BUILDING STRENGTH AND PERFORMANCE

ANNUAL REPORT 2004 INTRODUCTION FLETCHER BUILDING IS A BROADLY-BASED BUILDING MATERIALS GROUP WITH OPERATIONS PRINCIPALLY IN NEW ZEALAND, AUSTRALIA AND THE PACIFIC. OUR DIVERSE GEOGRAPHICAL AND INDUSTRY BASE IS A SOLID PLATFORM ANNUAL REPORT 2004 FOR PERFORMANCE AND GROWTH. 02 Highlights 04 Chairman’s Report 07 Chief Executive’s Report

13 Concrete With a range of market leadership positions in manufacturing and distribution, we generate good returns through the value 18 Distribution chain. We seek to align the interests of our customers, shareholders, employees and communities so that each benefi ts from 22 Laminates & Panels the company’s success. 29 Construction We aim to produce reliable earnings over the long term, irrespective of economic and industry cycles. Our near-term priorities 35 Building Products centre on growth from internal investment to improve performance and unlock capacity constraints, and on ensuring we have 40 Sustainability Review the fi nancial capacity for profi table growth by acquisition when opportunities arise. 48 Board of Directors 52 Corporate Governance 64 Financial Review 01 68 Financial Statements Success requires alignment of opportunity, preparation and performance. Our opportunity comes from market 128 Audit Report leadership and growth. Our preparation is the constant upgrading of knowledge, skills, attitudes and physical assets. 130 Trend Statement Performance – our primary focus – results only from delivering valued outcomes to our customers. 132 Regulatory Disclosures 148 Investor Information 150 Directory

GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER < back next > HIGHLIGHTS RECORD EARNINGS DRIVEN BY STRONG DEMAND THROUGHOUT THE YEAR, BENEFITS FROM ACQUISITIONS AND ONGOING PRODUCTIVITY IMPROVEMENTS

Net profi t after tax and minority interests rose 43 percent to $240 million Operating earnings were up 39 percent to $460 million, with all divisions increasing for the third successive year ANNUAL REPORT 2004 Earnings growth was assisted by a full year’s contribution from the Laminex business and nine months from Tasman Building Products 02 Highlights Cashfl ow from operations rose from $276 million to $424 million 04 Chairman’s Report Economic value added was $139 million 07 Chief Executive’s Report The total dividend was up from 19 to 25 cents per share with tax credits 13 Concrete Total shareholder return for the year was 33 percent 18 Distribution Return on average funds employed was up from 24.4 to 24.7 percent. 22 Laminates & Panels 29 Construction 35 Building Products 40 Sustainability Review 48 Board of Directors 52 Corporate Governance HIGHLIGHTS 64 Financial Review % % $M 02 68 Financial Statements 150 25 300

20 200 128 Audit Report 120 15 100 90 10 130 Trend Statement 0 60 5 –100 132 Regulatory Disclosures 0 30 148 Investor Information –5 –200 0 –10 –300 150 Directory 01 02 03 04 01 02 03 04 01 02 03 04 CUMULATIVE TOTAL SHAREHOLDER RETURN RETURN ON AVERAGE FUNDS NET EARNINGS GO DIRECTLY TO A SECTION OF THE

REPORT BY CLICKING ON THE NUMBER DIVIDEND SHARE PRICE APPRECIATION < back next > HIGHLIGHTS A RANGE OF INITIATIVES TO BROADEN THE OPERATING BASE OF THE COMPANY AND BUILD THE PLATFORM FOR CONTINUING PERFORMANCE

The acquisition of Tasman Building Products increased the proportion of revenue from Australia to 22 percent for the 2004 year The integration of Laminex and the New Zealand wood panels businesses was completed, delivering signifi cant savings The fi rst stage of a major upgrade to the Golden Bay Cement plant was commissioned

ANNUAL REPORT 2004 The fi rst stage of a major PlaceMakers store refurbishment programme was commenced A record construction work backlog secured

02 Highlights A range of opportunities were identifi ed to create value through capital investment within the company 04 Chairman’s Report A number of training and development programmes were launched to match employees’ personal aspirations with the company’s 07 Chief Executive’s Report need for knowledge and skills 13 Concrete Health and safety awareness was lifted across the company, along with a drive for further improvement in performance. 18 Distribution 22 Laminates & Panels STRONG PERFORMANCE LIKELY TO CONTINUE 29 Construction 35 Building Products Any softening in residential building markets should be largely offset by stronger non-residential building and infrastructure work 40 Sustainability Review Earnings are expected to be similar to the record level achieved in the 2004 year. 48 Board of Directors 52 Corporate Governance 64 Financial Review $M ¢PS ¢PS 03 68 Financial Statements 500 25 75

400 50 128 Audit Report 20 25 300 130 Trend Statement 15 0 200 10 -25 100 132 Regulatory Disclosures -50 5 148 Investor Information 0 -75 -100 0 -100 150 Directory 01 02 03 04 01 02 03 04 01 02 03 04 OPERATING EARNINGS (EBIT) DIVIDENDS EARNINGS PER SHARE GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER < back next > ANNUAL REPORT 2004 CHAIRMAN’S REPORT 02 Highlights 04 Chairman’s Report 07 Chief Executive’s Report Fletcher Building has enjoyed another good year, in which opportunity 13 Concrete 18 Distribution and endeavour converged to produce success. The board’s primary focus 22 Laminates & Panels is on ensuring that the elements of good performance remain in alignment. 29 Construction 35 Building Products Results Dividend 40 Sustainability Review The company has again produced a record result. The improvement in earnings has yet again enabled 48 Board of Directors Net profi t after taxation was $240 million – an directors to declare an increased dividend. The fi nal 52 Corporate Governance increase of 43 percent on the previous year’s dividend for the year, of 14 cents per share, refl ects 64 Financial Review $168 million. the company’s fi fth consecutive dividend increase in the little over three years since Fletcher Building 04 68 Financial Statements We have made further progress on strategies to became a stand-alone company. Along with the 128 Audit Report increase the reliability of earnings over the long interim dividend of 11 cents per share, it increases 130 Trend Statement term, and we are well placed to do so again in the full year dividend to 25 cents, compared to 132 Regulatory Disclosures the current year. 19 cents in the previous year. New Zealand and 148 Investor Information Australian tax credits are attached to the dividend 150 Directory to improve shareholder returns.

GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER < back next > CHAIRMAN’S REPORT Acquisitions Governance The makeup of the company has changed The board continues to operate in an effective substantially over the past two years – fi rstly and collegial manner, and benefi ts from the blend through the acquisition of Laminex, a predominantly of skills, experience and knowledge of the business Australian-based business which was acquired in contributed by all directors. There have been no November 2002; and then through the purchase changes to the composition of the board this year. on 30 September 2003 of the Tasman Building In addition to the normal board schedule, directors ANNUAL REPORT 2004 Products group of businesses, which also have a substantial Australian presence. The 2004 fi nancial visited all major operations in the South Island and year was the fi rst full year of Laminex ownership. completed a range of site visits in Australia and 02 Highlights Auckland. The board also attended the annual two 04 Chairman’s Report Both of these purchases have been successful. day strategy review with management. 07 Chief Executive’s Report The integration of Laminex with our existing panel The company’s corporate governance practices 13 Concrete businesses is now complete. Substantial synergies are now disclosed fully on our website. A summary 18 Distribution have been realised and earnings arising from of these is included in the corporate governance 22 Laminates & Panels this signifi cant acquisition have exceeded our expectations at the time the decision was made section of this report. As required by the Australian 29 Construction to acquire the business. Tasman Building Products’ Stock Exchange, we highlight in that part of the 35 Building Products excellent nine months’ contribution has been a key report any variances from its best practice guidelines. 40 Sustainability Review factor in the 61 percent improvement in operational 48 Board of Directors Apart from a modest $2,500 increase last year, earnings from the Building Products division. 52 Corporate Governance directors’ base fees have not changed since the company listed in March 2001. Fletcher Building’s 64 Financial Review These are excellent acquisitions from a strategic directors are not entitled to retirement allowances, 05 68 Financial Statements perspective, bringing leading market positions and even though most Australasian companies 128 Audit Report strong management while lessening our reliance historically have provided them. In line with new 130 Trend Statement on the New Zealand market. Fletcher Building is fi nancially positioned to undertake other similar corporate governance guidelines recommending 132 Regulatory Disclosures acquisitions should the opportunity arise and against retirement allowances, these are increasingly 148 Investor Information the case for doing so be compelling. being abolished and replaced by a commensurate 150 Directory increase in directors’ annual fees.

GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER < back next > CHAIRMAN’S REPORT Fletcher Building sought external professional Outlook advice on current market remuneration for directors Your directors, like many economic forecasters, on the basis that there would be no retirement have been expecting a slowdown in activity. allowances payable. This confi rmed that our levels of To the end of our 2004 fi nancial year this had remuneration were substantially behind the average not eventuated. Recently, residential consents for companies of our size. The board has thus decided have slowed in New Zealand and Australia while to move, over a two-year period, to close this gap. net migration has slowed in New Zealand, so we do This will result in a director’s base fee moving to ANNUAL REPORT 2004 expect residential housing demand to ease in 2005. $70,000 per year from 1 July 2004 and $80,000 Countering this, the non-residential construction from 1 July 2005. The chairman’s fee will remain outlook remains sound. When coupled with the 02 Highlights at three times the base fee. Small adjustments will company’s now broader spread of activities, this 04 Chairman’s Report also be effected to committee fees. At the proposed leads the board to expect another good year for 07 Chief Executive’s Report levels, total directors’ remuneration for the 2005 the company, with earnings maintained at around 13 Concrete and 2006 years will remain within the existing the record levels achieved this year. 18 Distribution approval limits. 22 Laminates & Panels Appreciation 29 Construction Roderick Deane Chairman 35 Building Products In just over three years as a stand-alone company, 40 Sustainability Review Fletcher Building has averaged over 30 percent 48 Board of Directors per year total shareholder return and has moved 52 Corporate Governance from being outside New Zealand’s top 15 companies by market capitalisation to inside the top fi ve. 64 Financial Review In November 2003 the company had the distinction 06 68 Financial Statements of being named the Deloitte – Management Magazine 128 Audit Report New Zealand Company of the Year. While the 130 Trend Statement company does have strong market positions, these 132 Regulatory Disclosures achievements are in no small way a refl ection of the 148 Investor Information breadth and depth of excellent management across 150 Directory the group. The company is also extremely well served by all of its employees, and we particularly value GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER the loyalty of our large and diverse customer base. < back next > ANNUAL REPORT 2004

02 Highlights CHIEF EXECUTIVE’S REPORT 04 Chairman’s Report 07 Chief Executive’s Report Fletcher Building’s third full year as an independent company was another 13 Concrete 18 Distribution of signifi cant achievement. It refl ected progress on several fronts, such as 22 Laminates & Panels building on the company’s excellent market positions and fi nancial strength 29 Construction and promoting a strong performance ethic. 35 Building Products 40 Sustainability Review The year featured a record profi t, another substantial The acquisitions have excellent market positions 48 Board of Directors value-adding acquisition, a further equity issue, the and strong management, and were acquired at 52 Corporate Governance start of an extensive internal capital investment sensible prices. The company now has a breadth programme, further sales of non-core businesses of successful businesses that has greatly reduced 64 Financial Review and the successful integration of our New Zealand its reliance on the New Zealand economy and will 07 68 Financial Statements based panels businesses with Laminex. provide the base for future growth. Along with 128 Audit Report the depth of extremely able management, as 130 Trend Statement The strong performance was underwritten by buoyant demonstrated by three successive years of 132 Regulatory Disclosures demand across the whole year in both New Zealand improvement in all divisions in profi t and return 148 Investor Information and Australia, but is also the consequence of internal on investment, this provides a good basis for 150 Directory improvements and strategic acquisitions over the confi dence in the company’s ability to trade previous years. successfully through entire economic cycles. GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER < back next > CHIEF EXECUTIVE’S REPORT Results Returns Net earnings were $240 million, compared to Across the company, we use several important $168 million and $93 million in the two preceding measures beyond profi t to gauge our performance years. An indication of how much the company against other companies and other investment has grown and improved is that each of these last opportunities. At the business unit level, executives two results was also well received by the market. are accountable and incentivised on their return Earnings per share in this latest year were 55.7 cents on funds employed. On a consolidated basis, the

ANNUAL REPORT 2004 compared to 43.4 cents in the previous year. company earned 24.7 percent on total average funds employed for the year. This compares very Operating earnings (earnings before interest and favourably with the previous year’s 24.4 percent, 02 Highlights tax) were $460 million – a 39 percent lift on the as the funds base for 2004 included the extra seven 04 Chairman’s Report prior year. As indicated above, all divisions lifted months of the $759 million Laminex acquisition 07 Chief Executive’s Report their operating earnings. Building Products, aided and nine months of Tasman’s $272 million in funds. 13 Concrete by the acquisition of Tasman Building Products on The returns are well above the pre-tax cost of 18 Distribution 30 September 2003, was up 61 percent on the prior capital, which is around 14.5 percent. 22 Laminates & Panels year. Distribution was up 24 percent on the previous year’s very strong result; Concrete was up 16 percent; At the corporate level, the key measures are 29 Construction Construction 24 percent and Laminates and Panels Economic Value Added (EVA) – the amount of 35 Building Products 76 percent, aided by the extra seven months of after-tax profi t over and above that required to 40 Sustainability Review Laminex ownership compared to the previous year. match the after-tax cost of capital – and Return 48 Board of Directors On Equity (ROE). In the latest year the company 52 Corporate Governance With improvement across the board it is diffi cult generated $139 million of EVA, following $65 64 Financial Review to isolate business units for special mention, but million in 2003 and $46 million in 2002. Corporate 08 68 Financial Statements Winstone Wallboards, Tasman Building Products, executives’ variable remuneration is determined 128 Audit Report Fletcher Residential and Firth were those most by EVA. The ROE was 24.3 percent, following ahead of their profi t plans. 130 Trend Statement 23 percent in 2003 and 16.9 percent in 2002. 132 Regulatory Disclosures 148 Investor Information 150 Directory

GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER < back next > CHIEF EXECUTIVE’S REPORT The measure that most interests shareholders, Whilst the merger was the major strategic and which is driven by the above return measures, development in this area of business, it is also is Total Shareholder Return (TSR) – the increase noteworthy that a number of growth options in share price plus the amount of gross dividends were identifi ed. Plans for new products, capacity including tax credits. This was 33 percent for the expansion and new export opportunities are year, following 43 percent in the 2003 year and in the early stages of development. 24 percent in the 2002 year. The total TSR from 23 March 2001, when the separation of Fletcher The transfer of Fletcher Wood Panels and ANNUAL REPORT 2004 Building from Fletcher Challenge was effected, to Scott Panel and Hardware from Building Products 30 June 2004 is 135 percent. There has been further reduced that division’s annual revenue by around 02 Highlights signifi cant share price appreciation since then. $300 million. The acquisition of Tasman Building Products on 30 September 2003, bringing annual 04 Chairman’s Report revenues of around $300 million, was thus a timely 07 Chief Executive’s Report Business improvement replacement. Tasman’s product range includes 13 Concrete From July 2003, the Laminex business assumed fi breglass insulation in Australia and New Zealand, 18 Distribution responsibility for New Zealand based Fletcher steel roofi ng tiles in New Zealand and the United 22 Laminates & Panels Wood Panels and Scott Panel and Hardware, which States, and stainless steel sinks and access fl ooring 29 Construction until then were within the Building Products division. systems in Australia. Its performance in 2004 was 35 Building Products This produced the Laminates and Panels division, with outstanding, but also pleasing is the range of growth 40 Sustainability Review around $1 billion of revenue in a single integrated opportunities available to it. The New Zealand 48 Board of Directors business trading on both sides of the Tasman under tile business is a major exporter, but is capacity 52 Corporate Governance “The Laminex Group” banner. Substantial savings constrained. Australian fi breglass is capacity have been achieved in New Zealand marketing, 64 Financial Review constrained and the sink business also needs raw material input and administration costs. 09 68 Financial Statements expansion capital to meet its growing export Manufacturing optimisation has also yielded 128 Audit Report business. These businesses will all be implementing savings – particularly in freight, as the merged new capital investments in 2005. 130 Trend Statement organisation is able to cease shipping board 132 Regulatory Disclosures across the Tasman while retaining the custom 148 Investor Information through locally manufactured product. 150 Directory

GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER < back next > CHIEF EXECUTIVE’S REPORT The Distribution division completed the fi rst stages It has also been another year of external recognition of a major store refurbishment programme. The new of our environmental and safety performance. Among PlaceMakers store at New Lynn and the fi rst stage of these are our Construction operations, which have the Riccarton upgrade opened during the year, while been a party to the National Environmental Award work commenced on new stores to replace existing 2004 from the Institute of Professional Engineers facilities in Queenstown and Mount Wellington. A for the rehabilitation of the Mangere oxidation further eight stores are to be upgraded or replaced ponds and the Arthur Mead Environmental Award over the next two years. The Building Depot and Hire 2004 for the Central Auckland Motorway Upgrade ANNUAL REPORT 2004 A Hubby businesses were sold during the year. The project. The latter project also won the Supreme Building Depot’s retail focus was not consistent with Safety Award in the Auckland Branch Contractors 02 Highlights the primary trade focus of the PlaceMakers chain. Federation competition, which is assessed by the 04 Chairman’s Report In a year of record demand, Distribution was still Department of Labour. 07 Chief Executive’s Report able to take steps that will reduce ongoing central Fletcher Residential has also been active in securing 13 Concrete administration costs. new strategic landholdings that will largely meet its 18 Distribution The fi rst stage of a $70 million upgrade to the major land requirements for the remainder of this 22 Laminates & Panels Concrete division’s Golden Bay cement plant was decade. This should allow the business to continue 29 Construction commissioned in June 2004. The plant was capacity to make the signifi cant contribution to earnings 35 Building Products constrained throughout the year, and will remain that it now generates. 40 Sustainability Review so until the most signifi cant benefi ts of the capital 48 Board of Directors programme become available in November 2004. 52 Corporate Governance When the programme is completed the plant will 64 Financial Review have lifted capacity by more than 25 percent whilst 10 68 Financial Statements also improving thermal effi ciency and reducing 128 Audit Report carbon dioxide emissions. These changes are vital for securing a satisfactory outcome in relief from future 130 Trend Statement carbon taxes through a Negotiated Greenhouse 132 Regulatory Disclosures Agreement with the New Zealand Government. 148 Investor Information 150 Directory

GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER < back next > CHIEF EXECUTIVE’S REPORT The forward agenda Our people In the 2005 year the investment priorities will be The continued strong performance of the company internal. While the company will continue to assess is a tribute to the efforts of all our employees. acquisition opportunities as and when they arise, In a year of strong demand there were high levels our fi rst priority will be to increase capacity in those of overtime and extra effort from staff required. businesses that are capacity constrained. Where The divisions and business units are led well by very there is presently unsatisfi ed demand, such capable managers, and the small but able corporate

ANNUAL REPORT 2004 investment can have a quick payback and the outlay staff complement has not increased despite the will typically be lower, in terms of the prospective signifi cant growth of the company over the past two earnings multiple, than acquiring existing businesses. years. The constructive relationships we enjoy with 02 Highlights The continued upgrade of the PlaceMakers facilities labour unions are also a positive contributor to the 04 Chairman’s Report will also be a capital priority. employment climate within the company. That some 07 Chief Executive’s Report 3,000 employees and their families attend the 13 Concrete Investments expected to be approved across existing annual company sports day in Auckland, that 1,000 18 Distribution business units will total up to $100 million more than employees participate in the Round The Bays run 22 Laminates & Panels depreciation, but that will be spent progressively in Fletcher Building T-shirts, and that the company over this and subsequent years as the projects are 29 Construction gymnasium and child care facility are so valued completed. With increasing exports to Asia from 35 Building Products are all signs of a healthy employer-employee a number of businesses, we are examining options 40 Sustainability Review relationship. We look forward to building on this to strengthen our distribution there. to maintain our success in the years ahead. 48 Board of Directors 52 Corporate Governance Further details on Fletcher Building’s wide range 64 Financial Review of businesses are included in the business reviews 11 68 Financial Statements that follow. Ralph Waters Chief Executive Offi cer 128 Audit Report 130 Trend Statement 132 Regulatory Disclosures 148 Investor Information 150 Directory

GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER < back next > BUSINESS ANNUAL REPORT 2004 REVIEWS 02 Highlights 04 Chairman’s Report READYMIX CONCRETE PRODUCTION EXCEEDED 07 Chief Executive’s Report ONE MILLION CUBIC METRES FOR THE FIRST TIME. 13 Concrete 18 Distribution PLACEMAKERS ACHIEVED MARKET SHARE OF ABOUT 22 Laminates & Panels 33% IN THE TRADE SEGMENT. ENOUGH LAMINATE 29 Construction WAS SOLD TO COVER THE HIGHWAY FROM MELBOURNE 35 Building Products 40 Sustainability Review TO PERTH. CONSTRUCTION HAD $600 MILLION OF 48 Board of Directors WORK IN THE PIPELINE AT 30 JUNE, WITH 50% BEING 52 Corporate Governance IN THE PUBLIC SECTOR. NEWLY-ACQUIRED TASMAN 64 Financial Review 12 68 Financial Statements BUILDING PRODUCTS CONTRIBUTED $31 MILLION 128 Audit Report 130 Trend Statement TO OPERATING EARNINGS. 132 Regulatory Disclosures 148 Investor Information 150 Directory

GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER < back next > [From the left] A stresscrete precast panel being lifted into place at the Civic Theatre project, Invercargill Installation of a Humes Pipeline Systems stormwater pipe The hot air duct from the pre-heater tower to the new coal mill at the Golden Bay Cement plant ANNUAL REPORT 2004 At Winstone Aggregates’ Hunua Quarry, Auckland Firth delivers readymix concrete to the Auckland Airport Runway project 02 Highlights CONCRETE 04 Chairman’s Report 07 Chief Executive’s Report The Concrete division is an integrated manufacturer of cement, aggregates, 13 Concrete 18 Distribution readymix concrete and concrete products, such as masonry blocks, precast 22 Laminates & Panels products and concrete pipes, operating from more than 100 sites throughout 29 Construction the country. The key brands are Golden Bay Cement, Winstone Aggregates, Firth, Humes Pipeline Systems 35 Building Products and Stresscrete. The division has a share of approximately 50 percent in the cement market and 30 percent 40 Sustainability Review of the readymix concrete market. It has market share in Auckland of around 33 percent in aggregates and 48 Board of Directors about 30 percent in sand supply. 52 Corporate Governance 64 Financial Review HIGHLIGHTS 13 68 Financial Statements 128 Audit Report  Operating earnings up by 16 percent to $94 million 130 Trend Statement  Cement and readymix concrete production at record levels 132 Regulatory Disclosures  Expansion of cement capacity under way 148 Investor Information  Price increases in most products 150 Directory  A signifi cant lift in performance by Humes Pipeline Systems.

GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER < back next > CONCRETE Performance 9% Prestress 23% Cement Revenue and earnings grew strongly, in line with 14% buoyant demand, higher prices and lower costs. Pipes All the New Zealand operations improved on the previous year’s results. Most product prices increased during the year, and a keen focus 11% Concrete products 15% on costs allowed margin improvement in all Aggregates

ANNUAL REPORT 2004 businesses other than cement. 28% Readymix concrete The Golden Bay cement business enjoyed a record 02 Highlights level of domestic sales, at 673,000 tonnes. Earnings REVENUE 04 Chairman’s Report growth was constrained by two main factors – the The Firth concrete products business produced a 07 Chief Executive’s Report requirement to import high volumes of clinker due strong rise in earnings, with record sales volume in 13 Concrete to capacity constraints, and higher distribution costs most product groups. Readymix concrete production 18 Distribution arising from the level of demand and from an outage passed one million cubic metres (equity accounting of the MV Golden Bay for an equipment replacement. 22 Laminates & Panels associates’ volumes) for the fi rst time. Margins rose 29 Construction The fi rst stage of the cement plant upgrade was in the readymix concrete business despite increasing 35 Building Products commissioned successfully in July 2004. The pressure on input costs. 40 Sustainability Review remaining stages are expected to be completed Humes Pipeline Systems substantially improved 48 Board of Directors by July 2005. The upgrade will create a range of earnings, primarily due to pricing and margin 52 Corporate Governance commercial and environmental benefi ts, including improvements. 64 Financial Review increased production capacity for both cement 14 68 Financial Statements and clinker. Stresscrete also lifted earnings substantially 128 Audit Report despite a reduction in sales volumes, as it capitalised Winstone Aggregates’ operating earnings grew by on the strong market conditions and on productivity 130 Trend Statement 18 percent, mainly as the result of an improved sales benefi ts from consolidation into a single operating 132 Regulatory Disclosures mix, price rises in key markets and a broad range of site in Auckland during the previous year. 148 Investor Information productivity improvements. Quarry output was down 150 Directory slightly, due to plant rationalisation, from the 10-year high set in the previous year. GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER < back next > CONCRETE The operations in Peru and Fiji recorded positive Winstone Aggregates rationalised its sand supply results for the year. by opening a plant in Hamilton that will provide the majority of its sand requirements for the Waikato RESULTS region. The company took steps to lift its production $M JUNE 2004 JUNE 2003* % in the key Auckland market, lodging an application 12 MONTHS 12 MONTHS CHANGE to increase volumes from its Kaipara operation. Revenue 518 487 +6 Initiatives taken over the past two years to centralise Operating earnings (EBIT) 94 81 +16 plant maintenance, and a constant focus on ANNUAL REPORT 2004 Margin 18.1% 16.6% +9 operational management, are expected to deliver benefi ts in the current fi nancial year. Funds 410 400 +2 02 Highlights Firth made a signifi cant investment in new trucking 04 Chairman’s Report Return on funds 22.9% 20.3% +13 capacity, with a net increase of 20 in its fl eet. It also 07 Chief Executive’s Report * Restated to transfer discontinued operations to corporate implementedimplemented a driverdriver trtrainingaining prprogrammeogramme ttoo 13 Concrete overcomeovercome a skill shorshortagetage in this ararea.ea. 18 Distribution Business improvement 22 Laminates & Panels HumesHumes PPipelinesipelines SSystemsystems hhasas ddevelopedeveloped aandnd The upgrade programme at the Golden Bay plant took 29 Construction implementedimplemented a nnewew ttenderingendering ssystemystem tthathat hhasas signifi cant steps forward, with the commissioning of 35 Building Products ledled ttoo iimprovedmproved mmarginsargins aandnd eenhancednhanced iitsts ssalesales the fi rst stage and the approval of expenditure on andand ooperationsperations pplanning,lanning, rresultingesulting iinn a ssignifiignifi c acantnt 40 Sustainability Review subsequent stages. The major capacity benefi ts of and sustainablesustainable reductionreduction in the investmentinvestment 48 Board of Directors the upgrade will be available from August 2005. required in inventory. 52 Corporate Governance The full upgrade programme will increase production 64 Financial Review capacity for cement by more than 25 percent to 15 68 Financial Statements 840,000 tonnes per annum. It will also deliver a 128 Audit Report signifi cant reduction in production costs and reduce 130 Trend Statement carbon dioxide emissions. The programme is expected 132 Regulatory Disclosures to be complete by July 2005. 148 Investor Information 150 Directory

GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER MARKMARK BBINNSINNS ChiefChief Executive,Executive, ConcreteConcrete < back next > CONCRETE People Health & safety The division has implemented a number of initiatives The division continued to improve its performance throughout the past year to promote the maintenance in health and safety, with the lost time injury rate and growth of its organisational capability. These (the number of lost time injuries per one million include a range of critical competency development work hours) reducing from 7.2 to 5.6. initiatives, such as accredited certifi cate programmes for front line operational staff in the readymix, New initiatives have focused on changing work cultures, so that all managers and other ANNUAL REPORT 2004 manufacturing and quarrying businesses. Several programmes include nationally recognised employees are aware of their responsibility for qualifi cations developed specifi cally for the industry their own safety and that of their colleagues. 02 Highlights in conjunction with industry training organisations Stresscrete has introduced a major change 04 Chairman’s Report and the New Zealand Qualifi cations Authority. programme reinforcing personal responsibility 07 Chief Executive’s Report and motivation in this area, in collaboration 13 Concrete Such competency development programmes with a training company working with prominent 18 Distribution have two key purposes – to enhance the attraction New Zealand sporting achievers. 22 Laminates & Panels and retention of skilled people and to invest in the future by growing and developing the unique Business units within the division have collaborated 29 Construction skillsets required of our people. An example is Firth’s with union representatives on new initiatives to 35 Building Products cadet programme, which provides a three-year address regulatory requirements for training health 40 Sustainability Review apprenticeship leading to a range of qualifi cations and safety representatives. 48 Board of Directors recognised nationally and licenses specifi c to the The major issues in health and safety are to maintain 52 Corporate Governance concrete industry. performance improvement beyond current levels 64 Financial Review and to ensure consistency across the division. This 16 68 Financial Statements The six business unit general managers within will be achieved by further programmes addressing 128 Audit Report the Concrete division have on average more than 17 years management experience within the building manager and supervisor skills. 130 Trend Statement industry. Focused training and development ensures 132 Regulatory Disclosures that their industry experience and knowledge is well 148 Investor Information supported and ably applied by operational staff. 150 Directory

GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER < back next > CONCRETE Environment required to secure a satisfactory outcome in relief The Concrete division has made signifi cant from carbon taxes through a Negotiated Greenhouse progress towards achieving compliance with Agreement with the New Zealand Government. new environmental standards being developed Winstone Aggregates won the leading environmental in regional and district plans and in recently award for the quarrying industry at the 2004 introduced regulations on hazardous substances. combined conference of the Institute of Quarrying In particular, the division is operating new water and the Aggregates and Quarry Association. The management systems at many operations. Several ANNUAL REPORT 2004 award identifi ed the Three Kings Quarry, in central Firth sites have implemented systems that recycle Auckland, as an example of excellence in both process water and solid wastes. 02 Highlights environmental management. 04 Chairman’s Report The cement manufacturing operations at Golden 07 Chief Executive’s Report Bay now have the capability to use waste wood Outlook 13 Concrete as a partial fuel substitute for 10-15 percent of coal Demand is expected to remain strong in New Zealand, 18 Distribution requirements, with consequent reductions in carbon with any fall in the residential sector offset by growth 22 Laminates & Panels dioxide emissions. The continuing capital upgrade in the commercial building and infrastructure areas. project will enable further reductions, which are 29 Construction The operations in Peru and Fiji are expected to 35 Building Products produce better results in 2005. 40 Sustainability Review 48 Board of Directors Cubic metres (000s) Tonnes (000s) LTIs per one million hours worked 52 Corporate Governance 1000 800 10 64 Financial Review 800 8 600 17 68 Financial Statements 600 6 128 Audit Report 400 130 Trend Statement 400 4 200 132 Regulatory Disclosures 200 2

148 Investor Information 0 0 0 01 02 03 04 01 02 03 04 150 Directory 02 03 04 READYMIX VOLUMES DOMESTIC CEMENT SALES LOST TIME INJURY GO DIRECTLY TO A SECTION OF THE FREQUENCY RATES REPORT BY CLICKING ON THE NUMBER < back next > [From the left] ANNUAL REPORT 2004 PlaceMakers is the naming sponsor for the PlaceMakers V8 International, Pukekohe Scenes from PlaceMakers New Lynn 02 Highlights DISTRIBUTION 04 Chairman’s Report 07 Chief Executive’s Report PlaceMakers distributes building materials and related products to trade and 13 Concrete 18 Distribution DIY customers throughout New Zealand. It has 52 outlets, most of which are 22 Laminates & Panels operated in joint venture with local store managers. PlaceMakers is the market 29 Construction leader and provides an important distribution channel for a number of other 35 Building Products Fletcher Building companies. It has more than 2,000 employees. 40 Sustainability Review 48 Board of Directors 52 Corporate Governance 64 Financial Review HIGHLIGHTS 18 68 Financial Statements  Operating earnings up 24 percent to $73 million – a 69 percent return on funds 128 Audit Report  Opening of a new format store in New Lynn, Auckland, with strong sales results 130 Trend Statement  Acquisition and joint venturing of Builders Hardware Company, in Christchurch 132 Regulatory Disclosures  Divestment of Hire A Hubby and The Building Depot. 148 Investor Information 150 Directory

GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER < back next > DISTRIBUTION Performance The Building Depot and Hire A Hubby businesses Revenue and earnings increased in line with very were sold. The Building Depot’s retail focus was not active market conditions in both the residential and consistent with the predominant building trade focus commercial sectors. PlaceMakers grew through the of the Distribution division, whilst Hire A Hubby was successful opening of a new store in New Lynn, not of suffi cient scale. Auckland, and the establishment of a joint venture The increase in market activity brought additional of the Builders Hardware Company, in Christchurch. operating pressures. Some manufacturers, and It also began a major capital investment programme ANNUAL REPORT 2004 PlaceMakers’ internal frame and truss supply, were to upgrade key existing locations. stretched by the growth in demand. The market 02 Highlights Operating earnings rose by 24 percent to $73 million, for experienced and able people to work within the business also tightened, but the joint venture 04 Chairman’s Report on revenue up by 16 percent to $863 million. Market business model gave Distribution stability with 07 Chief Executive’s Report share of core products was slightly higher than for a low turnover of key staff. 13 Concrete the previous year. Margin also grew slightly, through improvement in purchasing arrangements and a 18 Distribution Several new marketing programmes were advanced reduction in administration costs. An additional 22 Laminates & Panels during the year, incorporating brand, retail and trade franchise fee was charged to most of the PlaceMakers 29 Construction activities. For trade customers the LIFT education stores for the fi rst time, adjusting the company’s 35 Building Products and rewardsrewards programmesprogrammes werewere advanced,advanced, neneww brbrandand returns in line with the investment and risk profi le. 40 Sustainability Review andand rretailetail advertisementsadvertisements wwereere ddeveloped,eveloped, nnewew sstafftaff 48 Board of Directors Internal capital expenditure totalled $8 million – uniformsuniforms wwereere iintroducedntroduced aandnd newnew ssignageignage developed.developed. PlaceMakersPlaceMakers ccontinuedontinued ititss sponssponsorshiporship prprogrammeogramme 52 Corporate Governance mostly in store upgrading and improvement, toto mmaintainaintain visibilityvisibility aandnd ccustomerustomer aappreciation,ppreciation, 64 Financial Review and also in information technology. Along with throughthrough eventsevents ssuchuch aass tthehe MMasteraster BBuildersuilders HHouseouse 19 68 Financial Statements the New Lynn and Builders Hardware Company ofof the YearYear and the PlacPlaceMakerseMakers V8 SSupercars.upercars. 128 Audit Report openings, PlaceMakers unveiled the fi rst stage of an upgrade in Riccarton and started work on new 130 Trend Statement locations in Queenstown and Mount Wellington. 132 Regulatory Disclosures 148 Investor Information 150 Directory

GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER DAVID WORLEY Chief Executive, Distribution < back next > DISTRIBUTION People RESULTS Of the 52 PlaceMakers branches, 46 are led by a $M JUNE 2004 JUNE 2003* % manager who has an equity share in the operation. 12 MONTHS 12 MONTHS CHANGE Most of the joint venture partners have between fi ve Revenue 863 744 +16 and 10 years’ experience with the company, and many Operating earnings (EBIT) 73 59 +24 have considerably more in the building industry. Margin 8.5% 7.9% +7.6 Strategic direction, purchasing, marketing and ANNUAL REPORT 2004 Funds 106 92 +15 administration are supplied by a national support Return on funds 68.9% 64.1% +7 offi ce located in Auckland. As part of a review of the 02 Highlights organisation conducted during the latest year, the * Restated to transfer discontinued operations to corporate 04 Chairman’s Report complementary roles of joint venture partners and 07 Chief Executive’s Report the national offi ce were examined, and changes 13 Concrete made to streamline operations and ensure strong 18 Distribution Business improvement strategic alignment. 22 Laminates & Panels PlaceMakers undertook signifi cant restructuring in The PlaceMakers national support team has 29 Construction the second half of the year to align the organisation an extensive background in the building industry 35 Building Products to the growth strategy and market conditions. This and retail management. Its six functional general 40 Sustainability Review increased resources in the operational, marketing and managers – in fi nance, marketing & merchandising, 48 Board of Directors merchandising areas, and placed further emphasis operations, property, human resources and 52 Corporate Governance on operating standards and communication. information technology – have a total of 24 years 64 Financial Review experience at PlaceMakers and about 60 years PlaceMakers’ goal of becoming the world-class in building and related fi elds. 20 68 Financial Statements supplier of choice in the New Zealand market 128 Audit Report involves the development of facilities, systems PlaceMakers has a high priority on training and 130 Trend Statement and processes that enable it to compete strongly development. More than 1,200 employees have 132 Regulatory Disclosures and effectively with global competitors. attended in-house courses on sales, customer 148 Investor Information service and other subjects. 150 Directory

GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER < back next > DISTRIBUTION Health & safety Outlook PlaceMakers has taken a number of initiatives Residential construction, which is the major driver to improve awareness and performance in health of PlaceMakers sales, is expected to decline in the and safety. Those implemented during the latest second half of the current fi nancial year. While this year included the introduction of new policies will have an adverse impact on revenue, some offset and requirements for hazardous working areas, is expected from buoyant general construction a new reporting system, establishment of a strong activity and from residential alterations and additions.

ANNUAL REPORT 2004 relationship with the Department of Labour and an innovative workplace safety communication Competition is intensifying in the building materials programme titled “Use Your Noodle.” market, with the growth of large-format stores 02 Highlights targeting DIY customers in the main population 04 Chairman’s Report The number of lost time injuries, however, increased centres, and this trend is likely to continue. 07 Chief Executive’s Report from 16 to 25, emphasising the requirement for PlaceMakers is clearly established as the market 13 Concrete further progress in this area, but also refl ecting leader and is focused on retaining this position 18 Distribution greater focus and more accurate reporting. This is by becoming the world-class supplier of choice 22 Laminates & Panels a result of the proactive approach through internal to trade and DIY project customers. management of the rehabilitation process. 29 Construction Growth remains the main strategic priority, 35 Building Products with store and category development as the key 40 Sustainability Review platforms. A further eight stores are to be upgraded 48 Board of Directors or replaced over the next two years. 52 Corporate Governance �� ���������������������������������� 64 Financial Review ��� � 21 � 68 Financial Statements ��� � 128 Audit Report ��� � 130 Trend Statement ��� � � 132 Regulatory Disclosures ��� � 148 Investor Information ��� � 150 Directory � � ����������������� ������������������� ����������������� �� �� �� GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER REVENUE BY PRODUCT GROUP LOST TIME INJURY FREQUENCY RATES

���� ���� ���� < back next > [From the left] In the warehouse at the Laminex plant in Papakura, Auckland LAMINATES The Laminex Group South Australia showroom, Adelaide Loading kraft paper on the production line at the Papakura plant ANNUAL REPORT 2004 In the warehouse at Scott The Laminex Group distribution centre, Auckland Table featuring chilli tela from the Laminex colour palette 02 Highlights & PANELS 04 Chairman’s Report 07 Chief Executive’s Report The Laminex Group is Australia’s and New Zealand’s leading marketer, 13 Concrete 18 Distribution distributor and manufacturer of high-pressure and low-pressure decorative ® ® ® 22 Laminates & Panels surface laminates. Its major brands include Laminex , Formica and Melteca . 29 Construction It also manufactures and sells raw particleboard and raw medium density fi breboard (MDF), and in some regions it distributes timber, hardware and related products. It exports – mainly raw MDF – to a network 35 Building Products of regular customers in Asia. 40 Sustainability Review 48 Board of Directors Laminex has 14 production facilities and an extensive distribution network with more than 40 metropolitan 52 Corporate Governance and regional locations. It has more than 1,900 employees in Australia and more than 700 in New Zealand. 64 Financial Review 22 68 Financial Statements * Laminex was 128 Audit Report HIGHLIGHTS acquired in November 2002. Annualised 130 Trend Statement comparatives refl ect *  Operating earnings up by 76 percent, and by 6 percent on an annualised basis the full prior year 132 Regulatory Disclosures actual Laminex  Strong demand in Australia and New Zealand 148 Investor Information result to provide a like-for-like  Overall improvement in margin 150 Directory comparison.  Synergies of $6 million from integration of New Zealand and Australian operations GO DIRECTLY TO A SECTION OF THE  REPORT BY CLICKING ON THE NUMBER Warehouse consolidations completed in Sydney and Adelaide. < back next > LAMINATES & PANELS Performance The contributions from the division’s two joint Growth in revenue and earnings refl ected strong ventures in Western Australia were ahead of those market conditions, good operational performance for the previous year. Wespine Industries, the major and the integration of businesses in Australia and pine sawmiller in Western Australia, experienced a New Zealand under The Laminex Group banner. record year in line with market demand. Dynea WA, The results include a full year’s contribution from the resin supplier to the division’s Western Australian the Laminex operations acquired in November 2002, manufacturing operations, also performed strongly.

ANNUAL REPORT 2004 Fletcher Wood Panels and Scott Panel and Hardware. RESULTS The integration reduced overhead costs signifi cantly $M JUNE 2004 JUNE 2003* % 12 MONTHS 12 MONTHS CHANGE 02 Highlights and also allowed the optimisation of manufacturing Revenue 994 659 +51 04 Chairman’s Report facilities in New Zealand and Australia. Products that 07 Chief Executive’s Report were previously manufactured in New Zealand and Operating earnings (EBIT) 95 54 +76 13 Concrete shipped to Australia by Fletcher Wood Panels are now Margin 9.6% 8.2% +17 manufactured at Laminex’s Australian operations, 18 Distribution Funds 789 862 -8 providing substantial savings in freight and logistics. 22 Laminates & Panels Return on funds 12% 10.1%** +19 The New Zealand operations are now more focused 29 Construction on supplying the Asian market. 35 Building Products * Laminex acquired on 13 November 2002 and now restated to include FWP & SPH ** Estimated return based on full 12 months of Laminex 40 Sustainability Review On a comparable full-year basis, operating 48 Board of Directors earnings were 6.4 percent higher than those The division successfully consolidated three 52 Corporate Governance for the previous year. independent warehouses in Sydney into one 64 Financial Review new distribution centre, and two independent Sales to the Australian domestic market were up warehouses into one new distribution centre 23 68 Financial Statements by 4 percent on the previous year. Export sales from in Adelaide. These changes followed a similar 128 Audit Report Australia were down by 22 percent as a result of the consolidation in Melbourne in the previous year. 130 Trend Statement signifi cant increase in the value of the Australian 132 Regulatory Disclosures dollar. New Zealand domestic sales were up 10 percent 148 Investor Information in line with strong activity in the housing and 150 Directory commercial markets.

GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER < back next > LAMINATES & PANELS Construction began on a large distribution centre for Brisbane which, when complete, will fi nalise 8% the division’s programme of Australian capital city 30% Exports consolidations. This programme is one of the major Alterations & additions synergies resulting from the acquisition of the Formica and Wesfi businesses by The Laminex 28% Residential Group prior to its acquisition by Fletcher Building.

ANNUAL REPORT 2004

8% 34% 02 Highlights 18% Exports (mainly raw MDF) Other products Commercial 04 Chairman’s Report 15% REVENUE BY SEGMENT 07 Chief Executive’s Report High pressure decorative laminate 13 Concrete 19% 18 Distribution White/raw 22 Laminates & Panels particleboard

29 Construction 28% 35 Building Products 12% Low pressure 5% 8% White/raw MDF decorative laminate South Australia Exports 40 Sustainability Review 17% REVENUE BY PRODUCT 48 Board of Directors New South Wales 24% New Zealand 52 Corporate Governance 64 Financial Review 24 68 Financial Statements 18% 128 Audit Report Victoria/Tasmania 13% 130 Trend Statement Western Australia 15% 132 Regulatory Disclosures Queensland

148 Investor Information REVENUE BY REGION 150 Directory

GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER < back next > LAMINATES & PANELS Business improvement challenges. The division continually seeks new The Laminex Group has undertaken a major change means of improving customer service and increasing programme over the past fi ve years involving industry the effi ciency of its dealings with customers. consolidation, internal restructuring including plant A number of initiatives were undertaken during closures and upgrading of information technology the year. These included the development of systems. It is now the clear leader in decorative multi-branded state-based customer service centres high-pressure and low-pressure laminates in the in Australia, allowing customers one point of contact Australian and New Zealand markets. It has strong ANNUAL REPORT 2004 for all dealings with Laminex. Preparations were relationships with customers in Southeast Asia, completed for the consolidation of Formica® and Japan, Korea and China, and is well placed to develop ® 02 Highlights Formex into a newly launched and re-invigorated regional strategic relationships while consolidating Formica® brand, launched at the start of July 2004. 04 Chairman’s Report its position in the Australasian market. Savings are expected in the current year and beyond 07 Chief Executive’s Report through a reduction in duplication of inventories, 13 Concrete The division has an extremely large number of small product and support costs, while enhancing 18 Distribution customers across Australia and New Zealand. While this is a signifi cant strength, it also presents logistical customer service by providing a more fashionable 22 Laminates & Panels and current product offering. 29 Construction 35 Building Products 40 Sustainability Review 48 Board of Directors Square metres (millions) Cubic metres (000s) Square metres (millions) 52 Corporate Governance 25 1000 4 64 Financial Review 20 800 25 68 Financial Statements 3 15 600 128 Audit Report 2 130 Trend Statement 10 400 1 132 Regulatory Disclosures 5 200

148 Investor Information 0 0 0 150 Directory 00 01 02 03 04 00 01 02 03 04 00 01 02 03 04

DECORATIVE LOW PRESSURE RAW PARTICLE BOARD AND MEDIUM HIGH PRESSURE LAMINATE VOLUMES GO DIRECTLY TO A SECTION OF THE DENSITY FIBREBOARD VOLUMES REPORT BY CLICKING ON THE NUMBER LAMINATING VOLUMES < back next > LAMINATES & PANELS People Over the coming year, the focus will be on the A key focus for the year has been the integration development and implementation of a number of the senior management teams of The Laminex of systems and frameworks to increase the Group, Fletcher Wood Panels and Scott Panel and effectiveness of people development strategies. Hardware. This process is now complete, with one These will include a recruitment management senior management team that has a strong track system and a competency framework to allow record in driving the industry forward. A senior for benchmarking and measurement of individual performance. ANNUAL REPORT 2004 management leadership programme has also been established. Health & safety 02 Highlights The company decentralised a number of activities The division has invested signifi cantly in improving 04 Chairman’s Report from head offi ce to the operating units during the health and safety awareness and reducing the 07 Chief Executive’s Report year. This has resulted in an improved focus on incidence of workplace injuries. This encompasses 13 Concrete value creation at the operating unit level. training and education programmes aimed at 18 Distribution changing behaviours and increasing awareness, A number of people initiatives have been 22 Laminates & Panels and investment of capital funds to improve safety implemented over the past year. Among these is by eliminating hazards, improving machine 29 Construction an annual employee opinion survey, which aims at guarding and isolating key equipment. 35 Building Products identifying areas of improvement within the business. 40 Sustainability Review Employees are then actively involved in tackling these An external review of health and safety issues 48 Board of Directors issues in a manner that highlights the participative, was commissioned during the year and produced 52 Corporate Governance people-oriented approach of the division. A strong a number of recommendations that are now being 64 Financial Review learning and development focus continues, with implemented by the division. As the division’s 26 68 Financial Statements approximately 35 percent of employees enrolled operations involve a considerable amount of manual 128 Audit Report in accredited certifi cate programmes. The Laminex product handling, this is an area of particular focus Group was recognised by Australia’s the Equal to improve practices and reduce or eliminate 130 Trend Statement Opportunity in the Workplace Agency for its actions incidents. More than 65 percent of the division’s 132 Regulatory Disclosures regarding diversity and equal opportunity. lost time injuries result from manual handling. 148 Investor Information 150 Directory

GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER < back next > LAMINATES & PANELS The number of lost time injuries was down by The division is also pursuing opportunities that 16 percent to 65. The lost time injury frequency will allow increased use of recycled fi bre such as rate (the number of lost time injuries per one million industrial wood waste at its major production work hours) also improved, from 14.96 in 2003 to facilities. This will have the effect of reducing the 12.68. While both the number and frequency of lost reliance on virgin plantation wood resource and time injuries have reduced, further improvement is ensuring that waste wood is utilised rather than required. The division has recently strengthened its going to landfi ll. It is also working to continue focus on this issue, with all senior management now lowering the formaldehyde contained in products – ANNUAL REPORT 2004 actively involved on a regular basis in promoting the particularly in medium density fi breboard. health and safety programmes. 02 Highlights 04 Chairman’s Report Environment 07 Chief Executive’s Report The Laminex Group takes care to ensure protection 13 Concrete of the local communities where its operations exist 18 Distribution and also of the wider environment. At a local level, it 22 Laminates & Panels ensures it complies with all statutory and regulatory 29 Construction requirements. The division’s major manufacturing 35 Building Products sites are currently undertaking the ISO 14001 40 Sustainability Review certifi cation process. This international standard 48 Board of Directors for Environmental Management Systems ensures 52 Corporate Governance that the sites manage their interaction with the environment in a systematic, continually improving 64 Financial Review manner. Two sites in Western Australia achieved 27 68 Financial Statements ISO 14001 certifi cation during the latest year. 128 Audit Report 130 Trend Statement 132 Regulatory Disclosures 148 Investor Information 150 Directory

GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER

JONATHANJONATHAN LLINGING back next ChiefChief Executive,Executive, LaminatesLaminates aandnd PPanelsanels < > LAMINATES & PANELS Outlook The immediate outlook remains positive in both Australia and New Zealand despite forecasts of a reduction in new housing, particularly in New Zealand.

While the division has some exposure to the new housing sector in both countries, it is also ANNUAL REPORT 2004 actively involved in the alterations and additions and commercial sectors. The forecast for these 02 Highlights sectors remains positive in both countries 04 Chairman’s Report throughout the current year. 07 Chief Executive’s Report The division has a major presence in each Australian 13 Concrete state and in New Zealand, and a signifi cant export 18 Distribution presence in Asia. Activity levels vary from region to 22 Laminates & Panels region. The current domestic outlook is for Western 29 Construction Australia and Queensland to remain strong relative 35 Building Products to the other regions. The outlook for the export 40 Sustainability Review business will depend on the strength of both the 48 Board of Directors Australian and New Zealand dollars in comparison 52 Corporate Governance to the US currency. 64 Financial Review The focus will remain on productivity and cost 28 68 Financial Statements savings throughout the current year, as the division 128 Audit Report continues to fi ne tune its operations and pursue 130 Trend Statement opportunities for expansion and strategic alliances 132 Regulatory Disclosures in its key markets. 148 Investor Information 150 Directory

GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER < back next > [From the left] Work on the fi nal stage of the coastal walkway from New Plymouth’s port to the Waiwhakaiho River mouth The main entrance to the new Auckland Hospital, completed in July 2003 ANNUAL REPORT 2004 Putting the fi nishing touches to Northlands Mall, Christchurch The foyer of the upgraded Embassy Theatre, Wellington The award-winning Grafton Gully Motorway project, completed in February 2004 02 Highlights CONSTRUCTION 04 Chairman’s Report 07 Chief Executive’s Report Fletcher Construction is the largest general contractor and residential house 13 Concrete 18 Distribution builder in New Zealand and the South Pacifi c. It operates in the commercial 22 Laminates & Panels building, interior fi t out, civil and industrial engineering and housing markets. 29 Construction It has been responsible for the construction of many of New Zealand’s landmark buildings such as Te Papa Tongarewa (Museum of New Zealand), Sky City Casino and Tower, Westpac Trust Stadium and many of the 35 Building Products country’s infrastructure projects. 40 Sustainability Review 48 Board of Directors 52 Corporate Governance HIGHLIGHTS 64 Financial Review  Revenue up by 4 percent and operating earnings by 24 percent 29 68 Financial Statements  Completion of the Auckland Hospital and Grafton Gully Motorway projects 128 Audit Report  130 Trend Statement Commencement of the Central Motorway Junction project in joint venture 132 Regulatory Disclosures  Naming as preferred contractor for the University of Auckland Business School project 148 Investor Information  Share of major roading work (contracts in excess of $20 million) won over the past two years is in excess of 50 percent 150 Directory  Broadening of the international recruitment programme to address skill shortages. GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER < back next > CONSTRUCTION RESULTS With demand at an unprecedented level, the $M JUNE 2004 JUNE 2003 % Building division increased revenue by 10 percent 12 MONTHS 12 MONTHS CHANGE and operating earnings by 33 percent despite Revenue 643 618 +4 turning some work away because of resource Operating earnings (EBIT) 42 34 +24 constraints. The $200 million Auckland Hospital Funds -46 -62 +26 project was completed on time and within budget, and the Building division was named as preferred contractor for the University of Auckland Business Performance ANNUAL REPORT 2004 School project ($130 million). Revenue and earnings grew strongly, refl ecting the operating conditions and the leadership position Engineering revenues were 15 percent higher, 02 Highlights held by the company in its key markets. Two major but operating earnings remained at the same level, 04 Chairman’s Report projects were completed during the year, but a range refl ecting the completion of several successful 07 Chief Executive’s Report of new work was commenced or secured, providing projects in the 2003 year. The latest year saw the 13 Concrete a strong backlog across the company’s operations. completion of the Grafton Gully Motorway, a $130 18 Distribution million project in an alliance under the Freefl ow 22 Laminates & Panels banner. The company commenced work on the

29 Construction 9% $96 million Central Motorway Junction project 35 Building Products South Pacific in Auckland in a joint venture with Leighton 40 Sustainability Review Contractors, and the $40 million Fergusson 19% Wharf reclamation project. 48 Board of Directors Residential 52 Corporate Governance 52% Building The high-profi le motorway projects refl ect the 64 Financial Review recent growth of the company’s roading capability. 30 68 Financial Statements In 2001 Fletcher Construction had not undertaken a 20% 128 Audit Report Engineering major roading project for almost 10 years. A renewed 130 Trend Statement focus on this sector has lifted the division’s share of REVENUE 132 Regulatory Disclosures the major roading projects (contracts of more than $20 million) awarded over the past two years to 148 Investor Information approximately 50 percent. 150 Directory

GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER < back next > CONSTRUCTION In the South Pacifi c, operational performance Business improvement was satisfactory but the company was restricted The company acted to address resource constraints by skill shortages in Fiji and continued low demand resulting from the level of demand across the in Papua New Guinea. A drive to secure a higher construction business. It has recruited in the United share of the recovering Fiji market was successful, Kingdom over the past three years to fi ll 30 key staff securing two major contracts totalling $48 million. positions, and moved in the latest year to broaden Fletcher Residential achieved record operating recruitment efforts to other countries. ANNUAL REPORT 2004 earnings on a lower number of houses sold. Margins After balance date the company announced the rose, refl ecting the higher selling prices achievable purchase of the fi rst 200 residential sections at in the Auckland market. With demand exceptionally 02 Highlights the Jacks Point development on the shores of strong, earnings could have been higher still but 04 Chairman’s Report Lake Wakatipu, Queenstown. The Jacks Point land for the constraint of land supply. The company has 07 Chief Executive’s Report will allow the company to participate in the creation entered into an agreement to purchase prime land 13 Concrete of a lifestyle community in a region with international in Queenstown and is negotiating the purchase of a appeal. The company made a number of land 18 Distribution major block of strategically important land in Auckland. acquisitions in Auckland, including 300 sections at 22 Laminates & Panels It was decided to wind down the Napier operation Albany on the North Shore. It is also negotiating to 29 Construction given a shortage of quality land in that market. complete the acquisition of further lots at the Lunn 35 Building Products Avenue quarry, where it entered into an agreement 40 Sustainability Review 18% South Pacific to purchase an initial block of sections in 2001. 48 Board of Directors If completed, the Lunn Avenue acquisition will 52 Corporate Governance 43% provide steady land supply for the next seven Building 64 Financial Review years, with signifi cant participation in the 31 68 Financial Statements multi-dwelling unit market. 128 Audit Report 130 Trend Statement 39% Engineering 132 Regulatory Disclosures 148 Investor Information BACKLOG 150 Directory

GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER < back next > CONSTRUCTION People The company received independent verifi cation The attraction and retention of skilled people that the Engineering business unit and Brian Perry has developed into a major issue for the industry. Civil had met the requirements of Australian and Senior management within the company have New Zealand standard 4801 for safety management average service of nearly 20 years, providing systems. It also won the Supreme Safety Award a depth of experience that is invaluable in in the Auckland Branch Contractors Federation maintaining the company’s position as New competition (judged by the Department of Labour), for the fi rst stage of the Central Auckland Motorway ANNUAL REPORT 2004 Zealand’s pre-eminent construction company. It is recognised, however, that more must be done Upgrade Project. to attract talented young New Zealanders into 02 Highlights The lost time injury frequency rate (the number the company. In the current year the graduate of lost time injuries per one million work hours) 04 Chairman’s Report recruitment programme will be increased in size increased from 13 to 14. 07 Chief Executive’s Report for the third successive year. Meanwhile, discussions 13 Concrete are taking place with a tertiary institution on the 18 Distribution development of a new degree qualifi cation aligned 22 Laminates & Panels to the needs of the industry. 29 Construction 35 Building Products Health & safety 40 Sustainability Review Fletcher Construction continues to be a major 48 Board of Directors participant in building industry activities to improve 52 Corporate Governance safety, such as the Site Safe Passport and Gold Card 64 Financial Review training schemes. An important new initiative has 32 68 Financial Statements been the collaboration between principal contractors 128 Audit Report to impose consistent safety standards on all sub- 130 Trend Statement contractors. This has been developed in collaboration 132 Regulatory Disclosures with the Department of Labour and the Accident Compensation Corporation, which will conduct 148 Investor Information independent audits across the industry. 150 Directory MARK BINNS Chief Executive, Construction The company has also worked closely with unions to GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER develop a drug and alcohol programme that involves workers in addressing this key issue. < back next > CONSTRUCTION Environment The Engineering business unit incurred one The nature of construction work is such that environmental infringement notice, for an many projects have environmental signifi cance. unauthorised discharge of cement waste into The Construction division aims to continually water at Te Hana, North Auckland. improve its policies and processes for managing environmental impacts. During the latest year, the LTIs per one million hours worked 20 Engineering business unit achieved certifi cation to

ANNUAL REPORT 2004 ISO 14001 for its environmental management systems. 15

Two other external awards were received: 10 02 Highlights  The National Environmental Award 2004 from 04 Chairman’s Report 5 the Institute of Professional Engineers, for the 07 Chief Executive’s Report rehabilitation of the Mangere oxidation ponds 0 02 03 04 13 Concrete and their return to the Manukau Harbour. 18 Distribution LOST TIME INJURY FREQUENCY RATES  The Arthur Mead Environmental Award 2004, for 22 Laminates & Panels the fi rst stage of the Central Auckland Motorway 29 Construction Upgrade project. This is the second successive year 35 Building Products that Fletcher Construction has won this award. 40 Sustainability Review 48 Board of Directors 52 Corporate Governance 64 Financial Review 33 68 Financial Statements 128 Audit Report 130 Trend Statement 132 Regulatory Disclosures 148 Investor Information 150 Directory

GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER < back next > CONSTRUCTION Outlook The outlook for the South Pacifi c markets is Demand is likely to remain strong across the slightly more cautious. The most signifi cant spectrum of operations in New Zealand, with project opportunities over the coming year will economic growth continuing at relatively high probably be in Fiji, where several tourism-related levels. While residential activity may slow, projects are imminent. government spending on infrastructure is forecast to remain high in key areas. At balance date, 50 NZ$ million 15000 Forecast ANNUAL REPORT 2004 percent of contract backlog is work in the public sector, and we expect this to increase further by the 12000

end of the current fi nancial year. The commercial 9000 02 Highlights building operations are likely to benefi t from 6000 04 Chairman’s Report spending in health, education and corrections, 07 Chief Executive’s Report while engineering should benefi t from investments 3000 13 Concrete in road, energy and port facility infrastructure. 0 01 02 03 04 05 06 18 Distribution 22 Laminates & Panels The continuing strength of demand in these areas NEW ZEALAND CONSTRUCTION MARKET – is likely to outweigh any easing in the residential DOLLAR VALUE OF COMPLETED WORK 29 Construction sector. The land acquisitions in Auckland and 35 Building Products Residential Additions & alterations Queenstown will underpin the development of Non residential Infrastructure 40 Sustainability Review residential operations over the medium term. Source: Infometrics 48 Board of Directors 52 Corporate Governance 64 Financial Review 34 68 Financial Statements 128 Audit Report 130 Trend Statement 132 Regulatory Disclosures 148 Investor Information 150 Directory

GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER < back next > [From the left] Production line at the Tasman Sinkware plant, Adelaide BUILDING Installation of Gib ceiling panels In the Fletcher Easysteel coil store in Penrose, Auckland ANNUAL REPORT 2004 In the factory at the Tasman Insulation plant, Auckland A trainee roofer learns the art of installing Gerard roof tiles 02 Highlights PRODUCTS 04 Chairman’s Report 07 Chief Executive’s Report Building Products has a range of market leading positions in plasterboard, 13 Concrete 18 Distribution steel and downstream steel products, aluminium, fi breglass insulation, access 22 Laminates & Panels fl ooring systems and sinkware. In New Zealand it is the sole producer of plasterboard, and of 29 Construction reinforcing bar and rod. It is the country’s leading producer of metal roofi ng tiles, a major producer of other steel roofi ng and cladding products, a major steel distributor and one of the largest aluminium extruders. 35 Building Products 40 Sustainability Review Building Products is the leading producer across Australia and New Zealand of fi breglass insulation 48 Board of Directors products and of access fl ooring systems. It is the second largest producer of stainless steel sinks in Australia. 52 Corporate Governance The fi breglass insulation, roofi ng tiles, sinkware and access fl ooring operations were acquired during the latest 64 Financial Review year through the purchase of Tasman Building Products, on 30 September 2003. 35 68 Financial Statements 128 Audit Report HIGHLIGHTS 130 Trend Statement 132 Regulatory Disclosures  Operating earnings up 61 percent to $164 million

148 Investor Information  Acquisition of Tasman Building Products, with a $31 million contribution to operating earnings

150 Directory  Business improvement initiatives progressed in all operating companies

 GO DIRECTLY TO A SECTION OF THE Strong demand in domestic and export markets. REPORT BY CLICKING ON THE NUMBER < back next > BUILDING PRODUCTS RESULTS Tasman contributed $31 million to operating $M JUNE 2004** JUNE 2003* % earnings, which was more than was anticipated 12 MONTHS 12 MONTHS CHANGE prior to acquisition. Synergies achieved as a result Revenue 927 638 +45 of the acquisition were also ahead of the expected Operating earnings (EBIT) 164 102 +61 levels. There was particularly strong growth in Margin 17.7% 16% +11 demand for insulation in the Australian market and for metal roofi ng tiles in North American and Asian Funds 560 296 +89 markets, to the extent that capacity constraints were ANNUAL REPORT 2004 Return on funds 31%*** 34% -9 experienced. Tasman’s sinkware operations achieved

* Restated to transfer FWP & SPH to Laminates & Panels record export growth and also performed strongly 02 Highlights ** Includes 9 months of Tasman in the Australian market. *** Proforma return based on full 12 months of Tasman 04 Chairman’s Report Earnings excluding those from Tasman Building 07 Chief Executive’s Report Performance Products rose by 30 percent. Winstone Wallboards and 13 Concrete Fletcher Aluminium benefi ted from strong domestic 18 Distribution Building Products achieved outstanding growth in operating earnings – from $102 million to $164 demand. Fletcher Aluminium’s earnings increased 22 Laminates & Panels million – through the acquisition of the Tasman signifi cantly, aided by productivity improvements 29 Construction Building Products group, benefi ts from operating that allowed a 39 percent reduction in working 35 Building Products improvements and the strength of the New Zealand capital and improved manufacturing performance. 40 Sustainability Review market. All businesses in the division exceeded Despite the unusually high cost of power at the 48 Board of Directors their earnings for the previous year. beginning of the year and record scrap metal prices 52 Corporate Governance from mid-year, both Pacifi c Steel and Pacifi c Wire 64 Financial Review Export volumes were strong despite the increase lifted their earnings signifi cantly. The improvement 36 68 Financial Statements in value of the New Zealand dollar against the US dollar. Whilst there was some softening in was underpinned by productivity gains that resulted 128 Audit Report the residential construction market in Australia, in record production in the steel plant, the rolling 130 Trend Statement the division continued to perform well there. mill and the wire mill. Pacifi c Steel also benefi ted 132 Regulatory Disclosures from a steep rise in international prices for 148 Investor Information reinforcing bar and wire rod. 150 Directory

GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER < back next > BUILDING PRODUCTS All the downstream steel businesses increased Winstone Wallboards further expanded its range earnings, with Easysteel and Pacifi c Coilcoaters of specialist wall linings for different industrial and achieving outstanding results. Easysteel used residential uses, introducing a high performance new forecasting techniques to reduce inventory board to block x-rays in hospitals and dental to an all-time low whilst also increasing availability. surgeries. Specialist performance boards now Pacifi c Coilcoaters had a very busy year and would comprise about 40 percent of Winstone Wallboards’ have achieved record output but for steel supply total volume. issues in the second half. Dimond grew its market ANNUAL REPORT 2004 share despite a tough competitive environment. Pacifi c Wire Technologies, a Pacifi c Steel subsidiary, completed trials of a revolutionary electromagnetic wiping technology to control the amount of zinc 02 Highlights Business improvement used in galvanising wire. The fi rst orders for the new 04 Chairman’s Report The division has four strategies in place to create technology were received following its display at the 07 Chief Executive’s Report sustainable earnings growth: Dusseldorf Wire Show. The company also adapted 13 Concrete  Be operationally excellent in support of business this technology for “galfan”, a zinc aluminium 18 Distribution unit market strategies coating wire production technique. 22 Laminates & Panels 29 Construction  Acquire operations whose product ranges CSP Galvanizing developed technologies for 35 Building Products complement those already offered and which improving the quality and reducing the cost of have synergies with existing businesses 40 Sustainability Review hot-dip galvanising. It sold its fi rst fl ux monitoring 48 Board of Directors  Develop the New Zealand market position by and drossing units to a customer in Australia, and encountered signifi cant interest from several other 52 Corporate Governance taking existing research, investing in development other countries. 64 Financial Review and proving either the technology or its associated products 37 68 Financial Statements The increase in Dimond’s market share was due partly 128 Audit Report  Grow the offshore revenues of businesses that to the introduction of on-site rollforming for large 130 Trend Statement have unique capabilities or products projects requiring very long roofi ng elements. A 132 Regulatory Disclosures New Zealand record for a single extrusion (65 metres) All business units progressed initiatives in line 148 Investor Information was created by roofi ng supplied for Turners and with these strategies during the year. 150 Directory Growers’ Christchurch Distribution Centre project.

GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER < back next > BUILDING PRODUCTS

Dimond is also pursuing a range of promising new Building Products has retained a strong core technologies. Pacifi c Coilcoaters is developing a of experienced senior managers whilst creating ‘concept’ painting line that will enable it to expand opportunity for others to develop. The 14 business its product range, and commissioning is expected unit general managers have an average of over in February 2005. 16 years experience in the building products industry.

Additional production capacity is planned for The depth of management brings a range of benefi ts. Tasman Building Products’ metal roofi ng tiles For example, the due diligence and integration of ANNUAL REPORT 2004 to meet strongly growing demand from North Tasman Building Products was resourced primarily American and Asian markets. Tasman’s insulation from within the division, reducing the cost and risk 02 Highlights and sinkware operations also have capital profi le of the transaction, bringing forward the 04 Chairman’s Report investment plans to support growth. achievement of synergies and giving valuable 07 Chief Executive’s Report new experience to key staff. Pacifi c Steel can achieve signifi cant further 13 Concrete operational improvements with relatively small 18 Distribution LTIs per one million hours worked capital expenditure and will also begin to realise the 15 22 Laminates & Panels benefi ts of a customer-focused ‘lean manufacturing’ 12 29 Construction initiative. Synergies will also be realised in the 9 35 Building Products technology formation and marketing activities 40 Sustainability Review of CSP Galvanizing and Pacifi c Wire Technologies. 6

48 Board of Directors 3 52 Corporate Governance The commitment to these growth strategies is demonstrated by planned capital expenditure of 0 64 Financial Review 02 03 04 $70 million for the current year – approximately 38 68 Financial Statements LOST TIME INJURY FREQUENCY RATES $30 million in excess of amortisation and depreciation. 128 Audit Report As reported for the 2002 and 2003 fi nancial years. 130 Trend Statement The 2003 year excluded Fletcher Wood Panels. People The 2004 year included Tasman Building Products. 132 Regulatory Disclosures 148 Investor Information The performance improvements of the past three years refl ect the priority given to promotion 150 Directory of personal and team performance throughout GO DIRECTLY TO A SECTION OF THE the division. REPORT BY CLICKING ON THE NUMBER < back next > BUILDING PRODUCTS A key focus has been to achieve balance between the Environment experience and knowledge inherent in the All companies in the division actively pursue organisation and the essential process of critical compliance with relevant environmental legislation. review. Internal networking and information sharing There were no notable breaches during the year. between business units plays an important role in this and is actively pursued through a number Many Building Products’ businesses create value of ‘forums’ including Technology, Manufacturing, by processing what would otherwise be waste International and Sales & Marketing. streams. Pacifi c Steel reprocessed about 250,000 ANNUAL REPORT 2004 tonnes of scrap steel during the year into re-usable Health & safety products such as reinforcing bar and wire mesh for 02 Highlights the construction industry, and wire for vineyards and Recognition that safe practice requires the right 04 Chairman’s Report the dairy industry. Tasman Insulation reprocesses attitudes and behaviours is widespread in the division, 07 Chief Executive’s Report waste glass as the raw material for Pink® Batts®, and appropriate culture-change programmes are in 13 Concrete New Zealand’s best known house insulation. Pink® place. The focus on health and safety is reinforced by Batts® received the endorsement of Environmental 18 Distribution the inclusion of formal targets in general managers’ Choice New Zealand in August 2004, following a 22 Laminates & Panels personal incentive plans. The targets include a reviewreview ofof manufacturingmanufacturing iingredients,ngredients, thethe pproductionroduction 29 Construction reduction in injury frequency and a minimum number process,process, eenergynergy ssavingaving ppolicies,olicies, rrecyclingecycling pprogrammesrogrammes 35 Building Products of safety audits that executives are required to andand wwasteaste ddisposalisposal mmethods.ethods. 40 Sustainability Review complete during the year. 48 Board of Directors TheThe BuildingBuilding PProductsroducts ddivisionivision ffrequentlyrequently iinvestigatesnvestigates The lost time injury frequency rate (the number 52 Corporate Governance initiativesinitiatives ttoo rreduceeduce oorr rre-usee-use wwaste,aste, aandnd iiss ccurrentlyurrently of lost time injuries per one million work hours) was 64 Financial Review assessingassessing tthehe ddisposalisposal ooff uusedsed ttyresyres tthroughhrough tthehe reduced from 12.43 to 8.61. The decline was, in part, a PacifiPacifi cc SSteelteel eelectriclectric aarcrc ffurnace.urnace. 39 68 Financial Statements refl ection of the acquisition of the Tasman Building 128 Audit Report Products group of companies. 130 Trend Statement Outlook 132 Regulatory Disclosures The Occupational Safety and Health Service has laid WithWith ggoodood llevelsevels ooff ddemandemand aandnd bbenefienefi ttss 148 Investor Information charges against Pacifi c Steel in connection with two fromfrom internalinternal improvementimprovement programmes,programmes, fatalities at its rolling mill in 2002. Having reviewed all 150 Directory growthgrowth iinn eearningsarnings iiss eexpected,xpected, aalthoughlthough the circumstances surrounding the fatalities, the atat a llowerower rrateate tthanhan tthathat aachievedchieved iinn GO DIRECTLY TO A SECTION OF THE company is defending the charges. REPORT BY CLICKING ON THE NUMBER the latest year.

ANDREWANDREW RREDINGEDING ChiefChief Executive,Executive, BuildingBuilding PProductsroducts < back next > [From the left] The company and employees benefi t from training and development SUSTAINABILITY Dimond sponsors a project to protect the endangered Blue Duck Replanting at Grafton Gully, Auckland, as part of the new motorway project ANNUAL REPORT 2004 Waste glass is processed as raw material for Pink® Batts® insulation A Winstone Aggregates team looks on during an internal skills competition 02 Highlights REVIEW 04 Chairman’s Report 07 Chief Executive’s Report Fletcher Building recognises its responsibility to achieve success both 13 Concrete 18 Distribution in the near term and in creating a platform for future performance. 22 Laminates & Panels This is a continuing project that involves every part of the company. 29 Construction 35 Building Products 40 Sustainability Review Building a sustainable company Our commitment to sustainability is captured in a 48 Board of Directors set of values that are explicit and binding. We value 52 Corporate Governance Sustainability requires alignment of the economic, our people, our customers, our communities, our 64 Financial Review social and environmental aspects of the company’s performance. Whilst our primary focus is on environment, high ethical standards of behaviour, 40 68 Financial Statements creating economic value, we are also fully committed teamwork and supportive leadership, innovation, 128 Audit Report to meeting legitimate community expectations in excellence and results. Fletcher Building managers 130 Trend Statement other areas. We are focused in particular on our have a responsibility to promote the company’s 132 Regulatory Disclosures relationships with employees and the communities values, and all our people must conduct themselves 148 Investor Information in which we operate, and the impact our business in accordance with them. The statement of our 150 Directory has on the physical environment. values is found on the company’s website.

GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER < back next > SUSTAINABILITY REVIEW People LTIs per one million hours worked 12 Fletcher Building employs about 11,000 people – 7,000 based in New Zealand, 2,500 in Australia, 10 about 1,000 in the Pacifi c Islands and 500 in 8 North and South America. It is New Zealand’s 6 second-largest commercial employer. 4 2

The company recognises that a committed, 0 ANNUAL REPORT 2004 well-led workforce operating in a culture that values 02 03 04

performance is fundamental to the achievement LOST TIME INJURY FREQUENCY RATES – TOTAL GROUP 02 Highlights of business goals, and thus to sustainability. Includes nine months’ data for The Laminex Group in the 2003 04 Chairman’s Report year and nine months’ data for Tasman Building Products in 2004. We seek to implement policies and practices 07 Chief Executive’s Report that enhance the company’s standing as a preferred 13 Concrete Leadership employer, improve its ability to attract and retain 18 Distribution The company has a senior management group good people and assist them to achieve performance 22 Laminates & Panels of considerable experience, depth and breadth. excellence. Our goal is to create a powerful, 24 percent of our general managers have more 29 Construction distinctive and appealing employment brand than 15 years’ service with the company, and 35 Building Products that is in itself a sustainable resource. 40 Sustainability Review a further 15 percent have more than 10 years’ service. In turn, 35 percent of their direct reports 48 Board of Directors In the past year many programmes were implemented and progressed in support of these have more than 10 years service. 52 Corporate Governance goals, in areas including leadership development, 64 Financial Review The depth of knowledge that comes with this health and safety, employee benefi ts, succession 41 68 Financial Statements service, together with the strong external planning, recruitment and communication. 128 Audit Report experience of more recent senior appointees, 130 Trend Statement presents the company with a rich resource pool 132 Regulatory Disclosures for leadership and succession. 148 Investor Information 150 Directory

GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER < back next > SUSTAINABILITY REVIEW Fletcher Building is strongly committed to Training and development developing its own leaders, through a variety There is an extensive investment in training of programmes and processes. Among these and development to benefi t both employees are innovative programmes developed with the and the company. This is funded in two streams – University of Auckland Business School, including by grants made on an independent basis by Leadership Foundations, an Advanced Management The Fletcher Building Employee Educational Fund Programme now in its second year, and a portfolio and through routine skills training expenditure of customised short-courses. In the latest year, at business unit level. ANNUAL REPORT 2004 23 managers completed the AMP and 485 employees attended one or more short courses. The Fletcher Building Employee Educational Fund 02 Highlights provides fi nancial support to employees and their Our annual leadership climate survey, conducted 04 Chairman’s Report dependants for vocational learning and also funds in late 2003, gave 1,200 managers and supervisors 07 Chief Executive’s Report participation in a range of learning and development the chance to express their opinions about the 13 Concrete experiences targeted at student-aged children of company, their managers and their jobs. The survey employees. The fund is administered through a 18 Distribution is administered through an external supplier and trust established and functioning separately 22 Laminates & Panels provides anonymity to employees taking part. It from the company. 29 Construction encourages managers and their teams to implement 35 Building Products action plans to address any specifi c issues raised. 40 Sustainability Review 48 Board of Directors A 77 percent response rate was achieved in the survey. The fi ndings revealed employees to be 52 Corporate Governance signifi cantly more positive than those of benchmark 64 Financial Review companies in perceptions of pride (82 percent) 42 68 Financial Statements and commitment to the organisation (79 percent). 128 Audit Report 130 Trend Statement 132 Regulatory Disclosures 148 Investor Information 150 Directory

GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER < back next > SUSTAINABILITY REVIEW The trustees consider funding of educational Health & safety initiatives that have clear benefi ts to an employee Many of the company’s people work with hazardous or group of employees and that clearly enhance materials and heavy equipment. Keeping our their ability to make valuable contributions to the workplaces safe is thus our greatest priority – and company. In particular, they seek initiatives that will a considerable challenge, requiring high standards take the workforce to new levels of competence and of training, discipline and vigilance and the help the company to build the capabilities it requires commitment of all stakeholders. to achieve its objectives. ANNUAL REPORT 2004 The safety challenge is compounded by changing The number of applications to the fund has grown workplace demographics – as the national workforce 02 Highlights steadily in the past three years. There were 156 ages and becomes more ethnically diverse, fi tness and successful applications in the latest year, leading 04 Chairman’s Report communication factors are of increasing signifi cance to total grants of $3.1 million. These funded a very 07 Chief Executive’s Report in occupational health and safety management. wide range of learning experiences – from tertiary 13 Concrete qualifi cations to short courses and personal Fletcher Building continues to maintain a policy 18 Distribution development programmes, and ranging in content ofof zerozero tolerancetolerance fforor uunsafensafe bbehaviours,ehaviours, aandnd 22 Laminates & Panels from executive education and leadership to managementmanagement is fully accountableaccountable ttoo the boboardard 29 Construction specialised commercial and vocational disciplines. for this issue. 35 Building Products 40 Sustainability Review Support was also provided to the children of employees for a range of activities including 48 Board of Directors programmes for gifted children and children 52 Corporate Governance with special needs, fi eld scholarships, and 64 Financial Review programmes in art, mathematics and 43 68 Financial Statements other subjects. 128 Audit Report 130 Trend Statement 132 Regulatory Disclosures 148 Investor Information 150 Directory

GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER PETERPETER MMERRYERRY ExecutiveExecutive GGeneraleneral MManager,anager, HHumanuman RResourcesesources < back next > SUSTAINABILITY REVIEW The group-wide lost time injury frequency rate Work-life balance (the number of lost time injuries per one million The company offers several programmes to assist hours worked) was 9.5, compared with 10.2 for the its employees to balance their home and work lives. 2003 year (re-stated following the purchase of Wherever possible, these are available company-wide. Tasman Building Products). The company is committed to a signifi cant reduction in its The Fletcher Building Health and Fitness Centre, injury rate. in Auckland, offers a range of affordable health- management programmes and services to permanent ANNUAL REPORT 2004 Leading international occupational safety consultants employees. Kimba Corner, the company’s early DuPont Corporation conducted an audit of Fletcher childhood care and education centre, caters 02 Highlights Building in 2004, leading to a review of safety for more than 60 children from 18 months to fi ve 04 Chairman’s Report standards and practices. Responsibility for safety years. This facility also supports a school holiday reporting and support has since been devolved to 07 Chief Executive’s Report programme for older children, now in its tenth year. the fi ve divisions and their business units, with a 13 Concrete policy and performance overview being maintained The Fletcher Building Welfare Fund provides fi nancial 18 Distribution at the group level. assistance to employees suffering personal hardship 22 Laminates & Panels through unexpected misfortune. The fund is 29 Construction Fletcher Building continues to participate in the administered through a trust that is independent 35 Building Products Accident Compensation Corporation’s Partnership of the company. It also provides support for activities 40 Sustainability Review Programme, which assists employers to take and events that bring employees and their families 48 Board of Directors ownership of workplace health and safety, injury together for social and sporting occasions including management and claims management. Participation 52 Corporate Governance an annual Sevens Tournament and a Children’s in the Partnership Programme assists the company to 64 Financial Review Christmas Party. minimise its costs in this area whilst raising the overall 44 68 Financial Statements level of workplace health and safety management. The company’s staff discount card grants 128 Audit Report New Zealand employees access to negotiated 130 Trend Statement All Fletcher Building employees have access to discounts on a wide range of products and services. 132 Regulatory Disclosures confi dential counselling and support services through 148 Investor Information an independent, company-paid employee assistance 150 Directory programme. Further workplace wellbeing resources are accessible through the company’s intranet. GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER < back next > SUSTAINABILITY REVIEW Equal opportunity and diversity Our businesses make signifi cant contributions to A workplace that actively supports all employees the wellbeing of the environment through the use is central to the Fletcher Building culture. Our people of what would otherwise be solid waste in our major are richly varied in age and ethnicity, but still refl ect manufacturing operations. This includes steel and a historical gender imbalance. Women currently aluminium scrap, wood waste and coal ash. More comprise 15 percent of the company’s New Zealand than one petajoule of biomass energy is generated workforce and 25 percent of its Australian workforce. within the company’s operations. Fletcher Building aspires to be the employer of ANNUAL REPORT 2004 Signifi cant attention was given during the latest choice of all talented people, and is committed to year to work on the establishment of a Negotiated developing an environment that promotes business 02 Highlights Greenhouse Agreement with the New Zealand strength through diversity and equal opportunity. 04 Chairman’s Report Government. This will formally set the targets for 07 Chief Executive’s Report the company to achieve as part of New Zealand’s Labour relations commitment to the Kyoto Protocol on climate 13 Concrete 35 percent of Fletcher Building employees belong change. From the company’s perspective, the 18 Distribution to labour unions. The company has a sound labour agreement will mitigate the effect of the introduction 22 Laminates & Panels relations record and constructive relationships of a carbon tax in New Zealand from 2007. Good 29 Construction with all labour unions in its business. progress was made in the negotiation during the 35 Building Products year, and a successful conclusion is anticipated 40 Sustainability Review The environment within the current year. 48 Board of Directors The company recognises that its operations have 52 Corporate Governance Responsibility for monitoring performance and an impact on the environment. We seek to manage 64 Financial Review complying with regulatory requirements in regard this responsibly, by reviewing our performance to the environment is devolved to the divisions and 45 68 Financial Statements and taking measures to improve it, and by their business units. A range of programmes is 128 Audit Report accommodating environmental needs in the in place throughout the company. 130 Trend Statement design of processes and projects. 132 Regulatory Disclosures 148 Investor Information 150 Directory

GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER < back next > SUSTAINABILITY REVIEW Community THE SEVENS TOURNAMENT Fletcher Building businesses play a signifi cant role The Fletcher Building Sevens Tournament in many communities in Australia and New Zealand. provides friendly but spirited sporting Whilst our primary involvement is as employer, competition, along with a valued social supplier or customer to the many thousands of people occasion. The 2004 Sevens attracted almost we deal with daily, we recognise that we also have an 100 teams representing business units in important role as a responsible community member. ANNUAL REPORT 2004 rugby, netball, soccer and touch rugby. This means upholding the company’s values in all our dealings, maintaining good relationships 02 Highlights with our communities and, where appropriate, 04 Chairman’s Report participating in community activities. In the main, 07 Chief Executive’s Report responsibility for community-oriented activities is 13 Concrete held by the managers of the businesses within the 18 Distribution group, although there is corporate involvement 22 Laminates & Panels with Business in the Community and Habitat for Humanity. The involvements business units 29 Construction undertake refl ect specifi c community needs and 35 Building Products priorities, aligned with our businesses’ capability 40 Sustainability Review to contribute at the local level. They often also 48 Board of Directors harness the desire of our people to make their 52 Corporate Governance own contributions through personal involvement. 64 Financial Review 46 68 Financial Statements A number of businesses – including PlaceMakers, 128 Audit Report Winstone Wallboards, Tasman Insulation and Firth – became involved with the project to build a new 130 Trend Statement home for the Ofafonua family of Otahuhu, Auckland. 132 Regulatory Disclosures 148 Investor Information 150 Directory

GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER < back next > SUSTAINABILITY REVIEW The family had purchased a house with unseen LAMINEX AND THE structural problems and their position was publicised by Television New Zealand. The project to replace LEUKAEMIA FOUNDATION the house, co-ordinated by the Master Builders Laminex Group employees have raised Association, was completed in August 2004. A$173,000 over the past three years for the Leukaemia Foundation in Australia. Several businesses provide support to schools. Leukaemia Foundation chief executive offi cer In Building Products, the Whangarei branch of ANNUAL REPORT 2004 Chris Brown is shown accepting a cheque for Easysteel and a local engineering fi rm provide the amount raised in the 2004 year, from a $5,000 scholarship for a student from a local high school to study engineering at university. 02 Highlights Laminex chief executive Jonathan Ling. In Construction, the Interiors division provides basic 04 Chairman’s Report training in joinery to students from a local high 07 Chief Executive’s Report school. In Concrete, Winstone Aggregates provides 13 Concrete an annual grant of $5,000 to a primary school in 18 Distribution one of its operating areas and Golden Bay Cement 22 Laminates & Panels sponsors a Portland school’s participation in the 29 Construction Books in Homes Programme. 35 Building Products Other business units have established relationships 40 Sustainability Review that help them to manage the community impact 48 Board of Directors of their operations in co-operation with community 52 Corporate Governance representatives. Winstone Aggregates has a 64 Financial Review memorandum of understanding with a Tainui iwi in 47 68 Financial Statements connection with operations at its Whitehall quarry, 128 Audit Report a community liaison group in connection with its 130 Trend Statement Hunua quarry and an understanding with the Pokeno 132 Regulatory Disclosures community in which it contributes to a trust that 148 Investor Information supports community projects. It is also the primary sponsor of the Coast Guard on the Kaipara Harbour, 150 Directory where it has a sand extraction operation. GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER < back next > BOARD OF DIRECTORS

ANNUAL REPORT 2004

02 Highlights 04 Chairman’s Report 07 Chief Executive’s Report 13 Concrete RODERICK DEANE PAUL BAINES 18 Distribution 22 Laminates & Panels RODERICK SHELDON DEANE PAUL EDWARD BAINES 29 Construction PhD, LLD (Hon), BCom (Hons), FACA, FCIS, FNZIM, BCA, CA, MPP, Independent Non-Executive Director, 35 Building Products Independent Chairman of Directors, Chairman of the Chairman of the Audit Committee, Member of the 40 Sustainability Review Nominations Committee Nominations Committee 48 Board of Directors Dr Deane, 63, has had a broadly-based career in Mr Baines, 54, has an extensive background 52 Corporate Governance business and the executive branch of government. in fi nancial and strategic management and has wide 64 Financial Review He is currently chairman of several organisations in experience as a director of organisations in both the 48 68 Financial Statements addition to Fletcher Building, including Telecom New public and private sectors. He is a director of Gough 128 Audit Report Zealand, ANZ National Bank, Fletcher Building Gough and Hamer, Greenstone Fund, Telecom New 130 Trend Statement Finance, Te Papa Tongarewa (the Museum Zealand, Fletcher Building Finance, the Reserve Bank 132 Regulatory Disclosures of New Zealand) and the New Zealand Seed Fund. of New Zealand and the New Zealand Institute of 148 Investor Information Economic Research. Dr Deane is a director of the Australia and New 150 Directory Zealand Banking Group and Woolworths, both of

GO DIRECTLY TO A SECTION OF THE which are headquartered in Australia. He is also on REPORT BY CLICKING ON THE NUMBER the Board of Governance of IHC Inc. < back next > BOARD OF DIRECTORS

ANNUAL REPORT 2004

02 Highlights 04 Chairman’s Report 07 Chief Executive’s Report 13 Concrete HUGH FLETCHER GEOFFREY McGRATH 18 Distribution 22 Laminates & Panels HUGH ALASDAIR FLETCHER GEOFFREY JAMES McGRATH 29 Construction MCom (Hons), MBA (Stanford), BSc, Independent MIIE, Independent Non-Executive Director, Member 35 Building Products Non-Executive Director, Member of the Audit and of the Remuneration and Nominations Committees 40 Sustainability Review Nominations Committees 48 Board of Directors Mr McGrath, 62, has had extensive management Mr Fletcher, 56, has had extensive management 52 Corporate Governance experience in the Australian building products experience and now holds a number of directorships industry, including 10 years as managing director 64 Financial Review and advisory positions. He is chairman of the of GWA International, a manufacturer and marketer 49 68 Financial Statements Advisory Board of No 8 Ventures. He is a director of consumer and building products. Mr McGrath 128 Audit Report of IAG New Zealand, Ports of Auckland, Rubicon, retired as managing director in 2003, but has 130 Trend Statement VCU Technology, Fletcher Building Finance and renewed his relationship with GWA International 132 Regulatory Disclosures the Reserve Bank of New Zealand. He is also a through his appointment as a non-executive director 148 Investor Information member of the Asia Pacifi c Advisory Committee in July 2004. He is also Chairman of Campbell 150 Directory of the New York Stock Exchange, the Business Brothers (Brisbane) and a director of Fletcher Advisory Council of the United Nations Offi ce for Building Finance. GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER Project Services and the Council of the University of Auckland. < back next > BOARD OF DIRECTORS

ANNUAL REPORT 2004

02 Highlights 04 Chairman’s Report 07 Chief Executive’s Report 13 Concrete RALPH NORRIS SIR DRYDEN SPRING 18 Distribution 22 Laminates & Panels RALPH JAMES NORRIS SIR DRYDEN SPRING 29 Construction FNZCS, FNZIM, Independent Non-Executive Director, DSc (Hon), Independent Non-Executive Director, Chairman of the 35 Building Products Member of the Remuneration and Nominations Committees Remuneration Committee, Member of the Nominations Committee 40 Sustainability Review 48 Board of Directors Mr Norris, 55, is chief executive offi cer and Sir Dryden, 64, has a long-standing record of leadership, 52 Corporate Governance managing director of Air New Zealand. Before in a range of industries. He is chairman of WEL Energy taking up this role he was head of International Group, the Asia 2000 Foundation and the New Zealand 64 Financial Review Financial Services for the Commonwealth Bank APEC Business Advisory Council. He is a director of ANZ 50 68 Financial Statements Group (responsible for operations in New Zealand, National Bank, Port of Tauranga, Sky City Entertainment 128 Audit Report the Pacifi c and Asia), managing director and chief Group and Fletcher Building Finance. 130 Trend Statement executive offi cer of ASB Group and chairman of He is a member of the New Zealand Business and 132 Regulatory Disclosures Sovereign Assurance. He is also a director of Parliament Trust and the Waikato Medical Research 148 Investor Information Fletcher Building Finance. Foundation. He is also a distinguished fellow of the 150 Directory Institute of Directors and a member emeritus of the GO DIRECTLY TO A SECTION OF THE International Policy Council on Agriculture, Food REPORT BY CLICKING ON THE NUMBER and Trade. < back next > BOARD OF DIRECTORS

ANNUAL REPORT 2004

02 Highlights 04 Chairman’s Report 07 Chief Executive’s Report KERRIN VAUTIER RALPH WATERS 13 Concrete 18 Distribution 22 Laminates & Panels KERRIN MARGARET VAUTIER RALPH GRAHAM WATERS 29 Construction CMG, BA, Independent Non-Executive Director, MBus (WAIT), ARMIT (Mech Eng), CPEng (Aust), Chief 35 Building Products Member of the Audit and Nominations Committees Executive Offi cer and Managing Director 40 Sustainability Review 48 Board of Directors Mrs Vautier, 59, is a research economist specialising Mr Waters, 55 , was recruited as chief executive 52 Corporate Governance in competition law and economics. She is chair of offi cer in May 2001 and was appointed to the board the Advisory Board of the New Zealand Asia Institute in July 2001. Prior to joining Fletcher Building, 64 Financial Review and a director of Deloitte Touche Tohmatsu (NZ), Mr Waters was managing director of Email, a major 51 68 Financial Statements News & Media (NZ) and Fletcher Building Finance. Australian industrial company. In his 18 years 128 Audit Report with Email he was general manager planning, group 130 Trend Statement Mrs Vautier is a lay member of the High Court under manager industrial products, group general manager the Commerce Act, a senior part-time lecturer in the 132 Regulatory Disclosures major appliances, and fi nally managing director Commercial Law department at the University of 148 Investor Information from 1998. Auckland, and a former member of the New Zealand 150 Directory Commerce Commission. She is also a member of the Mr Waters is also a director of Fisher and Paykel GO DIRECTLY TO A SECTION OF THE International Advisory Group of the Pacifi c Economic Appliances Holdings and Fletcher Building Finance. REPORT BY CLICKING ON THE NUMBER Cooperation Council’s Trade Forum. < back next > CORPORATE

ANNUAL REPORT 2004 GOVERNANCE

02 Highlights 04 Chairman’s Report 07 Chief Executive’s Report Fletcher Building is a New Zealand based building materials 13 Concrete 18 Distribution manufacturer whose securities are listed on the New Zealand and 22 Laminates & Panels Australian stock exchanges. In accordance with the requirement by 29 Construction these exchanges for formal adoption by boards of directors of 35 Building Products approved corporate governance practices, the board of the 40 Sustainability Review company confi rms that it is committed to the highest standards 48 Board of Directors of behaviour and accountability, and has adopted policies and 52 Corporate Governance procedures that refl ect this. 64 Financial Review 52 68 Financial Statements 128 Audit Report 130 Trend Statement 132 Regulatory Disclosures 148 Investor Information

150 Directory MARTINMARTIN FFARRELLARRELL Company Secretary and General Counsel GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER < back next > CORPORATE GOVERNANCE The company has adopted 10 principles recognised The 10 essential governance principles adopted by the Australian Stock Exchange Corporate by the board are that the company should: Governance Council in its report of 31 March 2003. While there is no ‘best’ way to organise for corporate 1 Lay solid foundations for management governance, directors believe that this provides an and oversight appropriate format. In establishing its corporate The company’s procedures are designed to: governance procedures, the company has also  enable the board to provide strategic considered practices and trends in corporate ANNUAL REPORT 2004 guidance for the company and effective governance in other jurisdictions and has oversight of management incorporated these where appropriate. 02 Highlights  clarify the respective roles and responsibilities The practices so adopted ensure that the company 04 Chairman’s Report of board members and senior executives in order meets the requirements of the New Zealand to facilitate board and management accountability 07 Chief Executive’s Report Exchange’s Corporate Governance Best Practice to both the company and its shareholders 13 Concrete Code and the Corporate Governance in New Zealand 18 Distribution  ensure a balance of authority so that no single Principles and Guidelines published by the Securities individual has unfettered powers. 22 Laminates & Panels Commission in February 2004. 29 Construction The board has an obligation to protect and enhance The company’s corporate governance practices are 35 Building Products the value of the company’s assets, and to act in its now fully detailed on its website and shareholders 40 Sustainability Review interests. It exercises this obligation through the seeking a more in-depth review are encouraged 48 Board of Directors approval of appropriate corporate strategies and to access information from this source. 52 Corporate Governance processes, with particular regard to portfolio 64 Financial Review composition and return expectations. These include 53 68 Financial Statements approval of transactions relating to acquisitions, 128 Audit Report divestments and capital expenditures above 130 Trend Statement delegated authority limits; fi nancial and dividend policy; and the review of performance against 132 Regulatory Disclosures strategic objectives. 148 Investor Information 150 Directory

GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER < back next > CORPORATE GOVERNANCE As part of its review of the strategic direction of The governance procedures require the separation the company, an off-site strategy session is held of the role of chairman from that of the chief with senior management each year. At most monthly executive. The chairman’s role is to manage the board meetings, a strategic review is held of a board effectively, to provide leadership to the business group or business unit, where the focus board and to interact with the chief executive. is on specifi c strategies being contemplated or applied in that area. 2 Structure the board to add value

ANNUAL REPORT 2004 The company achieves board and management Directors believe that for the board to be effective accountability through written terms of reference it needs to facilitate the effi cient discharge of the duties imposed by law on the directors and add 02 Highlights for the chairman, directors and management, and a formal delegation of authority to the chief executive. value to the company. To achieve this, the board 04 Chairman’s Report The effect of this framework is that whilst the board is organised in such a way that it: 07 Chief Executive’s Report has statutory responsibility for the activities of the 13 Concrete  obtains a proper understanding of, and company, this is exercised through delegation to the 18 Distribution competence to deal with, the current and chief executive, who is charged with the day-to-day emerging issues of the business 22 Laminates & Panels leadership and management of the company. To 29 Construction strengthen its governance processes, the board  can effectively review and challenge the 35 Building Products reviewed the delegations to the chief executive performance of management and exercise 40 Sustainability Review during the year. independent judgement

48 Board of Directors  can assist in the identifi cation of director The board evaluates annually the performance of 52 Corporate Governance candidates for shareholder vote. the chief executive and the chief executive’s direct 64 Financial Review reports. The evaluation is based on criteria that 54 68 Financial Statements include the performance of the business and the 128 Audit Report accomplishment of long term strategic objectives 130 Trend Statement and other non-quantitative objectives established 132 Regulatory Disclosures at the beginning of each year. 148 Investor Information 150 Directory

GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER < back next > CORPORATE GOVERNANCE Board composition Committees While the constitution provides that the appropriate Committees established by the board review and size for the board is between three and nine analyse policies and strategies, usually developed members, the board has determined that eight is by management, which are within their terms of an appropriate number at this time. One-third of all reference. They examine proposals and, where directors stand for election every year. The directors appropriate, make recommendations to the full who retire in each year are those who have been board. Committees do not take action or make longest in offi ce since their last election or, if there decisions on behalf of the board unless specifi cally ANNUAL REPORT 2004 are more than one of equal term, by agreement. mandated by prior board authority to do so. Subject to continued shareholder support and with A committee or an individual director may engage 02 Highlights effect from 1 July 2003, the standard term for a separate independent counsel at the expense of 04 Chairman’s Report director will be six years from the date that he or the company in appropriate circumstances, with 07 Chief Executive’s Report she initially stands for election. At the end of this the approval of the chairman. 13 Concrete term the director will offer his or her resignation. The current committees of the board are audit, 18 Distribution The board may, if it considers it appropriate, offer remuneration and nominations. These meet when 22 Laminates & Panels a further three year term. necessary and consist entirely of non-executive 29 Construction The board has constituted a nominations committee directors. From time to time, the board may 35 Building Products chaired by the chairman of the company and create ad hoc committees to examine specifi c 40 Sustainability Review composed of all the non-executive directors. This issues on its behalf. 48 Board of Directors committee assists in the identifi cation of appropriate 52 Corporate Governance directors and, through the committee chair, reviews 64 Financial Review the performance of existing directors. 55 68 Financial Statements 128 Audit Report 130 Trend Statement 132 Regulatory Disclosures 148 Investor Information 150 Directory

GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER < back next > CORPORATE GOVERNANCE Board process 3 Promote ethical and responsible Although directors are elected by the shareholders decision-making to bring special expertise or perspectives to board The company has written procedures to: deliberations, decisions of the board are made as  clarify the standards of ethical behaviour required a group, after taking each perspective into account of company directors and key executives, and and in the best interests of the company as a whole. ensure the observance of those standards through The directors receive comprehensive information on a code of conduct and the terms of reference for ANNUAL REPORT 2004 the company’s operations before each meeting and directors and management

have unrestricted access to any other information  prescribe the circumstances where directors 02 Highlights or records. To assist in ensuring information is timely, and employees can trade in company securities. 04 Chairman’s Report focused and concise, board papers are prepared and 07 Chief Executive’s Report distributed electronically in PowerPoint format. Where The company has a written code of values, and 13 Concrete directors cannot participate in a meeting they forward supplements this with various code of conduct practices that are incorporated into all employees’ 18 Distribution their views to another director in advance of the meeting. Senior management is also available at each terms of employment. Further details are provided 22 Laminates & Panels meeting to address queries, and to assist in developing later in this section. 29 Construction the board’s understanding of the issues facing the 35 Building Products New Zealand legislation and the company’s securities company and the performance of its businesses. 40 Sustainability Review trading code of conduct prevent short-term trading 48 Board of Directors Director participation remains very high, with and dealing in the company’s securities whilst 52 Corporate Governance only three apologies during the year for the 10 directors and senior executives are in possession 64 Financial Review scheduled meetings. No director had more than of non public material and relevant information. 56 68 Financial Statements one apology. Included as part of these meetings The company reinforces these measures by requiring 128 Audit Report were 12 site visits and a strategic retreat session that anyone designated as having the opportunity with senior management. Outside of these to access price sensitive information can transact in 130 Trend Statement scheduled meetings were two special purpose the company’s securities only with the prior approval 132 Regulatory Disclosures board meetings and a review of the company’s of the company secretary. 148 Investor Information operations in Western Australia. 150 Directory

GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER < back next > CORPORATE GOVERNANCE 4 Safeguard integrity in fi nancial reporting 5 Make timely and balanced disclosure While the ultimate responsibility to ensure the The company has in place procedures designed integrity of the company’s fi nancial reporting rests to ensure compliance with the NZX and ASX Listing with the board, the company has in place a structure Rules such that:

of review and authorisation designed to ensure the  all investors have equal and timely access to truthful and factual presentation of the company’s material information concerning the company, fi nancial position. This includes: including its fi nancial situation, performance, ANNUAL REPORT 2004 ownership and governance  an appropriately resourced audit committee operating under a written charter  company announcements are factual and 02 Highlights presented in a clear and balanced way.  review and consideration by the audit committee 04 Chairman’s Report of the accounts and the preliminary releases of Accountability for compliance with disclosure 07 Chief Executive’s Report results to the market obligations is with the company secretary. Signifi cant 13 Concrete  a process to ensure the independence and market announcements, including the preliminary 18 Distribution competence of the company’s external auditors announcement of the half year and full year results, 22 Laminates & Panels and the accounts for those periods, require review  establishment of an internal audit function in 29 Construction by either the audit committee or the board. the corporate offi ce, with reporting responsibility 35 Building Products to the audit committee 40 Sustainability Review 48 Board of Directors  responsibility for appointment of the auditors 52 Corporate Governance residing with the audit committee. 64 Financial Review The audit committee met formally on three 57 68 Financial Statements occasions, at which all committee members 128 Audit Report were present. 130 Trend Statement 132 Regulatory Disclosures 148 Investor Information 150 Directory

GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER < back next > CORPORATE GOVERNANCE 6 Respect the rights of shareholders 8 Encourage enhanced performance The company seeks to ensure that its shareholders Directors and key executives need to be equipped empathise with its activities by: with the appropriate knowledge and information

 communicating effectively with them to discharge their responsibilities effectively, and assured that individual and collective performance  giving them ready access to balanced and is regularly and fairly reviewed. clear information about the company and corporate proposals The terms of reference for directors and the chairman, ANNUAL REPORT 2004  making it easy for them to participate in the charters for board committees and the delegation general meetings. to the chief executive offi cer all provide for reviews of 02 Highlights the performance of directors and senior management. 04 Chairman’s Report To assist with this, a company website is maintained The nominations committee assesses the composition 07 Chief Executive’s Report with relevant information, including copies of and effectiveness of the board and its committees 13 Concrete presentations, reports and media releases. The annually. The chair of the nominations committee 18 Distribution corporate governance procedures are also included undertakes one-on-one reviews with all directors on the website. To further assist shareholders the 22 Laminates & Panels on the effectiveness of the board. company prepares and distributes its accounts 29 Construction in electronic format, to shareholders who have The board evaluates annually the performance 35 Building Products so requested. This annual report is also available of the chief executive offi cer and his direct reports. 40 Sustainability Review in electronic format. The evaluation is based on criteria that include the 48 Board of Directors performance of the business and the accomplishment 52 Corporate Governance of long term strategic objectives and other non 7 Recognise and manage risk 64 Financial Review quantitative objectives established at the beginning The company has a formalised system for identifying, 58 68 Financial Statements of each year. over-seeing, managing and controlling risk. 128 Audit Report In addition to these annual performance reviews, 130 Trend Statement The processes involved require the maintenance signifi cant policy issues and capital expenditure or 132 Regulatory Disclosures of a risk register that identifi es key risks facing the divestment decisions of management are required 148 Investor Information business, and the status of initiatives employed to to go through a formal peer group review process, 150 Directory reduce them. The risk register is reviewed regularly, including approval by the executive offi ce or the including as part of the internal audit reviews. board where necessary. GO DIRECTLY TO A SECTION OF THE A formal risk review is held with the board at REPORT BY CLICKING ON THE NUMBER least annually. < back next > CORPORATE GOVERNANCE 9 Remunerate fairly and responsibly Directors’ fees are normally reviewed biennially by The company seeks to ensure that its remuneration the nominations committee unless it is apparent that policies attract and maintain talented and motivated a signifi cant market movement has occurred. This directors and employees as a way of enhancing the has been the case with the general trend to removing performance of the company. directors retiring allowances, and the increasingly onerous corporate governance obligations. The company’s policy is to align directors’ remuneration Non-executive directors’ remuneration with that for comparably sized Australian companies. ANNUAL REPORT 2004 The aggregate amount of fees paid to non-executive As a result, to retain the desired alignment with the directors for services in their capacity as directors market, directors’ remuneration will be increased 02 Highlights during the year ended 30 June 2004 were: over the next two years. The base fee for directors will be $70,000 per annum with effect from 1 July 04 Chairman’s Report BASE COMMITTEE OTHER TOTAL 07 Chief Executive’s Report FEES NZ$ FEES NZ$ FEES NZ$ NZ$ 2004 and $80,000 per annum from 1 July 2005. 13 Concrete R S Deane 187,500 3,750 191,250 In acknowledgement of the varying workloads of 18 Distribution P E A Baines 62,500 15,250 77,750 the board committees the additional remuneration 22 Laminates & Panels H A Fletcher 62,500 11,000 73,500 payable is $12,000 for membership of the audit 29 Construction G J McGrath 62,500 8,500 10,000 81,000 committee, $8,000 for the remuneration committee 35 Building Products and $4,000 for the nominations committee. These R G Norris 62,500 8,500 71,000 40 Sustainability Review will increase to $15,000, $10,000 and $5,000 48 Board of Directors Sir D Spring 62,500 11,500 74,000 respectively from 1 July 2005. Committee chairs 52 Corporate Governance K M Vautier 62,500 11,000 73,500 receive a 50 percent premium to the committee 64 Financial Review TOTAL 562,500 69,500 10,000 642,000 fee. The board chairman’s fee is determined 59 68 Financial Statements as three times the base fee paid to directors. 128 Audit Report The remuneration policy for directors does not In acknowledgement of the additional time commitment required of any Australian based 130 Trend Statement include participation in either a share or share director a travelling allowance of $10,000 per 132 Regulatory Disclosures option plan. Directors or their associates are annum is also payable. Where an ad hoc committee 148 Investor Information nevertheless required to hold at least 20,000 shares in the company. is convened, such as for due diligence, additional 150 Directory remuneration is payable at $1,000 per half day.

GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER < back next > CORPORATE GOVERNANCE The company believes that this will provide an Since balance date these options have been appropriate remuneration structure that recognises exercised and the shares so acquired are noted the increased Australasian focus of the company’s with the schedule of directors’ holdings of equity activities and the increased corporate governance securities in the Regulatory Disclosures section obligations imposed on directors. of this report.

Executive directors do not receive remuneration Executive director’s remuneration as directors of Fletcher Building Finance Limited ANNUAL REPORT 2004 R G Waters’ remuneration for the year ended or other group subsidiaries. 30 June 2004 was $1,640,000. This included a variable incentive payment of $720,000 for 02 Highlights Directors’ and offi cers’ indemnifi cation achieving company profi tability targets and 04 Chairman’s Report and insurance individual performance goals. A part of this 07 Chief Executive’s Report remuneration has been taken by way of an The company has arranged a programme of 13 Concrete employer contribution to a retirement benefi t directors’ and offi cers’ liability insurance covering 18 Distribution with the Fletcher Building Retirement Plan. directors, executives and employees in managerial 22 Laminates & Panels positions acting on behalf of the company. Cover is R G Waters’ appointment as chief executive is for damages, judgements, fi nes, penalties, legal costs 29 Construction for indefi nite duration, subject to the company’s awarded and defence costs arising from wrongful 35 Building Products standard criteria for cessation of employment. acts committed whilst acting for the company. 40 Sustainability Review In terms of that contract he has been issued The types of acts that are not covered are dishonest, 48 Board of Directors 1,000,000 options over the ordinary shares of the fraudulent or malicious acts or omissions; wilful 52 Corporate Governance company, at an exercise price of $2.28 per option, breach of statute, regulations or duty to the 64 Financial Review being the weighted average selling price of the company; improper use of information to the 60 68 Financial Statements company’s shares in the 10 trading days prior to the detriment of the company; and breach of 128 Audit Report date of announcement of his appointment on 16 May professional duty. This is supplemented by 130 Trend Statement 2001. The value of these options, assessed at the indemnifi cation by the company, but this does 132 Regulatory Disclosures date of grant, has been expensed over a three year not cover liability for criminal acts. 148 Investor Information restrictive period before they could be exercised, 150 Directory but is not included in the total annual remuneration of $1,640,000 noted above. GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER < back next > CORPORATE GOVERNANCE Senior management remuneration Superannuation The Fletcher Building Retirement Plan (the Plan) Remuneration philosophy provides defi ned benefi t and defi ned contribution The company’s remuneration strategy aims to savings entitlements. As the defi ned benefi t attract, retain and motivate high calibre employees entitlement has been closed to new members at all levels of the organisation, and so drive since 1990 only a few of the long serving members performance and sustained growth in shareholder participate on this basis. For those participating value. Underpinning this philosophy is that all an amount to recognise the value of the employer ANNUAL REPORT 2004 employees should be appropriate and competitively contributions required is included in the remuneration rewarded – particularly for delivering superior information in the Regulatory Disclosures section of 02 Highlights performance which contributes to improved this report. Participation on a defi ned contribution 04 Chairman’s Report business results. basis for senior executives has been available since 07 Chief Executive’s Report 2003, with executives having the ability to take a To this end, the company’s remuneration committee 13 Concrete portion of their total remuneration by way of an is kept fully apprised of relevant market information 18 Distribution employer contribution to the Plan. The amount and best practice, obtaining advice from external contributed on their behalf is after deduction, and 22 Laminates & Panels advisors when necessary. Remuneration levels are payment, of the required superannuation withholding 29 Construction reviewed annually for market competitiveness. 35 Building Products tax at 33 percent. Executives can elect to have the return on their investment determined by reference 40 Sustainability Review Total remuneration for executives comprises fi xed pay, including the value of any benefi ts, and short term to the investment return of the Plan, or by reference 48 Board of Directors variable pay in the form of an annual performance to the performance of the company’s shares. 52 Corporate Governance related bonus which forms a signifi cant portion 64 Financial Review of the total remuneration package. All executive 61 68 Financial Statements performance bonuses require achievement of a 128 Audit Report mixture of company fi nancial and personal targets. 130 Trend Statement 132 Regulatory Disclosures 148 Investor Information 150 Directory

GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER < back next > CORPORATE GOVERNANCE Holding the company’s securities 10 Recognise the legitimate interests Alignment with shareholder interests is achieved of stakeholders through a requirement that all senior executives The company recognises that it has a number hold shares in the company, or an economic interest of legal and other obligations to non shareholder in such shares, equal to the value of half of their stakeholders such as employees, clients, customers fi xed annual remuneration. Half the after tax value and the community as a whole. of any annual bonus payment received is required to be invested in this manner until the stipulated Its commitment to these obligations is captured ANNUAL REPORT 2004 threshold has been reached. in the code of values, and in various policies and procedures for ethical conduct, the responsibilities 02 Highlights The New Zealand Companies Act 1993 requires the of employees, confl icts of interest, and relationships 04 Chairman’s Report disclosure of all remuneration payable over $100,000 with suppliers and customers. These are incorporated 07 Chief Executive’s Report per annum in bands of $10,000 increments. As the into the employment terms of all employees. 13 Concrete company must comply with this obligation, it has chosen to not also make detailed disclosure of the 18 Distribution Compliance with ASX Corporate remuneration of the fi ve highest paid executives as 22 Laminates & Panels Governance Guidelines is considered best practice under the ASX Corporate 29 Construction Governance Guidelines. The company meets all the best practice 35 Building Products requirements of the ASX Corporate Governance 40 Sustainability Review Council other than making detailed disclosure of 48 Board of Directors the fi ve highest executives’ remuneration. As is 52 Corporate Governance noted above the company makes the remuneration 64 Financial Review disclosures required of a New Zealand company 62 68 Financial Statements under the Companies Act 1993. 128 Audit Report 130 Trend Statement 132 Regulatory Disclosures 148 Investor Information 150 Directory

GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER < back next > ANNUAL REPORT 2004

02 Highlights 04 Chairman’s Report 07 Chief Executive’s Report 13 Concrete 18 Distribution 22 Laminates & Panels 29 Construction 35 Building Products 40 Sustainability Review 48 Board of Directors 52 Corporate Governance 64 Financial Review 63 68 Financial Statements 128 Audit Report 130 Trend Statement 132 Regulatory Disclosures 148 Investor Information 150 Directory

GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER < back next > FINANCIAL REVIEW Financial Review

Strong financial position will support further growth opportunities Results The results for the year are set out in the Highlights section at the beginning of this report and commentary ANNUAL REPORT 2004 is provided at the group level in the reviews by the Chairman and the Chief Executive. Segmented results and operating information are set out in the divisional reviews on pages 13 to 39. 02 Highlights Balance sheet 04 Chairman’s Report With strong earnings and operating cashflow, and with gearing (net debt to net debt plus equity) 07 Chief Executive’s Report reduced from 49.9 percent at June 2003, to 43 percent, Fletcher Building remains in a very sound financial position. 13 Concrete TheThe companycompany eendeavoursndeavours ttoo mmaintainaintain iitsts ggearingearing iinn a rrangeange ooff 4400 ttoo 5500 ppercentercent aandnd aatt 4433 ppercentercent iiss wwellell wwithinithin aallll 18 Distribution relevantrelevant bankbank aandnd ddebtebt ccovenants.ovenants. IInterestnterest ccoverover ((EBITDAEBITDA ttoo ttotalotal iinterestnterest ppaid)aid) wwasas 77.8.8 ttimesimes iinn tthehe 22004004 yyear,ear, 22 Laminates & Panels up from 7.3 times in 2003. 29 Construction NetNet ddebtebt wwasas $848$848 mmillionillion aatt JJuneune 22004,004, wwithith aann iincreasencrease iinn bborrowingsorrowings ttoo ffundund tthehe aacquisitioncquisition ooff TTasmanasman 35 Building Products BuildingBuilding PProductsroducts bbeingeing ooffsetffset bbyy a ddecreaseecrease iinn wworkingorking ccapitalapital aandnd sstrongtrong ccashflowashflow ffromrom hhigherigher aactivityctivity llevels.evels. The comparable figure at June 2003 was $858 million. 40 Sustainability Review 48 Board of Directors TheThe purchasepurchase ofof TasmanTasman BuildingBuilding PProductsroducts wwasas ffinancedinanced bbyy ccashash ffromrom eexistingxisting ffacilitiesacilities aandnd tthehe iissuessue ofof 2525 millionmillion sharesshares atat $4.10$4.10 each,each, againstagainst a pre-announcementpre-announcement closingclosing priceprice ooff $$4.27.4.27. 52 Corporate Governance 64 Financial Review ToTo eenhancenhance tthehe ccompany’sompany’s ddebtebt mmaturityaturity pprofile,rofile, $$4444 mmillionillion ooff ccapitalapital nnotesotes hheldeld aass ttreasuryreasury stock were sold into the market. 64 68 Financial Statements DividendsDividends ppaidaid dduringuring tthehe yyearear ttotalledotalled $$9191 mmillion,illion, ooff wwhichhich $$6969 mmillionillion wwereere iinn ccashash aandnd 128 Audit Report thethe bbalancealance bbyy wwayay ooff tthehe ddividendividend rreinvestmenteinvestment pplan.lan. TThehe ccompany’sompany’s gguidelinesuidelines oonn ffutureuture 130 Trend Statement dividenddividend ddeclarationseclarations rrequireequire a reviewreview ofof availableavailable cashcash aafterfter ttakingaking iintonto cconsiderationonsideration 132 Regulatory Disclosures growth requirements and a prudent gearing policy. 148 Investor Information 150 Directory

GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER BILLBILL RROESTOEST ChiefChief FinancialFinancial OOffiffi cecerr < back next > FINANCIAL REVIEW Financial Review cont.

Cashflow At $424 million, cashflow from operations was $148 million up on the previous 12 months. This reflected the inclusion of a full year of earnings from The Laminex Group, the Tasman acquisition and higher activity levels. Good working capital management resulted in an overall reduction of $13 million during the year despite the growth of the company. Capital expenditure excluding acquisitions and divestments totalled $137 million, of which 27 percent was growth-related. This compares with depreciation of $111 million for the year.

ANNUAL REPORT 2004 The composition of the movement in net debt is shown below:

MOVEMENT IN NET DEBT (EXCLUDING CAPITAL NOTES) 02 Highlights $M 04 Chairman’s Report 800 07 Chief Executive’s Report

13 Concrete 650 18 Distribution 22 Laminates & Panels 500 29 Construction 35 Building Products 350 40 Sustainability Review 200 Fo Opening Deb T C Ca Dividends Distribution t Closing Deb Ca Acq asman Building Pr 48 Board of Directors ash fr r pit pit eign Ex uisitions al Expenditur al Not

52 Corporate Governance om Oper change es/Equit t

64 Financial Review /Div t o Minoritie

ations 65 68 Financial Statements estments e oduct y 128 Audit Report s s 130 Trend Statement

132 Regulatory Disclosures POSITIVE NEGATIVE 148 Investor Information 150 Directory

GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER < back next > FINANCIAL REVIEW Financial Review cont.

Risk management The company has an integrated programme to manage risks associated with interest rate, commodity price and exchange rate movements. This hedging programme aims to assure a base level of profitability and reduce volatility of earnings. Further details are provided in note 28 of the financial statements.

Revaluation The directors have adopted a policy to revalue land, buildings and plant and machinery in accordance with ANNUAL REPORT 2004 accounting standard FRS 3, which requires such items to be valued at fair value. There were no adjustments made to the carrying value of the assets of the business during the year.

02 Highlights Retirement plan 04 Chairman’s Report The company operates a number of defined benefit retirement plans for its employees. The largest of these is 07 Chief Executive’s Report the New Zealand plan which has been closed to new members for some years. These schemes are accounted for in 13 Concrete accordance with United States accounting standard FAS-87, which has the effect of smoothing the volatility in returns 18 Distribution earned by the scheme by amortising the difference between expected and actual returns over the remaining life of the members. At balance date, $57 million of net losses are to be expensed in future periods. The New Zealand 22 Laminates & Panels scheme is currently funded to 115 per cent of the projected benefit obligations following a $16 million contribution 29 Construction by the company in the 2004 year. 35 Building Products 40 Sustainability Review 48 Board of Directors OPERATING CASHFLOW GEARING CAPEX INVESTMENT

52 Corporate Governance �� � �� 64 Financial Review ��� �� ���� 66 68 Financial Statements ��� �� ��� 128 Audit Report ��� �� ��� 130 Trend Statement ��� �� ��� 132 Regulatory Disclosures 148 Investor Information ��� �� ��� 150 Directory � � � �� �� �� �� �� �� �� �� �� �� �� ��

GO DIRECTLY TO A SECTION OF THE ��������������������� ������������ REPORT BY CLICKING ON THE NUMBER < back next > FINANCIAL REVIEW Financial Review cont.

International Financial Reporting Standards The Accounting Standards Review Board announced in December 2002 that International Financial Reporting Standards (IFRS) will apply to New Zealand reporting entities for periods commencing 1 January 2007. Entities also have the option of adopting the IFRS early (from 1 January 2005, in line with Australian and European requirements) and Fletcher Building proposes to do so. The company established a project team in 2003 to prepare the group for transition to IFRS. Further work is required

ANNUAL REPORT 2004 in changing systems, training staff and managing the business impacts of adopting IFRS. Fletcher Building will prepare financial statements using IFRS from the period beginning 1 July 2005. The first interim statements will be for the six months ended 31 December 2005 and the first annual statements will be for the year 02 Highlights ended 30 June 2006. 04 Chairman’s Report To comply with IFRS for the first time the group will need to restate the comparative balances applying the new 07 Chief Executive’s Report standards. This will affect the earnings and cashflow statements and the statement of financial position. Most 13 Concrete adjustments required on transition to IFRS will be made retrospectively to retained earnings as at 30 June 2004. 18 Distribution The group has identified the impact of IFRS on its financial statements. Based on the current requirements, it is 22 Laminates & Panels estimated that the impact on the opening statement of financial position as at 30 June 2004 will be to reduce total 29 Construction assets by $12 million, increase total liabilities by $68 million and reduce equity by $80 million. It is estimated that the 35 Building Products impact on future earnings statements will be to increase net profit after tax by $16 million. An explanation of these 40 Sustainability Review adjustments is given in note 37 to the financial statements. 48 Board of Directors The IFRS are subject to further review by the Accounting Standards Review Board, and it is possible that some 52 Corporate Governance of the current proposals may change prior to finalisation. If so, the impact on Fletcher Building may also change. As we progress towards 30 June 2006 the group intends to update users of the financial statements with 64 Financial Review information concerning the likely impact as the standards are finalised. 67 68 Financial Statements 128 Audit Report 130 Trend Statement 132 Regulatory Disclosures 148 Investor Information 150 Directory

GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER < back next > FINANCIALS Statement of Financial Performance FOR THE YEAR ENDED 30 JUNE 2004

FLETCHER BUILDING GROUP FLETCHER BUILDING LIMITED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED NOTE JUNE 2004 JUNE 2003 JUNE 2004 JUNE 2003

NZ$M NZ$M NZ$M NZ$M ANNUAL REPORT 2004

Operating revenue 3, 4 3,958 3,221 135 57 02 Highlights Operating expenses (3,498) (2,890)

04 Chairman’s Report Operating earnings 4, 5 460 331 135 57

07 Chief Executive’s Report Funding costs 6 (75) (59) (54) (42) 13 Concrete Earnings before taxation 385 272 81 15

18 Distribution Taxation expense 7 (124) (85) 11 13 22 Laminates & Panels Earnings after taxation 261 187 92 28 29 Construction Minority interest (21) (19) 35 Building Products Net earnings 240 168 92 28 40 Sustainability Review 48 Board of Directors Net earnings per share (cents) 9 52 Corporate Governance Basic 55.7 43.4 64 Financial Review Diluted 50.9 39.9 68 68 Financial Statements Weighted average number of shares 9 128 Audit Report outstanding (millions of shares) 130 Trend Statement Basic 431 387 132 Regulatory Disclosures Diluted 515 469 148 Investor Information 150 Directory Dividends declared per share (cents) 25.0 19.0 The accompanying notes form part of and are to be read in conjunction with these financial statements. GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER < back next > FINANCIALS Statement of Movements in Equity FOR THE YEAR ENDED 30 JUNE 2004

FLETCHER BUILDING GROUP FLETCHER BUILDING LIMITED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED NOTE JUNE 2004 JUNE 2003 JUNE 2004 JUNE 2003 NZ$M NZ$M NZ$M NZ$M ANNUAL REPORT 2004 Total equity At the beginning of the year 860 591 823 564 02 Highlights 04 Chairman’s Report Net earnings – parent interest 12 240 168 92 28 07 Chief Executive’s Report Net earnings – minority interest 14 21 19 13 Concrete Revaluation of investments 12 128 126 18 Distribution Revaluation of fixed assets 12 (17) 22 Laminates & Panels Taxation on revaluation of fixed assets 12 6 29 Construction 35 Building Products Movement in currency translation reserve 12 (20) (3) 40 Sustainability Review Total recognised revenues and expenses for the year 241 173 220 154 48 Board of Directors Movement in minority equity 14 (18) (9) 52 Corporate Governance 64 Financial Review Movement in reported capital 11 126 173 126 173 69 68 Financial Statements Dividends 10 (91) (68) (91) (68) 128 Audit Report Total equity 1,118 860 1,078 823

130 Trend Statement The accompanying notes form part of and are to be read in conjunction with these financial statements. 132 Regulatory Disclosures 148 Investor Information 150 Directory

GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER < back next > FINANCIALS Statement of Financial Position AS AT 30 JUNE 2004

FLETCHER BUILDING GROUP FLETCHER BUILDING LIMITED NOTE JUNE 2004 JUNE 2003 JUNE 2004 JUNE 2003 NZ$M NZ$M NZ$M NZ$M

ANNUAL REPORT 2004 Assets Current assets:

02 Highlights Cash and liquid deposits 15 77 36 34 1

04 Chairman’s Report Stocks 16 464 448

07 Chief Executive’s Report Debtors 17 633 537 16 13 13 Concrete Total current assets 1,174 1,021 50 14 18 Distribution Non current assets: 22 Laminates & Panels Fixed assets 19 1,023 972 29 Construction Goodwill 20 176 53 35 Building Products Intangibles 21 166 142 40 Sustainability Review Investments 22 159 155 2,057 1,338 48 Board of Directors Provision for deferred taxation 25 92 105 1 1 52 Corporate Governance 64 Financial Review Advances to subsidiaries 33 248 313 70 68 Financial Statements Total non current assets 1,616 1,427 2,306 1,652 128 Audit Report Total assets 2,790 2,448 2,356 1,666 130 Trend Statement 132 Regulatory Disclosures 148 Investor Information 150 Directory

GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER < back next > FINANCIALS Statement of Financial Position cont. AS AT 30 JUNE 2004

FLETCHER BUILDING GROUP FLETCHER BUILDING LIMITED NOTE JUNE 2004 JUNE 2003 JUNE 2004 JUNE 2003 NZ$M NZ$M NZ$M NZ$M

Liabilities Current liabilities: ANNUAL REPORT 2004 Short-term loans 8 2 7 1

Accruals and provisions 23 143 127 2 3

02 Highlights Creditors 24 523 500 6 6

04 Chairman’s Report Contracts 18 75 66 07 Chief Executive’s Report Provision for current taxation 25 6 1 (9) (13) 13 Concrete Capital notes 26 68 60 68 60 18 Distribution Term debt 27 33 20 10 22 Laminates & Panels Total current liabilities 856 776 74 67 29 Construction Non current liabilities: 35 Building Products 40 Sustainability Review Capital notes 26 332 296 182 146 48 Board of Directors Term debt 27 484 516 198 160 52 Corporate Governance Advances from subsidiaries 33 824 470 64 Financial Review Total non current liabilities 816 812 1,204 776 71 68 Financial Statements Total liabilities 1,672 1,588 1,278 843 128 Audit Report 130 Trend Statement 132 Regulatory Disclosures 148 Investor Information 150 Directory

GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER < back next > FINANCIALS Statement of Financial Position cont. AS AT 30 JUNE 2004

FLETCHER BUILDING GROUP FLETCHER BUILDING LIMITED NOTE JUNE 2004 JUNE 2003 JUNE 2004 JUNE 2003 NZ$M NZ$M NZ$M NZ$M

Equity

Reported capital 11 754 628 754 628 ANNUAL REPORT 2004 Revenue reserves 13 315 166 (47) (48)

Other reserves 13 9 29 371 243 02 Highlights Shareholders’ funds 1,078 823 1,078 823

04 Chairman’s Report Minority equity 14 40 37 07 Chief Executive’s Report Total equity 1,118 860 1,078 823 13 Concrete Total liabilities and equity 2,790 2,448 2,356 1,666 18 Distribution The accompanying notes form part of and are to be read in conjunction with these financial statements. 22 Laminates & Panels On behalf of the Board, 11 August 2004. 29 Construction 35 Building Products Roderick Deane Chairman of Directors Ralph Waters Managing Director 40 Sustainability Review 48 Board of Directors 52 Corporate Governance 64 Financial Review 72 68 Financial Statements 128 Audit Report 130 Trend Statement 132 Regulatory Disclosures 148 Investor Information 150 Directory

GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER < back next > FINANCIALS Statement of Cashflows FOR THE YEAR ENDED 30 JUNE 2004

FLETCHER BUILDING GROUP FLETCHER BUILDING LIMITED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED

JUNE 2004 JUNE 2003 JUNE 2004 JUNE 2003 NZ$M NZ$M NZ$M NZ$M ANNUAL REPORT 2004 Cashflow from operating activities Receipts from customers 3,910 3,193 6 02 Highlights Dividends received 18 19 114 52 04 Chairman’s Report Interest received 2 3 22 6 07 Chief Executive’s Report Total received 3,930 3,215 142 58 13 Concrete Payments to suppliers, employees and other 3,310 2,840 9 18 Distribution Interest paid 76 54 55 45 22 Laminates & Panels Income tax paid 120 45 29 Construction 35 Building Products Total applied 3,506 2,939 55 54 40 Sustainability Review Net cash from operating activities 424 276 87 4 48 Board of Directors Cashflow from investing activities 52 Corporate Governance Sale of fixed assets 8 8 64 Financial Review Sale of investments 4 73 68 Financial Statements Sale of subsidiaries 5 15 128 Audit Report Total received 13 27 130 Trend Statement Purchase of fixed assets 125 85 132 Regulatory Disclosures Purchase of investments 26 3 148 Investor Information Purchase of subsidiaries 303 759 150 Directory (Cash)/net debt in subsidiaries acquired (10) 2

GO DIRECTLY TO A SECTION OF THE Total applied 444 849 REPORT BY CLICKING ON THE NUMBER Net cash from investing activities (431) (822) < back next > FINANCIALS Statement of Cashflows cont. FOR THE YEAR ENDED 30 JUNE 2004

FLETCHER BUILDING GROUP FLETCHER BUILDING LIMITED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED JUNE 2004 JUNE 2003 JUNE 2004 JUNE 2003 NZ$M NZ$M NZ$M NZ$M

Cashflow from financing activities

ANNUAL REPORT 2004 Net debt drawdowns/(settlements) 2 309 34 (21) Issue of shares 100 154 100 154

02 Highlights Advances from subsidiaries (163) (72) 04 Chairman’s Report Issue of capital notes 72 153 72 3 07 Chief Executive’s Report Total received 174 616 43 64 13 Concrete Repurchase of capital notes 28 27 28 27 18 Distribution Distribution to minority shareholders 29 16 22 Laminates & Panels Dividends and distributions 69 49 69 49 29 Construction Total applied 126 92 97 76 35 Building Products Net cash from financing activities 48 524 (54) (12) 40 Sustainability Review 48 Board of Directors Net movement in cash held 41 (22) 33 (8) 52 Corporate Governance Add opening cash and liquid deposits 36 59 1 9 64 Financial Review Effect of exchange rate changes on net cash (1) 74 68 Financial Statements Closing cash and liquid deposits 77 36 34 1

128 Audit Report The accompanying notes form part of and are to be read in conjunction with these financial statements. 130 Trend Statement 132 Regulatory Disclosures 148 Investor Information 150 Directory

GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER < back next > FINANCIALS Statement of Cashflows cont. FOR THE YEAR ENDED 30 JUNE 2004

FLETCHER BUILDING GROUP YEAR ENDED YEAR ENDED JUNE 2004 JUNE 2003 NZ$M NZ$M

Analysis of subsidiaries disposed 1

ANNUAL REPORT 2004 Proceeds from sale of subsidiaries 5 15

Fixed assets 2 17 02 Highlights Goodwill 1 04 Chairman’s Report Current assets 2 4 07 Chief Executive’s Report Current liabilities (9) 13 Concrete Net assets of subsidiaries disposed 5 12 18 Distribution Gain on disposal of subsidiaries 3 22 Laminates & Panels 29 Construction 1 During the year ended June 2004 The Building Depot and Hire A Hubby businesses were sold. During the year ended June 2003 the Bolivian 35 Building Products operations of Fletcher Challenge Industries S.A. were sold for a profit of $3 million. 40 Sustainability Review 48 Board of Directors 52 Corporate Governance 64 Financial Review 75 68 Financial Statements 128 Audit Report 130 Trend Statement 132 Regulatory Disclosures 148 Investor Information 150 Directory

GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER < back next > FINANCIALS Statement of Cashflows cont. FOR THE YEAR ENDED 30 JUNE 2004

FLETCHER BUILDING GROUP YEAR ENDED YEAR ENDED JUNE 2004 JUNE 2003 NZ$M NZ$M

Analysis of subsidiaries acquired 2

ANNUAL REPORT 2004 Fixed assets 65 357 Goodwill on acquisition 137 53

02 Highlights Intangibles 31 139 04 Chairman’s Report Investments 65 07 Chief Executive’s Report Tax assets/(liabilities) (5) 18 13 Concrete Current assets 85 257 18 Distribution Cash/(debt) in subsidiary 10 (2) 22 Laminates & Panels Outstanding consideration (26) 29 Construction Current liabilities (20) (102) 35 Building Products Cash paid for subsidiaries acquired 303 759 40 Sustainability Review 2 During the year ended June 2004 the Tasman Building Products Group was acquired for $272 million, net of $10 million cash on hand. In addition 48 Board of Directors $21 million was paid to the vendors of The Laminex Group in respect of the outstanding contingent consideration and working capital payment. 52 Corporate Governance A liability of $26 million for these was recognised in June 2003. This resulted in current liabilities decreasing by $26 million and goodwill decreasing by $5 million. Cash outflow on purchase of subsidiaries includes $759 million for The Laminex Group in November 2002. 64 Financial Review 76 68 Financial Statements The accompanying notes form part of and are to be read in conjunction with these financial statements. 128 Audit Report 130 Trend Statement 132 Regulatory Disclosures 148 Investor Information 150 Directory

GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER < back next > FINANCIALS Reconciliation of Net Earnings to Net Cash from Operating Activities FOR THE YEAR ENDED 30 JUNE 2004

FLETCHER BUILDING GROUP FLETCHER BUILDING LIMITED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED JUNE 2004 JUNE 2003 JUNE 2004 JUNE 2003 NZ$M NZ$M NZ$M NZ$M ANNUAL REPORT 2004 Cash was received from: Net earnings 240 168 92 28 02 Highlights Adjustment for items not involving cash: 04 Chairman’s Report Depreciation, depletions, amortisation and provisions 146 93 (2) 07 Chief Executive’s Report Taxation 4 40 (9) (13) 13 Concrete Minority interest in earnings of subsidiaries 21 19 18 Distribution Non cash adjustments 171 152 (9) (15) 22 Laminates & Panels Cashflow from operations 1 411 320 83 13 29 Construction Less (gain)/loss on disposal of affiliates and fixed assets (4) 35 Building Products Cashflow from operations before net working 40 Sustainability Review capital movements 411 316 83 13 48 Board of Directors Net working capital movements 13 (40) 4 (9) 52 Corporate Governance 2 64 Financial Review Net cash from operating activities 424 276 87 4 77 68 Financial Statements Net working capital movements: 128 Audit Report Debtors (53) 3 2 (7) 130 Trend Statement Stocks 11 (14) 132 Regulatory Disclosures Contracts 9 (20) 148 Investor Information Creditors 46 (9) 2 (2) 150 Directory 13 (40) 4 (9)

GO DIRECTLY TO A SECTION OF THE 1 Includes loss on disposal of affiliates and fixed assets. REPORT BY CLICKING ON THE NUMBER 2 As per the statement of cashflows. The accompanying notes form part of and are to be read in conjunction with these financial statements. < back next > FINANCIALS Statement of Accounting Policies FOR THE YEAR ENDED 30 JUNE 2004

Basis of presentation The financial statements presented are those of Fletcher Building Limited (the company) and its subsidiaries (the group). Fletcher Building Limited is a company domiciled in New Zealand, is registered under the Companies ANNUAL REPORT 2004 Act 1993, and is an issuer in terms of the Securities Act 1978 and the Financial Reporting Act 1993. The financial statements comprise statements of financial performance, movements in equity, financial position, cashflows, and significant accounting policies, as well as the notes to these financial statements. 02 Highlights 04 Chairman’s Report Accounting convention 07 Chief Executive’s Report The financial statements are based on the general principles of historical cost accounting, with the exception of 13 Concrete investments and specific fixed assets as noted below. These financial statements have been prepared in accordance 18 Distribution with generally accepted accounting practice (GAAP) in New Zealand. Where no financial reporting standard or statement of standard accounting practice exists in New Zealand in relation to a particular issue, the accounting 22 Laminates & Panels policies adopted have been determined having regard to authoritative support. These policies have been applied 29 Construction on a consistent basis except as disclosed in note 1, on changes in accounting policies. 35 Building Products 40 Sustainability Review Estimates 48 Board of Directors The preparation of financial statements in conformity with GAAP requires the directors to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities 52 Corporate Governance at the date of the financial statements and the reported amounts of revenues and expenses during the reporting 64 Financial Review period. Actual results could differ from those estimates. 78 68 Financial Statements 128 Audit Report 130 Trend Statement 132 Regulatory Disclosures 148 Investor Information 150 Directory

GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER < back next > FINANCIALS Statement of Accounting Policies cont.

Basis of consolidation The consolidated financial statements comprise the company and its subsidiaries and the group’s interest in associates, partnerships and joint ventures. Inter-company transactions are eliminated in preparing the consolidated financial statements.

Subsidiaries Subsidiaries are included in the consolidated financial statements using the purchase method of consolidation. ANNUAL REPORT 2004 The company has revalued its investment in subsidiaries to net asset backing.

Associates 02 Highlights The equity method has been used for associate entities in which the group has a significant but not controlling interest. 04 Chairman’s Report Goodwill on acquisition 07 Chief Executive’s Report Fair values are assigned to the assets and liabilities of subsidiaries and associates of the group at the date they are 13 Concrete acquired. Goodwill arises to the extent that the fair value is determined to be less than the purchase cost, and this goodwill is amortised to earnings on a systematic basis over the period in which it is believed benefits will arise. 18 Distribution 22 Laminates & Panels The period of amortisation is generally 20 years; however, in individual cases it may be less. The period of amortisation of any goodwill is regularly reviewed and, if it is believed that the amount remaining to be amortised 29 Construction will not be recovered by future benefits to be realised, the unrecoverable amount is written off to earnings and 35 Building Products the balance amortised over the period in which it is believed benefits will be realised. 40 Sustainability Review Joint ventures 48 Board of Directors Where the ownership interest in the joint venture is in the net residue of the business and does not give rise to 52 Corporate Governance an economic or controlling interest in excess of 50 percent, the share of the net assets and liabilities and earnings 64 Financial Review of the investment is included on an equity basis. If the interest does give rise to a controlling interest in excess of 79 68 Financial Statements 50 percent, the investment is consolidated. 128 Audit Report Joint ventures in which the ownership interest is directly in the assets and liabilities, rather than the net residue, 130 Trend Statement are included on a proportional basis with assets, liabilities and earnings based on the group’s proportional interest. 132 Regulatory Disclosures 148 Investor Information 150 Directory

GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER < back next > FINANCIALS Statement of Accounting Policies cont.

Valuation of assets Land, buildings, plant and machinery, fixtures and equipment The cost of purchasing land, buildings, plant and machinery, fixtures and equipment is the value of the consideration given to acquire the assets and the value of other directly attributable costs which have been incurred in bringing the assets to the location and the condition necessary for their intended service. The costs of self constructed assets include, where appropriate, the costs of all materials used in construction, direct ANNUAL REPORT 2004 labour on the project, site preparation and installation costs, costs of obtaining resource consents, financing costs that are directly attributable to the project, variable and fixed overheads and unrecovered operating costs incurred during planned commissioning. Costs cease to be capitalised as soon as the asset is ready for productive use. 02 Highlights All feasibility costs are expensed as incurred. 04 Chairman’s Report Land, buildings, and plant and machinery are revalued by independent registered valuers on the basis of fair value. 07 Chief Executive’s Report The revaluations are conducted on a systematic basis across the group so that assets are revalued at least every five 13 Concrete years. The values are reviewed annually to ensure that no asset is held at a value materially different from fair value. 18 Distribution Fixtures and equipment are valued at cost. Land, buildings, plant and machinery, fixtures and equipment are stated 22 Laminates & Panels at cost or valuation, less accumulated depreciation. 29 Construction Investments 35 Building Products Investments are valued at historical cost. Impairments in the value of investments are written off to earnings 40 Sustainability Review as they arise. 48 Board of Directors Stocks 52 Corporate Governance Trading stock, raw materials and work in progress are valued at the lower of cost or net realisable value, determined 64 Financial Review principally on the first-in-first-out basis. Cost includes direct manufacturing costs and manufacturing overheads at 80 68 Financial Statements normal operating levels.

128 Audit Report Debtors 130 Trend Statement Debtors are valued at estimated net realisable value. The valuation is net of a provision maintained for doubtful 132 Regulatory Disclosures debts. All known losses are written off to earnings in the period in which it becomes apparent that the debts are 148 Investor Information not collectable. 150 Directory Cash Cash and liquid deposits comprise cash and demand deposits with banks or other financial institutions and highly GO DIRECTLY TO A SECTION OF THE liquid investments that are readily convertible to cash. REPORT BY CLICKING ON THE NUMBER < back next > FINANCIALS Statement of Accounting Policies cont.

Valuation of assets cont.

Impairment Impairment is deemed to occur when the recoverable amount falls below the carrying value of the asset. The recoverable amount is determined to be the sum of expected future discounted net cashflows arising from the ownership of the asset. Future net cashflows take into account the remaining useful life and the expected period of continued ownership, including any intended disposals, and any costs or proceeds expected to eventuate at the end of the remaining useful life or the end of the expected period of continued ownership. ANNUAL REPORT 2004 For the purposes of considering whether there has been an impairment, assets are grouped at the lowest level for which there are identifiable cashflows that are largely independent of the cashflows of other groups of assets. 02 Highlights When an impairment loss arises the impairment is measured as the amount by which the carrying value exceeds 04 Chairman’s Report the recoverable amount. 07 Chief Executive’s Report Brands 13 Concrete Brands which have an indefinite useful life are held at cost and are not amortised, but are subject to an annual 18 Distribution impairment test. 22 Laminates & Panels Foreign currency 29 Construction Translation of the Financial Statements of Foreign Operations 35 Building Products The assets and liabilities of the group’s overseas operations are translated into New Zealand currency at the rates 40 Sustainability Review of exchange ruling at balance date. The revenue and expenditure of these entities are translated using an average 48 Board of Directors exchange rate reflecting an approximation of the appropriate transaction rates. Exchange variations arising on the 52 Corporate Governance translation of these entities are recognised directly in the currency translation reserve. 64 Financial Review Exchange differences 81 68 Financial Statements Monetary assets and liabilities in foreign currencies at balance date which are not covered by forward exchange 128 Audit Report contracts, are translated at the rates of exchange ruling at balance date. 130 Trend Statement Monetary assets and liabilities in foreign currencies at balance date which are covered by forward exchange 132 Regulatory Disclosures contracts, are translated at the exchange rates specified in those contracts. 148 Investor Information Non-monetary assets and liabilities in foreign currencies are translated at the exchange rates in effect when the 150 Directory amounts of these assets and liabilities were determined. If a foreign currency liability is designated as a hedge of a foreign currency non-monetary asset (or vice versa), both the asset and the liability are translated at the closing GO DIRECTLY TO A SECTION OF THE rate and the exchange difference taken to the currency translation reserve. REPORT BY CLICKING ON THE NUMBER < back next > FINANCIALS Statement of Accounting Policies cont.

Valuation of liabilities Derivative financial instruments Derivative financial instruments including foreign exchange contracts, interest rate swaps, currency swaps, options, forward rate agreements and electricity price swaps are utilised to reduce exposure to market risks. Group policy specifically prohibits the use of derivative financial instruments for trading or speculative purposes. All derivative financial instruments are held to hedge risk on underlying assets, liabilities, sales and purchases. ANNUAL REPORT 2004 For a derivative instrument to be classified and accounted for as a hedge, it must be highly correlated with, and effective as a hedge of the underlying risk being managed. Derivative financial instruments are reported in the financial statements on a basis consistent with the underlying 02 Highlights hedged item. The fair value of derivative financial instruments, as disclosed in the financial instruments note, is 04 Chairman’s Report estimated based on quoted market prices. 07 Chief Executive’s Report The group holds derivative financial instruments until expiry except where the underlying rationale from a risk 13 Concrete management point of view changes, such as when the underlying asset or liability which the instrument hedges 18 Distribution no longer exists, in which case early termination occurs. 22 Laminates & Panels Taxation 29 Construction The provision for current tax is the estimated amount due for payment during the next 12 months by the group. 35 Building Products The group’s provision for deferred tax is the liability for taxation that has been deferred because of timing 40 Sustainability Review differences, less taxation benefits which will offset the deferred liability as it arises. The provision for deferred 48 Board of Directors taxation has been calculated using the comprehensive basis under the liability method. 52 Corporate Governance Deferred tax assets are not recognised unless recovery is considered certain. 64 Financial Review Finance leases 82 68 Financial Statements Finance leases are capitalised to reflect the term borrowing incurred and the cost of the asset acquired. Such 128 Audit Report obligations are classified within term debt. The finance cost portion of lease payments is written off to earnings. 130 Trend Statement The leased asset is depreciated on a straight line basis over the estimated useful life of the asset with regard 132 Regulatory Disclosures to residual values. 148 Investor Information 150 Directory

GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER < back next > FINANCIALS Statement of Accounting Policies cont.

Income determination Revenue recognition Operating revenue is recognised in accordance with the terms of sale when the benefits of ownership and risk of loss passes to the customer.

Construction contracts Earnings on construction contracts (including sub-contracts) are determined using the percentage-of-completion method. ANNUAL REPORT 2004 Earnings on residential contracts are recognised on settlement. Earnings are not recognised until the outcome can be reliably estimated. Provision is made for estimated future losses on the entire contract from the date it is first recognised that a contract loss may be incurred. 02 Highlights Investment revenue 04 Chairman’s Report Interest income is taken to earnings when received or accrued in respect of the period for which it was earned. Dividends 07 Chief Executive’s Report and distributions are taken to earnings when received or accrued where declared prior to balance date. 13 Concrete Depreciation 18 Distribution Depreciation of fixed assets is calculated on the straight line method. Expected useful lives, which are regularly reviewed 22 Laminates & Panels on a weighted average basis are: 29 Construction Buildings 30 years 35 Building Products Plant and machinery 13 years 40 Sustainability Review Fixtures and equipment 5 years Leased assets capitalised 10 years 48 Board of Directors 52 Corporate Governance Leasing commitments Expenditure arising from operating leasing commitments is written off to earnings in the period in which it 64 Financial Review is incurred. Purchased head leases are valued at cost and amortised over the unexpired period of the lease. 83 68 Financial Statements Retirement plan expense 128 Audit Report The actuarial cost of providing retirement plan benefits in respect of services provided by plan members to the group 130 Trend Statement is expensed as it accrues over the service life of the employees, after taking account of the income earned by the income 132 Regulatory Disclosures generating assets owned by the plan. Any over or under accrual of expenses or income from previous periods is amortised 148 Investor Information to earnings over a maximum period of the remaining average service life of plan members employed by the group.

150 Directory Share options granted Share options have been granted under an executive option scheme. The fair value of the options is recognised as an expense GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER over the restricted period provided by the executive and a corresponding amount is recognised in shareholders’ funds. < back next > FINANCIALS

Notes to the Financial Statements

1 Changes in accounting policies There have been no changes in accounting policies during the year ended 30 June 2004, however certain comparatives were restated to conform with the current year’s presentation. ANNUAL REPORT 2004 2 Acquisition of Tasman The Tasman Building Products Group was acquired on 30 September 2003 for NZ$272 million, net of $10 million 02 Highlights cash. A formal fair value exercise has been undertaken which resulted in the fair value of the assets and liabilities 04 Chairman’s Report as described in the statement of cashflows. 07 Chief Executive’s Report FLETCHER BUILDING GROUP FLETCHER BUILDING LIMITED 13 Concrete YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED 18 Distribution JUNE 2004 JUNE 2003 JUNE 2004 JUNE 2003 NZ$M NZ$M NZ$M NZ$M 22 Laminates & Panels 29 Construction 3 Operating revenue 35 Building Products Operating revenue includes: 40 Sustainability Review Trading sales to external customers 3,934 3,204 48 Board of Directors Equity earnings 24 17 52 Corporate Governance Dividends received from subsidiary companies 114 52 64 Financial Review Interest received from subsidiary companies 21 5 84 68 Financial Statements 3,958 3,221 135 57 128 Audit Report 130 Trend Statement 132 Regulatory Disclosures 148 Investor Information 150 Directory

GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER < back next > FINANCIALS Notes to the Financial Statements cont.

4 Discontinued operations During the year ended June 2004, the group disposed of The Building Depot and the Hire A Hubby businesses. During the year ended June 2003, the group disposed of its Bolivian concrete operations. The impact on the 2004 and 2003 financial years of the discontinued operations is shown below.

FLETCHER BUILDING GROUP FLETCHER BUILDING LIMITED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED ANNUAL REPORT 2004 JUNE 2004 JUNE 2003 JUNE 2004 JUNE 2003 NZ$M NZ$M NZ$M NZ$M

Operating revenue 02 Highlights Discontinued operations 7 76 04 Chairman’s Report Continuing operations 3,951 3,145 135 57 07 Chief Executive’s Report 13 Concrete 3,958 3,221 135 57

18 Distribution Operating earnings 22 Laminates & Panels Discontinued operations (3) (2) 29 Construction Continuing operations 463 333 135 57 35 Building Products 460 331 135 57 40 Sustainability Review 48 Board of Directors 52 Corporate Governance 64 Financial Review 85 68 Financial Statements 128 Audit Report 130 Trend Statement 132 Regulatory Disclosures 148 Investor Information 150 Directory

GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER < back next > FINANCIALS Notes to the Financial Statements cont.

FLETCHER BUILDING GROUP FLETCHER BUILDING LIMITED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED JUNE 2004 JUNE 2003 JUNE 2004 JUNE 2003 NZ$M NZ$M NZ$M NZ$M

5 Operating earnings Operating earnings includes: Net gains on disposal of fixed assets (4) ANNUAL REPORT 2004 Amortisation of goodwill 8 5 Amortisation of intangibles 1 2 02 Highlights Depreciation and depletions: 04 Chairman’s Report 07 Chief Executive’s Report Buildings 8 6 13 Concrete Plant and machinery 76 63 18 Distribution Fixtures and equipment 21 19 22 Laminates & Panels Resource extraction assets 3 1 29 Construction Leased assets capitalised 3 2 35 Building Products Total depreciation and depletions 111 91 40 Sustainability Review Net periodic pension cost/(benefit) 7 (1) 48 Board of Directors Research and development 1 2 52 Corporate Governance Bad debts written off 6 6 64 Financial Review Directors’ fees 1 1 86 68 Financial Statements Donations 1 1 128 Audit Report Maintenance and repairs 88 73 130 Trend Statement Operating lease expense 63 53 132 Regulatory Disclosures 148 Investor Information Auditors’ fees and expenses payable for: 150 Directory Statutory audit 1 1 Other services 1 1 1 GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER 1 Fees paid to the auditors for other services consist mainly of the half annual review and accounting advice in respect of the international financial reporting standards project. < back next > FINANCIALS Notes to the Financial Statements cont.

FLETCHER BUILDING GROUP FLETCHER BUILDING LIMITED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED JUNE 2004 JUNE 2003 JUNE 2004 JUNE 2003 NZ$M NZ$M NZ$M NZ$M

6 Funding costs Interest payable on: ANNUAL REPORT 2004 Term debt 37 28 16 12 Short term loans and bank overdrafts 3 2 1 1 02 Highlights Capital notes 33 28 20 20 04 Chairman’s Report Interest paid to subsidiary companies 16 8 07 Chief Executive’s Report Income from short term deposits (2) (2) (1) (1) 13 Concrete 71 56 52 40 18 Distribution 22 Laminates & Panels Plus bank fees, registry and issue expenses 4 3 2 2 29 Construction 75 59 54 42 35 Building Products 40 Sustainability Review 48 Board of Directors 52 Corporate Governance 64 Financial Review 87 68 Financial Statements 128 Audit Report 130 Trend Statement 132 Regulatory Disclosures 148 Investor Information 150 Directory

GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER < back next > FINANCIALS Notes to the Financial Statements cont.

FLETCHER BUILDING GROUP FLETCHER BUILDING LIMITED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED JUNE 2004 JUNE 2003 JUNE 2004 JUNE 2003 NZ$M NZ$M NZ$M NZ$M

7 Taxation expense Earnings before taxation: ANNUAL REPORT 2004 New Zealand 308 230 81 15 Overseas 77 42 02 Highlights 385 272 81 15 04 Chairman’s Report Taxation at 33 cents per dollar 127 90 27 5 07 Chief Executive’s Report Adjusted for: 13 Concrete Benefit of lower tax rate in overseas jurisdictions (2) (1) 18 Distribution Non assessable income (6) (5) (38) (17) 22 Laminates & Panels Non deductible expenses 6 4 29 Construction 35 Building Products Other permanent differences (1) (3) (1) 40 Sustainability Review 124 85 (11) (13) 48 Board of Directors Current taxation: 52 Corporate Governance New Zealand 104 82 (11) (13) 64 Financial Review Overseas 21 6 88 68 Financial Statements Deferred taxation: 128 Audit Report 130 Trend Statement New Zealand 1 (2) 132 Regulatory Disclosures Overseas (2) (1) 148 Investor Information 124 85 (11) (13) 150 Directory

GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER < back next > FINANCIALS Notes to the Financial Statements cont.

FLETCHER BUILDING GROUP FLETCHER BUILDING LIMITED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED JUNE 2004 JUNE 2003 JUNE 2004 JUNE 2003 NZ$M NZ$M NZ$M NZ$M

8 Shareholder tax credits Imputation credit account ANNUAL REPORT 2004 Imputation credits at the beginning of the year 17 1 Taxation paid 57 16

02 Highlights 74 17 04 Chairman’s Report Imputation credits in subsidiaries and indirectly 07 Chief Executive’s Report available to shareholders at year end 74 17 13 Concrete 74 17 18 Distribution 22 Laminates & Panels Dividend withholding payment credit account 29 Construction Dividend withholding payment credits at 35 Building Products the beginning of the year (18) (10) (18) (10) 40 Sustainability Review Taxation paid 39 25 48 Board of Directors Dividend withholding payment credits received 39 25 52 Corporate Governance Dividend withholding payment credits 64 Financial Review attached to dividends paid (44) (33) (44) (33) 89 68 Financial Statements (23) (18) (23) (18) 128 Audit Report Dividend withholding payment credits in the parent 130 Trend Statement and available to shareholders at year end (23) (18) (23) (18) 132 Regulatory Disclosures (23) (18) (23) (18) 148 Investor Information Fletcher Building Limited has until 31 March 2005 to fund any deficiency in its dividend withholding payment credit account. 150 Directory

GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER < back next > FINANCIALS Notes to the Financial Statements cont.

FLETCHER BUILDING GROUP FLETCHER BUILDING LIMITED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED JUNE 2004 JUNE 2003 JUNE 2004 JUNE 2003 NZ$M NZ$M NZ$M NZ$M

9 Net earnings per share Diluted net earnings per share uses the weighted average number of shares used for basic net earnings per share, adjusted for dilutive securities. Capital notes and options are convertible into the company’s shares, and ANNUAL REPORT 2004 are therefore considered dilutive securities for diluted net earnings per share. Fletcher Building Limited may, at its option, purchase or redeem the capital notes for cash at the principal amount plus any accrued but unpaid interest. 02 Highlights 04 Chairman’s Report Numerator 07 Chief Executive’s Report Net earnings 240 168 13 Concrete Numerator for basic earnings per share 240 168 18 Distribution Dilutive capital notes distribution 22 19 22 Laminates & Panels Numerator for diluted net earnings per share 262 187 29 Construction Denominator (millions of shares) 35 Building Products 40 Sustainability Review Denominator for basic net earnings per share 431 387 48 Board of Directors Conversion of dilutive capital notes and options 84 82 52 Corporate Governance Denominator for diluted net earnings per share 515 469 64 Financial Review 90 68 Financial Statements 128 Audit Report 130 Trend Statement 132 Regulatory Disclosures 148 Investor Information 150 Directory

GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER < back next > FINANCIALS Notes to the Financial Statements cont.

FLETCHER BUILDING GROUP FLETCHER BUILDING LIMITED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED JUNE 2004 JUNE 2003 JUNE 2004 JUNE 2003 NZ$M NZ$M NZ$M NZ$M

10 Dividends Dividends paid to shareholders 91 68 91 68

ANNUAL REPORT 2004 91 68 91 68

11 Capital 02 Highlights 04 Chairman’s Report Reported capital at the beginning of the year 628 455 628 455 07 Chief Executive’s Report Issue of shares 128 176 128 176 13 Concrete Cost of share issue (2) (3) (2) (3) 18 Distribution 754 628 754 628 22 Laminates & Panels All ordinary shares are issued and fully paid, and carry equal rights in respect of voting, dividend payments 29 Construction and distribution upon winding up. 35 Building Products On 8 October 2002, the company issued 1,368,500 shares for $3,202,290 pursuant to an employee share 40 Sustainability Review purchase scheme complying with section DF7 of the Income Tax Act 1994. Each New Zealand based employee was 48 Board of Directors eligible to subscribe for a maximum of 1,000 shares for an issue price of $2.34, which represented an 18 percent 52 Corporate Governance discount to the market price on 19 August 2002, being the date of announcement. As required by the Income Tax Act 64 Financial Review the consideration for the shares was funded by an interest free loan to each employee, which will be repaid over a three year restricted period. At 30 June 2004 the total receivable owing from the employees is $1.1 million. The 91 68 Financial Statements shares allocated to employees are held on their behalf by the Trustee, which is Fletcher Building Share Schemes 128 Audit Report Limited. Employees are entitled to receive the dividends on the shares. Voting rights on the shares are exercised 130 Trend Statement by the Trustee on behalf of the employees. Peter Merry and Grant Niccol have been appointed by the company 132 Regulatory Disclosures as directors of Fletcher Building Share Schemes Limited. 148 Investor Information 150 Directory

GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER < back next > FINANCIALS Notes to the Financial Statements cont.

11 Capital cont.

FLETCHER BUILDING GROUP FLETCHER BUILDING LIMITED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED JUNE 2004 JUNE 2003 JUNE 2004 JUNE 2003

Number of ordinary shares: Number of shares at the beginning of the year 405,930,813 346,560,826 405,930,813 346,560,826 ANNUAL REPORT 2004 Issue of shares 25,000,000 53,466,850 25,000,000 53,466,850 Shares issued under the dividend 02 Highlights reinvestment plan 5,906,688 5,903,137 5,906,688 5,903,137 04 Chairman’s Report 436,837,501 405,930,813 436,837,501 405,930,813 07 Chief Executive’s Report 13 Concrete Share options: 18 Distribution On 13 June 2001, the company issued 1,000,000 share options under the executive option scheme. The exercise price of the share options is $2.28. The restrictive period was until 16 May 2004 and the final exercise 22 Laminates & Panels date is 13 June 2007. The fair value of the options at the grant date was determined by an independent firm, 29 Construction PricewaterhouseCoopers, as being $710,000. This has been expensed to earnings over the past three years 35 Building Products and credited to the share option reserve. 40 Sustainability Review 48 Board of Directors 52 Corporate Governance 64 Financial Review 92 68 Financial Statements 128 Audit Report 130 Trend Statement 132 Regulatory Disclosures 148 Investor Information 150 Directory

GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER < back next > FINANCIALS Notes to the Financial Statements cont.

FLETCHER BUILDING GROUP FLETCHER BUILDING LIMITED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED JUNE 2004 JUNE 2003 JUNE 2004 JUNE 2003 NZ$M NZ$M NZ$M NZ$M

12 Reserve movements Reserves at the beginning of the year 195 109 195 109 ANNUAL REPORT 2004 Net earnings 240 168 92 28 Investment revaluation 128 126 02 Highlights Revaluation of fixed assets (17) 04 Chairman’s Report Taxation on revaluation of fixed assets 6 07 Chief Executive’s Report Net currency translations (20) (3) 13 Concrete Dividends and distributions (91) (68) (91) (68) 18 Distribution 324 195 324 195 22 Laminates & Panels 29 Construction 35 Building Products 40 Sustainability Review 48 Board of Directors 52 Corporate Governance 64 Financial Review 93 68 Financial Statements 128 Audit Report 130 Trend Statement 132 Regulatory Disclosures 148 Investor Information 150 Directory

GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER < back next > FINANCIALS Notes to the Financial Statements cont.

FLETCHER BUILDING GROUP FLETCHER BUILDING LIMITED JUNE 2004 JUNE 2003 JUNE 2004 JUNE 2003 NZ$M NZ$M NZ$M NZ$M

13 Reserve balances Reserves comprise: Revenue reserves 315 166 (47) (48)

ANNUAL REPORT 2004 Asset revaluation – land and buildings 13 13 Asset revaluation – plant and machinery 33 33 02 Highlights Investment revaluation 370 243 04 Chairman’s Report Share option reserve 1 1 07 Chief Executive’s Report Net currency translation (38) (17)

13 Concrete 324 195 324 195 18 Distribution 22 Laminates & Panels 14 Minority equity 29 Construction Share capital 23 21 35 Building Products Reserves 17 16

40 Sustainability Review 40 37 48 Board of Directors 52 Corporate Governance 64 Financial Review 94 68 Financial Statements 128 Audit Report 130 Trend Statement 132 Regulatory Disclosures 148 Investor Information 150 Directory

GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER < back next > FINANCIALS Notes to the Financial Statements cont.

FLETCHER BUILDING GROUP FLETCHER BUILDING LIMITED JUNE 2004 JUNE 2003 JUNE 2004 JUNE 2003 NZ$M NZ$M NZ$M NZ$M

15 Cash and liquid deposits Cash and bank balances 51 36 8 1 Short-term deposits 26 26

ANNUAL REPORT 2004 77 36 34 1

$2 million of the cash at June 2004 is held on behalf of former divisions of Fletcher Challenge Limited (June 2003 02 Highlights $2 million). The liability to these other parties is included in creditors. 04 Chairman’s Report 07 Chief Executive’s Report 16 Stocks 13 Concrete Raw materials 91 89 18 Distribution Work in progress 27 29 22 Laminates & Panels Finished goods 309 297 29 Construction Consumable stores and spare parts 37 33

35 Building Products 464 448 40 Sustainability Review The group also has conditional commitments for the purchase of land to be used for residential construction totalling 48 Board of Directors $243 million. Delivery of this land is expected to take place over the period to 2010. 52 Corporate Governance 64 Financial Review 95 68 Financial Statements 128 Audit Report 130 Trend Statement 132 Regulatory Disclosures 148 Investor Information 150 Directory

GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER < back next > FINANCIALS Notes to the Financial Statements cont.

FLETCHER BUILDING GROUP FLETCHER BUILDING LIMITED JUNE 2004 JUNE 2003 JUNE 2004 JUNE 2003 NZ$M NZ$M NZ$M NZ$M

17 Debtors Trade debtors 513 412 Contract debtors 71 77 ANNUAL REPORT 2004 Less provision for doubtful debts (17) (14) 567 475 02 Highlights Other receivables 66 62 16 13 04 Chairman’s Report 633 537 16 13 07 Chief Executive’s Report 13 Concrete 18 Contracts 18 Distribution Gross construction work in progress 662 606 22 Laminates & Panels Progress billings (737) (672) 29 Construction Work in progress (75) (66) 35 Building Products 40 Sustainability Review 48 Board of Directors 52 Corporate Governance 64 Financial Review 96 68 Financial Statements 128 Audit Report 130 Trend Statement 132 Regulatory Disclosures 148 Investor Information 150 Directory

GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER < back next > FINANCIALS Notes to the Financial Statements cont.

19 Fixed assets

FLETCHER BUILDING GROUP PLANT & FIXTURES & RESOURCE LEASED LAND BUILDINGS MACHINERY EQUIPMENT EXTRACTION ASSETS TOTAL NZ$M NZ$M NZ$M NZ$M NZ$M NZ$M NZ$M

Gross value at the beginning of the year 67 143 790 188 11 17 1,216 Acquisitions 8 17 36 1 62 ANNUAL REPORT 2004 Additions 1 6 90 23 5 125 Disposals (1) (4) (16) (7) (28) 02 Highlights Currency translation (1) (4) (16) (21) 04 Chairman’s Report 07 Chief Executive’s Report Gross value at the end of the year 74 158 884 205 16 17 1,354

13 Concrete Accumulated depreciation at the 18 Distribution beginning of the year (12) (95) (126) (2) (9) (244) 22 Laminates & Panels Disposals 1 10 6 17 29 Construction Depreciation expense (8) (76) (21) (3) (3) (111) 35 Building Products Currency translation 1 6 7 40 Sustainability Review Accumulated depreciation at the 48 Board of Directors end of the year (18) (155) (141) (5) (12) (331) 52 Corporate Governance 64 Financial Review 97 68 Financial Statements Net book value at the end of the year 74 140 729 64 11 5 1,023 128 Audit Report Net book value at the end 130 Trend Statement of the previous year 67 131 695 62 9 8 972 132 Regulatory Disclosures 148 Investor Information 150 Directory

GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER < back next > FINANCIALS Notes to the Financial Statements cont.

19 Fixed assets cont.

All land, buildings, plant and machinery owned by the group on 30 June 2001 were revalued to fair value as at that day. The values were determined by independent registered valuers, Beca Valuations Ltd, who are registered and chartered engineers and a member of the New Zealand Institute of Valuers. The steel plant and rolling mill in New Zealand were revalued at 30 June 2003 by Beca Valuations Ltd and $17 million was written off to the asset revaluation reserve.

ANNUAL REPORT 2004 During the year $14 million was capitalised to the cost of fixed assets (June 2003 $2 million). This represents employment and overhead costs arising from the construction activities undertaken by The Fletcher Construction Company Limited for other group subsidiaries. No interest costs were capitalised. 02 Highlights 04 Chairman’s Report 07 Chief Executive’s Report 20 Goodwill 13 Concrete FLETCHER BUILDING GROUP FLETCHER BUILDING LIMITED JUNE 2004 JUNE 2003 JUNE 2004 JUNE 2003 18 Distribution NZ$M NZ$M NZ$M NZ$M 22 Laminates & Panels Goodwill acquired at cost 197 60 29 Construction Accumulated foreign currency translation 35 Building Products movement taken to reserves (6) 40 Sustainability Review Accumulated amortisation (15) (7) 48 Board of Directors Goodwill at the end of the year 176 53 52 Corporate Governance 64 Financial Review Goodwill at the beginning of the year 53 3 98 68 Financial Statements Acquired during the year 137 53 128 Audit Report Foreign currency translation movement taken to reserves (6) 130 Trend Statement Charged to earnings (8) (3) 132 Regulatory Disclosures Goodwill at the end of the year 176 53 148 Investor Information 150 Directory

GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER < back next > FINANCIALS Notes to the Financial Statements cont.

21 Intangibles FLETCHER BUILDING GROUP FLETCHER BUILDING LIMITED JUNE 2004 JUNE 2003 JUNE 2004 JUNE 2003 NZ$M NZ$M NZ$M NZ$M

Brands 165 140 Intangible assets 1 2

ANNUAL REPORT 2004 166 142

Brands 02 Highlights Brands at the beginning of the year 140 04 Chairman’s Report Acquired during the year 31 139 07 Chief Executive’s Report Foreign currency translation movement taken to reserves (6) 1 13 Concrete 18 Distribution Brands at the end of the year 165 140

22 Laminates & Panels Intangible assets 29 Construction Intangible assets acquired at cost 12 12 35 Building Products Accumulated amortisation (11) (10) 40 Sustainability Review Intangible assets at the end of the year 1 2 48 Board of Directors 52 Corporate Governance Intangible assets at the beginning of the year 2 2 64 Financial Review Arising during the year 2 99 68 Financial Statements Charged to earnings (1) (2) 128 Audit Report Intangible assets at the end of the year 1 2 130 Trend Statement 132 Regulatory Disclosures 148 Investor Information 150 Directory

GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER < back next > FINANCIALS Notes to the Financial Statements cont.

22 Investments FLETCHER BUILDING GROUP FLETCHER BUILDING LIMITED JUNE 2004 JUNE 2003 JUNE 2004 JUNE 2003 NZ$M NZ$M NZ$M NZ$M

Investment in associates 84 76 Investment in other companies 1 2

ANNUAL REPORT 2004 Retirement plan surplus 73 75 Other investments 1 2 02 Highlights Investment in subsidiary companies 1 2,057 1,338 04 Chairman’s Report 159 155 2,057 1,338

07 Chief Executive’s Report 1 The principal subsidiaries included within investment in subsidiary companies are disclosed in note 34, principal operations. 13 Concrete Carrying amount of associates: 18 Distribution Carrying amount at the beginning of the year 76 17 22 Laminates & Panels 29 Construction Acquisition of associates 65 35 Building Products Advances to associates 8 40 Sustainability Review Sale of associate (2) 48 Board of Directors Equity accounted earnings of associates 24 17 52 Corporate Governance Amortisation of goodwill in associates (2) (2) 64 Financial Review Impairment of overseas assets (1) 100 68 Financial Statements Foreign currency translation movement taken to reserves (3) 128 Audit Report Dividends from associates (18) (19) 130 Trend Statement Carrying amount at the end of the year 84 76 132 Regulatory Disclosures 148 Investor Information 150 Directory

GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER < back next > FINANCIALS Notes to the Financial Statements cont.

22 Investments cont.

FLETCHER BUILDING GROUP FLETCHER BUILDING LIMITED JUNE 2004 JUNE 2003 JUNE 2004 JUNE 2003 NZ$M NZ$M NZ$M NZ$M

Equity accounted earnings comprise: Surplus before taxation 29 20 ANNUAL REPORT 2004 Taxation (5) (3)

Net surplus 24 17 02 Highlights Included within the carrying amount of associates is: 04 Chairman’s Report 07 Chief Executive’s Report Goodwill acquired at cost 52 52 13 Concrete Accumulated amortisation (4) (2) 18 Distribution Unamortised balance of goodwill 48 50 22 Laminates & Panels As part of the Laminex acquisition in the year ending June 2003, the group acquired 50% of Wespine Industries 29 Construction Pty Limited and Dynea Industries W.A. Pty Limited, companies incorporated in Australia. As a result of the fair value 35 Building Products exercise, the assets have been recorded with a carrying value of $65 million, inclusive of $52 million of goodwill. 40 Sustainability Review $2 million of the goodwill has been amortised during the year ending June 2004 (June 2003 $2 million). The principal 48 Board of Directors activity of these companies is the operation of a sawmill and the manufacture of building products, respectively. 52 Corporate Governance During the year ended June 2003 the group disposed of its interest in Fletcher Pioneer Mauritius Limited, 64 Financial Review which operated a readymix plant in India. 101 68 Financial Statements 128 Audit Report 130 Trend Statement 132 Regulatory Disclosures 148 Investor Information 150 Directory

GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER < back next > FINANCIALS Notes to the Financial Statements cont.

FLETCHER BUILDING GROUP FLETCHER BUILDING LIMITED JUNE 2004 JUNE 2003 JUNE 2004 JUNE 2003 NZ$M NZ$M NZ$M NZ$M

23 Accruals and provisions Employee entitlements 84 67 Construction, property, environmental, ANNUAL REPORT 2004 product warranty and other provisions 59 60 2 3

143 127 2 3 02 Highlights 04 Chairman’s Report Construction, property, environmental, product warranty and other provisions: 07 Chief Executive’s Report Carrying amount at the beginning of the year 60 62 3 3 13 Concrete Charged to earnings 17 6 18 Distribution 22 Laminates & Panels Settled or utilised (13) (12) (1) 29 Construction Acquired in the year 1 7 35 Building Products Released to earnings (6) (3) 40 Sustainability Review 59 60 2 3 48 Board of Directors The group has provided for various obligations. The provisions are expected to be utilised over the next five years. 52 Corporate Governance 64 Financial Review 24 Creditors 102 68 Financial Statements Trade creditors 458 424 128 Audit Report Accrued interest 10 10 5 5 130 Trend Statement Other liabilities 55 66 1 1 132 Regulatory Disclosures 523 500 6 6 148 Investor Information 150 Directory

GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER < back next > FINANCIALS Notes to the Financial Statements cont.

FLETCHER BUILDING GROUP FLETCHER BUILDING LIMITED JUNE 2004 JUNE 2003 JUNE 2004 JUNE 2003 NZ$M NZ$M NZ$M NZ$M

25 Taxation assets Current taxation asset (6) (1) 9 13 Deferred taxation asset 92 105 1 1 ANNUAL REPORT 2004 86 104 10 14

02 Highlights Provision for current taxation: 04 Chairman’s Report Opening provision for taxation (1) 12 13 6 07 Chief Executive’s Report Taxation in the statement of financial performance (125) (88) 11 13 13 Concrete Transfer from deferred taxation 15 20 18 Distribution Intercompany payment (13) (6) 22 Laminates & Panels Acquisition during the year (6) (1) 29 Construction Minority share of taxation expense 10 9 35 Building Products Taxation in reserves (19) 2 (2) 40 Sustainability Review Net taxation payments 120 45 48 Board of Directors (6) (1) 9 13 52 Corporate Governance 64 Financial Review 103 68 Financial Statements 128 Audit Report 130 Trend Statement 132 Regulatory Disclosures 148 Investor Information 150 Directory

GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER < back next > FINANCIALS Notes to the Financial Statements cont. 25 Taxation assets cont.

FLETCHER BUILDING GROUP FLETCHER BUILDING LIMITED JUNE 2004 JUNE 2003 JUNE 2004 JUNE 2003 NZ$M NZ$M NZ$M NZ$M

Provision for deferred taxation: Opening provision for taxation 105 96 1 1 ANNUAL REPORT 2004 Taxation in the statement of financial performance 1 3 Transfer to current taxation (15) (20) 02 Highlights Acquisition during the year 2 19 04 Chairman’s Report Taxation on asset revaluation 6 07 Chief Executive’s Report Taxation in reserves (1) 1 13 Concrete Provision for deferred taxation 92 105 1 1 18 Distribution 22 Laminates & Panels Provision for deferred taxation: 29 Construction Provisions 44 49 1 1 35 Building Products Provision for doubtful debts 6 4 40 Sustainability Review Depreciation and amortisation 37 46 48 Board of Directors Other 5 6 52 Corporate Governance 92 105 1 1 64 Financial Review 104 68 Financial Statements 128 Audit Report 130 Trend Statement 132 Regulatory Disclosures 148 Investor Information 150 Directory

GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER < back next > FINANCIALS Notes to the Financial Statements cont.

FLETCHER BUILDING GROUP FLETCHER BUILDING LIMITED JUNE 2004 JUNE 2003 JUNE 2004 JUNE 2003 NZ$M NZ$M NZ$M NZ$M

26 Capital notes Capital notes Coupon Election date Series 2003 10.80% 30 November 2003 17 17 ANNUAL REPORT 2004 Series 2004 8.50% 15 April 2004 43 43 Series 2004 10.50% 30 April 2005 68 68 68 68 02 Highlights Series 2006 8.75% 15 March 2006 33 33 33 33 04 Chairman’s Report Series 2006 7.90% 31 October 2006 35 19 35 19 07 Chief Executive’s Report Series 2006 7.30% 31 October 2006 25 12 25 12 13 Concrete 18 Distribution Series 2006 8.30% 31 October 2006 28 14 28 14 22 Laminates & Panels Series 2008 8.60% 15 March 2008 113 113 29 Construction Series 2009 7.80% 15 March 2009 61 61 35 Building Products Series 2010 8.85% 15 March 2010 37 37 40 Sustainability Review 400 356 250 206 48 Board of Directors 52 Corporate Governance 64 Financial Review 105 68 Financial Statements 128 Audit Report 130 Trend Statement 132 Regulatory Disclosures 148 Investor Information 150 Directory

GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER < back next > FINANCIALS Notes to the Financial Statements cont.

26 Capital notes cont.

FLETCHER BUILDING GROUP FLETCHER BUILDING LIMITED JUNE 2004 JUNE 2003 JUNE 2004 JUNE 2003 NZ$M NZ$M NZ$M NZ$M

Capital notes due for election within 12 months 68 60 68 60 Capital notes due for election after 12 months 332 296 182 146

ANNUAL REPORT 2004 400 356 250 206

Capital notes are long-term fixed rate unsecured subordinated notes. On each election date, the coupon rate and 02 Highlights term to the next election date of that series of the capital notes is reset. Holders may then choose either to keep 04 Chairman’s Report their capital notes on the new terms or to convert the principal amount and any accrued but unpaid interest into 07 Chief Executive’s Report shares, in the prescribed ratio at approximately the current market price. Instead of issuing shares to holders who 13 Concrete choose to convert, Fletcher Building Limited may, at its option, purchase or redeem the capital notes for cash at 18 Distribution the principal amount plus any accrued but unpaid interest. 22 Laminates & Panels Under the terms of the capital notes, non-payment of interest is not an act of default although unpaid interest 29 Construction is accrued and is interest bearing at the same rate as the principal of the capital notes. Fletcher Building Limited has covenanted not to pay dividends to its shareholders, while interest that is due and payable on capital notes 35 Building Products has not been paid. 40 Sustainability Review The capital notes do not carry voting rights and do not participate in any change in value of the issued shares 48 Board of Directors of Fletcher Building Limited. 52 Corporate Governance If the principal amount of the capital notes held at 30 June 2004 were to be converted to shares, 90 million 64 Financial Review shares (June 2003 99 million shares) would be issued at the share price as at 30 June 2004, of $4.55 106 68 Financial Statements (June 2003 $3.67). 128 Audit Report 130 Trend Statement 132 Regulatory Disclosures 148 Investor Information 150 Directory

GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER < back next > FINANCIALS Notes to the Financial Statements cont.

27 Term debt Loans subject to the negative pledge The group borrows funds based on covenants, a negative pledge and guarantee arrangement. The principal borrowing covenants relate to gearing, interest cover and minimum net tangible assets. At 30 June 2004, the group was in compliance with all its covenants. The negative pledge ensures that external senior indebtedness ranks equally in all respects and includes the covenant that security can be given only in very limited circumstances.

ANNUAL REPORT 2004 Loans not subject to the negative pledge Loans not having the benefit of the negative pledge are secured against the subsidiaries’ own statement of financial position or finance leases against specific assets. 02 Highlights 04 Chairman’s Report Unused committed lines of credit At 30 June 2004, the group had $939 million of committed bank facilities of which $422 million was undrawn 07 Chief Executive’s Report (June 2003 $817 million; $280 million). 13 Concrete FLETCHER BUILDING GROUP FLETCHER BUILDING LIMITED 18 Distribution JUNE 2004 JUNE 2003 JUNE 2004 JUNE 2003 NZ$M NZ$M NZ$M NZ$M 22 Laminates & Panels Floating loans 208 378 28 29 Construction 35 Building Products Fixed loans 270 142 198 142 40 Sustainability Review Loans not subject to the negative pledge – floating 35 8 48 Board of Directors Loans not subject to the negative pledge – fixed 4 8 52 Corporate Governance Term debt 517 536 198 170 64 Financial Review 107 68 Financial Statements 128 Audit Report 130 Trend Statement 132 Regulatory Disclosures 148 Investor Information 150 Directory

GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER < back next > FINANCIALS Notes to the Financial Statements cont.

27 Term debt cont.

Summary of repayment terms and interest rates by repayment period

FLETCHER BUILDING GROUP JUNE 2004 JUNE 2004 JUNE 2003 JUNE 2003 NZ$M INT. RATE % NZ$M INT. RATE % Due for repayment:

ANNUAL REPORT 2004 within one year 33 7.0 20 6.7 within two years 248 5.9 2 9.0

02 Highlights within three years 1 9.0 302 5.5 04 Chairman’s Report within four years 155 6.1 1 9.0 07 Chief Executive’s Report within five years 79 6.4 210 5.5 13 Concrete after five years 1 9.0 1 9.0 18 Distribution 517 6.1 536 5.6 22 Laminates & Panels The amount due for repayment within one year relates to the current portion of the group’s syndicated loan, 29 Construction and to the PlaceMakers joint ventures, whose facilities are renewed annually. 35 Building Products Summary of repayment terms and interest rates by repayment period 40 Sustainability Review FLETCHER BUILDING LIMITED 48 Board of Directors JUNE 2004 JUNE 2004 JUNE 2003 JUNE 2003 52 Corporate Governance NZ$M INT. RATE % NZ$M INT. RATE % 64 Financial Review Due for repayment: 108 68 Financial Statements within one year 10 6.1 128 Audit Report within two years 75 5.9 130 Trend Statement within three years 95 6.2 132 Regulatory Disclosures within four years 45 6.2 148 Investor Information within five years 78 6.1 65 5.9 150 Directory 198 6.0 170 6.1

GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER Credit rating The company has not sought and does not hold a credit rating from an accredited rating agency. < back next > FINANCIALS Notes to the Financial Statements cont.

28 Financial instruments Exposures to currency, interest rate, and commodity risks arise in the normal course of the group’s business. To manage and limit the effects of these financial risks the group operates within the following policies and utilises the following financial instruments.

Management policies The group does not enter into derivative financial instruments for trading or speculative purposes.

ANNUAL REPORT 2004 Currency balance sheet risk It is group policy to hedge the foreign exchange exposure to balance sheet currency risk by borrowing in the 02 Highlights currency of the asset in proportion to the group’s debt to equity ratio. Where the underlying debt in any currency 04 Chairman’s Report does not equate to the required proportion of total debt, currency swaps are entered into. In addition the company has entered into currency forwards and swaps to hedge the taxation exposure arising from the translation of the 07 Chief Executive’s Report group’s Australian operations. 13 Concrete Currency trade risk 18 Distribution It is group policy that no currency exchange risk may be entered into or allowed to remain outstanding should it 22 Laminates & Panels arise on trade transactions. When exposures are incurred by operations in currencies other than their local currency, 29 Construction currency forwards, swaps and options are entered into to eliminate the exposure. 35 Building Products Interest rate risk 40 Sustainability Review It is group policy to manage the fixed interest rate component of its debt and capital notes obligations within the 48 Board of Directors range of 40 to 70 percent of total funding costs. The position in this range is managed depending upon underlying 52 Corporate Governance interest rate exposures and economic conditions. Interest rate swaps, forward rate agreements and options are 64 Financial Review entered into to manage this position. 109 68 Financial Statements Commodity price risk 128 Audit Report It is group policy to use commodity price swaps and options to manage the market price risk of certain commodities. 130 Trend Statement The group manages its commodity price risk depending on the underlying exposures, economic conditions, and 132 Regulatory Disclosures access to active derivatives markets. 148 Investor Information 150 Directory

GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER < back next > FINANCIALS Notes to the Financial Statements cont.

28 Financial instruments cont.

FLETCHER BUILDING GROUP FLETCHER BUILDING LIMITED JUNE 2004 JUNE 2003 JUNE 2004 JUNE 2003 NZ$M NZ$M NZ$M NZ$M

Off balance sheet risk Financial instruments are used as a means of reducing exposure to fluctuations in foreign exchange rates, interest

ANNUAL REPORT 2004 rates and commodity prices. While these financial instruments are subject to the risk of market rates changing subsequent to acquisition, such changes would generally be offset with an opposite effect on the items being hedged. The principal or contract amounts of forward exchange contracts and financial instruments with off 02 Highlights balance sheet risk for the group are as follows: 04 Chairman’s Report 07 Chief Executive’s Report Principal or contract amount: 13 Concrete Currency forward contracts 18 Distribution To pay 657 174 188 50 22 Laminates & Panels To receive (658) (174) (190) (50) 29 Construction (1) (2) 35 Building Products Currency options purchased 5 40 Sustainability Review 48 Board of Directors Interest rate swaps 270 144 270 144 52 Corporate Governance Electricity price swaps 116 12 64 Financial Review Aluminium price swaps 7 110 68 Financial Statements The cash settlement amounts of these instruments, if they had settled on 30 June 2004, approximates the principal 128 Audit Report or contract amounts, except for interest rate swaps, currency options and commodity price swaps for which the cash 130 Trend Statement settlement is limited to the fair value. 132 Regulatory Disclosures 148 Investor Information 150 Directory

GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER < back next > FINANCIALS Notes to the Financial Statements cont.

28 Financial instruments cont.

Credit risk To the extent the group has a receivable from another party there is a credit risk in the event of non-performance by that counterparty. At balance date there were no significant concentrations of credit risks in respect of trade receivables. The group enters into financial instruments with various counterparties in accordance with established limits as to credit rating and dollar limits and does not require collateral or other security to support the financial instruments. In accordance with the established counterparty restrictions, there are no significant concentrations ANNUAL REPORT 2004 of credit risk in respect of financial instruments.

Interest rate repricing 02 Highlights The following tables set out the interest rate repricing profile and weighted average interest rate of the group’s 04 Chairman’s Report and company’s term debt, capital notes and interest rate hedges: 07 Chief Executive’s Report FLETCHER BUILDING GROUP 13 Concrete JUNE 2004 JUNE 2004 JUNE 2003 JUNE 2003 18 Distribution NZ$M % NZ$M % 22 Laminates & Panels Interest rate repriced and average interest rate: 29 Construction within one year 311 7.1 450 6.0 35 Building Products within two years 123 6.8 70 10.5 40 Sustainability Review within three years 249 6.7 107 7.0 48 Board of Directors within four years 135 8.1 91 6.6 52 Corporate Governance within five years 61 7.8 136 8.1 64 Financial Review after five years 38 8.9 38 8.9 111 68 Financial Statements 917 7.2 892 7.0 128 Audit Report 130 Trend Statement 132 Regulatory Disclosures 148 Investor Information 150 Directory

GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER < back next > FINANCIALS Notes to the Financial Statements cont.

28 Financial instruments cont. Notes to the Financial Statements FLETCHER BUILDING LIMITED JUNE 2004 JUNE 2004 JUNE 2003 JUNE 2003 NZ$M % NZ$M %

Interest rate repriced and average interest rate: within one year 90 8.8

ANNUAL REPORT 2004 within two years 118 7.0 68 10.5 within three years 247 6.7 105 6.9

02 Highlights within four years 22 5.4 90 6.5 04 Chairman’s Report within five years 61 7.8 23 5.4 07 Chief Executive’s Report 448 7.5 376 7.8

13 Concrete The net effective interest rate for cash and liquid deposits and bank overdrafts as at 30 June 2004 is 2.0 percent. 18 Distribution Debtors and creditors are not interest rate sensitive. 22 Laminates & Panels Fair values 29 Construction The gain/(loss) of the estimated fair values of the group’s and company’s financial assets and company’s compared 35 Building Products to their carrying values, where materially different, are as follows: 40 Sustainability Review FLETCHER BUILDING GROUP 48 Board of Directors CARRYING VALUE FAIR VALUE CARRYING VALUE FAIR VALUE 52 Corporate Governance JUNE 2004 JUNE 2004 JUNE 2003 JUNE 2003 NZ$M NZ$M NZ$M NZ$M 64 Financial Review Currency forward contracts gain/(loss) (6) 112 68 Financial Statements Currency options 128 Audit Report Interest rate swaps 3 (1) 130 Trend Statement Electricity price swaps 2 132 Regulatory Disclosures 148 Investor Information Aluminium price swaps 150 Directory

GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER < back next > FINANCIALS Notes to the Financial Statements cont.

Fair values cont.

FLETCHER BUILDING LIMITED CARRYING VALUE FAIR VALUE CARRYING VALUE FAIR VALUE JUNE 2004 JUNE 2004 JUNE 2003 JUNE 2003 NZ$M NZ$M NZ$M NZ$M

Currency forward contracts gain/(loss) (1) Currency options ANNUAL REPORT 2004 Interest rate swaps 3 (1) Electricity price swaps 2 02 Highlights Aluminium price swaps 04 Chairman’s Report 07 Chief Executive’s Report The carrying values in the fair value table include interest accruals which are included within current assets and current liabilities. Term debt of $517 million (refer note 27) includes cross-currency, interest rate swaps and 13 Concrete currency forward exchange contracts. The fair value of derivative financial instruments is estimated based 18 Distribution on the quoted or estimated market prices of those instruments. 22 Laminates & Panels 29 Construction 35 Building Products 40 Sustainability Review 48 Board of Directors 52 Corporate Governance 64 Financial Review 113 68 Financial Statements 128 Audit Report 130 Trend Statement 132 Regulatory Disclosures 148 Investor Information 150 Directory

GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER < back next > FINANCIALS Notes to the Financial Statements cont.

FLETCHER BUILDING GROUP JUNE 2004 JUNE 2003 NZ$M NZ$M

29 Capital expenditure commitments Approved by the directors but uncommitted at year end 66 16 Committed at year end 30 32 ANNUAL REPORT 2004 96 48

02 Highlights 30 Lease commitments 04 Chairman’s Report The expected future minimum rental payments required under operating leases that have initial or remaining 07 Chief Executive’s Report non-cancellable lease terms in excess of one year at year end are as follows: 13 Concrete within one year 52 53 18 Distribution within two years 43 43 22 Laminates & Panels within three years 48 38 29 Construction within four years 26 30 35 Building Products within five years 24 25 40 Sustainability Review after five years 33 49 48 Board of Directors 226 238 52 Corporate Governance 64 Financial Review Operating lease commitments relate mainly to occupancy leases of buildings. 114 68 Financial Statements 128 Audit Report 130 Trend Statement 132 Regulatory Disclosures 148 Investor Information 150 Directory

GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER < back next > FINANCIALS Notes to the Financial Statements cont.

FLETCHER BUILDING GROUP JUNE 2004 JUNE 2003 NZ$M NZ$M

31 Contingent liabilities Provision has been made in the ordinary course of business for all known and probable future claims but not for such claims as are considered remote. Contingent liabilities arise in respect of the following categories:

ANNUAL REPORT 2004 Contingent liabilities with respect to guarantees extended on trading transactions, performance bonds and other transactions 185 139

02 Highlights Letters of credit 5 3 04 Chairman’s Report 32 Self insurance 07 Chief Executive’s Report The company has completed an analysis of its capacity to retain otherwise insurable loss. The directors believe 13 Concrete that the group’s risk management programmes are adequate to protect its assets and earnings against losses 18 Distribution incurred, within the self insurance level of $10 million. 22 Laminates & Panels Based on past experience, the company does not anticipate that future losses within these levels would have 29 Construction a significant impact on the group’s financial position or performance. 35 Building Products In certain circumstances, where required by law or where management considers it appropriate, insurance may 40 Sustainability Review be arranged for exposures within the self insurance levels. 48 Board of Directors In general terms, subject to the self insurance levels, the group remains insured with insurers having a Standard 52 Corporate Governance & Poor’s A grade rating or better. 64 Financial Review The following risks are insured at 30 June 2004 in respect of each event: 115 68 Financial Statements 128 Audit Report Public and product liability 100 100 130 Trend Statement Loss or damage to group property including business interruption 270 210 132 Regulatory Disclosures Marine public liability 60 50 148 Investor Information Public and product liability resulting from construction activities 50 50 150 Directory Contract works – each contract is covered to the value of the contract

GO DIRECTLY TO A SECTION OF THE The group has made provision for reported and estimated unreported losses incurred at balance date. REPORT BY CLICKING ON THE NUMBER < back next > FINANCIALS Notes to the Financial Statements cont.

FLETCHER BUILDING GROUP FLETCHER BUILDING LIMITED JUNE 2004 JUNE 2003 JUNE 2004 JUNE 2003 NZ$M NZ$M NZ$M NZ$M

33 Related party transactions Fletcher Building Group Trading activities with related parties: ANNUAL REPORT 2004 Purchase of scrap metal from Sims Pacific Metals Limited 73 50 02 Highlights Amounts owing relating to the purchase 04 Chairman’s Report of scrap metal from Sims Pacific Metals 07 Chief Executive’s Report Limited, and included within creditors 4 3 13 Concrete Purchase of raw materials from Wespine Industries 18 Distribution Pty Limited and Dynea Industries W.A. Pty Limited 50 19 22 Laminates & Panels Amounts owing relating to the purchase of raw materials from Wespine Industries Pty Limited 29 Construction and Dynea Industries W.A. Pty Limited, and included 35 Building Products within creditors 4 3 40 Sustainability Review 48 Board of Directors 52 Corporate Governance 64 Financial Review 116 68 Financial Statements 128 Audit Report 130 Trend Statement 132 Regulatory Disclosures 148 Investor Information 150 Directory

GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER < back next > FINANCIALS Notes to the Financial Statements cont.

33 Related party transactions cont.

FLETCHER BUILDING GROUP FLETCHER BUILDING LIMITED JUNE 2004 JUNE 2003 JUNE 2004 JUNE 2003 NZ$M NZ$M NZ$M NZ$M

Fletcher Building Limited Interest income received from subsidiary companies 21 5 ANNUAL REPORT 2004 Dividends received from subsidiary companies 114 52 Term receivable owing from subsidiary companies 1 248 313 02 Highlights Term liability owing to subsidiary companies 2 250 470 04 Chairman’s Report Term liability owing to subsidiary companies 3 574 07 Chief Executive’s Report 1 This unsecured advance represents long term funding even though it is for no fixed term and bears interest at 10.2 percent. 13 Concrete 2 These unsecured advances represents long term funding even though they are for no fixed term and bear interest at either 7.5 percent or 9 percent. 18 Distribution 3 This unsecured advance represents long term funding even though it is for no fixed term and is not interest bearing. 22 Laminates & Panels Fletcher Building Retirement Plan 29 Construction As at 30 June 2004, Fletcher Building Nominees Limited (the Retirement Plan) held 1,401,443 shares and 35 Building Products $10,000,000 of capital notes in Fletcher Building Limited (June 2003 974,746 shares, $nil capital notes). 40 Sustainability Review 48 Board of Directors 52 Corporate Governance 64 Financial Review 117 68 Financial Statements 128 Audit Report 130 Trend Statement 132 Regulatory Disclosures 148 Investor Information 150 Directory

GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER < back next > FINANCIALS Notes to the Financial Statements cont.

34 Principal operations Fletcher Building Limited is the holding company of the Fletcher Building Group. The principal subsidiaries and associates, as at 30 June 2004, are outlined below:

COUNTRY OF % PRINCIPLE DOMICILE HOLDING ACTIVITY

Principal subsidiaries ANNUAL REPORT 2004 Fletcher Building Holdings Limited NZ 100 Holding company Fletcher Building Products Limited NZ 100 Building products 02 Highlights Fletcher Concrete and Infrastructure Limited NZ 100 Concrete products 04 Chairman’s Report Fletcher Distribution Limited NZ 100 Merchandising 07 Chief Executive’s Report Fletcher Steel Limited NZ 100 Steel production 13 Concrete Fletcher Residential Limited NZ 100 Housing 18 Distribution The Fletcher Construction Company Limited NZ 100 Construction 22 Laminates & Panels Winstone Wallboards Limited NZ 100 Gypsum plasterboards 29 Construction Fletcher Property Limited NZ 100 Property management 35 Building Products PlaceMakers subsidiaries NZ 50.1 Retail 40 Sustainability Review Fletcher Building Finance Limited NZ 100 Finance company 48 Board of Directors 52 Corporate Governance Tasman Insulation New Zealand Limited NZ 100 Insulation 64 Financial Review AHI Roofing Limited NZ 100 Roofing 118 68 Financial Statements Firth Industries Peru S.A. Peru 100 Concrete products 128 Audit Report Cemac (Hong Kong) Limited Hong Kong 100 Wall partitions & ceiling systems 130 Trend Statement Fletcher Construction Company (Fiji) Limited Fiji 100 Construction 132 Regulatory Disclosures 148 Investor Information 150 Directory

GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER < back next > FINANCIALS Notes to the Financial Statements cont.

34 Principal operations cont.

COUNTRY OF % PRINCIPAL DOMICILE HOLDING ACTIVITY

Fletcher Challenge Concrete Industries (Fiji) Limited Fiji 100 Quarrying Metromix Concrete Company Limited Fiji 100 Concrete products ANNUAL REPORT 2004 Laminex Group Limited Australia 100 Building products Fletcher Building Australia Pty Limited Australia 100 Holding company 02 Highlights Tasman Insulation Pty Limited Australia 100 Insulation 04 Chairman’s Report Tasman Sinkware Pty Limited Australia 100 Sinks 07 Chief Executive’s Report Tasman Access Floors Pty Limited Australia 100 Flooring 13 Concrete Fletcher Construction (Solomon Islands) Limited Solomon Is. 100 Construction 18 Distribution Fletcher Morobe Construction Pty Limited PNG 100 Construction 22 Laminates & Panels Fletcher Buildings Netherlands B.V. Netherlands 100 Finance 29 Construction Tasman Investments (Netherlands Antilles) N.V. Neth Antilles 100 Finance 35 Building Products Decra Roofing Systems Inc. United States 100 Roofing 40 Sustainability Review 48 Board of Directors Associates 52 Corporate Governance Wespine Industries Pty Limited Australia 50 Saw miller 64 Financial Review Dynea Industries W.A. Pty Limited Australia 50 Building products 119 68 Financial Statements Sims Pacific Metals Limited NZ 50 Metal recycling 128 Audit Report 130 Trend Statement 132 Regulatory Disclosures 148 Investor Information 150 Directory

GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER < back next > FINANCIALS Notes to the Financial Statements cont.

35 Retirement plan Fletcher Building Limited is the principal sponsoring company of a plan that provides retirement and other benefits to employees of the Fletcher Building group in New Zealand. Participation in defined benefit retirement entitlements has been closed for a number of years, although defined contribution savings plans have been made available. During the year the group acquired the Tasman Building Products Group which also has defined contribution plans for its employees. During the year ended June 2003 the group acquired The Laminex Group which has two defined

ANNUAL REPORT 2004 benefit schemes in Australia and a number of defined contribution plans which The Laminex Group contributes to on behalf of its employees. These defined benefit obligations are based on years of service and the employees’ compensation during their years 02 Highlights of employment. Contributions are intended to provide not only for benefits attributed to service to date but also 04 Chairman’s Report for those expected to be earned in the future. These obligations are accounted for in accordance with Statement 07 Chief Executive’s Report of Financial Accounting Standard (FAS) 87, Employers Accounting for Pensions. This has the effect of smoothing 13 Concrete the volatility in the returns earned by the plans through amortising gains and losses over the life of the plans. 18 Distribution At 30 June 2004 $57 million (June 2003 $83 million) of net losses are to be expensed in future years. 22 Laminates & Panels If the funding ratio of the New Zealand plan falls below 115 percent at any two consecutive annual actuarial valuations, 29 Construction Fletcher Building Limited has an obligation to ensure that the value of the assets is at least 115 percent of the plan’s accrued actuarial liability, as calculated by the plan’s actuary. This calculation is done on the plan’s funding basis 35 Building Products which differs from the calculation under FAS 87. At 31 March 2004 the value of the assets was 115 percent of the 40 Sustainability Review actuarial liability. The company contributed $16 million during the year, which had been accrued at 30 June 2003. 48 Board of Directors Plan assets consist primarily of property, equity and fixed income securities. 52 Corporate Governance 64 Financial Review 120 68 Financial Statements 128 Audit Report 130 Trend Statement 132 Regulatory Disclosures 148 Investor Information 150 Directory

GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER < back next > FINANCIALS Notes to the Financial Statements cont.

35 Retirement plan cont.

JUNE 2004 JUNE 2003 NZ$M NZ$M

Assets of the plans Assets of plans at fair value 325 320 Total projected benefit obligation (309) (328) ANNUAL REPORT 2004 Funded surplus/(obligation) 16 (8) Projected unrecognised funded (surplus)/obligation consists of: 02 Highlights Net (gain)/loss 1 57 90 04 Chairman’s Report Transition asset 2 (7) 07 Chief Executive’s Report Projected unrecognised funded (surplus)/obligation 57 83 13 Concrete Recognised funded surplus 3 73 75 18 Distribution 1 The unrecognised net loss is being amortised over 10 years. 22 Laminates & Panels 2 The net transition asset was fully amortised in the year as per the requirements of FAS 87. 29 Construction 3 Recognised funded surplus included within note 22, Investments. 35 Building Products Net periodic pension cost 40 Sustainability Review Service cost earned during the year (9) (6) 48 Board of Directors Interest cost on projected benefit obligation (13) (15) 52 Corporate Governance Actual return on assets 27 64 Financial Review Net amortisation of: 121 68 Financial Statements Transition asset 7 12 128 Audit Report Amortisation of net (gain)/loss (10) (8) 130 Trend Statement Difference between expected and actual return on assets (9) 18 132 Regulatory Disclosures 148 Investor Information Net periodic pension (cost)/benefit (7) 1 150 Directory

GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER < back next > FINANCIALS Notes to the Financial Statements cont.

35 Retirement plan cont.

Assumptions used The following table provides the weighted average assumptions used to develop the net periodic pension cost and the actuarial present value of projected benefit obligations for the group’s plans:

2004 2003 % %

ANNUAL REPORT 2004 Assumed discount rate on benefit obligations 4.77 4.07 Expected annual rate of return on plan assets 5.59 5.61 02 Highlights Annual rate of increase in future compensation levels 3.59 3.58 04 Chairman’s Report During the year the New Zealand actuary increased the discount rate on benefit obligations from 3.8 percent to 07 Chief Executive’s Report 4.6 percent (June 2003 decreased from 4.75 percent to 3.8 percent) to reflect the increase in interest rates. This 13 Concrete had the effect of decreasing the projected benefit obligation by $17 million (June 2003 increasing by $26 million), 18 Distribution and is part of the closing net loss to be amortised in future periods. 22 Laminates & Panels 29 Construction 35 Building Products 40 Sustainability Review 48 Board of Directors 52 Corporate Governance 64 Financial Review 122 68 Financial Statements 128 Audit Report 130 Trend Statement 132 Regulatory Disclosures 148 Investor Information 150 Directory

GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER < back next > FINANCIALS Notes to the Financial Statements cont.

36 Segmental information

JUNE 2004 JUNE 2003 JUNE 2004 JUNE 2003 JUNE 2004 JUNE 2003 OPERATING OPERATING OPERATING OPERATING TOTAL TOTAL REVENUE REVENUE EARNINGS EARNINGS ASSETS ASSETS (EBIT) (EBIT) NZ$M NZ$M NZ$M NZ$M NZ$M NZ$M

Industry segments ANNUAL REPORT 2004 Building Products 927 638 164 102 728 533 Distribution 863 744 73 59 213 175 02 Highlights Concrete 518 487 94 81 485 462 04 Chairman’s Report Construction 643 618 42 34 188 173 07 Chief Executive’s Report Laminates & Panels 994 659 95 54 926 857 13 Concrete 18 Distribution Other 13 75 (8) 1 250 248 22 Laminates & Panels Group 3,958 3,221 460 331 2,790 2,448 29 Construction 35 Building Products Geographical segments 40 Sustainability Review Australia 886 522 86 41 944 857 48 Board of Directors New Zealand 2,900 2,588 365 278 1,721 1,523 52 Corporate Governance Other 172 111 9 12 125 68 64 Financial Review Group 3,958 3,221 460 331 2,790 2,448 123 68 Financial Statements 128 Audit Report 130 Trend Statement 132 Regulatory Disclosures 148 Investor Information 150 Directory

GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER < back next > FINANCIALS Notes to the Financial Statements cont.

37 International Financial Reporting Standards In December 2002 the New Zealand Accounting Standards Review Board announced that New Zealand standards which comply with International Financial Reporting Standards (IFRS) will apply to New Zealand entities for periods commencing 1 January 2007. Entities also have the option of early adoption from 1 January 2005, in line with Australian and European requirements and Fletcher Building proposes to do so. Accordingly the company will prepare financial statements using New Zealand standards that comply with IFRS for the period beginning on 1 July 2005. The first interim financial statements prepared under IFRS will be for the six months ended 31 December 2005 and ANNUAL REPORT 2004 the first annual financial statements will be for the year ended 30 June 2006. When complying with IFRS for the first time the group will need to restate the comparative financial statements 02 Highlights using IFRS. This will include the earnings and the cashflow statements and the balance sheet. Most adjustments 04 Chairman’s Report required on transition to IFRS will be made retrospectively against opening retained earnings at 30 June 2004, 07 Chief Executive’s Report however transitional adjustments relating to those standards where comparatives are not required, will only be 13 Concrete made at 30 June 2005. 18 Distribution The purpose of this disclosure is to highlight the impact that the group expects as a result of transitioning to IFRS 22 Laminates & Panels from current NZ GAAP based on the standards as they are today. It is possible that future developments to IFRS will change the nature of the adjustments required by the time the group reports its first financial statements prepared 29 Construction under IFRS. As we progress towards 30 June 2006 the group intends to continue to provide users of the financial 35 Building Products statements with updated information about the likely impacts of IFRS on the group’s earnings, cashflows and 40 Sustainability Review financial position. 48 Board of Directors 52 Corporate Governance 64 Financial Review 124 68 Financial Statements 128 Audit Report 130 Trend Statement 132 Regulatory Disclosures 148 Investor Information 150 Directory

GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER < back next > FINANCIALS Notes to the Financial Statements cont.

37 International Financial Reporting Standards cont.

The impact of adjustments on the financial statements at 30 June 2004 is set out below:

ESTIMATED IMPACT ON FUTURE NET EARNINGS EQUITY LIABILITIES TOTAL ASSETS AFTER TAX $M $M $M $M ANNUAL REPORT 2004 Reported at 30 June 2004 using NZ GAAP 1,118 1,672 2,790 Increase in goodwill and deferred tax 1, 4 51 51 02 Highlights Goodwill amortisation 2 10 04 Chairman’s Report Pension plan 3 (57) (57) 6 07 Chief Executive’s Report Deferred tax 4 (11) (11) 13 Concrete Financial Instruments 4, 5 (3) 4 1 18 Distribution Long service leave 4, 6 (9) 13 4 22 Laminates & Panels 29 Construction Estimated adjustment (80) 68 (12) 16 35 Building Products Restated balances under IFRS at 30 June 2004 1,038 1,740 2,778 40 Sustainability Review 48 Board of Directors 52 Corporate Governance 64 Financial Review 125 68 Financial Statements 128 Audit Report 130 Trend Statement 132 Regulatory Disclosures 148 Investor Information 150 Directory

GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER < back next > FINANCIALS Notes to the Financial Statements cont.

37 International Financial Reporting Standards cont.

1 Remeasurement of business combinations The group will apply IFRS to all business combinations that have occurred since 1 July 2002 and will re-perform the fair value exercise, including the acquisition of The Laminex Group and Tasman Building Products Group. A deferred tax liability of $51 million in respect of brands will be recognised, increasing goodwill. 2 Goodwill ANNUAL REPORT 2004 Goodwill relating to the acquisition of The Laminex Group and Tasman Building Products Group is currently amortised over 20 years. IFRS does not permit this to be amortised, but subjects this to an annual impairment test. This will increase future reported earnings. 02 Highlights 3 Defined benefit scheme obligations 04 Chairman’s Report The group currently accounts for its retirement plans under NZ GAAP in accordance with Statement of Financial Accounting 07 Chief Executive’s Report Standard (FAS) 87, Employers Accounting for Pensions. The unamortised losses of $57 million currently carried in the investment 13 Concrete value will be written off to retained earnings upon first time adoption of IFRS. Under NZ GAAP this would be amortised over ten 18 Distribution years and the change in policy will accordingly increase future reported earnings. The ongoing accounting for these plans under 22 Laminates & Panels IFRS is broadly similar to that currently required under FAS 87. 29 Construction 4 Taxation 35 Building Products IFRS requires the use of the ”balance sheet” approach rather than the ”profit and loss account” approach required under NZ GAAP. This will require the recognition for the first time of deferred tax liabilities on asset revaluations above historic cost 40 Sustainability Review ($6 million), the pension asset ($5 million) and on the value of brands ($51 million). A deferred tax benefit will be recognised 48 Board of Directors on long service obligations ($4 million) and a fair value loss recognised on financial instruments ($1 million). 52 Corporate Governance 64 Financial Review 126 68 Financial Statements 128 Audit Report 130 Trend Statement 132 Regulatory Disclosures 148 Investor Information 150 Directory

GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER < back next > FINANCIALS Notes to the Financial Statements cont.

37 International Financial Reporting Standards cont.

5 Financial instruments Accounting for financial instruments under IFRS involves some major changes from NZ GAAP. IFRS is very prescriptive on when a financial derivative can be considered an effective hedge on an underlying position or future cashflow. All derivative contracts will be carried at fair value on the group’s balance sheet. If a derivative financial transaction does not qualify for hedge accounting, the mark to market fair value movement will be taken to earnings. If a derivative financial transaction does qualify for hedge accounting, the mark to market fair value movement will be ANNUAL REPORT 2004 taken to a reserve within equity. As all of the financial derivative instruments entered into are to protect the group’s current position and are not speculative in nature, the majority of instruments will qualify for hedge accounting. Upon 02 Highlights first time adoption of IFRS a mark to market fair value loss of $4 million will be recognised against retained earnings. 04 Chairman’s Report 6 Long service leave 07 Chief Executive’s Report Long service leave is currently recognised when it vests, whereas under IFRS this is recognised on an accruals basis. 13 Concrete 7 Deemed historic cost adjustment to fixed assets 18 Distribution The carrying value of certain previously revalued items of land, buildings, and plant and machinery will be deemed 22 Laminates & Panels as the historic cost upon first time adoption of IFRS and accordingly will not be revalued going forward. Accordingly, 29 Construction the balance of the asset revaluation reserves of $46 million will be transferred to retained earnings from the revaluation reserves. There will be no impact to equity, asset values or earnings from this change in policy. 35 Building Products 8 Foreign currency translation reserve 40 Sustainability Review The balance of the foreign currency translation reserve of $38 million will be transferred to retained earnings 48 Board of Directors from the foreign currency translation reserve upon first time adoption of IFRS. There will be no impact on earnings 52 Corporate Governance or equity from this change. 64 Financial Review 127 68 Financial Statements 128 Audit Report 130 Trend Statement 132 Regulatory Disclosures 148 Investor Information 150 Directory

GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER < back next > AUDIT REPORT

Audit report

ANNUAL REPORT 2004 To the shareholders of Fletcher Building Limited 02 Highlights We have audited the financial statements on pages 68 to 127. The financial statements provide information about the past financial performance of the company and its financial position as at 30 June 2004. This information is stated 04 Chairman’s Report in accordance with the accounting policies set out on pages 78 to 83. 07 Chief Executive’s Report 13 Concrete Directors’ responsibilities The directors are responsible for the preparation of financial statements which give a true and fair view of the 18 Distribution financial position of the company as at 30 June 2004 and the results of its operations and cashflows for the year 22 Laminates & Panels ended on that date. 29 Construction Auditors’ responsibilities 35 Building Products It is our responsibility to express an independent opinion on the financial statements presented by the directors 40 Sustainability Review and report our opinion to you. 48 Board of Directors Basis of opinion 52 Corporate Governance An audit includes examining, on a test basis, evidence relevant to the amounts and disclosures in the financial 64 Financial Review statements. It also includes assessing: 128 68 Financial Statements • the significant estimates and judgements made by the directors in the preparation of the financial statements; 128 Audit Report • whether the accounting policies are appropriate to the company’s and group’s circumstances, consistently 130 Trend Statement applied and adequately disclosed. 132 Regulatory Disclosures We conducted our audit in accordance with New Zealand Auditing Standards issued by the Institute of Chartered 148 Investor Information Accountants of New Zealand. We planned and performed our audit so as to obtain all the information and 150 Directory explanations which we considered necessary in order to provide us with sufficient evidence to obtain reasonable assurance that the financial statements are free from material misstatements, whether caused by fraud or error. GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER In forming our opinion we also evaluated the overall adequacy of the presentation of information in the financial statements. < back next > AUDIT REPORT Audit report cont.

Our firm has also provided other services to the company and certain of its subsidiaries in relation to taxation and general accounting services. Partners and employees of our firm may also deal with the company and group on normal terms within the ordinary course of trading activities of the business of the company and group. These matters have not impaired our independence as auditors of the company and group. The firm has no other relationship with, or interest in, the company or any of its subsidiaries.

Unqualified opinion

ANNUAL REPORT 2004 We have obtained all the information and explanations we have required. In our opinion:

02 Highlights • proper accounting records have been kept by the company as far as appears from our examination of those records; 04 Chairman’s Report 07 Chief Executive’s Report • the financial statements on pages 68 to 127: 13 Concrete – comply with New Zealand generally accepted accounting practices; 18 Distribution – give a true and fair view of the financial position of the company as at 30 June 2004 and the results 22 Laminates & Panels of its operations and cashflows for the year ended on that date. 29 Construction Our audit was completed on 11 August 2004 and our unqualified opinion is expressed as at that date. 35 Building Products

40 Sustainability Review KPMG Auckland, New Zealand 48 Board of Directors 52 Corporate Governance 64 Financial Review 129 68 Financial Statements 128 Audit Report 130 Trend Statement 132 Regulatory Disclosures 148 Investor Information 150 Directory

GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER < back next > TREND STATEMENT

Trend Statement

PRO FORMA JUNE 2004 1 JUNE 2003 2 JUNE 2002 JUNE 2001 3 NZ$M NZ$M NZ$M NZ$M

ANNUAL REPORT 2004 Financial performance Operating revenue 3,958 3,221 2,966 2,273 02 Highlights Operating earnings (EBIT) 460 331 210 (87) 04 Chairman’s Report Net earnings 4 240 168 93 (272) 07 Chief Executive’s Report Cashflow from operations 424 276 187 251 13 Concrete Earnings per share (cents per share) 55.7 43.4 27.0 (83.7) 18 Distribution Dividends for the year (cents per share) 25.0 19.0 14.0 12.0 22 Laminates & Panels 29 Construction Financial position 35 Building Products Current assets 1,174 1,021 794 851 40 Sustainability Review Non current assets 1,616 1,427 842 985 48 Board of Directors Total assets 2,790 2,448 1,636 1,836 52 Corporate Governance 64 Financial Review Current liabilities 856 776 669 681 130 68 Financial Statements Non current liabilities 816 812 376 615

128 Audit Report Total liabilities 1,672 1,588 1,045 1,296 130 Trend Statement 132 Regulatory Disclosures Capital 754 628 455 449 148 Investor Information Other shareholders’ funds 324 195 109 89 150 Directory Minority equity 40 37 27 2 Total equity 1,118 860 591 540 GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER Total liabilities and equity 2,790 2,448 1,636 1,836 < back next > TREND STATEMENT Trend Statement cont.

PRO FORMA JUNE 2004 1 JUNE 2003 2 JUNE 2002 JUNE 2001 3 NZ$M NZ$M NZ$M NZ$M

Other financial data Return on average funds (%) 5 24.7 24.4 23.1 (8.6) Return on average equity (%) 6 24.3 23.0 16.9 (43.8) ANNUAL REPORT 2004 Net debt/net debt plus equity (%) 43.1 49.9 40.2 49.2 Net tangible assets per share ($) 1.68 1.54 1.60 1.52 02 Highlights Market capitalisation (NZ$m) 1,987 1,490 953 817 04 Chairman’s Report 1 The Tasman Building Products Group was acquired on 30 September 2003. 07 Chief Executive’s Report 2 The Laminex Group was acquired on 13 November 2002. 13 Concrete 3 On 23 March 2001 Fletcher Challenge Limited – Building Operations, a targeted share of Fletcher Challenge Limited became a standalone publicly 18 Distribution listed company Fletcher Building Limited. The proforma accounts consolidate the results of both entities for the year. 4 For the year ended 30 June 2001, capital notes were treated as a component of equity. Interest on the notes ($16 million after tax) was recorded 22 Laminates & Panels as a distribution from equity, rather than in funding costs. 29 Construction 5 EBIT/Average net debt +equity+capital notes-deferred tax asset. 35 Building Products 6 Net earnings/average shareholder funds. 40 Sustainability Review 48 Board of Directors 52 Corporate Governance 64 Financial Review 131 68 Financial Statements 128 Audit Report 130 Trend Statement 132 Regulatory Disclosures 148 Investor Information 150 Directory

GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER < back next > REGULATORY DISCLOSURES Regulatory Disclosures

Directors’ holdings of equity securities at 30 June 2004

ORDINARY SHARES OPTIONS CAPITAL NOTES ANNUAL REPORT 2004 BENEFICIAL ASSOCIATED BENEFICIAL ASSOCIATED PERSONS PERSONS

02 Highlights P E A Baines 22,115 25,000 04 Chairman’s Report R S Deane 1,295 50,000 300,000 07 Chief Executive’s Report H A Fletcher 9,028 754,328 40,000 13 Concrete G J McGrath 40,000 18 Distribution R J Norris 20,000 22 Laminates & Panels D T Spring 20,550 9,500 50,000 29 Construction K M Vautier 40,293 13,280 29,000 20,000 35 Building Products R G Waters 263,110 93,813 1,000,000 40 Sustainability Review 416,391 920,921 1,000,000 29,000 435,000 48 Board of Directors

52 Corporate Governance On 27 September 2004, R G Waters exercised the 1,000,000 options to acquire Fletcher Building shares and has 64 Financial Review retained all the shares so issued. As at that date his holding is, in aggregate, 1,356,923 ordinary shares. 132 68 Financial Statements 128 Audit Report 130 Trend Statement 132 Regulatory Disclosures 148 Investor Information 150 Directory

GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER < back next > REGULATORY Regulatory Disclosures cont. DISCLOSURES

RegulatoryShare dealings by Disclosures directors During the year, directors disclosed in respect of section 148(2) of the Companies Act 1993 that they acquired or disposed of a relevant interest in shares as follows:

DIRECTOR NUMBER OF NUMBER OF CONSIDERATION DATE SHARES SHARES PAID/RECEIVED ACQUIRED DISPOSED NZ$M H A Fletcher 25,000 105,329 11/11/03 ANNUAL REPORT 2004 H A Fletcher 11,932 52,285 13/11/03 H A Fletcher 25,000 101,921 24/11/03 02 Highlights H A Fletcher 100,000 401,000 12/02/04 04 Chairman’s Report 07 Chief Executive’s Report H A Fletcher 25,000 100,529 16/02/04 13 Concrete H A Fletcher 25,000 105,750 16/03/04 18 Distribution H A Fletcher 17,997 78,074 07/04/04 22 Laminates & Panels G J McGrath 20,000 81,110 11/02/04 29 Construction D T Spring 9,500 39,330 04/09/03 35 Building Products K M Vautier 1,166 5,109 13/11/03 40 Sustainability Review K M Vautier 1,322 5,748 07/04/04 48 Board of Directors R G Waters 2,558 11,207 13/11/03 52 Corporate Governance R G Waters 2,917 12,684 07/04/04 64 Financial Review R G Waters 263,110 Nil 1 30/04/04 133 68 Financial Statements 128 Audit Report 1 R G Waters had an economic interest in the company’s securities equivalent to a holding of 263,110 shares, 130 Trend Statement by way of a retirement benefit determined by reference to the value of Fletcher Building shares on withdrawal. The investment arose through an allocation from his total remuneration, and is after the deduction of the 132 Regulatory Disclosures appropriate tax. On 30 April 2004, R G Waters obtained a relevant interest in these shares when the Trustees 148 Investor Information of the Fletcher Building Retirement Plan granted him a right to elect that that benefit be satisfied by the transfer 150 Directory of Fletcher Building shares in lieu of a cash payment.

GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER < back next > REGULATORY Regulatory Disclosures cont. DISCLOSURES

Directors’ interests register Directors’ certificates to cover entries in the interests register in respect of remuneration, dealing in the company’s securities, insurance and other interests have been disclosed as required by the Companies Act 1993. In accordance with Section 140(2) of the Companies Act 1993, directors have advised changes in their interests during the year of:

As at 30 June 2004 ANNUAL REPORT 2004 P E A Baines New Zealand Institute of Enconomic Research 15/06/04 Appointed director 02 Highlights Wrightson Limited 28/06/04 Resigned as director 04 Chairman’s Report R S Deane 07 Chief Executive’s Report Trans Alta Corporation 31/08/03 Resigned as director 13 Concrete Mayoral Business Advisory Board (Wellington) 03/05/04 Resigned as chairman 18 Distribution 22 Laminates & Panels G J McGrath Campbell Brothers Ltd (Brisbane) Limited 07/07/03 Appointment as director 29 Construction 35 Building Products R J Norris 40 Sustainability Review Defence 2003 Trustees Limited 30/07/03 Resigned as director

48 Board of Directors Sir Dryden Spring 52 Corporate Governance Sky City Entertainment Group Limited 31/10/03 Appointed director 64 Financial Review Nufarm Limited 11/12/03 Resigned as director 134 68 Financial Statements Port of Tauranga Limited 01/04/04 Appointed director 128 Audit Report Maersk New Zealand Limited 31/03/04 Resigned as director 130 Trend Statement ANZ Banking Group (New Zealand) Limited 03/05/04 Appointed director The National Bank of New Zealand Limited 03/05/04 Resigned as director 132 Regulatory Disclosures Tenon Limited 09/06/04 Resigned as chairman and director 148 Investor Information 150 Directory K M Vautier Reserve Bank of New Zealand 04/12/03 Resigned as External Monetary GO DIRECTLY TO A SECTION OF THE Policy advisor REPORT BY CLICKING ON THE NUMBER < back next > REGULATORY Regulatory Disclosures cont. DISCLOSURES

Stock exchange listings The company’s shares are listed on the New Zealand (NZX) and Australian (ASX) stock exchanges.

20 largest shareholders as at 31 August 2004

NAME NO OF SHARES % OF SHARES

New Zealand Central Securities Depository Limited 194,537,979 44.53

ANNUAL REPORT 2004 RBC Global Services Australia Nominees Pty Limited 52,427,668 12.00 J P Morgan Nominees Australia Limited 17,899,229 4.09

02 Highlights National Nominees Limited 17,182,272 3.93 04 Chairman’s Report Westpac Custodian Nominees Limited 7,823,916 1.79 07 Chief Executive’s Report IOOF Investment Management Limited 7,225,067 1.65 13 Concrete Citigroup Nominees Pty Limited 6,766,800 1.53 18 Distribution Cogent Nominees Pty Limited 5,435,229 1.24 22 Laminates & Panels Queensland Investment Corporation 3,518,654 0.80 29 Construction Peter Hanbury Masfen & Joanna Alison Masfen 3,138,854 0.71 35 Building Products Fletcher Building Educational Fund 2,002,765 0.45 40 Sustainability Review ANZ Nominees Limited 1,985,514 0.45 48 Board of Directors ABN AMRO Craigs Limited 1,838,729 0.42 52 Corporate Governance NZ Guardian Trust Company Limited 1,240,532 0.28 64 Financial Review Fletcher Building Share Schemes Limited 1,217,568 0.27 135 68 Financial Statements 128 Audit Report First NZ Capital Custodians Limited 1,194,987 0.27 130 Trend Statement Fletcher Building Nominees Limited 1,024,069 0.23 132 Regulatory Disclosures Westpac Financial Services Limited 964,400 0.22 148 Investor Information Leveraged Equities Limited 888,188 0.20 150 Directory Westpac Life Insurance Services Limited 815,900 0.18

GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER < back next > REGULATORY Regulatory Disclosures cont. DISCLOSURES 20 largest shareholders as at 31 August 2004 cont.

New Zealand Central Securities Depository Limited provides a custodial depository service that allows electronic trading of securities to its members and does not have a beneficial interest in these shares. Its major holders of Fletcher Building shares are:

NAME NO OF SHARES % OF SHARES

National Nominees New Zealand Limited 83,312,589 19.07 ANNUAL REPORT 2004 Westpac Banking Corporation 24,852,446 5.69 Accident Compensation Corporation 15,345,006 3.51 02 Highlights ANZ Nominees Limited 10,780,249 2.47 04 Chairman’s Report Citibank Nominees (New Zealand) Limited 9,905,977 2.27 07 Chief Executive’s Report Custody and Investment Nominees Limited 5,604,432 1.28 13 Concrete NZ Superannuation Fund Nominees Limited 5,247,236 1.20 18 Distribution AMP Life Limited 4,329,097 0.99 22 Laminates & Panels The Trustees Executors and Agency Company of New Zealand 3,868,604 0.89 29 Construction Asteron Life Limited 3,833,200 0.88 35 Building Products 40 Sustainability Review 48 Board of Directors Substantial security holders 52 Corporate Governance According to notices given to the company under the Securities Markets Act 1988, as at 31 August 2004 the 64 Financial Review following were substantial security holders in the company with relevant interests as noted below: 136 68 Financial Statements The total number of issued voting securities of Fletcher Building Limited as at that date was 436,837,501.

128 Audit Report SUBSTANTIAL SECURITY HOLDER NUMBER OF VOTING DATE OF 130 Trend Statement SECURITIES NOTICE 132 Regulatory Disclosures Perpetual Trustees Australia Limited 43,093,813 04/09/03 148 Investor Information Perennial Value Management Limited 23,120,616 12/05/04 150 Directory The Capital Group of Companies Inc 21,864,988 20/05/04

GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER < back next > REGULATORY Regulatory Disclosures cont. DISCLOSURES

Distribution of shareholder and holdings as at 31 August 2004

SIZE OF HOLDING NUMBER OF % NUMBER OF % SHAREHOLDERS SHARES

1-999 9,332 31.27 3,657,662 0.83 1,000-4,999 15,715 52.66 31,287,043 7.16 5,000-9,999 2,702 9.06 17,642,677 4.04 ANNUAL REPORT 2004 10,000-49,999 1,891 6.34 32,103,947 7.35 50,000-99,999 101 0.34 6,407,667 1.47 02 Highlights 100,000-499,999 62 0.21 12,533,337 2.87 04 Chairman’s Report 500,000 and over 35 0.12 333,205,168 76.28 07 Chief Executive’s Report 29,838 100.00 436,837,501 100.00 13 Concrete 18 Distribution GEOGRAPHIC DISTRIBUTION NUMBER OF % NUMBER OF % 22 Laminates & Panels SHAREHOLDERS SHARES

29 Construction New Zealand 27,503 92.19 304,169,510 69.63 35 Building Products United States of America 135 0.45 327,570 0.07 40 Sustainability Review Australia 1,616 5.41 130,939,958 29.97 48 Board of Directors Rest of the World 584 1.95 1,400,463 0.33 52 Corporate Governance 29,838 100.00 436,837,501 100.00 64 Financial Review 137 68 Financial Statements All shares issued are fully paid and have full voting rights. The number of shareholders holding less than the 128 Audit Report marketable parcel of A$500 under the listing rules of the ASX is 501. 130 Trend Statement The other equity securities on issue are $400 million capital notes, which can convert to ordinary shares of the 132 Regulatory Disclosures company on the basis of 98 per cent of the then current value of the shares. These equity securities are quoted 148 Investor Information on the NZX but are unquoted on the ASX. 150 Directory

GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER < back next > REGULATORY Regulatory Disclosures cont. DISCLOSURES

Distribution of capital noteholders and holdings as at 31 August 2004

FLETCHER BUILDING LIMITED SIZE OF HOLDING NUMBER OF % NUMBER OF % NOTEHOLDERS CAPITAL NOTES

1-999 1 0.01 500 0.00 1,000-4,999 3,379 29.18 10,004,500 4.00

ANNUAL REPORT 2004 5,000-9,999 2,941 25.41 20,175,500 8.07 10,000-49,999 4,518 39.03 88,704,250 35.48

02 Highlights 50,000-99,999 494 4.27 30,981,750 12.39 04 Chairman’s Report 100,000-499,999 214 1.85 35,646,000 14.26 07 Chief Executive’s Report 500,000 and over 29 0.25 64,487,500 25.80

13 Concrete 11,576 100,00 250,000,000 100.00 18 Distribution 22 Laminates & Panels FLETCHER BUILDING FINANCE LIMITED 29 Construction SIZE OF HOLDING NUMBER OF % NUMBER OF % 35 Building Products NOTEHOLDERS CAPITAL NOTES 40 Sustainability Review 1-999 48 Board of Directors 1,000-4,999 1 0.02 4,000 0.00 52 Corporate Governance 5,000-9,999 1,049 19.97 5,768,000 3.85 64 Financial Review 10,000-49,999 3,558 67.75 63,138,000 42.09 138 68 Financial Statements 50,000-99,999 439 8.35 24,307,000 16.20 128 Audit Report 100,000-499,999 181 3.45 24,848,000 16.57 130 Trend Statement 500,000 and over 24 0.46 31,935,000 21.29 132 Regulatory Disclosures 5,252 100.00 150,000,000 100.00 148 Investor Information 150 Directory

GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER < back next > REGULATORY Regulatory Disclosures cont. DISCLOSURES

Limitations on the acquisition of the company’s securities The terms of the company’s admission to the ASX require the following disclosure. The company is incorporated in New Zealand. As such it is not subject to Chapters 6, 6A, 6B and 6C of the Australian Corporations Act dealing with the acquisition of shares (such as substantial holdings and takeovers). Limitations on acquisition of the securities are, however, imposed on the company under New Zealand law: (i) Securities in the company are in general freely transferable and the only significant restrictions or limitations ANNUAL REPORT 2004 in relation to the acquisition of securities are those imposed by New Zealand laws relating to takeovers, overseas investment and competition. (ii) The New Zealand Takeovers Code creates a general rule under which the acquisition of more than 20 percent 02 Highlights of the voting rights in the company or the increase of an existing holding of 20 percent or more of the voting 04 Chairman’s Report rights in the company can only occur in certain permitted ways. These include a full takeover offer in accordance 07 Chief Executive’s Report with the Takeovers Code, a partial takeover offer in accordance with the Takeovers Code, an acquisition approved 13 Concrete by an ordinary resolution, an allotment approved by an ordinary resolution, a creeping acquisition (in certain 18 Distribution circumstances) or compulsory acquisition if a shareholder holds 90 percent or more of the shares in the company. 22 Laminates & Panels (iii) The New Zealand Overseas Investment Act and Overseas Investment Regulations regulate certain investments 29 Construction in New Zealand by overseas persons. In general terms, the consent of the New Zealand Overseas Investment 35 Building Products Commission is likely to be required where an “overseas person” acquires shares or an interest in shares in the 40 Sustainability Review company that amount to more than 25 percent of the shares issued by the company or, if the overseas person already holds 25 percent or more, the acquisition increases that holding. 48 Board of Directors (iv) The New Zealand Commerce Act 1986 is likely to prevent a person from acquiring shares in the company if the 52 Corporate Governance acquisition would have, or would be likely to have, the effect of substantially lessening competition in a market. 64 Financial Review 139 68 Financial Statements 128 Audit Report 130 Trend Statement 132 Regulatory Disclosures 148 Investor Information 150 Directory

GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER < back next > REGULATORY Regulatory Disclosures cont. DISCLOSURES

New Zealand Exchange Waivers Capital notes On 17 September 2003 the Market Surveillance Panel of the NZX granted the company a waiver from Listing Rule 7.6.1 (prohibition on acquisition of an equity security of the company) with respect to the repurchase of capital notes made pursuant to a roll-over of a further tranche of notes. This waiver was necessary because the capital notes are equity securities by virtue of a term of their issue allowing a holder on certain dates to elect to have the capital notes convert to shares of the company. If the holder so elects, the company can either redeem or repurchase the ANNUAL REPORT 2004 capital notes for cash at par. A repurchase would be a technical breach of Listing Rule 7.6.1 even though the company’s option to purchase is expressly provided in the original terms of issue and those terms were fully 02 Highlights disclosed to holders. 04 Chairman’s Report Issue of securities 07 Chief Executive’s Report On 19 August 2003 the Market Surveillance Panel of the NZX granted the company waivers in relation to the 13 Concrete placement of shares to partly fund the purchase of Tasman Building Products Pty Limited. The waivers were: 18 Distribution (i) from Listing Rule 7.3.5 to the extent that shares may be issued to associated persons, if the sole reason for 22 Laminates & Panels the association is through common directors; 29 Construction (ii) from Listing Rule 9.2.1 so that shareholder approval is not required, provided that the aggregate gross value 35 Building Products of any shares issued to any participants that are associated with another participant, does not exceed 5% 40 Sustainability Review of the lesser of the company’s shareholders’ funds or average market capitalisation. 48 Board of Directors 52 Corporate Governance 64 Financial Review 140 68 Financial Statements 128 Audit Report 130 Trend Statement 132 Regulatory Disclosures 148 Investor Information 150 Directory

GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER < back next > REGULATORY Regulatory Disclosures cont. DISCLOSURES

Employee remuneration Section 211(1)(g) of the New Zealand Companies Act 1993 requires disclosure of remuneration and other benefits, including redundancy and other payments made on termination of employment, in excess of $100,000 per year, paid in respect of the current year by the company or any of its subsidiaries worldwide to any employees who are not directors of the company. To give more appropriate information on total employees’ remuneration, where there is a contractual commitment to provide incentive remuneration in respect of the year ended 30 June 2004 the amount accrued as at 30 June 2004 has also been included in the total remuneration disclosed below. ANNUAL REPORT 2004 NUMBER OF EMPLOYEES NUMBER OF EMPLOYEES NZ$ NEW ZEALAND INTERNATIONAL NZ$ NEW ZEALAND INTERNATIONAL 02 Highlights BUSINESS ACTIVITIES BUSINESS ACTIVITIES BUSINESS ACTIVITIES BUSINESS ACTIVITIES

04 Chairman’s Report 100,000–110,000 46 43 270,000–280,000 1 07 Chief Executive’s Report 110,000–120,000 39 22 280,000–290,000 4 1 13 Concrete 120,000–130,000 30 15 290,000–300,000 3 18 Distribution 130,000–140,000 26 16 300,000–310,000 4 1 22 Laminates & Panels 140,000–150,000 21 12 310,000–320,000 1 1 29 Construction 150,000–160,000 17 7 320,000–330,000 3 2 35 Building Products 160,000–170,000 16 10 330,000–340,000 2 1 40 Sustainability Review 170,000–180,000 15 6 350,000–360,000 1 48 Board of Directors 180,000–190,000 9 6 410,000–420,000 1 52 Corporate Governance 190,000–200,000 3 3 470,000–480,000 1 64 Financial Review 200,000–210,000 6 3 480,000–490,000 1 141 68 Financial Statements 210,000–220,000 6 1 500,000–510,000 1 128 Audit Report 220,000–230,000 6 4 540,000–550,000 1 130 Trend Statement 132 Regulatory Disclosures 230,000–240,000 4 1 580,000–590,000 1 148 Investor Information 240,000–250,000 3 1 630,000–640,000 1 150 Directory 250,000–260,000 3 700,000–710,000 1 260,000–270,000 1 720,000–730,000 1 GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER 275 160 < back next > REGULATORY Regulatory Disclosures cont. DISCLOSURES

Subsidiary company directors Section 211(2) of the New Zealand Companies Act 1993 requires the company to disclose, in relation to its subsidiaries, the total remuneration and value of other benefits received by directors and former directors and particulars of entries in the interests registers made during the year ended 30 June 2004. Apart from some overseas subsidiaries which have independent directors or are required to have a specific number of local residents as directors, no wholly owned subsidiary has directors who are not full-time employees of the group. The company had 171 subsidiaries worldwide at 30 June 2004. ANNUAL REPORT 2004 No employee of Fletcher Building Limited appointed as a director of Fletcher Building Limited or its subsidiaries receives, or retains any remuneration or other benefits, as a director. The remuneration and other benefits of such 02 Highlights employees, received as employees, are included in the relevant bandings for remuneration disclosed above under 04 Chairman’s Report Employee Remuneration. Except where shown below, no other director of any subsidiary company within the group 07 Chief Executive’s Report receives director’s fees or other benefits as a director. 13 Concrete The following persons respectively held office as directors of subsidiary companies at the end of the year or in the 18 Distribution case of those persons with the letter (R) after their name ceased to hold office during the year. Alternate directors 22 Laminates & Panels are indicated by the letter (A) after their name. 29 Construction AHI Roofing (Middle East) Limited Bandelle Pty Limited 35 Building Products A Reding, W Roest, P Stichbury (R) L Switzer (R) M Binns, L Box

40 Sustainability Review AHI Roofing Limited Bowen Building Supplies Limited 48 Board of Directors A Reding, W Roest, P Stichbury (R), L Switzer (R) B Bowen, D Worley, R de Raat (A), A Gray (A), P Flay (A R) 52 Corporate Governance Aickin Timber Limited Bramley Building Supplies Limited D Worley, W Roest, R Scott (R), R de Raat (R), O Lyttleton (R) P Bramley, D Worley, R de Raat (A), A Gray (A), L Dixon (A R) 64 Financial Review Alan Milne Building Supplies Limited Builders Hardware Company Limited 142 68 Financial Statements A Milne, D Worley, R de Raat (A), A Gray (A), L Dixon (A R) P Dolheguy, D Worley, A Gray (A), R de Raat (A)

128 Audit Report Amies Building Supplies Limited Building Choices Limited 130 Trend Statement O Lyttleton, D Worley, R de Raat (A), J Amies (R), D Deavoll (A R) D Close, D Worley, R de Raat (A), A Gray (A), L Dixon (A R) 132 Regulatory Disclosures Anson Building Supplies Limited BVP No. 1 Limited A Anson, D Worley, R de Raat (A), A Gray (A) M Binns, W Roest, A Reding (R), M Farrell (R) 148 Investor Information Aramis Investments Limited BVP No. 3 Limited 150 Directory W Roest, M Farrell, A Reding (R), M Binns (R) M Binns, W Roest, A Reding (R), M Farrell (R)

GO DIRECTLY TO A SECTION OF THE Auckland Frame and Truss Supplies Limited Calder Building Supplies Limited REPORT BY CLICKING ON THE NUMBER O Lyttleton, D Worley, D Deavoll, N Letica, M Waterman P Calder, D Worley, A Gray (A), R de Raat (A), P Flay (A R) < back next > REGULATORY Regulatory Disclosures cont. DISCLOSURES Subsidiary company directors cont.

Cemac (Hong Kong) Limited Evans Building Supplies Limited C Wing Shum, D Thomas M Evans, D Worley, R de Raat (A), A Gray (A), L Dixon (A R)

Cleaver Building Supplies Limited FDCC Californa Inc. M Cleaver, D Worley, R de Raat (A), A Gray (A) M Binns, K Kupchak, C Munkowits

Collier Building Supplies Limited FDL No. 12 Limited D Worley, R de Raat (A), A Ellis (R) D Worley ANNUAL REPORT 2004 Cotter & Thomas Building Supplies FDL No. 13 Limited D Worley, R de Raat, A Ellis (R) D Worley 02 Highlights Craig Building Supplies Limited FDL No. 14 Limited D Worley, R de Raat (A), A Ellis (R) D Worley 04 Chairman’s Report Cullen Building Supplies Limited FDL No. 15 Limited 07 Chief Executive’s Report R Cullen, D Worley, R de Raat (A), A Gray (A) D Worley 13 Concrete Cullity Timber Holdings Pty Limited Fegan Building Supplies Limited 18 Distribution M Farrell, D Le Quesne, W Roest, J Ling, L Box (A) M Fegan, D Worley, R de Raat (A), A Gray (A) 22 Laminates & Panels Davis & Casey Building Supplies Limited Fernhill Reality Limited 29 Construction T Davis, D Worley, R de Raat (A), A Gray (A), L Dixon (A R) S Boroughs, C Loughlin 35 Building Products Deavoll Building Supplies Limited Firth Industries Peru S.A. D Worley, D Deavoll, R de Raat (A), A Gray (A) M Binns, B Denekamp, R Silva-Rodriguez 40 Sustainability Review Decra Roofing Systems, Inc. Fletcher Aluminium Pty Limited 48 Board of Directors W Hudson, A Reding G Kirk, L Box

52 Corporate Governance Delcon Holdings (No. 1) Limited, Fletcher Building (Australia) Finance Pty Limited 64 Financial Review A Reding, W Roest, M Binns (R), M Farrell (R) M Binns, L Box, M Hope (R) 143 68 Financial Statements Delcon Holdings (No. 2) Limited Fletcher Building (Australia) Pty Limited A Reding, W Roest, M Binns (R), M Farrell (R) M Binns, L Box, D Le Quesne, M Hope (R) 128 Audit Report Delcon Holdings (No. 3) Limited Fletcher Building Finance Limited 130 Trend Statement D Haslett, M Wood, A Reding, W Roest P Baines, Dr. R Deane, H Fletcher, G McGrath, R Norris, Sir D Spring, K Vautier, R Waters 132 Regulatory Disclosures Delcon Holdings (No. 5) Limited 148 Investor Information A Reding, W Roest, M Binns (R), M Farrell (R) Fletcher Building Holdings Limited W Roest, M Farrell, A Reding (R), M Binns (R) 150 Directory Delcon Holdings (No. 8) Limited W Roest, M Farrell, A Reding (R), M Binns (R) Fletcher Building Holdings USA Inc. GO DIRECTLY TO A SECTION OF THE W Hudson, A Reding Duroid Pty Limited REPORT BY CLICKING ON THE NUMBER G Kirk, L Box Fletcher Building Netherlands B.V. M Farrell, W Roest, P Ruoff, A Van De Werken ($4,774) < back next > REGULATORY Regulatory Disclosures cont. DISCLOSURES Subsidiary company directors cont.

Fletcher Building Products Limited Fletcher Construction (Solomon Islands) Limited A Reding, W Roest, M Binns (R), M Farrell (R) A Brown, L Gray, R Gibson (R)

Fletcher Challenge Building Bolivia S.A. Fletcher Construction Australia Limited M Binns, K Cowie, H Ritchie M Binns, C Munkowits, M Stone, C Wickham, K Davey

Fletcher Challenge Building UK Limited Fletcher Construction Company (Fiji) Limited J Ollard, D Wood A Brown, L Gray, P Watts, R Gibson (R) ANNUAL REPORT 2004 Fletcher Challenge Finance Investments Limited Fletcher Constuction Company North America Inc. W Roest, M Farrell, A Reding (R), M Binns (R) M Binns, K Kupchak, C Munkowits 02 Highlights Fletcher Challenge Forest Industries Limited Fletcher Construction Limited M August, J Ollard, D Wood M Binns, C Munkowits, L Box 04 Chairman’s Report Fletcher Challenge Industries S.A. Fletcher Distribution Limited 07 Chief Executive’s Report M Binns, K Cowie, H Ritchie W Roest, D Worley, M Binns (R), M Farrell (R), A Reding (R) 13 Concrete Fletcher Challenge Investments Overseas Limited Fletcher Marketing Pty Limited 18 Distribution W Roest, M Farrell, A Reding (R), M Binns (R) M Binns, L Box 22 Laminates & Panels Fletcher Challenge Investments UK Limited Fletcher Morbe Construction Pty Limited 29 Construction D Wood, J Ollard A Brown, L Gray, L Mathias, K Fletcher, R Gibson (R) 35 Building Products Fletcher Challenge Materiais De Construcao Limitada Fletcher Pacific Steel (Fiji) Limited D Kenderdine D Hargovind ($2,620), A Pearson, A Reding, W Roest 40 Sustainability Review Fletcher Challenge Overseas Holdings Limited Fletcher Projects Pty Limited 48 Board of Directors W Roest, M Farrell, A Reding (R), M Binns (R) M Binns, L Box

52 Corporate Governance Fletcher Challenge Steel Products (Australia) Pty Limited Fletcher Property Developments UK Limited 64 Financial Review A Pearson, L Box M August, J Ollard, D Wood 144 68 Financial Statements Fletcher Concrete (Fiji) Limited Fletcher Property Investments UK Limited M Binns, R Harper M August, J Ollard, D Wood 128 Audit Report Fletcher Concrete & Infrastructure Limited Fletcher Property Limited 130 Trend Statement M Binns, W Roest, A Reding (R), M Farrell (R) M Binns, W Roest, M Farrell (R), A Reding (R)

132 Regulatory Disclosures Fletcher Construction (Malaysia) SDN BHD Fletcher Residential Limited 148 Investor Information C Lum ($2,107), T Chan ($2,107) M Binns, W Roest, M Farrell (R), A Reding (R) 150 Directory Fletcher Construction (Nouvelle Caledonie) Limited Fletcher Resorts Limited A Brown M Binns, W Roest, M Farrell (R), A Reding (R) GO DIRECTLY TO A SECTION OF THE Fletcher Construction (Singapore) PTE Limited Fletcher Steel Limited REPORT BY CLICKING ON THE NUMBER G Johnston, C Munkowits, Kay Lee ($1,847) A Reding, W Roest, M Binns (R), M Farrell (R) < back next > REGULATORY Regulatory Disclosures cont. DISCLOSURES Subsidiary company directors cont.

Fletcher Wood Panels (Australia) Pty Limited Kevin Jarvis Building Supplies Limited R Linton, A Reding, J Ling, L Box, J Brendan (R), H Dolan (R) K Jarvis, D Worley, R de Raat (A), A Gray (A)

Formex Pty Limited Key Building Supplies Limited M Farrell, D Le Quesne, W Roest, J Ling, L Box (A) D Worley, R de Raat (A), A Ellis (R)

Formica (N.Z.) Limited Kimura Building Supplies Limited J Ling, W Roest, R Waters (R), M Farrell (R) D Worley, A Gray (A), J Kimura, R de Raat (A), P Flay (R) ANNUAL REPORT 2004 Geoff Brown Building Supplies Limited Laminex (Australia) Pty. Limited G Brown, D Worley, R de Raat (A), A Gray (A), L Dixon (R) M Farrell, D Le Quesne, W Roest, J Ling, L Box (A) 02 Highlights Goldwood Pty Limited Laminex Group (N.Z.) Limited M Farrell, D Le Quesne, W Roest, L Box (A) J Ling, W Roest, M Binns (R), M Farrell (R), A Reding (R) 04 Chairman’s Report Graeme Joy Building Supplies Limited Laminex Group Limited 07 Chief Executive’s Report G Joy, D Worley, R de Raat (A), A Gray (A), L Dixon M Farrell, D Le Quesne, W Roest, J Ling, L Box (A) 13 Concrete Grant McLeod Building Supplies Limited Langford-Lee Building Supplies Limited 18 Distribution D Worley M Langford-Lee, D Worley, R de Raat (A), A Gray (A), P Flay (A R) 22 Laminates & Panels Gray Building Supplies Limited Laracy Building Supplies Limited 29 Construction C Gray, D Worley, R de Raat (A), A Gray (A) K Laracy, D Worley, R de Raat (A), A Gray (A) 35 Building Products Hedges Building Supplies Limited M Wong Building Supplies Limited R Hedges, D Worley, A Gray (A), R de Raat (A), A Ellis (A R), O Lyttelton, D Worley, R de Raat (A), A Gray (A), L Dixon (A R), 40 Sustainability Review P Flay (A R) M Wong (R)

48 Board of Directors Hilson Building Supplies Limited McDonald Building Supplies Limited 52 Corporate Governance D Worley, R de Raat (A), P Flay (A R) I McDonald, D Worley, R de Raat, A Gray (A), L Dixon (A R) 64 Financial Review Hooper Building Supplies Limited McGill Building Supplies Limited G Hooper, D Worley, R de Raat (A), A Gray (A), L Dixon (A R) J McGill, D Worley, R de Raat, A Gray (A), P Flay (R) 145 68 Financial Statements Hudson Building Supplies Limited McLaughlan Building Supplies Limited 128 Audit Report D Worley, R de Raat, A Ellis (R) K McLaughlan, D Worley, R de Raat (A), A Gray (A), L Dixon (A R)

130 Trend Statement Inventure Limited Mecon Hawaii Limited 132 Regulatory Disclosures W Roest, M Binns, M Farrell (R), A Reding (R) J Caldwell, D Hastert, K Kupchak 148 Investor Information John Cockburn Building Supplies Limited Meleccio Enterprises Limited J Cockburn, D Worley, R de Raat (A), A Gray (A), L Dixon (A R) M Binns, W Roest, M Farrell (R), A Reding (R) 150 Directory Ken Jones Building Supplies Limited Metromix Concrete Company Limited GO DIRECTLY TO A SECTION OF THE K Jones, D Worley, R de Raat (A), A Gray (A), L Dixon (A R) M Binns, R Harper REPORT BY CLICKING ON THE NUMBER Kenna Building Supplies Limited Mike Mattin Building Supplies Limited L Kenna, D Worley, R de Raat (A), A Gray (A), L Dixon (A R) M Mattin, D Worley, R de Raat (A), A Gray (A), P Flay (A R) < back next > REGULATORY Regulatory Disclosures cont. DISCLOSURES Subsidiary company directors cont.

Minnell Building Supplies Limited Seabar Holdings (No 16) Limited D Minnell, D Worley, R de Raat (A) M Binns, W Roest, M Farrell (R), A Reding (R)

Mount Timber & Hardware Limited Servicios Y Administraciones Apoquindo Limitada W Roest, D Worley, R de Raat (R), O Lyttleton (R), R Scott (R) C Eyzaguirre

Neil Thomson Building Supplies Limited Shunde Cemac Building Material Company Limited D Worley, R de Raat (A), P Flay (A R) W Keung Leung, C Wing Shum, D Thomas ANNUAL REPORT 2004 Nick Letica Building Supplies Limited Southbound Building Supplies Limited N Letica, D Worley, R de Raat (A), A Gray (A), D Deavoll (A R) A Rance, D Worley, R de Raat (A), A Gray (A), L Dixon (A) 02 Highlights Nock Building Supplies Limited Steven Marshall Building Supplies Limited M Nock, D Worley, R de Raat (A), A Gray (A), A Ellis (R), S Marshall, D Worley, R de Raat (A), A Gray (A), D Deavoll (A R) 04 Chairman’s Report P Flay (A R) Stichbury Building Supplies Limited 07 Chief Executive’s Report Oakley Wood Panels Pty Limited S Stichbury, D Worley, R de Raat (A), A Gray (A) 13 Concrete M Farrell, D Le Quesne, J Ling, W Roest, L Box (A) Stickland Building Supplies Limited 18 Distribution Pacific Trade & Export Limited L Stickland, D Worley, R de Raat (A), A Gray (A), D Deavoll (A R) M Binns, W Roest, M Farrell (R), A Reding (R) 22 Laminates & Panels Sullivan & Armstrong Building Supplies Limited 29 Construction Panelbilt Systems Limited J Sullivan, D Worley, R de Raat (A), A Gray (A), D Deavoll (A R) A Reding, W Roest, S Broome (R), R Linton (R) 35 Building Products Tasman Access Floors Pty Limited Peter Flint Building Supplies Limited D Le Quesne, A Reding, R Rigby (R), L Switzer (R) 40 Sustainability Review D Worley, P Flint, A Gray (A), R de Raat (R) Tasman Australia Pty Limited 48 Board of Directors Placemakers Limited D Le Quesne, A Reding D Worley, W Roest 52 Corporate Governance Tasman Building Products Offshore Limited 64 Financial Review Raoul Holdings Limited A Reding, W Roest, P Stichbury (R), L Switzer (R) M Binns, W Roest, M Farrell (R), A Reding (R) 146 68 Financial Statements Tasman Building Products Pty Limited Residential Advances Limited D Le Quesne, A Reding, G Penklis (R), L Switzer (R), 128 Audit Report M Binns, W Roest, D Halsey (R) A Rothery (R), C Khanna (R)

130 Trend Statement Residential Mortgage Investments Limited Tasman Insulation Australia Pty Limited 132 Regulatory Disclosures M Binns, W Roest, D Halsey (R) D Le Quesne, A Reding, A Dragicevich (R), L Switzer (R) 148 Investor Information Residential Morgages Limited Tasman Insulation New Zealand Limited M Binns, W Roest, D Halsey (R) D Le Quesne, A Reding, W Smith (R), L Switzer (R) 150 Directory Rolleston Building Supplies Limited Tasman Investments (Netherlands Antilles) N.V. GO DIRECTLY TO A SECTION OF THE R Rolleston, D Worley, R de Raat (A), A Gray (A), P Flay (A R) E Rakers, M Farrell, T Mol, W Roest REPORT BY CLICKING ON THE NUMBER RTI Wood Panels Pty Limited Tasman Overseas Pty Limited M Farrell, D Le Quesne, J Ling, W Roest, L Box (A) D Le Quesne, A Reding < back next > REGULATORY Regulatory Disclosures cont. DISCLOSURES Subsidiary company directors cont.

Tasman Roofing Australia Pty Limited Van Der Vossen Building Supplies Limited D Le Quesne, A Reding, A Dragicevich (R), L Switzer (R) D Worley, R de Raat (A), A Ellis (R)

Tasman Sinkware North America, Inc. Varoy Building Supplies Limited A Reding J Varoy, D Worley, A Gray (A), R de Raat (A), A Ellis (R), D Deavoll (R) Tasman Sinkware Pty Limited D Le Quesne, A Reding, B Walters (R), L Switzer (R) Warren Smith Building Supplies Limited ANNUAL REPORT 2004 D Worley, R de Raat (A), A Ellis (R) TBP Group Pty Limited D Le Quesne, A Reding Waterman Building Supplies Limited M Waterman, D Worley, R de Raat (A), A Gray (A), Ted Harper Building Supplies Limited 02 Highlights D Deavoll (A R) E Harper, D Worley, R de Raat (A), A Gray (A), P Flay (A R) 04 Chairman’s Report Wesfi Constructions Pty Limited Terrace Insurances (PCC) Limited M Farrell, D Le Quesne, W Roest, J Ling, L Box (A) 07 Chief Executive’s Report M Eades ($5,732), J Stuart, J McDonald ($5,732), 13 Concrete J Parkinson, M Farrell Wesfi Jandakot Pty Limited M Farrell, D Le Quesne, W Roest, J Ling, L Box (A) 18 Distribution Terrace Insurances Limited M Eades ($5,732), J Stuart, J McDonald ($5,732), J Parkinson Wesfi Limited 22 Laminates & Panels M Farrell, D Le Quesne, W Roest, J Ling, L Box (A) 29 Construction Terry Mellsop Building Supplies Limited T Mellsop, D Worley, R de Raat (A), A Gray (A), A Ellis (R), Wesfi Lumber Pty Limited 35 Building Products P Flay (A R) M Farrell, D Le Quesne, W Roest, J Ling, L Box (A)

40 Sustainability Review The Fletcher Construction Company Cook Islands Limited Wesfi Manufacturing Pty Limited 48 Board of Directors A Brown, L Gray, R Gibson (R) M Farrell, D Le Quesne, W Roest, J Ling, L Box (A) 52 Corporate Governance The Fletcher Construction Company Limited Wesfi Woodworks Pty Limited M Binns, W Roest, M Farrell (R), A Reding (R) M Farrell, D Le Quesne, W Roest, J Ling, L Box (A) 64 Financial Review The Fletcher Organisation (Vanuatu) Limited Winstone Limited 147 68 Financial Statements A Brown, L Gray, R Gibson (R) M Binns, W Roest, M Farrell (R), A Reding (R)

128 Audit Report The Fletcher Trust and Investment Company Limited Winstone Wallboards Limited 130 Trend Statement M Binns, W Roest, C Munkowits (R) A Reding, W Roest, M Binns (R), M Farrell (R) 132 Regulatory Disclosures Trade Mart Limited W Roest, D Worley, R de Raat (R), R Scott (R), A Ellis (R), 148 Investor Information O Lyttleton (R), A Gray (R)

150 Directory Trademates Limited W Roest, D Worley, O Lyttleton (R), R Scott (R) GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER Trevor Cockburn Building Supplies Limited D Worley, T Cockburn, R de Raat (A), A Gray (A), L Dixon (R) < back next > INVESTOR INFORMATION

Investor Information

Annual shareholders’ meeting Direct crediting of interest and dividends The annual shareholders’ meeting of Fletcher Building To minimise the risk of fraud and misplacement of interest Limited will be held at the Rangitoto Room, Sheraton and dividend cheques shareholders and noteholders are Auckland Hotel & Towers, Auckland, New Zealand, at strongly recommended to have all payments by way of direct ANNUAL REPORT 2004 2.00pm on Tuesday 9 November 2004. credit to their nominated bank account. This can be done by simply giving the share registry written notice. Dividend reinvestment plan 02 Highlights Fletcher Building shareholders (excluding those in jurisdictions Share registries 04 Chairman’s Report where the issue of shares is not permitted by law) can Details of the company’s share registries are given in the 07 Chief Executive’s Report participate in a dividend reinvestment plan, under which they Directory on the back cover of this report. 13 Concrete have the opportunity to reinvest their dividends in additional Shareholders with enquiries about share transactions, changes shares. To participate, please contact the share registry. 18 Distribution of address or dividend payments should contact the share registry in the country in which their shares are registered. 22 Laminates & Panels On-line trading and financial information Details on Fletcher Building, its governance policies, and its 29 Construction Electronic communications operations for the year ended 30 June 2004 can be viewed The New Zealand Electronic Transactions Act 2002 allows the 35 Building Products at the Fletcher Building website, at www.fletcherbuilding.com. company to distribute all shareholder materials in electronic 40 Sustainability Review This website contains all news releases to the New Zealand form, where shareholders so agree. Shareholders interested 48 Board of Directors Exchange and other financial presentations made by the in viewing the electronic version of the annual report can 52 Corporate Governance company. so do by going to the company’s website, as noted above. 64 Financial Review 148 68 Financial Statements 128 Audit Report 130 Trend Statement 132 Regulatory Disclosures 148 Investor Information 150 Directory

GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER < back next > INVESTOR INFORMATION Investor Information cont.

Final dividend information 1 The company has declared a final dividend for the year of 14 cents per share payable on 11 November 2004 with New Zealand and Australian tax credits attached. This is in addition to the interim dividend of 11 cents per share paid in April 2004.

NZ CENTS PER SHARE NEW ZEALAND AUSTRALIAN OTHER NON RESIDENTS RESIDENTS RESIDENTS

Dividend declared 14.0000 14.0000 14.0000 ANNUAL REPORT 2004 NZ tax credits 2 6.8955

02 Highlights NZ tax credit refund 6.8955 6.8955 2 04 Chairman’s Report Australian franking tax credits 3.0000

07 Chief Executive’s Report Gross dividend for tax purposes 20.8955 23.8955 20.8955

13 Concrete NZ tax (33%) (6.8955) 18 Distribution NZ non-resident withholding tax (15%) 3 (3.1343) (3.1343) 22 Laminates & Panels 29 Construction Net cash received after NZ tax 14.0000 17.7612 17.7612 35 Building Products Australian tax (15%) 4 (3.5843) 40 Sustainability Review Reduced by credit for NZ non-resident 48 Board of Directors withholding tax 3.1343 Less Australian franking credit offset 5 3.0000 52 Corporate Governance 64 Financial Review Net cash dividend to shareholders 14.0000 20.3112 17.7612 149 68 Financial Statements 1 This summary is of a general nature and the tax rates used and the calculations are intended for guidance only. As individual circumstances 128 Audit Report will vary, shareholders are advised to seek independent tax advice. 2 These amounts are not received in cash but are relevant in determining the gross dividend received for tax purposes. 130 Trend Statement 3 NZ non-resident withholding tax is imposed at the rate of 15 percent on the sum of the dividend declared and the NZ tax credit refund. It is not 132 Regulatory Disclosures imposed on the Australian franking credits component of the gross dividend.

4 148 Investor Information This summary uses the 15 percent income tax rate applicable in Australia to complying superannuation funds, approved deposit funds and pooled superannuation trusts. Different tax rates will apply to other Australian shareholders, including individuals, depending on their circumstances. 150 Directory 5 Surplus franking credits are refundable to Australian resident shareholders on issue of their Australian tax assessment.

GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER < back next > DIRECTORY

Executive Committee Registered Offices Shareholder Enquiries Ralph Waters Chief Executive Officer and Managing Director New Zealand Shareholders with enquiries MBus (WAIT), ARMIT (Mech Eng), CPEng (Aust) Fletcher Building Limited about share transactions or Mark Binns Chief Executive, Construction Private Bag 92 114 changes of address should Chief Executive, Concrete Auckland contact the share registrar LLB (Auckland) Fletcher House in the country in which their shares are registered. Martin Farrell Company Secretary and General Counsel 810 Great South Road Penrose, Auckland ANNUAL REPORT 2004 BCom, LLB (Otago), CA (NZ) Other Investor Enquiries New Zealand Jonathan Ling Chief Executive, Laminates and Panels Fletcher Building Limited Telephone: +64 9 525 9000 02 Highlights BEng (Melb), MBA (RMIT) Private Bag 92 114 04 Chairman’s Report Peter Merry Executive General Manager, Human Resources Australia Auckland, New Zealand Fletcher Building Limited 07 Chief Executive’s Report BBusSci (Capetown), MBA (Capetown) Telephone: +64 9 525 9000 PO Box 407 13 Concrete Andrew Reding Chief Executive, Building Products Facsimile: +64 9 525 9032 MA (Oxon), MBA (Cranfield) Doncaster, Melbourne Email: [email protected] 18 Distribution Victoria 3108 Website: www.fletcherbuilding.com 22 Laminates & Panels Bill Roest Chief Financial Officer FCCA (UK), ACA (NZ) Level 2, 90-94 Tram Road 29 Construction Doncaster, Melbourne David Worley Chief Executive, Distribution 35 Building Products Victoria 3108, Australia BCom (Auckland), MBA (Auckland) 40 Sustainability Review Telephone: +61 3 9848 4811 48 Board of Directors ARBN 096 046 936 52 Corporate Governance 64 Financial Review 68 Financial Statements 128 Audit Report DIRECTORY 130 Trend Statement 132 Regulatory Disclosures 148 Investor Information 150 Directory

GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER < back next > DIRECTORY

Registries Trustee for Capital Noteholders New Zealand Australia Perpetual Trust Limited Computershare Investor Computershare Investor PO Box 3376 ANNUAL REPORT 2004 Services Limited Services Pty Limited Auckland Private Bag 92 119 GPO Box 7045, Sydney Level 17, HSBC Centre Auckland 1020 NSW 2001, Australia 02 Highlights 1 Queen Street, Auckland 04 Chairman’s Report Level 2, 159 Hurstmere Road Level 3, 60 Carrington Street Telephone: +64 9 366 3290 Takapuna, North Shore City Sydney, NSW 2000, Australia 07 Chief Executive’s Report New Zealand Telephone: 1800 501 366 13 Concrete Telephone: +64 9 488 8777 (within Australia) 18 Distribution Facsimile: +64 9 488 8787 Telephone: +61 3 9615 5970 22 Laminates & Panels Email: [email protected] (outside Australia) 29 Construction Facsimile: +61 2 8234 5050 35 Building Products 40 Sustainability Review 48 Board of Directors 52 Corporate Governance 64 Financial Review 151 68 Financial Statements 128 Audit Report 130 Trend Statement 132 Regulatory Disclosures 148 Investor Information 150 Directory

GO DIRECTLY TO A SECTION OF THE REPORT BY CLICKING ON THE NUMBER < back