate swap contracts, cross-currency interest rate swaps, interest rate risk exposures and fair value assessments relating to fi nancial assets and fi nancial liabilities of the consolidated entity.

For all interest rate, foreign exchange and commodity contracts, that are designated as part of a cash fl ow hedge, the portion of the gain or loss on the hedging instrument that is determined to be an effective hedge is recognised directly in equity. The amount that has been deferred in equity is released to the balance sheet or income statement, as appropriate, when the cash outfl ow or infl ow occurs.

At balance date, contracts determined to be an effective hedge of liabilities of $13.1 million (2006: assets of $3.5 million) were recognised directly in equity. During the year ended 30 June 2007, $1.5 million loss (2006: $0.2 million gain) was removed from equity and added to the measurement of non-fi nancial assets and a $7.5 million gain (2006: $7.9 million gain) was transferred to the income statement. In the year ended 30 June 2007, there was a loss from the decrease in fair value of non-designated hedging instruments of $6.8 million (2006: $2.4 million increase).

Financial risk management

The Company and the consolidated entity’s activities expose it to a variety of fi nancial risks: market risk (including price risk, foreign currency risk, employee share plan risk and interest rate risk), credit risk and liquidity risk. The consolidated entity’s overall risk management programme focuses on the unpredictability of fi nancial markets and seeks to minimise potential adverse effects on the consolidated entity’s fi nancial performance. The consolidated entity negotiates appropriate commercial terms or uses derivative fi nancial instruments, such as foreign exchange contracts and interest rate swaps, to hedge these risk exposures.

Risk management is carried out by Amcor Group Finance for interest rate, foreign exchange exposures and commodity exposures under policies approved by the Board of Directors. Amcor Group Finance identifi es, evaluates and hedges fi nancial risks in close cooperation with the consolidated entity’s Business Groups. The Board has determined written principles for overall risk management, as well as written policies covering specifi c areas such as mitigating foreign exchange, interest rate and credit risks, use of derivative fi nancial instruments and investing excess liquidity.

Amcor Limited 97

(a) Market risk Price risk

The consolidated entity is exposed to commodity price risk from a number of commodities, including resin, aluminium and related commodities.

To manage the commodity price risks in respect of resin the consolidated entity is able to pass the price risk contractually through to certain customers. In the case of aluminium, some hedging is undertaken using fi xed priced swaps, options and futures, on behalf of certain customers. Hedging undertaken is based on customer instructions and all related benefi ts and costs are passed onto the customer.

The following table sets out the gross value (Australian dollar equivalents) to be received under commodity fi xed priced contracts, the weighted average contracted London Metals Exchange rates and the settlement periods of contracts outstanding at 30 June:

	Average f xed price per tonne	Average f xed price per tonne	Contract amounts	Contract amounts
			A$ m	A$ m
	2007	2006	2007	2006
Buy Aluminium contracts US$ denominated
Less than one year	2,738.4	2,599.6	6.9	13.8
Between one and two years	–	2,785.0	–	1.0
Buy Aluminium contracts A$ denominated
Less than one year	3,337.2	3,715.0	32.1	24.5
	Strike price per tonne		Contract amounts
			A$ m	A$ m
	2007	2006	2007	2006
Buy Aluminium ‘call’ options US$ denominated
Less than one year	3,000.0	–	6.6	–
Between one and two years	3,000.0	–	6.6	–

The consolidated entity is exposed to equity securities price risk because of investments held by the consolidated entity that are classifi ed on the balance sheet as either available-for-sale or at fair value through the income statement. The equity investments that are subject to price risk are all publicly traded (refer note 14) for investments in companies listed on stock exchanges.

Foreign currency risk

The consolidated entity operates internationally and is exposed to foreign exchange risk arising from various currency exposures, primarily with respect to the Euro and US dollar. Foreign currency risk arises from future commercial transactions (including interest payments on long-term borrowings and the purchase of resin), recognised assets and liabilities denominated in a currency that is not the functional currency of the Company and net investments in foreign operations.

To manage the foreign currency exchange risk arising from future commercial transactions, the Company and the consolidated entity uses forward exchange contracts to hedge forecast or actual foreign currency exposures greater than A$100,000, where the exposure is measured as forecast or actual transactional cash fl ows in currencies other than the functional currency of the business. Whether a proportion or 100% of the forecasted or actual foreign currency exposure is hedged is dependent upon the timeframe of the forecasted transaction. The cash fl ows are expected to occur at various dates up to 36 months from the balance date.

The consolidated entity has certain investments in foreign operations whose net assets are exposed to foreign currency translation risk. Currency exposure arising from the net assets of the consolidated entity’s foreign operations is managed primarily through borrowings denominated in the relevant foreign currency. Cross-currency interest rate swaps allow the consolidated entity to swap long-term Australian denominated borrowings into foreign currencies to hedge the investment in entities with functional currencies which are not the reporting currency of the parent entity.

98 Amcor Limited

Notes to the Financial Statements

30 June 2007

Note 28 Additional Financial Instruments Disclosures (continued)

(a) Market risk (continued)

At balance date, the details of outstanding forward foreign currency contracts (Australian dollar equivalents) are outlined below specifying currency and the average exchange rate of the outstanding contracts:

	Weighted Average Rate	Weighted Average Rate	Contract Amounts	Contract Amounts
	2007	2006	2007	2006
			$million	$million
Sell CAD Buy USD 0-12 months	1.07	1.11	(33.0)	(73.3)
Net CAD position – Sell CAD			(33.0)	(73.3)
Buy CHF Sell AUD 0-12 months	0.97	0.83	0.8	–
Net CHF position – Buy CHF			0.8	–
Buy CHF Sell EUR 0-12 months	–	1.56	–	0.5
Sell CHF Buy EUR 0-12 months	–	1.56	–	(0.2)
Net CHF position – Buy CHF			–	0.3
Buy DKK Sell EUR 0-12 months	7.45	7.46	6.6	9.9
Sell DKK Buy EUR 0-12 months	7.45	7.46	(4.4)	(5.6)
Net DKK position – Buy DKK			2.2	4.3
Buy EUR Sell AUD 0-12 months	0.60	0.59	39.2	49.1
Net EUR position – Buy EUR			39.2	49.1
Buy EUR Sell SGD – 0-12 months	1.99	–	1.5	–
Net EUR position – Buy EUR			1.5	–
Buy EUR Sell USD 0-12 months	1.27	1.25	26.0	27.0
Buy EUR Sell USD 1-2 years	–	1.24	–	16.1
Net EUR position – Buy EUR			26.0	43.1
Buy EUR Sell NZD – 0-12 months	–	1.80	–	0.7
Net EUR position – Buy EUR			–	0.7
Buy GBP Sell AUD 0-12 months	0.40	0.43	3.8	0.5
Net GBP position – Buy GBP			3.8	0.5
Buy GBP Sell EUR 0-12 months	0.68	0.68	11.3	14.8
Sell GBP Buy EUR 0-12 months	0.68	0.69	(16.6)	(13.2)
Sell GBP Buy EUR 1-2 years	0.69	–	(2.1)	–
Net GBP position – (Sell)/Buy GBP			(7.4)	1.6
Buy JPY Sell EUR 0-12 months	162.65	–	0.1	–
Net JPY position – Buy JPY			0.1	–
Buy NOK Sell EUR 0-12 months	8.10	–	0.1	–
Sell NOK Buy EUR 0-12 months	8.14	7.85	(3.0)	(4.9)
Net NOK position – Sell NOK			(2.9)	(4.9)
Sell NZD Buy AUD 0-12 months	1.13	1.14	(14.1)	(66.7)
Net NZD position – Sell NZD			(14.1)	(66.7)
Buy PLN Sell EUR 0-12 months	–	4.07	–	1.6
Net PLN position – Buy PLN			–	1.6
Buy SEK Sell AUD 0-12 months	5.68	–	0.9	–
Net SEK position – Buy SEK			0.9	–
Buy SEK Sell EUR 0-12 months	9.27	9.30	12.2	13.4
Sell SEK Buy EUR 0-12 months	9.31	9.28	(2.0)	(2.3)
Net SEK position – Buy SEK			10.2	11.1
Buy USD Sell AUD 0-12 months	0.80	0.75	113.8	93.6
Buy USD Sell AUD 1-2 years	0.76	0.75	1.1	1.6
Sell USD Buy AUD 0-12 months	0.84	0.75	(17.8)	(3.5)
Sell USD Buy AUD 1-2 years	0.83	–	(15.3)	–
Sell USD Buy AUD 2-3 years	0.83	–	(1.6)	–
Net USD position – Buy USD			80.2	91.7
Buy USD Sell NZD 0-12 months	0.66	0.60	35.0	7.7
Buy USD Sell NZD 1-2 years	0.71	–	21.1	–
Buy USD Sell NZD 2-3 years	0.64	–	0.5	–
Net USD position – Buy USD			56.6	7.7
Sell USD Buy EUR 0-12 months	1.34	1.25	(16.2)	(70.9)
Net USDposition – Sell USD			(16.2)	(70.9)

Amcor Limited 99

Employee share plan risk

In relation to the cash settled variants of the Employee Share Plan Options, the Employee Bonus Payment Plan and the Senior Executive Retention Payment Plan, the consolidated entity is exposed to movements in the value of the underlying ordinary shares of Amcor Limited. For all such entitlements offered, the consolidated entity has hedged its exposure by entering into cash settled equity share options or equity share swap contracts that mirror the terms and conditions, and therefore offset the fl uctuations, in the value of the employee benefi t.

The following tables set out the expiry or vesting date (if applicable), the outstanding option/share hedge contract positions and the hedged price of the contracts as at 30 June:

Equity share option ‘American’ contracts

	2007 2006
	Average Average Contract hedged Contract hedged Expiry date amounts price $ Expiry date amounts price $
Less than one year Between one and f ve years More than f ve years	1 Jul 07 70,000 7.40 Less than one year 11 Sep 06 50,000 8.28 2 Aug 07 21,500 6.84 24 Mar 07 17,800 7.87 11 Sep 07 50,000 8.28 Between one and f ve years 1 Jul 07 160,000 7.40 12 Sep 07 100,000 7.20 2 Aug 07 21,500 6.84 11 Sep 08 50,000 8.28 11 Sep 07 50,000 8.28 24 Mar 10 249,200 7.87 12 Sep 07 100,000 7.20 2 Aug 10 309,600 6.84 11 Sep 08 50,000 8.28 31 Dec 10 29,100 6.78 24 Mar 10 289,250 7.87 1 Nov 12 365,200 8.20 2 Aug 10 348,300 6.84 More than f ve years 1 Nov 12 457,600 8.20

Equity share swap contracts

	2007 2006
	Average Average Contract hedged Contract hedged Vesting date amounts price $ Vesting date amounts price $
Vested Less than one year Between one and f ve years More than f ve years	Dec 03 4,000 7.11 Vested Dec 03 5,000 7.11 Dec 04 11,400 7.11 Dec 04 16,800 7.11 Dec 05 93,800 7.11 Dec 05 105,800 7.11 Feb 07 72,500 7.11 Less than one year Jul 06 50,000 7.11 Jan 08 9,325 7.11 Oct 06 8,000 7.11 Sep 11 8,410 7.11 Feb 07 198,400 7.11 Sep 12 28,315 7.11 Between one and f ve years Jan 08 20,000 7.11 Sep 13 17,425 7.11 More than f ve years Sep 11 8,410 7.11 Sep 12 28,315 7.11 Sep 13 17,425 7.11

During the 12 months to 30 June 2007, a loss of $0.5 million (2006: $1.4 million loss) was recognised in the income statement to refl ect the decrease in the fair value of equity share options and equity swap contracts.

(b) Liquidity risk

Prudent liquidity risk management implies maintaining suffi cient cash and marketable securities, the availability of funding through an adequate amount of committed credit facilities and the ability to close-out market positions. Due to the dynamic nature of the underlying businesses, Amcor Group Finance aims at maintaining fl exibility in funding by keeping committed credit lines available whilst maintaining minimum cash balances.

100 Amcor Limited

Notes to the Financial Statements

30 June 2007

Note 28 Additional Financial Instruments Disclosures (continued)

(b) Liquidity risk (continued)

At reporting date, the standby arrangements and unused credit facilities of the consolidated entity were as follows:

		Consolidated
$million	2007	2006
Financing facilities available
Bank overdrafts	184.8	109.8
Unsecured bill acceptance facility	590.0	677.4
Loan facilities	3,140.9	3,354.6
	3,915.7	4,141.8
Facilities utilised
Bank overdrafts	184.5	48.9
Unsecured bill acceptance facility	450.4	211.0
Loan facilities	2,364.2	2,515.4
	2,999.1	2,775.3
Facilities not utilised
Bank overdrafts	0.3	60.9
Unsecured bill acceptance facility	139.6	466.4
Loan facilities	776.7	839.2
	916.6	1,366.5

Refer to note 21 for further details of the major funding arrangements of the consolidated entity.

(c) Credit risk

The Company and the consolidated entity manage the exposure to credit risk via credit risk management policies which allocate credit limits based on the overall fi nancial and competitive strength of the counterparty. Credit policies cover exposures generated from the sale of products and the use of derivative instruments.

Derivative counterparties are limited to high-credit-quality fi nancial institutions and other organisations with a minimum long-term credit rating of A– by Standard & Poor’s. In addition, the Board of Directors has approved the use of these fi nancial institutions, and specifi c internal guidelines have been established with regard to limits, dealing and settlement procedures. The Company and the consolidated entity have no signifi cant concentration of credit risk in relation to derivatives undertaken in accordance with the consolidated entity’s hedging and risk management activities.

The carrying amount of fi nancial assets recognised in the balance sheet, and disclosed in notes 12 and 14, best represents the consolidated entity’s maximum exposure to credit risk at the reporting date. The consolidated entity minimises its concentrations of credit risk by undertaking transactions with a large number of customers and counterparties in various countries with policies in place to ensure that sales of products and services are made to customers with an appropriate credit history. In respect to these fi nancial assets and the credit risk embodied within them, the consolidated entity holds no signifi cant collateral as security. The credit quality of all fi nancial assets that are neither past due nor impaired is appropriate and is consistently monitored in order to identify any potential adverse changes in the credit quality. The consolidated entity and the Company have no material exposure to any individual customer.

(d) Interest rate risk

The Company and the consolidated entity’s income and operating cash fl ows are substantially independent of changes in market interest rates. The consolidated entity’s direct interest rate risk arises from various long-term debt facilities. Borrowings issued at variable rates expose the consolidated entity to cash fl ow interest rate risk. Borrowings issued at fi xed rates expose the consolidated entity to fair value interest rate risk.

Exposure limits are set to help ensure that the consolidated entity is not exposed to excess risk from interest rate volatility. Amcor Group Finance manages the consolidated entity’s interest rate risk by monitoring global interest rates and, where appropriate, hedging interest rate exposures or borrowings at fi xed interest rates.

The consolidated entity manages its cash fl ow interest rate risk by using fl oating-to-fi xed interest rate swaps and forward rate agreements. Such interest rate swaps have the effect of converting borrowings from fl oating rates into fi xed rates and vice versa. Under the interest rate swaps, the consolidated entity agrees with other parties to exchange, at specifi ed intervals (either quarterly or semi-annually), the difference between fi xed contract rates and fl oating rate interest amounts calculated by reference to the agreed notional principal amounts.

In addition, the consolidated entity may enter into cross-currency interest rate swaps to swap long-term Australian denominated borrowings into foreign currencies to hedge the investment in entities with functional currencies which are not the reporting currency of the Company. Each contract involves quarterly or semi-annual payment or receipts of the net amount of interest. Floating rates are based on the interest rate setting in the currencies concerned plus the consolidated entity’s credit margin.

No interest rate swaps or cross-currency interest rate swaps were entered into during the 12 months to 30 June 2007 and there are no swap contracts outstanding as at 30 June 2007 (2006: nil).

During the 12 months to 30 June 2006, all interest rate swaps and cross-currency interest rate swaps were settled. A gain from a decrease in the fair value of non-designated interest rate swaps of $9.2 million was recognised in the income statement. While, for cross-currency interest rate swaps of the $31.1 million reduction in fair value of the swaps, $0.1 million was recognised in the income statement and $31.0 million was recognised in equity.

Amcor Limited 101

Interest rate risk exposures

The following table sets out the consolidated entity’s fi nancial instruments exposed to interest rate risk, including the contractual re-pricing dates and the effective weighted average interest rate by maturity periods.

Floating interest $million Note rate	Fixed interest maturingin: Effective weighted More Non- average 1 year 1–2 2–5 than interest interest or less years years 5years bearing Total rate
30 June 2007 Financial assets Cash and cash equivalents 11 114.7 Trade receivables 12 – Loans, prepayments and other receivables 12,14 –	– – – – – 114.7 3.48% – – – – 1,113.3 1,113.3 – – – – – 999.4 999.4 – – – – – 2,112.7 2,227.4 – – – – 1,881.4 1,881.4 – 5.6 1.4 135.8 – 4.6 1,356.0 5.53% – – – – – 450.4 6.29% – – 47.2 541.8 – 589.0 5.58% – – 553.0 – – 553.0 4.44% 45.0 – 4.4 – – 50.7 6.61% 50.6 1.4 740.4 541.8 1,886.0 4,880.5
Total f nancial assets 114.7
Financial liabilities Payables 20 – Bank and other loans 21 1,208.6 Commercial paper 21 450.4 US$ notes 21 – Eurobond 21 – Lease liabilities 21 1.3
Total f nancial liabilities 1,660.3
30 June 2006 Financial assets Cash and cash equivalents 11 113.9 Trade receivables 12 – Loans, prepayments and other receivables 12,14 –	– – – – – 113.9 2.30% – – – – 1,366.2 1,366.2 – – – – – 338.4 338.4 – – – – – 1,704.6 1,818.5 – – – – 2,107.7 2,107.7 – 6.1 51.6 – 161.7 5.1 1,229.0 4.93% – – – – – 211.0 5.56% – – 54.0 621.1 – 675.1 5.58% – – 595.5 – – 595.5 4.44% 6.2 – 56.4 – – 64.7 6.48% 464.2 – – – – 464.2 8.41% 476.5 51.6 705.9 782.8 2,112.8 5,347.2
Total f nancial assets 113.9
Financial liabilities Payables 20 – Bank and other loans 21 1,004.5 Commercial paper 21 211.0 US$ notes 21 – Eurobond 21 – Lease liabilities 21 2.1 Subordinated convertible securities 22 –
Total f nancial liabilities 1,217.6

(e) Fair values

The fair values of cash and cash equivalents and monetary fi nancial assets and fi nancial liabilities approximate their carrying value. The fair values of other monetary fi nancial assets and liabilities are either based upon market prices, where a market exists, or has been determined by discounting the expected future cash fl ows by the current interest rate for fi nancial assets and fi nancial liabilities with similar risk profi les.

Listed equity investments have been valued by reference to market prices prevailing at reporting date. For unlisted equity instruments, the fair value is an assessment by the directors based on the underlying net assets, future maintainable earnings and any special circumstances pertaining to the particular investment.

The valuation of derivative fi nancial assets and liabilities detailed below refl ects the estimated amounts which the consolidated entity would be required to pay or receive to terminate the contracts (net of transaction costs) or replace the contracts at their current market rates at reporting date. This is based on internal valuations using standard valuation techniques.

As the purpose of these derivative fi nancial instruments is to hedge the consolidated entity’s underlying assets and liabilities denominated in foreign currencies and to hedge against risk of interest rate fl uctuations, it is unlikely that, in the absence of abnormal circumstances, these contracts would be terminated prior to maturity.

102 Amcor Limited

Notes to the Financial Statements

30 June 2007

Note 28 Additional Financial Instruments Disclosures (continued)

(e) Fair values (continued)

The carrying amount and fair values of fi nancial assets and fi nancial liabilities at reporting date are:

		Carrying	Net fair	Carrying	Net fair
		amount	value	amount	value
$million	Note	2007	2007	2006	2006
Financial assets
Cash and cash equivalents	11	114.7	114.7	113.9	113.9
Trade receivables	12	1,113.3	1,113.3	1,366.2	1,366.2
Other debtors and prepayments	12	895.6	895.6	303.3	303.3
Loans to other persons	12, 14	103.8	103.8	35.1	35.1
Available-for-sale f nancial assets	14	15.6	15.6	4.0	4.0
Financial assets at fair value through prof t or loss	14	0.2	0.2	0.3	0.3
Forward foreign exchange contracts, net position	14, 23	–	–	7.0	7.0
Equity share options ‘American’ contracts	14	0.8	0.8	3.1	3.1
Equityshare swapcontracts	14	1.8	1.8	0.8	0.8
		2,245.8	2,245.8	1,833.7	1,833.7
Financial liabilities
Payables	20	1,881.4	1,881.4	2,107.7	2,107.7
Bank and other loans	21	1,356.0	1,356.0	1,229.0	1,229.0
Commercial paper	21	450.4	450.4	211.0	211.0
US$ notes	21	589.0	533.2	675.1	623.4
Eurobond	21	553.0	538.9	595.5	589.3
Lease liabilities	21	50.7	50.7	64.7	64.7
Subordinated convertible securities	22	–	–	464.2	464.7
Forward foreign exchange contracts, net position	14, 23	9.0	9.0	–	–
Commodityf xedprice swaps,netposition	14,23	0.4	0.4	1.2	1.2
		4,889.9	4,820.0	5,348.4	5,291.0

The fair value of the US$ notes and the Eurobond refl ects the revaluation of these instruments, at prevailing market rates. The US$ notes mature between December 2009 and December 2017 while the Eurobond matures in March 2011.

For all other assets and liabilities, based on the facts and circumstances existing at reporting date and the nature of the consolidated entity’s assets and liabilities, including hedged positions, the consolidated entity has no reason to believe that any of the above assets could not be exchanged, or any of the above liabilities could not be settled in an arm’s length transaction at an amount approximating its carrying value.

For details relating to methods and signifi cant assumptions applied in determining fair values of fi nancial assets and liabilities, refer to note 1(w).

Note 29 Share-Based Payments

(a) Employee Share Purchase Plan (‘ESPP’)

In 1985, the consolidated entity established the Employee Share Purchase Plan (‘ESPP’). The following sub-plans have been implemented pursuant to this plan.

(i) Employee Incentive Share Plan (‘EISP’)

Under the Employee Incentive Share Plan (‘EISP’), shares were offered for the benefi t of all full-time employees, permanent part-time employees and executive directors of the Company with more than 12 months service. The number of shares offered depended upon the company’s annual increase in earnings per share (before signifi cant items).

The EISP has been discontinued for the foreseeable future and there were no commitments at 30 June 2007 (2006: nil) to issue shares under the EISP

and none were granted or exercised during the year ended 30 June 2007 (2006: nil).

Amcor Limited 103

(ii) Senior Executive Retention Share Plan (‘SERSP’)

Under the Senior Executive Retention Share Plan (‘SERSP’), the Board nominates certain senior executives as eligible to receive fully paid ordinary shares in part satisfaction of their remuneration for the relevant fi nancial year. The number of shares issued is at the discretion of the Board. The restrictions on these shares do not allow the employee to dispose of the shares for a period of up to fi ve years, unless the employee ceases employment later than three years after the shares were issued. Any right or interest in the shares will be forfeited if the employee voluntarily ceases employment within three years from the date the shares were issued or, if the employee is dismissed during the restriction period for cause or poor performance. The shares subject to the SERSP carry full dividend entitlements and voting rights.

These retention shares are used to reward outstanding levels of previous performance, with the intention to retain key senior executives by:

• tying the longer term interests of senior executives more closely to those of its shareholders;

• providing exposure for those senior executives to the company’s development; and

– providing an incentive for those senior executives to stay with the Company by providing such senior executives with Amcor Limited shares which must be retained for certain periods of time in order to gain full access to their values.

Details of the total movement in shares issued under the SERSP during the current and comparative period are as follows:

	Weighted average	2007	Weighted average	2006
	fair value		fair value
	No.	$	No.	$
Restricted shares at beginning of f nancial period	45,000	6.68	550,425	7.15
Issued during the period	40,000	7.42	–	–
Restriction lifted	(45,000)	7.40	(505,425)	6.89
Restricted shares at end of f nancialperiod	40,000	7.42	45,000	6.68

(b) Employee Share Option Plans

(i) Employee Share Option Plan (‘ESOP’)

In 1985, the consolidated entity also established the Employee Share Option Plan (‘ESOP’). Under the ESOP, partly paid shares or options over shares in the Company can be issued to executive offi cers and directors (including directors who are executives) and senior staff members selected by the directors.

The partly paid shares are issued at the closing market price at the time of issue on the allotment date. The call outstanding only becomes payable on termination, death or at the directors’ discretion. Voting rights exercisable by holders of partly paid ordinary shares are reduced pro rata to the portion of the issue price paid up on those shares as per the Australian Securities Exchange Listing Rules.

Options granted under the ESOP may be issued upon such terms and subject to such conditions as the directors of the Company determine at the time. Options granted under the ESOP are exercisable at a price equal to the closing market share price of Amcor Limited shares traded on the ASX at the date on which the options were granted or a weighted average market price during a period up to and including the date of grant. The options are granted with performance hurdles established by the directors.

Options are granted under the ESOP at no consideration and carry no dividend entitlement or voting rights until they vest and are converted to ordinary shares on a one-for-one basis. The options are issued for a term of up to ten years; they cannot be transferred and are not quoted on any exchange.

For the majority of options issued, executives and certain members of staff are generally only eligible to exercise the options if returns on average funds employed exceed targeted levels at the end of the fi nancial reporting period in which the options were granted. For those options granted prior to 1 July 2006 the return on average funds employed is defi ned as Earnings Before Interest Tax and Signifi cant items (‘EBIT’) divided by average funds employed. For those options granted subsequent to 1 July 2006 the options become exercisable based on the outcome of a Total Shareholder Return (‘TSR’) test.

104 Amcor Limited

Notes to the Financial Statements

30 June 2007

Note 29 Share-Based Payments (continued)

• (b) Employee Share Option Plans (continued)

• (i) Employee Share Option Plan (‘ESOP’) (continued)

Details of the total movement in options issued under the ESOP during the current and comparative period are as follows:

	Weighted average	2007	Weighted average	2006
	fair value		fair value
	No.	$	No.	$
Outstanding at beginning of f nancial period	15,487,012	1.43	19,100,965	1.57
Granted(1)	–	–	750,000	1.01
Exercised	(2,702,360)	1.62	(1,903,000)	2.51
Lapsed	(20,000)	1.34	(186,000)	2.80
Cancelled	(1,499,555)	1.50	(2,274,953)	1.44
Outstanding at end of f nancial period	11,265,097	1.37	15,487,012	1.43
Exercisable at end of f nancial period	6,772,635	1.61	5,775,780	1.92

(1) During the year ended 30 June 2006, the Managing Director and Chief Executive Offi cer of Amcor Limited was issued 750,000 options. The options were issued in three individual tranches of 250,000, with the number of options that will ultimately vest being based on the outcome of a Total Shareholders Return (TSR) test to be performed at a predetermined time for each tranche. The relative performance of Amcor’s average TSR is to be compared against the average TSR of a comparator Group of companies similar to Amcor Limited and will determine the ultimate number of options to be vested.

(ii) Long Term Incentive Plan – Share Options (‘LTIP Options’)

In June 2006, the consolidated entity established the Amcor Limited Long Term Incentive Plan. Under the LTIP, performance options or performance rights over shares in the Company, or performance shares, can be issued to executive offi cers, senior executives and senior staff members selected by the directors. Refer note 29(c)(vii) for details of performance rights issued under the LTIP during the period.

Options granted under the LTIP give the employee the right to acquire a share at a future point in time upon meeting specifi ed vesting conditions that are time based and performance based and upon payment of an exercise price. The number of options that ultimately vest are based on performance over a period of four years from the date of grant and the outcome of a Total Shareholder Return (‘TSR’) test to be performed at a predetermined time. The relative performance of Amcor’s average TSR is to be compared against the average TSR of a comparator group of companies similar to Amcor Limited and will determine the ultimate number of options to be received. The exact terms and conditions of the options granted are determined by the directors of the Company at the time of granting the option.

Options granted under the LTIP are exercisable at a price equal to the closing market share price of Amcor Limited shares traded on the ASX at the date of the grant. The options are granted at no consideration and carry no dividend entitlement or voting rights until they vest and are exercised to ordinary shares on a one-for-one basis. Upon meeting the vesting conditions the award may be exercised up to one year following the end of the vesting period.

Options that do not vest before the end of the vesting period will expire. Awards that have vested during the vesting period will remain exercisable until the expiry date, following which any vested awards that remain unexercised will expire. Any unvested awards will be forfeited if the employee voluntarily ceases employment or if the employee is dismissed for poor performance.

Details of the total movement in options issued under the LTIP during the current period are as follows:

	Weighted average	2007	Weighted average	2006
	fair value		fair value
	No.	$	No.	$
Outstanding at beginning of f nancial period	–	–	–	–
Granted	10,296,650	0.98	–	–
Cancelled	(78,050)	0.91	–	–
Outstanding at end of f nancial period	10,218,600	0.98	–	–
Exercisable at end of f nancialperiod	–	–	–	–

Amcor Limited 105

Weighted	average	share	Balance at price at Balance at	Exercise Exercise beginning Options Options Options Options exercise end of period Proceeds	date on Expiry price of period granted lapsed cancelled exercised date On issue Exercisable received	Grant date or after date $ No. No. No. No. No. $ No. No. $	30 June 2007	13 Sep 01 13 Sep 04 13 Sep 06 6.02 512,500 – 20,000 – 492,500 6.64 – – 2,964,850	1 Oct 01 1 Oct 01 1 Oct 06 6.03 100,000 – – – 100,000 7.42 – – 603,000	1 Oct 02 1 Oct 02 1 Oct 06 6.03 100,000 – – – 100,000 7.42 – – 603,000	1 Oct 02 1 Oct 02 1 Oct 07 7.25 40,000 – – – – – 40,000 40,000 –	1 Oct 03 1 Oct 03 1 Oct 06 6.03 100,000 – – – 100,000 7.42 – – 603,000	1 Oct 03 1 Oct 03 1 Oct 07 7.25 40,000 – – – – – 40,000 40,000 –	1 Nov 02(1) 1 Nov 05 1 Nov 12 8.20 3,397,680 – – 499,400 – – 2,898,280 2,898,280 –	13 Oct 03(1) 1 Nov 05 1 Nov 12 8.20 79,200 – – – – – 79,200 79,200 –	20 Oct 03(1) 1 Nov 05 1 Nov 12 8.20 26,400 – – 13,200 – – 13,200 13,200 –	1 Nov 02(1) 1 Nov 02 1 Jul 07 7.30 100,000 – – – 100,000 7.49 – – 730,000	1 Nov 02(1) 30 Sep 03 1 Jul 07 7.30 100,000 – – – 100,000 7.49 – – 730,000	1 Nov 02(1) 30 Sep 04 1 Jul 07 7.30 100,000 – – – 100,000 7.49 – – 730,000	1 Nov 02(1) 30 Sep 03 1 Jul 07 7.40 275,000 – – 30,000 245,000 7.45 – – 1,813,000	1 Nov 02(1) 30 Sep 04 1 Jul 07 7.40 805,000 – – – 805,000 7.45 – – 5,957,000	23 Mar 04 23 Mar 07 23 Mar 10 7.87 450,340 – – 258,100 – – 192,240 192,240 –	24 Mar 04 24 Mar 07 24 Mar 10 7.87 3,954,270 – – 462,355 – – 3,491,915 3,491,915 –	31 May 04 24 Mar 07 24 Mar 10 7.87 17,800 – – – – – 17,800 17,800 –	2 Aug 04 2 Aug 07 2 Aug 10 6.84 4,487,222 – – 236,500 534,060 7.09 3,716,662 – 3,652,970	2 May 05 2 Aug 07 2 Aug 10 6.84 51,600 – – – 25,800 7.35 25,800 – 176,472	27 Oct 05 1 Jan 08 31 Dec 10 6.78 250,000 – – – – – 250,000 – –	27 Oct 05 1 Jul 08 30 Jun 11 6.78 250,000 – – – – – 250,000 – –	27 Oct 05 1 Jan 09 31 Dec 11 6.78 250,000 – – – – – 250,000 – –	4 Aug 06 31 Dec 09 31 Dec 10 6.78 – 2,594,900 – 44,050 – – 2,550,850 – –	4 Aug 06 31 Dec 09 31 Dec 10 6.78 – 1,292,300 – 24,000 – – 1,268,300 – –	4 Aug 06 31 Dec 09 31 Dec 10 6.78 – 280,000 – – – – 280,000 – –	4 Aug 06 30 Jun 10 30 Jun 11 6.78 – 280,000 – – – – 280,000 – –	4 Aug 06 31 Dec 10 31 Dec 11 6.78 – 280,000 – – – – 280,000 – –	4 Aug 06 31 Dec 09 31 Dec 10 6.78 – 100,000 – – – – 100,000 – –	4 Aug 06 30 Jun 10 30 Jun 11 6.78 – 90,000 – – – – 90,000 – –	4 Aug 06 31 Dec 10 31 Dec 11 6.78 – 90,000 – – – – 90,000 – –	22 Sep 06 31 Dec 09 31 Dec 10 6.78 – 131,950 – – – – 131,950 – –	1 Feb 07 31 Dec 10 31 Dec 11 7.19 – 3,317,000 – 10,000 – – 3,307,000 – –	1 Feb 07 31 Dec 10 31 Dec 11 7.19 – 1,717,900 – – – – 1,717,900 – –	5 Mar 07 31 Dec 10 31 Dec 11 7.19 – 122,600 – – – – 122,600 – –	15,487,012 10,296,650 20,000 1,577,605 2,702,360 21,483,697 6,772,635 18,563,292	(1) A f xed exchange rate applies to overseas participants on these share option grants.

106 Amcor Limited

Notes to the Financial Statements

30 June 2007

Weighted average share Balance at price at Balance at Exercise Exercise beginning Options Options Options Options exercise end of period Proceeds date on Expiry price of period granted lapsed cancelled exercised date On issue Exercisable received Grant date or after date $ No. No. No. No. No. $ No. No. $	30 June 2006 14 Sep 00 14 Sep 03 14 Sep 05 5.16 366,000 – 36,000 – 330,000 6.66 – – 1,702,800 1 Oct 00 1 Oct 00 1 Oct 05 5.10 237,000 – 30,000 – 207,000 6.69 – – 1,055,700 13 Sep 01 13 Sep 04 13 Sep 06 6.02 727,500 – – 5,000 210,000 6.93 512,500 512,500 1,264,200 1 Oct 01 1 Oct 01 1 Oct 06 6.03 100,000 – – – – – 100,000 100,000 – 1 Oct 01 1 Oct 01 1 Oct 05 5.10 464,000 – 60,000 – 404,000 6.69 – – 2,060,400 1 Oct 02 1 Oct 02 1 Oct 05 5.10 676,000 – 60,000 – 616,000 6.70 – – 3,141,600 1 Oct 02 1 Oct 02 1 Oct 06 6.03 100,000 – – – – – 100,000 100,000 – 1 Oct 02 1 Oct 02 1 Oct 07 7.25 40,000 – – – – – 40,000 40,000 – 1 Oct 03 1 Oct 03 1 Oct 06 6.03 100,000 – – – – – 100,000 100,000 – 1 Oct 03 1 Oct 03 1 Oct 07 7.25 40,000 – – – – – 40,000 40,000 – 1 Nov 02(1) 1 Nov 05 1 Nov 12 8.20 3,919,080 – – 521,400 – – 3,397,680 3,397,680 – 13 Oct 03(1) 1 Nov 05 1 Nov 12 8.20 118,800 – – 39,600 – – 79,200 79,200 – 20 Oct 03(1) 1 Nov 05 1 Nov 12 8.20 26,400 – – – – – 26,400 26,400 – 1 Nov 02(1) 1 Nov 02 1 Jul 07 7.30 100,000 – – – – – 100,000 100,000 – 1 Nov 02(1) 30 Sep 03 1 Jul 07 7.30 100,000 – – – – – 100,000 100,000 – 1 Nov 02(1) 30 Sep 04 1 Jul 07 7.30 100,000 – – – – – 100,000 100,000 – 1 Nov 02(1) 30 Sep 03 1 Jul 07 7.40 772,500 – – 447,500 50,000 7.56 275,000 275,000 370,000 1 Nov 02(1) 30 Sep 04 1 Jul 07 7.40 805,000 – – – – – 805,000 805,000 – 23 Mar 04 23 Mar 07 23 Mar 10 7.87 481,490 – – 31,150 – – 450,340 – – 24 Mar 04 24 Mar 07 24 Mar 10 7.87 4,161,195 – – 206,925 – – 3,954,270 – – 31 May 04 24 Mar 07 24 Mar 10 7.87 17,800 – – – – – 17,800 – – 2 Aug 04 2 Aug 07 2 Aug 10 6.84 5,588,200 – – 1,014,978 86,000 7.24 4,487,222 – 588,240 2 May 05 2 Aug 07 2 Aug 10 6.84 60,000 – – 8,400 – – 51,600 – – 27 Oct 05 1 Jan 08 31 Dec 10 6.78 – 250,000 – – – – 250,000 – – 27 Oct 05 1 Jul 08 30 Jun 11 6.78 – 250,000 – – – – 250,000 – – 27 Oct 05 1 Jan 09 31 Dec 11 6.78 – 250,000 – – – – 250,000 – –	19,100,965 750,000 186,000 2,274,953 1,903,000 15,487,012 5,775,780 10,182,940

Amcor Limited 107

(c) Other compensation plans

Entitlement plans are an alternative to the ESPP and the ESOP and are in place in countries where the Company is unable to issue shares or options. Participants are offered entitlements and, over the period during which employees hold their entitlements, their value will mirror the fl uctuating value of Amcor Limited shares, including (in the case of the Employee Bonus Payment Plan) all dividends paid on the shares during this time.

(i) Employee Bonus Payment Plan (‘EBPP’)

The Employee Bonus Payment Plan (‘EBPP’) is equivalent to the EISP and enables the Company to offer employees, in certain countries, an equivalent plan where the EISP is unavailable. Under the EBPP, participants were offered entitlements which were equivalent to 60% of the weighted average price of Amcor shares, and over the period during which employees held their entitlements, the value mirrored the fl uctuating value of Amcor’s shares, including all dividends paid on the shares during this time. The consolidated entity hedged its exposure to fl uctuations in the value of the underlying Amcor shares. Employees were only able to convert their entitlements into a cash bonus payment when they left the Company or three years passed since the date on which entitlements were originally issued.

Offers of new entitlements under the EBPP have been discontinued for the foreseeable future.

(ii) Senior Executive Retention Payment Plan (‘SERPP’)

From time to time, the Board may nominate certain employees in Belgium, New Zealand, Poland, Switzerland and the USA as eligible to participate in the Senior Executive Retention Payment Plan (‘SERPP’). Instead of receiving fully paid ordinary shares, entitlements are issued in part satisfaction of an employee’s remuneration for the relevant fi nancial year. The value of each plan entitlement is linked to the performance of Amcor Limited shares (including the value of accrued dividends). Plan entitlements may be converted into cash payment after the fi ve year restriction period has expired, provided that the employee has not been dismissed for cause or poor performance during this time. If the employee voluntarily ceases employment within four or fi ve years from the date the plan entitlements were issued, the employee forfeits 40% or 20% of their plan entitlements, respectively.

The Chief Executive Offi cer, in conjunction with senior management, makes recommendations to the Human Resources Committee nominating high performing employees to receive retention shares or the equivalent. The Committee reviews the recommendations and, if approved, makes a recommendation to the Board which fi nally determines whether the incentives are granted. When granted, these plans operate to provide senior executives the opportunity to share in the growth in value of the Company and encourages them to improve the long-term performance of the Company and its returns to shareholders. This plan also helps to attract and retain skilled and experienced senior executives and provide them with incentive to have a greater involvement and focus on the longer term goals of the Company.

Details of the entitlements issued under the SERPP during the current and comparative period are as follows:

	Weighted average	2007	Weighted average	2006
	fair value		fair value
	No.	$	No.	$
Outstanding at beginning of f nancial period	78,000	6.68	108,000	6.70
Exercised	(78,000)	6.84	(30,000)	6.69
Outstanding at end of f nancial period	–	–	78,000	6.68
Exercisable at end of f nancial period	–	–	–	–

(iii) Share Appreciation Entitlements (‘SAE’)

Share Appreciation Entitlements (‘SAE’) may be issued to employees who take part of their bonus by way of entitlements. The value of entitlements is equivalent to the fl uctuating value of Amcor Limited shares during the period which the employee holds the entitlements. Details of entitlements issued during the current and comparative period are as follows:

	Weighted average	2007	Weighted average	2006
	fair value		fair value
	No.	$	No.	$
Outstanding at beginning of f nancial period	250,000	0.29	605,132	0.52
Exercised	–	–	(255,132)	0.67
Expired	(50,000)	–	(100,000)	0.37
Outstanding at end of f nancial period	200,000	0.34	250,000	0.29
Exercisable at end of f nancialperiod	200,000	0.34	250,000	0.29

108 Amcor Limited

Notes to the Financial Statements

30 June 2007

Note 29 Share-Based Payments (continued)

• (c) Other compensation plans (continued)

• (iv) Cash settled employee share plan options

Cash settled employee share plan options are issued to employees residing in jurisdictions that, for statutory reasons, are not covered by option plans described above. The cash settled employee share plan option plans operate in a manner similar to other option plans, although no entitlements to actual shares or options exist. Details of entitlements issued during the current and comparative period are as follows:

	Weighted average	2007	Weighted average	2006
	fair value		fair value
	No.	$	No.	$
Outstanding at beginning of f nancial period	1,294,450	0.59	1,611,350	0.78
Granted	135,075	1.13	–	–
Exercised	(60,000)	0.31	–	–
Cancelled	(278,950)	0.49	(316,900)	0.71
Outstanding at end of f nancial period	1,090,575	0.76	1,294,450	0.59
Exercisable at end of f nancial period	624,400	0.52	617,600	0.47

(v) CEO performance rights

On 27 October 2005, 300,000 performance rights were issued to the Managing Director and Chief Executive Offi cer of Amcor Limited. Performance rights represent an entitlement to receive an equivalent share in Amcor Limited. Performance rights were issued in three individual tranches of 100,000 rights which vest on 31 December 2009, 30 June 2010 and 31 December 2010 respectively. The number of performance rights that will ultimately vest will be based on the outcome of a Total Shareholders Return (TSR) test to be performed at predetermined times for each tranche. The relative performance of Amcor’s average TSR is to be compared against the average TSR of a comparator group of companies similar to Amcor Limited and will determine the ultimate number of performance rights to be received.

Details of entitlements issued during the current and comparative period are shown in the table below.

	Weighted average	2007	Weighted average	2006
	fair value		fair value
	No.	$	No.	$
Outstanding at beginning of f nancial period	300,000	4.15	–	–
Granted	–	–	300,000	4.15
Outstanding at end of f nancial period	300,000	4.15	300,000	4.15
Exercisable at end of f nancialperiod	–	–	–	–

(vi) CEO Medium Term Incentive Plan (‘MTIP’)

On 19 April 2007, the CEO Medium Term Incentive Plan (‘MTIP’) was established. The MTIP is at the discretion of the directors and has initially been structured as a cash award. Subject to shareholder approval, the directors will have discretion as to whether any award made will be delivered in the form of cash, rights to Amcor Limited shares or a combination thereof.

Unless otherwise determined by the directors, the award will vest subject to the satisfaction of a number of performance and time hurdles that must be achieved during the period 1 January 2007 to 31 December 2008. The performance measures include:

– a fi nancial performance measure, based upon meeting certain average funds employed and average working capital targets;

– a business unit portfolio and market position measure which focuses on business improvement, restructuring and growth; and

– other operational objectives around customers, cost, capital and culture.

The CEO will become entitled to receive an amount equal to 100% of Average Total Fixed Remuneration (‘TFR’) calculated over the performance period. Based on performance, the percentage may vary from a minimum of 50% to a maximum of 150%. Any vested award is subject to further deferral periods, with 50% of the vested award to be received on 31 December 2009 and the remaining 50% on 31 December 2010. The awards will be forfeited if the CEO resigns during either the performance period or the relevant deferral periods.

The amount payable is impacted by a capping mechanism revolving around options and performance rights previously issued to the CEO in October 2005 (refer notes 29(b)(i) and 29(c)(v) above). For any of the options and performance rights that vest during the deferral period, the award amount will be reduced on a “dollar-for-dollar” basis.

Based on an independent valuation of the MTIP, as at 30 June 2007, the consolidated entity and the Company have recognised a provision of $0.6 million in relation to this employee compensation plan.

Amcor Limited 109

(vii) Long Term Incentive Plan – Performance Rights (‘LTIP Rights’)

In June 2006 the consolidated entity established the Amcor Limited Long Term Incentive Plan. Under the LTIP performance options or performance rights over shares in the Company, or performance shares, can be issued to executive offi cers, senior executives and senior staff members selected by the directors. Refer note 29(b)(ii) for details of performance options issued under the LTIP during the period.

Rights granted under the LTIP give the employee the right to receive a share at a future point in time upon meeting specifi ed vesting conditions that are time-based and performance-based with no exercise price payable. The number of rights that vest are based on performance over a period and the outcome of a Total Shareholder Return (‘TSR’) test to be performed at a predetermined time. The relative performance of Amcor’s average TSR is to be compared against the average TSR of a comparator group of companies similar to Amcor Limited and will determine the ultimate number of rights to be received. The exact terms and conditions of the rights granted are determined by the directors of the Company at the time of granting the right.

The rights are granted at no consideration and carry no dividend entitlement or voting rights until they vest and are exercised to ordinary shares on a one-for-one basis. Upon meeting the vesting conditions, the award may be exercised up to one year following the end of the vesting period.

Rights that do not vest before the end of the vesting period will expire. Awards that have vested during the vesting period will remain exercisable until the expiry date, following which any vested awards that remain unexercised will expire. Any unvested awards will be forfeited if the employee voluntarily ceases employment or if the employee is dismissed for poor performance.

Details of the total movement in rights issued under the LTIP during the current period are as follows:

	Weighted average	2007	Weighted average	2006
	fair value		fair value
	No.	$	No.	$
Outstanding at beginning of f nancial period	–	–	–	–
Granted	3,408,825	4.47	–	–
Cancelled	(25,450)	4.21	–	–
Outstanding at end of f nancial period	3,383,375	4.47	–	–
Vested at end of f nancial period	–	–	–	–

(d) Fair value of options and rights granted Fair value of options

The fair value of each option granted is estimated on the date of grant by independent valuers, using a Black-Scholes option-pricing model that takes into account the exercise price, the term of the option, the vesting and performance criteria, and where applicable the market condition criteria, the impact of dilution, the non-tradeable nature of the option, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk-free interest rate for the term of the option.

The following weighted average assumptions were used for options granted in the current and comparative period:

	2007	2006
Expected dividend yield (%)	4.95	5.00
Expected price volatility of the company’s shares (%)	21.00	22.00
Share price at grant date ($)	6.97	6.69
Exercise price ($)	7.08	6.78
Historical volatility (%)	21.00	22.00
Risk-free interest rate (%)	5.92	5.40
Expected life of option (years)	4.80	5.50

The dividend yield refl ects the assumption that the current dividend payout will continue with no anticipated changes. The expected life of the options is based on historical data and is not necessarily indicative of exercise patterns that may occur. The expected volatility refl ects the assumption that the historical volatility is indicative of future trends, which may not necessarily be the actual outcome. For specifi c details of grant dates and exercise prices, refer note 29(b).

Fair value of rights

An independent valuer is used to identify the fair value of each right granted. The fair value of each grant is estimated at grant date using a Monte Carlo valuation model which simulates the date of vesting, the percentage vesting, the share price and total shareholder return. Once the simulated date of vesting is determined, a Black–Scholes methodology is utilised to determine the fair value of the rights granted.

110 Amcor Limited

Notes to the Financial Statements

30 June 2007

Note 29 Share-Based Payments (continued)

(e) Expenses arising from share-based payment transactions

Total expenses arising from share-based payment transactions recognised during the period as part of employee benefi t expense were as follows:

	Consolidated	Consolidated		Amcor Limited	Amcor Limited
$million	2007		2006	2007	2006
Equity settled share-based payment transactions
Options issued under employee option plan	3.9		3.3	1.6	3.3
Performance rights issued	3.1		0.2	1.5	0.2
Cash settled share-based payment transactions
Cash settled share-basedpayments	(0.8)		(0.7)	(0.9)	(0.7)
	6.2		2.8	2.2	2.8
(f) Liabilities for share-based payments
Cash settled share-based payments liability
Shares	0.8		1.6	0.8	1.6
Shares – Overseas	0.4		0.3	–	–
Options	0.7		0.7	0.7	0.7
Total carryingamount of liabilities for cash settled arrangements	1.9		2.6	1.5	2.3
Intrinsic value for vested cash settled shares liability
Shares	0.9		1.5	0.9	1.5
Options(1)	–		–	–	–
Total intrinsic value of liability for vested benef ts	0.9		1.5	0.9	1.5

(1) Due to the exercise price for vested options being greater than market value at 30 June 2007 ($7.47), fully vested cash settled share options have an intrinsic value of zero.

Note 30 Key Management Personnel Disclosures

Key Management Personnel (KMP) are those persons having authority and responsibility for planning, directing and controlling the activities of the Amcor Group. All executive and non-executive directors of Amcor Limited are KMPs of Amcor Limited and the consolidated entity. The following directors and senior executives were considered Key Management Personnel for the entire period unless otherwise indicated.

(a) Directors
Name	Position
Current Directors
C I (Chris) Roberts	Independent Non-Executive Director and Chairman
K N (Ken) MacKenzie	Managing Director and Chief Executive Off cer
R K (Keith) Barton	Independent Non-Executive Director
G J (John) Pizzey	Independent Non-Executive Director
J G (John) Thorn	Independent Non-Executive Director
G A (Geoff) Tomlinson	Independent Non-Executive Director
E J J (Ernest) Pope	Independent Non-Executive Director (appointed 27 October 2005)
Former Directors
D C K (Charles) Allen	Independent Non-Executive Director (retired 27 October 2005)
E A (Elizabeth) Alexander	Independent Non-Executive Director (retired 27 October 2005)

(b) Senior Executives

In light of the signifi cant reorganisation of the Amcor management structure since the appointment of Mr Ken MacKenzie as Managing Director and CEO in July 2005, a reassessment of Key Management Personnel was performed in the current period. The persons that qualifi ed as KMP for the current year are:

Name	Position	Employer
2007
W P Day	Executive General Manager Finance (retired 1 June 2007)(1)	Amcor Limited
L A Desjardins	Executive General Manager Finance (appointed 1 June 2007)	Amcor Limited
I G Wilson	Strategic Development Director	Amcor Limited
L J Lachal	Managing Director, Amcor Australasia	Amcor Limited
W J Long	President, Amcor PET Packaging	Amcor PET Packaging USA Inc

(1) On 1 June 2007, W P Day retired from the position of Executive General Manager Finance of the consolidated entity. Mr Day is still employed by Amcor Limited.

Amcor Limited 111

During 2006, the persons that were designated as KMP were:

Name	Position	Employer
2006
W P Day	Executive General Manager Finance	Amcor Limited
I G Wilson	Strategic Development Director	Amcor Limited
L J Lachal	Managing Director, Amcor Australasia	Amcor Limited
G S James	Chief Executive Off cer, Amcor Flexibles (retired 30 June 2006)	Amcor Europe Group Management
W J Long	President, Amcor PET Packaging	Amcor PET Packaging USA Inc
E E Bloom	President and Chief Executive Off cer, Amcor Sunclipse	Amcor Packaging (USA) Inc
C K Chan	Managing Director, Amcor Asia	Leigh-Mardon Singapore Pte Ltd

Certain executives classifi ed as KMP in the prior period have either retired or are no longer considered KMP for the purposes of this annual fi nancial report.

(c) Key management personnel compensation

The following table details the compensation paid to Key Management Personnel included in ‘employee benefi ts expense’, refer note 6.

		Consolidated	Consolidated		Amcor Limited	Amcor Limited
$ million	2007			2006	2007	2006
Short-term employee benef ts	10.6			12.3	9.3		7.2
Post-employment benef ts	2.1			0.8	1.8		0.6
Termination benef ts	–			0.9	–		0.5
Share-basedpayments	2.0			1.3	1.8		0.8
	14.7			15.3	12.9		9.1

(d) Individual director’s and executive’s compensation disclosures

Information regarding individual directors’ and executives’ compensation and some equity instrument disclosures, as permitted by the Corporations Regulations 2M.3.03 and 2M.6.04, are provided in the Remuneration Report section of the Directors’ Report on pages 30 to 40.

Apart from the information disclosed in this note, no director has entered into a material contract with the Company or the consolidated entity since the end of the previous fi nancial year and there were no material contracts involving directors’ interests existing at year end.

Loans to Key Management Personnel and their related parties

Details of loans made to the Key Management Personnel of the consolidated entity, including their personally related entities, are set out below:

			Interest
			paid and			Number
	Balance	Loan	payable for	Balance	Interest	of loans at
	at 1 July	repayments	the period	at 30 June	not charged	the end of
Consolidated	$	$	$	$	$	the period
2007
Directors	–	–	–	–	–	–
Senior Executives	9,173	2,035	–	7,138	615	1
2006
Directors	–	–	–	–	–	–
Senior Executives	11,318	2,145	–	9,173	688	1

No individual Key Management Person or related party holds a loan greater than $100,000 with the consolidated entity (2006: nil).

Loans to Key Management Personnel are repayable on cessation of employment, have interest charged at varying rates and are secured by holdings locks on employee entitlements and securities. The amount shown for interest not charged in the table above represents the difference between the amount paid and payable for the year and the amount of interest that would have been charged on an arm’s length basis.

No impairment losses have been recognised in relation to any loans made to Key Management Personnel (2006: nil).

Loans for the purchase of shares and other loans are made in accordance with the terms and conditions of the share plans referred to in note 29. During the year, under the employee share plans, share loan repayments totalling $2,035 (2006: $2,145) were received from L J Lachal.

No loans were advanced during the current year (2006: nil).

112 Amcor Limited

Notes to the Financial Statements

30 June 2007

Note 30 Key Management Personnel Disclosures (continued)

(d) Individual director’s and executive’s compensation disclosures (continued) Options and Rights over equity instruments

Options and shares are issued as part of long-term incentive plans. Non-Executive Directors do not participate in the long-term incentive plans. There are two umbrella plans in place: the Employee Share Option Plan (ESOP) and the Employee Share Purchase Plan (ESPP). The details and conditions pertaining to these plans are outlined within the Remuneration Report section of the Directors’ Report and note 29.

The number of options and rights over ordinary shares in the Company held during the fi nancial year by each of the Key Management Personnel of the consolidated entity, including their personally related entities, are set out below:

			Granted as	Granted as
			compensation					Balance
		Balance	Share	Share		Other	Balance at	vested and not
Name		at 1 July	options	rights	Exercised	changes(1)	30 June	yet exercised
Directors(2)
K N MacKenzie	2007	1,313,000	–	–	–	–	1,313,000	177,000
	2006	277,000	750,000	300,000	–	(14,000)	1,313,000	88,000
Senior Executives
W P Day	2007	437,500	200,000	70,000	–	–	707,500(3)	222,500(3)
(retired 1 June 2007)	2006	472,500	–	–	–	(35,000)	437,500	–
L A Desjardins	2007	–(3)	–	–	–	–	–	–
(appointed 1 June 2007)
I G Wilson(4)	2007	–	300,000	105,000	–	–	405,000	–
	2006	–	–	–	–	–	–	–
L J Lachal	2007	307,000	360,000	120,000	–	–	787,000	178,000
	2006	352,000	–	–	(24,000)	(21,000)	307,000	–
W J Long(5)	2007	694,000	360,000	120,000	(300,000)	–	874,000	222,000
	2006	722,000	–	–	–	(28,000)	694,000	344,000
G S James	2006	347,500	–	–	(20,000)	(21,000)	306,500(3)	44,000(3)
(retired 30 June 2006)
E E Bloom	2006	690,500	–	–	(145,000)	(14,000)	531,500(3)	344,000(3)
C K Chan	2006	385,000	–	–	(152,000)	(14,000)	219,000(3)	44,000(3)

(1) Other changes represent options or rights that have expired or were forfeited during the period.

(2) Non-Executive Directors do not participate in the long-term incentive plans of the consolidated entity and are therefore excluded from the analysis in the above table.

(3) Represents holding on cessation or commencement of designation as Key Management Personnel in accordance with AASB 124 Related Party Disclosures .

(4) I G Wilson also holds 200,000 (2006: 250,000) shares issued in accordance with the Share Appreciation Entitlements Plan as described in note 29(c)(iii).

(5) In the prior period W J Long held 20,000 shares issued in accordance with the Senior Executive Retention Payment Plan as described in note 29(c)(ii).

No options are vested and unexercisable at the end of the year. No options or performance rights were held by Key Management Personnel related parties.

Amcor Limited 113

The movement during the fi nancial period in the number of ordinary shares in Amcor Limited held, directly, indirectly or benefi cially, by each Key Management Person, including their related parties, is as follows:

Received Purchased Balance at on exercise during the Sold during Balance at Name 1 July of options period the period 30 June Directors C I Roberts 2007 160,674 – 3,996 – 164,670 2006 135,482 – 25,192 – 160,674 K N MacKenzie 2007 11,703 – 520 – 12,223 2006 11,200 – 503 – 11,703 R K Barton 2007 33,899 – – – 33,899 2006 29,390 – 4,509 – 33,899 G J Pizzey 2007 18,181 – – – 18,181 2006 12,248 – 5,933 – 18,181 J G Thorn 2007 10,380 – – – 10,380 2006 3,915 – 6,465 – 10,380 G A Tomlinson 2007 43,068 – 414 – 43,482 2006 44,322 – 11,692(1) (12,946)(1) 43,068 E J J Pope 2007 5,731 – – – 5,731 (appointed 27 October 2005) 2006 2,000(2) – 3,731 – 5,731 E A Alexander(3) 2006 31,929 – 2,629 – 34,558(2) (retired 27 October 2005) D C K Allen 2006 59,715 – 1,531 – 61,246(2) (retired 27 October 2005) Senior Executives W P Day 2007 64,077 – 802 (29,775) 35,104(2) (retired 1 June 2007) 2006 62,129 – 1,948 – 64,077 L A Desjardins (appointed 1 June 2007) 2007 –(2) – 40,000(4) – 40,000 I G Wilson 2007 62,085 – – – 62,085 2006 62,085 – – – 62,085 L J Lachal(5) 2007 223,469 – – – 223,469 2006 249,469 24,000 – (50,000) 223,469 W J Long 2007 100 300,000 – (260,000) 40,100 2006 100 – – – 100 G S James 2006 24,500 20,000 – (44,200) 300(2) (retired 30 June 2006) E E Bloom 2006 1,000 145,000 – (145,000) 1,000(2) C K Chan(5) 2006 40,000 152,000 – (152,000) 40,000(2)	Received Purchased Balance at on exercise during the Sold during Balance at Name 1 July of options period the period 30 June Directors C I Roberts 2007 160,674 – 3,996 – 164,670 2006 135,482 – 25,192 – 160,674 K N MacKenzie 2007 11,703 – 520 – 12,223 2006 11,200 – 503 – 11,703 R K Barton 2007 33,899 – – – 33,899 2006 29,390 – 4,509 – 33,899 G J Pizzey 2007 18,181 – – – 18,181 2006 12,248 – 5,933 – 18,181 J G Thorn 2007 10,380 – – – 10,380 2006 3,915 – 6,465 – 10,380 G A Tomlinson 2007 43,068 – 414 – 43,482 2006 44,322 – 11,692(1) (12,946)(1) 43,068 E J J Pope 2007 5,731 – – – 5,731 (appointed 27 October 2005) 2006 2,000(2) – 3,731 – 5,731 E A Alexander(3) 2006 31,929 – 2,629 – 34,558(2) (retired 27 October 2005) D C K Allen 2006 59,715 – 1,531 – 61,246(2) (retired 27 October 2005) Senior Executives W P Day 2007 64,077 – 802 (29,775) 35,104(2) (retired 1 June 2007) 2006 62,129 – 1,948 – 64,077 L A Desjardins (appointed 1 June 2007) 2007 –(2) – 40,000(4) – 40,000 I G Wilson 2007 62,085 – – – 62,085 2006 62,085 – – – 62,085 L J Lachal(5) 2007 223,469 – – – 223,469 2006 249,469 24,000 – (50,000) 223,469 W J Long 2007 100 300,000 – (260,000) 40,100 2006 100 – – – 100 G S James 2006 24,500 20,000 – (44,200) 300(2) (retired 30 June 2006) E E Bloom 2006 1,000 145,000 – (145,000) 1,000(2) C K Chan(5) 2006 40,000 152,000 – (152,000) 40,000(2)
Directors C I Roberts 2007 160,674 – 3,996 – 164,670 2006 135,482 – 25,192 – 160,674 K N MacKenzie 2007 11,703 – 520 – 12,223 2006 11,200 – 503 – 11,703 R K Barton 2007 33,899 – – – 33,899 2006 29,390 – 4,509 – 33,899 G J Pizzey 2007 18,181 – – – 18,181 2006 12,248 – 5,933 – 18,181 J G Thorn 2007 10,380 – – – 10,380 2006 3,915 – 6,465 – 10,380 G A Tomlinson 2007 43,068 – 414 – 43,482 2006 44,322 – 11,692(1) (12,946)(1) 43,068 E J J Pope 2007 5,731 – – – 5,731 (appointed 27 October 2005) 2006 2,000(2) – 3,731 – 5,731 E A Alexander(3) 2006 31,929 – 2,629 – 34,558 (retired 27 October 2005) D C K Allen 2006 59,715 – 1,531 – 61,246 (retired 27 October 2005)
	(2) (2)
Senior Executives W P Day 2007 64,077 – 802 (29,775) 35,104 (retired 1 June 2007) 2006 62,129 – 1,948 – 64,077 L A Desjardins (appointed 1 June 2007) 2007 –(2) – 40,000(4) – 40,000 I G Wilson 2007 62,085 – – – 62,085 2006 62,085 – – – 62,085 L J Lachal(5) 2007 223,469 – – – 223,469 2006 249,469 24,000 – (50,000) 223,469 W J Long 2007 100 300,000 – (260,000) 40,100 2006 100 – – – 100 G S James 2006 24,500 20,000 – (44,200) 300 (retired 30 June 2006) E E Bloom 2006 1,000 145,000 – (145,000) 1,000 C K Chan(5) 2006 40,000 152,000 – (152,000) 40,000
	(2)
	(2) (2) (2)

(1) Includes acquisition and disposal for no monetary consideration.

(2) Represents shares owned at commencement or cessation of designation as Key Management Personnel in accordance with AASB 124 Related Party Disclosures .

(3) E A Alexander sold 50,000 partly paid shares, paid to fi ve cents, on her retirement from the Amcor Board.

(4) During the period 40,000 fully paid Amcor Limited ordinary shares were issued to L A Desjardins for nil consideration under the terms and conditions of the Senior Executive Retention Share Plan (refer note 29(a)(ii)) on appointment as Amcor’s Executive General Manager of Finance.

(5) L J Lachal also holds 20,000 partly paid shares paid to one cent. C K Chan also holds 50,000 partly paid shares paid to fi ve cents.

Other Key Management Personnel transactions

From time to time, Directors and Group executives (and their personally related parties) may enter into transactions with the Company and its controlled entities. These transactions occur within normal customer or supplier relationships on terms and conditions that are no more favourable than those available, or which might be expected to be available, on similar transactions to non-director related entities on an arm’s length basis.

Other than those items discussed above, there have been no other transactions between Key Management Personnel and the Company and its controlled entities.

114 Amcor Limited

Notes to the Financial Statements

30 June 2007

Note 31 Other Related Party Disclosures

Subsidiaries

Loans are provided by the Company to wholly-owned subsidiaries. Interest is charged on all loans that are not repayable on demand at rates based on the consolidated entity’s planned investment and borrowing rates at the commencement of the fi nancial period. Interest and dividends received by the Company from controlled entities and interest paid by the Company to controlled entities is disclosed in notes 5 and 6 respectively. In addition, the Company charged $20.9 million (2006: $20.8 million) to controlled entities relating to services provided during the period which is included within ‘general and administration expenses’.

Details of investments in associates and controlled entities are disclosed in notes 15 and 34.

Amounts due to and receivable from controlled entities within the wholly-owned Group are disclosed in notes 12, 20 and 21. These balances comprise:

$million	2007	2006
Trade receivables	7.2	5.5
Loans receivable at call	6,555.6	6,509.5
Accrued interest	2.9	2.0
	6,565.7	6,517.0
Weighted average interest rate	5.94%	5.76%
Trade payables	6.4	0.4
Loans payable at call	3,819.3	4,109.1
Accrued interest	10.6	7.5
	3,836.3	4,117.0
Weighted average interest rate	5.75%	4.70%

The Company has also provided guarantees in respect of certain borrowings by controlled entities within the wholly-owned Group (refer note 23).

Equity accounted investments

During the year ended 30 June 2007, the consolidated entity and the Company did not enter into any transactions with associates. Refer note 15 for further information on equity accounted investments.

During the 12 months to 30 June 2007, the consolidated entity received dividends of $6.9 million from associates (2006: $0.4 million).

Other related parties

Contributions to superannuation funds on behalf of employees are disclosed in notes 6 and 25.

Amcor Limited 115

Note 32 Contingencies

Details of contingent liabilities where the probability of future payments/receipts is not considered remote are set out below:

		Consolidated	Consolidated		Amcor Limited	Amcor Limited
$million	2007			2006	2007	2006
Contingent liabilities arisingin respect ofguarantees(1)	10.6			12.9	147.1	594.2
Total contingent liabilities	10.6			12.9	147.1	594.2

(1) Comprises mainly guarantees given by Amcor Limited in respect of certain borrowings principally in wholly-owned subsidiaries. A subsidiary of the consolidated entity has also given a guarantee in respect of a former subsidiary.

Details of other contingent liabilities which, although considered remote, directors consider should be disclosed are set out below. The directors are of the opinion that provisions are not required in respect of these matters, as it is either not probable that a future sacrifi ce of economic benefi ts will be required or the amount is not capable of reliable measurement.

• Amcor Limited has indemnifi ed the PaperlinX Limited Group in relation to potential taxation and workcover liabilities in excess of any provisions made in the fi nancial statements of the PaperlinX Limited Group at 31 March 2000.

– Under the terms of the ASIC Class Order 98/1418 (as amended) dated 13 August 1998, which relieved certain wholly-owned subsidiaries from the requirement to prepare audited fi nancial statements, Amcor Limited and certain wholly-owned subsidiaries have entered into an approved deed for the cross guarantee of liabilities with those subsidiaries identifi ed in note 35. No liabilities subject to the Deed of Cross Guarantee at 30 June 2007 are expected to arise to Amcor Limited and subsidiaries, as all such subsidiaries were fi nancially sound and solvent at that date.

Competition Law Investigations Leniency Application – Australia

On 21 December 2005, the Australian Competition and Consumer Commission (‘ACCC’) commenced legal proceedings in the Federal Court of Australia against certain Visy Group companies and executives. The proceedings are in respect of alleged cartel conduct in the Australian corrugated packaging industry. The ACCC alleges that the Visy Group companies (being Amcor’s competitors) and executives engaged in conduct in the corrugated fi breboard container industry that was anti-competitive, including engaging in price fi xing and market sharing, in contravention of section 45 of the Australian Trade Practices Act 1974 .

The ACCC also announced on 21 December 2005, that Amcor and its former senior executives have been granted immunity from legal proceedings by the ACCC. The immunity was granted in accordance with the terms of the ACCC’s Leniency Policy for Cartel Conduct (June 2003); see http://www.accc.gov.au/content/index.phtml/itemId/459479. Accordingly, although the ACCC asserts that Amcor Group companies were involved in the relevant conduct, those companies are not the subject of any proceedings by the ACCC for a pecuniary penalty or otherwise for any alleged cartel conduct. The immunity is conditional upon continuing full cooperation from Amcor and its former senior executives in providing information to the ACCC about the alleged cartel. As a result of this grant of immunity, Amcor does not expect to incur any pecuniary penalties arising out of the ACCC investigations.

The operation of the ACCC’s Leniency Policy for Cartel Conduct does not exclude or limit claims by third parties who allege to have suffered loss or damage as a result of any cartel conduct.

Leniency Application – New Zealand

The NZCC is the regulatory agency responsible for enforcing New Zealand’s anti-trust laws, the Commerce Act 1986 (‘Commerce Act’).

On 29 November 2004, Amcor notifi ed the NZCC that the Company may have been involved in cartel conduct in New Zealand. Amcor applied for leniency pursuant to the NZCC’s Leniency Policy for Cartel Conduct (‘NZ Leniency Policy’). The NZ Leniency Policy allows for immunity from NZCC initiated proceedings to the fi rst person involved in a cartel to come forward with information about the cartel and cooperate fully with the NZCC in its investigation and prosecution of the cartel.

Amcor was granted conditional immunity on 1 December 2004. Pursuant to the NZ Leniency Policy, Amcor entered into an agreement with the NZCC under which Amcor is obliged to comply with specifi ed conditions including full cooperation with the NZCC. The NZCC’s investigation is continuing and Amcor continues to provide full cooperation.

The operation of the NZ Leniency Policy does not exclude or limit claims by third parties who claim to have suffered loss or damage as a result of any cartel conduct. Under the Commerce Act, third parties may pursue private claims for compensatory or exemplary damages.

116 Amcor Limited

Notes to the Financial Statements

30 June 2007

Note 32 Contingencies (continued)

Competition Law Investigations (continued) Estimated Damages – New Zealand

As a result of the grant of conditional immunity, Amcor does not expect to incur any pecuniary penalties arising out of the NZCC investigation. It is not possible at present to provide either a reasonable estimate, or a reasonable estimated range of any amounts which might become payable by way of damages to any third parties who might have suffered loss as a result of any cartel conduct in New Zealand.

Third Party Claims Australia

Jarra Creek Central Packaging Shed Pty Ltd

Jarra Creek Central Packaging Shed Pty Ltd fi led a class action claim in the Federal Court of Australia on 11 April 2006 against Amcor Ltd, Amcor Packaging (Australia) Ltd and Fibre Containers (Queensland) Pty Ltd alleging cartel behaviour and seeking declarations, injunctions and unspecifi ed damages. The proceeding is expressed to have been brought on behalf of all persons or entities that purchased more than $100,000 of corrugated fi breboard packaging products between 1 May 2000 and 5 May 2005.

The allegations made in the class action are broadly similar to the allegations made in the ACCC’s proceedings against the Visy Group: it is alleged that certain Amcor Group and Visy Group companies engaged in anti-competitive conduct in the corrugated fi breboard container industry, including engaging in price fi xing and market sharing, in breach of section 45 of the Australian Trade Practices Act 1974 . The class members seek, amongst other things, compensation in respect of the effect that the alleged behaviour had on the prices they paid for corrugated fi breboard products during the relevant period.

Amcor is defending the claims made in the class action. Against the possibility that it is not wholly successful in defending these claims, Amcor has cross claimed against certain Visy Group companies (being the corporate respondents to the ACCC’s proceeding), claiming contribution for any damages which may be awarded against Amcor in the class action.

It is too early for Amcor to provide any reliable assessment of its prospects of defending the class action, of the likely quantum of any damages that may become payable if its defence is unsuccessful in whole or part or of the extent to which it may obtain contribution from the Visy Group companies in respect of any damages awarded.

Although it is not possible at present to establish a reasonable estimated range of damages, there can be no assurance that any damages ultimately incurred will not be material to the results of operations or fi nancial condition of Amcor.

Cadbury Schweppes

Cadbury Schweppes fi led a proceeding in the Federal Court of Australia on 15 December 2006 against Amcor Limited and Amcor Packaging (Australia) Pty Ltd alleging cartel behaviour between Amcor and Visy (and related contract claims). Cadbury Schweppes claims damages and rectifi cation of certain supply contracts. Although the amount claimed totals approximately $120.0 million, certain of the claims overlap.

The proceeding contains allegations of cartel conduct in the corrugated fi breboard container industry that are broadly similar to the allegations made in the Jarra Creek proceeding (see above). However, it also contains allegations that the cartel conduct extended beyond the corrugated business and affected other product lines.

Against the possibility that Amcor is not wholly successful in defending the proceeding, Amcor has cross-claimed against those Visy Group Companies which are cross-respondents to the Jarra Creek proceeding, claiming contribution for any damages which may be awarded against Amcor.

It is too early for Amcor to provide any reliable assessment as to the prospects of success or the quantum of damages, if any, that may be awarded in either these proceedings or any other proceedings which may be instituted by third parties.

Amcor Limited 117

Note 33 Commitments

(a) Capital expenditure commitments

	Consolidated	Consolidated	Amcor Limited	Amcor Limited
$million	2007	2006	2007	2006
Contracted at the reporting date but not provided for or payable:
Property, plant and equipment:
Within one year	60.7	141.3	–		–
Between one and f veyears	0.1	0.2	–		–
	60.8	141.5	–		–
(b) Supply and service commitments
Expenditure contracted but not provided for or payable covering other supplies and services to be provided:
Within one year	68.6	64.7	–		–
Between one and f ve years	68.4	63.3	–		–
More than f veyears	15.5	15.7	–		–
	152.5	143.7	–		–
(c) Operating lease commitments
Lease expenditure contracted but not provided for or payable:
Within one year	117.8	125.8	0.7		1.0
Between one and f ve years	284.5	304.9	0.2		0.7
More than f ve years	162.0	176.7	–		–
	564.3	607.4	0.9		1.7
Less sub-lease rental income	(2.8)	(20.2)	–		–
	561.5	587.2	0.9		1.7

The consolidated entity leases motor vehicles, plant and equipment and property under operating leases. Leases generally provide the consolidated entity with a right of renewal at which time all terms are renegotiated.

Some leases provide for payment of incremental contingent rentals based on movements in a relevant price index or in the event that units produced by certain leased assets exceed a predetermined production capacity. Contingent rental paid during the period is disclosed in note 6.

(d) Finance lease commitments

	Consolidated	Consolidated		Amcor Limited	Amcor Limited
$ million	2007		2006	2007	2006
Lease expenditure contracted and provided for due:
Within one year	47.9		9.8	–	–
Between one and f ve years	3.6		53.0	–	–
More than f ve years	0.1		10.1	–	–
Minimum lease payments	51.6		72.9	–	–
Less future f nance charges	(0.9)		(8.2)	–	–
	50.7		64.7	–	–
Current lease liability (refer note 21)	45.5		6.9	–	–
Non-current lease liability (refer note 21)	5.2		57.8	–	–
	50.7		64.7	–	–

The consolidated entity leases equipment under fi nance leases expiring from one to 20 years. At the end of the lease term, the consolidated entity has the option to purchase the equipment at an agreed residual value. For details of interest rate risk, refer to note 28(d).

118 Amcor Limited

Notes to the Financial Statements

30 June 2007

Note 34 Particulars in Relation to Controlled Entities and Businesses

The ultimate controlling party of the consolidated entity is Amcor Limited, a company incorporated in Australia. The companies listed below are those whose results or fi nancial position principally affected the fi gures shown in this consolidated annual fi nancial report of Amcor Limited. The accounting year end of all subsidiaries is 30 June.

			Amcor Group’s	Amcor Group’s
			effective interest
Controlled entities	Note	Country of incorporation	2007	2006
Amcor Packaging (Australia) Pty Ltd	(a)	Australia	100%	100%
Amcor Fibre Packaging – Asia Pte Ltd		Singapore	100%	100%
Amcor Packaging (New Zealand) Ltd	(a)	New Zealand	100%	100%
Amcor PET Packaging USA, Inc		United States of America	100%	100%
Amcor Sunclipse North America		United States of America	100%	100%
Amcor PET Packaging de Mexico SA de CV		Mexico	100%	100%
Amcor PET Packaging de Venezuela SA		Venezuela	100%	100%
Amcor PET Packaging de Argentina SA		Argentina	100%	100%
Amcor PET Packaging do Brasil Ltda		Brazil	100%	100%
Amcor PET Packaging Canada Inc		Canada	100%	100%
Amcor Flexibles UK Ltd		United Kingdom	100%	100%
Amcor PET Packaging U.K. Limited	(b)	United Kingdom	100%	100%
Amcor Flexibles Transpac SA		Belgium	100%	100%
Amcor Flexibles A/S		Denmark	100%	100%
Amcor Flexibles France SA		France	100%	100%
Amcor PET Packaging France SAS	(b)	France	100%	100%
Amcor Rentsch France SAS		France	100%	100%
Amcor PET Packaging Deutschland GmbH	(b)	Germany	100%	100%
Amcor Rentsch Novgorod		Netherlands	100%	100%
Amcor Rentsch Polska Sp.z.o.o.		Poland	100%	100%
Grupo Amcor Flexibles Hispania SL		Spain	100%	100%
Amcor PET Packaging Iberia SA	(b)	Spain	100%	100%
Amcor Flexibles Lund AB		Sweden	100%	100%
Amcor Flexibles Schupbach AG		Switzerland	100%	100%

(a) Amcor Limited and these subsidiary companies have entered into an approved deed for the cross guarantee of liabilities, refer note 35.

(b) These entities were included in the disposal of the Amcor PET European operations, refer to note 4.

In the fi nancial statements of the Company investments in subsidiaries are measured at cost. The Company does not have any associate and joint venture investments.

Acquisition of controlled entities and businesses

During the 12 months to 30 June 2007, Amcor did not acquire any controlled entities or businesses.

		Consideration	Net assets
		paid	acquired
2006	Acquisition date	$ million	$ million
Astron LLC	20 June 2006	0.6	0.6
Ecuador minority interest buy-out	1 October 2005	5.8	5.8

Amcor Limited 119

Disposal of controlled entities and businesses

The following controlled entities and business disposed of are classifi ed as discontinued operations in this fi nancial report (refer note 4).

		Consideration	Consolidated
		received/	prof t/(loss)
		receivable	on disposal
	Disposal date	$ million	$ million
2007
PET European business(1)	29 June 2007	711.6	245.4
2006
White Cap Metal Closures business(2)	1 June 2006	333.0	(10.8)
Asian Corrugated business(3)	28 February 2006	12.9	(7.2)
(1) The following entities were disposed of within	the PET European business:
– Amcor PET Packaging U.K. Limited	– Amcor PET Packaging Europe Limited
– Amcor PET Packaging Belgium NV	– Amcor PET Packaging Iberia S.A.
– PET Packaging Amcor Maroc, S.A.R.L. AU	– Amcor PET Packaging Deutschland GmbH
– Amcor PET Packaging France S.A.S.	– Amcor PET Recycling France S.A.S.
(2) The following entities were disposed of within	the White Cap Metal Closures business:
– Amcor Franc Holding No. 2	– Amcor White Cap Belgium
– Amcor White Cap Espana SL	– Amcor White Cap Polska Sp.z.o.o
– Amcor White Cap France SAS	– Amcor White Cap Deutschland GmbH
– Amcor White Cap UK Ltd	– Amcor White Cap Ukraine LLC
– Amcor Ambalaj Ticaret AS	– Amcor White Cap do Brasil Ltda
– Amcor White Cap Investments Inc	– Amcor White Cap Properties Inc
– Amcor White Cap South East Asia Inc	– Amcor White Cap Shanghai Ltd
– Amcor White Cap de Venezuela SA
(3) The following entities were disposed of within	the Asian Corrugated business:
– Leigh Mardon Pacif c Packaging Pte Ltd	– PT Amcor Indonesia
– Amcor Containers Packaging (Thailand)	– AMB Packaging Pte Ltd

Note 35 Deed of Cross Guarantee

Pursuant to ASIC Class Order 98/1418 (as amended) dated 13 August 1998, the wholly-owned subsidiaries listed below are relieved from the Corporations Act 2001 requirements for preparation, audit and lodgement of fi nancial reports, and directors’ reports.

It is a condition of the Class Order that the holding entity, Amcor Limited, and each of the relevant subsidiaries enter into a deed of cross guarantee (the “deed”). The effect of the deed is that in the event of winding up any of these subsidiaries under certain provisions of the Corporations Act 2001 , Amcor Limited guarantees to each creditor of that subsidiary payment in full of any debt. If a winding up occurs under other provisions of the Corporations Act 2001 , Amcor Limited will only be liable in the event that after six months any creditor has not been paid in full. These subsidiaries have also given similar guarantees in the event that Amcor Limited is wound up.

The holding entity and subsidiaries subject to the deed of cross guarantee are:

Amcor Limited [Holding Entity] Pak Pacifi c Corporation Pty Ltd Amcor Packaging (Asia) Pty Ltd ACN 002693843 Box Pty Ltd Amcor Nominees Pty Ltd Lynyork Pty Ltd Amcor Investments Pty Ltd Fibre Containers (Qld) Pty Ltd Amcor Packaging (New Zealand) Ltd Specialty Packaging Group Pty Ltd (formerly Service Containers Pty Ltd) Amcor Finance (NZ) Ltd ACN 089523919 CCC Pty Ltd Amcor Packaging (Australia) Pty Ltd Rota Die International Pty Ltd AGAL Holdings Pty Ltd Rota Die Pty Ltd Trustee of Rota Die Trust Envirocrates Pty Ltd Amcor European Holdings Pty Ltd PP New Pty Ltd Amcor Holdings (Australia) Pty Ltd AP Chase Pty Ltd Anfor Investments Pty Ltd

120 Amcor Limited

Notes to the Financial Statements

30 June 2007

Note 35 Deed of Cross Guarantee (continued)

Financial statements for the Amcor Limited Deed of Cross Guarantee

Consolidated income statements and consolidated balance sheets, comprising Amcor Limited and the wholly-owned subsidiaries party to the deed, after eliminating all transactions between the parties, as at 30 June, are set out below:

• (a) Summarised income statement and retained profi ts

	2007	2006
$million		Restated*
Prof t before related income tax expense	370.3	(29.3)
Income tax expense	39.2	5.4
Prof t from continuing operations after tax	409.5	(23.9)
Retained prof ts at beginning of f nancial period	952.2	1,285.6
Actuarial gains/(losses) recognised directly in equity	16.3	(4.4)
Adjustment on transition to AIFRS, net of tax	–	(6.3)
	1,378.0	1,251.0
Dividends recognised during the f nancial period	(305.7)	(298.8)
Retainedprof ts at the end of the f nancialperiod	1,072.3	952.2
(b) Balance sheet
Current assets
Cash and cash equivalents	9.0	15.4
Trade and other receivables	2,965.9	3,209.4
Inventories	364.8	365.9
Other f nancial assets	1.6	9.3
Total current assets	3,341.3	3,600.0
Non-current assets
Other f nancial assets	3,719.2	3,808.8
Property, plant and equipment	1,551.1	1,576.6
Deferred tax assets	–	–
Intangible assets	186.0	190.8
Other non-current assets	26.9	40.5
Total non-current assets	5,483.2	5,616.7
Total assets	8,824.5	9,216.7
Current liabilities
Trade and other payables	534.4	417.4
Interest-bearing liabilities	2,701.7	2,791.0
Subordinated convertible securities	–	246.0
Other f nancial liabilities	11.2	2.9
Current tax liabilities	4.1	14.0
Provisions	149.2	139.9
Total current liabilities	3,400.6	3,611.2
Non-current liabilities
Trade and other payables	0.5	0.7
Interest-bearing liabilities	1,531.2	1,721.9
Other f nancial liabilities	3.3	–
Deferred tax liabilities	7.0	12.5
Provisions	33.5	37.4
Retirement benef t obligations	6.3	39.7
Total non-current liabilities	1,581.8	1,812.2
Total liabilities	4,982.4	5,423.4
Net assets	3,842.1	3,793.3
Equity
Contributed equity	2,742.8	2,810.3
Reserves	27.0	30.8
Retainedprof ts	1,072.3	952.2
Total equity	3,842.1	3,793.3

• See page 121 for explanation of restatement of the comparative period for correction of prior period errors.

Amcor Limited 121

• (c) Prior period corrections to deed of cross guarantee

Errors on adoption of Australian Equivalents to International Financial Reporting Standards

In preparing the consolidated fi nancial information of those entities that are party to the Deed of Cross Guarantee certain adjustments, relating to the adoption and transition to Australian Equivalents to International Financial Reporting Standards (‘AIFRS’) on 1 July 2005, were inadvertently omitted.

A number of errors were identifi ed that resulted in an overstatement of the deferred tax liability by $132.1 million, an understatement of the opening retained profi t position by $78.5 million, an understatement of reserves by $53.6 million and an understatement of total equity by $132.1 million of the consolidated position of entities party to the deed (‘the deed Group’), on the date of transition to AIFRS. The errors identifi ed included:

• failure to transfer the credit balance of $65.5 million within the asset revaluation to retained profi ts on the election to measure items of property, plant and equipment at deemed cost;

• failure to transfer a $11.9 million debit balance from the exchange fl uctuation reserve to retained profi ts upon applying the exemption available on adoption of AIFRS that allowed for cumulative foreign currency translation differences to be reset to zero;

• an amount of $98.1 million relating to deferred tax liabilities, that was appropriate under accounting standards that were applicable prior to the adoption of AIFRS, failed to be correctly adjusted when determining the correct tax position of the deed Group in accordance with AIFRS; and

• due to the misinterpretation of the facts surrounding the tax values of certain items of property, plant and equipment, deferred tax liabilities were overstated by $34.0 million and retained profi ts were understated by $34.0 million (refer note 2).

Other matters

With regards to the consolidated balance sheet of the deed Group there was a failure to appropriately offset deferred tax assets and liabilities of those entities that are within the same tax jurisdiction as required by AASB 112 Income Taxes . This error had the effect of overstating total assets and total liabilities of the deed Group at 30 June 2006 by $151.2 million. In addition, as at 30 June 2006 an adjustment required to correctly record the tax consolidation position of the deed Group was inadvertently omitted. This error had the effect of overstating total assets and total liabilities by $35.1 million.

A number of consolidation entries that transferred foreign currency from the income statement to the exchange fl uctuation reserve were incorrectly processed as part of the deed consolidation. The errors identifi ed relate to both the 2005 and the 2006 fi nancial years, after the adoption of AIFRS. The accumulated impact of this error on the fi nancial result and position of the deed Group was an understatement of the opening retained profi ts position by $2.4 million; overstatement of the 30 June 2006 profi t from continuing operations by $60.0 million; understatement of reserves by $57.6 million; and an overstatement of closing retained profi ts by $57.6 million.

In addition to the above foreign currency transfer errors an additional foreign currency transaction, that occurred during the 2005 fi nancial year, was inadvertently included within the deed group consolidation when in fact the transaction did not relate to entities party to the deed. The impact of this error was an overstatement of opening retained profi ts by $33.8 million and an understatement of reserves by $33.8 million.

Note 36 Events Subsequent to Balance Date

Capital Management – Share Buy-Back

On 29 August 2007, the consolidated entity announced that, after considering the forecast cash requirements for new growth projects in the context of the strong balance sheet, it would undertake an on-market share buy-back of up to $350.0 million.

122 Amcor Limited

Directors’ Declaration

1. In the opinion of the directors of Amcor Limited (“the Company”):

2. (a) the fi nancial statements and notes and remuneration disclosures that are detailed within the Remuneration Report, in the Directors’ Report, are in accordance with the Corporations Act 2001 , including:

3. i. giving a true and fair view of the company’s and the consolidated entity’s fi nancial position as at 30 June 2007 and of their performance, for the fi nancial year ended on that date; and

4. ii. complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Regulations 2001 ;

5. (b) the fi nancial report also complies with International Financial Reporting Standards as disclosed in note 1(a);

6. (c) the remuneration disclosures that are contained in the Remuneration Report in the Directors’ Report comply with Australian Accounting Standard 124 Related Party Disclosures ; and

7. (d) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.

8. There are reasonable grounds to believe that the Company and the consolidated entities identifi ed in note 35 will be able to meet any obligations or liabilities to which they are or may become subject to by virtue of the Deed of Cross Guarantee between the Company and those consolidated entities pursuant to ASIC Class Order 98/1418.

9. The directors have been given the declarations required by Section 295A of the Corporations Act 2001 from the Chief Financial Offi cer and the Chief Financial Offi cer for the fi nancial year ended 30 June 2007.

Signed in accordance with a resolution of the directors, dated at Melbourne Victoria, this 29th day of August 2007.

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Chris Roberts Chairman

Ken MacKenzie Managing Director and Chief Executive Offi cer

Amcor Limited 123

Independent Audit Report to Members of Amcor Limited

Report on the fi nancial report and AASB 124 remuneration disclosures contained in the Directors’ Report

We have audited the accompanying fi nancial report of Amcor Limited (“the Company”) which comprises the balance sheets at 30 June 2007, and the income statements, statements of recognised income and expense, and cash fl ow statements for the year ended on that date, a description of the signifi cant accounting policies and other explanatory notes 1 to 36, and the directors’ declaration of the consolidated entity comprising the Company and the entities it controlled at the year’s end or from time to time during the fi nancial year.

As permitted by the Corporations Regulations 2001 , the Company has disclosed information about the remuneration of directors and executives, required by Australian Accounting Standard AASB 124 Related Party Disclosures , under the heading ‘Remuneration Report’ within the Directors’ Report and not in the fi nancial report. We have audited the remuneration disclosures in Section B to G excluding Table 13 in Section D and Tables 19 and 20 in Section E (‘The Audited Remuneration Disclosures’).

Directors’ responsibility for the fi nancial report and the AASB 124 remuneration disclosures contained in the Directors’ Report

The directors of the Company are responsible for the preparation and fair presentation of the fi nancial report in accordance with Australian Accounting Standards (including Australian Accounting Interpretations) and the Corporations Act 2001 . This responsibility includes establishing and maintaining internal control relevant to the preparation and fair presentation of the fi nancial report that is free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. In note 1(a), the directors also state, in accordance with Australian Accounting Standard AASB 101 Presentation of the Financial Statements , that the fi nancial report of the consolidated entity, comprising the fi nancial statements and notes, complies with International Financial Reporting Standards .

The directors are also responsible for the remuneration disclosures contained in the Directors’ Report.

Auditor’s responsibility

Our responsibility is to express an opinion on the fi nancial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards . These Auditing Standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance whether the fi nancial report is free from material misstatement. Our responsibility is also to express an opinion on the remuneration disclosures contained in the Directors’ Report based on our audit.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the fi nancial report and the remuneration disclosures contained in the Directors’ Report. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the fi nancial report and the remuneration disclosures contained in the Directors’ Report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the fi nancial report and the remuneration disclosures contained in the Directors’ Report in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the fi nancial report and the remuneration disclosures contained in the Directors’ Report.

We performed the procedures to assess whether in all material respects the fi nancial report presents fairly, in accordance with the Corporations Act 2001 and the Australian Accounting Standards (including the Australian Accounting Interpretations), a view which is consistent with our understanding of the company’s and the consolidated entity’s fi nancial position and of their performance and whether the remuneration disclosures are in accordance with Australian Accounting Standard AASB 124 .

We believe that the audit evidence we have obtained is suffi cient and appropriate to further provide a basis for our audit opinion.

Auditor’s opinion on the fi nancial report

1. In our opinion:

2. (a) the fi nancial report of Amcor Limited is in accordance with the Corporations Act 2001 , including:

3. i. giving a true and fair view of the company’s and the consolidated entity’s fi nancial position as at 30 June 2007 and of their performance for the fi nancial year ended on the date; and

4. ii. complying with Australian Accounting Standards (including Australian Accounting Interpretations) and the Corporations Regulations 2001 .

5. (b) the fi nancial report of the consolidated entity also complies with International Financial Reporting Standards as disclosed in note 1(a).

Auditors’ opinion on AASB 124 remuneration disclosures contained in the Directors’ Report

In our opinion, the audited remuneration disclosures that are contained in the Remuneration Report in the Directors’ Report comply with Australian Accounting Standard AASB 124 Related Party Disclosures .

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KPMG

P M Shannon Partner

Melbourne 29 August 2007

124 Amcor Limited

Statement of Shareholdings

Statement pursuant to Australian Securities Exchange offi cial list requirements: Holders of shares in Amcor Limited at 20 August 2007:

	Fully Paid	Percentage of
Amcor’s TopTwentyShareholders	OrdinaryShares	Total Shares
HSBC Custody Nominees (Australia) Limited	237,990,640	26.95
J P Morgan Nominees Australia Limited	122,865,288	13.91
National Australia Bank Ltd	113,205,835	12.82
ANZ Bank Ltd	56,608,292	6.41
Citicorp Nominees Pty Limited	55,869,817	6.32
AMP Ltd	27,577,657	3.12
RBC Global Services Australia Nominees Pty Limited	22,301,134	2.53
Australian Foundation Investment Company Limited	10,415,514	1.18
Argo Investments Limited	5,051,511	0.57
Queensland Investment Corporation	4,751,261	0.54
Commonwealth Funds Management Limited	4,704,468	0.53
Fleet Nominees Pty Limited	4,000,372	0.45
Merrill Lynch (Australia) Nominees Pty Ltd	3,256,542	0.37
CS Third Nominees Pty Ltd	3,124,042	0.35
Sandhurst Trustees Limited	2,573,769	0.29
Djerriwarrh Investments Ltd C/- Australian Foundation Investment Co Ltd	1,921,692	0.22
The Senior Master Of The Supreme Court (Victoria)	1,402,310	0.16
CS Fourth Nominees Pty Ltd	1,347,291	0.15
UBS Wealth Management Australia Nominees Pty Ltd	1,343,585	0.15
M F Custodians Ltd	1,269,439	0.14
Total	681,580,459	77.16

Substantial Shareholders

Mondrian Investment Partners Ltd, by notice dated 27 September 2004, has a relevant interest in 67,329,189 shares.

Commonwealth Bank of Australia (ACN 123 123 124), by notice dated 11 July 2007, has a relevant interest in 54,612,450 shares.

The Capital Group Companies Inc, by notice dated 12 February 2007, has a relevant interest in 54,523,415 shares.

These shares are held through several nominee companies.

Distribution of Shareholdings

Fully Paid Ordinary Shares (at 20 August 2007)

	Number of	% of	Number	% of
Size of Holding	Shareholders	Shareholders	of Shares	Shares
1 - 1,000 shares *	41,449	48.3	19,024,380	2.2
1001 - 5,000 shares	36,407	42.5	80,155,553	9.1
5,001 - 10,000 shares	5,107	6.0	35,514,938	4.0
10,001 - 100,000 shares	2,619	3.1	51,397,383	5.8
100,001 and over shares	122	0.1	697,056,985	78.9
Total	85,704	100.0	883,149,239	100.0

• Of these shareholders, 2,767 held less than a marketable parcel.

Votes of shareholders are governed by Rules 43 to 48 of the Company’s Constitution. In broad summary, but without prejudice to the provisions of these rules, on a show of hands every shareholder present in person shall have one vote and upon a poll every shareholder present in person or by proxy or attorney shall have one vote for every fully-paid share held.

Unquoted Equity Securities – issued pursuant to the Amcor Employee Share/Option Plan approved by Shareholders on 24 October 1985, and as amended on 20 October 1988.

amended on 20 October 1988.
	Numbers of Employees	Numbers of
Unquoted Equity Securities	Participating	Securities
Partly paid ordinary shares paid to 1 cent	24	279,000
Partly paid ordinary shares paid to 5 cents	59	775,000
Options over ordinary shares exercisable at various prices	428	21,285,072

Amcor Limited 125

Statistical Summary

Results shown before signifi cant items except where indicated $ million (except where indicated)

For theyears ended 30 June:	2007(1)	2006(1)	2005(1)	2004	2003	2002
Amcor Consolidated Results:
Net sales	10,875.2	11,439.3	11,099.6	10,405.9	10,709.9	7,472.4
Operating prof t before interest and tax	731.9	775.7	821.8	703.5	721.6	567.9
Operating prof t before tax(3)	517.1	529.1	613.6	571.3	575.3	446.4
Net operating prof t/(loss)(3)	397.0	405.9	458.8	440.3	431.4	316.9
Net operating prof t/(loss) after signif cant items(3)	533.7	351.3	193.0	345.7	361.3	851.7
Earnings per share (cents) pre signif cant items(2)	44.2	46.1	52.2	44.7	45.3	42.1
Earnings per share (cents) post signif cant items	59.5	39.9	22.0	33.8	37.0	122.6
Return on average shareholders’ equity (% p.a.)	11.2	11.9	12.9	9.4	9.8	12.1
Dividend and distribution	305.7	298.8	290.2	332.7	305.2	242.6
Dividend per ordinary share (cents)	34.0	34.0	34.0	32.0	30.0	28.0
Dividend franking (% p.a)	-	15.0	25.0	40.0	45.0	50.0
Dividend cover (times)	1.30	1.36	1.54	1.38	1.50	1.31
Financial Ratios:
Net tangible asset backing per share ($)	2.3	1.8	1.8	2.5	2.7	4.1
Net PBITDA interest cover (times)	5.6	5.1	5.9	7.0	6.7	5.8
Gearing (net debt/net debt and shareholders’ equity) (%)	44.6	46.4	50.9	36.0	33.0	(6.0)
Financial Statistics:
Income from dividends and interest	23.9	20.0	21.0	13.8	11.0	17.2
Depreciation and amortisation provided during the year	467.0	473.4	461.8	603.8	607.2	341.1
Net interest (including PACRS)	214.9	246.6	218.7	132.2	146.3	114.1
Cash f ow from operations	946.3	964.1	901.8	979.7	964.5	725.8
Capital expenditure and acquisitions	637.8	562.7	692.8	1,086.0	832.2	392.5
Balance Sheet Data as at 30 June:
Current assets	3,394.5	3,196.9	3,483.4	3,052.0	2,950.5	4,591.1
Non-current assets	5,747.8	6,701.3	6,985.1	7,234.4	6,611.8	4,250.9
Total Assets	9,142.3	9,898.2	10,468.5	10,286.4	9,562.3	8,842.0
Current liabilities	3,521.6	3,579.1	3,676.3	2,976.7	3,025.7	2,128.8
Non-current liabilities	2,039.4	2,713.1	3,401.7	2,602.1	1,900.8	2,146.3
Total Liabilities	5,561.0	6,292.2	7,078.0	5,578.8	4,926.5	4,275.1
Net Assets	3,581.3	3,606.0	3,390.5	4,707.6	4,635.8	4,566.9
Shareholders’ Equity
Share capital	2,742.8	2,810.3	2,725.5	3,351.9	3,135.3	2,972.8
Reserves	(313.5)	(84.5)	(176.3)	(349.2)	(210.8)	73.3
Retained prof ts	1,099.8	828.6	763.3	1,614.3	1,515.3	1,348.6
Shareholders’ equity attributable to Amcor Limited	3,529.1	3,554.4	3,312.5	4,617.0	4,439.8	4,394.7
Minority interests in controlled entities	52.2	51.6	78.0	90.6	196.0	172.2
Total Shareholders’ equity	3,581.3	3,606.0	3,390.5	4,707.6	4,635.8	4,566.9
Other data as at 30 June:
Fully paid shares (000’s)	883,119	890,252	878,183	877,950	848,224	822,601
Convertible securities - number of shares (000’s)	-	69,900	140,763	139,546	140,563	144,117
Amcor share price
- year’s high ($)	7.71	7.70	7.90	9.13	8.93	9.10
- year’s low ($)	6.16	6.41	6.26	6.52	7.68	5.69
- close ($)	7.47	6.68	6.70	6.97	8.12	8.24
Market capitalisation	6,596.9	5,946.9	5,883.8	7,091.9	8,029.0	7,965.8
Employee numbers	22,312	24,538	27,243	29,100	28,600	23,600
Number of shareholders	87,433	104,433	125,936	135,100	121,600	113,700

(1) Numbers have been prepared in accordance with Australian Equivalents to International Financial Reporting Standards and include all operations.

(2) Based on net operating profi t before signifi cant items divided by the weighted average number of shares for the period.

(3) PACRS coupon payment is treated as interest in the 2006 and 2005 periods. The 2005 period excludes the 5% conversion discount. Note: 2004 and prior periods presented above have been prepared in accordance with previous Australian GAAP.

126 Amcor Limited

Investor Information

Amcor has decided to provide a progress report to shareholders in two different formats. Shareholders can choose to receive the detailed fi nancial information available in the comprehensive Full Year Financial Report produced annually. Alternatively, shareholders can choose to receive an easy-to-read, environmentally-friendly Annual Review.

The Amcor Annual Review contains the information of most interest to shareholders including: key fi nancial results, performance highlights, a report from the Chairman and summaries of governance and remuneration information.

Both or either of these reports are sent by post or e-mail to shareholders who are on record as wishing to receive a copy.

Amcor also provides these reports on its website www.amcor.com in a user-friendly format. The reports are interactive, searchable, printable, downloadable and easily emailed, or able to be viewed quickly on your computer. If shareholders fi nd this facility satisfactory for their needs, we would appreciate them contacting the Share Registry and asking to be removed from the mailing list. Apart from lowering Amcor’s registry costs, this will also help the environment by reducing paper use and wastage.

Share Registry Enquiries

Shareholders who wish to approach the Company on any matter related to their shareholding should contact Amcor’s Share Registry in Melbourne.

For enquiries within Australia call 1300 302 458 and from outside Australia call +61 3 9415 4104.

Alternatively, shareholders can contact the Share Registry –

By post to:

Amcor Share Registry Yarra Falls, 452 Johnston Street Abbotsford Victoria 3067 Australia

or

GPO Box 2975 Melbourne Victoria 3001 Australia

or

By fax to: +61 3 9473 2500

Internet Facilities

Shareholders can access Amcor’s Share Registry information via Amcor’s website – www.amcor.com. This facility provides a 24-hour service to shareholders, enabling access to

information such as current holding balances, TFN notifi cation, dividend history, choice about receipt of reports, historical price information and graphs of the share price against market indices. This information can be accessed by clicking on ‘Investor Information’ in the main menu then choosing Shareholders > Internet Share Registry. You will need to key in your Securityholder Reference Number (SRN) or Holder Identifi cation Number (HIN), your family name and postcode.

Changes to your shareholder details, such as a change of name or address, or notifi cation of your tax fi le number, direct credit of dividend advice or Dividend Reinvestment Plan preferences, can be made directly on the internet or by printing out any forms you need, fi lling them in and sending the changes to Amcor’s Share Registry.

Change of Address

Issuer sponsored shareholders should notify Amcor’s Share Registry immediately of any change to their registered address in writing, signed by the shareholder/s. Shareholders should quote their previous address and Securityholder Reference Number. CHESS uncertifi cated shareholders should advise their sponsoring broker or non-broker participant. Forms for this service are available from Amcor’s Share Registry or from the Amcor website.

Dividends

The Company normally pays dividends around April and October each year. Shareholders should retain all remittance advices relating to dividend payments for tax purposes.

The following alternatives are available to shareholders regarding payment of dividends:

1) By cheque payable to the shareholder Lost or stolen cheques should be reported, in writing, immediately to Amcor’s Share Registry to enable a “stop payment” and replacement.

2) By direct deposit to an Australian bank, building society or credit union account Shareholders may choose to have their dividends paid directly into a nominated bank, building society or credit union account anywhere in Australia. Payments are electronically credited on the dividend date and confi rmed by a payment advice sent to the shareholder. Forms for this service are available from Amcor’s Share Registry or from Amcor’s website.

3) Dividend Reinvestment Plan (DRP)

The DRP provides shareholders with the opportunity to re-invest their dividends in additional Amcor shares. Shares acquired under the DRP rank equally with existing fully paid ordinary shares and will be provided to participants with no discount at a price equivalent to the arithmetic average of the daily weighted average market price of Amcor shares sold on the ASX during a period of nine business days after the record date for the relevant

dividend. That period begins on the second business day after the record date and ends on the tenth business day.

Due to legal constraints which apply, securityholders who reside in certain countries will not be able to participate in the DRP and will receive dividends by cheques.

A booklet containing full details of the DRP and a DRP election form are available on request from Amcor’s Share Registry. The DRP election form and booklet are also available from Amcor’s website in PDF format.

Tax File Numbers

Amcor is required to withhold tax at the rate of 46.5% on any unfranked component of a dividend or interest paid to investors resident in Australia who have not supplied the Company with a tax fi le number (TFN) or exemption form. Investors are not required by law to provide their TFN and can choose whether or not they wish to do so. From 1 July 2006, the rate of withholding changed to 46.5%.

Stock Exchange Listings

Amcor shares are listed on the Australian Securities Exchange. All shares are recorded on the principal share register of Amcor Limited, located in Victoria, Australia. Amcor Limited’s Eurobonds are listed on the London Stock Exchange.

American Depositary Receipts

Amcor shares are traded in the form of American Depositary Shares (ADSs) evidenced by American Depositary Receipts (ADRs) on the Over-The-Counter market in the US. Each ADS traded represents four Amcor ordinary shares. Information about ADRs is available from the depositary, JPMorgan Chase Bank and via the internet on www.ADR.com.

Amcor Publications

The Company’s Full Year Financial Report is the main source of information for investors. Changes to the law in June 2007 means that the report is published on the Company’s website and is mailed only to those shareholders who request a copy in late September.

Other publications issued during the year are:

• 1) The Chairman’s Address to the Annual General Meeting, which is mailed to shareholders on request, in November. This includes the fi rst quarter results.

• 2) The Half Year Financial Report reviewing the company’s performance for the six months to 31 December which is mailed to shareholders on request, in March.

These publications, and many others which may also be of interest, such as Sustainability and Community reports, are also available from the Company’s website.

Amcor Limited 127

Senior Management and Corporate Directory

Website: www.amcor.com Email: head.offi ce@amcor.com.au

Amcor Limited

Corporate Head Offi ce 679 Victoria Street Abbotsford Victoria 3067 Australia Telephone: +61 3 9226 9000 Facsimile: +61 3 9226 9050

Ken MacKenzie Managing Director and Chief Executive Offi cer

Amcor Australasia 971 Burke Road Camberwell Victoria 3124 Australia Telephone: +61 3 9811 7111 Facsimile: +61 3 9811 7171

Louis J Lachal Managing Director

Amcor Asia 17 Senoko Loop Woodlands East Industrial Estate Singapore 758151 Telephone: +65 6756 1088 Facsimile: +65 6756 1087

Billy Chan Managing Director

Amcor Flexibles Food Da Vincilaan 2 B-1935 Zaventem Belgium Telephone: +32 2 416 2611 Facsimile: +32 2 416 2612

Gérard Blatrix Managing Director

Amcor Flexibles Healthcare 1919 South Butterfi eld Road Mundelein Illinois 60060-9735 United States of America Telephone: +1 847 362 9000 Facsimile: +1 847 918 4665

Amcor PET Packaging 935 Technology Drive Suite 100 Ann Arbor Michigan 48108 United States of America Telephone: +1 734 428 9741 Facsimile: +1 734 302 2298

William Long President

Amcor Rentsch Industriestrasse West 6 CH-4613 Rickenbach Switzerland Telephone: +41 62 209 0111 Facsimile: +41 62 209 0112

Jerzy Czubak Group Managing Director

Amcor Sunclipse 6600 Valley View Street Buena Park California 90620 United States of America Telephone: +1 714 562 6000 Facsimile: +1 714 562 6059

Eric Bloom President and Chief Executive Offi cer

Bericap North America 835 Syscon Court Burlington, Ontario Canada L7L 6C5 Telephone: +1 905 634 2248 Facsimile: +1 905 634 7780

Scott Ambrose Chief Operating Offi cer

Corporate Executives Ron Delia Executive General Manager Operations Development

Leslie Desjardins Executive General Manager Finance

Steve Keogh Executive General Manager Human Resources

Julie McPherson Company Secretary and Group General Counsel

John Murray Executive General Manager Corporate Affairs

Ian Wilson Strategic Development Director

Share Registry Amcor Share Registry Computershare Yarra Falls 452 Johnston Street Abbotsford Victoria 3067 Australia

Postal address: GPO Box 2975 Melbourne Victoria 3001 Australia

Telephone: 1300 302 458 (within Australia)

Telephone: +61 3 9415 4104 (outside Australia)

Facsimile: +61 3 9473 2500

Email: web.queries@computershare.com.au

Peter Brues President

128 Amcor Limited

Financial Calendar

Financial Calendar 2007/08

Financial full year 2006/07 ends	30 June 2007
Announcement of full year result for 2006/07	29 August 2007
Ex dividend date for f nal dividend (for 2006/07)	6 September 2007
Record date for f nal dividend (for 2006/07)	13 September 2007
Final dividend payment date (for 2006/07)	5 October 2007
Annual General Meeting (Sof tel, Melbourne)	24 October 2007
Chairman’s address to Annual General Meeting mailed	November 2007
Financial half year ends	31 December 2007
Announcement of interim (half year) results for 2007/08	February 2008
Ex dividend date for interim dividend (for 2007/08)	Early March 2008
Record data for interim dividend (for 2007/08)	Early March 2008
Interim dividend payment date (for 2007/08)	Late March 2008
Financial full year 2007/08 ends	30 June 2008

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Paper and printing of this annual report
This report is printed on ecoStar, an environmentally friendly 100% recycled paper, certifi ed by
the Forest Stewardship Council (FSC).
The report was printed by Vega Press, an Australian ISO certifi ed (14001: 2004 Environmental
Management Systems) company.
The printing process used digital printing plates to eliminate fi lm and chemicals. Vegetable-based
inks were used, rather than traditional mineral oils that emit higher volumes of greenhouse gases.
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