AMCOR PLC — Annual Report 2007

Aug 28, 2007

Appendix 4E Rule 4.3A

Preliminary Final report

AMCOR LIMITED ABN 62 000 017 372

1. Details of the reporting period and the previous corresponding period

Reporting Period: Previous Corresponding Period:

Year Ended 30 June 2007 Year Ended 30 June 2006

2. Results for announcement to the market

					$A million
2.1	Revenues from ordinary activities
	• From Continuing Operations	down	2.6%	to	9,960.2
	• From Discontinued Operations	down	24.8%	to	915.1
2.2	Net profit from ordinary activities after tax but	down	2.2%	to	397.0
	before significant items, attributable to members
2.3	Net profit for the period attributable, after	up	51.9%	To	533.7
	significant items, attributable to members

Dividends		Amount per security	Franked amount per security
Current period 2.4 Final dividend 2.4 Interim dividend		17.0 cents 17.0 cents	nil nil
Previous corresponding period 2.4 Final dividend 2.4 Interim dividend		17.0 cents 17.0 cents	2.55 cents 2.55 cents
2.5 Record date for determining entitlements to the dividend	Final dividend – 13 September 2007

2.6 Brief explanation of figures in 2.1 to 2.4 –:

• i) Dividends in the current period are unfranked. Franking amounts are based on 15% franking for dividends in the year to 30 June 2006.

• ii) Dividends to foreign holders are subject to with-holding tax and the declaration that 75% of the dividend is sourced from the Conduit Foreign Income Account.

• iii) Refer to attached press release for further details relating to 2.1 to 2.4.

3. Statement of Financial Performance – refer attached

4. Statement of Financial Position – refer attached

5. Statement of Cash Flows – refer attached

6. Details of individual dividends and payment dates – refer attached, Note 27 Dividends

Page 1

30/6/2007

Appendix 4E

7. Details of dividend reinvestment plan

The Dividend Reinvestment Plan (DRP) is in operation. Issue price will be calculated on the arithmetic average of the volume weighted average price for the nine business days September 17 to 27, 2007 inclusive. The last date for receipt of election notices for the DRP is 13 September 2007.

8. Statement of retained earnings – refer attached, Note 26 Contributed Equity and Reserves

9. Net tangible assets

9. Net tangible assets
	Current period	Previous corresponding Period(1)
Net tangible asset backing per ordinary security	$2.29	$2.09

(1) The processing of the correction of a prior period error has resulted in a change in the net tangible asset backing per ordinary security calculated for the previous corresponding period. Refer attached, Note 2 Correction of Prior Period Errors for an explanation of the correction.

10. Control gained over entities having a material effect – refer attached, Note 34 Particulars in Relation to Controlled Entities and Businesses

11. Details of associates and joint venture entities – refer attached, Note 15 Equity Accounted Investments

12. Significant information – refer press release attached

13. Not applicable

14. Commentary on results for the period – refer press release attached

15. This report is based on accounts which have been audited.

29[th] August, 2007 ............................................................ Date: ............................ Julie McPherson Company Secretary

Page 2

30/6/2007

Appendix 4E

A M C O R L I M I T E D A.B.N. 62 000 017 372

ANNUAL FINANCIAL REPORT

FULL REPORT

FOR THE FINANCIAL YEAR ENDED 30 JUNE 2007

29 August 2007

Amcor Limited and its controlled entities

Income Statements

For the financial year ended 30 June 2007

		Consolidated	Consolidated	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 profit		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 profit of equity accounted investments	15	22.0	9.8	-		-
Profit/(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 finance costs		(210.4)	(235.0)	55.3		74.0
Profit/(loss) before related income tax expense		293.9	485.4	493.2	(183.1)
Income tax (expense)/benefit	8	(43.0)	(82.0)	(4.1)	106.0
Profit/(loss) from continuing operations		250.9	403.4	489.1		(77.1)
Profit/(loss) from discontinued operations, net of tax	4	294.2	(24.2)	(0.6)		2.8
Profit/(loss) for the financial period		545.1	379.2	488.5		(74.3)
Profit/(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 profit from continuing operations		Cents	Cents
attributable to the ordinary equity holders of Amcor Limited
Basic earnings per share	10	26.7	42.7
Diluted earnings per share	10	26.2	41.8
Earnings per share for profit 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 7 to 87.

Page 1

Amcor Limited and its controlled entities

Balance Sheets As at 30 June 2007

Balance Sheets As at 30 June 2007
		Consolidated		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 financial 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 financial 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 financial 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 financial 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 benefit 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 profits	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 7 to 87.

Page 2

Amcor Limited and its controlled entities

Statements of Recognised Income and Expense For the financial year ended 30 June 2007

	Consolidated	Amcor Limited
	2007 2006	2007 2006
$ million Note	Restated*	Restated*
Net change in fair value of available-for-sale financial assets Effective portion of changes in fair value of cash flows hedges Exchange differences on translation of foreign operations Actuarial gains and (losses) on defined benefit plans 25(vi) 8(c) Income and expense recognised directly in equity Profit/(loss) for the financial period 26 Members of Amcor Limited 26 Minority interest 26 Effects of changes in accounting policy, net of tax: Attributable to members of Amcor Limited - decrease in contributed equity at the beginning of the financial period 26 - increase in retained earnings at the beginning of the financial period 26 - decrease in reserves at the beginning of the financial period 26 Attributable to minority interest 26 Net change in fair value of cash flow hedges transferred to non- financial assets Total recognised income and expense for the financial period Total recognised income and expense for the financial period is attributable to: Net change in fair value of cash flow hedges transferred to profit or loss Income tax on income and expense recognised directly in equity	7.5 (0.1) (13.1) 3.5 7.5 7.9 (1.5) 0.2 (210.6) 69.2 58.7 22.3 (44.4) 4.3 (195.9) 107.3 545.1 379.2 349.2 486.5 341.5 452.5 7.7 34.0 349.2 486.5 - (596.6) - 3.2 - (28.1)	- - (1.4) 3.9 5.2 - - - - - 19.6 (4.6) (7.0) 0.3
		16.4 (0.4) 488.5 (74.3)
		504.9 (74.7)
		504.9 (74.7) - -
		504.9 (74.7)
		- - - (8.3) - (24.1)
	- (621.5) - - - (621.5)	- (32.4) - -
		- (32.4)
Effects of corrections of errors, net of tax: Attributable to members of Amcor Limited - increase in retained earnings at the beginning of the period 2 Attributable to minority interest 26	- 34.0 - - - 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 8 to 88.

Page 3

Amcor Limited and its controlled entities

Cash Flow Statements For the financial year ended 30 June 2007

Cash Flow Statements For the financial year ended 30 June 2007
		Consolidated		Amcor	Limited
$ million	Note	2007	2006	2007	2006
Cash flows from operating activities
Profit/(loss) for the financial 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 financial 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 benefit expense	25	35.0	41.7	(0.1)	1.5
Net finance 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 financial assets at fair value through income statement	5, 6	0.1	(11.4)	(0.6)	(10.2)
Share of net profits 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 significant item		(261.0)	20.0	0.8	(18.6)
Other sundry items		3.0	11.4	(6.8)	(5.1)
Income tax expense/(benefit)	8	62.8	85.8	4.1	(106.0)
Operating profit 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 benefits 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 otherpayables		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 taxpaid		(80.1)	(79.1)	(11.0)	(26.1)
Net cash from operating activities		946.3	964.1	95.0	(3.5)
Cash flows 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 ofproperty, plant and equipment		156.8	33.4	1.5	-
Net cash from investing activities		(566.8)	(247.0)	(4.6)	12.3

(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 the PET European business, refer note 4.

The above cash flow statements should be read in conjunction with the accompanying notes on pages 7 to 87.

Page 4

Amcor Limited and its controlled entities

Cash Flow Statements (continued) For the financial year ended 30 June 2007

		Consolidated	Consolidated	Amcor	Limited
$ million	Note	2007	2006	2007	2006
Cash flows from financing 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 equitydistributionspaid		(319.2)	(308.8)	(305.7)	(298.8)
Net cash from financing 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 financial 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 financial period(3)		(69.8)	65.0	(12.1)	(5.8)

(3) Refer to notes 11 and 21 for details of the financing arrangements of the consolidated entity and the company.

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 financial year as shown in the Cash Flow Statements is reconciled to the related items in the Balance Sheet as follows:

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 Financing 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) fully paid ordinary shares.

.

The above cash flow statements should be read in conjunction with the accompanying notes on pages 7 to 87.

Page 5

Amcor Limited and its controlled entities

Contents of notes to the financial statements

Note	1.	Summary of Significant Accounting Policies .............................................................7
Note	2.	Correction of Prior Period Errors .............................................................................19
Note	3.	Segment Information...............................................................................................19
Note	4.	Discontinued Operations.........................................................................................24
Note	5.	Revenue, Other Income and Financial Income .......................................................26
Note	6.	Expenses ................................................................................................................27
Note	7.	Significant Items......................................................................................................28
Note	8.	Income Tax Expense...............................................................................................30
Note	9.	Auditors’ Remuneration...........................................................................................31
Note	10.	Earnings per Share .................................................................................................31
Note	11.	Cash and Cash Equivalents....................................................................................33
Note	12.	Trade and Other Receivables .................................................................................33
Note	13.	Inventories...............................................................................................................33
Note	14.	Other Financial Assets ............................................................................................34
Note	15.	Equity Accounted Investments................................................................................35
Note	16.	Property, Plant and Equipment ...............................................................................37
Note	17.	Deferred Tax Assets and Liabilities.........................................................................39
Note	18.	Intangible Assets.....................................................................................................42
Note	19.	Other Non-Current Assets.......................................................................................44
Note	20.	Trade and Other Payables ......................................................................................45
Note	21.	Interest-Bearing Liabilities.......................................................................................45
Note	22.	Subordinated Convertible Securities .......................................................................47
Note	23.	Other Financial Liabilities ........................................................................................48
Note	24.	Provisions................................................................................................................49
Note	25.	Retirement Benefit Obligations................................................................................51
Note	26.	Contributed Equity and Reserves............................................................................56
Note	27.	Dividends ................................................................................................................58
Note	28	Additional Financial Instrument Disclosures............................................................60
Note	29.	Share-Based Payments ..........................................................................................67
Note	30.	Key Management Personnel Disclosures................................................................75
Note	31.	Other Related Party Disclosures .............................................................................79
Note	32.	Contingencies .........................................................................................................80
Note	33.	Commitments ..........................................................................................................81
Note	34.	Particulars in Relation to Controlled Entities and Businesses .................................83
Note	35.	Deed of Cross Guarantee .......................................................................................84
Note	36.	Events Subsequent to Balance Date.......................................................................87

Page 6

Amcor Limited and its controlled entities

Notes to the financial statements

30 June 2007

Note 1. Summary of Significant Accounting Policies

Amcor Limited (‘the company’) is a company domiciled in Australia. The financial report includes separate financial statements for Amcor Limited and the consolidated financial 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 financial report are set out below. These policies have been consistently applied to all the periods presented in these consolidated financial statements by the consolidated entity, except as described in note 1(q) and 1(s).

(a) Basis of preparation

Statement of compliance

This general purpose financial 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 financial 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 financial report have been rounded to the nearest $100,000 or, where the amount is $50,000 or less, zero, unless specifically stated otherwise.

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

Basis of measurement

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

Early adoption of standards

In the prior financial 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 financial 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 figures in the comparative reporting period in accordance with AASB 108 Accounting Policies, Changes in Accounting Estimates and Errors.

Comparative presentation

In the preparation of this financial 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;

• Note 18 – Intangible assets;

• • Note 24 – Provisions;

• Note 25 – Retirement benefit obligations;

• Note 26 – Contributed equity and reserves;

• Note 27 – Dividends;

• Note 28 – Additional financial instruments disclosures; and

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

Page 7

Amcor Limited and its controlled entities

Notes to the financial statements

30 June 2007

Note 1. Summary of Significant Accounting Policies (continued)

(a) Basis of preparation (continued)

Comparative presentation (continued)

In addition, the cash flow 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 financial 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 significant in the preparation of the financial statements:

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

• The testing for impairment of goodwill – refer note 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.

(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 financial and operating policies of an entity so as to obtain benefits 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 financial statements of subsidiaries are included in the consolidated financial 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 financial 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 significant influence, but not control, to govern the financial 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 significant influence commences, the consolidated entity recognises its share of the associates’ profits or losses in the income statement, and its share of movements in reserves is recognised in reserves, until the date that significant influence 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) identified on acquisition.

(c) Foreign currency translation

Items included in the financial 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 financial 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 flow hedges and qualifying net investment hedges, refer note 1(j).

Page 8

Amcor Limited and its controlled entities

Notes to the financial statements

30 June 2007

Note 1. Summary of Significant Accounting Policies (continued)

(c) Foreign currency translation (continued)

Foreign currency transactions (continued)

Translation differences on non-monetary items, such as equities held at fair value through profit or loss, are reported as part of the fair value gain or loss. Translation differences on non-monetary items, such as equities classified as available-for-sale financial assets, are included in the available-for-sale investments revaluation reserve in equity.

Foreign operations

The results and financial 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 profit or loss on disposal.

Hedge of net investment in foreign operation

Foreign currency differences arising on the retranslation of financial 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 profit 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.

Identifiable 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 identifiable 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 significant 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.

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 finance leases are apportioned between the finance expense and the reduction of the outstanding lease liability. The interest element of the finance 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.

Page 9

Amcor Limited and its controlled entities

Notes to the financial statements

30 June 2007

Note 1. Summary of Significant Accounting Policies (continued)

(h) Net finance costs

Net finance costs include interest income and expense, amortisation of discounts or premiums relating to borrowings, interest costs related to defined benefit pension plans, amortisation of ancillary costs incurred in connection with the arrangement of borrowings, lease finance 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 profit for the year, except to the extent the financing costs are directly attributable to the acquisition, construction or production of a qualifying asset. Such financing 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 profit 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 financial 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 financial 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 profit; 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 profits 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 benefit 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 significant judgment 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 final 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 profits 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 financial 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.

Page 10

Amcor Limited and its controlled entities

Notes to the financial statements

30 June 2007

Note 1. Summary of Significant 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 reflect 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 flows are included in the cash flow statements on a gross basis. The GST/VAT component of cash flows arising from investing and financing activities which are recoverable from, or payable to, taxing authorities are classified as operating cash flows.

(j) Financial instruments

Non-derivative financial instruments

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

A non-derivative financial instrument is recognised when the consolidated entity becomes a party to the contractual provisions of the instrument. The purchase of investments and other financial 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 flows from the financial 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 specified in the contract expire or are discharged or cancelled.

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

Non-derivative financial 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 flows.

(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 financial assets with fixed 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 classified as non-current assets (refer notes 12 and 14).

(iii) Investments in equity securities

Investments in listed equity securities are available-for-sale financial 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 classified 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.

Page 11

Amcor Limited and its controlled entities

Notes to the financial statements

30 June 2007

Note 1. Summary of Significant Accounting Policies (continued)

(j) Financial instruments (continued)

(iv) Trade and other payables These amounts represent liabilities for goods and services provided to the consolidated entity prior to the end of the financial year which were unpaid at the end of the financial 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 financial instruments

The consolidated entity uses derivative financial instruments to hedge its exposure to foreign exchange, interest rate, commodity price and employee share plan risk arising from operational, financing and investment activities (refer notes 14 and 23).

Derivative financial instruments are recognised initially at fair value on the date the instrument is entered into. Subsequent to initial recognition, derivative financial 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 profit 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 firm commitments (fair value hedges); hedges of the exposure to variability in cash flows attributable to a recognised asset or liability or highly probable forecast transaction (cash flow 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 flows 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 financial 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 flow hedge Where a derivative financial instrument is designated as a hedge of the variability in cash flows of a recognised asset or liability, or a highly probable forecast transaction, the effective part of any gain or loss on the derivative financial instrument is recognised directly in equity. The change in the fair value that is identified 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 profit 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-financial asset (for example, inventory) or a non-financial 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 fluctuations 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.

Page 12

Amcor Limited and its controlled entities

Notes to the financial statements

30 June 2007

Note 1. Summary of Significant Accounting Policies (continued)

(j) Financial instruments (continued)

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 profit or loss.

(k) Contributed equity

(i) Ordinary shares Ordinary shares are classified 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 benefit.

(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 first-in, first-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 fixed 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 benefits associated with the item will flow 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 financial 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%

• Finance 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.

(n) Leased assets

Leases under which the consolidated entity assumes substantially all the risks and benefits of ownership are classified as finance 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 identifiable 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 reflect 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.

Page 13

Amcor Limited and its controlled entities

Notes to the financial statements

30 June 2007

Note 1. Summary of Significant Accounting Policies (continued)

(o) Intangible assets (continued)

Other intangible assets

Other intangible assets are measured at cost less accumulated amortisation and accumulated impairment losses, except for those identified as having indefinite 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 benefits 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 benefits are expected to arise, typically not exceeding ten years.

(ii) Computer software Expenditure on significant commercial development, including major software applications and associated systems, is capitalised and amortised over the period of time during which the benefits are expected to arise, typically between 3 to 8 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 benefits attributable to the asset will flow 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 benefits 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-financial assets

The recoverable amount of the consolidated entity’s non-financial assets, excluding inventories, deferred tax assets, defined benefit 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 indefinite 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 identifiable group of assets that generate cash flows that are largely independent from the cash flows 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 first 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 flows of that asset. Individually significant financial assets are tested for impairment on an individual basis. The remaining financial assets are assessed in groups which share similar credit risk characteristics.

Impairment losses in respect of a financial asset measured at amortised cost are calculated as the difference between the carrying amount and the present value of the estimated future cash flows discounted at the original effective interest rate. An impairment loss in respect of an available-for-sale financial 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 financial asset recognised previously in equity is transferred to the income statement when the impairment is recognised.

Page 14

Amcor Limited and its controlled entities

Notes to the financial statements

30 June 2007

Note 1. Summary of Significant Accounting Policies (continued)

(p) Impairment (continued)

Financial assets (continued)

Impairment losses are only reversed if the reversal can be objectively related to an event occurring after the impairment loss was recognised. For financial assets that are measured at amortised cost and available-for-sale financial assets that are debt securities, the reversal is recognised in the income statement. For available-for-sale financial assets that are equity securities, the reversal is recognised directly in equity.

Use of estimates and judgements

The determination of impairment for non-financial assets, financial 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 significant judgements concerning the identification 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 significant estimates regarding future cash flows 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 flows, 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.

(q) Financial guarantee contracts

Financial guarantee contracts are recognised as financial liabilities at the date the guarantee is issued. Liabilities arising from financial 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 financial guarantee is determined as the present value of the difference in net cash flows 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 financial statements of the company.

Change in accounting policy

The policy of recognising financial guarantee contracts as financial liabilities was adopted for the first time in the current financial year. In previous reporting periods, a liability for financial 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 financial year has been restated.

The change in accounting policy has no impact upon the financial statements of the consolidated entity or the earnings per share disclosed in note 10.

In the financial 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 financial guarantees provided to third parties on behalf of the controlled entities of the company. A corresponding financial guarantee liability of $2.9 million was recognised with $0.9 million income also being recognised in the income statement of the company reflecting the amortisation of the financial guarantee liability.

(r) Provisions

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 sacrifice of economic benefits will be required to settle the obligation, and the amount can be reliably estimated.

Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects the current market assessments of the time value of money and the risks specific to the liability.

When some or all of the economic benefits 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 increase to the related item of property, plant and equipment.

Page 15

Amcor Limited and its controlled entities

Notes to the financial statements

30 June 2007

Note 1. Summary of Significant Accounting Policies (continued)

(r) Provisions (continued)

Asset restoration and decommissioning (continued)

At each reporting date, the liability is remeasured in line with changes in discount rates, estimated cash flows and the timing of those cash flows. 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 financing 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 financial 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 flows are based on the assumption that all claims will be settled and the weighted average cost of historical claims adjusted for inflation will continue to approximate future costs.

Onerous contracts

A provision for onerous contracts is recognised when the expected benefits 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 fulfilling the contract and any compensation or penalties arising from the failure to fulfil 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 benefits

Wages, Salaries, Annual Leave and Sick Leave

Liabilities for employee benefits such as wages, salaries, annual leave, sick leave and other current employee entitlements represent present obligations resulting from employees' 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 outflows 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 reflect the terms to maturity and currency that match, as closely as possible, the estimated future cash outflows.

Profit Sharing and Bonus Plans

A liability and an expense is recognised for profit sharing and bonus plans, including benefits based on the future value of equity instruments and benefits 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 financial reporting period.

Share-based Payments

The company provides benefits 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 ESSP, including the Employee Incentive Share Plan (‘ESIP”), the Senior Executive Retention Share Plan (‘SERSP’) and the Senior Executive Retention Payment Plan (‘SERPP’).

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.

Page 16

Amcor Limited and its controlled entities

Notes to the financial statements

30 June 2007

Note 1. Summary of Significant Accounting Policies (continued)

(s) Employee benefits (continued)

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 benefit 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 reflect 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 reflected 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 benefit 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 financial statements of the consolidated entity or the earnings per share disclosed in note 10.

In the financial 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 benefit obligations

Defined Contribution Plans

Obligations for contributions by the company or the consolidated entity to defined contribution funds are recognised as an expense in the income statement as they become payable.

Defined Benefit Plans

The consolidated entity’s liability or asset in respect of defined benefit pension plans and other post-retirement plans is recognised in the balance sheet, and is measured as the present value of the defined benefit 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 specified 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 benefit obligation (eg taxes on investment income and employer contributions) are taken into account in measuring the net liability or asset.

The present value of the defined benefit 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 terms to maturity and currency match, as closely as possible, the estimated future cash outflows.

Use of estimates and judgements

In determining the liability or asset that the consolidated entity recognises in the balance sheet in respect of defined benefit pension and other post-retirement plans, the main categories of assumptions used in the valuations include: discount rate; rate of inflation; 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 financial period in accounting for these plans. The assumptions made have a significant 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.

Page 17

Amcor Limited and its controlled entities

Notes to the financial statements

30 June 2007

Note 1. Summary of Significant Accounting Policies (continued)

(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. Classification as a discontinued operation occurs upon disposal or when the operation meets the criteria to be classified as held for sale, if earlier. When an operation is classified 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 profit 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 financing 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 identification of dilutive potential ordinary shares is based on net profit 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 financial assets and financial liabilities must be estimated for recognition, measurement and disclosure purposes.

The fair value of financial 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 financial assets held by the consolidated entity is the current bid price. The quoted market price used for financial liabilities is the current ask price.

The fair value of financial 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 flows to calculate the fair value of financial 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 longterm debt instruments held.

The carrying value of trade receivables and payables are assumed to approximate their fair values. The fair value of financial liabilities for disclosure purposes is estimated by discounting the future contractual cash flows at the current market interest rate that is available to the consolidated entity for similar financial 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 identified 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 financial report:

• Interpretation 14 AASB 119 – The Limit on a Defined Benefit 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 defined benefit pension accounting including when refunds or reductions in future contributions can be recognised as a gain in accordance with AASB 119 Employee Benefits; 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 financial 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 financial 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 Benefits, 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 financial report.

Page 18

Amcor Limited and its controlled entities

Notes to the financial statements

30 June 2007

Note 1. Summary of Significant Accounting Policies (continued)

(x) New accounting standards and interpretations not yet adopted (continued)

• 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, 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 200510 is applicable for annual reporting periods beginning on or after 1 January 2007 and is expected to only impact disclosures contained within the consolidated financial report.

• AASB 7 Financial Instruments: Disclosures (August 2005) replaces the presentation requirements of financial 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 financial 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 financial 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 flow statement of the consolidated entity for the year ended 30 June 2006.

The error has been corrected in this financial report by restating each of the affected financial statement line items for the prior period of the consolidated entity. The deferred tax assets and deferred tax liabilities previously reported in the consolidated financial 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 financial statement line items for the prior year, as described above.

Note 3. Segment Information

Segment information is presented in the financial statements in respect of business segments, which are the primary reporting segments of the consolidated entity as they reflect the management and internal reporting structure of the consolidated entity during the financial period. The secondary reporting segments have been classified 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; flexible packaging; plastic and metal closures; glass wine bottles; multi-wall sacks; cartonboard; paper and paper recycling.

Amcor Flexibles

Flexible and film 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 fibre based, specialty product packaging including ‘point of sale’ displays.

Amcor Asia

Tobacco carton packaging; flexible plastic packaging for the food and industrial markets.

Page 19

Amcor Limited and its controlled entities

Notes to the financial statements

30 June 2007

Note 3. Segment Information (continued)

(a) Description of segments (continued)

Geographic segments

Although the consolidated entity’s operations are managed on a global basis, they operate in five 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; flexible 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.

(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 office expenses. Segment result is profit before unallocated finance 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 classified 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 reflect 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.

Page 20

Amcor Limited and its controlled entities

Notes to the financial statements

30 June 2007

Note 3. Segment Information (continued)

(c) Business segments

(c) Business segments	(c) Business segments
For the year ended 30 June $ million 2007 2006 2007 2006 2007 2006 2007 2006 2007 2006 2007 2006 2007 2006 2007 2006 2007 2006 2007 2006 Other Unallocated/ Inter- segment eliminations Amcor PET Amcor Australasia Amcor Flexibles Amcor Sunclipse Amcor Asia *Consolidated Consolidated continuing operations Discontinued operations*
Segment revenue
Revenue from external customers 3,064.5 3,229.8 2,523.5 2,557.7 3,002.6 2,965.6 1,248.7 1,287.7 120.8 173.4 - 8.6 - - 9,960.1 10,222.8 915.1 1,216.5 10,875.2 11,439.3
Inter-segment revenue - - 0.7 3.2 6.2 13.0 1.9 4.4 1.1 1.1 - - (9.9) (21.7) - - - - - -
Total sales revenue 3,064.5 3,229.8 2,524.2 2,560.9 3,008.8 2,978.6 1,250.6 1,292.1 121.9 174.5 - 8.6 (9.9) (21.7) 9,960.1 10,222.8 915.1 1,216.5 10,875.2 11,439.3 Share of net profits of associates 0.2 - - - - - - - 21.8 9.8 - - - - 22.0 9.8 - - 22.0 9.8 Other income 11.7 18.1 15.7 12.7 21.4 20.1 1.0 0.6 15.1 99.4 (1.4) 13.5 - - 63.5 164.4 8.7 19.3 72.2 183.7
Total segment revenue 3,076.4 3,247.9 2,539.9 2,573.6 3,030.2 2,998.7 1,251.6 1,292.7 158.8 283.7 (1.4) 22.1 (9.9) (21.7) 10,045.6 10,397.0 923.8 1,235.8 10,969.4 11,632.8
Segment result
361.2 363.4 361.6 384.2 301.6 292.8 76.6 78.4 39.0 37.4 (45.8) (40.5) - - Profit/(loss) before depreciation, amortisation, interest, related income tax expense and significant items	1,094.2 1,115.7 104.7 133.4 1,198.9 1,249.1
Depreciation and amortisation (165.8) (166.5) (139.7) (121.8) (103.1) (101.2) (13.3) (13.3) (4.0) (6.9) (2.4) (1.9) - -	(428.3) (411.6) (38.7) (61.8) (467.0) (473.4)
195.4 196.9 221.9 262.4 198.5 191.6 63.3 65.1 35.0 30.5 (48.2) (42.4) - - Net finance costs (38.2) (7.4) (72.8) - (65.7) (71.9) - - 15.1 96.0 - (0.4) - - Profit from ordinary activities before related income tax expense and significant items Significant items before related income tax expense Profit/(loss) before interest, related income tax expense and significant items Profit before related income tax expense Income tax expense Profit/(loss) for the financial period	665.9 704.1 66.0 71.6 731.9 775.7 (210.4) (235.0) (4.5) (11.6) (214.9) (246.6)
	455.5 469.1 61.5 60.0 517.0 529.1 (161.6) 16.3 252.5 (80.4) 90.9 (64.1)
	293.9 485.4 314.0 (20.4) 607.9 465.0 (43.0) (82.0) (19.8) (3.8) (62.8) (85.8)
	250.9 403.4 294.2 (24.2) 545.1 379.2

*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 Asian corrugated businesses (previously reported in the Amcor Asia segment) that were announced as sold on 23 February 2006, refer note 4.

Page 21

Amcor Limited and its controlled entities

Notes to the financial statements

30 June 2007

Note 3. Segment Information (continued)

(c) Business segments (continued)

For the year ended 30 June $ million 2007 2006 2007 2006 2007 2006 2007 2006 2007 2006 2007 2006 2007 2006 2007 2006 2007 2006 2007 2006 Other Unallocated/ Inter- segment eliminations Amcor Asia Amcor Flexibles Amcor Sunclipse Amcor PET *Amcor Australasia Consolidated Consolidated continuing operations Discontinued operations*	For the year ended 30 June $ million 2007 2006 2007 2006 2007 2006 2007 2006 2007 2006 2007 2006 2007 2006 2007 2006 2007 2006 2007 2006 Other Unallocated/ Inter- segment eliminations Amcor Asia Amcor Flexibles Amcor Sunclipse Amcor PET *Amcor Australasia Consolidated Consolidated continuing operations Discontinued operations*
Segment assets 2,754.7 3,031.6 2,491.5 2,552.4 2,586.5 2,312.3 446.5 548.5 126.3 126.7 412.0 98.1 (11.2) (9.3) 8,806.3 8,660.3 - 821.5 8,806.3 9,481.8 3.7 - - - - - - - 275.6 283.1 - - - - 279.3 283.1 - - 279.3 283.1 Unallocated assets 56.7 118.8 - 14.5 56.7 133.3 Total assets 9,142.3 9,062.2 - 836.0 9,142.3 9,898.2 Segment liabilities 719.4 672.5 569.8 536.2 755.8 889.6 121.3 144.8 43.0 33.3 131.2 179.7 (11.2) (9.3) 2,329.3 2,446.8 - 301.4 2,329.3 2,748.2 Unallocated corporate borrowings 2,999.1 3,096.2 - 143.4 2,999.1 3,239.6 Unallocated liabilities 232.6 293.2 - 11.2 232.6 304.4 Total liabilities 5,561.0 5,836.2 - 456.0 5,561.0 6,292.2 268.8 207.5 173.8 123.2 110.2 107.4 5.5 15.2 45.3 64.1 1.6 1.8 - - 605.2 519.2 32.6 34.0 637.8 553.2 Investment in associates accounted for using the equity method Acquisition of property, plant and equipment, intangibles and other non- current assets
	5,561.0 5,836.2 - 456.0 5,561.0 6,292.2
	605.2 519.2 32.6 34.0 637.8 553.2
(32.9) (4.6) (13.5) - (18.6) (18.2) - - (0.3) (2.1) - 1.1 - - Impairment losses of property, plant and equipment, intangibles and other non-current assets	(65.3) (23.8) - (41.9) (65.3) (65.7)
(2.6) (0.1) (1.4) (8.4) (2.5) (2.7) (0.1) - (0.9) (1.8) - - - - Impairment losses - inventories	(7.5) (13.0) 1.6 (4.8) (5.9) (17.8)
(8.4) (0.9) (0.8) 1.9 3.1 6.1 (3.4) (3.4) 0.5 (1.0) (18.7) (4.7) - - Impairment losses - trade receivables	(27.7) (2.0) 6.8 (2.0) (20.9) (4.0)
- - - (7.1) - - - - - - - - - - Reversal of previous impairment losses on property, plant and equipment, intangible and other non- current assets	- (7.1) - - - (7.1)
Other non-cash (income)/expenses 12.1 62.2 136.8 55.6 18.2 60.1 (1.9) (0.4) 2.3 1.5 2.3 (35.3) - -	169.8 143.7 9.5 24.4 179.3 168.1

*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 Asian corrugated businesses (previously reported in the Amcor Asia segment) that were announced as sold on 23 February 2006, refer note 4.

Page 22

Amcor Limited and its controlled entities

Notes to the financial statements

30 June 2007

Note 3. Segment Information (continued)

(d) Geographic segments

The geographic segments have been prepared for continuing operations only.

For the year ended 30 June	Australia and New Zealand	Australia and New Zealand	Europe		North	America	Latin America	Latin America	Asia		Consolidated	Consolidated
$ million	2007	2006	2007	2006	2007	2006	2007	2006	2007	2006	2007	2006
Revenue from external customers	2,523.5	2557.70083	2,725.0	2,629.2	3,599.5	3,806.4	975.101503	1,024.5	137.0	205.0	9,960.1	10,222.8
Segment assets	2,327.6	2,178.4	2,940.3	2,523.2	2,467.5	2,781.3	932.2	1,011.2	418.0	449.3	9,085.6	8,943.4
Acquisition of property, plant and equipment, intangibles and other non-current assets	129.0	125.0	141.0	116.0	226.1	133.3	62.7	80.8	46.4	64.1	605.2	519.2

Page 23

Amcor Limited and its controlled entities

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 (€438.1 million) with effect from 29 June 2007. This business has been presented as a discontinued operation in this financial 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 financial report.

The financial 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
$ million	2007	2006
(b) Financial performance and cash flow information
Profits 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 profit before related income tax expense	61.5	(1.0)
Income tax expense	(16.9)	(5.2)
Operating profit after related income tax expense of discontinued operations	44.6	(6.2)
Profit/(loss) on sale of discontinued operations before related income tax (expense)/benefit	252.5	(19.4)
Income tax (expense)/benefit	(2.9)	1.4
Profit/(loss) on sale of discontinued operations after related income tax benefit/(expense)	249.6	(18.0)
Profit/(loss) from discontinued operations	294.2	(24.2)
cents
Basic earnings profit/(loss) per share	32.8	(2.8)
Diluted earnings profit/(loss) per share	32.2	(2.4)
(c) Cash flows from discontinued operations
Net cash from operating activities	(142.0)	52.5
Net cash from investing activities(2)	(233.9)	266.3
Net cash from financingactivities	247.1	(8.5)
Net cash from discontinued operations	(128.8)	310.3

(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 inflow of $297.5 million from the sale of discontinued operations.

Page 24

Amcor Limited and its controlled entities

Notes to the financial statements

30 June 2007

Note 4. Discontinued Operations (continued)

Note 4. Discontinued Operations (continued)
	Discontinued	operations
$ million	2007	2006
(d) Carrying amounts of assets and liabilities
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 benefit obligations	26.3	45.4
Other	-	2.0
Total liabilities	458.3	245.6
Net assets	442.2	367.8
(e) Details of the sale of operations
Consideration received or receivable:
Cash and short-term deposits	-	308.6
Present value of deferred salesproceeds,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 fluctuation reserve and foreign exchange translation	(21.9)	2.5
Profit/(loss) on sale before related income tax benefit	247.5	(19.4)
Income tax(expense)/benefit	(2.1)	1.4
Profit/(loss) on sale after related income tax benefit of disposed operations	245.4	(18.0)
Settlement adjustments onprioryear disposal,net of tax	4.2	-
Profit/(loss) on sale of discontinued operations after related income tax benefit	249.6	(18.0)
Net cash (outflow)/inflow 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 flow statement	(154.4)	297.5

Page 25

Amcor Limited and its controlled entities

Notes to the financial statements

30 June 2007

Note 5. Revenue, Other Income and Financial Income

	Consolidated	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 profit on disposal of property, plant and equipment	3.7	2.0	0.2	-
Net profit 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 financial 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 financial guarantee contracts	-	-	0.9	-
Other	35.5	46.6	2.2	1.6
Significant 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 arising on 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 financial 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.

Page 26

Amcor Limited and its controlled entities

Notes to the financial statements

30 June 2007

Note 6. Expenses

	Consolidated	Consolidated	Amcor	Limited
	2007	2006	2007	2006
$ million		Restated*		Restated*
Profit before related income tax includes the following specific 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 financial 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
Borrowing costs	6.5	7.8	2.9	0.7
Total financial 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 benefits 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 - defined benefit funds	32.3	45.4	(0.1)	1.5
- Superannuation costs - accumulation funds	42.6	45.9	2.5	1.4
- Other employment benefits expense	14.1	15.2	4.2	4.0
- Share basedpayments expense	6.2	2.8	2.2	2.8
Total employee benefits 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 financial 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.

Page 27

Amcor Limited and its controlled entities

Notes to the financial statements

30 June 2007

Note 7. Significant Items

Note 7. Significant Items
	Consolidated		Amcor Limited
$ million	2007	2006	2007	2006
Significant 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 arisingon 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 ofpension funds	-	(4.5)	-	-
	(171.7)	(160.9)	(0.8)	2.8
Significant items before related income tax (expense)/benefit	90.9	(64.1)	(0.8)	2.8
Related income tax (expense)/benefit on significant 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 benefit on PET business integration and restructure	1.8	0.2	-	-
Income tax benefit on Australasia restructuring	33.8	-	19.1	-
Income tax benefit on Flexibles market sector rationalisation	10.4	14.8	-	-
Income tax (expense)/benefit on Closures business restructure and loss on disposal(3)	(0.8)	4.9	-	-
Income tax benefit on asset impairments	9.0	3.4	-	-
Income tax benefit on onerous leases and curtailment ofpension funds	-	2.0	-	-
Income tax benefit on significant items	45.8	25.3	12.8	-
Significant items after related tax income expense	136.7	(38.8)	12.0	2.8
Significant 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
Significant 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)/benefit on significant items:
Continuing operations	48.7	11.7	12.8	-
Discontinued operations	(2.9)	13.6	-	-
	45.8	25.3	12.8	-
Significant items after related income tax (expense)/benefit attributed to:
Continuing operations	(112.9)	28.0	12.6	-
Discontinued operations	249.6	(66.8)	(0.6)	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).

Page 28

Amcor Limited and its controlled entities

Notes to the financial statements 30 June 2007

Note 7. Significant Items (continued)

The following table represents a segmental analysis of significant items before income tax (expense)/benefit, refer note 3:

2007 $ million	Redundancy Plant closure Onerous lease Pension curtailment Impairment of assets Disposal of controlled entities Other Total Restructuring
PET Flexibles Australasia Closures Asia	(0.3) (5.0) - - (32.9) 247.5 - 209.3 (15.3) (31.8) - - (18.6) - - (65.7) (43.5) (16.8) - - (12.5) - - (72.8) - - - - - 9.0 9.0 - - - - - (4.0) 15.1 11.1
Total	(59.1) (53.6) - - (64.0) 252.5 15.1 90.9

2006 $ million	Redundancy Plant closure Onerous lease Pension curtailment Impairment of assets Disposal of controlled entities Other Total Restructuring
PET Flexibles Closures Asia Corporate	(1.8) (6.1) (6.0) 1.9 (8.3) - - (20.3) (3.0) (47.9) - - (18.2) - (2.8) (71.9) (7.7) - - - (15.5) (13.1) - (36.3) (0.4) - - - (24.8) 45.5 44.5 (1) 64.8 - - (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)

Page 29

Amcor Limited and its controlled entities

Notes to the financial statements

30 June 2007

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 prioryears now recouped	12.6	12.3	-	-
Total current tax (expense)/benefit	(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
Changeinapplicable tax rates	1.5	-	-	-
Total deferred tax expense	(7.9)	(5.8)	(88.9)	57.3
Total income tax (expense)/benefit	(62.8)	(85.8)	(4.1)	106.0
Lessincome taxexpense attributable to discontinued operations	(19.8)	(3.8)	-	-
Total income tax (expense)/benefit attributable to continuing operations	(43.0)	(82.0)	(4.1)	106.0
Deferred income tax (expense)/benefit 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)/benefit included in income tax (note 17)	(7.9)	(5.8)	(88.9)	57.3
(b) Numerical reconciliation of income tax (expense)/benefit to
prima facie tax payable
Profit/(loss) from continuing operations	293.9	485.4	493.2	(183.1)
Profit/(loss)from discontinued operations	314.0	(20.4)	(0.6)	2.8
Profit/(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 significant 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 benefit related to tax losses of the wholly-owned subsidiaries in the tax-consolidatedgroup	-	-	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)/benefit	(62.8)	(85.8)	(4.1)	106.0
Lessincome taxexpense attributable to discontinued operations	(19.8)	(3.8)	-	-
Total income tax (expense)/benefit attributable to continuing operations	(43.0)	(82.0)	(4.1)	106.0

Page 30

Amcor Limited and its controlled entities

Notes to the financial statements

30 June 2007

Note 8. Income Tax Expense (continued)

Note 8. Income Tax Expense (continued)
	Consolidated		Amcor	Limited
$ million	2007	2006	2007	2006
(c) Amounts recognised directly in equity
Total income tax (expense)/benefit 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 firm:
Audit and review of financial reports	2,472	3,062	1,572	1,884
Overseas KPMG firms:
Audit and review of financial reports	3,406	5,209	-	-
Other regulatoryaudit services	2,115	2,655	-	-
Total remuneration for audit services	7,993	10,926	1,572	1,884
Other services:
KPMG Australian firm:
Taxation services	400	400	400	400
Other assurance services	1,099	515	949	515
Overseas KPMG firms:
Taxation services	659	728	-	-
Other assurance services	1,010	46	-	-
Total remuneration for other services	3,168	1,689	1,349	915
Note 10. Earnings per Share

Note 10. Earnings per Share
	2007	2006
	cents	cents
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 ordinary equity holders 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

Page 31

Amcor Limited and its controlled entities

Notes to the financial statements

30 June 2007

Note 10. Earnings per Share (continued)

Note 10. Earnings per Share (continued)
$ million	2007	2006
(a) Reconciliation of earnings used in calculating earnings per share
Basic earnings per share
Profit from continuing operations	250.9	403.4
Profit from continuingoperations attributable to minorityinterests	(11.4)	(27.9)
Profit from continuing operations attributable to the ordinary equity holders of the company used in calculating basic earnings per share	239.5	375.5
Profit/(loss) from discontinued operations	294.2	(24.2)
Profit attributable to the ordinary equity holders of the company used in calculating basic earnings per share	533.7	351.3
Diluted earnings per share
Profit 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
Profit from continuing operations attributable to the ordinary equity holders of the company used in calculating diluted earnings per share	239.5	423.6
Profit/(loss) from discontinued operations	294.2	(24.2)
Profit 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 ordinary shares and potential ordinary shares for diluted EPS	914.1	1,014.1

(c) Information concerning classification of securities

In the calculation of basic earnings per share, only ordinary shares have been included in the calculation. The following securities have been classified 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.

Page 32

Amcor Limited and its controlled entities

Notes to the financial statements

30 June 2007

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 floating 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
Lessprovision 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 financial 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	-	-
Finishedgoods 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 financial 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).

Page 33

Amcor Limited and its controlled entities

Notes to the financial statements

30 June 2007

Note 14. Other Financial Assets

	Consolidated		Amcor	Limited
$ million	2007	2006	2007	2006
Current
Derivative financial 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 ("EquityShare Swapcontracts")	1.1	-	1.1	-
	1.2	5.2	1.2	3.9
Derivative financial instruments - cash flow hedges:
Forward exchange contracts	1.9	5.2	-	0.2
Commoditycontracts	0.3	0.4	-	-
	2.2	5.6	-	0.2
Total current other financial 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 financial 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 Swapcontracts")	0.7	0.8	0.7	0.8
	1.4	1.3	1.4	1.3
Derivative financial instruments - cash flow hedges:
Forward exchange contracts	-	0.8	-	-
Commoditycontracts	0.4	-	-	-
	0.4	0.8	-	-
Loans and other receivables	25.4	12.7	6.6	6.3
Total non-current other financial 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 financial 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 benefit. 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.

Page 34

Amcor Limited and its controlled entities

Notes to the financial statements 30 June 2007

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 ownership	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

Financial information related to equity accounted investments
	Consolidated
$ million	2007	2006
Revenues (100%)	282.5	145.9
Expenses(100%)	(228.5)	(106.8)
Profit (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 profits before taxes	23.8	10.7
Consolidated entityshare of income tax expense	(1.8)	(0.9)
Consolidated entity share of profits after tax	22.0	9.8

Page 35

Amcor Limited and its controlled entities

Notes to the financial statements

30 June 2007

Note 15. Equity Accounted Investments (continued)

Commitments

Commitments
	Consolidated
$ million	2007	2006
Share of capital commitments contracted but not provided for or payable:
Within one year	5.9	0.9
Between one and five years	-	-
More than fiveyears	-	-
	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 five years	0.8	0.3
More than fiveyears	0.1	-
	1.3	0.5

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 profits of K Laser China of $1.7 million. In addition, $15.1 million profit 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 profits 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 profits of Tien Wah Press (M) Sdn, up to the date of disposal, of $0.1 million loss (2006: $1.0 million profit). 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 profits of AMVIG for the financial year ending 30 June 2007, the consolidated entity has used the latest publicly available financial 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 profits 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 financial information used in determining the consolidated entity’s share of profits for the period from the date of acquisition of this entity to 30 June 2007.

The company does not have any equity accounted investments.

Page 36

Amcor Limited and its controlled entities

Notes to the financial statements 30 June 2007

Note 16. Property, Plant and Equipment

Consolidated

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

Page 37

Amcor Limited and its controlled entities

Notes to the financial statements

30 June 2007

Note 16. Property, Plant and Equipment (continued)

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 twelve 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.

(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 identification 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 finalised 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 profit 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 flows.

• 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.

Page 38

Amcor Limited and its controlled entities

Notes to the financial statements

30 June 2007

Note 16. Property, Plant and Equipment (continued)

(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.

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 Impairment of trade receivables Valuation of inventories Employee benefits Provisions Financial instruments at fair value Tax losses carry-forward(1) Accruals and other items	- (346.5) (346.5) 7.6 - 7.6 50.9 (4.9) 46.0 60.2 2.9 63.1 55.4 - 55.4 0.7 - 0.7 33.8 - 33.8 143.5 (143.4) 0.1	- (436.8) (436.8) 7.9 - 7.9 17.7 (0.1) 17.6 99.6 (0.1) 99.5 46.1 - 46.1 16.1 (1.2) 14.9 78.6 - 78.6 164.5 (108.8) 55.7
Tax assets/(liabilities) Set off of tax	352.1 (491.9) (139.8) (295.4) 295.4 -	430.5 (547.0) (116.5) (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 Employee benefits Provisions Financial instruments at fair value Accruals and other items	0.3 - 0.3 4.0 - 4.0 0.1 - 0.1 0.7 - 0.7 (4.7) (59.9) (64.6)	1.1 - 1.1 12.8 - 12.8 0.1 - 0.1 9.1 - 9.1 20.8 (7.5) 13.3
Tax assets/(liabilities) Set off of tax	0.4 (59.9) (59.5) (0.4) 0.4 -	43.9 (7.5) 36.4 (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.

Page 39

Amcor Limited and its controlled entities

Notes to the financial statements

30 June 2007

Note 17. Deferred Tax Assets and Liabilities (continued)

(b) Movement in temporary differences during the year

Consolidated

Consolidated
	Net asset/	Adoption	Recognised in		Included in		Net asset/
	(liability)	AASB 132 &	income	Recognised	disposal	Exchange	(liability)
$ million	at 1 July	139	statement	in equity	group	difference	at 30 June
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 benefits	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 benefits	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)

Amcor Limited

	Net asset/	Adoption			Net asset/
	(liability)	AASB 132 &	Recognised	Recognised	(liability)
$ million	at 1 July	139	in income	in equity	at 30 June
2007
Property, plant and equipment	1.1	-	(0.8)	-	0.3
Employee benefits	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 benefits	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

Page 40

Amcor Limited and its controlled entities

Notes to the financial statements

30 June 2007

Note 17. Deferred Tax Assets and Liabilities (continued)

(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	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 benefits at applicable rates of tax losses	186.2	211.3		-	-
Deductible temporary differences	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 profit will be available against which the consolidated entity can utilise the benefits 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 financial 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 indefinitely 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 significant. As Amcor controls when the deferred tax liability will be incurred and is satisfied that it will not be incurred in the foreseeable future, the deferred tax liability has not been recognised.

Page 41

Amcor Limited and its controlled entities

Notes to the financial statements

30 June 2007

Note 18. Intangible Assets

Consolidated

Consolidated
	Product	Computer		Other 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

Page 42

Amcor Limited and its controlled entities

Notes to the financial statements

30 June 2007

Note 18. Intangible Assets (continued)

Amcor Limited

Amcor Limited
	2007	2006
$ million	Computer software Other intangible assets Total	Computer software Other intangible assets Total
Cost Balance at 1 July Additions through internal activities Additions for the period Disposals duringtheperiod	9.3 8.2 17.5 0.9 - 0.9 0.7 - 0.7 (1.2) - (1.2)	5.7 5.3 11.0 0.7 - 0.7 3.4 2.9 6.3 (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) (0.6) (1.3) (1.9) - - -	- (0.5) (0.5) (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

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 indefinite 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:

	Consolidated	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 (including utilisation of acquired tax losses)	(24.4)	(14.3)
	1,328.8	1,743.6

Page 43

Amcor Limited and its controlled entities

Notes to the financial statements

30 June 2007

Note 18. Intangible Assets (continued)

(a) Impairment tests for goodwill (continued)

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 flow 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 reflect the current market assessment of the time value of money and the risks specific to the countries in which the CGUs operate for which the future cash flow 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 justified 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 specific 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 specific 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 financial year ending 30 June 2007.

30 June 2006

During the year ended 30 June 2006, indicators of impairment were identified 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).

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 financial assets	-	-		-	1.3
Retirement benefit assets (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

Page 44

Amcor Limited and its controlled entities

Notes to the financial statements

30 June 2007

Note 20. Trade and Other Payables

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

		Consolidated	Consolidated	Amcor	Limited
$ million	Footnote	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 owingto controlled entities		-	-	3,819.3	4,109.1
		1,322.5	677.6	4,787.8	4,570.2
Total current interest-bearing liabilities		1,378.6	690.4	4,787.8	4,570.2

Page 45

Amcor Limited and its controlled entities

Notes to the financial statements

30 June 2007

Note 21. Interest-Bearing Liabilities (continued)

		Consolidated	Consolidated	Amcor	Limited
$ million	Footnote	2007	2006	2007	2006
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

Adequate committed facilities exist to refinance 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 indefinitely 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 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, A$70.0 million of commercial paper was outstanding with an average maturity of 32 days (2006: A$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 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.

Page 46

Amcor Limited and its controlled entities

Notes to the financial statements

30 June 2007

Note 21. Interest-Bearing Liabilities (continued)

• (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 financial 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 million Amcor Limited senior unsecured guaranteed notes issued in the United States Private Placement market. The notes have final bullet maturities between 2009 and 2017. Interest on these notes is payable semi-annually.

• (11) Represents EUR350 million Amcor Limited unsecured notes issued in the Eurobond market. The notes mature in March 2011 and pay an annual coupon of 4.25%.

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 semiannual 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 fixed until the first 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 Stock 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, fixed until the first 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 final interest period up to the conversion date of 30 April 2006. The offer price, together with the final interest payment of $4.2514 per note, reflected 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.

Page 47

Amcor Limited and its controlled entities

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 financial guarantees		-	-		0.1	-
Derivative financial instruments:
Forward exchange contracts		2.1	0.3		1.9	-
Commoditycontracts		1.1	-		-	-
		3.2	0.3		2.0	-
Derivative financial instruments - cash flow hedges:
Forward exchange contracts		8.4	1.2		0.6	-
Commoditycontracts		-	1.7		-	-
		8.4	2.9		0.6	-
	11.6		3.2		2.6	-
Non-current
Liabilities for financial guarantees		-	-		2.9	-
Derivative financial instruments - cash flow hedges:
Forward exchange contracts		0.4	-		-	-
		0.4	-		2.9	-

Financial guarantees

The company has guaranteed the bank overdrafts, operating leases and finance leases of a number of subsidiaries. Under the terms of the financial 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 2007	30 June 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 guaranteed the repayment of all relevant current and future creditors in the event any of the entities party to the deed are wound up. Details of the deed and the consolidated financial 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).

Page 48

Amcor Limited and its controlled entities

Notes to the financial statements

30 June 2007

Note 24. Provisions

Consolidated

Consolidated
	Employee	Insurance &	Onerous	Asset
$ million	entitlements	other 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 twelve 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 flows are based on the assumption that all claims will be settled and the weighted average cost of historical claims adjusted for inflation 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 reflects only the onerous element of these commitments.

Page 49

Amcor Limited and its controlled entities

Notes to the financial statements

30 June 2007

Note 24. Provisions (continued)

Description of provisions (continued)

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 ongoing 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.

Restructuring provisions

The following tables provides a segmental analysis of the restructuring provision at the end of the reporting period:

Consolidated

Consolidated
$ million	Amcor Flexibles	Amcor 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 movementin foreignexchangerate	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 recycling paper mills at Spearwood in Western Australia.

The company did not have any restructuring provisions as at 30 June 2007 (2006: nil).

Page 50

Amcor Limited and its controlled entities

Notes to the financial statements

30 June 2007

Note 25. Retirement Benefit Obligations

Note 25. Retirement Benefit Obligations
	Consolidated		Amcor Limited
$ million	2007	2006	2007	2006
Defined benefit pension plans	78.4	216.8	7.6	35.8
Defined benefitpost-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 benefits 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 defined contribution and defined benefit plans. The principal benefits of these plans are pensions or lump sums for members on resignation, retirement, death or total permanent disablement. These benefits are determined on either a defined benefit or accumulation benefit basis.

Employee contribution rates are either determined by the rules of the fund or selected by members from a specified range of rates. In addition to legislative requirements, employer companies contribute to defined benefit funds as described below or, in the case of defined contribution funds, the amounts set out in the appropriate fund rules.

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 benefits 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 benefits. There exists a legally enforceable obligation on employer companies to contribute as required by legislation.

Defined Benefit Plans

The consolidated entity maintains several defined benefit superannuation arrangements internationally. On a vested benefit basis, some arrangements are in actuarial surplus, others are in a position of actuarial deficiency. Surpluses and deficiencies depend on many diverse factors and can vary significantly 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 defined benefit arrangements.

The consolidated entity has no legal obligation to settle any unfunded defined benefit obligation with an immediate contribution or additional one-off contributions. The objective of funding is to ensure that the benefit entitlements of members and other beneficiaries are fully funded by the time they become payable.

The consolidated entity's current intention is to make annual contributions to defined benefit 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 defined benefit 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 fit.

The following tables set out financial information in relation to both defined benefit pension plans and defined benefit post-retirement plans. The company does not participate in any defined benefit post-retirement plans (2006: nil).

Page 51

Amcor Limited and its controlled entities

Notes to the financial statements

30 June 2007

Note 25. Retirement Benefit Obligations (continued)

(i) Amounts recognised in the balance sheet

	Consolidated	Consolidated	Amcor	Limited
$ million	2007	2006	2007	2006
Present value of the unfunded defined benefit obligation	47.6	57.2	-	-
Present value of the funded defined benefit obligation	933.3	1,034.6	317.1	290.4
Liabilities for defined benefit obligations	980.9	1,091.8	317.1	290.4
Fair value of defined benefitplan assets	(890.7)	(848.8)	(309.5)	(254.6)
Net liability for defined benefit obligations	90.2	243.0	7.6	35.8
Amounts not recognised as an asset	8.0	0.7	-	-
Net liability in the balance sheet	98.2	243.7	7.6	35.8
Net liability in the balance sheet comprises:
Retirement benefit assets (note 19)	(3.2)	(2.9)	-	-
Retirement benefit 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		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 defined benefit 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).

(iii) Movement in the liability for defined obligations

	Consolidated	Consolidated	Amcor	Limited
$ million	2007	2006	2007	2006
Defined benefit 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 benefit 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
Benefits 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 defined contribution to defined benefit	-	57.5	-	-
Exchange differences on foreignplans	(50.2)	36.7	-	-
Defined benefit obligations at 30 June	980.9	1,091.8	317.1	290.4

Page 52

Amcor Limited and its controlled entities

Notes to the financial statements

30 June 2007

Note 25. Retirement Benefit Obligations (continued)

(iv) Movement in plan assets

		Consolidated		Amcor	Limited
	$ million	2007	2006	2007	2006
	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
	Benefits 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 defined contribution to defined benefit	1.1	64.2	-	-
	Exchange differences on foreignplans	(40.0)	23.9	-	-
	Fair value of plan 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 benefit 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 ceilingrecognised directlyin equity	(2.8)	-	-	-
		58.7	22.3	19.6	(4.6)
	Cumulative amount at 30 June	34.6	(24.1)	32.6	13.0

Page 53

Amcor Limited and its controlled entities

Notes to the financial statements

30 June 2007

Note 25. Retirement Benefit Obligations (continued)

(vii) Principal actuarial assumptions

The principal actuarial assumptions (expressed as weighted averages) used for the purposes of reporting under AASB 119 Employee Benefits for the consolidated entity’s and company’s defined benefit plans are as follows:

	Consolidated		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 defined benefit plans are varied, with the plans seeking to achieve moderate to high returns within a given risk profile. Investment target strategies for the material defined benefit 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 fixed 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 pre-determined percentage above the prevailing inflation 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 defined benefit 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 defined benefit obligation by $0.1 million and $0.2 million respectively.

(viii) Estimated future contributions

Employer contributions to the defined benefit pension plans and defined benefit post-retirement plans are based on recommendations by the plans’ actuaries. Actuarial assessments are made periodically.

Employer contributions to defined benefit funds and defined benefit post-retirement plans for the consolidated entity during the financial year ending 30 June 2008 are expected to total $53.5 million. Employer contributions to defined benefit plans for the parent entity during the financial year ending 30 June 2008 are expected to total $19.9 million.

Page 54

Amcor Limited and its controlled entities

Notes to the financial statements

30 June 2007

Note 25. Retirement Benefit Obligations (continued)

(ix) Historical summary

(ix) Historical summary
$ million	2007	2006	2005
Consolidated
Present value of the defined benefit obligation	988.9	1,092.5	983.2
Fair value ofplan assets	890.7	848.8	624.9
Deficit 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 defined benefit obligation	317.1	290.4	265.6
Fair value ofplan assets	309.5	254.6	206.8
Deficit 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) Defined benefit expense

The expense for both defined benefit plans and defined benefit post-retirement plans were recognised in the following line items in the income statement.

income statement.
	Consolidated		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 financingcosts	(5.9)	2.1	(6.5)	(4.4)
	29.1	43.8	11.5	16.6

(1) Included within the above defined benefit expense for Amcor Limited are $18.1 million (2006: $19.5 million) of costs incurred by wholly owned subsidiaries of the company.

Page 55

Amcor Limited and its controlled entities

Notes to the financial statements

30 June 2007

Note 26. Contributed Equity and Reserves

(a) Reconciliation of movement in contributed equity and reserves

Consolidated

Consolidated
		Available-for-					Total
		sale		Share-based	Exchange		Attributable to
	Contributed	revaluation	Cash flow	payments	fluctuation	Retained	Members of	Minority	Total
$ million	equity	reserve	hedge reserve	reserve	reserve	profits	Amcor	interest	equity
Balance at 1 July 2006	2,810.3	(1.8)	(19.0)	7.8	(71.5)	828.6	3,554.4	51.6	3,606.0
Total recognised income and expense	-	7.5	(5.2)	-	(237.7)	576.9	341.5	7.7	349.2
Contributions of equity, net of transaction costs	265.4	-	-	(0.6)	-	-	264.8	-	264.8
Share-based payments option expense	-	-	-	7.0	-	-	7.0	-	7.0
Share buy-back	(332.9)	-	-	-	-	-	(332.9)	-	(332.9)
Dividends paid (note 27)	-	-	-	-	-	(305.7)	(305.7)	-	(305.7)
Dividends paid to minority interests in subsidiaries	-	-	-	-	-	-	-	(5.8)	(5.8)
Disposals of controlled entities and businesses	-	-	-	-	-	-	-	(1.3)	(1.3)
Balance at 30 June 2007	2,742.8	5.7	(24.2)	14.2	(309.2)	1,099.8	3,529.1	52.2	3,581.3
Balance at 1 July 2005	3,322.1	-	-	4.4	(152.6)	726.1	3,900.0	78.0	3,978.0
Adoption of AASB 132 and 139, net of tax	(596.6)	(1.7)	(28.0)	-	1.6	3.2	(621.5)	-	(621.5)
Correction of error(refer note 2)	-	-	-	-	-	34.0	34.0	-	34.0
Balance at 1 July 2005 restated	2,725.5	(1.7)	(28.0)	4.4	(151.0)	763.3	3,312.5	78.0	3,390.5
Total recognised income and expense	-	(0.1)	9.0	-	79.5	364.1	452.5	34.0	486.5
Contributions of equity, net of transaction costs	142.6	-	-	(0.1)	-	-	142.5	-	142.5
Share-based payments option expense	-	-	-	3.5	-	-	3.5	-	3.5
Share buy-back	(57.8)	-	-	-	-	-	(57.8)	-	(57.8)
Dividends paid (note 27)	-	-	-	-	-	(298.8)	(298.8)	-	(298.8)
Minority interest buy-out	-	-	-	-	-	-	-	(5.7)	(5.7)
Dividends paid to minority interests in subsidiaries	-	-	-	-	-	-	-	(8.0)	(8.0)
Disposals of controlled entities and businesses	-	-	-	-	-	-	-	(46.7)	(46.7)
Balance at 30 June 2006	2,810.3	(1.8)	(19.0)	7.8	(71.5)	828.6	3,554.4	51.6	3,606.0

Page 56

Amcor Limited and its controlled entities

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

		Cash flow	Share-based
	Contributed	hedge	payments	Retained	Total
$ million	equity	reserve	reserve	earnings	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(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)
Dividendspaid(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 financial 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 flow hedge reserve

The hedging reserve comprises the effective portion of the cumulative net change in the fair value of cash flow 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 fluctuation reserve

Exchange differences arising on translation of foreign controlled operations are taken to the exchange fluctuation 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.

(b) Contributed equity

	Consolidated	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
1,084,000 partly paid ordinary shares with no par value	0.1	0.1	0.1	0.1
(2006: 1,317,000)(2)
	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 five 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[.] .

Page 57

Amcor Limited and its controlled entities

Notes to the financial statements

30 June 2007

Note 26. Contributed Equity and Reserves (continued)

(b) Contributed equity (continued)

• (i) Reconciliation of fully paid ordinary shares

(i) Reconciliation of fully paid ordinary shares
Consolidated	No. '000 $ million No. '000 $ million 2006 2007
Balance at beginning of period Calls on partly paid shares Issue of shares under the employee share purchase plan (note 29(a)(ii)) Exercise of options and loan repayments under the Employee Share/ Option Plan (note 29(b)) Conversion of convertible securities (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 - - - 35,700 242.5 18,203 121.5 (45,808) (332.9) (8,187) (57.8) - (0.8) - (0.9) 2,702 22.2 1,903 20.9
Balance at end of period	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 per share	Total amount $ million Franked/ unfranked(1) Day of payment
2007 2007 Interim dividend per fully paid share 17.0 2006 Final dividend per fully paid share 17.0 2006 2006 Interim dividend per fully paid share 17.0 2005 Final dividend per fully paid share 17.0	152.3 Unfranked 30 March 2007 153.4 Franked at 15% 29 September 2006 305.7 149.5 Franked at 15% 31 March 2006 149.3 Franked at 22% 28 September 2005 298.8

• (1) 75% is sourced from the Conduit Foreign Income Account.

Page 58

Amcor Limited and its controlled entities

Notes to the financial statements

30 June 2007

Note 27. Dividends (continued)

In addition to the above dividends, since the end of the financial year, the directors have declared the following final dividend. The financial 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 financial reports.

		Cents per	Total amount	Franked/
		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 final dividend payable, subject to variations in number of shares up to record date.

Franking Account

There are no franking credits available for distribution from the franking account. Accordingly, the final 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.

Page 59

Amcor Limited and its controlled entities

Notes to the financial statements

30 June 2007

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 assessment’s relating to financial assets and financial liabilities of the consolidated entity.

For all interest rate, foreign exchange and commodity contracts, that are designated as part of a cash flow 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 outflow or inflow 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-financial 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 financial 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 financial markets and seeks to minimise potential adverse effects on the consolidated entity’s financial performance. The consolidated entity negotiates appropriate commercial terms or uses derivative financial 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 identifies, evaluates and hedges financial risks in close co-operation with the consolidated entity’s business groups. The Board has determined written principles for overall risk management, as well as written policies covering specific areas such as mitigating foreign exchange, interest rate and credit risks, use of derivative financial instruments and investing excess liquidity.

(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 fixed priced swaps, options and futures, on behalf of certain customers. Hedging undertaken is based on customer instructions and all related benefits and costs are passed onto the customer.

The following table sets out the gross value (Australian dollar equivalents) to be received under commodity fixed priced contracts, the weighted average contracted London Metals Exchange rates and the settlement periods of contracts outstanding at 30 June:

	Average fixed price per tonne	Average fixed price per tonne		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 classified 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.

Page 60

Amcor Limited and its controlled entities

Notes to the financial statements

30 June 2007

Note 28. Additional Financial Instruments Disclosures (continued)

(a) Market risk (continued)

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 flows 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 time frame of the forecasted transaction. The cash flows 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.

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
	2007	2006	2007	2006
			$ million	$ million
Sell CAD BuyUSD 0-12 months	1.07	1.11	(33.0)	(73.3)
Net CADposition - Sell CAD			(33.0)	(73.3)
BuyCHF Sell AUD 0-12 months	0.97	0.83	0.8	-
Net CHFposition - BuyCHF			0.8	-
Buy CHF Sell EUR 0-12 months	-	1.56	-	0.5
Sell CHF BuyEUR 0-12 months	-	1.56	-	(0.2)
Net CHFposition - BuyCHF			-	0.3
Buy DKK Sell EUR 0-12 months	7.45	7.46	6.6	9.9
Sell DKK BuyEUR 0-12 months	7.45	7.46	(4.4)	(5.6)
Net DKKposition - BuyDKK			2.2	4.3
BuyEUR Sell AUD 0-12 months	0.60	0.59	39.2	49.1
Net EURposition - BuyEUR			39.2	49.1
BuyEUR Sell SGD - 0-12 months	1.99	-	1.5	-
Net EURposition - BuyEUR			1.5	-
Buy EUR Sell USD 0-12 months	1.27	1.25	26.0	27.0
BuyEUR Sell USD 1-2years	-	1.24	-	16.1
Net EURposition - BuyEUR			26.0	43.1
BuyEUR Sell NZD - 0-12 months	-	1.80	-	0.7
Net EURposition - BuyEUR			-	0.7
BuyGBP Sell AUD 0-12 months	0.40	0.43	3.8	0.5
Net GBPposition - BuyGBP			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 BuyEUR 1-2years	0.69	-	(2.1)	-
Net GBPposition -(Sell)/BuyGBP			(7.4)	1.6
BuyJPY Sell EUR 0-12 months	162.65	-	0.1	-
Net JPYposition - BuyJPY			0.1	-
Buy NOK Sell EUR 0-12 months	8.10	-	0.1	-
Sell NOK BuyEUR 0-12 months	8.14	7.85	(3.0)	(4.9)
Net NOKposition - Sell NOK			(2.9)	(4.9)
Sell NZD BuyAUD 0-12 months	1.13	1.14	(14.1)	(66.7)
Net NZDposition - Sell NZD			(14.1)	(66.7)

Page 61

Amcor Limited and its controlled entities

Notes to the financial statements

30 June 2007

Note 28. Additional Financial Instruments Disclosures (continued)

(a) Market risk (continued)

Foreign currency risk (continued)

(a) Market risk (continued) Foreign currency risk (continued)
	Weighted Average Rate		Contract	Amounts
	2007	2006	2007	2006
			$ million	$ million
BuyPLN Sell EUR 0-12 months	-	4.07	-	1.6
Net PLNposition - BuyPLN			-	1.6
BuySEK Sell AUD 0-12 months	5.68	-	0.9	-
Net SEKposition - BuySEK			0.9	-
Buy SEK Sell EUR 0-12 months	9.27	9.30	12.2	13.4
Sell SEK BuyEUR 0-12 months	9.31	9.28	(2.0)	(2.3)
Net SEKposition - BuySEK			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 BuyAUD 2-3years	0.83	-	(1.6)	-
Net USDposition - BuyUSD			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	-
BuyUSD Sell NZD 2-3years	0.64	-	0.5	-
Net USDposition - BuyUSD			56.6	7.7
Sell USD BuyEUR 0-12 months	1.34	1.25	(16.2)	(70.9)
Net USDposition - Sell USD			(16.2)	(70.9)

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 fluctuations, in the value of the employee benefit.

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
	Expiry date Contract amounts Average hedged price $ 01-Jul-07 70,000 7.40 02-Aug-07 21,500 6.84 11-Sep-07 50,000 8.28 12-Sep-07 100,000 7.20		Expiry date Contract amounts Average hedged price $
Less than one year		Less than one year Between one and five years	11-Sep-06 50,000 8.28 24-Mar-07 17,800 7.87 01-Jul-07 160,000 7.40 02-Aug-07 21,500 6.84
Between one and five years	11-Sep-08 50,000 8.28		11-Sep-07 50,000 8.28
	24-Mar-10 249,200 7.87 02-Aug-10 309,600 6.84 31-Dec-10 29,100 6.78		12-Sep-07 100,000 7.20 11-Sep-08 50,000 8.28 24-Mar-10 289,250 7.87
More than five years	01-Nov-12 365,200 8.20		02-Aug-10 348,300 6.84
		More than five years	01-Nov-12 457,600 8.20

Page 62

Amcor Limited and its controlled entities

Notes to the financial statements

30 June 2007

Note 28. Additional Financial Instruments Disclosures (continued)

(a) Market risk (continued)

Employee share plan risk (continued)

Equity share swap contracts

Equity share swap contracts
	2007		2006
	Vesting date Contract amounts Average hedged price $ Dec-03 4,000 7.11 Dec-04 11,400 7.11 Dec-05 93,800 7.11 Feb-07 72,500 7.11 Jan-08 9,325 7.11 Sep-11 8,410 7.11 Sep-12 28,315 7.11 Sep-13 17,425 7.11		Vesting date Contract amounts Average hedged price $
Vested Less than one year Between one and five years More than five years		Vested Less than one year Between one and five years More than five years	Dec-03 5,000 7.11 Dec-04 16,800 7.11 Dec-05 105,800 7.11 Jul-06 50,000 7.11 Oct-06 8,000 7.11 Feb-07 198,400 7.11 Jan-08 20,000 7.11 Sep-11 8,410 7.11 Sep-12 28,315 7.11 Sep-13 17,425 7.11

During the twelve months to 30 June 2007, a loss of $0.5 million (2006: $1.4 million loss) was recognised in the income statement to reflect the decrease in the fair value of equity share options and equity swap contracts.

(b) Liquidity risk

Prudent liquidity risk management implies maintaining sufficient 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 flexibility in funding by keeping committed credit lines available whilst maintaining minimum cash balances.

At reporting date, the standby arrangements and unused credit facilities of the consolidated entity were as follows:

	Consolidated	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.

Page 63

Amcor Limited and its controlled entities

Notes to the financial statements

30 June 2007

Note 28. Additional Financial Instruments Disclosures (continued)

(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 financial 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 financial 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 financial institutions, and specific internal guidelines have been established with regard to limits, dealing and settlement procedures. The company and the consolidated entity has no significant 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 financial assets recognised in the balance sheet, and disclosed in note 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 financial assets and the credit risk embodied within them, the consolidated entity holds no significant collateral as security. The credit quality of all financial 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 flows 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 flow interest rate risk. Borrowings issued at fixed 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 fixed interest rates.

The consolidated entity manages its cash flow interest rate risk by using floating-to-fixed interest rate swaps and forward rate agreements. Such interest rate swaps have the effect of converting borrowings from floating rates into fixed rates and vice-versa. Under the interest rate swaps, the consolidated entity agrees with other parties to exchange, at specified intervals (either quarterly or semi-annually), the difference between fixed contract rates and floating 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 twelve months to 30 June 2007 and there are no swap contracts outstanding as at 30 June 2007 (2006: nil).

During the twelve 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.

Page 64

Amcor Limited and its controlled entities

Notes to the financial statements

30 June 2007

Note 28. Additional Financial Instruments Disclosures (continued)

(d) Interest rate risk (continued)

Interest rate risk exposures

The following table sets out the consolidated entity’s financial instruments exposed to interest rate risk, including the contractual repricing dates and the effective weighted average interest rate by maturity periods.

			Fixed interest	Fixed interest	maturing in:	maturing in:
									Effective
									weighted
		Floating					Non-		average
		interest	1 year or			More than	interest		interest
$ million	Note	rate	less	1-2 years	2-5 years	5 years	bearing	Total	rate
30 June 2007
Financial assets
Cash and cash equivalents	11	114.7	-	-	-	-	-	114.7	3.48%
Trade receivables	12	-	-	-	-	-	1,113.3	1,113.3	-
Loans, prepayments and other receivables	12,14	-	-	-	-	-	999.4	999.4	-
Total financial assets		114.7	-	-	-	-	2,112.7	2,227.4
Financial liabilities
Payables	20	-	-	-	-	-	1,881.4	1,881.4	-
Bank and other loans	21	1,208.6	5.6	1.4	135.8	-	4.6	1,356.0	5.53%
Commercial paper	21	450.4	-	-	-	-	-	450.4	6.29%
US$ Notes	21	-	-	-	47.2	541.8	-	589.0	5.58%
Eurobond	21	-	-	-	553.0	-	-	553.0	4.44%
Lease liabilities	21	1.3	45.0	-	4.4	-	-	50.7	6.61%
Total financial liabilities		1,660.3	50.6	1.4	740.4	541.8	1,886.0	4,880.5
30 June 2006
Financial assets
Cash and cash equivalents	11	113.9	-	-	-	-	-	113.9	2.30%
Trade receivables	12	-	-	-	-	-	1,366.2	1,366.2	-
Loans, prepayments and other receivables	12,14	-	-	-	-	-	338.4	338.4	-
Total financial assets		113.9	-	-	-	-	1,704.6	1,818.5
Financial liabilities
Payables	20	-	-	-	-	-	2,107.7	2,107.7	-
Bank and other loans	21	1,004.5	6.1	51.6	-	161.7	5.1	1,229.0	4.93%
Commercial paper	21	211.0	-	-	-	-	-	211.0	5.56%
US$ Notes	21	-	-	-	54.0	621.1	-	675.1	5.58%
Eurobond	21	-	-	-	595.5	-	-	595.5	4.44%
Lease liabilities	21	2.1	6.2	-	56.4	-	-	64.7	6.48%
Subordinated convertible securities	22	-	464.2	-	-	-	-	464.2	8.41%
Total financial liabilities		1,217.6	476.5	51.6	705.9	782.8	2,112.8	5,347.2

Page 65

Amcor Limited and its controlled entities

Notes to the financial statements

30 June 2007

Note 28. Additional Financial Instruments Disclosures (continued)

(e) Fair values

The fair values of cash and cash equivalents and monetary financial assets and financial liabilities approximate their carrying value. The fair values of other monetary financial assets and liabilities are either based upon market prices, where a market exists, or has been determined by discounting the expected future cash flows by the current interest rate for financial assets and financial liabilities with similar risk profiles.

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 financial assets and liabilities detailed below reflects 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 financial instruments is to hedge the consolidated entity’s underlying assets and liabilities denominated in foreign currencies and to hedge against risk of interest rate fluctuations, it is unlikely that, in the absence of abnormal circumstances, these contracts would be terminated prior to maturity.

The carrying amount and fair values of financial assets and financial liabilities at reporting date are:

	Note	Carrying amount	Net fair value	Carrying amount Net fair value	Carrying amount Net fair value
$ million		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 financial assets	14	15.6	15.6	4.0	4.0
Financial assets at fair value through profit 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	464.2
Forward foreign exchange contracts, net position	14, 23	9.0	9.0	-	-
Commodityfixedprice swaps,netposition	14,23	0.4	0.4	1.2	1.2
		4,889.9	4,820.0	5,348.4	5,290.5

The fair value of the US$ notes and the Eurobond reflects 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 significant assumptions applied in determining fair values of financial assets and liabilities, refer to note 1(w).

Page 66

Amcor Limited and its controlled entities

Notes to the financial statements

30 June 2007

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 benefit of all full-time employees, permanent part-time employees and executive directors of the company with more than twelve months service. The number of shares offered depended upon the company’s annual increase in earnings per share (before significant 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 ESIP and none were granted or exercised during the year ended 30 June 2007 (2006: nil).

(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 financial 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 5 years, unless the employee ceases employment later than 3 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	Weighted average	Weighted average	Weighted average
	2007	fair value	2006	fair value
	No.	$	No.	$
Restricted shares at beginning of financial 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 financial period	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 officers 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 Stock 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 Australian Stock Exchange 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.

Page 67

Amcor Limited and its controlled entities

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)

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 financial reporting period in which the options were granted. For those options granted prior to 1 July 2006 the return on average funds employed is defined as Earnings Before Interest Tax and significant 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.

Details of the total movement in options issued under the ESOP during the current and comparative period are as follows:

	Weighted average	Weighted average	Weighted average	Weighted average
	2007	fair value	2006	fair value
	No.	$	No.	$
Outstanding at beginning of financial 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 financial period	11,265,097	1.37	15,487,012	1.43
Exercisable at end of financial 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 Officer 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 officers, senior executives and senior staff members selected by the directors. Refer 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 specified 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 Australian Stock Exchange 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	Weighted average	Weighted average	Weighted average
	2007	fair value	2006	fair value
	No.	$	No.	$
Outstanding at beginning of financial period	-	-	-	-
Granted	10,296,650	0.98	-	-
Cancelled	(78,050)	0.91	-	-
Outstanding at end of financial period	10,218,600	0.98	-	-
Exercisable at end of financial period	-	-	-	-

Page 68

Amcor Limited and its controlled entities

Notes to the financial statements

30 June 2007

Note 29. Share Based Payments (continued)

(b) Employee Share Option Plans (continued)

The following tables provide a summary of the options granted under the ESOP and LTIP Options for the consolidated entity and the company during the current and comparative period:

30 June 2007

On issue Exercisable Proceeds received $ No. No. No. No. No. $ No. No. $ Grant date Exercise date on or after Expiry date Exercise price Balance at beginning of period Options granted Options lapsed Options cancelled Options exercised Weighted average share price at exercise date Balance at end ofperiod	On issue Exercisable Proceeds received $ No. No. No. No. No. $ No. No. $ Grant date Exercise date on or after Expiry date Exercise price Balance at beginning of period Options granted Options lapsed Options cancelled Options exercised Weighted average share price at exercise date Balance at end ofperiod
13-Sep-01 13-Sep-04 13-Sep-06 6.02 01-Oct-01 01-Oct-01 01-Oct-06 6.03 01-Oct-02 01-Oct-02 01-Oct-06 6.03 01-Oct-02 01-Oct-02 01-Oct-07 7.25 01-Oct-03 01-Oct-03 01-Oct-06 6.03 01-Oct-03 01-Oct-03 01-Oct-07 7.25 01-Nov-02 (1) 01-Nov-05 01-Nov-12 8.20 13-Oct-03 (1) 01-Nov-05 01-Nov-12 8.20 20-Oct-03 (1) 01-Nov-05 01-Nov-12 8.20 01-Nov-02 (1) 01-Nov-02 01-Jul-07 7.30 01-Nov-02 (1) 30-Sep-03 01-Jul-07 7.30 01-Nov-02 (1) 30-Sep-04 01-Jul-07 7.30 01-Nov-02 (1) 30-Sep-03 01-Jul-07 7.40 01-Nov-02 (1) 30-Sep-04 01-Jul-07 7.40 23-Mar-04 23-Mar-07 23-Mar-10 7.87 24-Mar-04 24-Mar-07 24-Mar-10 7.87 31-May-04 24-Mar-07 24-Mar-10 7.87 02-Aug-04 02-Aug-07 02-Aug-10 6.84 02-May-05 02-Aug-07 02-Aug-10 6.84 27-Oct-05 01-Jan-08 31-Dec-10 6.78 27-Oct-05 01-Jul-08 30-Jun-11 6.78 27-Oct-05 01-Jan-09 31-Dec-11 6.78 04-Aug-06 31-Dec-09 31-Dec-10 6.78 04-Aug-06 31-Dec-09 31-Dec-10 6.78 04-Aug-06 31-Dec-09 31-Dec-10 6.78 04-Aug-06 30-Jun-10 30-Jun-11 6.78 04-Aug-06 31-Dec-10 31-Dec-11 6.78 04-Aug-06 31-Dec-09 31-Dec-10 6.78 04-Aug-06 30-Jun-10 30-Jun-11 6.78 04-Aug-06 31-Dec-10 31-Dec-11 6.78 22-Sep-06 31-Dec-09 31-Dec-10 6.78 01-Feb-07 31-Dec-10 31-Dec-11 7.19 01-Feb-07 31-Dec-10 31-Dec-11 7.19 05-Mar-07 31-Dec-10 31-Dec-11 7.19	512,500 - 20,000 - 492,500 6.64 - - 2,964,850 100,000 - - - 100,000 7.42 - - 603,000 100,000 - - - 100,000 7.42 - - 603,000 40,000 - - - - - 40,000 40,000 - 100,000 - - - 100,000 7.42 - - 603,000 40,000 - - - - - 40,000 40,000 - 3,397,680 - - 499,400 - - 2,898,280 2,898,280 - 79,200 - - - - - 79,200 79,200 - 26,400 - - 13,200 - - 13,200 13,200 - 100,000 - - - 100,000 7.49 - - 730,000 100,000 - - - 100,000 7.49 - - 730,000 100,000 - - - 100,000 7.49 - - 730,000 275,000 - - 30,000 245,000 7.45 - - 1,813,000 805,000 - - - 805,000 7.45 - - 5,957,000 450,340 - - 258,100 - - 192,240 192,240 - 3,954,270 - - 462,355 - - 3,491,915 3,491,915 - 17,800 - - - - - 17,800 17,800 - 4,487,222 - - 236,500 534,060 7.09 3,716,662 - 3,652,970 51,600 - - - 25,800 7.35 25,800 - 176,472 250,000 - - - - - 250,000 - - 250,000 - - - - - 250,000 - - 250,000 - - - - - 250,000 - - - 2,594,900 - 44,050 - - 2,550,850 - - - 1,292,300 - 24,000 - - 1,268,300 - - - 280,000 - - - - 280,000 - - - 280,000 - - - - 280,000 - - - 280,000 - - - - 280,000 - - - 100,000 - - - - 100,000 - - - 90,000 - - - - 90,000 - - - 90,000 - - - - 90,000 - - - 131,950 - - - - 131,950 - - - 3,317,000 - 10,000 - - 3,307,000 - - - 1,717,900 - - - - 1,717,900 - - - 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 fixed exchange rate applies to overseas participants on these share option grants

Page 69

Amcor Limited and its controlled entities

Notes to the financial statements

30 June 2007

Note 29. Share Based Payments (continued)

(b) Employee Share Option Plans (continued)

30 June 2006

On issue Exercisable Proceeds received $ No. No. No. No. No. $ No. No. $ Weighted average share price at exercise date Options cancelled Options exercised Balance at end ofperiod Balance at beginning of period Options granted Options lapsed Grant date Exercise date on or after Expiry date Exercise price	On issue Exercisable Proceeds received $ No. No. No. No. No. $ No. No. $ Weighted average share price at exercise date Options cancelled Options exercised Balance at end ofperiod Balance at beginning of period Options granted Options lapsed Grant date Exercise date on or after Expiry date Exercise price
14-Sep-00 14-Sep-03 14-Sep-05 5.16 01-Oct-00 01-Oct-00 01-Oct-05 5.10 13-Sep-01 13-Sep-04 13-Sep-06 6.02 01-Oct-01 01-Oct-01 01-Oct-06 6.03 01-Oct-01 01-Oct-01 01-Oct-05 5.10 01-Oct-02 01-Oct-02 01-Oct-05 5.10 01-Oct-02 01-Oct-02 01-Oct-06 6.03 01-Oct-02 01-Oct-02 01-Oct-07 7.25 01-Oct-03 01-Oct-03 01-Oct-06 6.03 01-Oct-03 01-Oct-03 01-Oct-07 7.25 01-Nov-02 (1) 01-Nov-05 01-Nov-12 8.20 13-Oct-03 (1) 01-Nov-05 01-Nov-12 8.20 20-Oct-03 (1) 01-Nov-05 01-Nov-12 8.20 01-Nov-02 (1) 01-Nov-02 01-Jul-07 7.30 01-Nov-02 (1) 30-Sep-03 01-Jul-07 7.30 01-Nov-02 (1) 30-Sep-04 01-Jul-07 7.30 01-Nov-02 (1) 30-Sep-03 01-Jul-07 7.40 01-Nov-02 (1) 30-Sep-04 01-Jul-07 7.40 23-Mar-04 23-Mar-07 23-Mar-10 7.87 24-Mar-04 24-Mar-07 24-Mar-10 7.87 31-May-04 24-Mar-07 24-Mar-10 7.87 02-Aug-04 02-Aug-07 02-Aug-10 6.84 02-May-05 02-Aug-07 02-Aug-10 6.84 27-Oct-05 01-Jan-08 31-Dec-10 6.78 27-Oct-05 01-Jul-08 30-Jun-11 6.78 27-Oct-05 01-Jan-09 31-Dec-11 6.78	366,000 - 36,000 - 330,000 6.66 - - 1,702,800 237,000 - 30,000 - 207,000 6.69 - - 1,055,700 727,500 - - 5,000 210,000 6.93 512,500 512,500 1,264,200 100,000 - - - - - 100,000 100,000 - 464,000 - 60,000 - 404,000 6.69 - - 2,060,400 676,000 - 60,000 - 616,000 6.70 - - 3,141,600 100,000 - - - - - 100,000 100,000 - 40,000 - - - - - 40,000 40,000 - 100,000 - - - - - 100,000 100,000 - 40,000 - - - - - 40,000 40,000 - 3,919,080 - - 521,400 - - 3,397,680 3,397,680 - 118,800 - - 39,600 - - 79,200 79,200 - 26,400 - - - - - 26,400 26,400 - 100,000 - - - - - 100,000 100,000 - 100,000 - - - - - 100,000 100,000 - 100,000 - - - - - 100,000 100,000 - 772,500 - - 447,500 50,000 7.56 275,000 275,000 370,000 805,000 - - - - - 805,000 805,000 - 481,490 - - 31,150 - - 450,340 - - 4,161,195 - - 206,925 - - 3,954,270 - - 17,800 - - - - - 17,800 - - 5,588,200 - - 1,014,978 86,000 7.24 4,487,222 - 588,240 60,000 - - 8,400 - - 51,600 - - - 250,000 - - - - 250,000 - - - 250,000 - - - - 250,000 - - - 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

(1) A fixed exchange rate applies to overseas participants on these share option grants

Page 70

Amcor Limited and its controlled entities

Notes to the financial statements

30 June 2007

Note 29. Share Based Payments (continued)

(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 fluctuating 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 fluctuating value of Amcor’s shares, including all dividends paid on the shares during this time. The consolidated entity hedged its exposure to fluctuations 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 financial 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 five 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 five years from the date the plan entitlements were issued, the employee forfeits 40% or 20% of their plan entitlements, respectively.

The Chief Executive Officer, 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 finally 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	Weighted average	Weighted average	Weighted average
	2007	fair value	2006	fair value
	No.	$	No.	$
Outstanding at beginning of financial period	78,000	6.68	108,000	6.70
Exercised	(78,000)	6.84	(30,000)	6.69
Outstanding at end of financial period	-	-	78,000	6.68
Exercisable at end of financial 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 fluctuating 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	Weighted average	Weighted average	Weighted average
	2007	fair value	2006	fair value
	No.	$	No.	$
Outstanding at beginning of financial 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 financial period	200,000	0.34	250,000	0.29
Exercisable at end of financial period	200,000	0.34	250,000	0.29

Page 71

Amcor Limited and its controlled entities

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:

and comparative period are as follows:
	Weighted average		Weighted average
	2007	fair value	2006	fair value
	No.	$	No.	$
Outstanding at beginning of financial 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 financial period	1,090,575	0.76	1,294,450	0.59
Exercisable at end of financial 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 Officer 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 pre-determined 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	Weighted average	Weighted average	Weighted average
	2007	fair value	2006	fair value
$ million	No.	$	No.	$
Outstanding at beginning of financial period	300,000	4.15	-	-
Granted	-	-	300,000	4.15
Outstanding at end of financial period	300,000	4.15	300,000	4.15
Exercisable at end of financial period	-	-	-	-

(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 financial 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%. The 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 note 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’.

Page 72

Amcor Limited and its controlled entities

Notes to the financial statements

30 June 2007

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.

Note 29. Share Based Payments (continued)

(c) Other compensation plans (continued)

(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 officers, senior executives and senior staff members selected by the directors. Refer 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 specified 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	Weighted average	Weighted average	Weighted average
	2007	fair value	2006	fair value
	No.	$	No.	$
Outstanding at beginning of financial period	-	-	-	-
Granted	3,408,825	4.47	-	-
Cancelled	(25,450)	4.21	-	-
Outstanding at end of financial period	3,383,375	4.47	-	-
Vested at end of financial 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 optionpricing 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 reflects 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 reflects the assumption that the historical volatility is indicative of future trends, which may not necessarily be the actual outcome. For specific details of grant dates and exercise prices, refer note 29(b).

Page 73

Amcor Limited and its controlled entities

Notes to the financial statements 30 June 2007

Note 29. Share Based Payments (continued)

(d) Fair value of options and rights granted (continued)

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.

(e) Expenses arising from share-based payment transactions

Total expenses arising from share-based payment transactions recognised during the period as part of employee benefit expense were as follows:

		Consolidated		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 carrying amount 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 benefits	0.9	1.5	0.9	1.5

(f) Liabilities for share-based payments

(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.

Page 74

Amcor Limited and its controlled entities

Notes to the financial statements

30 June 2007

Note 30. Key Management Personnel Disclosure

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

(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 Officer
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 (Charlies) 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 significant 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 qualified 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.

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 Officer, 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 Officer, Amcor Sunclipse	Amcor Packaging (USA) Inc
C K Chan	Managing Director, Amcor Asia	Leigh-Mardon Singapore Pte Ltd

Certain executives classified as KMP in the prior period have either retired or are no longer considered KMP for the purposes of this annual financial report.

Page 75

Amcor Limited and its controlled entities

Notes to the financial statements 30 June 2007

Note 30. Key Management Personnel Disclosures (continued)

(c) Key management personnel compensation

The following table details the compensation paid to key management personnel included in ‘employee benefits expense’, refer note 6.

note 6.
	Consolidated		Amcor Limited
$ million	2007	2006	2007	2006
Short-term employee benefits	10.6	12.3	9.3	7.2
Post-employment benefits	2.1	0.8	1.8	0.6
Termination benefits	-	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 director’s and executive’s 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 Director’s report.

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 financial 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:

are set out below:
			Interest paid and			Number of
	Balance at	Loan	payable for the	Balance at	Interest not	loans at the
	1 July	repayments	period	30 June	charged	end of the
Consolidated	$	$	$	$	$	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).

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 Director’s Report and note 29.

Page 76

Amcor Limited and its controlled entities

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 (continued)

The number of options and rights over ordinary shares in the company held during the financial year by each of the key management personnel of the consolidated entity, including their personally related entities, are set out below:

Name Balance at 1 July	- - - - 1,313,000 177,000 750,000 300,000 - (14,000) 1,313,000 88,000 200,000 70,000 - - 707,500 (3) 222,500 (3) Exercised Other changes(1) Balance vested and not yet exercised Balance at 30 June Share options Share rights Granted as compensation
Directors(2) K N MacKenzie 2007 1,313,000 2006 277,000
Senior Executives W P Day 2007 437,500
(retired 1 June 2007) 2006 472,500	- - - (35,000) 437,500 -
L A Desjardins (appointed 1 June 2007) 2007 - (3) I G Wilson(4) 2007 - 2006 - L J Lachal 2007 307,000 2006 352,000 W J Long(5) 2007 694,000 2006 722,000 G S James (retired 30 June 2006) 2006 347,500 E E Bloom 2006 690,500 C K Chan 2006 385,000	- - - - - - 300,000 105,000 405,000 - - - - - - - 360,000 120,000 787,000 178,000 - - (24,000) (21,000) 307,000 - 360,000 120,000 (300,000) - 874,000 222,000 - - - (28,000) 694,000 344,000 - (20,000) (21,000) 306,500 (3) 44,000 (3) - - (145,000) (14,000) 531,500 (3) 344,000 (3) - - (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.

Page 77

Amcor Limited and its controlled entities

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 (continued)

The movement during the financial period in the number of ordinary shares in Amcor Limited held, directly, indirectly or beneficially, by each key management person, including their related parties, is as follows:

				Received on	Purchased
		Balance at		exercise of	during the		Sold during		Balance at
Name		1 July		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) (retired 27 October 2005)	2006	31,929		-	2,629		-		34,558	(2)
D C K Allen (retired 27 October 2005)	2006	59,715		-	1,531		-		61,246	(2)
Senior Executives
W P Day	2007	64,077		-	802		(29,775)		35,104	(2)
(resigned 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 (retired 30 June 2006)	2006	24,500		20,000	-		(44,200)		300	(2)
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)

(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 five 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 five cents.

Page 78

Amcor Limited and its controlled entities

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)

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 it’s controlled entities.

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 financial period. Interest and dividends received by the company from controlled entities and interest paid by the company to controlled entities is disclosed in note 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 twelve 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.

Page 79

Amcor Limited and its controlled entities

Notes to the financial statements 30 June 2007

Note 32. Contingencies

Details of contingent liabilities where the probability of future payments/receipts is not considered remote are set out below:

	Consolidated		Amcor	Limited
$ million	2007	2006	2007	2006
Contingentliabilities 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 sacrifice of economic benefits will be required or the amount is not capable of reliable measurement.

• Amcor Limited has indemnified the PaperlinX Limited Group in relation to potential taxation and workcover liabilities in excess of any provisions made in the financial 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 financial statements, Amcor Limited and certain wholly-owned subsidiaries have entered into an approved deed for the cross guarantee of liabilities with those subsidiaries identified 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 financially sound and solvent at that date.

Competition Law Investigations

Leniency Application – Australia

On 21 December 2005, the Australian Competition & 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 fibreboard container industry that was anticompetitive, including engaging in price fixing 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 notified 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 first person involved in a cartel to come forward with information about the cartel and co-operate 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 specified 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.

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.

Page 80

Amcor Limited and its controlled entities

Notes to the financial statements 30 June 2007

Note 32. Contingencies (continued)

Third Party Claims Australia

Jarra Creek Central Packaging Shed Pty Ltd

Jarra Creek Central Packaging Shed Pty Ltd filed 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 unspecified damages. The proceeding is expressed to have been brought on behalf of all persons or entities that purchased more than $100,000 of corrugated fibreboard 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 fibreboard container industry, including engaging in price fixing 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 fibreboard 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 financial condition of Amcor.

Cadbury Schweppes

Cadbury Schweppes filed 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 rectification 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 fibreboard 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.

Note 33. Commitments

(a) Capital expenditure commitments

(a) Capital expenditure commitments
	Consolidated		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 fiveyears	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 five years	68.4	63.3	-	-
More than fiveyears	15.5	15.7	-	-
	152.5	143.7	-	-

Page 81

Amcor Limited and its controlled entities

Notes to the financial statements

30 June 2007

Note 33. Commitments (continued)

(c) Operating lease commitments

(c) Operating lease commitments
	Consolidated		Amcor Limited
$ million	2007	2006	2007	2006
Lease expenditure contracted but not provided for or payable:
Within one year	117.8	125.8	0.7	1.0
Between one and five years	284.5	304.9	0.2	0.7
More than fiveyears	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

(d) Finance lease commitments
	Consolidated		Amcor Limited
$ million	2007	2006	2007	2006
Lease expenditure contracted and provided for due:
Within one year	47.9	9.8	-	-
Between one and five years	3.6	53.0	-	-
More than fiveyears	0.1	10.1	-	-
Minimum lease payments	51.6	72.9	-	-
Less future finance 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 finance 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).

Page 82

Amcor Limited and its controlled entities

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 financial position principally affected the figures shown in this consolidated annual financial 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 financial statements of the company investments in subsidiaries are measured at cost. The company does not have any associate and joint venture investments.

Page 83

Amcor Limited and its controlled entities

Notes to the financial statements 30 June 2007

Note 34. Particulars in Relation to Controlled Entities and Businesses (continued)

Acquisition of controlled entities and businesses

During the twelve months to 30 June 2007, Amcor did not acquire any controlled entities or businesses.

		Consideration paid	Net assets 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

Disposal of controlled entities and businesses

The following controlled entities and business disposed of are classified as discontinued operations in this financial report, refer note 4.

note 4.
		Consideration	Consolidated
		received/	profit/(loss) on
		receivable	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 Iberia S.A.

• Amcor PET Packaging Belgium NV

• 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 Pacific 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 financial 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.

Page 84

Amcor Limited and its controlled entities

Notes to the financial statements 30 June 2007

Note 35. Deed of Cross Guarantee (continued)

The holding entity and subsidiaries subject to the deed of cross guarantee are:

Amcor Limited [Holding Entity] Pak Pacific 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

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 profits

(a) Summarised income statement and retained profits
	2007	2006
$ million		Restated*
Profit before related income tax expense	370.3	(29.3)
Income tax expense	39.2	5.4
Profit from continuing operations after tax	409.5	(23.9)
Retained profits at beginning of financial 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 duringthe financialperiod	(305.7)	(298.8)
Retainedprofits at the end of the financialperiod	1,072.3	952.2

• See below for explanation of restatement of the comparative period for correction of prior period errors.

Page 85

Amcor Limited and its controlled entities

Notes to the financial statements

30 June 2007

Note 35. Deed of Cross Guarantee (continued)

(b) Balance sheet

b) Balance sheet
	2007	2006
$ million		Restated*
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 financialassets	1.6	9.3
Total current assets	3,341.3	3,600.0
Non-current assets
Other financial 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 financial 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 financial liabilities	3.3	-
Deferred tax liabilities	7.0	12.5
Provisions	33.5	37.4
Retirement benefit 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
Retainedprofits	1,072.3	952.2
Total equity	3,842.1	3,793.3

• See below for explanation of restatement of the comparative period for correction of prior period errors.

Page 86

Amcor Limited and its controlled entities

Notes to the financial statements

30 June 2007

Note 35. Deed of Cross Guarantee (continued)

(c) Prior period corrections to deed of cross guarantee

Errors on adoption of Australian Equivalents to International Financial Reporting Standards

In preparing the consolidated financial 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 identified that resulted in an overstatement of the deferred tax liability by $132.1 million, an understatement of the opening retained profit 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 identified included:

• failure to transfer the credit balance of $65.5 million within the asset revaluation to retained profits 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 fluctuation reserve to retained profits 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 profits 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 fluctuation reserve were incorrectly processed as part of the deed consolidation. The errors identified relate to both the 2005 and the 2006 financial years, after the adoption of AIFRS. The accumulated impact of this error on the financial result and position of the deed group was an understatement of the opening retained profits position by $2.4 million; overstatement of the 30 June 2006 profit from continuing operations by $60.0 million, understatement of reserves by $57.6 million and an overstatement of closing retained profits by $57.6 million.

In addition to the above foreign currency transfer errors an additional foreign currency transaction, that occurred during the 2005 financial 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 profits 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.

Page 87