NCI

2 0 0 7AnnuAl RepoRt

National Can Industries Limited

Lucas ada • NewtoN ada • LusiaNa adikaususu • david agNew • eddie ahoLima • Jim aiNsworth • eLLiJah aisam • moh aiyub • Peata akuiLa • meLda aLach • brett aLdoNs • saLam aLi • PhiLiP aLLeN • adeLL aLLwood • rosa aLoi • kumara amarasekera • veLe amiNi • baNda amitharathaNe • craig aNdersoN • keith aNdersoN • christoPher aNdrews • LJiLJaNa aNdric • aNNa aNgeLis • susaN aNthoNy-smith • kam ao • Fred aPeLu • subramaNiaN araveNdaN • aLex armadass • Peter arNoLd • terreNce arNoLd • margarita arsova • sit aso • chrisaNthi asseN • richard asseN • FiLiPo NiLi atoNio • david atuaN • iNdira awasthi • saLma azizi • charLie babob • gLeNN bacusmo • geoFFrey baLshaw • imeLda baquir • steveN baraghiNi • craig barNett • mark beddows • berNa begue • robert beLFiore • JustiNe beLL • vidosava beNJocki • michaeL beNtLey • christiNe bercich • carLo berNardi • JohN berry • JustiN bird • Jim birse • cLemeNt bLack • eLeNa bLack • JasoN bLaNey • Jeremy bLaNFord • daLibor bLazevski • caNe bogdaNovski • Laisiasa bogiNivaLu • margaret boLa • mioko boska • scott botica • PhiLLiP bovaird • teriNa bowLes • Patty bradFord • ater brimo • gordoN broad • JohN brook • aLaN brooks • Nagaire brosNam • darryL broughtoN • NathaN browN • yvoNNe browN • aNthoNy bruce • margret bryaNt • raymoNd buara • NeiL bucoy • soLimaN bugay • keNNeth buidi • haNk bumote • tom burNs • giusePPe buseLLi • marisa buskuLic • maria byrNes • seaN cachia • Peter caLLick • gary camPbeLL • sabatiNo caPretta • maL carr • Peter carr • giusePPiNa caruso • bradLey casey • raFaeL casiPit • PameLa cass • steve cataLaNo • deaN catteraLL • PauL cavaNough • suresh chaNd • Louise chaNg • eugeNe chavez • may chiNg • try chou • swarNa choudhary • gLeNN chuter • taNgi cLaNcy • wayNe cLaNcy • adam cLark • robert cLark • david cLarke • steveN coe • JohN coLaiacovo • Peter coLemaN • ross coLey • coNNie coLosimo • LuciaNo comar • haNa cooPer • stePheN corcoraN • aNdrew corderoy • achiLLes coroNeL • FraNk correa • mark corrigaLL • sam costa • coLiN court • FortuNato crea • LaNce cromPtoN • deborah crossmaN • russeLL cuNNiNgham • Joe curcic • richard curNock • LawreNce cusdiN • LaNce dae • LieN daNg • david dargue • gwyN davies • LyNette dawsoN • Jack day • ivaN d'cruz • Louis de boNo • deNNis de LeoN • keviN deaN • NemeNcio dee • gary deeriNg • aNgie deLLios • emaNueL demetita • Joki dex • katie dharma • aNthoNy dias • eLizabeth dimech • khaNg diNh • trac diNh • oLiva diPia • Phuoc duNg do • shirLey doeL • kathy dovic • PauL drakeFord • aLaN drew • JohN duLLard • bryaN duNN • hieP duoNg • veLemir duvNJak • tiLe ekeroma • FraNk ektoras • LiNda eLLis • haNNa eLvey • michaeL eNgLaNd • Paea eNosi • Lotoa ePati • kaLoLo ese • gLeN esLer • hasNa estePhaN • mark evaNs • eveNi eveNi • PauL Faavaoga • aNthoNy FaiFai • ma'aNaima FaiFai • toNy FaiFai • deNise FairFax • Peka FaLa • edward Fatu • teodoro FazoN • Fedi Ferris • JosePh Ferris • LiNda Ferris • sam FiNau • shaNe FLitcroFt • mathew FLowers • desmoNd FoeNaNder • tevita FoLiaki • shaNe FoLLas • carL Forsyth • michaeL Forsyth • domeNic Foti • bouLos FraNgie • susaN FraNkLiN • steveN FrigaNiotis • ciPriaNo FroNda • eLoNa FroNda • david FrueaN • waLLace Fu • zhigaNg Fu • tim Fuakoko • hari gadePaLLy • Joe gaFa • JosePh gaLea • ray gaLLacher • wayNe gambLe • JiN gao • meLe gataua • tau gataua • steveN gaviN • Lucy giaccotto • wayNe gibboNs • mavra giLchrist • JohN giLLam • evaN giLLesPie • evaN giLLesPie • gLeN giLLick • mere gLaNviLLe • radomir gLigorevic • gNaNam gNaNam • JohN goLi • PriNce goNzaLes • toNy gorgievski • stoJNa gorgiovski • suak goro • webster gough • simoNe gouvoussis • braNka govedarica • deaNadayaLaN goveNder • estera govic • robert graNt • LiLLiaN gray • mirko grbic • breNdaN greig • diaNe greig • gary greig • mariJa grgat • LorraiNe griFFiN • diaNNe groom • breNdaN gruNdig • shaNe guLa • LJube guLevski • FraNcis guLum • amit guPta • tessa gurry • do ha • huoNg my thi ha • ky ha • asmahaN habkouk • NathaLie haLes • mavis haLL • wiLLiam haLL • Lavaka hamaLa • LoviaNa hamaLa • margaret hamiLtoN • eLissar haNNa • mark haNNa • Peter haNNaN • JohN harrigaN • greg harris • mike harris • trevor harvey • maLia hausia • debra hawkiNs • Lee hawkiNs • gurcharaN hayer • darreN heath • LaNi heather • JohN higgiNs • Peter hisLoP-dewar • Louise hoPe • ray horsburgh • charLes hubert • sioNe huFaNga • graeme hughes • Jake hughes • keith hughes • cathryN huitema • ashLey huNNN • omar husseiN

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The front and back covers of this report contain the names of all NCI employees, in recognition of their valuable contribution to the company’s success.

The front and back covers of this report contain the names of all NCI employees, in recognition of their valuable contribution to the company’s success.

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Financial Highlights 2 – 3

Chairman’s Review 4

Managing Director’s Review 5

Directors’ Report 6 – ��

Auditor’s Independence Declaration �2

Corporate Governance �3 – �4

Financial Report �5 – 43

Five Year Financial Summary �6

Income Statements

for the year ended June 30, 2007 �7

Balance Sheets

as at June 30, 2007 �8

Cash Flow Statements

for the year ended June 30, 2007 �9

Statements of changes in equity

for the year ended June 30, 2007 20

Notes to the Financial Statements 2� – 43

Directors’ Declaration 44

Independent Audit Report 45

ASx Additional Information 46

Shareholder Information 47

National Can Industries LimitedA.C.N. 006 266 799

Financial Statements and ReportsJune 30, 2007

NCI

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2007 2006 % +/(-)

Sales Revenue $'000 182,003 188,410 ( 3.4)

Earnings before interest, tax, depreciation and amortisation (EBITDA) $'000 26,743 29,117 ( 8.2)

Earnings before interest and tax (EBIT) $'000 17,588 20,000 ( 12.1)

Net profit before tax (PBT) $'000 17,511 19,938 ( 12.2)

Net profit after tax (PAT) $'000 12,177 13,939 ( 12.6)

Total Assets $'000 164,322 148,158 10.9

Total Liabilities $'000 33,873 25,413 33.3

Net Assets (Shareholders Equity) $'000 130,449 122,745 6.3

Net Debt $'000 ( 28,294) ( 28,148) 0.5

Depreciation and amortisation expense $'000 9,155 9,117 0.4

Interest expense $'000 77 62 24.2

Income tax expense $'000 5,334 5,999 ( 11.1)

Performance Ratios & Statistics

EBIT/Sales % 9.7 10.6

PAT/Sales % 6.7 7.4

Return on Equity(PAT/Net Assets) % 9.3 11.4

Gearing (Net Debt/Net Assets) % ( 21.7) ( 22.9)

Shares on issue 000 66,774 66,774

Earnings per share cents 18.2 20.9

Dividend per share total cents 11.0 10.0

Dividend – total $'000 7,345 6,677

Dividend – payout ratio % 60.3 47.9

Net Tangible Assets per share $ 1.93 1.82

FINANCIAl HIGHlIGHtS for year ended June 30, 2007

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189.8180.7 180.4

188.4182.0

5.2

7.9

9.3

11.4

8.0

9.6

20.0

12.8

17.6

13.6

8.7

13.6

20.9

18.2

13.0

03 04 05 06 07

Sales($M)

Return on Equity(%)

Earnings per Share(cents)

EBIT($M)

0

50

100

150

200

03 04 05 06 07

03 04 05 06 07

0

2

4

6

8

10

12

0

5

10

15

20

25

03 04 05 06 070

5

10

15

20

FINANCIAl HIGHlIGHtSF

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The 2006/07 year was disappointing for the company after the solid improvement in revenue and earnings of the previous year.

In the mature and competitive markets that the company operates in, generating sales growth again proved challenging. The loss of tinplate sheeting sales as a consequence of BlueScope Steel’s decision to cease domestic tinplate manufacture made the task somewhat more difficult.

Allowing for the one-off tinplate contract settlement gain in the Australian result, underlying earnings in all countries were lower with operational issues in New Zealand having a significant adverse impact on profit levels. Management was successful however in recovering the situation in New Zealand by the end of the year. Earnings per share fell from 20.6 cents to 18.2 cents while net tangible asset backing increased to $1.93.

Considerable focus during the year was given to developing new revenue streams from existing markets through investments in enhanced packaging product technology. A number of these projects are nearing completion and are expected to make a positive contribution during the 2007/08 financial year.

The company maintained its very strong financial condition which leaves it well placed to take up industry rationalisation opportunities that may emerge in the future whilst also allowing investment in the current business for future growth.

In March 2007, Mr Marco Bertei retired from the Board after 7 years service as a non-executive director. Mr Bertei was previously managing director of the company between 1989–2000. The Board expresses its appreciation for the contribution Mr Bertei made to the success of NCI during this period.

Dividend

Directors have declared a final dividend of 7.0 cents per share fully franked and payable on Friday October 26, 2007. Entitlement to the dividend will be on the basis of registrable transfers received up to 5.00 pm on Friday October 12, 2007.

Notwithstanding the disappointing performance of the company, on behalf of the Board, I wish to acknowledge the efforts of all the Company’s employees during 2006/07.

Brian Noxon Chairman

CHAIRMAN’S REVIEWF

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Review of OperationsRevenue for the year ended June 30, 2007 was $184 million, 3% below the previous year. Profit after tax, at $12.2 million, decreased 13% on last year and included a one-off gain from early termination of a raw material supply contract of $3.7 million after tax.

Packaging – AustraliaPackaging – Australia comprises metal can and drum manufacturing, plastic injection moulding and metal sheeting and decoration operations. The business has 8 manufacturing plants and supplies metal and plastic packaging products and services for application in paint, chemical, aerosol, industrial and food packaging markets.

Sales revenues fell 6% to $133 million. The announcement of BlueScope Steel’s withdrawal from domestic tinplate supply changed sourcing decisions of sheeting customers and led to lower throughput during the year. Higher operating costs and tight market conditions impacted on margins while demand in key packaging segments was steady.

Packaging – New ZealandPackaging – New Zealand comprises metal can, drum and closure manufacturing and metal decoration operations. The business has 3 manufacturing plants and supplies metal and plastic packaging products and services for application in paint, chemical, aerosol, industrial and food packaging markets.

Sales revenues increased 8% to $45 million, boosted by the aluminium aerosols business acquired late last year. Export revenues were lower as the strong local currency dampened demand for food cans while new business was secured in the domestic food segment.

Earnings were adversely affected by production and capacity issues which increased input costs while the issues were overcome. By year-end, service and quality levels had returned to normal. Margins on export sales were also reduced by the appreciating NZ Dollar.

Packaging - PNGPackaging – Papua New Guinea comprises a steel can, drum and closure manufacturing plant located in Lae, PNG. The business supplies metal packaging products for application in paint, petroleum, chemical, industrial, food and beverage packaging markets.

Sales revenue decreased 8% to $4.5 million. Earnings were correspondingly lower and were also reduced on translation into $A from the weaker PNG currency.

Packaging - FijiPackaging – Fiji comprises a steel can and drum manufacturing plant located in Suva, Fiji. The business supplies metal packaging products for application in paint, chemical and industrial packaging markets.

Sales and earnings were 5% below last year due mainly to lower demand following the military coup in December 2006.

SafetyGood progress was again made in overall safety performance during the year with a further reduction in the number of lost-time accidents.

Financial ConditionThe overall financial position of the company remained strong. Inventory was built-up to manage the transition from domestic to imported supply of tinplate during the 2nd Half. The change in raw material supply also flowed through to payables, reflecting the extended payment terms for the imported raw material purchases.

Forward OutlookMarket conditions will remain challenging with increased competition from imported packaging and inter-material alternatives.

Providing economic conditions do not deteriorate significantly from the current outlook, Directors expect an improvement in underlying earnings in 2008, that is, after allowing for the one-off contract termination gain in 2007.

Michael Tyrrell Managing Director

MANAGING DIRECtOR’S REVIEWF

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The Directors present this report on the consolidated entity consisting of National Can Industries Limited and the entities it controlled at the end of, or during, the year ended June 30, 2007.

DirectorsThe following persons were directors of National Can Industries Limited during the whole of the financial year and up to the date of this report:-

E. B. Noxon

T. X. O’Brien

R. G. Pitcher

M. W. Tyrrell

R. K. Horsburgh was appointed as director on November 23, 2006 and continues in office at the date of this report.

J. M. Bertei was a director from the beginning of the financial year until his resignation on March 29, 2007.

Principal activitiesDuring the year the principal continuing activities of the group consisted of the manufacture and sale of packaging products and services including metal cans, drums and pails, plastic containers, plastic pails, caps and closures, tinplate and aluminium sheeting and decoration, machine equipment and tooling. These products are manufactured in plants throughout Australia, New Zealand, Papua New Guinea and Fiji and are sold for use in a range of markets including paint, aerosol, food, chemical and beverage industries, wholesale merchants, and to export markets in a number of countries.

There were no significant changes in the nature of the activities of the consolidated entity during the year.

Consolidated results and dividendsThe consolidated profit for the year attributed to the members of National Can Industries Limited was:

2007 2006

$’000 $’000

Net profit after income tax 12,177 13,939

Earnings per share Cents per share

Basic earnings per share Diluted earnings per share is not different from basic earnings per share

18.2 20.9

NumberWeighted average number of Ordinary Shares on issue used in the calculation of basic earnings per share 66,773,572

Dividends

Dividends paid to members during the financial year were as follows: $’000s

Final ordinary fully franked dividend for the year ended June 30, 2006 of 6.0 cents per share paid on October 26, 2006

4,006

Interim ordinary fully franked divided for the year ended June 30, 2007 of 4.0 cents per share paid on April 27, 2007

2,671

6,677

In addition to the above dividends, since the end of the financial year, the directors have declared a final ordinary fully franked dividend of 7.0 cents per share ($4,674,000) to be paid on October 26, 2007 out of retained profits at June 30, 2007.

Review of operationsA review of operational performance is included on page 5.

Significant changes in the state of affairsIn the opinion of Directors, there were no significant changes in the state of affairs of the consolidated entity that occurred during the financial year under review not otherwise disclosed in this report or the consolidated accounts.

Significant events after the balance dateThere has not arisen in the interval between the end of the financial year and the date of this report any item, transaction or event of a material and unusual nature likely, in the opinion of the Directors of the Company, to affect significantly the operations of the consolidated entity, the results of these operations, or the state of affairs of the consolidated entity, in subsequent financial years.

Likely developmentsThese are summarised in the Managing Director’s Review on page 5.

Environmental regulationThe consolidated entity’s operations are conducted under a wide variety of environmental protection acts and regulations. National Can Industries Limited has in place an environmental policy to ensure its operating divisions comply fully with all applicable regulations. Relevant environmental licences and permits are held at the Company’s manufacturing sites and monitoring procedures are in place to ensure compliance with licence conditions. Over the past year there have been no material breaches of the Company’s licence conditions and the consolidated entity did not experience any significant environmental incident.

The Company has in place environmental management systems designed to minimise pollution and environmental impairment risk. Regular audits are conducted at Company sites and any major environmental risks identified are reported to the consolidated entity’s Board as part the Company’s risk management program, along with other key environmental matters. During the year, no breaches of environmental regulation or legislation were reported and no major non-conformances were advised.

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Information on Directors

E. B. NOxON BSc, FIEAust, FAIM (Non-executive Chairman)ExperienceIndependent non-executive director for 7 years and Chairman since January 2005. Mr. Noxon has extensive experience in manufacturing industries.

Other current directorships Non-executive Chairman of Lemarne Corporation Limited (director since 1979).

Former directorships in last 3 yearsNone.

Special responsibilitiesChairman of the BoardChairman of Compensation and Nomination CommitteeMember of Audit, Compliance and Risk Management Committee

Interest in shares and options40,000 ordinary shares in National Can Industries Limited

R. K. HORSBURGH, AM B. Eng (Chem.) (Non-executive Director)ExperienceIndependent non-executive director since November 23, 2006. Mr. Horsburgh has recently retired as managing director and CEO of Smorgon Steel Ltd. and has extensive experience in steel, transport and glass industries.

Other current directorships Non-executive director of Toll Holdings Ltd. (director since 2004) and CSR Ltd. (director since 2006).

Former directorships in last 3 yearsManaging director of Smorgon Steel Ltd. from 1998 to 2007.

Special responsibilitiesMember of Compensation and Nomination CommitteeMember of Audit, Compliance and Risk Management Committee

Interest in shares and options11,220 ordinary shares in National Can Industries Limited.

t. x. O’BRIEN FCPA (Non-executive Director)ExperienceIndependent non-executive director since November 2004. Mr. O’Brien is currently managing director of Simplot Australia Pty Ltd and has extensive experience in food and textile manufacturing industries.

Other current directorships Simplot Australia Pty Ltd

Former directorships in last 3 yearsNone.

Special responsibilitiesMember of Compensation and Nomination CommitteeMember of Audit, Compliance and Risk Management Committee

Interest in shares and options48,500 ordinary shares in National Can Industries Limited.

R. G. PItCHER, AM FCA, FCPA (Non-executive Director)ExperienceIndependent non-executive director for 13 years. Mr. Pitcher is founder and former principal partner of accounting and advisory firm, Pitcher Partners and has extensive experience in manufacturing industries.

Other current directorships Non-executive director of Reece Australia Limited (director since 2003).Non-executive chairman of Cellestis Limited (director since 2001) and McMillan Shakespeare Limited (director since 2004).

Former directorships in last 3 yearsNon-executive director of Capral Aluminium Limited from 2001 to 2007.

Special responsibilitiesChairman of Audit, Compliance and Risk Management CommitteeMember of Compensation and Nomination Committee

Interest in shares and optionsNone.

M. W. tYRREll (Managing Director)ExperienceManaging director since 2000 and executive director for 20 years. Mr. Tyrrell has extensive experience in metal and plastic packaging industries.

Other current directorships None.

Former directorships in last 3 yearsNone.

Special responsibilitiesManaging Director.

Interest in shares and options33,538,906 ordinary shares in National Can Industries Limited

Company SecretaryThe company secretary is Mr. M.R. McDonald who was appointed to the position of company secretary in 2000. Mr. McDonald is also General Manager - Administration & Finance. Mr. McDonald has held senior accounting and finance positions during more than 25 years service with the company.

Left to Right: Terry O’Brien – Director , Ron Pitcher – Director, Ray Horsburgh – Director, Brian Noxon – Chairman and Michael Tyrrell – Managing Director.

DIRECtORS’ REPORtF

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Meetings of directorsThe number of meetings of the company’s board and of each board committee held during the year ended June 30, 2007, and the numbers of meetings attended by each director were:

Director

BoarD of DirectorsMeetings

auDit, coMpliance & risk ManageMent coMMittee Meetings

coMpensation & noMination coMMittee Meetings

Held (a)

attended(b)

Held(a)

attended(b)

Held(a)

attended(b)

J.M. Bertei (retired March 29, 2007)

12 10 2 2 4 4

R.K. Horsburgh (appointed November 23, 2006)

8 7 2 2 2 2

E.B. Noxon 14 14 3 3 4 4

T.X. O’Brien 14 11 3 3 4 4

R.G. Pitcher 14 14 3 3 4 4

M.W.Tyrrell 14 14 - - - -

(a) = Number of meetings held during the time the director was a member of the board/committee during the year(b) = Number of meetings attended

Remuneration reportThe remuneration report is set out under the following main headings:

A Principles used to determine the nature and amount of remuneration

B Details of remuneration

C Service agreements

D Additional information

The information provided under headings A-C includes remuneration disclosures that are required under Accounting Standard AASB 124 Related Party Disclosures. These disclosures have been transferred from the financial report and been audited. The disclosures in Section D are additional disclosures required by the Corporations Act 2001 and the Corporations Regulations 2001 which have not been audited.

A Principles used to determine the nature and amount of remuneration (audited)The Compensation & Nomination Committee reviews and sets the salary of the managing director and provides broad guidelines to the managing director for executive salary setting within the National Can Group. Incentive plans for senior executives operate on the basis of achievement of set annual targets directly relating to the performance of the company and executives.

Executive RemunerationNCI’s executive remuneration policy is designed to ensure that remuneration packages:-

• are commensurate with the responsibilities and duties of senior executives;

• encourage and recognise the achievement of corporate objectives and targets

• attract and maintain the right personnel for each role and

• are market competitive

In applying the remuneration policy, the Compensation and Nomination Committee also gives due consideration to the overall performance of the consolidated entity including the level of earnings and growth in shareholder wealth over financial periods.

Remuneration packages are composed of two elements:-

1. Guaranteed Pay

Base remuneration is determined by the executive’s experience, knowledge and individual performance in the role. Packages are reviewed annually with the aim of:-

• maintaining competitiveness in line with market rates

• recognising changes in an executive’s overall value to the company, be it through the acquisition of relevant skills and knowledge, or relevant experience in role

• motivating higher levels of performance

2. Performance Pay

A discretionary incentive payment system (Performance Pay) operates for certain executives with payments dependent on achievement of short-term individual Key Performance Indicators (KPIs). The maximum level of Performance Pay is based on a percentage of the executive’s total remuneration package and is not greater than 25% for any of the company’s executives. KPIs are set annually and are based on and aligned to individual and company performance targets. Targets vary according to the role and areas of responsibility of the individual executive whilst directed towards attainment of common corporate goals such as growth in earnings and shareholder wealth, achievement of workplace safety, working capital and customer service targets. Performance against the KPIs is assessed annually and recommendations for payments determined following the end of the respective financial year.

The Compensation & Nomination Committee assess and approve any Performance Payments for the Managing Director and ratify the Managing Director’s assessments of Performance Pay for senior executives. In approving Performance Payments for the company’s senior management, consideration is given

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to the affordability of the payments, relative to the annual targets of the company.

NCI does not offer equity-based remuneration to executives or directors.

Director RemunerationNon-executive directors are remunerated only by way of directors’ fees in the form of cash and superannuation. Apart from annual superannuation contributions, NCI does not provide any other retirement benefits to non-executive directors.

Non-executive directors do not receive equity-based remuneration nor participate in bonus or incentive schemes.

The fees payable to non-executive directors are reviewed annually and recommended by the Compensation & Nomination Committee and approved by the Board within the aggregate amount approved by shareholders. The maximum currently stands at $ 500,000 per annum and was approved by shareholders at the Annual General Meeting on October 24, 2006. Directors’ fees are not payable to executive directors.

Directors’ fees are set having regard for the size of the company, the time requirement of directors and market levels for comparable boards. The current base remuneration was set with effect from July 1, 2005 having previously remained unchanged since July 1, 2000. The Chairman’s remuneration is inclusive of committee fees while non-executive directors who chair a committee receive additional yearly fees.

The following fees have applied during the year:-

Base fee Chairman $ 120,000

Other non-executive directors $ 55,000

Additional fees Audit committee chairman $ 10,000

B Details of remuneration (audited)Details of the remuneration of the directors and the key management personnel (as defined in AASB 124 Related Party Disclosures) of National Can Industries Limited and the consolidated entity are set out in the following tables.

The key management personnel of the consolidated entity includes the directors as per page 7 and the following executive officers who report directly to the managing director:-

• J. Harrigan – Sales Manager Australia

• J. McCormack – Operations Manager

• M. McDonald – General Manager - Administration & Finance

• M. Robins – General Manager - Business Improvement

The 5 executives of the consolidated entity who received the highest remuneration for the year ended June 30, 2007 are:-

• G. Chuter – Manager NSW

• J. Harrigan – Sales Manager Australia

• J. McCormack – Operations Manager

• M. McDonald – General Manager - Administration & Finance

• M. Robins – General Manager - Business Improvement

DIRECtORS’ REPORt

Key management personnel of the Consolidated Entity – 2007

primarypost-

employmentlong-term

benefitsequity

casH salary anD fees

$

casH Bonus

$

non-MonetaryBenefits

$

superannuation

$

long service leave

$

options

$

total

$

non-executive directors

E.B. Noxon Chairman

120,000 - - 13,200 - - 133,200

J.M. Bertei (from 1/7/2006 to 29/3/2007)

41,250 - - 4,538 - - 45,788

R. K. Horsburgh (appointed 23/11/2006)

33,377 - - 3,671 - - 37,048

T. X. O’Brien 55,000 - - 6,050 - - 61,050

R.G. Pitcher 65,000 - - 7,150 - - 72,150

executive Director

M. W. Tyrrell Managing Director

281,076 - - 30,712 6,899 - 318,687

other key management personnel

M. McDonald 180,232 36,504 - 42,766 5,479 - 264,981

M. Robins 133,315 45,000 23,464 14,565 2,834 - 219,178

J. McCormack 157,208 - 15,831 15,721 - - 188,760

J. Harrigan 108,106 32,999 18,872 11,733 3,357 - 175,067

other highest paid executive

G. Chuter 106,206 32,980 36,476 11,454 1,684 - 188,800

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Key management personnel of the Consolidated Entity – 2006

primary post- employment

long-term benefits

equity

casH salary anD fees

$

casH Bonus

$

non-MonetaryBenefits

$

superannuation

$

long service leave

$

options

$

total

$

non-executive directors

E.B. Noxon Chairman

120,000 - - 13,200 - - 133,200

J.M. Bertei 55,000 - - 6,050 - - 61,050

T.X. O’Brien 55,000 - - 6,050 - - 61,050

R.G. Pitcher 65,000 - - 7,150 - - 72,150

executive Director

M. W. Tyrrell Managing Director

287,094 84,560 - 31,024 14,909 - 417,587

other key management personnel

M. McDonald 196,918 54,000 - 21,121 5,610 - 277,649

J. McCormack 154,250 60,366 16,068 15,425 - - 246,109

M. Robins 132,977 42,054 19,750 14,295 2,329 - 211,405

J. Harrigan 104,275 34,035 17,888 11,318 3,977 - 171,493

other highest paid executive

G. Chuter 116,706 30,600 19,960 12,728 1,007 - 181,001

C Service Agreements (audited)Remuneration and other terms of employment for the Managing Director and the specified executives are formalised in service agreements. The major provisions of these agreements, are common for these employees and provide for:-

• no defined term of employment

• one (1) month’s notice of termination

• no designated payments upon termination other than for redundancy

• provision of performance-related cash bonuses

D Additional information – unaudited Principles used to determine the nature and amount of remuneration:

Relationship between remuneration and company performance

The overall level of executive reward takes into account the performance of the Group over a number of years, with greater emphasis given to the current and prior year. Over the past 5 years, the Group’s profit from ordinary activities after income tax has grown at an average rate of 12% per annum, and shareholder wealth has grown at an average rate of 15% per annum. During the same period, average executive remuneration has grown by approximately 4% per annum.

Details of remuneration – cash bonusesFor each cash bonus included in the tables on page 9, the percentage of the available bonus that was paid in the financial year, and the percentage that was forfeited because performance criteria was not met, is set out below. No part of the bonuses is payable in future years.

Name

CASH BONuS

paiD % forfeiteD %

M. Tyrrell 0% 100%

M. McDonald 54% 46%

J. McCormack 0% 100%

M. Robins 87% 13%

J. Harrigan 79% 21%

G. Chuter 81% 19%

Insurance of officersIn accordance with Clause 166 of the company’s constitution, the Company has entered into agreements to indemnify all directors of the Company and current and former executive officers of the Company and its controlled entities against all liabilities to persons (other than the Company or a related body corporate) which arise out of the performance of their normal duties as a director or executive officer unless the liability relates to conduct involving a lack of good faith. The Company has agreed to the indemnity of the directors and executive officers against all costs and expenses incurred in defending an action that falls within the scope of the indemnity and any resulting payments. During the financial year a related body corporate paid insurance premiums in respect of directors’ and officers’ liability insurance. The insurance contract prohibits disclosure of the premium paid. The policies do not specify separate premiums for directors or officers either individually or by a group.

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DIRECtORS’ REPORt

Non-audit servicesThe company may decide to employ the auditor on assignments additional to their statutory audit duties where the auditor’s expertise and experience with the company or the consolidated entity are important.

Details of the amounts paid or payable to the auditor (PricewaterhouseCoopers) and other non related audit firms for audit and non-audit services provided during the year are set out below.

The Board of Directors has considered the position and, in accordance with the advice received from the Audit, Compliance & Risk Management Committee, is satisfied that the provision of the non-audit services is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001. The Directors are satisfied that the provision of non-audit services by the auditor, as set out below,

did not compromise the auditor independence requirements of the Corporations Act 2001 for the following reasons:-

• all non-audit services have been reviewed by the Audit, Compliance & Risk Management Committee to ensure they do not impact the impartiality and objectivity of the auditor

• none of the services undermine the general principles relating to auditor independence as set out in Professional Statement F1, including reviewing or auditing the auditor’s own work, acting in a management or decision-making capacity for the company, acting as advocate for the company or jointly sharing economic risks and rewards.

During the year the following fees were paid or payable for services provided by the auditor of the parent entity, its related practices and non-related audit firms:

CoNsoliDaTeD

Assurance services 2007 2006

$ $1. Audit services

PricewaterhouseCoopers Australian firm:Audit and review of financial reports and other audit work under the Corporations Act 2001 229,400

221,300 Related practices of PricewaterhouseCoopers Australian firm 14,556 12,133

Non-PricewaterhouseCoopers audit firms 34,660 36,916

Total remuneration for audit services 278,616 270,349

2. Other assurance servicesPricewaterhouseCoopers Australian firm:

IFRS accounting services 23,000Total remuneration for assurance services 278,616 293,349

Taxation services

Related practices of PricewaterhouseCoopers Australian firm 7,552 6,078

Non-PricewaterhouseCoopers firms 39,313 44,272

Total remuneration for taxation services 46,865 50,350

Auditor’s independence declarationA copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001 is set out on page 12.

Rounding of amountsThe company is of a kind referred to in Class Order 98/0100 issued by the Australian Securities and Investments Commission, relating to ‘rounding off’ of amounts in the directors’ report. Amounts in the directors’ report have been rounded off in accordance with that Class Order to the nearest thousand dollars, or in certain cases, to the nearest dollar.

This report is made in accordance with a resolution of directors.

Brian NoxonChairman

Michael TyrrellManaging Director

Melbourne – September 7, 2007

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As lead auditor for the audit of National Can Industries Limited for the year ended 30 June 2007, I declare that to the best of my knowledge and belief, there have been:

a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and

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

This declaration is in respect of National Can Industries Limited and the entities it controlled during the period.

John O’Donoghue

Partner

PricewaterhouseCoopers

September 7, 2007

Melbourne

AUDItOR’S INDEPENDENCE DEClARAtION F

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CORPORAtE GOVERNANCE

The board of National Can Industries Limited recognises the need for the governance of the company to be maintained at standards acceptable to community expectations and in accordance with the requirements of the Australian Stock Exchange’s Principles of Good Corporate Governance and Best Practice Recommendations.

A description of the Company’s main corporate governance practices is set out below. All these practices, unless otherwise stated, were in place for the entire year.

The board of directorsThe NCI Board is accountable to shareholders for the performance of the Company.

The Board operates in accordance with the principles outlined in the Board Charter which is available upon request from the registered office. The charter describes the Board’s composition, functions and responsibilities and designates authority reserved to the Board and that delegated to management.

Board MembersDetails of the members of the Board, their experience, expertise, qualifications, term of office and independent status are set out in the Directors’ Report under the heading “Information on directors”. There are four (4) non-executive directors, all of whom are deemed independent under the principles set out below, and one (1) executive director at the date of signing the Directors’ Report. The Board keeps under review the balance of skills and experience of its Members, their independence and access to advice and information.

Board ResponsibilitiesThe Board prescribes the respective roles and responsibilities of Board and Management.

The Board is generally responsible for business strategies of the Company, overseeing the management of the Company, setting the values and standards of the Company to uphold in dealings with all stakeholders and acting as custodian of the Company’s shareholders’ interests.

The Board’s functions as set out in the Board Charter are summarized as follows:

• setting the strategic direction of the Company and approving its Business Plans, objectives and financial budgets

• reviewing and evaluating the operational and financial performance of the Company

• overseeing the management of the Company’s capital including approval of major capital expenditure projects, acquisitions and divestments

• ensuring the Company provides reliable and timely disclosures to shareholders and the financial market of matters materially affecting the Company

• selecting, appointing and where appropriate removing the Managing Director

• annually reviewing the performance and effectiveness of the Board, its committees and individual directors

The Board delegates to the Managing Director the authority and power to manage the Company and its businesses within levels of authority specified by the Board from time to time.

Directors’ IndependenceAs part of the Board Charter, the Board has set out specific principles in relation to directors’ independence. These accord directly with the Australian Stock Exchange’s principles of Good Governance and Best Practice Recommendations with one exception as disclosed below.

The Board does not assess the independence of directors based on the length of a director’s service on the Board which is a departure from Principle 2 of the ASX’s Principles of Good Corporate Governance and Best Practice Recommendations. The Board does not believe that the tenure of a director can materially interfere with the director’s ability to act in the best interests of the Company or that arbitrary limits of tenure are appropriate.

No non-executive director of the Board had during the year any association or relationship with the Company that required materiality assessments of the above independence criteria. Should this situation change in the future, materiality thresholds would be determined.

Independent professional adviceIndividual directors may obtain independent professional advice in relation to their Board and Committee duties and responsibilities, with the costs borne by the Company, subject to prior consultation with and approval by the Chairman. The Board’s policy requires all Directors to be provided with a copy of such advice and to be notified if the Chairman’s approval is withheld.

Performance assessmentThe Board has adopted a formalised and structured process of assessing the performance of the Board, its committees and directors.

Selection and appointment of new directors The Compensation and Nomination Committee is responsible for making recommendations on appointments of directors to the Board. The Committee undertakes this process through the application of policies and procedures covering the selection and appointment of new directors including engagement of appropriate recruitment consultants to assist in identifying individuals with the requisite skills and experience.

In accordance with the Company’s constitution, a director appointed in the period since the previous annual general meeting can hold office only until the conclusion of the next following annual general meeting of the Company and shall be eligible for election at that meeting.

Statements from Management The Managing Director and Chief Financial Officer have made the following statements to the Board:-

· that the company’s financial reports are complete and present a true and fair view, in all material respects, of the financial condition and operational results of the company and are in accordance with relevant accounting standards

· that the above statement is founded on a sound system of risk management and internal compliance and control and which implements the policies adopted by the board and that the company’s risk management and internal compliance and control is operating efficiently and effectively in all material respects.

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Board committeesThe Board has in place two (2) committees being the Compensation & Nomination Committee and the Audit, Compliance & Risk Management Committee. Each Committee is comprised solely of non-executive directors and operates under a written charter, which has been approved by the Board. Copies of these charters are available upon request from the Company’s registered office.

Compensation and Nomination Committee The Committee consists of the following non-executive directors:

E B Noxon (Chairman)

R K Horsburgh

T X O’Brien

R G Pitcher

Details of these directors’ attendance at committee meetings are set out in the Directors’ Report on page 8.

Audit, Compliance and Risk Management CommitteeThe Committee consists of the following non-executive directors:

R G Pitcher (Chairman)

R K Horsburgh

E B Noxon

T X O’Brien

Details of these directors’ qualifications and attendance at committee meetings are set out in the Directors’ Report on page 8.

The committee has the appropriate financial expertise and all members are financially literate.

Risk ManagementThe Audit, Compliance and Risk Management Committee oversees the Company’s risk management and internal control systems. Key financial, business and operational risks are assessed, identified and reviewed by the Committee in conjunction with management. A range of policies and procedures have been adopted, as appropriate, to eliminate, manage or ameliorate the impact of these identified risks. The effectiveness of these risk management policies is reviewed by the committee on an ongoing basis.

The Committee monitors the effectiveness of the Company’s internal control system through oversight and review of the internal and external audit programs. The effectiveness of monitoring compliance with laws and regulations is also regularly assessed by the Committee.

Information on compliance with significant environmental regulations is set out in the Directors’ Report.

External AuditorsThe Audit, Compliance and Risk Management Committee has responsibility for the selection and appointment of the external auditors of the Company. The Committee annually makes recommendations to the Board for the appointment, reappointment or termination of the external auditor, having consideration for the independence and performance of the external auditor.

PricewaterhouseCoopers was appointed as the external auditors of the company in 1984. It is PricewaterhouseCoopers’ policy to rotate audit engagement partners on listed companies at least every five (5) years. A new audit engagement partner was introduced for the year ended June 30, 2007. It is the policy of the external auditors to provide an annual declaration of their independence to the Audit, Compliance and Risk Management Committee.

Remuneration PoliciesThe Compensation and Nomination Committee is responsible for the application and review of the Company’s remuneration policies. Policies are set out in the Remuneration Report of the Directors’ Report on page 8.

Code of ConductThe Company has in place a Code of Conduct which expresses the values of NCI and the standards by which business is required to be conducted by the Company and its employees. The Code applies to all directors and employees so that all stakeholders can have confidence in the Company’s integrity and ethics in all business dealings.

The Code requires company personnel, among other things, to act with integrity and honesty in all business dealings at all times and to comply with company policies and procedures and the law.

Compliance with the Code is monitored by the Board and senior management on an ongoing basis.

The Company also has in place policies and procedures covering the purchase and sale of company shares. Prior to dealing in the company’s shares, a director or senior manager must be satisfied that he or she is not in possession of any price sensitive information and notify the Chairman of the Board accordingly. No transactions can be undertaken without acknowledgment of the notification by the Chairman.

A copy of the Code of Conduct and share trading policy is available upon request from the registered office of the Company.

Disclosure Management and Shareholder CommunicationThe Company has in place policies and procedures to ensure that NCI manages the disclosure of price sensitive information effectively and in accordance with the requirements as set out by regulatory bodies. All market disclosures are approved by the Board. The Company Secretary is authorised to release approved disclosures to the Australian Stock Exchange (ASX) and is the appointed person responsible for communications with the ASX.

The Company also has adopted a Communication Strategy to provide information to shareholders about the company in a timely and effective manner. All announcements made to the ASX, including annual and half-year financial reports and information regarding general meeting notices and voting results, are placed on the Company’s web site immediately after public release.

The format of general meetings aims to encourage shareholders to actively participate in the meeting through being invited to comment or raise questions of directors and the Company’s auditors on any matter relevant to the performance and operation of the Company.

A copy of the Disclosure Management policy and Communication Strategy is available upon request from the registered office of the Company.

CORPORAtE GOVERNANCEF

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National Can Industries Limited and its Controlled Entities

Directors

E. Brian NoxonChairman

Ray K. Horsburgh

Terry X. O’Brien

Ronald G. Pitcher

Michael W. TyrrellManaging Director

Secretary and Registered OfficeMark R. McDonald

National Can Industries Limited24 Groom Street,

Clifton Hill Victoria 3068 Telephone: (03) 9276 9600 Telefax: (03) 9489 3701

AuditorsPricewaterhouseCoopers

Ross Melville P.K.F.

BankersCommonwealth Bank of Australia

Bank of New Zealand

SolicitorsRussell Kennedy

Simpson Grierson

Share RegistryComputershare Investor Services Pty. Ltd.

Yarra Falls, 452 Johnston StreetAbbotsford VIC 3067

Telephone: Inside Australia 1300 850 505 Outside Australia (613) 9415 4000

Stock ExchangeThe Company is listed on the

Australian Stock Exchange.The Home Exchange is Melbourne.

FINANCIAl REPORtF

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Financial Data

2007 2006 2005 2004 2003

Sales Revenue $ 000 182,003 188,410 180,414 180,730 189,804

Earnings before interest, tax, depreciation and amortisation (EBITDA)

$ 000 26,743 29,117 22,607 20,524 25,243

Earnings before interest and tax (EBIT) $ 000 17,588 20,000 12,830 9,567 13,558

Net profit before tax (PBT) $ 000 17,511 19,938 12,626 9,050 12,317

Net profit after tax (PAT) $ 000 12,177 13,939 9,099 5,834 8,675

Current Assets $ 000 94,315 80,404 71,258 61,034 59,370

Property, plant and equipment $ 000 61,427 59,189 58,521 66,878 70,953

Intangibles $ 000 1,535 1,506 1,542 1,553 2,151

Other Non-current Assets $ 000 5,100 4,327 4,872 4,822 4,998

Total Assets $ 000 164,322 148,158 138,168 134,287 138,472

Current Liabilities $ 000 31,080 21,890 18,181 17,156 19,575

Non-current Liabilities $ 000 2,793 3,523 3,712 5,122 10,400

Total Liabilities $ 000 33,873 25,413 21,893 22,278 29,975

Issued Capital $ 000 33,699 33,699 33,699 33,699 33,699

Reserves $ 000 6,135 3,929 6,387 6,883 5,467

Retained Profits $ 000 90,615 85,117 76,189 71,427 69,331

Total Shareholders’ Equity $ 000 130,449 122,745 116,275 112,009 108,497

Depreciation and amortisation expense $ 000 9,155 9,117 9,777 10,957 11,685

Interest expense $ 000 77 62 204 517 1,241

Income tax $ 000 5,334 5,999 3,527 3,216 3,642

Performance Ratios & Statistics

EBIT/Sales % 9.7 10.6 7.1 5.3 7.1

PAT/Sales % 6.7 7.4 5.0 3.2 4.6

Return on Equity (PAT/Net Assets) % 9.3 11.4 7.8 5.2 8.0

Gearing (Net Debt/Net Assets) % ( 21.7) ( 22.9) ( 2.4) ( 5.8) 7.1

Shares on issue 000 66,774 66,774 66,774 66,774 66,774

Earnings per share cents 18.2 20.9 13.6 8.7 13.0

Dividend per share total cents 11.0 10.0 6.5 5.5 6.5

Dividend – total $ 000 7,345 6,677 4,340 3,673 4,340

Dividends payout ratio % 60.3 47.9 49.7 63.0 50.0

Net Tangible Assets per share $ 1.93 1.82 1.72 1.65 1.59

FIVE YEAR FINANCIAl SUMMARY year ended June 30, 2007

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INCOME StAtEMENtS for the year ended June 30, 2007

CoNsoliDaTeD PaReNT eNTiTY

Notes 2007 2006 2007 2006

$’000 $’000 $’000 $’000

Revenue from continuing operations 2 183,980 190,138 7,229 5,560

Other income 2(a) 5,465 892

Changes in inventories of finished goods and work in progress 3,610 ( 2,567)

Raw materials and consumables used ( 84,689) ( 83,484)

Employee benefits expense ( 47,991) ( 44,806) ( 349) ( 328)

Depreciation and amortisation expenses 3 ( 9,155) ( 9,117)

Borrowing costs expense 3 ( 77) ( 62)

Distribution expense ( 8,698) ( 8,053)

Repairs and maintenance of property, plant and equipment ( 6,169) ( 5,881)

Insurance ( 2,652) ( 2,293)

Rental expense relating to operating lease payments 3 ( 3,083) ( 2,755)

Other expenses ( 13,030) ( 12,074) ( 97) ( 81)

Profit before income tax expense 3 17,511 19,938 6,783 5,151

Income tax expense 4 ( 5,334) ( 5,999) ( 32) ( 43)

Net profit attributable to members of NCI 19b 12,177 13,939 6,751 5,108

Cents

Basic earnings per share 20 18.2 20.9

Diluted earnings per share 20 18.2 20.9

The above income statements should be read in conjunction with the accompanying notes.

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CoNsoliDaTeD PaReNT eNTiTY

Notes 2007 2006 2007 2006

Assets $’000 $’000 $’000 $’000

Current assets

Cash and cash equivalents 6 28,294 28,148 484 440

Trade and other receivables 7 27,385 27,190 7,898 8,705

Inventories 8 37,988 24,323

Other 9 648 743

Total current assets 94,315 80,404 8,382 9,145

Non-current assets

Shares in controlled entities 28,287 28,287

Property, plant and equipment 10a 61,427 59,189

Investment properties 10b 1,945 1,960

Deferred tax assets 12 4,458 4,327 4 4

Intangible assets 11 1,535 1,506

Deferred Technical agreement contract cost 642 772

Total non-current assets 70,007 67,754 28,291 28,291

Total assets 164,322 148,158 36,673 37,436

Liabilities

Current liabilities

Trade and other payables 13 19,202 10,376 17 35

Current tax liabilities 3,218 3,649 2,411 3,230

Provisions 14 8,660 7,865

Total current liabilities 31,080 21,890 2,428 3,265

Non-current liabilities

Deferred tax liabilities 16 1,786 2,237 0 0

Provisions 17 1,007 1,286

Total non-current liabilities 2,793 3,523 0 0

Total liabilities 33,873 25,413 2,428 3,265

Net assets 130,449 122,745 34,245 34,171

Equity

Parent entity interest

Contributed equity 18 33,699 33,699 33,699 33,699

Reserves 19a 6,135 3,929 0 0

Retained profits 19b 90,615 85,117 546 472

Total equity 130,449 122,745 34,245 34,171

The above balance sheets should be read in conjunction with the accompanying notes.

BAlANCE SHEEtS as at June 30, 2007

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CASH FlOW StAtEMENtS for the year ended June 30, 2007

CoNsoliDaTeD PaReNT eNTiTY

Notes 2007 2006 2007 2006

$’000 $’000 $’000 $’000

Cash flows from operating activities

Receipts from trade and other debtors (Inclusive of GST) 200,656 208,017

Payments to trade and other creditors and employees (Inclusive of GST) ( 184,199) ( 163,965) ( 465) ( 398)

Income tax paid ( 6,011) ( 4,107) ( 43) ( 59)

Interest paid 3 ( 77) ( 62)

Interest received 2 1,444 961 552 552

Supplier contract termination settlement 2a 5,300

Dividends received 6,677 5,008

Net cash inflows from operating activities 29 17,113 40,844 6,721 5,103

Cash flows from investing activities

Payments for property, plant and equipment 10(a) ( 10,377) ( 10,532)

Proceeds from sale of property, plant and equipment 79 55

Payments for trademarks ( 8) ( 4)

Net cash outflows from investing activities ( 10,306) ( 10,481)

Cash flows from financing activities

Dividends paid 5 ( 6,677) ( 5,008) ( 6,677) ( 5,008)

Net cash outflows from financing activities ( 6,677) ( 5,008) ( 6,677) ( 5,008)

Net increase/(decrease) in cash held 130 25,355 44 95

Cash at beginning of financial year 28,148 2,846 440 345

Effect of exchange rate change on cash 16 ( 53)

Cash at end of the financial year 6 28,294 28,148 484 440

Financing arrangements 15

The above cash flow statements should be read in conjunction with the accompanying notes.

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CoNsoliDaTeD PaReNT eNTiTY

Notes 2007 2006 2007 2006

$’000 $’000 $’000 $’000

Total equity at the beginning of the financial year 122,745 116,275 34,171 34,071

Exchange differences on translation of foreign operations 19a 2,204 ( 2,461)

Net income recognised directly in equity 2,204 ( 2,461)

Profit for the year 12,177 13,939 6,751 5,108

Total recognised income and expense for the year 14,381 11,478 6,751 5,108

Dividends provided for or paid 5 ( 6,677) ( 5,008) ( 6,677) ( 5,008)

Total equity at the end of the financial year 130,449 122,745 34,245 34,171

The above statements of changes in equity should be read in conjunction with the accompanying notes.

StAtEMENtS OF CHANGES IN EqUItY for the year ended June 30, 2007

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1. SummaryofsignificantaccountingpoliciesThe principal accounting policies adopted in the preparation of the financial report are set out below. These policies have been consistently applied to all years presented, unless otherwise stated. The financial report includes separate financial statements for National Can Industries Limited as an individual entity and the consolidated entity consisting of National Can Industries Limited and its subsidiaries.

a) BasisofpreparationThis general purpose financial report has been prepared in accordance with Australian equivalents to International Financial Reporting Standards (AIFRSs), other authoritative pronouncements of the Australian Accounting Standards Board, Urgent Issues Group Interpretations and the Corporations Act 2001.

Historical cost convention

These financial statements have been prepared under the historical cost convention.

Critical accounting estimates

The preparation of financial statements in conformity with AIFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the group’s accounting policies. There were no areas involving a higher degree of judgement or complexity, and no areas where assumptions and estimates were significant to the financial statements.

b) PrinciplesofconsolidationThe consolidated financial statements incorporate the assets and liabilities of all subsidiaries of National Can Industries Limited (‘’company’’ or ‘’parent entity’’) as at 30 June 2007 and the results of all subsidiaries for the year then ended. National Can Industries Limited and its subsidiaries together are referred to in this financial report as the consolidated entity.

Subsidiaries are all those entities over which the Consolidated entity has the power to govern the financial and operating policies, generally accompanying a shareholding of more than one-half of the voting rights. Subsidiaries are fully consolidated from the date on which control is transferred to the Consolidated entity. They are de-consolidated from the date that control ceases. The purchase method of accounting is used to account for the acquisition of subsidiaries by the Consolidated entity (refer to note 1(h)).

Intercompany transactions, balances and unrealised gains on transactions between Consolidated entity companies are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Consolidated entity.

c) SegmentreportingThe consolidated entity operates in four geographical segments – Australia, New Zealand, Papua New Guinea and Fiji. Intersegment transactions are conducted on an arms length basis.

d) Foreigncurrencytranslation(i) Functional and presentation currency

Items included in the financial statements of the consolidated entity are measured using the currency of the primary economic environment in which the entity operates (‘the functional currency’). The consolidated financial statements are presented in Australian dollars, which is National Can Industries Limited’s functional and presentation currency.

(ii) Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates 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.

(iii) Consolidated entity companies

The results and financial position of all the Group’s entities (none of which has the currency of a hyperinflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

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

• income and expenses for each income statement are translated at average exchange rates (unless this is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the dates of the transactions); and

• all resulting exchange differences are recognised as a separate component of equity.

On consolidation, exchange differences arising from the translation of any net investment in foreign entities, and of borrowings and other currency instruments designated as hedges of such investments, are taken to shareholders’ equity.

Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the closing rate.

e) RevenuerecognitionRevenue is measured at the fair value of the consideration received or receivable. Amounts disclosed as revenue are net of returns, trade allowances and duties and taxes paid. A sale is recorded when goods have been despatched and the associated risks passed to the customer. Interest income is recognised on a time proportion basis using the actual interest rate applicable to the deposit.

f) IncometaxThe income tax expense or revenue for the period is the tax payable on the current period’s taxable income based on the notional income tax rate for each jurisdiction 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 to unused tax losses.

Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to apply when the assets are recovered or liabilities are settled, based on those tax rates which are enacted or substantively enacted for each jurisdiction. The relevant tax rates are applied to the cumulative amounts of deductible and taxable temporary differences to measure the deferred tax asset or liability.

Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses.

Notes to the FiNaNcial statemeNtsF

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Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and tax bases of investments in controlled entities where the parent entity is able to control the timing of the reversal of the temporary differences and it is probable that the differences will not reverse in the foreseeable future.

Current and deferred tax balances attributable to amounts recognised directly in equity are also recognised directly in equity.

National Can Industries Limited and its wholly-owned Australian controlled entities have implemented the tax consolidation legislation.

g) LeasesControlled entities lease property and vehicles where all the risks and benefits of ownership are effectively retained by the lessor and thus these leases are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to the income statement on a straight-line basis over the period of the lease. Lease income from operating leases is recognised in income over the lease term.

h) AcquisitionsofassetsThe 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 at the date of exchange plus costs directly attributable to the acquisition. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date, irrespective of the extent of any minority interest. 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 to note 1(q)i). 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, but only after a reassessment of the identification and measurement of the net assets acquired.

i) ImpairmentofassetsAssets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment, or more frequently if events or changes in circumstances indicate that they might be impaired. Assets that are subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash generating units). Non-financial assets other than goodwill that suffered an impairment are reviewed for possible reversal of that impairment at each reporting date.

j) CashandcashequivalentsCash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities on the balance sheet.

k) TradereceivablesTrade accounts receivable are carried at amounts receivable at settlement. Collectibility of trade receivables is reviewed on an

ongoing basis. Debts which are known to be uncollectible are written off. A provision for doubtful receivables is established when there is objective evidence that the Consolidated entity will not be able to collect all amounts due according to the original terms of receivables. The amount of the provision is recognised in the income statement.

l) InventoriesRaw materials and stores, work in progress and finished goods are stated at the lower of cost and net realisable value. Cost comprises direct materials, direct labour and an appropriate proportion of variable and fixed overhead expenditure, the latter being allocated on the basis of normal operating capacity. Costs are assigned to individual items of inventory on the first in first out basis. Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs necessary to make the sale.

m) DerivativesDerivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently remeasured to their fair value. The method of recognising the resulting gain or loss depends on whether the derivative is designated as a hedging instrument, and if so, the nature of the item being hedged. The Consolidated entity designates certain derivatives as either; (1) hedges of the fair value of recognised assets or liabilities or a firm commitment (fair value hedge); or (2) hedges of highly probable forecast transactions (cash flow hedges).

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, of 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.

(i)Fair value hedge

Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recorded in the income statement, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk.

(ii) Cash flow hedge

The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognised in equity in the hedging reserve. The gain or loss relating to the ineffective portion is recognised immediately in the income statement.

Amounts accumulated in equity are recycled in the income statement in the periods when the hedged item will affect profit or loss. 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 or terminated, 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,

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the cumulative gain or loss that was reported in equity is immediately transferred to the income statement.

(iii) Derivatives that do not qualify for hedge accounting

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.

n) FairvalueestimationThe fair value of financial assets and financial liabilities must be estimated for recognition and measurement or for disclosure purposes.

The fair value of forward exchange contracts is determined using forward exchange market rates at the balance sheet date.

The nominal value less estimated credit adjustments of trade receivables and payables are assumed to approximate their fair values.

o) Property,plantandequipmentThe consolidated entity has adopted the provisions available under AASB116, which allows the carrying value at 30 June 2004 under AGAAP to become the opening deemed cost for AIFRS at 1 July 2004.

All property, plant and equipment is stated at deemed cost less depreciation. Deemed cost includes expenditure that is directly attributable to the acquisition of the items. Cost may also include transfers from equity of any gains/losses on qualifying cash flow hedges of foreign currency purchases of property, plant and equipment.

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. Land is not depreciated.

Depreciation on other assets is calculated using the straight line method to allocate their cost, net of their residual values, over their estimated useful lives, as follows:

– Buildings 25-40 years

– Plant and equipment 3-12 years

– Vehicles 5 years

The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date.

An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount (note 1(i)).

Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in the income statement.

p) InvestmentpropertyInvestment property, principally comprising freehold factory buildings and residential houses, is held for rental yields and is not occupied by the consolidated entity. Investment properties are carried using the cost model.

Depreciation on investment properties is calculated using the straight line method to allocate cost, net of residual value, over the estimated useful life of the asset.

q) Intangibleassets(i) Goodwill

Goodwill represents the excess of the cost of an acquisition over the fair value of the Consolidated entity’s share of the net identifiable assets of the acquired subsidiary at the date of acquisition. Goodwill on acquisitions of subsidiaries is included in intangible assets.

Goodwill acquired in business combinations is not amortised. Instead, goodwill is tested for impairment annually, or more frequently if events or changes in circumstances indicate that it might be impaired, and is carried at cost less accumulated impairment losses. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.

Goodwill is allocated to cash-generating units for the purpose of impairment testing. Each of those cash-generating units represents the Consolidated entity’s investment in each country of operation by each primary reporting segment.

(ii) Patents designs and trademarks

Patents, trademarks and designs have a finite useful life and are carried at cost less accumulated amortisation and impaired losses. Amortisation is calculated using the straight line method to allocate the cost of patents, trademarks and designs over their estimated useful lives, which vary from 8 to 16 years.

(iii) Research and development

Expenditure on research and development activities, undertaken with the prospect of obtaining new technical knowledge and understanding, is recognised in the income statement as an expense when it is incurred.

r) TradeandotherpayablesThese amounts represent liabilities for goods and services provided to the Consolidated entity prior to the end of the year which are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition.

s) ProvisionsProvisions for claims are recognised when: the Consolidated entity has a present legal or constructive obligation as a result of past events; it is more likely than not that an outflow of resources will be required to settle the obligation; and the amount has been reliably estimated. Provisions are not recognised for future operating losses. Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. A provision is recognised even if the likelihood of an outflow with respect to any one item included in the same class of obligations may be small. Provisions are measured at the present value of management’s best estimate of the expenditure required to settle the present obligation at the balance sheet date. The discount rate used to determine the present value reflects current market assessments of the time value of money and the risks specific to the liability.

t) Employeebenefits(i) Wages and salaries, annual leave and sick leave

Liabilities for wages and salaries are recognised in other payables in respect of employees’ services up to the reporting date and are measured at the amounts expected to be paid when the liabilities are settled. Liabilities for annual leave expected to be settled within 12 months of the reporting date are recognised in provisions in respect of employees’ services up to the reporting date and are measured at the amounts expected to be paid when the liabilities are settled. Liabilities

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for non-accumulating sick leave are recognised when the leave is taken and measured at the rates paid or payable.

(ii) Long service leave

The liability for long service leave is recognised in the provision for employee benefits and is measured as the present value of expected future payments to be made in respect of services provided by employees up to the reporting date 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 at the reporting date on national government bonds with terms to maturity and currency that match, as closely as possible, the estimated future cash outflows.

(iii) Profit-sharing and bonus plans

The Consolidated entity recognises a liability and an expense for bonuses and profit-sharing based on a formula that takes into consideration the profit attributable to the company’s shareholders after certain adjustments. The Consolidated entity recognises a provision where contractually obliged or where there is a past practice that has created a constructive obligation.

u) ContributedequityOrdinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds. Incremental costs directly attributable to the issue of new shares or options, or for the acquisition of a business, are included in the cost of the acquisition as part of the purchase consideration.

v) DividendsProvision is made for the amount of any dividend declared on or before the end of the year but not distributed at balance date.

w) Earningspershare(i) Basic earnings per share

Basic earnings per share is calculated by dividing the profit attributable to equity holders of the company, excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the year.

(ii) Diluted earnings per share

Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares.

x) RoundingofamountsThe company is of a kind referred to in Class order 98/0100, issued by the Australian Securities and Investments Commission, relating to the ‘’rounding off’’ of amounts in the financial report. Amounts in the financial report have been rounded off in accordance with that Class Order to the nearest thousand dollars, or in certain cases, the nearest dollar.

y) BorrowingcostsBorrowing costs incurred for the construction of any qualifying asset are capitalised during the period of time that is required to complete and prepare the asset for its intended use or sale. Other borrowing costs are expensed.

z)NewaccountingstandardsandinterpretationsCertain new accounting standards and interpretations have been published that are not mandatory for 30 June 2007 reporting periods. The Group’s and the parent entity’s assessment of the impact of these new standards and interpretations is set out below.

i) AASB 7 Financial Instruments: Disclosures and AASB 2005-10 Amendments to Australian Accounting Standards (AASB 132, AASB 101, AASB 114, AASB 117, AASB 133, AASB 139, AASB 1, AASB 4, AASB 1023 & AASB 1038)

AASB 7 and AASB 2005-10 are applicable to annual reporting periods beginning on or after 1 January 2007. The Group has not adopted the standard early. Application of the standards will not affect any of the amounts recognised in the financial statements, but will impact the type of information disclosed in relation to the Group’s and the parent entity’s financial instruments.

ii) AASB-I 10 Interim Financial Reporting and Impairment

AASB-I 10 is applicable to reporting periods commencing on or after 1 November 2006. The Group has not recognised an impairment loss in relation to goodwill, investments in equity instruments or financial assets carried at cost in an interim reporting period and then subsequently reversed the impairment loss in the annual report. Application of the interpretation will therefore have no impact on the Group’s financial statements.

aa)FinancialriskmanagementThe Group uses derivative financial instruments such as foreign exchange contracts to hedge certain risk exposures.

i) Foreign exchange risk

Foreign exchange risk arises when future commercial transactions and recognised assets and liabilities are denominated in a currency that is not the entity’s functional currency. The Group operates internationally and is exposed to foreign exchange risk arising from currency exposures. Forward contracts are used to manage foreign exchange risk. The Group’s risk management policy is to hedge fully committed capital and trading stock purchases above approved limits. The Group also manages the foreign exchange risk on translation of its foreign controlled entities assets and liabilities through currency options.

ii) Credit risk

The Group has no significant concentrations of credit risk. The Group has policies in place to ensure that sales of products and services are made to customers with an appropriate credit history. The Group has policies that limit the amount of credit exposure to any one financial institution.

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2. RevenueConsolidated Parent entity

2007 2006 2007 2006$’000 $’000 $’000 $’000

RevenuefromcontinuingoperationsSale of Goods 181,845 188,137 Services 158 273

182,003 188,410 OtherrevenueRent received 54 106 Settlement discounts 413 366 Dividends received/receivable from controlled entities 6,677 5,008 Interest received from controlled entities 552 552 Interest received from other persons 1,444 961 Other revenues 66 295

1,977 1,728 7,229 5,560 183,980 190,138 7,229 5,560

2a. OtherincomeForeign exchange gains 165 842 Insurance recovery receivable relating to fire 50 Supplier contract termination settlement 5,300

5,465 892

3. ExpensesProfit before income tax includes the following specific expenses:

Net loss on disposal property, plant and equipment 50 78 Net foreign exchange losses 52

Depreciation Buildings 711 685 Plant and equipment 8,153 7,949

Total depreciation 8,864 8,634

Amortisation Leasehold improvements 75 163 Patents and trademarks 8 8 Supplier contract fee 312 Technical Service fee 208

Total amortisation 291 483

Finance costs Interest and finance charges paid/payable 77 62 Rental expense relating to operating lease payments 3,083 2,755 Research and development 255 194 Repairs and maintenance relating to investment properties 2 4 Bad debt expense 95 148 Superannuation contributions 2,707 2,541 35 32F

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4.IncometaxConsolidated Parent entity

2007 2006 2007 2006$’000 $’000 $’000 $’000

(a)IncometaxexpenseCurrent tax 5,755 6,480 32 43 Deferred tax ( 320) ( 414)Over provided in prior years ( 101) ( 67)

5,334 5,999 32 43

Income tax expense is attributable to:Profit from continuing operations 5,334 5,999 32 43

Deferred income tax revenue included in income tax expense comprises:Increase in deferred tax assets 131 ( 233)(Decrease) increase in deferred tax liabilities ( 451) ( 181)

( 320) ( 414)

(b) Numericalreconciliationofincometaxexpensetoprimafacietaxpayable

Profit from continuing operations before income tax expense 17,511 19,938 6,783 5,151

Tax at the Australian tax rate of 30% (2006 30%) 5,253 5,981 2,035 1,545 Tax effect of amounts which are not deductible (taxable) in calculating taxable income:

Depreciation and amortisation ( 7) ( 6)Rebateable dividends ( 2,003) ( 1,502)Research and development ( 23) ( 15)Capital gains/(losses) ( 156)Sundry items 270 99

5,493 5,903 32 43 Difference in overseas tax rates ( 58) 163 Over provision in prior years ( 101) ( 67)Incometaxexpense 5,334 5,999 32 43

(c)Taxconsolidationlegislation

National Can Industries Limited and its wholly-owned Australian controlled entities have implemented the tax consolidation legislation as of 1 July 2003. The accounting policy in relation to this legislation is set out in note 1(f).

On adoption of the tax consolidation legislation, the entities in the tax consolidated group entered into a tax sharing agreement which, in the opinion of the directors, limits the joint and several liability of the wholly-owned entities in the case of a default by the head entity, National Can Industries Limited.

The entities have also entered into a tax funding agreement under which the wholly-owned entities fully compensate National Can Industries Limited for any current tax payable assumed and are compensated by National Can Industries Limited for any current tax receivable and deferred tax assets relating to unused tax losses or unused tax credits that are transferred to National Can Industries Limited under the tax consolidation legislation. The funding amounts are determined by reference to the amounts recognised in the wholly-owned entities’ financial statements.

The amounts receivable/payable under the tax funding agreement are due upon receipt of the funding advice from the head entity, which is issued as soon as practicable after the end of each financial year. The head entity may also require payment of interim funding amounts to assist with its obligations to pay tax instalments. The funding amounts are recognised as current intercompany receivables or payables (see note 7).F

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5. DividendsConsolidated Parent entity

2007 2006 2007 2006$’000 $’000 $’000 $’000

OrdinarysharesFinal dividend for the year ended June 30, 20066.0 cents (2005 - 3.5 cents) per fully paid shareFully franked based on tax paid @30% 4,006 2,337

Interim dividend for the year ended June 30, 2007 4.0 cents (2006 - 4.0 cents) per fully paid share Fully franked based on tax paid @30% 2,671 2,671 Totaldividendsprovidedfororpaid 6,677 5,008

Paid in cash in the current year 6,677 5,008

Dividendsnotrecognisedatyearend

In addition to the above dividends, since the year end, the directors have declared a final dividend of 7 cents per fully paid ordinary share, fully franked based on tax paid at 30%. The aggregate amount of the proposed dividend expected to be paid on October 26, 2007 out of retained profits at June 30, 2007, but not recognised as a liability at year end is 4,674 4,006 FrankeddividendsFranking credits available for subsequent financial years based on a tax rate of 30% (2006 - 30%) 6,970 5,455 6,970 5,455

The above amount represents the balance of the franking account as at the end of the financial year, adjusted for:a. franking credits that will arise from the payment of the current tax liabilityb. franking debits that will arise from the payment of dividends recognised as liability at the reporting datec. franking credits that will arise from the receipt of dividends recognised as receivables at the reporting date, andd. franking credits that may be prevented from being distributed in subsequent financial years.The consolidated amounts include franking credits that would be available to the parent entity if distributable profits of controlled entities were paid as dividends.

6. Currentassets–Cashandcashequivalents

Consolidated Parent entity2007 2006 2007 2006

$’000 $’000 $’000 $’000Cash at bank and in hand 4,506 7,252 484 440 Deposits at call 23,788 20,896 Balances per cash flow statements 28,294 28,148 484 440

(a)CashatbankandonhandCash at bank is bearing floating interest rates of 2.8%. (2006 - 2.65%).

(b)DepositsatcallThe deposits are bearing floating interest rates of 5.97%. (2006 - 5.76%).

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7. Currentassets–Receivables

Consolidated Parent entity2007 2006 2007 2006

$’000 $’000 $’000 $’000Trade receivables 26,871 27,163 Provision for doubtful receivables ( 223) ( 272)

26,648 26,891 Receivable from controlled entities 5,518 5,518 Other receivables 737 299 2,380 3,187

27,385 27,190 7,898 8,705

(a)OtherreceivablesThese 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.

(b)EffectiveinterestratesandcreditriskInformation concerning the effective interest rate and credit risk of both current and non-current receivables is set out in the financial instruments note 21 b) & c)

8. Currentassets–InventoriesRaw materials and stores – cost 19,404 9,166 Raw materials and stores – NRV 253 436 Work in progress – cost 11,314 7,947 Work in progress – NRV 1,009 1,118 Finished goods – cost 4,785 4,753 Finished goods-NRV 1,223 903

37,988 24,323 InventoryexpenseWrite-backs of inventories previously written down to net realisable value recognised as income during the year ended 30 June 2007 amounted to $48,222 (2006 $121,365). This income was included in “raw materials and consumables used” in the income statement.

9. Currentassets–OtherPrepayments 648 743

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10a.Non-currentassets–Property,plantandequipment

Freehold land BuildingsLeasehold

improvementsPlant &

equipment

Plant & equipment

in course of construction

Total

Consolidated $’000 $’000 $’000 $’000 $’000 $’000At1July2005Cost 8,780 19,253 1,087 140,009 1,818 170,947 Accumulated depreciation ( 4,887) ( 648) ( 106,891) ( 112,426)Net book amount 8,780 14,366 439 33,118 1,818 58,521

Yearended30June2006Opening net book amount 8,780 14,366 439 33,118 1,818 58,521 Additions 601 27 3,446 6,458 10,532 Disposals ( 130) ( 130)Depreciation charge ( 670) ( 163) ( 7,949) ( 8,782)Exchange differences ( 166) ( 346) ( 8) ( 403) ( 29) ( 952)Closing net book amount 8,614 13,951 295 28,082 8,247 59,189

At30June2006Cost 8,614 19,365 976 133,575 8,247 170,777 Accumulated depreciation ( 5,414) ( 681) ( 105,493) ( 111,588)Net book amount 8,614 13,951 295 28,082 8,247 59,189

Yearended30June2007Opening net book amount 8,614 13,951 295 28,082 8,247 59,189 Additions 198 79 10,839 ( 739) 10,377 Disposals ( 132) ( 132)Depreciation charge ( 696) ( 75) ( 8,153) ( 8,924)Exchange differences 150 303 2 307 155 917 Closing net book amount 8,764 13,756 301 30,943 7,663 61,427

At30June2007Cost 8,764 19,966 1,072 143,677 7,663 181,142 Accumulated depreciation ( 6,210) ( 771) ( 112,734) ( 119,715)Net book amount 8,764 13,756 301 30,943 7,663 61,427

ValuationsforlandandbuildingsThe Directors obtained independent valuations of all land and buildings owned and used by the consolidated entity as at June 30, 2007. The independent valuations were carried out by the firm of property valuers, C.B. Richard Ellis, on the basis of fair value, being the amounts for which the assets could be exchanged between willing parties in an arm’s length transaction, based on current prices in an active market for similar properties in the same location and condition.

After due consideration of these independent valuations, the directors determined a valuation of $ 47.809 million for all land and buildings owned and used by the consolidated entity as at June 30, 2007.

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10b.Non-currentassets–Investmentproperties

ConsolidatedConsolidated $’000

At1July2005Cost 2,141Accumulated depreciation 166Net book amount 1,975

Yearended30June2006Opening net book amount 1,975Depreciation charge 15Closing net book amount 1,960

At30June2006Cost 2,141Accumulated depreciation 181Net book amount 1,960

Yearended30June2007Opening net book amount 1,960Depreciation charge 15Closing net book amount 1,945

At30June2007Cost 2,141Accumulated depreciation 196Net book amount 1,945

ValuationsforinvestmentpropertiesThe Directors obtained independent valuations of all investment properties owned by the consolidated entity as at June 30, 2007. The independent valuations were carried out by the firm of property valuers, C.B. Richard Ellis, on the basis of fair value, being the amounts for which the assets could be exchanged between willing parties in an arm’s length transaction, based on current prices in an active market for similar properties in the same location and condition.

After due consideration of these independent valuations, the directors determined a valuation of $4.890 million for all investment properties owned by the consolidated entity as at June 30, 2007.

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11. Non-currentassets–Intangibleassets

GoodwillPatents and trademarks

Total

Consolidated $’000 $’000 $’000

At1July2005Cost 9,933 140 10,073 Accumulated depreciation and impairment ( 8,473) ( 58) ( 8,531)Netbookamount 1,460 82 1,542

Yearended30June2006Opening net book amount 1,460 82 1,542 Additions 4 4 Amortisation charge * ( 8) ( 8)Exchange differences ( 32) ( 32)Closingnetbookamount 1,428 78 1,506

At30June2006Cost 9,824 144 9,968 Accumulated depreciation and impairment ( 8,396) ( 66) ( 8,462)Netbookamount 1,428 78 1,506

Yearended30June2007Opening net book amount 1,428 78 1,506 Additions 8 8 Amortisation charge * ( 8) ( 8)Exchange differences 29 29 Closingnetbookamount 1,457 78 1,535

At30June2007Cost 9,885 152 10,037 Accumulated depreciation and impairment ( 8,428) ( 74) ( 8,502)Netbookamount 1,457 78 1,535

* Amortisation of $7,585 (2006: $8,000) is included in depreciation and amortisation expense in the income statement.

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12. Non-currentassets–Deferredtaxassets

Consolidated Parent entity2007 2006 2007 2006

$’000 $’000 $’000 $’000Thebalancecomprisestemporarydifferencesattributableto:

Amounts recognised in profit and loss:Doubtful debts 69 85Employee benefits 3,074 2,591Provision for redundancy and relocation 11 20Provision for customer and employee claims 225Provision for audit fees 66 63 4 4Patents amortisation 53 39Workers compensation insurance accrual 40 21Fringe benefits tax accrual 14Inventory and engineering spares adjustments 370 583Capital losses 156 156Property, plant and equipment depreciation 619 530Net deferred tax assets 4,458 4,327 4 4

Movements:Opening balance at 1 July 4,327 4,560 4 4Credited/(charged) to the income statement (note 4) 131 ( 233)Closing balance at 30 June 4,458 4,327 4 4

13. Currentliabilities–PayablesTrade payables 12,153 5,925 17 23 Other payables 7,049 4,451 12

19,202 10,376 17 35

14. Currentliabilities–ProvisionsEmployee entitlements 8,660 7,115 Insurance recovery claims 750

8,660 7,865 InsurancerecoveryclaimsProvision is made for the estimated settlement costs of various claims made by workers’ compensation insurance authorities to recover accident payments.

Movements in this provision during the financial year is set out below:-Carrying amount at start of year 750Writeback unused provision balance ( 175)Payments/other sacrifices of economic benefits ( 575)Carrying amount at end of year 0 F

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15. Non-currentliabilities–Interestbearingliabilities

Consolidated Parent entity2007 2006 2007 2006

$’000 $’000 $’000 $’000The bank loans and overdraft are secured by a negative pledge that imposes certain covenants on the consolidated entity. The negative pledge states that (subject to certain exceptions) the consolidated entity will not provide any other security over its assets, and will ensure that certain financial ratios meet the required levels.As at June 30, 2007 the consolidated entity fully satisfied the requirements of the specified financial ratios.

FinancingarrangementsUnrestricted access was available at balance date to the following lines of credit:

BankoverdraftsTotal Facilities 1,073 1,075 Used at balance dateUnused at balance date 1,073 1,075

BankloanfacilitiesTotal facilities 20,527 19,717 Used at balance dateUnused at balance date 20,527 19,717

The bank overdraft facilities may be drawn at any time are payable on demand and are subject to an annual review. The bank loan facilities may be drawn at any time and have an average maturity of 2 years (2006 – 2 years).

The interest rates are 9.55% (2006 – 9.55%) on the overdraft and there are nil bank loans at June 30 2007.

16. Non-currentliabilities–DeferredtaxliabilitiesThe balance comprises temporary differences attributable to:

Amounts recognised in profit and loss:Depreciation 1,681 2,137 Patents and trademarks amortisation 24 23Accrued foreign exchange gains 1Prepaid rates and taxes 48 43

1,753 2,204 0 0Amounts recognised directly in equity:Post CGT revalued land and buildings 33 33Net deferred tax liabilities 1,786 2,237 0 0

Movements:Opening balance at 1 July 2,237 2,418 Credited/(charged) to the income statement (note 4) ( 451) ( 181)Closing balance at 30 June 1,786 2,237 0 0F

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17. Non-currentliabilities–Provisions

Consolidated Parent entity2007 2006 2007 2006

$’000 $’000 $’000 $’000Employee benefits 857 1,136 Decommissioning costs 150 150

1,007 1,286 DecommissioningcostsProvision is made for the estimated future decommissioning costs in respect of certain properties.

18. ContributedequityConsolidated and Parent entity

2007 2006 2007 2006‘000 ‘000 $000 $000

(a)SharecapitalOrdinary sharesFully Paid 66,774 66,774 33,699 33,699

(b)Movementsinordinarysharecapital: share Issue

Date Details number Price $’000 $’00030 June 2005 Opening balance 66,774 $0.50 33,699 33,69930 June 2006 Balance 66,774 $0.50 33,699 33,69930 June 2007 Balance 66,774 $0.50 33,699 33,699

(c)OrdinarysharesOrdinary shares entitle the holder to participate in dividends and the proceeds on winding up of the Parent entity in proportion to the number of and amounts paid on the shares held.

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19. ReservesandretainedprofitsConsolidated Parent entity

2007 2006 2007 2006$’000 $’000 $’000 $’000

(a)ReservesForeign currency translation reserve ( 704) ( 2,908)Capital profits reserve 6,839 6,837

6,135 3,929 0 0 Movements:Foreign currency translation reserve

Balance 1 July ( 2,908) ( 447)Currency translation differences arising during the year 2,204 ( 2,461)Balance 30 June ( 704) ( 2,908)

CapitalprofitsreserveOpening Balance 6,837 6,834 Transfer from retained profits 2 3 Closing Balance 6,839 6,837

(b)RetainedprofitsRetained profits at the beginning of the financial year 85,117 76,189 472 372 Net profit attributable to members of NCI 12,177 13,939 6,751 5,108 Transfer to capital reserve ( 2) ( 3)Dividends provided for or paid (Note 5) ( 6,677) ( 5,008) ( 6,677) ( 5,008)Retained profits at the end of the financial year 90,615 85,117 546 472

(c)Natureandpurposeofreserves

(i) Foreign currency translation reserveExchange differences arising on translation of the foreign controlled entities, PNG, Fiji and New Zealand are taken to the foreign currency translation reserve, as described in accounting policy note 1(d) Foreign Currency.

(ii) Capital Profits ReserveThe capital profits reserve is used to record capital gains realised from the sale of non-current assets. These gains are transferred from retained profits.

20.EarningspershareConsolidated

2007 2006Cents Cents

Basicearningspershare 18.2 20.9There are no differences between the basic, alternative and dilutive earnings per share as disclosed above.

2007 2006shares Shares

‘000 ‘000Weightedaveragenumberofsharesusedasthedenominatorincalculatingbasicearningspershare. 66,774 66,774

2007 2006$’000 $’000

ReconciliationofearningsusedincalculatingearningspershareNet profit 12,177 13,939Earnings used in calculating basic earnings per share 12,177 13,939

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21. FinancialInstruments(a)DerivativeinstrumentsNational Can Industries Ltd and certain of its controlled entities were parties to derivative financial instruments in the normal course of business in order to hedge exposure to fluctuations in foreign exchange rates and interest rate movements.

(b)CreditriskexposuresThe credit risk on financial assets of the consolidated entity which have been recognised on the statement of financial position, other than investments in shares, is generally the carrying amount, net of any provisions for doubtful debts.

(c)InterestrateriskexposuresThe consolidated entity’s exposure to interest rate risk and the effective weighted average interest rate by maturity period is set out in the following table. For interest rates applicable to each class of asset or liability, refer to individual notes in the financial statements. Exposures arise predominantly from assets and liabilities bearing variable interest rates as the consolidated entity intends to hold fixed rate assets and liabilities to maturity.

Floating interest rate

Non-interest bearing

Total

$’000 $’000 $’0002007Financial assetsCash and deposits (note 6) 28,294 28,294 receivables (note 7) 27,385 27,385

28,294 27,385 55,679 Weighted average interest rates 5.97%

Financial liabilitiesBank overdrafts and loans (note 15) 0 0 trade and other creditors (note 13) 19,202 19,202

0 19,202 19,202 net financial assets (liabilities) 28,294 8,183 36,477

2006 $’000 $’000 $’000Financial assetsCash and deposits (note 6) 28,148 28,148 Receivables (note 7) 27,190 27,190

28,148 27,190 55,338 Weighted average interest rates 5.76%

Financial LiabilitiesBank overdrafts and loans (note 15) 0 0 Trade and other creditors (note 13) 10,376 10,376

0 10,376 10,376 Net financial assets (liabilities) 28,148 16,814 44,962

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22.RemunerationofauditorsConsolidated Parent entity

2007 2006 2007 2006$ $ $ $

During the year the following services were paid to the auditor of the parent entity, its related practices and non-related audit firms.

(a)AssuranceservicesAudit servicesPricewaterhouseCoopers Australian firm:Audit and review of financial reports and other audit work under the Corporations Act 2001. 229,400 221,300 12,000 12,000 Related practices of PricewaterhouseCoopers Australian firm 14,556 12,133 Non-PricewaterhouseCoopers audit firms for the audit and review of financial reports of any entity in the consolidated entity 34,660 36,916 Total remuneration for audit services 278,616 270,349 12,000 12,000

Other audit servicesPricewaterhouseCoopers Australian firm: IFRS Accounting services 23,000 Total remuneration for assurance services 278,616 293,349 12,000 12,000

(b)TaxationservicesRelated practices of PricewaterhouseCoopers Australian firm 7,552 6,078 Non-PricewaterhouseCoopers firms 39,313 44,272 Total remuneration for taxation services 46,865 50,350

23.DeedofCrossGuaranteeNational Can Industries Limited, NCI Holdings Pty Ltd, National Can Australia Pty Ltd (formerly NCI Packaging Pty Ltd), NCI Specialty Metal Products Pty Ltd and NCI Diversified Products Pty Ltd (formerly Pacmetal Services Pty Ltd) are parties to a deed of cross guarantee under which each company guarantees the debts of the others. By entering the deed, the wholly-owned entities have been relieved from the requirement to prepare a financial report and directors’ report under Class Order 98/1418 (as amended by Class Orders 98/2017, 00/0321, 01/1087, 02/0248 and 02/1017) issued by the Australian Securities & Investments Commission.

(a)CondensedconsolidatedincomestatementandasummaryofmovementsinconsolidatedretainedprofitsThe above companies represent a “Closed Group” for the purposes of the Class Order, and as there are no other parties to the Deed of Cross Guarantee that are controlled by National Can Industries Limited, they also represent the “Extended Closed Group”.

Set out below is a condensed income statement and a summary of movements in consolidated retained profits for the year ended 30 June 2007 of the Closed Group consisting of National Can Industries Limited, NCI Holdings Pty Ltd, National Can Australia Pty Ltd (formerly NCI Packaging Pty Ltd), NCI Speciality Products Pty Ltd and NCI Diversified Products Pty Ltd (formerly Pacmetal Services Pty Ltd).

2007 2006

$’000 $’000Condensedincomestatement

Profitbeforeincometaxexpense 15,045 13,304 Income tax expense 4,236 3,540 Profitfortheyear 10,809 9,764

Summaryofmovementsinconsolidatedretainedprofits

Retainedprofitsatthebeginningofthefinancialyear 64,633 59,877 Profit for the year 10,809 9,764 Dividends provided for or paid ( 6,677) ( 5,008)Retainedprofitsattheendofthefinancialyear 68,765 64,633

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23.DeedofCrossGuarantee(cont.)(b)Condensedbalancesheet

Set out below is a consolidated balance sheet as at 30 June 2007 of the Closed Group consisting of National Can Industries Limited, NCI Holdings Pty Ltd, National Can Australia Pty Ltd (formerly NCI Packaging Pty Ltd), NCI Specialty Metal Products Pty Ltd and NCI Diversified Products Pty Ltd (formerly Pacmetal Services Pty Ltd).

Consolidated2007 2006

$’000 $’000CurrentassetsCash and cash equivalents 23,853 23,092 Receivables 21,188 22,276 Inventories 27,402 16,390 Other 338 442 Total current assets 72,781 62,200

Non-currentassetsInvestments in Subsidiaries 4,496 4,496 Investment properties 1,945 1,960 Property, plant and equipment 50,496 49,125 Deferred tax assets 2,913 3,099 Intangible assets 614 614 Total non-current assets 60,464 59,294

Totalassets 133,245 121,494

CurrentliabilitiesPayables 15,439 6,492 Current tax liabilities 2,412 3,230 Provisions 7,198 6,893 Total current liabilities 25,049 16,615

Non-currentliabilitiesDeferred tax liabilities 1,706 2,149 Provisions 862 1,164 Total non-current liabilities 2,568 3,313

Totalliabilities 27,617 19,928

Netassets 105,628 101,566

EquityContributed equity 33,699 33,699 Reserves 3,164 4,231 Retained profits 68,765 63,636 Totalequity 105,628 101,566

24. CommitmentsCapitalcommitmentsCapital expenditure contracted for at the reporting date but not recognised as liabilities is as follows:

Payable no later than one year 3,375 5,373

LeaseCommitmentsCommitment in relation to leases contracted for at the reporting dates but not recognised as liabilities, payable:

Within one year 2,872 2,649 Later than one year and not later than five years 6,247 6,001 Later than five years 306 1,020 Representing non-cancellable operating leases 9,425 9,670

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25.EmployeeentitlementsConsolidated Parent entity

2007 2006 2007 2006$’000 $’000 $’000 $’000

ProvisionforemployeeentitlementsCurrent (note 14) 8,660 7,115 Non-current (note 17) 857 1,136 Aggregate employee entitlement liability 9,517 8,251

26.Relatedpartytransactions(a)ParententitiesNational Can Industries Ltd is the ultimate parent entity.

(b)SubsidiariesInterests in subsidiaries are set out in note 27

(c)KeymanagementpersonnelDisclosures relating to key management personnel are set out in remuneration report of the directors report.

(d)TransactionswithrelatedpartiesThe following transactions occurred with related parties:

Consolidated Parent entity2007 2006 2007 2006

$ $ $ $Dividend revenue

Subsidiaries 6,677,356 5,008,075

Tax consolidation legislationCurrent tax payable assumed from wholly-owned tax consolidated entities

2,380,398 3,187,616

Other transactionsRemuneration paid to directors of the ultimate parent entity 314,627 295,000 314,627 295,000Contributions to superannuation funds on behalf of employees 2,706,896 2,541,182 34,609 32,450

(e)Outstandingbalancesarisingfromsales/purchasesofgoodsandservicesThe following balances are outstanding at the reporting date in relation to transactions with related parties:Current receivables (tax funding agreement)

Wholly-owned tax consolidated entities 2,380,398 3,187,616

No provisions for doubtful debts have been raised in relation to any outstanding balances, and no expense has been recognised in respect of bad or doubtful debts due from related parties.

(f)Loansto/fromrelatedpartiesLoans to subsidiaries

Beginning of the year 5,518,000 5,518,000Interest charged 551,810 551,810Interest received ( 551,810) ( 551,810)End of the year 5,518,000 5,518,000

No provisions for doubtful debts have been raised in relation to any outstanding balances, and no expense has been recognised in respect of bad or doubtful debts due from related parties.(g)TermsandconditionsThe terms and conditions of the tax agreement are set in note 4(c)All other transactions were made on normal commercial terms and conditions and at market rates, except that there are no fixed terms for the repayment of loans between parties. Outstanding balances are unsecured and are repayable in cash.

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27. InvestmentsincontrolledentitiesCouNTry oF

INCorPPareNT eNTITy BeNeFICIaL

INTeresT %2007 2006

NCI Holdings Pty Ltd * Aust. 100 100National Can Australia Pty Ltd (formerly NCI Packaging Pty Ltd) Aust. 100 100NCI Specialty Metal Products Pty Ltd Aust. 100 100NCI Diversified Products Pty Ltd (formerly Pacmetal Services Pty Ltd) Aust. 100 100NCI (N.Z.) Limited NZ 100 100NCI Packaging (N.Z.) Limited NZ 100 100NCI Packaging (PNG) Ltd PNG 100 100

* Part of the business is carried on in Fiji

NCI Holdings Pty Ltd owns 100% of the issued ordinary shares of all the controlled Australian entities and 100% of the issued ordinary and redeemable preference shares of NCI (N.Z.) Limited which in turn owns 99.2% of the issued ordinary shares of NCI Packaging (N.Z.) Limited. NCI Holdings Pty Ltd owns the remaining 0.8% of shares in NCI Packaging (NZ) Ltd. NCI Holdings Pty Ltd also owns 100% of the issued ordinary shares of NCI Packaging (PNG) Ltd.

28.Segmentinformation

Primary reporting – geographical segments australia New ZealandPapua New

Guinea Fiji

unallocated/ Intersegment elimination’s Consolidated

$’000 $’000 $’000 $’000 $’000 $’0002007sales to customers outside the consolidated entity 133,307 42,876 4,477 1,343 182,003 intersegment sales 4,851 2,583 19 1 ( 7,454) - total sales revenue 138,158 45,459 4,496 1,344 ( 7,454) 182,003 other revenue 7,136 202 84 20 7,442 total segment revenue 145,294 45,661 4,580 1,364 ( 7,454) 189,445 segment result 14,402 1,622 1,257 270 37 17,588

Unallocated revenue less expenses ( 77)income tax expense ( 5,334)net profit after tax 12,177 segment assets 125,899 29,716 3,957 940 ( 648) 159,864 Unallocated assets 4,458 total assets 164,322 segment liabilities 23,501 5,473 501 42 ( 648) 28,869 Unallocated liabilities 5,004 total liabilities 33,873 acquisitions of property,plant and equipment,intangibles and other non current assets 8,506 1,679 189 3 10,377 depreciation and amortisation expense 7,076 1,980 84 15 9,155 other non - cash items 42 ( 84) 36 1 ( 5)

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28.Segmentinformation(cont.)

Primary reporting – geographical segments australia New ZealandPapua New

Guinea Fiji

unallocated/ Intersegment elimination’s Consolidated

2006Sales to customers outside the consolidated entity 140,871 41,238 4,880 1,421 188,410 Intersegment sales 2,155 799 ( 2,954) - Total sales revenue 143,026 42,037 4,880 1,421 ( 2,954) 188,410 Other revenue 1,441 1,078 101 2,620 Total segment revenue 144,467 43,115 4,981 1,421 ( 2,954) 191,030 Segment result 12,460 5,360 1,692 286 202 20,000

Unallocated revenue less expenses ( 62)Income tax expense ( 5,999)Net profit after tax 13,939 Segment assets 113,898 25,993 4,084 766 ( 910) 143,831 Unallocated assets 4,327 Total assets 148,158 Segment liabilities 14,548 5,402 459 28 ( 910) 19,527 Unallocated liabilities 5,886 Total liabilities 25,413 Acquisitions of property,plant and equipment,intangibles and other non current assets 8,379 2,665 264 11,308 Depreciation and amortisation expense 7,404 1,624 73 16 9,117 Other non - cash items 55 30 ( 12) 73

GeographicalSegmentsThe consolidated entity operates in four geographical segments – Australia, New Zealand, Papua New Guinea and Fiji. Intersegment transactions are conducted on an arms length basis.SecondaryReportingThe consolidated entity operations are predominantly in packaging material processing and packaging manufacture which represents a single industry.

29. Reconciliationofnetcashflowsfromoperatingactivitiestooperatingprofitafterincometax

Consolidated Parent entity2007 2006 2007 2006

$’000 ‘000 $’000 ‘000Operatingprofitafterincometax 12,177 13,939 6,751 5,108 Depreciation and amortisation 9,155 9,117 Amounts credited to sundry provisions ( 5) 73 Net (gain) loss on sale of non-current assets 50 78 Net exchange differences 1,123 ( 1,441)Change in operating assets and liabilities net of effect of acquisition of entities:(Increase) decrease in future tax benefits ( 131) 233 (Decrease) increase in deferred tax payable ( 451) ( 181)(Decrease) Increase in income tax payable ( 431) 2,035 ( 819) 1,733 (Increase) decrease in trade debtors and other receivable ( 146) 1,644 807 ( 1,749)(Increase) decrease in deferred costs ( 772)(Increase) decrease in prepayments 95 ( 421)(Increase) decrease in inventories ( 13,665) 14,874 (Decrease) increase in trade and other creditors and employee entitlements 9,342 1,666 ( 18) 11 Netcashinflowsfromoperatingactivities 17,113 40,844 6,721 5,103

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30.KeymanagementpersonneldisclosuresDirectorsThe following persons were directors of National Can Industries Limited during the financial year:

Chairman–non-executive

E B Noxon

Executivedirector

M W Tyrrell, Managing Director

Non-executivedirectors

J M Bertei (from 1 July 2006 – 29 March 2007)

R K Horsburgh (from 23 November 2006)

T X O’Brien

R G Pitcher

OtherkeymanagementpersonnelThe following persons also had authority and responsibility for planning, directing and controlling the activitives of the consolidated entity, directly or indirectly, during the financial year.

Name Position Employer

J Harrigan Sales Manager – Australia NCI Holdings Pty Ltd

J McCormack Operations Manager NCI Packaging (NZ) Ltd

M McDonald General Manager – Administration & Finance NCI Holdings Pty Ltd

M Robins General Manager – Business Breakthrough NCI Holdings Pty Ltd

All of the above persons were also key management persons during the year ended 30 June 2006.

Keymanagementpersonnelcompensation

Consolidated Parent entity2007 2006 2007 2006

$ $ $ $Short-term employee benefits 1,347,234 1,499,235 314,627 295,000Post-employment benefits 150,106 125,633 34,609 32,450

Long-term benefits 18,569 26,825

Total 1,515,909 1,651,693 349,236 327,450

The company has taken advantage of the relief provided by ASIC Class Order 06/50 and has transferred the detailed remuneration disclosures to the directors’ report. The relevant information can be found in section A-C of the remuneration report on pages 8 to 10.

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30.Keymanagementpersonneldisclosures(cont.)Equityinstrumentdisclosuresrelatingtokeymanagementpersonnel

ShareholdingsThe number of shares in the company held during the financial year by each director of NATIONAL CAN INDUSTRIES LIMITED and other key management personnel of the consolidated entity, including their personally-related entities, are set out below. There were no shares granted during the reporting period as compensation.

2007

name

BaLaNCe aT The sTarT oF The year

reCeIved durING The year oN exerCIse oF

oPTIoNs

oTher ChaNGes durING The year

BaLaNCe aT The eNd oF The year

Directors of National Can Industries Limited

Ordinary shares

J. M. Bertei - - - -

r. K. Horsburgh - - 11,220 11,220

e.B. noxon 40,000 - - 40,000

t.X. o’Brien 40,000 - 8,500 48,500

r.G. Pitcher - - - -

M. W. tyrrell 33,518,906 - 20,000 33,538,906

Other key management personnel of the consolidated entity

Ordinary shares

M. Mcdonald 20,000 - - 20,000

J. McCormack - - - -

M. robins 4,000 - - 4,000

J. Harrigan - - - -

2006

NameBaLaNCe aT The

sTarT oF The year

reCeIved durING The year oN exerCIse oF

oPTIoNsoTher ChaNGes

durING The yearBaLaNCe aT The eNd oF The year

directors of National Can Industries Limited

ordinary shares

J. M. Bertei - - - -

E.B. Noxon - - 40,000 40,000

T.X. O’Brien - - 40,000 40,000

R.G. Pitcher - - - -

M. W. Tyrrell 33,518,906 - - 33,518,906

other key management personnel of the consolidated entity

ordinary shares

M. McDonald 20,000 - - 20,000

J. McCormack - - - -

M. Robins 4,000 - - 4,000

J. Harrigan - - - -

OthertransactionswithkeymanagementpersonnelA director, Mr. M W Tyrrell, is a director and shareholder in Tyrrell (1984) Nominees Pty Ltd. A subsidiary of National Can Industries Limited leases a factory from Tyrrell (1984) Nominees Pty Ltd. The lease is based on normal commercial terms and conditions.

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In the directors’ opinion:

(a) the financial statements and notes set out on pages 17 to 43 are in accordance with the Corporations Act 2001, including:

(i) complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements; and

(ii) giving a true and fair view of the company’s and consolidated entity’s financial position as at 30 June 2007 and of their performance for the financial year ended on that date; and

(b) there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable; and

(c) the audited remuneration disclosures set out in of the directors’ report on pages 8 to 10 comply with Accounting Standards AASB 124 Related Party Disclosures and the Corporations Regulations 2001; and

(d) at the date of this declaration, there are reasonable grounds to believe that the members of the Extended Closed Group identified in note 23 will be able to meet any obligations or liabilities to which they are, or may become, subject by virtue of the deed of cross guarantee described in note 23.

The directors have been given the declarations by the chief executive officer and chief financial officer required by section 295A of the Corporations Act 2001.

This declaration is made in accordance with a resolution of the directors.

BrianNoxonChairman

MichaelTyrrellManaging Director

MelbourneSeptember 7, 2007

Directors’ DeclaratioN

Independentauditor’sreporttothemembersofNationalCanIndustriesLimited

Report on the financial report and the AASB 124Remuneration disclosures contained in the directors’report

We have audited the accompanying financial report of National Can Industries Limited (the company), which comprises the balance sheets as at 30 June 2007, and the income statements, statements of changes in equity and cash flow statements for the year ended on that date, a summary of significant accounting policies, other explanatory notes and the directors’ declaration for the National Can Industries Limited Group. The consolidated entity comprises the company and the entities it controlled at the year’s end.

We have also audited the remuneration disclosures contained in the directors’ report. As permitted by the Corporations Regulations 2001, the company has disclosed information about the remuneration of directors and executives (remuneration disclosures), required by Accounting Standard AASB 124 Related Party Disclosures, under the heading

“remuneration report” in the directors’ report on pages 8 to 10 and not in the financial report.

Directors’responsibilityforthefinancialreportandtheAASB124Remunerationdisclosurescontainedinthedirectors’report

The directors of the company are responsible for the preparation and fair presentation of the financial report in accordance with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Act 2001. This responsibility includes establishing and maintaining internal control relevant to the preparation and fair presentation of the financial report that is free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. In Note 1, the directors also state, in accordance with Accounting Standard AASB 101 Presentation of Financial Statements, that compliance with the Australian equivalents to International Financial Reporting Standards ensures that the financial report, comprising the financial statements and notes, complies with International Financial Reporting Standards.

The directors of the company are also responsible for the remuneration disclosures contained in the directors’ report.

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iNDepeNDeNt auDit report

Auditor’sresponsibility

Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. These Auditing Standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance whether the financial report is free from material misstatement. Our responsibility is to also express an opinion on the remuneration disclosures contained in the directors’ report based on our audit.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report and the remuneration disclosures contained in the directors’ report. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial report and the remuneration disclosures contained in the directors’ report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial report and the remuneration disclosures contained in the directors’ report in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial report and the remuneration disclosures contained in the directors’ report.

Our procedures include reading the other information in the Annual Report to determine whether it contains any material inconsistencies with the financial report.

For further explanation of an audit, visit our website http://www.pwc.com/au/financialstatementaudit.

Our audit did not involve an analysis of the prudence of business decisions made by directors or management.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

IndependenceIn conducting our audit, we have complied with the independence requirements of the Corporations Act 2001.

Auditor’sopiniononthefinancialreport

In our opinion:

(a) the financial report of National Can Industries Limited is in accordance with the Corporations Act 2001, including:

(i) giving a true and fair view of the company’s and consolidated entity’s financial position as at 30 June 2007 and of their performance for the year ended on that date; and

(ii) complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Regulations 2001; and

(b) the consolidated financial statements and notes also comply with International Financial Reporting Standards as disclosed in Note 1.

Auditor’s opinion on the AASB 124 Remunerationdisclosurescontainedinthedirectors’report

In our opinion, the remuneration disclosures that are contained in the directors’ report on pages 8 to 10 comply with Accounting Standard AASB 124.

PricewaterhouseCoopers

John O’Donoghue

Partner

PricewaterhouseCoopers

September 7, 2007

Melbourne

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ShareholdingsVoting rightsOn a show of hands, one vote for every registered holder and on a poll, one vote for each share held by registered holders.

issued CapitalThe company’s issued capital at August 31, 2007 consisted of 66,773,572 ordinary shares (2006: 66,773,572)

distribution of shareholdings at august 31, 2007

Range No. of Shareholders No. of Shares1 – 1,000 80 48,619

1,001 – 5,000 270 763,9715,001 – 10,000 100 780,376

10,001 – 100,000 98 2,633,650100,001 and over 24 62,546,956

Total 572 66,773,572

Number of holders of a less than marketable parcel: 14 1,724

notification of substantial shareholdings

No. of Shares %

Tyrrell Investments Pty Ltd and related corporations and associates 33,993,451 50.91

Visy Industrial Packaging Holdings Pty Ltd 8,160,493 12.22

Perpetual Trustees Australia Ltd 6,744,131 10.10

Hunter Hall Investment Management Ltd 5,845,454 8.75

Top 20 ordinary shareholders (August 31, 2007)No. of Shares %

Tyrrell Investments Pty Limited 28,192,650 42.22

Citicorp Nominees Pty Limited 6,300,543 9.44

Tyrrell (1984) Nominees Pty Ltd 5,081,296 7.61

RBC Dexia Investor Services Australia Nominees Pty Limited (PIPOOLED a/c) 4,753,299 7.12

Invia Custodian Pty Limited (yELLOW a/c) 4,159,776 6.23

Salvage Pty Ltd 4,000,717 5.99

Mr Keith Barsby Preen & Mr Barnaby Ryder Greatrex 2,019,238 3.02

O’Halloran Investments Pty Limited 1,901,673 2.85

Mr Alan John Pitman 910,655 1.36

RBC Dexia Investor Services Australia Nominees Pty Limited (PIIC a/c) 703,906 1.05

Citicorp Nominees Pty Limited (CFSIL CWLTH AUST SHS 4 a/c) 659,874 0.99

Cogent Nominees Pty. Ltd. 627,052 0.94

Munitus Pty (H G & A G Stevens a/c) 563,868 0.84

Mrs Patricia Thomas 531,000 0.80

Mr Ian Alexander 389,307 0.58

Mrs Kathleen Patricia Tyrrell 343,613 0.51

Mr Michael Tyrrell 264,960 0.40

Geminder Holdings 250,000 0.37

National Nominees Ltd 200,009 0.30

Atkins Consulting Group 200,000 0.30

62,053,436 92.92

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ShareholderEnquiries

Shareholders with enquiries about their shareholdings should contact the company’s share registry, Computershare Investor Services Pty. Ltd.

Contact details are set out below.

Computershare Investor Services Pty. Ltd. yarra Falls, 452 Johnston Street Abbotsford VIC 3067 P.O. Box 103 Abbotsford VIC 3067

InvestorEnquiries(within Australia): 1300 850 505 Outside Australia: (613) 9415 4000 Facsimile: (613) 9473 2500 Email web.queries@computershare.com.au Website: www.computershare.com

ChangeofAddress

Shareholders should notify the share registry in writing, immediately upon any change in their registered address.

RemovalfromtheAnnualReportmailinglist

Shareholders who do not want to receive an Annual Report, or who are receiving more than one copy, should advise the share registry in writing. These shareholders will continue to receive all other shareholder information.

ConsolidationofShareholdings

Shareholders who wish to consolidate their separate shareholdings into one account should advise the share registry in writing.

TaxFileNumber

Shareholders wishing to record their tax file number or exemption details in relation to their shareholding in NCI should advise the share registry by telephone or in writing.

Dividends

Dividends may be paid directly to any Australian bank, building society or credit union that participates in the direct debit system. Payments are electronically credited on the dividend date and confirmed by mailed payment advice. Shareholders who want their dividends to be paid in this way should advise the share registry in writing.

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NCINCI Head Officewww.nci-ltd.com

Clifton Hill, 24 Groom Street Ph. (03) 9276 9600 info@nci-ltd.com

Packaging

NCI

NCI Packagingwww.nci-packaging.cominfo@nci-packaging.com

Victoria

Preston, 90–92 Chifley Drive Ph. (03) 9290 6800

Tullamarine, 76–80 Lambeck Drive Ph. (03) 9335 6155

Bayswater, 31–35 Burgess Road Ph. (03) 9729 7933

The Packaging Shop Northcote, 219 Separation Street Ph. (03) 9488 9200

New South Wales

Thornleigh, Whitcroft Place Ph. (02) 9910 8500

Queensland

Rocklea, 51 Reginald Street Ph. (07) 3277 4377

South Australia

Gepps Cross, 15–17 Waldaree Street Ph. (08) 8359 5656

Western Australia

Welshpool, 286 Treasure Road Ph. (08) 9358 5723

New Zealand

Avondale, 320 Rosebank Road Ph. (+649) 914 9444

Panmure, 80 Mt Wellington Highway Ph. (+649) 914 9444

Upper Hutt 62–66 Montgomery Crescent Ph. (+649) 914 9444

Papua New Guinea

Lae, Taraka, Orion Road, Morobe Province Ph. (+675) 475 7110

Fiji

Lami Suva, Lot 18 Wailada Industrial Estate Ph. (+679) 362 944

Services

Pacmetal

Pacmetal Serviceswww.pacmetal-services.comservice@pacmetal-services.com

Victoria

Northcote, 225 Separation Street

Ph. (03) 9488 9201

New South Wales

Glendenning, 194 Power Street Ph. (02) 9208 6800

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• Kiem HuynH • Kim HuynH • melanie HuynH • Su Ha HuynH • Tam De HuynH • afereTi iaKopo • aSofa iaKopo • JoHn iaKopo • aivale ieSe • irene ieva • GiaTuru iGa • DapHne iHaKa • DaviD iKiua • enTama iKiua • Goran ilic • Suzana ilic • emanuele inivale • Daniel iSaac • peTer iwaSiw • marlene JacKSon • ruSSell JacobS • laKmana JayaSinGHe • Karen Jeffery • veSna JevTic • aDam Jewell • micHael JoHnSon • eDDie JoneS • JaSon JoneS • marGareT JoneS • merv JoneS • rob JoneS • SureSH JoSHi • miTKo JoSifovSKi • cviJeTa Jovanovic • mara JovcevSKa • alex JovcevSKi • Goran JovcevSKi • micHael Juain • cHriSTian JuDan • Daniela KaJmaKoSKa • Kellie KalopiTa • pHilip Kamo • benSon Kane • calvin Kane • balDev KanG • manJeeT KanG • Sione KaToa • yaTenG KaTum • TeiTilani KaufuSi • vicTor KauGa • milly KauKau • STan Keeble • Darren Keenan • cHmoune KelaDa • Dave Kelly • GreGory Kelly • Kenny KemeS • cameron KenneDy • SenGa KenzoK • micHael KerSHaw • pHilip Kewv • moHammeD KHan • JoHn KHouDair • roSe KHouDair • 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• micHael Tyrrell • Simon ulaSe • anKica uroDa • marK uTaTao • faiva vailelo • mino vaivao • moKa vaKe • SemiSi vaKe • SeaD vaTric • maria veGa • ruza velicKovSKa • JoHn verSace • fianu viliami • anTonio viliamu • SilovaTe viyalaiwai • arGirioS vouTHaS • lorraine vrienDS • boziDarKa vuJicic • zora vuJicic • JuDy vuna • anDrew waHuKuma • Daniel walmSley • JoHn walTerS • KenneTH wane • cHriS ware • SHane warren • brammel warrin • eDwin warrin • Jim warupi • SozinG wawarie • clauDe wecKe • Kevin weST • maryann weST • miTcHell weTTon • JameS wewa • Te aTamira wHarTon • Dulcie wHiTe • Jeff wHiTfielD • bruce wHiTman • niu wHiTman • DaviD wHiTTaKer • aileen wHyaTT • ruSSel wicKramaSinGHe • liz wiHonGi • JeDDa wilKinSon • Ken wilKinSon • KenT wilKinSon • Suzanne wilKinSon • Darrell williamS • Geoff williamS • Jamie williamS • Ken williamS • loSaline williamS • Debra wilSon • micHael win • yicK wonG • maria wooD • pHilip wooD • alan worSman • aSHley wriGHT • cHriS xuereb • Helen yan • winDSor yanG • SHamiran youKHana • anna younG • luKa yowar • Jenny yu • Sam zaaTiTi • JoHn zammiT • STeven zampaGlione • weDracKi zbiGniew • Karl zurrer •

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