Annual Report 1999

LAWRENCE & HANSON, CORYS FRASERS, LANSON, EXPRESS PARTS CENTRES, LUCAS, PACIFIC DATACOM, DUNLOP, GOODYEAR, OLYMPIC, KELLY SPRINGFIELD, BEAUREPAIRES F KMATE, LIFESTYLES, MATES, MANIX, GAMMEX, NUTEX, NITRILITE, GOLDEN NEEDLES, ENCORE, ELITE, OVATION, DUNLOP, SLAZENGER, NIBLICK, MAXFLI, REPCO, MALVERN STA MCO, NATURALISER, ENDURO, SPRINGTRED, LIGHTNING BOLT, JULIUS MARLOW REPCO, CHECKPOINT, TRADERS AUTO SPARES, APPCO, AUTO PRO, ASHDOWN, LAWRENCE & HANSO YEAR AUTO SERVICE CENTRES, CHAMPION, MARSHALL, EXIDE, STOWAWAY, ABSOLYTE, DUNLOP, MARATHON, SPRINTER, ANSELL, PERRY, EDMONT, CHECKMATE, LIFESTYLES, MATE D ROBIN, JOCKEY, GROSBY, DREAMLAND, BONDS, SLEEPMAKER, SIMMONS, DUNLOPILLO, TONTINE, HANG TEN, JORDACHE, RIO, CANDY, DR SCHOLL, AMCO, NATURALISER, ENDUR S PARTS CENTRES, LUCAS, PACIFIC DATACOM, DUNLOP, GOODYEAR, OLYMPIC, KELLY SPRINGFIELD, BEAUREPAIRES FOR TYRES, MCLEOD TYRES, GOODYEAR AUTO SERVICE CENTRE ILITE, GOLDEN NEEDLES, ENCORE, ELITE, OVATION, DUNLOP, SLAZENGER, NIBLICK, MAXFLI, REPCO, MALVERN STAR, BERLEI, HESTIA, HOLEPROOF, RED ROBIN, JOCKEY, GROSB JULIUS MARLOW REPCO, CHECKPOINT, TRADERS AUTO SPARES, APPCO, AUTO PRO, ASHDOWN, LAWRENCE & HANSON, CORYS FRASERS, LANSON, EXPRESS PARTS CENTRES, LUCA DE, STOWAWAY, ABSOLYTE, DUNLOP, MARATHON, SPRINTER, ANSELL, PERRY, EDMONT, CHECKMATE, LIFESTYLES, MATES, MANIX, GAMMEX, NUTEX, NITRILITE, GOLDEN NEEDLE AKER, SIMMONS, DUNLOPILLO, TONTINE, HANG TEN, JORDACHE, RIO, CANDY, DR SCHOLL, AMCO, NATURALISER, ENDURO, SPRINGTRED, LIGHTNING BOLT, JULIUS MARLOW REPC OODYEAR, OLYMPIC, KELLY SPRINGFIELD, BEAUREPAIRES FOR TYRES, MCLEOD TYRES, GOODYEAR AUTO SERVICE CENTRES, CHAMPION, MARSHALL, EXIDE, STOWAWAY, ABSOLYT OP, SLAZENGER, NIBLICK, MAXFLI, REPCO, MALVERN STAR, BERLEI, HESTIA, HOLEPROOF, RED ROBIN, JOCKEY, GROSBY, DREAMLAND, BONDS, SLEEPMAKER, SIMMONS, DUNLOPILL RES, APPCO, AUTO PRO, ASHDOWN, LAWRENCE & HANSON, CORYS FRASERS, LANSON, EXPRESS PARTS CENTRES, LUCAS, PACIFIC DATACOM, DUNLOP, GOODYEAR, OLYMPIC, KEL R, ANSELL, PERRY, EDMONT, CHECKMATE, LIFESTYLES, MATES, MANIX, GAMMEX, NUTEX, NITRILITE, GOLDEN NEEDLES, ENCORE, ELITE, OVATION, DUNLOP, SLAZENGER, NIBLIC DACHE, RIO, CANDY, DR SCHOLL, AMCO, NATURALISER, ENDURO, SPRINGTRED, LIGHTNING BOLT, JULIUS MARLOW REPCO, CHECKPOINT, TRADERS AUTO SPARES, APPCO, AUTO PR FOR TYRES, MCLEOD TYRES, GOODYEAR AUTO SERVICE CENTRES, CHAMPION, MARSHALL, EXIDE, STOWAWAY, ABSOLYTE, DUNLOP, MARATHON, SPRINTER, ANSELL, PERRY, EDMO BERLEI, HESTIA, HOLEPROOF, RED ROBIN, JOCKEY, GROSBY, DREAMLAND, BONDS, SLEEPMAKER, SIMMONS, DUNLOPILLO, TONTINE, HANG TEN, JORDACHE, RIO, CANDY, DR SCHOL CORYS FRASERS, LANSON, EXPRESS PARTS CENTRES, LUCAS, PACIFIC DATACOM, DUNLOP, GOODYEAR, OLYMPIC, KELLY SPRINGFIELD, BEAUREPAIRES FOR TYRES, MCLEOD TYRE S, MANIX, GAMMEX, NUTEX, NITRILITE, GOLDEN NEEDLES, ENCORE, ELITE, OVATION, DUNLOP, SLAZENGER, NIBLICK, MAXFLI, REPCO, MALVERN STAR, BERLEI, HESTIA, HOLEPRO SPRINGTRED, LIGHTNING BOLT, JULIUS MARLOW REPCO, CHECKPOINT, TRADERS AUTO SPARES, APPCO, AUTO PRO, ASHDOWN, LAWRENCE & HANSON, CORYS FRASERS, LANSO RES, CHAMPION, MARSHALL, EXIDE, STOWAWAY, ABSOLYTE, DUNLOP, MARATHON, SPRINTER, ANSELL, PERRY, EDMONT, CHECKMATE, LIFESTYLES, MATES, MANIX, GAMMEX, NUTE REAMLAND, BONDS, SLEEPMAKER, SIMMONS, DUNLOPILLO, TONTINE, HANG TEN, JORDACHE, RIO, CANDY, DR SCHOLL, AMCO, NATURALISER, ENDURO, SPRINGTRED, LIGHTNING BO FIC DATACOM, DUNLOP, GOODYEAR, OLYMPIC, KELLY SPRINGFIELD, BEAUREPAIRES FOR TYRES, MCLEOD TYRES, GOODYEAR AUTO SERVICE CENTRES, CHAMPION, MARSHALL, EXID , ELITE, OVATION, DUNLOP, SLAZENGER, NIBLICK, MAXFLI, REPCO, MALVERN STAR, BERLEI, HESTIA, HOLEPROOF, RED ROBIN, JOCKEY, GROSBY, DREAMLAND, BONDS, SLEEPMAKE TRADERS AUTO SPARES, APPCO, AUTO PRO, ASHDOWN, LAWRENCE & HANSON, CORYS FRASERS, LANSON, EXPRESS PARTS CENTRES, LUCAS, PACIFIC DATACOM, DUNLOP, GOODYEA MARATHON, SPRINTER, ANSELL, PERRY, EDMONT, CHECKMATE, LIFESTYLES, MATES, MANIX, GAMMEX, NUTEX, NITRILITE, GOLDEN NEEDLES, ENCORE, ELITE, OVATION, DUNL INE, HANG TEN, JORDACHE, RIO, CANDY, DR SCHOLL, AMCO, NATURALISER, ENDURO, SPRINGTRED, LIGHTNING BOLT, JULIUS MARLOW REPCO, CHECKPOINT, TRADERS AUTO SPARE FIELD, BEAUREPAIRES FOR TYRES, MCLEOD TYRES, GOODYEAR AUTO SERVICE CENTRES, CHAMPION, MARSHALL, EXIDE, STOWAWAY, ABSOLYTE, DUNLOP, MARATHON, SPRINTE I, REPCO, MALVERN STAR, BERLEI, HESTIA, HOLEPROOF, RED ROBIN, JOCKEY, GROSBY, DREAMLAND, BONDS, SLEEPMAKER, SIMMONS, DUNLOPILLO, TONTINE, HANG TEN, JORDACH LAWRENCE & HANSON, CORYS FRASERS, LANSON, EXPRESS PARTS CENTRES, LUCAS, PACIFIC DATACOM, DUNLOP, GOODYEAR, OLYMPIC, KELLY SPRINGFIELD, BEAUREPAIRES F KMATE, LIFESTYLES, MATES, MANIX, GAMMEX, NUTEX, NITRILITE, GOLDEN NEEDLES, ENCORE, ELITE, OVATION, DUNLOP, SLAZENGER, NIBLICK, MAXFLI, REPCO, MALVERN STA MCO, NATURALISER, ENDURO, SPRINGTRED, LIGHTNING BOLT, JULIUS MARLOW REPCO, CHECKPOINT, TRADERS AUTO SPARES, APPCO, AUTO PRO, ASHDOWN, LAWRENCE & HANSO YEAR AUTO SERVICE CENTRES, CHAMPION, MARSHALL, EXIDE, STOWAWAY, ABSOLYTE, DUNLOP, MARATHON, SPRINTER, ANSELL, PERRY, EDMONT, CHECKMATE, LIFESTYLES, MATE D ROBIN, JOCKEY, GROSBY, DREAMLAND, BONDS, SLEEPMAKER, SIMMONS, DUNLOPILLO, TONTINE, HANG TEN, JORDACHE, RIO, CANDY, DR SCHOLL, AMCO, NATURALISER, ENDUR S PARTS CENTRES, LUCAS, PACIFIC DATACOM, DUNLOP, GOODYEAR, OLYMPIC, KELLY SPRINGFIELD, BEAUREPAIRES FOR TYRES, MCLEOD TYRES, GOODYEAR AUTO SERVICE CENTRE ILITE, GOLDEN NEEDLES, ENCORE, ELITE, OVATION, DUNLOP, SLAZENGER, NIBLICK, MAXFLI, REPCO, MALVERN STAR, BERLEI, HESTIA, HOLEPROOF, RED ROBIN, JOCKEY, GROSB JULIUS MARLOW REPCO, CHECKPOINT, TRADERS AUTO SPARES, APPCO, AUTO PRO, ASHDOWN, LAWRENCE & HANSON, CORYS FRASERS, LANSON, EXPRESS PARTS CENTRES, LUCA DE, STOWAWAY, ABSOLYTE, DUNLOP, MARATHON, SPRINTER, ANSELL, PERRY, EDMONT, CHECKMATE, LIFESTYLES, MATES, MANIX, GAMMEX, NUTEX, NITRILITE, GOLDEN NEEDLE AKER, SIMMONS, DUNLOPILLO, TONTINE, HANG TEN, JORDACHE, RIO, CANDY, DR SCHOLL, AMCO, NATURALISER, ENDURO, SPRINGTRED, LIGHTNING BOLT, JULIUS MARLOW REPC OODYEAR, OLYMPIC, KELLY SPRINGFIELD, BEAUREPAIRES FOR TYRES, MCLEOD TYRES, GOODYEAR AUTO SERVICE CENTRES, CHAMPION, MARSHALL, EXIDE, STOWAWAY, ABSOLYT OP, SLAZENGER, NIBLICK, MAXFLI, REPCO, MALVERN STAR, BERLEI, HESTIA, HOLEPROOF, RED ROBIN, JOCKEY, GROSBY, DREAMLAND, BONDS, SLEEPMAKER, SIMMONS, DUNLOPILL RES, APPCO, AUTO PRO, ASHDOWN, LAWRENCE & HANSON, CORYS FRASERS, LANSON, EXPRESS PARTS CENTRES, LUCAS, PACIFIC DATACOM, DUNLOP, GOODYEAR, OLYMPIC, KEL R, ANSELL, PERRY, EDMONT, CHECKMATE, LIFESTYLES, MATES, MANIX, GAMMEX, NUTEX, NITRILITE, GOLDEN NEEDLES, ENCORE, ELITE, OVATION, DUNLOP, SLAZENGER, NIBLIC DACHE, RIO, CANDY, DR SCHOLL, AMCO, NATURALISER, ENDURO, SPRINGTRED, LIGHTNING BOLT, JULIUS MARLOW REPCO, CHECKPOINT, TRADERS AUTO SPARES, APPCO, AUTO PR FOR TYRES, MCLEOD TYRES, GOODYEAR AUTO SERVICE CENTRES, CHAMPION, MARSHALL, EXIDE, STOWAWAY, ABSOLYTE, DUNLOP, MARATHON, SPRINTER, ANSELL, PERRY, EDMO BERLEI, HESTIA, HOLEPROOF, RED ROBIN, JOCKEY, GROSBY, DREAMLAND, BONDS, SLEEPMAKER, SIMMONS, DUNLOPILLO, TONTINE, HANG TEN, JORDACHE, RIO, CANDY, DR SCHOL CORYS FRASERS, LANSON, EXPRESS PARTS CENTRES, LUCAS, PACIFIC DATACOM, DUNLOP, GOODYEAR, OLYMPIC, KELLY SPRINGFIELD, BEAUREPAIRES FOR TYRES, MCLEOD TYRE S, MANIX, GAMMEX, NUTEX, NITRILITE, GOLDEN NEEDLES, ENCORE, ELITE, OVATION, DUNLOP, SLAZENGER, NIBLICK, MAXFLI, REPCO, MALVERN STAR, BERLEI, HESTIA, HOLEPRO SPRINGTRED, LIGHTNING BOLT, JULIUS MARLOW REPCO, CHECKPOINT, TRADERS AUTO SPARES, APPCO, AUTO PRO, ASHDOWN, LAWRENCE & HANSON, CORYS FRASERS, LANSO RES, CHAMPION, MARSHALL, EXIDE, STOWAWAY, ABSOLYTE, DUNLOP, MARATHON, SPRINTER, ANSELL, PERRY, EDMONT, CHECKMATE, LIFESTYLES, MATES, MANIX, GAMMEX, NUTE REAMLAND, BONDS, SLEEPMAKER, SIMMONS, DUNLOPILLO, TONTINE, HANG TEN, JORDACHE, RIO, CANDY, DR SCHOLL, AMCO, NATURALISER, ENDURO, SPRINGTRED, LIGHTNING BO FIC DATACOM, DUNLOP, GOODYEAR, OLYMPIC, KELLY SPRINGFIELD, BEAUREPAIRES FOR TYRES, MCLEOD TYRES, GOODYEAR AUTO SERVICE CENTRES, CHAMPION, MARSHALL, EXID , ELITE, OVATION, DUNLOP, SLAZENGER, NIBLICK, MAXFLI, REPCO, MALVERN STAR, BERLEI, HESTIA, HOLEPROOF, RED ROBIN, JOCKEY, GROSBY, DREAMLAND, BONDS, SLEEPMAKE TRADERS AUTO SPARES, APPCO, AUTO PRO, ASHDOWN, LAWRENCE & HANSON, CORYS FRASERS, LANSON, EXPRESS PARTS CENTRES, LUCAS, PACIFIC DATACOM, DUNLOP, GOODYEA MARATHON, SPRINTER, ANSELL, PERRY, EDMONT, CHECKMATE, LIFESTYLES, MATES, MANIX, GAMMEX, NUTEX, NITRILITE, GOLDEN NEEDLES, ENCORE, ELITE, OVATION, DUNL INE, HANG TEN, JORDACHE, RIO, CANDY, DR SCHOLL, AMCO, NATURALISER, ENDURO, SPRINGTRED, LIGHTNING BOLT, JULIUS MARLOW REPCO, CHECKPOINT, TRADERS AUTO SPARE FIELD, BEAUREPAIRES FOR TYRES, MCLEOD TYRES, GOODYEAR AUTO SERVICE CENTRES, CHAMPION, MARSHALL, EXIDE, STOWAWAY, ABSOLYTE, DUNLOP, MARATHON, SPRINTE I, REPCO, MALVERN STAR, BERLEI, HESTIA, HOLEPROOF, RED ROBIN, JOCKEY, GROSBY, DREAMLAND, BONDS, SLEEPMAKER, SIMMONS, DUNLOPILLO, TONTINE, HANG TEN, JORDACH LAWRENCE & HANSON, CORYS FRASERS, LANSON, EXPRESS PARTS CENTRES, LUCAS, PACIFIC DATACOM, DUNLOP, GOODYEAR, OLYMPIC, KELLY SPRINGFIELD, BEAUREPAIRES F KMATE, LIFESTYLES, MATES, MANIX, GAMMEX, NUTEX, NITRILITE, GOLDEN NEEDLES, ENCORE, ELITE, OVATION, DUNLOP, SLAZENGER, NIBLICK, MAXFLI, REPCO, MALVERN STA MCO, NATURALISER, ENDURO, SPRINGTRED, LIGHTNING BOLT, JULIUS MARLOW REPCO, CHECKPOINT, TRADERS AUTO SPARES, APPCO, AUTO PRO, ASHDOWN, LAWRENCE & HANSO YEAR AUTO SERVICEPACIFIC CENTRES, CHAMPION, MARSHALL, EXIDE, STOWAWAY, ABSOLYTE, DUNLOP,DUNLOP MARATHON, SPRINTER, ANSELL, PERRY, EDMONT, CHECKMATE, LIFESTYLES, MATE D ROBIN, JOCKEY, GROSBY, DREAMLAND, BONDS, SLEEPMAKER, SIMMONS, DUNLOPILLO, TONTINE, HANG TEN, JORDACHE, RIO, CANDY, DR SCHOLL, AMCO, NATURALISER, ENDUR S PARTS CENTRES, LUCAS, PACIFIC DATACOM, DUNLOP, GOODYEAR, OLYMPIC, KELLY SPRINGFIELD, BEAUREPAIRES FOR TYRES, MCLEOD TYRES, GOODYEAR AUTO SERVICE CENTRE ILITE, GOLDEN NEEDLES, ENCORE, ELITE, OVATION, DUNLOP, SLAZENGER, NIBLICK, MAXFLI, REPCO, MALVERN STAR, BERLEI, HESTIA, HOLEPROOF, RED ROBIN, JOCKEY, GROSB JULIUS MARLOW REPCO, CHECKPOINT, TRADERS AUTO SPARES, APPCO, AUTO PRO, ASHDOWN, LAWRENCE & HANSON, CORYS AnnualFRASERS, Report LANSON, 1999EXPRESS PARTS CENTRES, LUCA DE, STOWAWAY, ABSOLYTE, DUNLOP, MARATHON, SPRINTER, ANSELL, PERRY, EDMONT, CHECKMATE, LIFESTYLES, MATES, MANIX, GAMMEX, NUTEX, NITRILITE, GOLDEN NEEDLE AKER, SIMMONS, DUNLOPILLO, TONTINE, HANG TEN, JORDACHE, RIO, CANDY, DR SCHOLL, AMCO, NATURALISER, ENDURO, SPRINGTRED, LIGHTNING BOLT, JULIUS MARLOW REPC OODYEAR, OLYMPIC, KELLY SPRINGFIELD, BEAUREPAIRES FOR TYRES, MCLEOD TYRES, GOODYEAR AUTO SERVICE CENTRES, CHAMPION, MARSHALL, EXIDE, STOWAWAY, ABSOLYT OP, S L AZENGER, NIBLICK, MAXFLI, REPCO, MALVERN STAR, BERLEI, HESTIA, HOLEPROOF, RED ROBIN, JOCKEY, GROSBY, DREAMLAND, BONDS, SLEEPMAKER, SIMMONS, DUNLOPILL RES, APPCO, AUTO PRO, ASHDOWN, LAWRENCE & HANSON, CORYS FRASERS, LANSON, EXPRESS PARTS CENTRES, LUCAS, PACIFIC DATACOM, DUNLOP, GOODYEAR, OLYMPIC, KEL R, ANSELL, PERRY, EDMONT, CHECKMATE, LIFESTYLES, MATES, MANIX, GAMMEX, NUTEX, NITRILITE, GOLDEN NEEDLES, ENCORE, ELITE, OVATION, DUNLOP, SLAZENGER, NIBLIC DACHE, RIO, CANDY, DR SCHOLL, AMCO, NATURALISER, ENDURO, SPRINGTRED, LIGHTNING BOLT, JULIUS MARLOW REPCO, CHECKPOINT, TRADERS AUTO SPARES, APPCO, AUTO PR FOR TYRES, MCLEOD TYRES, GOODYEAR AUTO SERVICE CENTRES, CHAMPION, MARSHALL, EXIDE, STOWAWAY, ABSOLYTE, DUNLOP, MARATHON, SPRINTER, ANSELL, PERRY, EDMO BERLEI, HESTIA, HOLEPROOF, RED ROBIN, JOCKEY, GROSBY, DREAMLAND, BONDS, SLEEPMAKER, SIMMONS, DUNLOPILLO, TONTINE, HANG TEN, JORDACHE, RIO, CANDY, DR SCHOL CORYS FRASERS, LANSON, EXPRESS PARTS CENTRES, LUCAS, PACIFIC DATACOM, DUNLOP, GOODYEAR, OLYMPIC, KELLY SPRINGFIELD, BEAUREPAIRES FOR TYRES, MCLEOD TYRE S, MANIX, GAMMEX, NUTEX, NITRILITE, GOLDEN NEEDLES, ENCORE, ELITE, OVATION, DUNLOP, SLAZENGER, NIBLICK, MAXFLI, REPCO, MALVERN STAR, BERLEI, HESTIA, HOLEPRO SPRINGTRED, LIGHTNING BOLT, JULIUS MARLOW REPCO, CHECKPOINT, TRADERS AUTO SPARES, APPCO, AUTO PRO, ASHDOWN, LAWRENCE & HANSON, CORYS FRASERS, LANSO RES, CHAMPION, MARSHALL, EXIDE, STOWAWAY, ABSOLYTE, DUNLOP, MARATHON, SPRINTER, ANSELL, PERRY, EDMONT, CHECKMATE, LIFESTYLES, MATES, MANIX, GAMMEX, NUTE REAMLAND, BONDS, SLEEPMAKER, SIMMONS, DUNLOPILLO, TONTINE, HANG TEN, JORDACHE, RIO, CANDY, DR SCHOLL, AMCO, NATURALISER, ENDURO, SPRINGTRED, LIGHTNING BO FIC DATACOM, DUNLOP, GOODYEAR, OLYMPIC, KELLY SPRINGFIELD, BEAUREPAIRES FOR TYRES, MCLEOD TYRES, GOODYEAR AUTO SERVICE CENTRES, CHAMPION, MARSHALL, EXID , ELITE, OVATION, DUNLOP, SLAZENGER, NIBLICK, MAXFLI, REPCO, MALVERN STAR, BERLEI, HESTIA, HOLEPROOF, RED ROBIN, JOCKEY, GROSBY, DREAMLAND, BONDS, SLEEPMAKE TRADERS AUTO SPARES, APPCO, AUTO PRO, ASHDOWN, LAWRENCE & HANSON, CORYS FRASERS, LANSON, EXPRESS PARTS CENTRES, LUCAS, PACIFIC DATACOM, DUNLOP, GOODYEA MARATHON, SPRINTER, ANSELL, PERRY, EDMONT, CHECKMATE, LIFESTYLES, MATES, MANIX, GAMMEX, NUTEX, NITRILITE, GOLDEN NEEDLES, ENCORE, ELITE, OVATION, DUNL INE, HANG TEN, JORDACHE, RIO, CANDY, DR SCHOLL, AMCO, NATURALISER, ENDURO, SPRINGTRED, LIGHTNING BOLT, JULIUS MARLOW REPCO, CHECKPOINT, TRADERS AUTO SPARE FIELD, BEAUREPAIRES FOR TYRES, MCLEOD TYRES, GOODYEAR AUTO SERVICE CENTRES, CHAMPION, MARSHALL, EXIDE, STOWAWAY, ABSOLYTE, DUNLOP, MARATHON, SPRINTE I, REPCO, MALVERN STAR, BERLEI, HESTIA, HOLEPROOF, RED ROBIN, JOCKEY, GROSBY, DREAMLAND, BONDS, SLEEPMAKER, SIMMONS, DUNLOPILLO, TONTINE, HANG TEN, JORDACH LAWRENCE & HANSON, CORYS FRASERS, LANSON, EXPRESS PARTS CENTRES, LUCAS, PACIFIC DATACOM, DUNLOP, GOODYEAR, OLYMPIC, KELLY SPRINGFIELD, BEAUREPAIRES F KMATE, LIFESTYLES, MATES, MANIX, GAMMEX, NUTEX, NITRILITE, GOLDEN NEEDLES, ENCORE, ELITE, OVATION, DUNLOP, SLAZENGER, NIBLICK, MAXFLI, REPCO, MALVERN STA MCO, NATURALISER, ENDURO, SPRINGTRED, LIGHTNING BOLT, JULIUS MARLOW REPCO, CHECKPOINT, TRADERS AUTO SPARES, APPCO, AUTO PRO, ASHDOWN, LAWRENCE & HANSO YEAR AUTO SERVICE CENTRES, CHAMPION, MARSHALL, EXIDE, STOWAWAY, ABSOLYTE, DUNLOP, MARATHON, SPRINTER, ANSELL, PERRY, EDMONT, CHECKMATE, LIFESTYLES, MATE D ROBIN, JOCKEY, GROSBY, DREAMLAND, BONDS, SLEEPMAKER, SIMMONS, DUNLOPILLO, TONTINE, HANG TEN, JORDACHE, RIO, CANDY, DR SCHOLL, AMCO, NATURALISER, ENDUR S PARTS CENTRES, LUCAS, PACIFIC DATACOM, DUNLOP, GOODYEAR, OLYMPIC, KELLY SPRINGFIELD, BEAUREPAIRES FOR TYRES, MCLEOD TYRES, GOODYEAR AUTO SERVICE CENTRE ILITE, GOLDEN NEEDLES, ENCORE, ELITE, OVATION, DUNLOP, SLAZENGER, NIBLICK, MAXFLI, REPCO, MALVERN STAR, BERLEI, HESTIA, HOLEPROOF, RED ROBIN, JOCKEY, GROSB JULIUS MARLOW REPCO, CHECKPOINT, TRADERS AUTO SPARES, APPCO, AUTO PRO, ASHDOWN, LAWRENCE & HANSON, CORYS FRASERS, LANSON, EXPRESS PARTS CENTRES, LUCA DE, STOWAWAY, ABSOLYTE, DUNLOP, MARATHON, SPRINTER, ANSELL, PERRY, EDMONT, CHECKMATE, LIFESTYLES, MATES, MANIX, GAMMEX, NUTEX, NITRILITE, GOLDEN NEEDLE AKER, SIMMONS, DUNLOPILLO, TONTINE, HANG TEN, JORDACHE, RIO, CANDY, DR SCHOLL, AMCO, NATURALISER, ENDURO, SPRINGTRED, LIGHTNING BOLT, JULIUS MARLOW REPC OODYEAR, OLYMPIC, KELLY SPRINGFIELD, BEAUREPAIRES FOR TYRES, MCLEOD TYRES, GOODYEAR AUTO SERVICE CENTRES, CHAMPION, MARSHALL, EXIDE, STOWAWAY, ABSOLYT OP, SLAZENGER, NIBLICK, MAXFLI, REPCO, MALVERN STAR, BERLEI, HESTIA, HOLEPROOF, RED ROBIN, JOCKEY, GROSBY, DREAMLAND, BONDS, SLEEPMAKER, SIMMONS, DUNLOPILL BroughtRES, APPCO to, youAUTO by PRO Global, ASHDOWN Reports, LAWRENCE & HANSON, CORYS FRASERS, LANSON, EXPRESS PARTS CENTRES, LUCAS, PACIFIC DATACOM, DUNLOP, GOODYEAR, OLYMPIC, KEL Contents 2 The Year in Review Pacific Dunlop Limited ACN 004 085 330 4 Chairman’s Message 6 Operations Review The Annual General Meeting will be 10 Managing Director’s Review held in the John Batman Theatre at the of Operations Melbourne Convention Centre, corner 14 Ansell Spencer Street and Flinders Street, 16 Pacific Brands Melbourne on 3 November 1999 18 Pacific Distribution at 2.15pm. Details of the business 20 South Pacific Tyres of the meeting are contained in the 22 GNB Technologies Notice of Meeting enclosed with this 24 Pacific Dunlop Board Annual Report. 25 Corporate Governance Voting by proxy is the most effective 29 Report of the Directors way for shareholders to participate in 34 Discussion and Analysis the Company’s affairs. All shareholders of the Financial Statements are therefore encouraged to complete 37 Five Year Summary and return the proxy form enclosed 38 Profit and Loss Statement with the Notice of Meeting. 39 Balance Sheet 40 Statement of Cash Flows 41 Business Segments 42 Notes to the Financial Statements 49 Directors’ Declaration 50 Independent Auditors’ Report 51 Shareholders 52 Investor Information 53 Directory

ANSELL, PERRY, EDMONT, CHECKMATE, LIFESTYLES, MARSHALL, MANIX, GAMMEX, NUTEX, NITRILITE, GOLDEN NEEDLES, ENCORE, ELITE, OVATION, DUNLOP, SLAZENGER, NIBLICK RIO, CANDY, DR SCHOLL, AMCO, NATURALISER, ENDURO, SPRINGTRED, REPCO, CHECKPOINT, TRADERS AUTO SPARES, APPCO, AUTO PRO, ASHDOWN, LAWRENCE & HANSON, CHAM

Brought to you by Global Reports We are building a one-company culture and a one-company operation where prime focus is on the customer and the creation of shareholder value. By doing this, we are unlocking the power of Pacific Dunlop: our wonderful brands, the competitive advantages we have yet to maximise, and the greater sharing of skills, knowledge and services across the whole Company.

, MAXFLI, REPCO, MALVERN STAR, BERLEI, HOLEPROOF, RED ROBIN, JOCKEY, GROSBY, DREAMLAND, BONDS, SLEEPMAKER, SIMMONS, DUNLOPILLO, TONTINE, HANG TEN, JORDACHE, PION, LANSON, EXPRESS PARTS CENTRES, LUCAS, PACIFIC DATACOM, DUNLOP, GOODYEAR, OLYMPIC, KELLY SPRINGFIELD, BEAUREPAIRES FOR TYRES, MCLEOD TYRES, GOODYEAR

Brought to you by Global Reports The Year in Review

Financial Results 1999 1998 % change

Revenue ($ million) 6,150 5,984 +2.8

Operating profit before interest, tax and goodwill amortisation ($ million) 401 366 +9.5

Profit before abnormal items ($ million) 200 181 +10.5

Abnormal loss ($ million) (94) (156) –

Profit after abnormals ($ million) 106 25 +324

Assets employed ($ million) 5,219 5,598 – 6.8

Return on shareholders’ equity before abnormals (%) 12.2 10.7 +15.9

Average shares on issue (million) 1,030 1,028 +0.2

Earnings per share before abnormal items (cents) 19.4 17.6 +10.2

Earnings per share after abnormal items (cents) 10.3 2.4 +329

Dividends per share (cents) 14.0 14.0 –

All figures in A$ unless otherwise stated. 23

• Profit attributable to Pacific Dunlop shareholders before abnormals of $199.8 million, up 10.5 per cent. • Earnings per share before abnormals up 10.2 per cent to 19.4 cents. • All Operating Groups, with the exception of GNB Technologies, exceeded their Weighted Average Cost of Capital. • Debt lower by $225 million, with improved interest cover of 3.9 times.

Brought to you by Global Reports Dividends per Share ProfitProfit AttributableAttributable toto ShareholdersShareholders EarningsEarnings perper ShareShare beforebefore AbnormalsAbnormals (cents)(cents) beforebefore Abnormals/AssetsAbnormals/Assets EmployedEmployed (cents)(cents)

Assets After Before Employed Profit Goodwill Goodwill

15 6000 200 25 199.8 14.0 14.0 14.0 5000 23.2 5598.0 5592.9

12 180.8 20 175.6 21.1

5218.9 150 20.3

4000 19.4

15 17.6

9 17.2

3000 100

6 10

2000

50 3 5 1000

0 0 0 0 1997 1998 1999 1997 1998 1999 1997 1998 1999

Dividends maintained Profit of $199.8 million, Earnings per share at 14 cents for the year. an increase of 10.5%. increased by 10.2%.

Brought to you by Global Reports Chairman’s Message

Dear Shareholder As Pacific Dunlop enters its second century as a publicly listed company we do so with renewed confidence. And we do so with good reason. The management team has, for the past three years, been focused on getting the fundamentals of the business in much better shape, underpinning the confidence we have for the future.

Laying the foundation to achieve sustained improvement in competitive performance takes time, and the benefits do not show immediately. But the effort is well worthwhile. The outcome is a more competitive operating base and a growth platform on which we can build confidently. This is important because the past few years have been difficult for the Group. The unfortunate experience with the pacing leads had a debilitating effect as well as being time consuming. The failure of the purchaser to complete the contract for the purchase of GNB Technologies was a further disappointment for the Company and the sharemarket. The positive news is that we are beginning to see the results of the rebuilding process, with earnings for the past year being the best for five years despite the very competitive environment in which the Company is operating. At the same time, encouraging growth re-emerged in Pacific Distribution while Ansell continued to build on its pre-eminence in the world market. The restructuring of Pacific Brands has also positioned it for stronger performance going forward. While South Pacific Tyres’ profit was lower, this business performed quite credibly when considered how others have fared in a very competitive market resulting from strong import flows of tyres from

Brought to you by Global Reports developing countries to the markets of the developed economies. The management of GNB Technologies deserve special mention for the way they maintained the business in a period of considerable uncertainty during the protracted, and ultimately aborted, sales process. The Balance Sheet of the Company was significantly strengthened, principally as the consequence of asset sales which contributed $320 million. The Australasian and Sri Lankan cable businesses were the major assets sold. While we have seen improvement in performance, the Directors and senior executives are acutely aware there is both need and scope for much more to be done. This will come from growing revenue as well as extracting maximum productivity and competitive advantage from the rationalisation and restructuring already in place and still to be done. There are further costs to be met before current restructuring plans are completed. Effort will continue to be focused on getting the fundamentals right. It means putting our effort into strengthening and developing our core competencies as the way of delivering shareholder value. Another step along this path is the association with Andersen Consulting to take initiatives on shared services to another level. The consequence will be lower costs in certain areas, faster development of systems, the benefits of shared knowledge and opportunity to grow profit. At the same time, Pacific Dunlop management can focus on the main business of the Group and its profitable growth. Outlook Ansell, Pacific Distribution and Pacific Brands are all positioned to achieve better operating performance this year. We will also be looking for stronger performance from our tyre and battery businesses despite the very competitive environment in which they are operating. The support of GNB Technologies’ customers since the termination of the contractual arrangements with Quexco has been especially encouraging. Now that the long, drawn out process is over, GNB management is able to concentrate on restoring the results and market position of the battery business. The first significant step in this process was the announcement in August 1999 of the decision to mothball the troublesome Columbus smelter in the US, which will have an immediate positive impact on earnings.

Matching the past year’s result in this current financial year will be especially challenging. First is the task of replacing the earnings of the cable business. Second is the impact of currency fluctuations on the earnings of Ansell and GNB Technologies. While these pressures will impact on immediate profits, we are confident we will be operating from a much improved base as we move into the new millennium. Board Mr Charles Goode retired as a Director at the end of the financial year after having served on the Board for 12 years. Throughout that time he made a valuable contribution to the affairs of Pacific Dunlop and, on behalf of my fellow Board members, I have pleasure in recording our appreciation. His wise counsel and his general business knowledge will be greatly missed.

John T Ralph Chairman

Brought to you by Global Reports Operations Review

Ansell Pacific Brands

Barrier protection products for healthcare, Clothing, footwear, sporting goods, bedding consumer and industrial markets and foam products Sales of $1.2 billion Sales of $1.2 billion

Core Competencies Advanced technology low-cost thin barrier Brands, marketing and logistics protection in natural and synthetic latex Global branded marketing and distribution

Brands Ansell, Perry, Edmont, Checkmate, Lifestyles, Dunlop, Slazenger, Niblick, Maxfli, Repco, Mates, Manix, Gammex, NuTex, Nitrilite, Malvern Star, Berlei, Hestia, Holeproof, Red Robin, Golden Needles, Encore, Elite, Ovation Jockey, Grosby, Dreamland, Bonds, Sleepmaker, Simmons, Dunlopillo, Tontine, Hang Ten, Jordache, Rio, Candy, Dr Scholl, Amco, Naturaliser, Enduro, Springtred, Lightning Bolt, Julius Marlow

Scale 25 plants in the US, the UK, Malaysia, 44 plants in Australia, New Zealand, China, Thailand, Sri Lanka, Mexico and India Indonesia, the Philippines and Malaysia

Market Share US Australia Medical gloves 15-17% Bras 25-30% Industrial gloves 25-30% Underwear 45-50% Condoms 20-25% Socks 40-45% Europe Footwear 20-25% Bicycles 40-45% Medical gloves 25-30% Tennis balls 80-85% Industrial gloves 25-30% Golf balls 30-35% 67 Condoms 10% Beds 35-40% Australia Medical gloves 60-70% Condoms 65-70%

People Australia 59 Australia 4,480 Europe 388 Europe 39 America 3,304 Asia-Pacific 3,214 Asia-Pacific 8,302 New Zealand 321

Scope Europe, North America, Japan, Asia-Pacific Australia, New Zealand, Asia-Pacific, Europe, and Latin America UK and US More than 90 per cent of sales outside Australia More than 13 per cent of sales outside Australia

Three Year Summary $ million 1999 1998 1997 1999 1998 1997 Sales Revenue 1,185 1,078 856 1,204 1,177 1,214 Depreciation 36 30 25 25 27 25 Operating Profit 170 162 111 97 94 105 Assets Employed 876 831 723 601 618 624 Capital Expenditure 93 50 40 16 26 28 Profit Margin (%) 14.3 15.0 13.0 8.1 8.0 8.6 People 12,053* 9,560 9,093 8,054 8,252 8,653 Sales per Person ($’000) 98 112 94 149 143 140

*Includes the acquisition of Suretex Group and Kemwell Inc.

Brought to you by Global Reports Pacific Distribution

K, MAXFLI, REPCO, MALVERN STAR, BERLEI, HOLEPROOF, RED ROBIN, JOCKEY, GROSBY, DREAMLAND, BONDS, SLEEPMAKER, SIMMONS, DUNLOPILLO, TONTINE, HANG TEN, JORDACHE, PION, LANSON, EXPRESS PARTS CENTRES, LUCAS, PACIFIC DATACOM, DUNLOP, GOODYEAR, OLYMPIC, KELLY SPRINGFIELD, BEAUREPAIRES FOR TYRES, MCLEOD TYRES, GOODYEA

Pacific Distribution South Pacific Tyres GNB Technologies

Distribution of electrical and automotive Passenger, light truck, truck, agricultural and Lead acid automotive and industrial batteries products in retail and wholesale channels industrial tyres Sales of $1.5 billion Sales of $1.1 billion Sales of $1.4 billion

Product sourcing and distribution logistics Manufacture, marketing and distribution Sealed lead acid battery technology and of tyres lead recycling

Repco, Checkpoint, Traders Auto Spares, Dunlop, Goodyear, Olympic, Kelly Springfield, Champion, Marshall, Exide (Australia and Appco, Auto Pro, Ashdown, Lawrence & Hanson, Beaurepaires for Tyres, McLeod Tyres, New Zealand only), Stowaway, Absolyte, Corys Frasers, Lanson, Express Parts Centres, Goodyear Auto Service Centres Dunlop, Marathon, Sprinter Lucas, Pacific Datacom

662 outlets in Australia and New Zealand 5 tyre plants, 19 retreading plants and 18 plants in the US, Australia and New Zealand 708 tyre outlets in Australia and New Zealand

Australia Australia 40-45% US Automotive 15-20% Automotive 15-20% New Zealand 35-40% Electrical 30-35% Stationary batteries 25-30% New Zealand Motive power 20-25% Automotive 25-30% Australia Electrical 25-30% Automotive 40-45% Telecommunications/ Power control 30-35% Electric vehicle 45-50%

Australia 5,018 Australia 4,929 Australia 610 New Zealand 840 Asia-Pacific 1,076 Europe 20 America 4,226 Asia-Pacific 212

Australia and New Zealand Australia, New Zealand and Papua New Guinea North America, Latin America, Australia, New Zealand, Asia-Pacific, China and Europe More than 20 per cent of sales outside Australia More than 85 per cent of sales outside Australia

1999 1998 1997 1999 1998 1997 1999 1998 1997 1,494 1,468 1,486 1,070 1,049 1,075 1,386 1,236 1,144 21 21 17 39 36 36 45 49 45 77 65 80 73 79 92 51 55 34 579 588 595 686 658 664 945 1,084 936 15 26 27 45 40 35 77 58 38 5.2 4.4 5.4 6.8 7.5 8.6 3.7 4.5 3.0 5,858 5,959 6,261 6,005 5,977 6,022 5,068 5,200 5,203 255 246 237 178 176 179 273 238 220

These details represent 100 per cent of this joint venture. Pacific Dunlop is entitled to a 50 per cent proportional interest in sales and operating profit of the partnership with Goodyear Tire and Rubber Company (excluding the New Zealand operations). Brought to you by Global Reports OUR BRANDS AND PRODUCTS ARE LEADERS

89 PACIFIC DUNLOP OUR BRANDS CONTINUE TO BE MARKET LEADERS INTERNATIONALLY AND DOMESTICALLY. A RECORD WE ARE PROUD OF.

Men’s and Women’s Surgical Gloves Branded Condoms Underwear and Socks Bedding International International Australia Australia

23% marketshare 14% marketshare 45% marketshare 35% marketshare

Brought to you by Global Reports Ansell is a market leader in medical gloves. Ansell supplies 60-70 per cent of Australia’s requirements; 25-30 per cent in Europe; and 15-17 per cent in the United States.

00 00

Replacement Automotive Adult Footwear Passenger Tyres Aftermarket – Trade Industrial Batteries Australia Australia Australia North America

20% marketshare 42% marketshare 16% marketshare 22% marketshare

Brought to you by Global Reports Managing Director’s Review

The reshaping of Pacific Dunlop into a more competitive value-creating business made two important advances last year. The first was the acceleration of the comprehensive change process in all operations. The second is the restructuring of the Group’s asset portfolio. The change process is allowing us to go forward with renewed purpose based on a one-company culture with its prime focus being shareholder value creation and the delivery of customer satisfaction.

10 11

The task of transforming Pacific Dunlop’s portfolio of businesses into this new mould has been a step-by-step effort over nearly three years. It has embraced changing attitudes, marketing, processes, strategies and direction. Included in this has been the development of fresh, more appropriately targeted strategies for the Company’s great range of branded products. A major reform has been the expansion of shared services across the whole group. This includes the sharing of skills, knowledge and services. Its introduction last year delivered demonstrable cost savings and added value. We expect this to continue as we go further down this path. The response of our people to these changes, which have been far-reaching, has been excellent and is a real cause for optimism as we face the new millennium. Our internal recognition and reward program, Personal Best, has been enthusiastically adopted by our people since its launch just over 12 months ago, and is underpinning an improvement in morale and performance.

Brought to you by Global Reports The year’s second area of significant progress was the restructuring of Pacific Dunlop’s asset portfolio and businesses to fit new, more rigorous yardsticks for growth, earnings and return on equity. In this regard, three key decisions were made: • If a business cannot provide and sustain acceptable returns to shareholders we will look to exit it. We will be more demanding in evaluating performance, allocation of investment funds and the determining of the future businesses. • Remaining in low value-added manufacturing is no longer a sustainable proposition. Growth and added value do not necessarily come from owning factories. • We can manage our brands better. This means improved or different brand positioning, marketing, delivery channels and customer relationships if we are to realise full brand value. In implementing these decisions, the following actions have been taken: 1. We exited the Australasian and Sri Lankan cables businesses and a number of non-core businesses across the Company. The cables business, despite its contribution over many years and its recent profit improvement, was no longer seen as a core part of Pacific Dunlop. The sale proceeds of $300 million are being channelled into debt reduction and businesses with higher growth and return on equity potential. The contract also provides an additional payment of up to $16 million on the achievement of certain profit criteria over the next two years. This will enhance Pacific Dunlop’s longer term earnings, even though the effect of the sale is currently earnings dilutive. Other businesses sold during the year included Dunlop Skega, Dunlop Membranes and Automotive Foams and Fibres. 2. We continued the extensive rationalisation and reorganisation of Pacific Brands. This program has over the past three years seen the amalgamation or relocation of more than 20 plants, plus the establishment of new state-of-the-art production facilities in Australia. The policy of concentrating value-added manufacturing into fewer, larger, more automated facilities is now bringing results – not only in Pacific Brands but in our other businesses as well. This was signified by the strong finish to the year by the Pacific Brands Group.

In August this year, a major change to the senior management was announced following the move by Mr Robert Hershan to Group Head Office to oversee a number of company-wide sales and marketing initiatives. Mr Paul Moore, formerly Group Director Operations, was appointed Managing Director of this unit. Each business unit has been reorganised to focus managers on dramatically improving customer interface at a national and local retailer level. Sales growth and brand management are two key performance measures of success. This new structure will help maximise the power of its outstanding stable of brands, which is, I believe, the finest in Australia. 3. We revitalised and reorganised Pacific Distribution into the year’s best profit growth performer. The introduction of talented new management and new trading and customer service concepts drove EBIT up by 19 per cent and working capital down. More initiatives in the pipeline, including greater customer channel specialisation, supply chain management and retail skills, are expected to provide further improvement this year. The announcement in August 1999 of a joint venture with Atkins Carlyle in the automotive wholesaling business will help increase sales and drive down costs.

Brought to you by Global Reports Managing Director’s Review continued

4. We strengthened Ansell’s position in all its world markets, particularly the United States. We have grasped the opportunity for Ansell to become a truly global business. It possesses a unique combination of marketing power, technology and low-cost production, which has already given its products world leadership, with sales in more than 100 countries. Ansell’s prospects for longer term growth are excellent. It has strong market positions in its principal product categories in most geographical regions; it is in strong, high volume growth markets where its products are clearly regarded as world leaders; it has opportunities for growth in underdeveloped markets; and it has leading edge proprietary technology in products and processes. 5. We fast-tracked a number of restructuring and profit improvement initiatives at GNB which had been placed on hold during the nearly 12 months of delay during the aborted sale process with Quexco Inc. The subsequent decision to mothball the Columbus smelter is one example of this. GNB is also aggressively pursuing new business, and has recently been awarded a significant contract by Delco Remy in the US. These initiatives will ensure GNB is progressively better placed to compete in the aggressive North American automotive battery market. 6. We successfully introduced a large number of new Pacific Dunlop products and brands to the market. Principal among these were Olympic-related products in Bonds and Berlei, new industrial and medical gloves and condoms from Ansell, tyres for demanding overseas and domestic markets, innovative retail concepts in Pacific Distribution, and new automotive and industrial batteries. During the year, appeals were lodged with the US District Court to the judgment and order of the Court approving the class action settlement with respect to the claims of patients implanted with the Accufix J Pacing Leads in the US. The Company continues to believe a settlement is in the best interest of patients and their families.

12 13

Performance Summary Ansell recorded its eighth successive year of growth, with gains in all markets. Footholds gained in the previous year in new markets in Latin and South America, Eastern Europe, South Africa and the Middle East were expanded. While there remains pricing pressure in some markets, new product introductions will ensure Ansell retains its leadership position and healthy margins. The integration of two major acquisitions, the Suretex Group and Kemwell Inc, has progressed well. Ansell also increased the new product capacity of its principal manufacturing facilities in South-East Asia and India. Pacific Brands ended the year with an 18 per cent better second half compared with the same six months of the previous year. The clothing division had a much improved year, which was helped by more efficient production and sourcing, the acquisition of new brands and leveraging of its position as a major supplier and licensee of the Sydney 2000 Olympic Games.

Brought to you by Global Reports Pacific Distribution had an encouraging result under an energetic new management team. A restructuring of business units within the Automotive and Electrical divisions has focused on the creation of distinct customer channels, new operations and the aggressive expansion of shared services. South Pacific Tyres had a disappointing year, and this year faces the immediate challenge of consolidating recently regained market share and improving profitability. Pricing pressure within the tyre industry remains intense due to continuing global over-capacity and a significant reduction in demand in Asia. Exports, however, increased by 12 per cent to $92 million. GNB Technologies had a solid sales increase, albeit at lower margins. A number of profit improvement initiatives are being aggressively implemented, including the announcement in August of the decision to mothball the Columbus smelter. We are confident of a much better result this year. This is particularly evident in the industrial battery business, with the first signs of a recovery in Asia flowing through in recent months. Sydney 2000 Olympic Games Pacific Dunlop’s Team Millennium Olympic Partner sponsorship is playing a major part in revitalising those brands involved: Bonds, Berlei, Sleepmaker, Ansell, Dunlop Tyres, Goodyear and Marshall batteries. The sponsorship is delivering successfully against each of the objectives we set for it: 1. Driving sales of branded products. 2. Providing a unique differentiation with customers and suppliers. 3. Underpinning the Company’s internal recognition program, Personal Best. Workplace Safety Company-wide, good progress was made during the year in making our factories, distribution centres and administration offices safer for our people. Over the past two years, Pacific Dunlop has more than halved the number of lost time injuries to 1.5 per 200,000 hours worked. The figure of 200,000 hours is the measure used by the Occupational Safety and Health Authority in the US and relates to the normal hours worked by 100 people in a year. More remains to be done, however, to achieve world’s best practice.

Y2K Year 2000 compliance has been a major program for the Company at a total cost of approximately $19 million. We have also taken the opportunity to advance the installation of new systems where those systems were approaching their replacement dates.

Rod L Chadwick Managing Director and Chief Executive

Brought to you by Global Reports THE WORLD LEADER IN MEDICAL AND INDUSTRIAL

14 15 GLOVES THE WORLD’S NUMBER ONE MARKETER AND MANUFACTURER OF HIGH QUALITY MEDICAL AND INDUSTRIAL GLOVES AND CONDOMS. A WONDERFUL ACHIEVEMENT FOR AN AUSTRALIAN COMPANY.

Ansell’s EBIT result represents the eighth consecutive year ANSELL of profit growth, an excellent performance given the adverse impact of currency in the second half of the year and costs associated with the integration of the Suretex and Kemwell acquisitions. The Protective Products Division had a record sales year, with demand for Critical Environment gloves, including the Nitrilite range, continuing to increase as the major capacity expansion in Ansell’s purpose-built Troy, Alabama, facility nears completion. A range of new products was launched, focusing on the growing demand for lighter, ergonomically-superior gloves in industrial applications as well as the proFood range specially

Damien Brown, designed to meet increasingly stringent requirements in Australian Olympic food processing and handling. weightlifter and long-time Ansell ambassador

Brought to you by Global Reports Ansell continued its global expansion during the year, successfully gaining share in established markets, building on the footholds established in developing markets and launching a large number of world-class new products. Ansell is now well placed to meet global customer needs with its extensive powder-free latex and synthetic range of medical surgical and examination gloves, specialty industrial products and condoms.

00 00

The Healthcare Division had a strong result, with sales In condoms, significant volume gains were achieved in growth in medical gloves and condoms. Europe partly due to the launch of the Benetton branded In medical gloves, operating profit came under currency- range and JK Ansell’s Kama Sutra range into targeted related pricing pressure mainly in Europe, but held up well in countries. In the US, market share of Ansell’s LifeStyles other developed markets. In the US, achievements included range benefited from the addition of two award-winning the successful launch of the improved synthetic surgical new products, ‘Xtrapleasure’ and ‘Discs’. glove, Encore, and the powder-free examination glove, The acquisition of Suretex is allowing the progressive transfer Dermaclean, as well as significant increased sales to the of condom production from the US to Thailand, resulting in a growing Alternate Care market and additional major hospital more competitive cost position for the entire Ansell condom buying groups. The acquisition of the Indian medical glove product range. Significant capital continues to be invested to manufacturer, Kemwell, has provided Ansell with a low achieve the Group’s stated objectives: aggressive development cost export capacity for developing markets and will extend of the powder free medical glove market; aggressive pursuit its presence in the emerging Indian domestic medical of the world market for Critical Environment gloves; and to glove market. be the lowest cost producer across its entire product range.

Brought to you by Global Reports A POWERFUL STABLE OF

16 17 BRANDS OVER 100 YEARS’ OUR BRANDS AND PRODUCTS HAVE BECOME HOUSEHOLD NAMES IN AUSTRALIA AND NEW ZEALAND AND, INCREASINGLY, PACIFICOTHER PARTS OF THE WORLD. BRANDS

Liz Weekes, member of the Australian women’s water polo team, is sponsored by and models for Bonds

Brought to you by Global Reports Pacific Brands is continuing its fundamental change program, improving quality and customer satisfaction while driving costs down. The Group’s major involvement as a supplier and licensee to the Sydney 2000 Olympic Games, together with an improving retail environment, is providing optimism in the current year.

00 00

Results last year were generally steady across most product • The continued consolidation and upgrade of IT platforms categories, although clothing had a much stronger result than to assist in the integration of products and services to in the previous year. Bonds had an outstanding year, in good allow more effective interaction with major customers part fuelled by its involvement in the Olympics, and in the and the pursuit of e-commerce opportunities. second half Berlei recorded strong growth. A number of new products and brands were introduced during Major initiatives of the change program throughout the year the year, including the unique Ultra Fresh™ anti-microbial foam included: treatment; the acquisition of the Lightning Bolt surfwear, • The amalgamation of specialist Australian sock making Amco Jeans and Julius Marlow shoe brands; the Revolution facilities at Nunawading. golf ball was introduced at the premium end of the market • The consolidation of men’s underwear manufacturing. and gained market leadership in the category; and new • The establishment of a state-of-the-art pillow manufacturing versions of the market leading Stackhat bicycle helmet facility. were released. • The creation of automated bedding production sites in the three eastern states, providing improved delivery capability and quality.

Brought to you by Global Reports BUILDING A SUSTAINABLE GROWTH

18 19 PLATFORM PACIFIC DUNLOP VALUE OUR GREATEST ASSET, OUR PEOPLE. IT IS OUR PEOPLE WHO HAVE MADE THE COMPANY AND WILL LEAD US FORWARD. PACIFIC DISTRIBUTION

The new format for servicing our trade customers, Express Parts Centres, is trialling well

Brought to you by Global Reports Pacific Distribution had an exciting and very pleasing year of change, with improvements in profitability and significant work undertaken to provide a platform for sustainable future growth.

The new management team implemented four major initiatives 2. A continuing strong focus on supply chain management. during the year: Pacific Distribution is continuing to build a core competency 1. Greater channel specialisation in the Automotive and in supply chain management, which will drive increased Electrical businesses. sales through improved customer service and lead to In Automotive, the business has been separated into further reductions in inventory and the rationalisation trade and retail, with a focus on better retail skills expected of a number of small inefficient facilities. to drive better performance from new format stores. 3. Shared services. A new format is also being piloted in trade, with stores The continued development and implementation of shared being consolidated into Express Parts Centres, distributing services across Pacific Distribution is contributing to direct to customers. The first centre, in Reservoir in significant cost savings and, importantly, much improved Melbourne’s northern suburbs, has trialled well. customer service. Further pilots have been undertaken in Footscray 4. Consolidation of electrical reseller businesses. and Richmond in Melbourne. The reseller businesses of Wattmaster, Click and Engel In Electrical, the business is being focused into three key products were consolidated into one operation resulting channels: electrical contractors, electrical industrial and in promising sales growth. data communications. The focus of skilled, highly-trained There remains significant opportunity for improvement within specialists to service each of these channels is bringing Pacific Distribution. increased sales and improved customer satisfaction.

Brought to you by Global Reports A FOCUS ON PRODUCTIVITY

20 21 AND QUALITY WE ARE AGGRESSIVELY PURSUING OVERSEAS MARKETS TO OFFSET A FLOOD OF CHEAP IMPORTS DOMESTICALLY. SOUTH PACIFIC TYRES

The first Goodyear blimp in Australia was launched during the year, one of seven Goodyear blimps worldwide

Brought to you by Global Reports South Pacific Tyres improved its original equipment market share during the year, with increases in business with Ford and Holden. Together with another increase in exports, this helped offset the impact of intense competitive pressures. While sales were up 2 per cent, earnings were down 9 per cent.

Margins were adversely impacted by the continuing industry Exports were again up substantially (12 per cent) to a record global over-capacity, particularly as a consequence of the Asian $92 million, demonstrating SPT’s ability to develop and crisis. With demand still soft in many domestic economies provide world-class products to other markets. in the region, imports are at a record level. SPT’s New Zealand operations continued to perform solidly, There was a marked increase in the volume of low entry price with increases in sales and profitability. point imports, particularly from China. Aggressive marketing Major changes in organisation structure were implemented campaigns specifically aimed at low cost imports enabled during the year designed to streamline operations and position SPT to gain market share. SPT for the future. These included consolidation of brand On the positive side, SPT recorded strong manufacturing gains marketing, segregating commercial and retail responsibilities, for the year despite the impact of the gas outage in Victoria and a complete reorganisation of the technical, original in the first half and also reported further improvements in equipment and export group. reducing waste levels.

Brought to you by Global Reports FAST-TRACKING PROFIT

22 23 IMPROVEMENT PRODUCT INNOVATION AND QUALITY AND CUSTOMER SERVICE ARE KEY TO FUTURE SUCCESS. GNB TECHNOLOGIES

GNB’s quality industrial batteries are providing all the back-up power to the new Stadium Australia and athletes’ village

Brought to you by Global Reports GNB Technologies continues to be recognised internationally for its quality and superior customer satisfaction, receiving awards during the year from Ford, Wal-Mart, Toyota, Advance Auto Parts, John Deere and Nippon Telegraph and Telephone, the world’s largest telephone company.

00 00

These awards were accompanied by a solid 12 per cent Elsewhere across the business, a number of major initiatives increase in sales to $1.4 billion. Continuing pressure on were undertaken during the year as GNB: selling prices in the automotive sector resulted in a lower • Launched an expanded Champion® product line to increase operating profit; however, major new customers included coverage to more than 95 per cent of lift trucks sold in Batteries Plus and a contract to supply the new Toyota Tundra North America and Europe. pick-up truck and, since the year end, Delco Remy America. • Opened an assembly facility in Douai, France, to service Internationally, the Group made good progress in growing the European industrial battery market. the industrial battery business, with European revenues • Expanded the North American Automotive branch network. up 48 per cent and the establishment of a sales and • Launched a patented QuickSmart™ battery charger/tester manufacturing assembly centre in India for the fast growing for the automotive after-market. domestic market. • Was awarded an exclusive supply contract to Advance Stationary battery sales were flat due to softness in Auto Parts, the second largest auto parts chain in North worldwide telecommunications markets, particularly Asia, America, with more than 1,500 stores. although there are promising signs of recovery. Motive power sales are up a healthy 15 per cent mainly due to sales of the sealed Champion®* battery.

*Champion® is a registered trademark of the Champion Federal Mogul Corporation

Brought to you by Global Reports Pacific Dunlop Board

Mr John T Ralph AO, Hon LLD (Melb and Qld), FCPA Chairman since August 1997 and a Non-Executive Director since 1994. He is Chairman of Foster’s Brewing Group Ltd., Deputy Chairman of the Commonwealth Bank of Australia and Telstra Corporation Ltd., a Director of The Broken Hill Proprietary Co. Ltd., Pioneer International Ltd., National Chairman of The Queen’s Trust for Young Australians, Chairman of the Australian Foundation for Science and Director of the Melbourne Business School. Resident Melbourne. Age 66.

Mr Rodney L Chadwick FCPA Managing Director and Chief Executive since July 1996, and an Executive Director since 1990, prior to which he was Managing Director of South Pacific Tyres from 1987 to 1995. He is a National Councillor of the Australian Industry Group. Appointed Victorian Branch President of the Australian Industry Group in September 1999, and Chair of the Business Council of Australia’s Population Policy Steering Committee. Resident Melbourne. Age 53.

Mr Anthony B Daniels OAM Non-Executive Director since 1997. A Director of the Australian Gaslight Company, Pasminco Ltd., Orica Ltd., IBJ Australia Bank and Capral Aluminium Ltd., he was formerly Managing Director of Tubemakers Australia. Resident Sydney. Age 64.

Mr Robert B Hershan BComm, ASCPA Appointed an Executive Director in 1995, Chairman of Pacific Brands, of which he was Managing Director from 1986 to 1999. President of the Textile Fashion Industry Association, Chairman of the Textiles, Clothing & Footwear Advisory Board and a member of the Defence and Industry Advisory Council. Joined the Company in 1978. Resident Melbourne. Age 51.

Ms Margaret A Jackson BEcon, MBA, FCA Non-Executive Director since 1992. She is Chairman Victorian Transport Accident Commission and of the Playbox Theatre Company Pty Ltd; a Director of the Australia and New Zealand Banking Group Ltd., The Broken Hill Proprietary Co Ltd., Qantas Ltd., Brain Imaging Research Foundation, and a Board 24 25 Member of Howard Florey Institute of Experimental Physiology and Medicine. Resident Melbourne. Age 46.

Mr R J McLean BEc (Hons), MBA Non-Executive Director since 1997, he was previously Managing Director of the Australian and New Zealand practice of McKinsey & Co., and Chairman of its Asia Pacific Council. A Director of CSR Ltd. and of The Centre for Independent Studies, he is a member of the Business Advisory Group of the National Council for the Centenary of Federation. Resident Sydney. Age 53.

Professor David G Penington AC, MA, DM, BCh, FRCP, FRACP, FRCPA Non-Executive Director since 1991 and Vice Chancellor of Melbourne University from 1988 to 1995. He is Chairman of Cochlear Ltd. and of the Co-operative Research Centre for Cell Growth Factors; President of the Museum of Victoria, a Director of the Murdoch Institute for Medical Research and a principal of Foursight Pty Ltd. He was Chairman of the Premier’s Drug Advisory Council in Victoria in 1995-96. Resident Melbourne. Age 69.

Mr Ian E Webber AO, BE Non-Executive Director since 1991. He is a Director of Santos Ltd. and WMC Ltd, and a member of the General Motors Australian Advisory Council and of the Australian Advisory Board of Asea Brown Boveri Pty Ltd. Formerly Chairman of Mayne Nickless Ltd., he was an Associate Commissioner to the Post 2000 Automotive Industry Review. Resident Adelaide. Age 64.

Brought to you by Global Reports Corporate Governance

The Board works under a set of well-established corporate governance policies designed to protect further the best interests of shareholders. The policies reinforce the responsibilities of all Directors in accordance with the requirements of the Corporations Law and the Australian Stock Exchange. In addition, many of the governance elements are enshrined in the Company’s Constitution. Responsibilities The Board’s responsibilities and duties include the following: • reviewing and determining with management strategic direction and policies, allocation of resources, planning for the future and succession planning; • appointing the Chief Executive Officer for the ongoing management task of developing and implementing suitable business strategies consistent with the Company’s policies and strategic direction; • regularly evaluating the performance of the Chief Executive Officer and senior management, and determining their remuneration; • continuously monitoring and overseeing the Company’s financial position, including the audit process; and • ensuring that the conduct of the Company and its officers is legally and ethically of the highest order, and that working practices in all operations give priority to health and safety. Pacific Dunlop places high priority on risk identification and management throughout the group’s operations, and has processes in place to review their adequacy. These include: • a comprehensive risk control program, which includes property protection and health, safety and environmental audits using underwriters, self-audits, engineering and professional advisers; and • a process for the identification and measurement of business risk. In carrying out its duties, the Board meets formally over one or two days, at least eight times during the year. Directors also participate in meetings of various Board Committees (see page 27) which assist the full Board in examining particular areas or issues. Board Composition The Board’s policy is that there should be a majority of non-Executive Directors. This is a requirement embodied in the Company’s Constitution ensuring that all Board discussions or decisions have the benefit of predominantly outside views and experience. Maintaining a balance of experience and skills is an important factor in Board composition. The requirement under the Constitution is for at least twice as many non-Executive Directors as Executive Directors. As an additional safeguard in preserving the value of Board independence, the office of Chairman cannot be held by an Executive Director. Any Director can seek independent professional advice at the Company’s expense in the furtherance of his or her duties, subject to prior discussion with the Chairman. If this occurs, the Chairman must notify the other Directors of the approach and any resulting advice received. Election Process The Pacific Dunlop Board currently has eight Directors. Of these, six are non-Executive Directors (including the Chairman) and two are Executive Directors (including the Managing Director). The Constitution requires a minimum of five Directors, with a maximum of 15. New Directors are nominated by the Board after a careful process referred to below, and then must receive shareholder endorsement by ordinary resolution at the next Annual General Meeting. All Directors other than the Managing Director are required to seek re-election every three years on a rotating basis.

Brought to you by Global Reports Corporate Governance continued

Remuneration Non-Executive Directors are paid an annual fee within a fixed amount approved for all non-Executive Directors by shareholders. The total annual amount approved for Pacific Dunlop is currently $750,000, which was approved in 1989. The fees take into account what is paid by comparable companies and what is necessary to attract high calibre people. Retirement benefits based on period of service are paid in accordance with a schedule previously approved by shareholders and the Corporations Law. As members of management, Executive Directors do not receive fees or Directors’ retirement benefits. They are members of the Company’s Superannuation Fund and, as such, they receive Company retirement benefits. Directors’ Dealings in Shares Subject to the restriction that persons may not deal in any securities when they are in possession of price-sensitive information, Directors generally may only buy or sell Pacific Dunlop shares in the periods immediately following any price-sensitive announcements, including the half-year and full- year results and Annual General Meeting. At other times, transactions must receive the approval of the Board. Board and Committee Meetings The number of Board and Committee meetings held during the period the Director was a member of the Board or Committee and the number of meetings attended during that period are set out below: Attendance at Board and Board Committee Meetings during the year ended 30 June 1999

Board Audit Corporate Remuneration Nominations Donations Conduct* Held Attd Held Attd Held Attd Held Attd Held Attd Held Attd J T Ralph 12 12 3311 R L Chadwick 12 12 3 3 1 1 26 27 A B Daniels 12 12 333311 C B Goode 12 12 4 3 3 2 1 1 R B Hershan 12 11 M A Jackson 12 11 4 4 3 2 1 1 R J McLean 12 12 4 4 3 3 D G Penington 12 12 3333 11 I E Webber 12 11 3211 *The Corporate Conduct Committee will in future meet as a Safety, Health and Environment Committee and separately as a Corporate Conduct and Compliance Committee. Attd – Indicates the number of meetings attended during the period. Mr C B Goode retired from the Board on 30 June 1999.

Brought to you by Global Reports Relevant Interests The relevant interests of each of those Directors in the share capital of the Company as at the date of this Report (or in the case of Mr C B Goode, at 30 June 1999 upon his retirement from the Board), as notified to the Australian Stock Exchange Limited pursuant to the provisions of section 235 of the Corporations Law, were: 1234 J T Ralph 60,100 R L Chadwick 451,400 170,000 1,800,000 A B Daniels 5,000 C B Goode 148,500 50,000 R B Hershan 70,866 370,000 600,000 M A Jackson 95,500 1,718,900 R J McLean 10,000 D G Penington 22,700 40,000 I E Webber 67,265 1 Beneficially held in own name, or in the name of a trust, nominee company or private company. 2 Beneficial, paid to 1 cent. 3 Beneficial, Executive Share Options. 4 Non-Beneficial. No interests were held in the shares of any related body corporate. For details of Options over shares held by Messrs Chadwick and Hershan, see Note 4 on page 44. Board Committees The Board has six committees which are designed to add to the quality and depth of advice. Those committees which are concerned with specific management-related matters, the structure of the Board, Director nominations and executive remuneration are made up of non-Executive Directors only. Senior executives attend Board and Committee meetings by invitation whenever particular matters arise which require management presentations or participation. Audit Committee The Committee reviews the financial statements, adequacy of financial controls and the annual audit arrangement. It monitors controls and financial reporting systems, applicable Company policies, national and international accounting standards, and other regulatory or statutory requirements.

Audit Committee Membership at 10 September 1999 Ms Margaret Jackson (Chairman) Mr Tony Daniels Mr Robert McLean

The Committee also liaises with the Company’s internal and external auditors, reviews the external auditors’ remuneration and advises the Board on their appointment. The Committee reviews the processes in place for the identification, management and reporting of business risk, and reviews the findings reported. The Managing Director, Executive General Manager – Finance, Group Chief Accountant and principal external audit partner participate at meetings by invitation. The Audit Committee also has discussions without management and auditors present. Donations Committee This Committee advises on policy and recommendations for corporate donations.

Donations Committee Membership at 10 September 1999 Professor David Penington (Chairman) Ms Margaret Jackson Mr Rod Chadwick

Brought to you by Global Reports Corporate Governance continued

Safety, Health and Environment and Corporate Conduct and Compliance Committees These Committees, which were previously encompassed within a single Corporate Conduct Committee, deal with ethical and public issues which may affect Pacific Dunlop and compliance with the rules and regulations which the Company must observe. These include corporate governance matters, ethics, risk management, insurance, public and product liability, environment, health and safety, taxation, trade practices and competition policy, fair dealing and insider trading. Separation into two Committees will allow more detailed consideration to be given to all issues, and where appropriate outside expertise and advice can be presented more effectively during the Committees’ meetings.

Membership for both Committees at 10 September 1999 Professor David Penington (Chairman) Mr Tony Daniels Mr Rod Chadwick Mr Ian Webber

Nominations Committee This Committee periodically reviews the structure of the Board and recommends changes when necessary. This includes identifying suitable candidates for appointment as non-Executive Directors. In doing so, the Committee establishes the policies and criteria for Non-Executive Director selection. The criteria include the candidate’s personal qualities, professional and business experience, age, city and country of residence and availability.

Nominations Committee Membership at 10 September 1999 Mr John Ralph (Chairman) Mr Ian Webber Mr Tony Daniels

Remuneration and Evaluation Committee This Committee comprises only the non-Executive Directors. Its brief is to consider matters including succession and senior executive compensation policy.

28 29 Remuneration and Evaluation Committee Membership at 10 September 1999 Mr John Ralph (Chairman) Mr Robert McLean Mr Tony Daniels Professor David Penington Ms Margaret Jackson Mr Ian Webber

The Committee is also responsible for an appraisal of its own and the full Board’s performance based on the experience of the non-Executive Directors in other companies and fields, their own information and assessment received externally, and information received through management. The Committee has available independent professional advisers in line with Pacific Dunlop’s policy of attracting high calibre people at all levels and to ensure that the terms and conditions offered by the Company are competitive with those offered by comparable companies. The Committee meets at least twice yearly. The Executive General Manager – Strategic Human Resources attends by invitation the meetings concerned with remuneration matters. Staff Superannuation Ms Margaret Jackson, a Non-Executive Director, represents the Company on the Board of Trustees of the Company’s staff superannuation funds in Australia. Political Donations During the year, the Board approved donations to political parties at the Federal and State levels totalling $80,000.

Brought to you by Global Reports Report of the Directors

This Report by the Directors of Pacific Dunlop Limited (‘the Company’) is made for the year ended 30 June 1999 pursuant to Division 1 of Part 2M.3 of the Corporations Law. Directors The names of each person who has been a Director of the Company during or since the end of the financial year, the relevant interests of each of those Directors in the share capital of the Company and any related body corporate that have been notified to Australian Stock Exchange under the provisions of section 235 of the Corporations Law and particulars of the qualifications, experience and special responsibilities of each Director as at the date of this Report, and of their other Directorships are as set out on pages 24 to 29. Details of meetings of the Company’s Directors (including Meetings of Committees of Directors), and Directors’ attendance thereat, are set out on page 26. At the date of this Report there is an Audit Committee of the Board comprising Ms M A Jackson (Chair) and Messrs A B Daniels and R J McLean. Principal activities The principal activities of the Group during the year were the marketing, distribution, sale and manufacturing of examination, medical and industrial gloves and condoms, cables and engineered products, automotive and industrial batteries, metals recovery, household products, sporting goods, clothing, footwear, automotive and electrical products and tyres. Significant changes in the nature of the principal activities of the Group during the year included: • Effective 2 June 1999, the Company sold its Australasian and Sri Lankan Cable businesses for a cash price of $300 million, plus an earn-out provision of up to $16 million over the next two years. The results for the year include 11 months of the Cables Division. • Negotiations for the sale of GNB Technologies as referred to in the previous year’s Report, were terminated on 17 June 1999, following the failure by the purchaser, Quexco Incorporated of the US, to complete the transaction at the previously agreed price of US$500 million. While the GNB operations remained intact throughout the sale process, competition activity during the period of uncertainty, together with easing demand in some markets, led to GNB’s full year result being below that of the previous year. Dividends The following amounts have been paid by Pacific Dunlop Limited by way of dividends to its shareholders since the end of the previous financial year: • as shown in last year’s Report, an interim ordinary dividend of 7.0 cents per share (franked to the extent of 60 per cent for the purposes of the Income Tax Assessment Act) in respect of the year ended 30 June 1998, paid on 1 July 1998, totalling $72,059,000; • as shown in last year’s Report, a final ordinary dividend at the rate of 7.0 cents per share (unfranked) in respect of the year ended 30 June 1998, paid on 4 November 1998, totalling $72,059,000; • an interim ordinary dividend of 7.0 cents per share (unfranked) in respect of the year ended 30 June 1999, paid on 1 July 1999, totalling $72,219,000. In addition, a final ordinary dividend of 7.0 cents per share (unfranked) in respect of the year ended 30 June 1999 has been declared, payable on 3 November 1999 to shareholders registered on 5 October 1999.

Brought to you by Global Reports Report of the Directors continued

Executive Share Plan As previously reported, the Pacific Dunlop Executive Share Plan was closed to new members effective 12 September 1996, and no further issues of Executive Plan Shares will be made. During the financial year, the amounts outstanding on 2,103,000 existing Executive Plan Shares were fully paid (of which 486,000 shares were shown in the previous year’s Report). Since the end of the financial year, the amounts outstanding on a further 564,500 Executive Plan Shares have been fully paid. Employee Share Plan During the financial year, the loan liability of members in respect of 607,458 fully paid ordinary shares of 50 cents each was discharged (of which 139,539 shares were shown in the previous year’s Report). Since the end of the financial year, the loan liability in respect of a further 539,165 fully paid shares has been so discharged. Under the Employee Share Plan, 10 cents was payable on subscription for each Plan share allotted to eligible employees, the balance of issue price being funded by way of interest free loans from the Company to the member. No new shares were issued during the financial year or up to the date of this Report under the Pacific Dunlop Employee Share Plan. Performance in relation to Environmental Regulations The Group’s Australian operations are subject to environmental regulation in each of the States or Territories in which activities are carried out. While a wide variety of licences are held, the regulations under which these licences are issued apply not only to the Group, but across the industries involved, and include waste and storm water management, air emissions, dust and noise control, spillage and contamination issues, and dangerous and controlled substances (including their storage and disposal). The Group has an established environmental management system, which reports regularly to the Conduct and Compliance Committee of the Board. The Directors are not aware of any material breaches of Australian environmental regulations during the year. Review of Operations and Results A review of the operations of the Group during the financial year and the results of those operations 30 31 is contained on pages 14 to 23. The consolidated operating profit of the Group for the year after providing for income tax was $199.8 million before abnormal items, and was $105.8 million after abnormal items. In the opinion of the Directors, other than as referred to in this report, there were no significant changes in the state of affairs of the Group.

Brought to you by Global Reports Events after balance date Since the end of the financial year, the following matters or circumstances have arisen that have significantly affected, or may significantly affect, the operations, results of operations or state of affairs of the Group in subsequent financial years: • On 20 August 1999, GNB Technologies announced plans to idle its lead-acid battery recycling facility in Columbus, Georgia, US. This is expected to lead to an indefinite suspension of operations at the facility from the end of October 1999. • On 26 August 1999, Pacific Distribution and Atkins Carlyle Ltd. announced the signing of a Memorandum of Understanding for the formation of a Joint Venture marketing organisation to merge their automotive wholesaling operations, excluding specialty businesses, in which each company will hold 50 per cent equity. Trading is expected to commence in October 1999. Likely developments Certain likely developments in the operations of the Group, and the expected results of those operations, in financial years subsequent to the financial year ended 30 June 1999, are referred to above and in the Chairman’s Message and Managing Director’s Review. In the opinion of the Directors it would be likely to result in unreasonable prejudice to the Group if further information was to be included. Directors’ and Senior Executives’ Emoluments The Board’s Remuneration and Evaluation Committee is responsible for reviewing the remuneration policies and practices of the Company, including the compensation arrangements for Executive Directors and senior management, the Company’s superannuation arrangements and, within the aggregate amount approved by shareholders, the fees for non-executive members of the Board. This role also includes responsibility for the Company’s employee share and option plans. Executive and senior management performance review and succession planning are matters referred to and considered by the Committee. The Remuneration and Evaluation Committee has access to independent advice and comparative studies on the appropriateness of remuneration arrangements. Non-Executive Directors – As indicated above, within the aggregate amount approved by shareholders, the fees of the Chairman and non-Executive Directors are set at levels which represent the responsibilities of, and the time commitments provided by, those Directors in discharging their duties. Regard is also had to the level of fees payable to non-Executive Directors of comparable companies. Senior Executives – Remuneration levels are competitively set to attract, retain and motivate appropriately qualified and experienced senior executives capable of discharging their respective responsibilities. Remuneration packages of senior executives incorporate both short and long-term performance based components. Short-term performance based components include bonus payments, while long-term performance based components are in the form of equity participation through the Pacific Dunlop Executive Share Option Plan. Options issued under the Plan are linked to the longer-term performance of the Company and are only exercisable following the satisfaction of performance hurdles that are designed to maximise shareholder wealth.

Brought to you by Global Reports Report of the Directors continued

During the financial year, Options over unissued shares were granted to the officers shown below as part of their remuneration. No Options have been granted since the end of the financial year and no Options have been exercised at the date of this Report. Details of Options previously granted by the Company are set out in Note 4 on page 44. The following table sets out the remuneration provided to the Directors and the most highly remunerated officers of the Company and the Group (including those based overseas) for the financial year.

Fixed Fees Incentives Superannuation Total Options Remuneration(a) Contributions(e) Granted(f) A$ A$ A$ A$ A$ Executive Directors R L Chadwick 746,133 – 88,839(b) 142,265 977,237 R B Hershan 572,761 – – 109,379 682,140 Non-Executive Directors J T Ralph – 201,470(g) – 12,600 214,070 D G Penington – 145,218 – 10,165 155,383 M A Jackson – 97,500 6,825 104,325 A B Daniels – 65,224 4,566 69,790 R J McLean – 65,000 4,550 69,550 C B Goode(h) – 65,000 – 4,550 69,550 I E Webber – 61,365 – 4,295 65,660 Officers of the Company and the Group A W Stobart(i) 353,882 – 704,000(c) 63,312 1,121,194 375,000 T O Minner(j) 729,411 – 256,351(b) – 985,762 H Boon(j) 870,425 – – 96,410 966,835 J P Farnik 484,371 – 75,000(d) – 559,371 600,000 P R Gay 435,988 – – 78,263 514,251 32 33 J A Eady 428,079 – – 72,530 500,609 450,000 I D Veal 413,379 – – 74,506 487,885

(a)Comprises the cost to the Company of cash salary, non-cash benefits, such as motor vehicles, housing loans and home office expenses,and expatriate assignment costs. Fringe benefits tax is included where applicable. (b)Performance-based incentive. (c)Includes performance-based incentive and incentive relating to facilitation of sale of business. (d)Sign-on incentive. (e)Imputed notional contribution calculated at an actuarial rate or to satisfy Superannuation Guarantee requirements. No amounts were required to be paid to the superannuation fund in respect of the year ended 30 June 1999 upon advice of the Trustee. These amounts do not form part of the remuneration of Directors and Executives set out in Note 28 to the Financial Statements. (f) Options granted during the year under the Executive Share Option Plan were issued in three equal tranches at an exercise price of $3.30 when the market value was $2.85 and will expire if not exercised by 11 December 2002. As noted below, 375,000 of these Options have already lapsed. Details of the Exercise Conditions that must be satisfied before the Options vest and the Exercise Periods are set out in Note 4. The value of each Option using a Monte Carlo simulation model, as referred to in Note 4, is approximately 45 cents, but they will have no value if the performance hurdles are not met. (g)Includes provision of vehicle and office facilities. (h)Retired 30 June 1999. (i) Transferred 31 May 1999 upon sale of business. (375,000 Options, plus 225,000 previously allocated, lapsed at that date). (j) US-based officers.

Brought to you by Global Reports Indemnity No Director or Officer of the Company has received the benefit of an indemnity from the Company during or since the end of the year, except that, as stated in previous reports, Article 138 of the Company’s Articles of Association also provides an indemnity in favour of officers (including the Directors and Company Secretary) of the Company against liabilities incurred while acting as such officers to persons (excluding Group companies) to the extent permitted by law. Convertible Bonds The Company has no Convertible Bonds on issue. Share Buy-Back The Company did not buy back any shares during the year, and there is not a current on-market buy-back program. Rounding Pacific Dunlop Limited is a company of the kind referred to in Australian Securities and Investments Commission Class Order 98/100 (as in force on 30 June 1999) and, unless otherwise shown, amounts in this Report have been rounded off to the nearest one hundred thousand dollars. This Report is made in accordance with a resolution of the Board of Directors and is signed for and on behalf of the Directors.

J T Ralph Director

R L Chadwick Director Dated at Melbourne this 10th day of September 1999.

Brought to you by Global Reports Discussion and Analysis of the Financial Statements

The following discussion and analysis is provided to assist members in understanding the concise financial report. Consolidated Operations Sales revenue for 1998/99 was $6,150 million, a 2.8 per cent increase over 1997/98, with sales from continuing operations increasing by 5.9 per cent. Earnings before interest and tax (EBIT) in 1998/99 were $360 million, compared with $326 million in 1997/98. The result includes 11 months of the Cables Group, which was sold effective 2 June 1999. Income tax expense, as a percentage of operating profit before goodwill amortisation and abnormal items, was 17.2 per cent compared with 17.3 per cent in the previous year. Profit after tax attributable to shareholders, before abnormal items, increased by 10.5 per cent to $199.8 million. An abnormal loss after tax of $94 million was recorded in relation to GNB Technologies. This has been applied in writing down the value of the loss making Columbus Smelter in the US and other impaired assets. As detailed in the Business Segments Report, international operations in 1998/99 contributed sales of $2,851 million, or 46 per cent of total sales, compared with $2,567 million, or 43 per cent of total sales, in the previous year. In addition, international operating results were $234.1 million, or 51 per cent of total operating results, compared with last year’s $253 million, or 58 per cent of total operating results. Profits from New Zealand and Asia declined by 19 per cent during the year, whilst improvement of 7 per cent in the Americas reflected a continuing strong return from Ansell. Liquidity and Capital Reserves Net cash provided by operating activities was the most significant source of funds for the Company and improved over the year, with $379 million produced in 1998/1999, compared with $281 million in 1997/98, a 35 per cent improvement. This was after a one-off payment of $116 million into the 34 35 Accufix Settlement Fund. Net cash used in investing activities was $3.2 million. This included an inflow of $245 million from the sale of businesses, primarily related to the sale of the Cables Group. An additional $28.1 million was received from the sale of plant and equipment. These net proceeds were offset by cash outflows of $58.1 million for the purchase of businesses. Capital expenditure for the year (excluding South Pacific Tyres) was $223 million, compared with $192 million in 1997/98. This represents an increase of $31 million, the majority of which was invested in Ansell to expand capacity in respect of new products and to lower the cost base of existing manufacturing facilities. The Australian dollar strengthened against most currencies over the year, benefiting net debt (borrowings, including trade bills less cash) by $156 million, compared with a deterioration of $289 million the previous year. This, plus the improvement in cash from operations and the sale of Cables, improved the ratio of net debt to shareholders’ equity, decreasing it from 75.4 per cent last year to 64.5 per cent this year. Net liabilities to equity improved from 172 per cent in 1997/98 to 154.7 per cent in the current year.

Brought to you by Global Reports The Group maintained substantial cash reserves at 30 June 1999 of $1,021 million, compared with $945 million for the previous year. A significant amount of cash reserves result from the Group’s overseas investment hedge policy, whereby foreign currency is borrowed on a dollar for dollar basis, equal to the net assets of foreign investments. By far the largest component currency is US dollars, and the proceeds of the borrowings are converted to Australian dollars and deposited in the local money market. This policy reduces the impact of the volatile Australian dollar on Group shareholders’ funds. This policy means it is more appropriate to base assessment of the Group’s debt position on a net rather than gross debt basis. The Company has declared a final unfranked dividend of 7 cents, in line with last year, making a full year dividend of 14 cents unfranked. The Parent Company had retained earnings of $284 million at 30 June 1999. Ratings During the year, the Moody’s rating was downgraded from A2 long term to Baa1, and P1 short term to P2. The outlook remains stable. Standard & Poor’s rating is unchanged at A– (long term), and A2 (short term) with a negative outlook. The Company continues to seek ratings from these agencies to enable it to access the international debt markets. The current ratings remain strong investment grade. Interest Cost At year end, the borrowing portfolio was in the process of being lengthened as the GNB sale did not proceed. The Olex proceeds have been used initially to reduce debt where possible, with the remainder added to cash on deposit. Average maturity of the borrowing portfolio was 470 days at 30 June 1999, down marginally on the 475 days at 30 June 1998. Borrowings continue to be accessed through the Company issuing its own debt instruments in the form of commercial paper and medium term notes in a number of international markets. The facilities continued to be well received. In order to ensure continuous access to funds, the Group had bank facilities totalling US$350 million and NZ$60 million (A$578 million) as fully committed long-term backup facilities. The total interest cost increased from A$100.1 million to A$103.3 million, primarily as a result of higher borrowings for part of the year. Both interest rate and foreign exchange movements were beneficial. The average cost of interest from all sources for the year was 6.16 per cent, compared with 6.77 per cent for the previous year. Interest cover before goodwill amortisation was 3.9 times, an improvement on the previous year’s 3.7 times. Working Capital The Company’s average working capital to sales ratio in 1998/99 was 21.5 per cent, compared with 20.9 per cent in 1997/98. This is comprised of the following:

1999 1998 Average Inventory to Sales (%) 16.9 16.5 Average Debtors to Sales (%) 14.7 14.4 Average Creditors to Sales (%) 10.1 10.0

The Company continues to actively pursue strategies to reduce investment in working capital and increase stockturns.

Brought to you by Global Reports Discussion and Analysis of the Financial Statements continued

Cash Value Added Depreciation Cash Value Added analysis continues to (including amortisation 1999 1998 receive a high profile within monthly reporting lease assets) $ million $ million at each business unit. For 1998/99, only GNB GNB Technologies 45 49 did not achieve returns in excess of the Ansell 36 30 Company’s weighted average cost of capital. South Pacific Tyres (100%) 39 36 The creation of Shareholder Value remains Pacific Distribution 21 21 our primary objective. Pacific Brands 25 27 Other 29 28 Capital Expenditure During 1998/99, the Company’s capital Sales Revenue

expenditure totalled $223 million (excluding $ billion South Pacific Tyres), compared with the 1997 5.8 depreciation for the year of $156 million and 1998 6.0 the previous year’s capital expenditure of $192 1999 6.1 million. During the last fiscal year the Company invested in property, plant and equipment at a Capital Expenditure rate 1.4 times its annual depreciation charge. $ million In the previous fiscal years 1998 and 1997, 1997 198 the figure was 1.2 and 1.3 times respectively. 1998 192 Research and Development 1999 223

Pacific Dunlop does not operate a central Factories by Region research and development function. Each 1999 1998 business segment undertakes research 53 and development appropriate for its needs. Australia 77 All associated costs are expensed as incurred. SE Asia and New Zealand 34 38 Americas 24 27 Research and Development expenditure for 36 37 Europe 1 1 continuing operations (excluding South Pacific Total 112 143 Tyres) was $37 million in 1998/99, a 16 per cent increase on the $32 million spent last year. Average Working Capital to Sales Capital Expenditure % 1997 22.3 1999 1998 (including finance leases) $ million $ million 1998 20.9 GNB Technologies 77 58 1999 21.5

Ansell 93 50 Net Liabilities to Shareholders’ Equity Ratio South Pacific Tyres (100%) 45 40 % Pacific Distribution 15 26 1997 138.0 Pacific Brands 16 26 1998 172.0 Other 22 32 1999 154.0

Assets Employed by Region

1999 % Australia 45.0 SE Asia and New Zealand 14.0 Americas 36.0 Europe 5.0

Brought to you by Global Reports Five Year Summary of Pacific Dunlop Limited and Controlled Entities for the year ended 30 June 1999

$ million 1999 1998 1997 1996 1995 Profit and Loss Sales 6,150 5,984 5,783 6,471 7,306 Depreciation 156 155 149 170 198 Operating EBIT 401 366 373 386 563 Goodwill amortisation 41 40 36 37 26 EBIT 360 326 337 349 537 Net interest expense 103 100 71 85 156 Income tax expense 51 46 83 94 122 Profit attributable 200 181 176 162 251 for six months to 30 June 97 91 92 44 100 for six months to 31 December 103 90 84 118 151 Abnormal items (94) (156) 2 (294) (157) Net profit/(loss) after abnormals 106 25 178 (133) 94 Dividends 145 144 144 143 242 Balance Sheet(f) Current assets(a) 1,999 2,059 1,975 2,278 3,386 Property, plant and equipment 1,066 1,258 1,242 1,238 1,444 Investments 148 167 189 184 195 Goodwill 403 465 469 410 490 Brand names 205 219 171 167 178 Other non-current assets 326 434 355 344 405 Total assets 4,147 4,602 4,401 4,621 6,098 Current accounts payable 726 796 778 859 863 Current net borrowings 268 422 191 134 894 Other current liabilities 515 565 470 508 616 Non-current accounts payable 14 14 6 59 75 Non-current net borrowings 781 848 825 993 1,228 Other non-current liabilities 209 265 284 275 165 Total liabilities 2,513 2,910 2,554 2,828 3,841 Net assets 1,634 1,692 1,847 1,793 2,257 Paid-up capital 1,776 515 514 511 535 Reserves (102) 1,189 1,182 1,501 1,662 Retained profits (65) (38) 116 (257) 12 Pacific Dunlop shareholders’ equity (e) 1,609 1,666 1,812 1,755 2,209 Outside equity interests 25 26 35 38 48 Total shareholders’ equity 1,634 1,692 1,847 1,793 2,257 Total funds employed(b) 2,688 2,968 2,877 3,010 4,479 Share Information Earnings per share before abnormal items (cents) 19.4 17.6 17.2 15.7 23.1 Earnings per share excluding goodwill amortisation and abnormals (cents) 23.2 21.1 20.6 19.3 25.5 Dividends per share (cents) 14 .0 14 .0 14.0 14 .0 22.5 Dividend payout ratio (%) 72.5 79.7 81.8 88.5 96.1 Net assets per share ($) 1.57 1.62 1.76 1.72 2.06 General Cash received from divestments 245 36 303 1,331 53 Net cash from operating activities 379 281 378 354 461 Capital expenditure (excluding SPT) 223 192 198 226 422 Shareholders (no.) 85,116 89,918 94,218 111,426 122,724 Employees (no.)(c) 38,438 37,424 38,148 40,671 48,234 Ratios Return on shareholders’ equity (%) 12.2 10.7 9.7 9.2 11.4 Return on funds employed (%) 14.9 12.3 13.0 12.8 12.6 Operating profit margin (%) 6.5 6.1 6.4 6.2 7.7 Average working capital to sales (%) 21.5 20.9 22.3 22.8 21.9 Interest cover (times) 3.9 3.7 4.3 3.3 3.6 Net liabilities to shareholders’ equity (%) (d) 154 172 138 158 170 Number of shares at 30 June (million) 1,027 1,024 1,021 1,013 1,060 (a)Excludes cash at bank and short-term deposits. (b)Total funds employed equals total shareholders’ equity plus net borrowings, lease liabilities and bills payable. (c)Includes 100% of South Pacific Tyres. (d)Net liabilities equals total liabilities less cash at bank and short-term deposits. (e)Refer Note 4 for details of changes in standards for dissection of shareholders’ equity. (f)Certain assets and liabilities in 1998 have been reclassified to reverse the 30 June 1998 entries to record the sale of GNB Technologies.

Brought to you by Global Reports Profit and Loss Statement of Pacific Dunlop Limited and Controlled Entities for the year ended 30 June 1999

Consolidated 1999 1998 Notes $ million $ million Revenue Sales revenue 6,150.0 5,983.5 Other revenue 333.8 122.9 Total revenue 6,483.8 6,106.4 Costs and expenses Cost of goods sold 4,277.5 4,173.2 Selling, general and administrative 1,806.7 1,553.8 Total costs and expenses 6,084.2 5,727.0 Interest expense 142.9 153.6 Operating profit before abnormal items and income tax 256.7 225.8 Abnormal items before income tax 2 (94.0) (157.5) Operating profit before income tax 162.7 68.3 Income tax attributable to operating profit 51.2 44.5 Operating profit after income tax 111.5 23.8 Outside equity interests in operating profit after income tax 5.7 (1.0) Operating profit after income tax attributable to Pacific Dunlop Limited shareholders* 105.8 24.8 (Accumulated losses)/Retained profits at the beginning of the financial year (38.2) 116.1 Adjustment to Retained profits at the beginning of the financial year on initial adoption of revised AASB 1016 Accounting for Investments in Associates – (23.3) Aggregate of amounts transferred from reserves 12.1 (11.6) 38 39 Total available for appropriation 79.7 106.0 Dividends provided for or paid Redemption of Bonds Preference Shares 0.6 – Interim and final dividends 3 144.4 144.1 Under provision for prior year interim and final dividends 0.1 0.1 Accumulated losses at end of financial year (65.4) (38.2) Summary of operating profit for the year *Operating profit after income tax attributable to Pacific Dunlop Limited shareholders 105.8 24.8 Abnormal items after income tax attributable to Pacific Dunlop Limited shareholders (94.0) (156.0) Operating profit after income tax before abnormal items attributable to Pacific Dunlop Limited shareholders 199.8 180.8 Earnings per share based on operating profit after income tax attributable to Pacific Dunlop Limited shareholders cents cents Basic earnings per share before goodwill amortisation and abnormal items 23.2 21.1 Basic earnings per share before abnormal items 19.4 17.6 Basic earnings per share inclusive of abnormal items 10.3 2.4

The above profit and loss statement is to be read in conjunction with the discussion and analysis on pages 34 to 36 and the notes to the financial statements set out on pages 42 to 48.

Brought to you by Global Reports Balance Sheet of Pacific Dunlop Limited and Controlled Entities for the year ended 30 June 1999

Consolidated 1999 1998 Notes $ million $ million Current Assets Cash 1,072.3 997.3 Receivables 987.5 978.7 Inventories 952.2 1,021.9 Prepayments 58.9 58.5 Total Current Assets 3,070.9 3,056.4 Non-Current Assets Receivables 45.8 69.8 Investments 148.4 166.9 Property, plant and equipment 1,065.8 1,257.7 Intangibles 607.8 683.4 Future income tax benefit 280.2 363.8 Total Non-Current Assets 2,148.0 2,541.6 Total Assets 5,218.9 5,598.0 Current Liabilities Accounts payable 725.7 795.8 Borrowings 1,340.3 1,419.4 Provisions 508.3 562.4 Other 7.1 2.4 Total Current Liabilities 2,581.4 2,780.0 Non-Current Liabilities Accounts payable 14.0 14.2 Borrowings 781.0 848.1 Provisions 174.9 228.2 Other 33.3 35.8 Total Non-Current Liabilities 1,003.2 1,126.3 Total Liabilities 3,584.6 3,906.3 Net Assets 1,634.3 1,691.7 Shareholders’ Equity Share Capital 4 1,776.0 514.9 Reserves (102.1) 1,188.9 Accumulated losses (65.4) (38.2) Shareholders’ equity attributable to Pacific Dunlop Limited shareholders 1,608.5 1,665.6 Outside equity interests in controlled entities 25.8 26.1 Total Shareholders’ Equity 1,634.3 1,691.7

The above Balance Sheet is to be read in conjunction with the discussion and analysis on pages 34 to 36 and the notes to the financial statements set out on pages 42 to 48.

Brought to you by Global Reports Statement of Cash Flows of Pacific Dunlop Limited and Controlled Entities for the year ended 30 June 1999

Consolidated 1999 1998 $ million $ million Cash Flows from Operating Activities Receipts from customers (excluding medical) 6,243.2 6,023.6 Payments to suppliers and employees (excluding medical) (5,683.1) (5,637.0) Net receipts from customers (excluding medical) 560.1 386.6 Payments to suppliers and employees net of customer receipts (medical) (22.5) (42.9) 537.6 343.7 Income taxes paid (42.8) (62.7) Dividends received 0.5 0.4 Net Cash Provided by Operating Activities Before Settlement Funds Payments 495.3 281.4 Amounts paid into Accufix Settlement Funds (United States) by ARI and Pacific Dunlop Ltd (116.0) – Net Cash Provided by Operating Activities 379.3 281.4 Cash Flow from Investing Activities Payments for businesses, net of cash acquired (58.1) (23.8) Payments for property, plant and equipment (222.6) (192.3) Payments for brand names (1.3) – Payment for redemption of preference shares (0.6) – Proceeds from sale of businesses, net of cash disposed 245.2 36.0 Proceeds from sale of plant and equipment in the ordinary course of business 28.1 31.9 Loans repaid 4.5 23.6 Proceeds from sale of other investments 3.4 0.8 Payments for other investments (1.8) (3.1) 40 41 Net Cash Used in Investing Activities (3.2) (126.9) Cash Flows from Financing Activities Proceeds from borrowings 9,746.3 8,025.5 Repayments of borrowings (9,754.2) (8,190.7) Net repayment of borrowings (7.9) (165.2) Proceeds from issues of shares 3.4 3.6 Lease payments (1.3) (1.4) Dividends paid (148.7) (148.7) Interest received 39.3 53.4 Interest and borrowing costs paid (149.5) (156.5) Net Cash Used in Financing Activities (264.7) (414.8) Net Increase/(Decrease) in Cash Held 111.4 (260.3) Cash at the beginning of the financial year 944.5 1,171.7 Effects of exchange rate changes on the balances of cash held in foreign currencies at the beginning of the financial year (34.6) 33.1 Cash at the End of the Financial Year 1,021.3 944.5

The above statement of cash flows is to be read in conjunction with the discussion and analysis on pages 34 to 36 and the notes to the financial statements set out on pages 42 to 48.

Brought to you by Global Reports Business Segments of Pacific Dunlop Limited and Controlled Entities for the year ended 30 June 1999

Operating Revenue Assets Employed Operating Result 1999 1998 1999 1998 1999 1998 Industries $ million $ million $ million $ million $ million $ million Protective and Healthcare Products Ansell 1,184.8 1,078.1 876.1 830.7 169.5 162.2 Industrial and Automotive Batteries GNB 1,386.2 1,235.3 945.5 1,083.5 50.9 55.4 Tyres South Pacific Tyres 1,070.3 1,049.2 686.4 658.2 72.6 79.6 Less: Goodyear Share (50%) 535.2 524.6 343.2 329.1 36.3 39.8 535.1 524.6 343.2 329.1 36.3 39.8 Consumer Goods Pacific Brands 1,204.4 1,177.4 600.9 617.6 97.1 94.6 Automotive and Electrical Distribution Pacific Distribution 1,494.2 1,467.8 578.7 588.3 77.0 64.5 5,804.7 5,483.2 3,344.4 3,449.2 430.8 416.5 Non-Core/Discontinued Businesses 410.4 514.8 254.0 456.3 30.8 19.7 6,215.1 5,998.0 3,598.4 3,905.5 461.6 436.2 Tyre Partnership Adjustment (65.1) (14.5) (211.5) (198.6) (11.4) (11.3) Y2K Compliance Costs (6.3) (3.3) Unallocated Items 87.4 122.9 151.9 210.4 (43.4) (56.1) Operating EBIT 400.5 365.5 Goodwill and Brand names 607.8 683.4 (40.6) (39.6) Earnings Before Net Interest and Tax (EBIT) 359.9 325.9 Net Consolidated Interest Expense (103.2) (100.1) Tax (51.2) (46.0) Outside Equity Interests (5.7) 1.0 Operating Results 6,237.4 6,106.4 4,146.6 4,600.7 199.8 180.8 Abnormals after tax and outside equity interests 246.4 (94.0) (156.0) Cash 1,072.3 997.3 Total Consolidated 6,483.8 6,106.4 5,218.9 5,598.0 105.8 24.8 Regions Australia 3,364.2 3,431.0 1,615.3 1,790.4 227.5 183.2 Asia and New Zealand 613.6 574.2 508.7 567.5 88.4 109.0 America 1,870.6 1,695.2 1,284.2 1,375.6 145.8 135.9 Europe 366.7 297.6 190.2 172.0 (0.1) 8.1 6,215.1 5,998.0 3,598.4 3,905.5 461.6 436.2

Prior year comparatives have been adjusted for reclassification of former Industry Segment businesses which are now subject to sale or abandonment and hence classified as Non-Core/Discontinued. The above report is to be read in conjunction with the discussion and analysis on pages 34 to 36 and notes to the financial statements set out of pages 42 to 48.

Brought to you by Global Reports Notes to the Financial Statements

Note 1 Basis of Preparation of Concise Financial Report The concise financial report has been prepared in accordance with the Corporations Law, Accounting Standard AASB 1039 ‘Concise Financial Reports’ and applicable Urgent Issues Group Consensus Views. The financial statements and specific disclosures required by AASB 1039 have been derived from the consolidated entity’s full financial report for the financial year. Other information included in the concise financial report is consistent with the consolidated entity’s full financial report. The concise financial report does not, and cannot be expected to, provide as full an understanding of the financial performance, financial position and financing and investing activities of the consolidated entity as the full financial report. It has been prepared on the basis of historical costs and, except where stated, does not take into account changing money values or current valuations of non-current assets. These accounting policies have been consistently applied by each entity in the consolidated entity and, except where there is a change in accounting policy, are consistent with those of the previous year. Where necessary, comparative information has been reclassified to achieve consistency in disclosure with current financial year amounts and other disclosures. Reinstatement of GNB The 1998 comparatives set out in these accounts differ from those published in the Pacific Dunlop 1998 Annual Report. Comparatives for the consolidated entity have been amended to include the assets and liabilities of the GNB (Batteries) Group (‘GNB’) following the abandonment of the sale to Quexco Inc. of the US. 1998 Annual Report The 1998 Annual Report accounted for GNB as a business sold during that year. This accounting treatment was adopted as the sale process, at 30 June 1998, was substantially complete and the signing of the contract on 6 July 1998 provided further evidence of a condition precedent. After providing for additional environmental costs attributable to the business and which arose from the various due diligence processes, and after providing for other costs and asset adjustments associated with the transaction, the Profit and Loss for the 1998 year included a loss of $88 million. The amount receivable 42 43 under the contract of sale was equal to the carrying value of the net assets subject to sale. Accordingly the net assets of GNB were reclassified under one caption ‘Proceeds Receivable on Sale of GNB’ and included within current receivables. 1999 Annual Report The 1998 comparatives have been restated to allocate the ‘Proceeds Receivable on Sale of GNB’ amount back into the appropriate asset and liability captions. No gain or loss arises from this process, as the environmental and other amounts provided for in 1998 have been expended, or remain as liabilities. Furthermore the incremental loss reported in the consolidated entity’s 31 December Half-Year Financial Report of $94 million arising from the renegotiation of the sale price has not been reversed following abandonment of the sale. This loss arose from price negotiation in respect of certain GNB assets. The Company considers that the renegotiation was a clear indication of impairment of value of those assets and accordingly those balances have been fully provided for as an abnormal loss in the 1999 profit and loss.

Brought to you by Global Reports Consolidated 1999 1998 Note 2 $ million $ million Abnormal Items GNB environmental and fair value adjustments (94.0) (88.0) Net charge following creation of Accufix Settlement Funds in the United States of America – (69.5) Income tax benefit – 1.5 Abnormal Items after Income Tax attributable to Pacific Dunlop Limited shareholders (94.0) (156.0) Analysis of Abnormal Items Abnormal items before income tax (94.0) (157.5) Income tax benefit on abnormal items – 1.5 Abnormal Items after Income Tax attributable to Pacific Dunlop Limited shareholders (94.0) (156.0) The Company 1999 1998 Note 3 $ million $ million Dividends Paid and Proposed Dividends paid or declared by the Company are: (a) an interim dividend of 7 cents (1998 – 7 cents) unfranked (1998 – franked to 60%) was paid on 1 July 1999 72.2 72.0 (b) a final dividend of 7 cents (1998 – 7 cents) unfranked (1998 – unfranked) has been declared by the Directors 72.2 72.1

Dividend Franking Account The balance of available franking credits in the franking account as at 30 June 1999 was Nil (1998 – $1.3 million). The final dividend is unfranked.

Brought to you by Global Reports Notes to the Financial Statements continued

Consolidated 1999 1998 Note 4 $ million $ million Share Capital Paid up Capital 1,026,781,984 (1998 – 1,024,071,526 of 50 cents par value each) ordinary shares, fully paid* 1,773.4 512.0 4,975,187 (1998 – 5,582,645 of 50 cents par value each) ordinary plan shares, fully paid* 2.5 2.8 11,433,400 (1998 – 13,536,400 of 50 cents par value each) ordinary plan shares, paid to 1 cent* 0.1 0.1 1,776.0 514.9

*The Company Law Review Act 1998 (‘the Act’) came into effect on 1 July 1998. The Act abolished par value shares, and any amount standing to the credit of the share premium reserve and capital redemption reserve became part of the Company’s share capital on 1 July 1998. As a result the balance of the share premium reserve and capital redemption reserve amounting to $1,229.6 million and $28.0 million respectively became part of the share capital account on 1 July 1998 increasing the share capital on that date to $1,772.5 million. From 1 July 1998 share capital does not have a nominal (par) value. Options – At the date of this report 8,835,000 unissued ordinary shares in the Company remain under option. Options to Managing Director Options to subscribe for up to 1,800,000 unissued ordinary shares in the Company remain on issue to the Managing Director, in accordance with an approval received from shareholders at the Annual General Meeting on 15 November 1996, at an exercise price of $2.80 per share. The options expire on 14 November 2001 and are exercisable in three separate tranches of 600,000 options between 1 and 14 November 1999, 2000 and 2001, only where, in relation to each separate tranche of options, two separate performance conditions are satisfied, details of which were set out in last year’s Report. Executive Share Option Plan 7,035,000 unissued ordinary shares are subject to options granted under the Pacific Dunlop Executive 44 45 Share Option Plan, including 600,000 options granted to Mr R B Hershan, an Executive Director. The exercise price of each option, which may be increased by the amount (if any) by which the increase in the Consumer Price Index over the period of the options exceeds the dividend yield upon the Company’s shares, was $3.30. The options expire on 11 December 2002, and are exercisable in three tranches of equal amount during a period commencing, in the case of tranche 1 on 13 November 2000; in the case of tranche 2 on 13 November 2001; and in the case of tranche 3 on 13 November 2002, and in each case ending on the expiry date, subject to satisfaction of a separate performance hurdle attaching to each tranche. The condition, or ‘hurdle’, that must be satisfied before the options can be exercised is that the total return to shareholders (i.e. growth in share price plus dividends reinvested) in respect of Pacific Dunlop shares exceeds the simple average total return to shareholders in a selected group of major listed companies over comparable periods in respect of each tranche of options. Upon exercise the options carry the right to any bonus share issued by the Company during the life of the option, but do not carry any right to participate in any other share issue of the Company or any other body corporate, and no options have been exercised at the date of this Report. No determinable value has been ascribed to these options, nor included within the disclosed Executive remuneration details set out in Note 28 to the Financial Statements under Australian Generally Accepted Accounting Principles (GAAP). Under United States GAAP the compensation fair value of all options which are outstanding has been calculated at $4.6 million. The fair value of the options granted was estimated on the dates of grant using a Monte Carlo simulation model with the following assumptions for 1999, 2000, 2001 and 2002 respectively: risk free interest rate of 5.94 per cent for all years; total shareholder return of 13.08 per cent for all years; expected lives of three years, four years and five years; and volatility of 27.8 per cent for all years.

Brought to you by Global Reports Consolidated 1999 1998 Note 5 $ million $ million Contingent Liabilities Secured Other amounts arising in the ordinary course of business 0.8 4.8 Unsecured Other amounts arising in the ordinary course of business 1.2 31.2 2.0 36.0

Pacific Dunlop Limited has guaranteed the performance of certain controlled entities that participate in commercial paper, medium term note and bond issues. The extent of the paper issued by these controlled entities as at 30 June 1999 was $268.9 million (1998 – $355.6 million). Pacific Dunlop Limited has also guaranteed the performance of certain wholly owned controlled entities which have negative shareholders’ funds. Year 2000 Systems Operations The consolidated entity has plans in place to minimise any adverse impact in servicing its customers due to date-related issues to beyond the Year 2000. Broadly, plans cover four categories: Business systems, facilities and equipment, suppliers and customers. Potential exposures for each category have been identified and analysed, and appropriate compliance plans developed to address Year 2000 compliance. The additional expenditure for the replacement and modification of existing systems is estimated at $19 million over the three years to December 1999. The consolidated entity anticipates that its Year 2000 plans will be substantially complete however, cannot guarantee that all of its internal systems or the businesses of its customers, suppliers and utility providers will be Year 2000 ready. The Group is undertaking Business Continuity Planning across all groups to further mitigate risk. Indemnities and Guarantees As previously disclosed, a wholly owned controlled entity provided indemnities in favour of Directors of entities involved in the float of Cochlear Limited during 1996 against civil liabilities that may be incurred through participation in the float and signing of the prospectus and, in one case, from continuing to act as a Director of a controlled entity. The Company provided a guarantee in support of certain of these indemnities. As disclosed previously, the Company has entered into Deeds of Indemnity with each of the Directors of the Company and with certain officers of controlled entities, in relation to liabilities that they may incur (other than to Group companies) as Directors of the Company and Directors of certain controlled entities, respectively, to the extent permitted by law and the Company’s Constitution. At this time, no liabilities the subject of any such indemnity have been identified and, accordingly, it is not possible to quantify any financial obligation of the consolidated entity under these indemnities and of the Company pursuant to its guarantee. Accufix Litigation General Claims have been made against Accufix Research Institute, Inc. (formerly TPLC, Inc.) (‘ARI’), certain other wholly owned controlled entities of Pacific Dunlop Limited and, in some instances, Pacific Dunlop Limited (collectively ‘the Defendants’) relating to the Accufix Pacing leads models 329-701, 330-801 and 033-812 manufactured by ARI which were withdrawn in late 1994 following reports of fracture of the ‘J’ shaped retention wire, which forms part of the lead (the ‘Accufix Pacing Leads’) . Approximately 40,500 Accufix Pacing Leads were implanted worldwide between 1987 and 1994. The first lawsuit arising out of these claims was filed on 18 January 1995 in the United States. Lawsuits were subsequently filed in Canada, Australia, France, Germany, Japan, Argentina, the United Kingdom and Turkey. In Canada, Australia and the United States some of these lawsuits took the form of class or representative actions.

Brought to you by Global Reports Notes to the Financial Statements continued

Note 5 continued Canada On 3 October 1997, the Ontario Court of Justice in Canada approved a settlement between ARI and the plaintiffs in the Canadian class action comprising all persons (and their families) implanted with an Accufix Pacing Lead and resident in Canada, and also the plaintiffs in related litigation brought by certain hospitals in Canada. The settlement closed on 8 January 1999. The total amount paid under the settlement was C$22,061,266 and it has been met from proceeds received from ARl’s insurers. Australia On 16 June 1998, the Defendants’ insurers reached preliminary agreement to resolve all the claims of persons in Australia whose Accufix Pacing Leads have been, or will be, removed. This settlement was granted formal approval by the Federal Court of Australia sitting in Sydney on 11 August 1998. It is expected that this settlement will be covered by insurance, some of which may be borne by Pacific Dunlop Insurances Pte Ltd. The Australian settlement does not resolve the claims of persons with working leads (‘the Australian Monitoring Class’) who are expected to seek monetary damages. United States On 5 March 1999, the United States District Court for the Southern District of Ohio, Western Division, granted approval to a settlement intended to resolve all current and future litigation in the United States arising out of the Accufix Pacing Leads. As part of this approval process, the Court issued an order preliminarily enjoining all 495 pending lawsuits in the United States. The settlement provides that it will bind all citizens or residents of the United States implanted with an Accufix Pacing Lead and their families and will ensure that no further lawsuits relating to the Accufix Pacing Leads can be brought in the future. ARI will contribute US$78.5 million to the four funds comprising the settlement, thus applying all of its available cash resources. Pacific Dunlop Limited will contribute US$10 million. Appeals against approval of the settlement have been filed with the United States Court of Appeals for the Sixth Circuit. Whilst the Appellate Court has indicated it will expedite the hearing of the appeals, as the briefing schedule is not yet completed it is not presently possible to estimate when the appeals will be heard or when any decision on the appeals will be handed down. 46 47 Rest of World As of 30 June 1999, eight suits by individual plaintiffs are pending; two of these suits are in the United Kingdom, two in France, and one each in Japan, Germany, Argentina and Turkey. Impact The settlement in the United States, should it proceed, requires payments totalling US$88.5 million (A$144.6 million) to be made. It is expected that the exposure (if any) of Pacific Dunlop Insurances Pte Ltd to the Australian explant settlement will not exceed A$4 million. These sums were fully provided for by provisions made in the financial statements for the year ended 30 June 1998. Product liability of the nature faced by the Defendants worldwide with respect to the Accufix Pacing Lead is complex, and in the case of the Australian Monitoring Class, appears to break new ground and to be far from certain in its outcome. Taking these factors into account, and recognising that appeals with respect to the settlement in the United States remain pending, it is not possible to quantify further the exposure of the Defendants (if any) to the present claims.

Brought to you by Global Reports Encor Lead Litigation United States On 17 March 1997, a putative class action lawsuit was filed in the United States District Court for the Eastern District of California, sitting in Sacramento, California, against ARI and affiliates including Pacific Dunlop, on behalf of all United States implantees of Encor 330-854 and Encor 033-856 bipolar Telectronics passive fixation atrial ‘J’ pacemaker leads manufactured by ARI (‘Encor Pacing Leads’). 9,049 Encor 330-854 bipolar passive leads were distributed in the United States between 1989 and their voluntary withdrawal from the market in September 1995. No Encor 033-856 bipolar passive leads were distributed in the United States. The Court in Sacramento denied the application for class certification on 3 May 1999. The plaintiffs have filed a petition for permission to appeal with the United States Court of Appeals for the Ninth Circuit, and the preliminary question as to whether the appeal ought be heard is now fully briefed. No indication has been given by the Appellate Court as to when a decision may be expected. With the uncertainty surrounding the class certification matter in California, the liability (if any) of the Defendants in relation to the claims in the United States relating to Encor Pacing Leads, cannot be quantified. Ansell Latex Allergy Litigation Ansell Incorporated and Ansell Perry Inc. (together now known as Ansell Healthcare Products Inc.) and Ansell Edmont Industrial Inc. (now known as Ansell Protective Products Inc.), certain other wholly owned controlled entities of Pacific Dunlop Limited, and, in some instances, Pacific Dunlop Limited (collectively ‘the Ansell Defendants’) (along with a wide variety of manufacturers and distributors of natural rubber latex gloves), are defendants in lawsuits filed in the United States since 1993 on behalf of individuals alleging wrongful death, personal injuries and lost wages as a result of their exposure to natural rubber latex gloves. The lawsuits claim that the Ansell Defendants and other manufacturers of natural rubber latex gloves were negligent in the design and manufacture of the gloves and failed to give adequate warnings of the possibility of allergic reactions. As of 30 July 1999, there were approximately 261 such cases pending against one or more of the Ansell Defendants, representing some 50.5 per cent of cases filed against all defendants. Of these cases, 166 have been consolidated for discovery and deposition pursuant to the rules on multi-district litigation before the United States District Court for the Eastern District of Pennsylvania. The remaining 95 cases are spread through State Courts in 31 States, with the greatest concentration in California (16 cases). All of the latex glove cases are still in the discovery phase of litigation. With the uncertainty created by the multiplicity of defendants in these cases and the difficulty of determining whose natural rubber latex gloves were utilised by particular plaintiffs, the liability of the Ansell Defendants, if any, in relation to these claims cannot be quantified.

Brought to you by Global Reports Notes to the Financial Statements continued

Note 6 Environmental Matters The consolidated entity manufactures and markets a diverse range of products in many countries and, consequently, must comply with a variety of regulatory controls, mainly environmental regulations, product manufacturing and performance standards, occupational health and safety laws and regulations, import/ export regulations, tariffs and quotas. The consolidated entity believes it is in substantial compliance with all applicable regulatory controls, and any lack of compliance is not expected to have a materially adverse effect on its financial condition. As a manufacturer of, among other products, automotive and industrial batteries, polyurethane foam and tyres, as an operator of secondary lead and recycling smelters and plastic moulding facilities, environmental protection has been, and will continue to be, an important factor affecting the consolidated entity’s operations. The consolidated entity provides for identified environmental costs when the amounts of such are reasonably determinable. GNB Technologies incurred expenditure for environmental remediation and compliance activities of approximately $13 million during 1998/99. A provision of $41.2 million was made in the 1995/96 financial statements in respect of GNB Technologies’ expenses associated with the environmental remediation of previously closed sites in the US, some of them closed many years ago. The provision was increased by a further $47.4 million in 1997/98. The balance of the provision at 30 June 1999 was $77.2 million. GNB received a Notice of Violation and Proposed Consent Order dated 20 August 1998, from the Georgia Department of Natural Resources (‘Georgia DNR’), relating to certain alleged violations of the Columbus, Georgia facility’s Hazardous Waste Facility Permit No. HW-057-(S&T), the Georgia Hazardous Waste Management Act and the Georgia Rules for Hazardous Waste Management. Georgia DNR proposed a penalty of US$546,000. On or about 30 June 1999, GNB resolved its alleged liability. Under the terms of the settlement, GNB will pay US$200,000 and perform certain environmental projects over the next year for US$1.7 million. The consolidated entity has closely followed the development of US Environmental Protection Agency (‘EPA’) initiatives related to lead batteries. Management believes that the US regulations regarding lead and smelter operations will not have a materially adverse effect on the competitive position of GNB Technologies because the principal competitors of GNB Technologies in the areas of battery production and lead smelting are subject to similar regulatory requirements and because certain regulations encourage 48 49 the recycling of lead. GNB Technologies has developed several recycling programs. Recycling helps overcome the threat to the environment posed by discarded batteries and reduces the amount of virgin (i.e. newly-mined) lead that is introduced into the environment by making secondary (i.e. recycled) lead available to manufacturers of batteries (including GNB Technologies) and other products incorporating lead. In the United States, GNB Technologies’ ‘Total Battery Management’ recycling program collects used batteries and converts them into lead and plastic components for new battery manufacturing. During the year, GNB Technologies’ three US recycling plants had capacity for recycling approximately 250,000 tons of lead per year. The Columbus smelter, with a design capacity of 90,000 tons, will be idled effective October 1999. GNB Technologies also provides recycling programs for major customers which encourage consumers to return used batteries for collection and reclamation of lead, plastic and acid by GNB Technologies. The Total Battery Management System is also being implemented in Australia and New Zealand. In addition, regular review of the consolidated entity’s land and buildings, which are mainly manufacturing sites, is undertaken based on advice of independent appraisers. Within various business segments the consolidated entity monitors emerging environmental legislation and its anticipated impact on the applicable industries worldwide. For example, the Household Products Division has monitored initiatives regarding elimination of Chlorofluorocarbons (‘CFCs’), which historically were involved in the manufacture of polyurethane foam. The primary initiative has been an international accord signed in 1993/94 by numerous member nations of the United Nations (the ‘Montreal Protocol’) which bans the production or use of CFCs from its operations. Elimination of CFC usage in 1993 has not had a material adverse effect upon the consolidated entity’s financial condition or operations because its principal competitors are also subject to the requirements of the Montreal Protocol. In the ordinary course of business, the consolidated entity has maintained comprehensive general liability insurance policies covering its operations and assets. Generally, such policies exclude coverage for most environmental liabilities.

Brought to you by Global Reports Directors’ Declaration

In the opinion of the Directors of Pacific Dunlop Limited (‘the Company’) the accompanying concise financial report of the consolidated entity, comprising Pacific Dunlop Limited and its controlled entities for the year ended 30 June 1999 (a) has been derived from or is consistent with the full financial report for the financial year; and (b) complies with Accounting Standard AASB 1039 ‘Concise Financial Reports’. This declaration is made in accordance with a resolution of the Board of Directors and is signed for and on behalf of the Directors.

J T Ralph Director

R L Chadwick Director Dated at Melbourne this 10th day of September 1999

Brought to you by Global Reports Independent Auditors’ Report on Concise Financial Report to the members of Pacific Dunlop Limited

Scope We have audited the concise financial report of Pacific Dunlop Limited and its controlled entities for the financial year ended 30 June 1999 as set out on pages 34 to 36 and 38 to 48, in order to express an opinion on it to the members of the Company. The Company’s Directors are responsible for the concise financial report. Our audit has been conducted in accordance with Australian Auditing Standards to provide reasonable assurance whether the concise financial report is free of material misstatement. We have also performed an independent audit of the full financial report of Pacific Dunlop Limited and its controlled entities for the year ended 30 June 1999. Our audit report on the full financial report was signed on 10 September 1999, and was not subject to any qualification. Our procedures in respect of the audit of the concise financial report included testing that the information in the concise financial report is consistent with the full financial report and examination, on a test basis, of evidence supporting the amounts, discussion and analysis, and other disclosures which were not directly derived from the full financial report. These procedures have been undertaken to form an opinion as to whether, in all material respects, the concise financial report is presented fairly in accordance with Accounting Standard AASB 1039 ‘Concise Financial Reports’. The audit opinion expressed in this report has been formed on the above basis. Audit Opinion In our opinion the concise financial report of Pacific Dunlop Limited and its controlled entities for the year ended 30 June 1999 complies with AASB 1039 ‘Concise Financial Reports’.

KPMG Chartered Accountants

50 51 William J Stevens Partner Dated in Melbourne this 10th day of September 1999

Brought to you by Global Reports Shareholders

Details of quoted shares held in Pacific Dunlop Limited as at 31 August 1999.

Distribution of Ordinary Shareholders and Shareholdings Size of Holding Number of Shareholders Number of Shares 1 – 1,000 33,258* 38.71% 17,656,815 1.72% 1,001 – 5,000 40,390 47.02% 97,523,694 9.49% 5,001 – 10,000 7,615 8.87% 55,253,402 5.38% 10,001 – 100,000 4,393 5.11% 94,196,860 9.16% 100,001 and over 252 0.29% 762,822,512 74.25% 85,908 100% 1,027,453,283 100%

*Including 7,001 shareholders holding a parcel of shares of less than $500 in value (208 shares), based on a market price of $2.40. Percentage of the total holding of the 20 largest shareholders – 58.56 per cent. In addition to the foregoing, there were 4,091 members of the Employee Share Plan, holding 4,802,058 shares and 1,607 members of the Executive Share Plan, whose shares are paid to one cent each, holding 10,952,400 Plan shares. Voting rights as governed by the Constitution of the Company provide that each ordinary shareholder present in person or by proxy at a meeting shall have: (a) on a show of hands, one vote only; (b) on a poll, one vote for every fully paid ordinary share held.

Number of % of Fully Paid Shares Issued Twenty Largest Shareholders of 50 cents each Capital Chase Manhattan Nominees Limited 136,720,781 13.31 Westpac Custodian Nominees Limited 70,839,234 6.89 BT Custodial Services Pty Limited (Equity Account) 66,951,793 6.52 ANZ Nominees Limited 58,682,584 5.71 National Nominees Limited 56,340,528 5.48 BT Custodial Services Pty Limited 27,508,092 2.68 MLC Limited 19,805,588 1.93 Perpetual Trustees Nominees Limited 19,210,571 1.87 Queensland Investment Corporation 16,542,152 1.61 Westpac Custodian Nominees Limited (ADR Account) 16,415,653 1.60 BT Custodial Services Pty Ltd (Sub Customer Account) 14,669,319 1.43 AMP Life Limited 12,375,956 1.20 AMP Nominees Pty Limited 11,690,649 1.14 Citicorp Nominees Pty Limited 11,632,687 1.13 BT Custodians Limited 11,311,081 1.10 BT Custodial Services Pty Limited (Growth Account) 10,328,057 1.01 AXA Trustees Limited (PFM Ind Share Fund Account) 10,284,965 1.00 Perpetual Trustees Nominees Limited 10,280,087 1.00 Perpetual Trustees Australia Limited 10,045,274 0.98 BT Custodial Services Pty Limited (MFTP Account) 9,971,587 0.97 601,606,638 58.56

Register of Substantial Shareholders The names of substantial shareholders in the Company as at the date of this Report, and the number of fully paid ordinary shares in which each have an interest, as disclosed in substantial shareholder notices to the Company on the respective dates shown, are as follows: 27 July 1998 Franklin Resources Inc. and its affiliates 98,933,546 9.66% 10 August 1999 Maple-Brown Abbott Ltd. 74,108,250 7.22% 1 September 1999 Bankers Trust Australia Limited and its related companies 144,625,379 13.80%

Brought to you by Global Reports Investor Information

Annual Report All shareholders are entitled to receive a copy of the Annual Report. Those who do not wish to receive the Annual Report can have their name deleted from the mailing list by advising the Company in writing. The financial statements in this Concise Annual Report come from the Group’s full 1999 Financial Report. A copy of the full Financial Report, including the Auditors’ Report, is available from the Company’s website (www.pacdun.com) or upon request. Change of Address Shareholders should notify the Company in writing immediately there is a change to their registered address. For added protection shareholders should quote their securityholder reference number (SRN) or Holder Identification Number (HIN). Dividend A final dividend of 7 cents a share will be paid on 3 November 1999 to shareholders registered on 5 October 1999, bringing the full year dividend to 14 cents per share. The dividend will be unfranked. Australian shareholders may elect to have cash dividends paid directly into any bank, building society or credit union account in Australia. Shareholders with registered addresses in New Zealand, the UK or the US who receive cash dividends may elect to be paid by cheque in their respective currencies. Shareholders with a registered address in Canada can receive their dividends in US dollars. Company Directory The Annual Report is the main source of information for investors. Shareholders who wish to contact the Company on any matter relating to their shareholding are invited to contact the most convenient office listed below:

Australia United States United Kingdom Hong Kong Pacific Dunlop Limited Pacific Dunlop Holdings Inc. Pacific Dunlop Holdings Pacific Dunlop (Asia) Ltd Level 41, 101 Collins Street 6121 Lakeside Drive (Europe) Ltd Level 16, Tower 11 Melbourne, VIC 3000 Suite #200 Ansell House The Gateway Telephone (613) 9270 7270 Reno, Nevada 89511, USA 119 Ewell Road Harbour City Facsimile (61 3) 9270 7300 Telephone (1702) 824 4600 Surbiton, Surrey KT6 6AL Suites 1606-1611 Facsimile (1 702) 824 4626 Telephone (44181) 481 1800 25-27 Canton Road Facsimile (44 181) 481 1830 Kowloon, Hong Kong Telephone (852) 2956 6688 52 53 Facsimile (852) 2956 2155

Enquiries Financial Calendar Shareholders requiring information about their shareholdings should contact the Company’s 1999 registry at: 5 October Computershare Registry Services Pty Ltd Record date for final dividend GPO Box 2975EE 3 November Melbourne, VIC 3001 Annual General Meeting Telephone (613) 9611 5711 Facsimile (61 3) 9611 5710 3 November Listings Payment of final dividend Pacific Dunlop’s shares (Ticker symbol PDP) are listed on the Australian, New Zealand and 2000 London stock exchanges. In the US, Pacific Dunlop shares are traded in the form of American 11 February Depositary Receipts (ADRs) on NASDAQ. Each ADR unit represents four ordinary Pacific Dunlop Announcement of result shares. Cash dividends for ADRs are paid in US dollar denominated cheques and stock dividends for half-year ending are issued in the form of ADRs by the administrator of the program. ADR investors requiring 31 December 1999 information concerning their shareholdings should contact: 10 August The Administrator Announcement of result for J.P. Morgan & Co., ADR Department year ending 30 June 2000 500 Stanton Christiana Road, 2/OPS2 Newark DE 19713, USA 13 October Telephone (1302) 552 0334 Annual General Meeting Facsimile (1 302) 552 0340

Brought to you by Global Reports Directory

Registered Office Share Registry Pacific Dunlop Limited Computershare Registry Services Pty Ltd ACN 004 085 330 Level 12, 565 Bourke Street Level 41, 101 Collins Street Melbourne, VIC 3000 Melbourne, VIC 3000 Telephone (61 3) 9611 5711 Telephone (61 3) 9270 7270 Facsimile (61 3) 9611 5710 Facsimile (61 3) 9270 7300 Note: Secretary All share correspondence should be directed to the John C Rennie Share Registry. Auditors KPMG Solicitors Freehill Hollingdale & Page Head Office Directory Ansell Corporate Headquarters 200 Schulz Drive Red Bank NJ 07701 USA Telephone (1 732) 345 5400 Facsimile (1 732) 345 9695 GNB Technologies 375 Northridge Road Suite 100 Atlanta GA 30350 USA Telephone (1 770) 557 0300 Facsimile (1 770) 557 9188 South Pacific Tyres 170-180 Hume Highway Somerton, VIC 3062 Australia Telephone (61 3) 9305 0222 Facsimile (61 3) 9305 3168 Pacific Brands 25 Camberwell Road Hawthorn East, VIC 3123 Australia Telephone (61 3) 9252 2600 Facsimile (61 3) 9252 2622 Pacific Distribution 818 Glenferrie Road Hawthorn, VIC 3122 A complete copy of the financial statements can Australia be obtained from the Pacific Dunlop website: Telephone (61 3) 9810 3900 www.pacdun.com Facsimile (61 3) 9818 5179

Brought to you by Global Reports ANDY, DR SCHOLL, AMCO, NATURALISER, ENDURO, SPRINGTRED, LIGHTNING BOLT, JULIUS MARLOW REPCO, CHECKPOINT, TRADERS AUTO SPARES, APPCO, AUTO PRO, ASHDOWN, , MCLEOD TYRES, GOODYEAR AUTO SERVICE CENTRES, CHAMPION, MARSHALL, EXIDE, STOWAWAY, ABSOLYTE, DUNLOP, MARATHON, SPRINTER, ANSELL, PERRY, EDMONT, CHEC I, HESTIA, HOLEPROOF, RED ROBIN, JOCKEY, GROSBY, DREAMLAND, BONDS, SLEEPMAKER, SIMMONS, DUNLOPILLO, TONTINE, HANG TEN, JORDACHE, RIO, CANDY, DR SCHOLL, AM FRASERS, LANSON, EXPRESS PARTS CENTRES, LUCAS, PACIFIC DATACOM, DUNLOP, GOODYEAR, OLYMPIC, KELLY SPRINGFIELD, BEAUREPAIRES FOR TYRES, MCLEOD TYRES, GOODY X, GAMMEX, NUTEX, NITRILITE, GOLDEN NEEDLES, ENCORE, ELITE, OVATION, DUNLOP, SLAZENGER, NIBLICK, MAXFLI, REPCO, MALVERN STAR, BERLEI, HESTIA, HOLEPROOF, RE GTRED, LIGHTNING BOLT, JULIUS MARLOW REPCO, CHECKPOINT, TRADERS AUTO SPARES, APPCO, AUTO PRO, ASHDOWN, LAWRENCE & HANSON, CORYS FRASERS, LANSON, EXPRES PION, MARSHALL, EXIDE, STOWAWAY, ABSOLYTE, DUNLOP, MARATHON, SPRINTER, ANSELL, PERRY, EDMONT, CHECKMATE, LIFESTYLES, MATES, MANIX, GAMMEX, NUTEX, NITR MLAND, BONDS, SLEEPMAKER, SIMMONS, DUNLOPILLO, TONTINE, HANG TEN, JORDACHE, RIO, CANDY, DR SCHOLL, AMCO, NATURALISER, ENDURO, SPRINGTRED, LIGHTNING BOLT, C DATACOM, DUNLOP, GOODYEAR, OLYMPIC, KELLY SPRINGFIELD, BEAUREPAIRES FOR TYRES, MCLEOD TYRES, GOODYEAR AUTO SERVICE CENTRES, CHAMPION, MARSHALL, EXI E, ELITE, OVATION, DUNLOP, SLAZENGER, NIBLICK, MAXFLI, REPCO, MALVERN STAR, BERLEI, HESTIA, HOLEPROOF, RED ROBIN, JOCKEY, GROSBY, DREAMLAND, BONDS, SLEEPM KPOINT, TRADERS AUTO SPARES, APPCO, AUTO PRO, ASHDOWN, LAWRENCE & HANSON, CORYS FRASERS, LANSON, EXPRESS PARTS CENTRES, LUCAS, PACIFIC DATACOM, DUNLOP, G P, MARATHON, SPRINTER, ANSELL, PERRY, EDMONT, CHECKMATE, LIFESTYLES, MATES, MANIX, GAMMEX, NUTEX, NITRILITE, GOLDEN NEEDLES, ENCORE, ELITE, OVATION, DUNLO NE, HANG TEN, JORDACHE, RIO, CANDY, DR SCHOLL, AMCO, NATURALISER, ENDURO, SPRINGTRED, LIGHTNING BOLT, JULIUS MARLOW REPCO, CHECKPOINT, TRADERS AUTO SPAR GFIELD, BEAUREPAIRES FOR TYRES, MCLEOD TYRES, GOODYEAR AUTO SERVICE CENTRES, CHAMPION, MARSHALL, EXIDE, STOWAWAY, ABSOLYTE, DUNLOP, MARATHON, SPRINTE LI, REPCO, MALVERN STAR, BERLEI, HESTIA, HOLEPROOF, RED ROBIN, JOCKEY, GROSBY, DREAMLAND, BONDS, SLEEPMAKER, SIMMONS, DUNLOPILLO, TONTINE, HANG TEN, JORD WN, LAWRENCE & HANSON, CORYS FRASERS, LANSON, EXPRESS PARTS CENTRES, LUCAS, PACIFIC DATACOM, DUNLOP, GOODYEAR, OLYMPIC, KELLY SPRINGFIELD, BEAUREPAIRES KMATE, LIFESTYLES, MATES, MANIX, GAMMEX, NUTEX, NITRILITE, GOLDEN NEEDLES, ENCORE, ELITE, OVATION, DUNLOP, SLAZENGER, NIBLICK, MAXFLI, REPCO, MALVERN STAR, NATURALISER, ENDURO, SPRINGTRED, LIGHTNING BOLT, JULIUS MARLOW REPCO, CHECKPOINT, TRADERS AUTO SPARES, APPCO, AUTO PRO, ASHDOWN, LAWRENCE & HANSON, C EAR AUTO SERVICE CENTRES, CHAMPION, MARSHALL, EXIDE, STOWAWAY, ABSOLYTE, DUNLOP, MARATHON, SPRINTER, ANSELL, PERRY, EDMONT, CHECKMATE, LIFESTYLES, MATE OBIN, JOCKEY, GROSBY, DREAMLAND, BONDS, SLEEPMAKER, SIMMONS, DUNLOPILLO, TONTINE, HANG TEN, JORDACHE, RIO, CANDY, DR SCHOLL, AMCO, NATURALISER, ENDURO, SS PARTS CENTRES, LUCAS, PACIFIC DATACOM, DUNLOP, GOODYEAR, OLYMPIC, KELLY SPRINGFIELD, BEAUREPAIRES FOR TYRES, MCLEOD TYRES, GOODYEAR AUTO SERVICE CENTR LITE, GOLDEN NEEDLES, ENCORE, ELITE, OVATION, DUNLOP, SLAZENGER, NIBLICK, MAXFLI, REPCO, MALVERN STAR, BERLEI, HESTIA, HOLEPROOF, RED ROBIN, JOCKEY, GROSBY, DR S MARLOW REPCO, CHECKPOINT, TRADERS AUTO SPARES, APPCO, AUTO PRO, ASHDOWN, LAWRENCE & HANSON, CORYS FRASERS, LANSON, EXPRESS PARTS CENTRES, LUCAS, PACI AWAY, ABSOLYTE, DUNLOP, MARATHON, SPRINTER, ANSELL, PERRY, EDMONT, CHECKMATE, LIFESTYLES, MATES, MANIX, GAMMEX, NUTEX, NITRILITE, GOLDEN NEEDLES, ENCORE, ONS, DUNLOPILLO, TONTINE, HANG TEN, JORDACHE, RIO, CANDY, DR SCHOLL, AMCO, NATURALISER, ENDURO, SPRINGTRED, LIGHTNING BOLT, JULIUS MARLOW REPCO, CHECKPOINT, IC, KELLY SPRINGFIELD, BEAUREPAIRES FOR TYRES, MCLEOD TYRES, GOODYEAR AUTO SERVICE CENTRES, CHAMPION, MARSHALL, EXIDE, STOWAWAY, ABSOLYTE, DUNLOP, M NGER, NIBLICK, MAXFLI, REPCO, MALVERN STAR, BERLEI, HESTIA, HOLEPROOF, RED ROBIN, JOCKEY, GROSBY, DREAMLAND, BONDS, SLEEPMAKER, SIMMONS, DUNLOPILLO, TONT , AUTO PRO, ASHDOWN, LAWRENCE & HANSON, CORYS FRASERS, LANSON, EXPRESS PARTS CENTRES, LUCAS, PACIFIC DATACOM, DUNLOP, GOODYEAR, OLYMPIC, KELLY SPRING L, PERRY, EDMONT, CHECKMATE, LIFESTYLES, MATES, MANIX, GAMMEX, NUTEX, NITRILITE, GOLDEN NEEDLES, ENCORE, ELITE, OVATION, DUNLOP, SLAZENGER, NIBLICK, MAXFLI ANDY, DR SCHOLL, AMCO, NATURALISER, ENDURO, SPRINGTRED, LIGHTNING BOLT, JULIUS MARLOW REPCO, CHECKPOINT, TRADERS AUTO SPARES, APPCO, AUTO PRO, ASHDOWN, , MCLEOD TYRES, GOODYEAR AUTO SERVICE CENTRES, CHAMPION, MARSHALL, EXIDE, STOWAWAY, ABSOLYTE, DUNLOP, MARATHON, SPRINTER, ANSELL, PERRY, EDMONT, CHEC I, HESTIA, HOLEPROOF, RED ROBIN, JOCKEY, GROSBY, DREAMLAND, BONDS, SLEEPMAKER, SIMMONS, DUNLOPILLO, TONTINE, HANG TEN, JORDACHE, RIO, CANDY, DR SCHOLL, AM FRASERS, LANSON, EXPRESS PARTS CENTRES, LUCAS, PACIFIC DATACOM, DUNLOP, GOODYEAR, OLYMPIC, KELLY SPRINGFIELD, BEAUREPAIRES FOR TYRES, MCLEOD TYRES, GOODY X, GAMMEX, NUTEX, NITRILITE, GOLDEN NEEDLES, ENCORE, ELITE, OVATION, DUNLOP, SLAZENGER, NIBLICK, MAXFLI, REPCO, MALVERN STAR, BERLEI, HESTIA, HOLEPROOF, RE GTRED, LIGHTNING BOLT, JULIUS MARLOW REPCO, CHECKPOINT, TRADERS AUTO SPARES, APPCO, AUTO PRO, ASHDOWN, LAWRENCE & HANSON, CORYS FRASERS, LANSON, EXPRES PION, MARSHALL, EXIDE, STOWAWAY, ABSOLYTE, DUNLOP, MARATHON, SPRINTER, ANSELL, PERRY, EDMONT, CHECKMATE, LIFESTYLES, MATES, MANIX, GAMMEX, NUTEX, NITR MLAND, BONDS, SLEEPMAKER, SIMMONS, DUNLOPILLO, TONTINE, HANG TEN, JORDACHE, RIO, CANDY, DR SCHOLL, AMCO, NATURALISER, ENDURO, SPRINGTRED, LIGHTNING BOLT, C DATACOM, DUNLOP, GOODYEAR, OLYMPIC, KELLY SPRINGFIELD, BEAUREPAIRES FOR TYRES, MCLEOD TYRES, GOODYEAR AUTO SERVICE CENTRES, CHAMPION, MARSHALL, EXI E, ELITE, OVATION, DUNLOP, SLAZENGER, NIBLICK, MAXFLI, REPCO, MALVERN STAR, BERLEI, HESTIA, HOLEPROOF, RED ROBIN, JOCKEY, GROSBY, DREAMLAND, BONDS, SLEEPM KPOINT, TRADERS AUTO SPARES, APPCO, AUTO PRO, ASHDOWN, LAWRENCE & HANSON, CORYS FRASERS, LANSON, EXPRESS PARTS CENTRES, LUCAS, PACIFIC DATACOM, DUNLOP, G P, MARATHON, SPRINTER, ANSELL, PERRY, EDMONT, CHECKMATE, LIFESTYLES, MATES, MANIX, GAMMEX, NUTEX, NITRILITE, GOLDEN NEEDLES, ENCORE, ELITE, OVATION, DUNLO NE, HANG TEN, JORDACHE, RIO, CANDY, DR SCHOLL, AMCO, NATURALISER, ENDURO, SPRINGTRED, LIGHTNING BOLT, JULIUS MARLOW REPCO, CHECKPOINT, TRADERS AUTO SPAR GFIELD, BEAUREPAIRES FOR TYRES, MCLEOD TYRES, GOODYEAR AUTO SERVICE CENTRES, CHAMPION, MARSHALL, EXIDE, STOWAWAY, ABSOLYTE, DUNLOP, MARATHON, SPRINTE LI, REPCO, MALVERN STAR, BERLEI, HESTIA, HOLEPROOF, RED ROBIN, JOCKEY, GROSBY, DREAMLAND, BONDS, SLEEPMAKER, SIMMONS, DUNLOPILLO, TONTINE, HANG TEN, JORD WN, LAWRENCE & HANSON, CORYS FRASERS, LANSON, EXPRESS PARTS CENTRES, LUCAS, PACIFIC DATACOM, DUNLOP, GOODYEAR, OLYMPIC, KELLY SPRINGFIELD, BEAUREPAIRES KMATE, LIFESTYLES, MATES, MANIX, GAMMEX, NUTEX, NITRILITE, GOLDEN NEEDLES, ENCORE, ELITE, OVATION, DUNLOP, SLAZENGER, NIBLICK, MAXFLI, REPCO, MALVERN STAR, NATURALISER, ENDURO, SPRINGTRED, LIGHTNING BOLT, JULIUS MARLOW REPCO, CHECKPOINT, TRADERS AUTO SPARES, APPCO, AUTO PRO, ASHDOWN, LAWRENCE & HANSON, C EAR AUTO SERVICE CENTRES, CHAMPION, MARSHALL, EXIDE, STOWAWAY, ABSOLYTE, DUNLOP, MARATHON, SPRINTER, ANSELL, PERRY, EDMONT, CHECKMATE, LIFESTYLES, MATE OBIN, JOCKEY, GROSBY, DREAMLAND, BONDS, SLEEPMAKER, SIMMONS, DUNLOPILLO, TONTINE, HANG TEN, JORDACHE, RIO, CANDY, DR SCHOLL, AMCO, NATURALISER, ENDURO, SS PARTS CENTRES, LUCAS, PACIFIC DATACOM, DUNLOP, GOODYEAR, OLYMPIC, KELLY SPRINGFIELD, BEAUREPAIRES FOR TYRES, MCLEOD TYRES, GOODYEAR AUTO SERVICE CENTR LITE, GOLDEN NEEDLES, ENCORE, ELITE, OVATION, DUNLOP, SLAZENGER, NIBLICK, MAXFLI, REPCO, MALVERN STAR, BERLEI, HESTIA, HOLEPROOF, RED ROBIN, JOCKEY, GROSBY, DR S MARLOW REPCO, CHECKPOINT, TRADERS AUTO SPARES, APPCO, AUTO PRO, ASHDOWN, LAWRENCE & HANSON, CORYS FRASERS, LANSON, EXPRESS PARTS CENTRES, LUCAS, PACI AWAY, ABSOLYTE, DUNLOP, MARATHON, SPRINTER, ANSELL, PERRY, EDMONT, CHECKMATE, LIFESTYLES, MATES, MANIX, GAMMEX, NUTEX, NITRILITE, GOLDEN NEEDLES, ENCORE, ONS, DUNLOPILLO, TONTINE, HANG TEN, JORDACHE, RIO, CANDY, DR SCHOLL, AMCO, NATURALISER, ENDURO, SPRINGTRED, LIGHTNING BOLT, JULIUS MARLOW REPCO, CHECKPOINT, IC, KELLY SPRINGFIELD, BEAUREPAIRES FOR TYRES, MCLEOD TYRES, GOODYEAR AUTO SERVICE CENTRES, CHAMPION, MARSHALL, EXIDE, STOWAWAY, ABSOLYTE, DUNLOP, M NGER, NIBLICK, MAXFLI, REPCO, MALVERN STAR, BERLEI, HESTIA, HOLEPROOF, RED ROBIN, JOCKEY, GROSBY, DREAMLAND, BONDS, SLEEPMAKER, SIMMONS, DUNLOPILLO, TONT , AUTO PRO, ASHDOWN, LAWRENCE & HANSON, CORYS FRASERS, LANSON, EXPRESS PARTS CENTRES, LUCAS, PACIFIC DATACOM, DUNLOP, GOODYEAR, OLYMPIC, KELLY SPRING L, PERRY, EDMONT, CHECKMATE, LIFESTYLES, MATES, MANIX, GAMMEX, NUTEX, NITRILITE, GOLDEN NEEDLES, ENCORE, ELITE, OVATION, DUNLOP, SLAZENGER, NIBLICK, MAXFLI ANDY, DR SCHOLL, AMCO, NATURALISER, ENDURO, SPRINGTRED, LIGHTNING BOLT, JULIUS MARLOW REPCO, CHECKPOINT, TRADERS AUTO SPARES, APPCO, AUTO PRO, ASHDOWN, , MCLEOD TYRES, GOODYEAR AUTO SERVICE CENTRES, CHAMPION, MARSHALL, EXIDE, STOWAWAY, ABSOLYTE, DUNLOP, MARATHON, SPRINTER, ANSELL, PERRY, EDMONT, CHEC I, HESTIA, HOLEPROOF, RED ROBIN, JOCKEY, GROSBY, DREAMLAND, BONDS, SLEEPMAKER, SIMMONS, DUNLOPILLO, TONTINE, HANG TEN, JORDACHE, RIO, CANDY, DR SCHOLL, AM FRASERS, LANSON, EXPRESS PARTS CENTRES, LUCAS, PACIFIC DATACOM, DUNLOP, GOODYEAR, OLYMPIC, KELLY SPRINGFIELD, BEAUREPAIRES FOR TYRES, MCLEOD TYRES, GOODY X, GAMMEX, NUTEX, NITRILITE, GOLDEN NEEDLES, ENCORE, ELITE, OVATION, DUNLOP, SLAZENGER, NIBLICK, MAXFLI, REPCO, MALVERN STAR, BERLEI, HESTIA, HOLEPROOF, RE GTRED, LIGHTNING BOLT, JULIUS MARLOW REPCO, CHECKPOINT, TRADERS AUTO SPARES, APPCO, AUTO PRO, ASHDOWN, LAWRENCE & HANSON, CORYS FRASERS, LANSON, EXPRES PION, MARSHALL, EXIDE, STOWAWAY, ABSOLYTE, DUNLOP, MARATHON, SPRINTER, ANSELL, PERRY, EDMONT, CHECKMATE, LIFESTYLES, MATES, MANIX, GAMMEX, NUTEX, NITR MLAND, BONDS, SLEEPMAKER, SIMMONS, DUNLOPILLO, TONTINE, HANG TEN, JORDACHE, RIO, CANDY, DR SCHOLL, AMCO, NATURALISER, ENDURO, SPRINGTRED, LIGHTNING BOLT, C DATACOM, DUNLOP, GOODYEAR, OLYMPIC, KELLY SPRINGFIELD, BEAUREPAIRES FOR TYRES, MCLEOD TYRES, GOODYEAR AUTO SERVICE CENTRES, CHAMPION, MARSHALL, EXI E, ELITE, OVATION, DUNLOP, SLAZENGER, NIBLICK, MAXFLI, REPCO, MALVERN STAR, BERLEI, HESTIA, HOLEPROOF, RED ROBIN, JOCKEY, GROSBY, DREAMLAND, BONDS, SLEEPM KPOINT, TRADERS AUTO SPARES, APPCO, AUTO PRO, ASHDOWN, LAWRENCE & HANSON, CORYS FRASERS, LANSON, EXPRESS PARTS CENTRES, LUCAS, PACIFIC DATACOM, DUNLOP, G P, MARATHON, SPRINTER, ANSELL, PERRY, EDMONT, CHECKMATE, LIFESTYLES, MATES, MANIX, GAMMEX, NUTEX, NITRILITE, GOLDEN NEEDLES, ENCORE, ELITE, OVATION, DUNLO NE, HANG TEN, JORDACHE, RIO, CANDY, DR SCHOLL, AMCO, NATURALISER, ENDURO, SPRINGTRED, LIGHTNING BOLT, JULIUS MARLOW REPCO, CHECKPOINT, TRADERS AUTO SPAR GFIELD, BEAUREPAIRES FOR TYRES, MCLEOD TYRES, GOODYEAR AUTO SERVICE CENTRES, CHAMPION, MARSHALL, EXIDE, STOWAWAY, ABSOLYTE, DUNLOP, MARATHON, SPRINTE LI, REPCO, MALVERN STAR, BERLEI, HESTIA, HOLEPROOF, RED ROBIN, JOCKEY, GROSBY, DREAMLAND, BONDS, SLEEPMAKER, SIMMONS, DUNLOPILLO, TONTINE, HANG TEN, JORD WN, LAWRENCE & HANSON, CORYS FRASERS, LANSON, EXPRESS PARTS CENTRES, LUCAS, PACIFIC DATACOM, DUNLOP, GOODYEAR, OLYMPIC, KELLY SPRINGFIELD, BEAUREPAIRES KMATE, LIFESTYLES, MATES, MANIX, GAMMEX, NUTEX, NITRILITE, GOLDEN NEEDLES, ENCORE, ELITE, OVATION, DUNLOP, SLAZENGER, NIBLICK, MAXFLI, REPCO, MALVERN STAR, NATURALISER, ENDURO, SPRINGTRED, LIGHTNING BOLT, JULIUS MARLOW REPCO, CHECKPOINT, TRADERS AUTO SPARES, APPCO, AUTO PRO, ASHDOWN, LAWRENCE & HANSON, C EAR AUTO SERVICE CENTRES, CHAMPION, MARSHALL, EXIDE, STOWAWAY, ABSOLYTE, DUNLOP, MARATHON, SPRINTER, ANSELL, PERRY, EDMONT, CHECKMATE, LIFESTYLES, MATE OBIN, JOCKEY, GROSBY, DREAMLAND, BONDS, SLEEPMAKER, SIMMONS, DUNLOPILLO, TONTINE, HANG TEN, JORDACHE, RIO, CANDY, DR SCHOLL, AMCO, NATURALISER, ENDURO, SS PARTS CENTRES, LUCAS, PACIFIC DATACOM, DUNLOP, GOODYEAR, OLYMPIC, KELLY SPRINGFIELD, BEAUREPAIRES FOR TYRES, MCLEOD TYRES, GOODYEAR AUTO SERVICE CENTR LITE, GOLDEN NEEDLES, ENCORE, ELITE, OVATION, DUNLOP, SLAZENGER, NIBLICK, MAXFLI, REPCO, MALVERN STAR, BERLEI, HESTIA, HOLEPROOF, RED ROBIN, JOCKEY, GROSBY, DR S MARLOW REPCO, CHECKPOINT, TRADERS AUTO SPARES, APPCO, AUTO PRO, ASHDOWN, LAWRENCE & HANSON, CORYS FRASERS, LANSON, EXPRESS PARTS CENTRES, LUCAS, PACI AWAY, ABSOLYTE, DUNLOP, MARATHON, SPRINTER, ANSELL, PERRY, EDMONT, CHECKMATE, LIFESTYLES, MATES, MANIX, GAMMEX, NUTEX, NITRILITE, GOLDEN NEEDLES, ENCORE, ONS, DUNLOPILLO, TONTINE, HANG TEN, JORDACHE, RIO, CANDY, DR SCHOLL, AMCO, NATURALISER, ENDURO, SPRINGTRED, LIGHTNING BOLT, JULIUS MARLOW REPCO, CHECKPOINT, IC, KELLY SPRINGFIELD, BEAUREPAIRES FOR TYRES, MCLEOD TYRES, GOODYEAR AUTO SERVICE CENTRES, CHAMPION, MARSHALL, EXIDE, STOWAWAY, ABSOLYTE, DUNLOP, M NGER, NIBLICK, MAXFLI, REPCO, MALVERN STAR, BERLEI, HESTIA, HOLEPROOF, RED ROBIN, JOCKEY, GROSBY, DREAMLAND, BONDS, SLEEPMAKER, SIMMONS, DUNLOPILLO, TONT , AUTO PRO, ASHDOWN, LAWRENCE & HANSON, CORYS FRASERS, LANSON, EXPRESS PARTS CENTRES, LUCAS, PACIFIC DATACOM, DUNLOP, GOODYEAR, OLYMPIC, KELLY SPRING L, PERRY, EDMONT, CHECKMATE, LIFESTYLES, MATES, MANIX, GAMMEX, NUTEX, NITRILITE, GOLDEN NEEDLES, ENCORE, ELITE, OVATION, DUNLOP, SLAZENGER, NIBLICK, MAXFLI ANDY, DR SCHOLL, AMCO, NATURALISER, ENDURO, SPRINGTRED, LIGHTNING BOLT, JULIUS MARLOW REPCO, CHECKPOINT, TRADERS AUTO SPARES, APPCO, AUTO PRO, ASHDOWN, , MCLEOD TYRES, GOODYEAR AUTO SERVICE CENTRES, CHAMPION, MARSHALL, EXIDE, STOWAWAY, ABSOLYTE, DUNLOP, MARATHON, SPRINTER, ANSELL, PERRY, EDMONT, CHEC I, HESTIA, HOLEPROOF, RED ROBIN, JOCKEY, GROSBY, DREAMLAND, BONDS, SLEEPMAKER, SIMMONS, DUNLOPILLO, TONTINE, HANG TEN, JORDACHE, RIO, CANDY, DR SCHOLL, AM FRASERS, LANSON, EXPRESS PARTS CENTRES, LUCAS, PACIFIC DATACOM, DUNLOP, GOODYEAR, OLYMPIC, KELLY SPRINGFIELD, BEAUREPAIRES FOR TYRES, MCLEOD TYRES, GOODY X, GAMMEX, NUTEX, NITRILITE, GOLDEN NEEDLES, ENCORE, ELITE, OVATION, DUNLOP, SLAZENGER, NIBLICK, MAXFLI, REPCO, MALVERN STAR, BERLEI, HESTIA, HOLEPROOF, RE GTRED, LIGHTNING BOLT, JULIUS MARLOW REPCO, CHECKPOINT, TRADERS AUTO SPARES, APPCO, AUTO PRO, ASHDOWN, LAWRENCE & HANSON, CORYS FRASERS, LANSON, EXPRES PION, MARSHALL, EXIDE, STOWAWAY, ABSOLYTE, DUNLOP, MARATHON, SPRINTER, ANSELL, PERRY, EDMONT, CHECKMATE, LIFESTYLES, MATES, MANIX, GAMMEX, NUTEX, NITR MLAND, BONDS, SLEEPMAKER, SIMMONS, DUNLOPILLO, TONTINE, HANG TEN, JORDACHE, RIO, CANDY, DR SCHOLL, AMCO, NATURALISER, ENDURO, SPRINGTRED, LIGHTNING BOLT, C DATACOM, DUNLOP, GOODYEAR, OLYMPIC, KELLY SPRINGFIELD, BEAUREPAIRES FOR TYRES, MCLEOD TYRES, GOODYEAR AUTO SERVICE CENTRES, CHAMPION, MARSHALL, EXI E, ELITE, OVATION, DUNLOP, SLAZENGER, NIBLICK, MAXFLI, REPCO, MALVERN STAR, BERLEI, HESTIA, HOLEPROOF, RED ROBIN, JOCKEY, GROSBY, DREAMLAND, BONDS, SLEEPM KPOINT, TRADERS AUTO SPARES, APPCO, AUTO PRO, ASHDOWN, LAWRENCE & HANSON, CORYS FRASERS, LANSON, EXPRESS PARTS CENTRES, LUCAS, PACIFIC DATACOM, DUNLOP, G P, MARATHON, SPRINTER, ANSELL, PERRY, EDMONT, CHECKMATE, LIFESTYLES, MATES, MANIX, GAMMEX, NUTEX, NITRILITE, GOLDEN NEEDLES, ENCORE, ELITE, OVATION, DUNLO BroughtNE, HANG to TEN you, JORDACHE by Global, RIO Reports, CANDY, DR SCHOLL, AMCO, NATURALISER, ENDURO, SPRINGTRED, LIGHTNING BOLT, JULIUS MARLOW REPCO, CHECKPOINT, TRADERS AUTO SPAR PACIFIC DUNLOP LIMITED FINANCIAL STATEMENTS 1999

Brought to you by Global Reports 1 Pacific Dunlop Board P

A Mr John T Ralph AO, Hon LLD (Melb and QId), FCPA C Chairman since August 1997 and a Non-Executive Director since 1994. He is Chairman of Foster's Brewing Group Ltd., I F

I Deputy Chairman of the Commonwealth Bank of Australia and Telstra Corporation Ltd., a Director of The Broken Hill C

Proprietary Co. Ltd., Pioneer International Ltd, National Chairman of The Queen's Trust for Young Australians, Chairman of D

U the Australian Foundation for Science and Director of the Melbourne Business School. Resident Melbourne. Age 66. N L O Mr Rodney L Chadwick FCPA P

A Managing Director and Chief Executive since July 1996, and an Executive Director since 1990, prior to which he was

N Managing Director of South Pacific Tyres from 1987 to 1995. He is a National Councillor of the Australian Industry Group. N

U Appointed Victorian Branch President of the Australian Industry Group in September 1999, and Chair of the Business A Council of Australia's Population Policy Steering Committee. Resident Melbourne. Age 53. L

R E

P Mr Anthony B Daniels OAM

O Non-Executive Director since 1997. A Director of the Australian Gaslight Company, Pasminco Ltd., Orica Ltd., IBJ R

T Australia Bank and Capral Aluminium Ltd., he was formerly Managing Director of Tubemakers Australia.

1 Resident Sydney. Age 64. 9 9 9 Mr Robert B Hershan BComm, ASCPA Appointed an Executive Director in 1995. Chairman of Pacific Brands, of which he was Managing Director from 1986 to 1999. President of the Textile Fashion Industry Association, Chairman of the Textiles, Clothing & Footwear Advisory Board and a member of the Defence and Industry Advisory Council. Joined the Company in 1978. Resident Melbourne. Age 51.

Ms Margaret A Jackson BEcon, MBA, FCA Non-Executive Director since 1992. She is Chairman Victorian Transport Accident Commission and of the Playbox Theatre Company Pty Ltd; a Director of the Australia and New Zealand Banking Group Ltd., The Broken Hill Proprietary Co Ltd., Qantas Ltd., Brain Imaging Research Foundation, and a Board Member of Howard Florey Institute of Experimental Physiology and Medicine. Resident Melbourne. Age 46.

Professor David G Penington AC, MA, DM, BCh, FRCP, FRACP, FRCPA Non-Executive Director since 1991 and Vice Chancellor of Melbourne University from 1988 to 1995. He is Chairman of Cochlear Ltd, and of the Co-operative Research Centre for Cell Growth Factors; President of the Museum of Victoria, a Director of the Murdoch Institute for Medical Research and a principal of Foursight Pty Ltd. He was Chairman of the Premier's Drug Advisory Council in Victoria in 1995-96. Resident Melbourne. Age 69

Mr lan E Webber AO, BE Non-Executive Director since 1991. He is a Director of Santos Ltd, and WMC Ltd, and a member of the General Motors Australian Advisory Council and of the Australian Advisory Board of Asea Brown Boveri Pty Ltd. Formerly Chairman of Mayne Nickless Ltd., he was an Associate Commissioner to the Post 2000 Automotive Industry Review. Resident Adelaide. Age 64. Corporate Governance

The Board works under a set of well-established corporate governance policies designed to protect further the best interests of shareholders.

The policies reinforce the responsibilities of all Directors in accordance with the requirements of the Corporations Law and the Australian Stock Exchange. In addition, many of the governance elements are enshrined in the Company's Constitution.

Responsibilities The Board's responsibilities and duties include the following: reviewing and determining with management strategic direction and policies, allocation of resources, planning for the future and succession planning; appointing the Chief Executive Officer for the ongoing management task of developing and implementing suitable business strategies consistent with the Company's policies and strategic direction; regularly evaluating the performance of the Chief Executive Officer and senior management, and determining their remuneration; continuously monitoring and overseeing the Company's financial position, including the audit process; and ensuring that the conduct of the Company and its officers is legally and ethically of the highest order, and that working practices in all operations give priority to health and safety.

Brought to you by Global Reports 2

Pacific Dunlop places high priority on risk identification and management throughout the group's operations, and has P A

processes in place to review their adequacy. These include: C I F I environmental audits using underwriters, self-audits, engineering and professional advisers; and a process C

for the identification and measurement of business risk. U N L

a comprehensive risk control program, which includes property protection and health, safety and O P

environmental audits using underwriters, self-audits, engineering and professional advisers; and A

a process for the identification and measurement of business risk. N In carrying out its duties, the Board meets formally over one or two days, at least eight times during the year. N U

Directors also participate in meetings of various Board Committees (see page3) which assist the full Board A L

in examining particular areas or issues. R E P

Board Composition O

The Board's policy is that there should be a majority of non-Executive Directors. This is a requirement embodied R T

in the Company's Constitution ensuring that all Board discussions or decisions have the benefit of predominantly 1 outside views and experience. Maintaining a balance of experience and skills is an important factor in Board 9 9

composition. 9

The requirement under the Constitution is for at least twice as many non-Executive Directors as Executive Directors. As an additional safeguard in preserving the value of Board independence, the office of Chairman cannot be held by an Executive Director.

Any Director can seek independent professional advice at the Company's expense in the furtherance of his or her duties, subject to prior discussion with the Chairman. If this occurs, the Chairman must notify the other Directors of the approach and any resulting advice received.

Election Process The Pacific Dunlop Board currently has eight Directors. Of these, six are non-Executive Directors (including the Chairman) and two are Executive Directors (including the Managing Director). The Constitution requires a minimum of five Directors, with a maximum of 15.

New Directors are nominated by the Board after a careful process referred to below, and then must receive shareholder endorsement by ordinary resolution at the next Annual General Meeting. All Directors other than the Managing Director are required to seek re-election every three years on a rotating basis.

The fees take into account what is paid by comparable companies and what is necessary to attract high calibre people. Retirement benefits based on period of service are paid in accordance with a schedule previously approved by shareholders and the Corporations Law.

As members of management, Executive Directors do not receive fees or Directors' retirement benefits. They are members of the Company's Superannuation Fund and, as such, they receive Company retirement benefits.

Directors' Dealings In Shares Subject to the restriction that persons may not deal in any securities when they are in possession of price-sensitive information, Directors generally may only buy or sell Pacific Dunlop shares in the periods immediately following any price-sensitive announcements, including the half-year and full-year results and Annual General Meeting. At other times, transactions must receive the approval of the Board.

Brought to you by Global Reports 3 Board and Committee Meetings P

A The number of Board and Committee meetings held during the period the Director was a member of the Board C or Committee and the number of meetings attended during that period are set out below: I F I C

Attendance at Board and Board Committee Meetings during the year ended 30 June 1999 D

U Board Audit Corporate Remuneration Nominations Donations N

L Conduct*

O Held Attd Held Attd Held Attd Held Attd Held Attd Held Attd P

J T Ralph 12 12 3 3 1 1 A

N R L Chadwick 12 12 3 3 1 1 N

U A B Daniels 12 12 3 3 3 3 1 1

A C B Goode 12 12 4 3 3 2 1 1 L

R B Hershan 12 11 R

E M A Jackson 12 11 4 4 3 2 1 1 P

O R J McLean 12 12 4 4 3 3 R D G Penington 12 12 3 3 3 3 1 1 T

1 I E Webber 12 11 3 2 1 1 9 9 9 * The Corporate Conduct Committee will in future meet as a Safety, Health and Environment Committee and separately as a Corporate Conduct and Compliance Committee Attd - Indicates the number of meetings attended during the period. Mr C B Goode retired from the board on 30 June 1999.

Relevant interests The relevant interests of each of those Directors in the share capital of the Company as at the date of this Report (or in the case of Mr C B Goode, at 30 June 1999 upon his retirement from the Board), as notified to the Australian Stock Exchange Limited pursuant to the provisions of section 235 of the Corporations Law, were:

12 3 4

J T Ralph 60,100 R L Chadwick 451,400 170,000 1,800,000 A B Daniels 5,000 C B Goode 148,500 50,000 R B Hershan 70,866 370,000 600,000 M A Jackson 95,500 1,718,900 R J McLean 10,000 D G Penington 22,700 40,000 I E Webber 67,265

1 Beneficially held in own name, or in the name of a trust, nominee company or private company. 2 Beneficial, paid to 1 cent. 3 Beneficial, Executive Share Options. 4 Non-Beneficial. No interests were held in the shares of any related body corporate. For details of Options over shares held by Messrs Chadwick and Hershan, see Note 25 on page 34.

Board Committees The Board has six committees which are designed to add to the quality and depth of advice. Those committees which are concerned with specific management-related matters, the structure of the Board, Director nominations and executive remuneration are made up of non-Executive Directors only.

Senior executives attend Board and Committee meetings by invitation whenever particular matters arise which require management presentations or participation.

Audit Committee The Committee reviews the financial statements, adequacy of financial controls and the annual audit arrangement. It monitors controls and financial reporting systems, applicable Company policies, national and international accounting standards, and other regulatory or statutory requirements.

Audit Committee Membership at 10 September 1999 Ms Margaret Jackson (Chairman) Mr Tony Daniels Mr Robert McLean

Brought to you by Global Reports 4 The Committee also liaises with the Company's internal and external auditors, reviews the external auditors' P

A remuneration and advises the Board on their appointment. The Committee reviews the processes in place for the C identification, management and reporting of business risk, and reviews the findings reported. The Managing Director, I F

I Executive General Manager - Finance, Group Chief Accountant and principal external audit partner participate at C

meetings by invitation. The Audit Committee also has discussions without management and auditors present. D U N

L Donations Committee

O This Committee advises on policy and recommendations for corporate donations. P

N Donations Committee Membership at 10 September 1999 N

U Professor David Penington (Chairman) Ms Margaret Jackson

A Mr Rod Chadwick L

E Safety, Health and Environment and Corporate Conduct and Compliance Committees P

O These Committees, which were previously encompassed within a single Corporate Conduct Committee, deal with R ethical and public issues which may affect Pacific Dunlop and compliance with the rules and regulations which the T

1 Company must observe. These include corporate governance matters, ethics,. risk management, insurance, public 9

9 and product liability, environment, health and safety, taxation, trade practices and competition policy, fair dealing 9 and insider trading.

Separation into two Committees will allow more detailed consideration to be given to all issues, and where appropriate outside expertise and advice can be presented more effectively during the Committees' meetings.

Membership for both Committees at 10 September 1999 Professor David Penington (Chairman) Mr Tony Daniels Mr Rod Chadwick Mr lan Webber

Nominations Committee This Committee periodically reviews the structure of the Board and recommends changes when necessary. This includes identifying suitable candidates for appointment as non-Executive Directors. In doing so, the Committee establishes the policies and criteria for Non-Executive Director selection. The criteria include the candidate's personal qualities, professional and business experience, age, city and country of residence and availability.

Nominations Committee Membership at 10 September 1999 Mr John Ralph (Chairman) Mr lan Webber Mr Tony Daniels

Remuneration and Evaluation Committee This Committee comprises only the non-Executive Directors. Its brief is to consider matters including succession and senior executive compensation policy.

Remuneration and Evaluation Committee Membership at 10 September 1999 Mr John Ralph (Chairman) Mr Robert McLean Mr Tony Daniels Professor David Penington Ms Margaret Jackson Mr lan Webber

The Committee is also responsible for an appraisal of its own and the full Board's performance based on the experience of the non-Executive Directors in other companies and fields, their own information and assessment received externally, and information received through management.

The Committee has available independent professional advisers in line with Pacific Dunlop's policy of attracting high calibre people at all levels and to ensure that the terms and conditions offered by the Company are competitive with those offered by comparable companies.

The Committee meets at least twice yearly. The Executive General Manager - Strategic Human Resources attends by invitation the meetings concerned with remuneration matters.

Staff Superannuation Ms Margaret Jackson, a Non-Executive Director, represents the Company on the Board of Trustees of the Company's staff superannuation funds in Australia.

Political Donations During the year, the Board approved donations to political parties at the Federal and State levels totalling $80,000.

Brought to you by Global Reports 5 Report of the Directors P

A This Report by the Directors of Pacific Dunlop Limited ('the Company') is made for the year ended 30 June 1999 pursuant to C Division 1 of Part 2M.3 of the Corporations Law. I F I C

Directors D

U The names of each person who has been a Director of the Company during or since the end of the financial year, the relevant N interests of each of those Directors in the share capital of the Company and any related body corporate that have been L

O notified to Australian Stock Exchange under the provisions of section 235 of the Corporations Law and particulars of the P

qualifications, experience and special responsibilities of each Director as at the date of this Report, and of their other A

N Directorships are as set out on page 1. N U

A Details of meetings of the Company's Directors (including Meetings of Committees of Directors), and Directors' attendance L

thereat, are set out on page 3. R E

P At the date of this Report there is an Audit Committee of the Board comprising Ms M A Jackson (Chair) and Messrs A B O

R Daniels and R J McLean. T

9 Principal activities 9

9 The principal activities of the Group during the year were the marketing, distribution, sale and manufacturing of examination, medical and industrial gloves and condoms, cables and engineered products, automotive and industrial batteries, metals recovery, household products, sporting goods, clothing, footwear, automotive and electrical products and tyres.

Significant changes in the nature of the principal activities of the Group during the year included:

Effective 2 June 1999, the Company sold its Australasian and Sri Lankan Cable businesses for a cash price of $300 million, plus an earn-out provision of up to $16 million over the next two years. The results for the year include 11 months of the Cables Division.

Negotiations for the sale of GNB Technologies as referred to in the previous year's Report, were terminated on 17 June 1999, following the failure by the purchaser, Quexco Incorporated of the US, to complete the transaction at the previously agreed price of US$500 million. While the GNB operations remained intact throughout the sale process, competition activity during the period of uncertainty, together with easing demand in some markets, led to GNB's full year result being below that of the previous year.

Dividends The following amounts have been paid by Pacific Dunlop Limited by way of dividends to its shareholders since the end of the previous financial year:

as shown in last year's Report, an interim ordinary dividend of 7.0 cents per share (franked to the extent of 60 per cent for the purposes of the Income Tax Assessment Act) in respect of the year ended 30 June 1998, paid on 1 July 1998, totalling $72,059,000;

as shown in last year's Report, a final ordinary dividend at the rate of 7.0 cents per share (unfranked) in respect of the year ended 30 June 1998, paid on 4 November 1998, totalling $72,059,000;

an interim ordinary dividend of 7.0 cents per share (unfranked) in respect of the year ended 30 June 1999, paid on 1 July 1999, totalling $72,219,000.

In addition, a final ordinary dividend of 7.0 cents per share (unfranked) in respect of the year ended 30 June 1999 has been declared, payable on 3 November 1999 to shareholders registered on 5 October 1999.

During the financial year, the amounts outstanding on 2,103,000 existing Executive Plan Shares were fully paid (of which 486,000 shares were shown in the previous year's Report). Since the end of the financial year, the amounts outstanding on a further 564,500 Executive Plan Shares have been fully paid.

Employee Share Plan During the financial year, the loan liability of members in respect of 607,458 fully paid ordinary shares of 50 cents each was discharged (of which 139,539 shares were shown in the previous year's Report). Since the end of the financial year, the loan liability in respect of a further 539,165 fully paid shares has been so discharged. Under the Employee Share Plan, 10 cents was payable on subscription for each Plan share allotted to eligible employees, the balance of issue price being funded by way of interest free loans from the Company to the member. No new shares were issued during the financial year or up to the date of this Report under the Pacific Dunlop Employee Share Plan.

Printed: 29/09/99 16:08 Sheet: AA1 Brought to you by Global Reports Report of the Directors 6 P

Performance in relation to Environmental Regulations A The Group's Australian operations are subject to environmental regulation in each of the States or Territories in which C I F

activities are carried out. While a wide variety of licences are held, the regulations under which these licences are issued I C

apply not only to the Group, but across the industries involved, and include waste and storm water management, air D

emissions, dust and noise control, spillage and contamination issues, and dangerous and controlled substances U N

(including their storage and disposal). The Group has an established environmental management system, which reports L

regularly to the Conduct and Compliance Committee of the Board. O P

The Directors are not aware of any material breaches of Australian environmental regulations during the year. N N U

Review of Operations and Results A L

A review of the operations of the Group during the financial year and the results of those operations is contained on pages 8 to 9. R

The consolidated operating profit of the Group for the year after providing for income tax was $199.8 million before abnormal items, E P

and was $105.8 million after abnormal items. O R T

In the opinion of the Directors, other than as referred to in this report, there were no significant changes in the state of affairs 1 9

of the Group. 9 9 Events after balance date Since the end of the financial year, the following matters or circumstances have arisen that have significantly affected, or may significantly affect, the operations, results of operations or state of affairs of the Group in subsequent financial years: On 20 August 1999, GNB Technologies announced plans to idle its lead-acid battery recycling facility in Columbus, Georgia, US. This is expected to lead to an indefinite suspension of operations at the facility from the end of October 1999. On 26 August 1999, Pacific Distribution and Atkins Carlyle Ltd. announced the signing of a Memorandum of Understanding for the formation of a Joint Venture marketing organisation to merge their automotive wholesaling operations, excluding specialty businesses, in which each company will hold 50 per cent equity. Trading is expected to commence in October 1999.

Likely developments Certain likely developments in the operations of the Group, and the expected results of those operations, in financial years subsequent to the financial year ended 30 June 1999, are referred to above and in the Chairman's Message and Managing Director's Review. In the opinion of the Directors it would be likely to result in unreasonable prejudice to the Group if further information was to be included.

Directors' and Senior Executives' Emoluments The Board's Remuneration and Evaluation Committee is responsible for reviewing the remuneration policies and practices of the Company, including the compensation arrangements for Executive Directors and senior management, the Company's superannuation arrangements and, within the aggregate amount approved by shareholders, the fees for non-executive members of the Board. This role also includes responsibility for the Company's employee share and option plans. Executive and senior management performance review and succession planning are matters referred to and considered by the Committee.

The Remuneration and Evaluation Committee has access to independent advice and comparative studies on the appropriateness of remuneration arrangements.

Non-Executive Directors - As indicated above, within the aggregate amount approved by shareholders, the fees of the Chairman and non-Executive Directors are set at levels which represent the responsibilities of, and the time commitments provided by, those Directors in discharging their duties. Regard is also had to the level of fees payable to non-Executive Directors of comparable companies.

Senior Executives - Remuneration levels are competitively set to attract, retain and motivate appropriately qualified and experienced senior executives capable of discharging their respective responsibilities.

Remuneration packages of senior executives incorporate both short and long-term performance based components. Short-term performance based components include bonus payments, while long-term performance based components are in the form of equity participation through the Pacific Dunlop Executive Share Option Plan. Options issued under the Plan are linked to the longer-term performance of the Company and are only exercisable following the satisfaction of performance hurdles that are designed to maximise shareholder wealth.

Printed: 29/09/99 15:16 Sheet: AA1A Brought to you by Global Reports 7 Report of the Directors P

A The following table sets out the remuneration provided to the Directors and the most highly remunerated officers of the C Company and the Group (including those based overseas) for the financial year. I F I C

Fixed Fees Incentives Superannuation Total Options D

U Remuneration(a) Contributions (e) Granted (f) N A$ A$ A$ A$ A$ L

O Executive Directors P

R L Chadwick 746,133 - 88,839 (b) 142,265 977,237 A

N R B Hershan 572,761 - - 109,379 682,140 N Non-Executive Directors U

A J T Ralph - 201,470 (g) - 12,600 214,070 L

D G Penington - 145,218 - 10,165 155,383 R

E M A Jackson - 97,500 - 6,825 104,325 P

O A B Daniels - 65,224 - 4,566 69,790

R R J McLean - 65,000 - 4,550 69,550 T

C B Goode (h) - 65,000 - 4,550 69,550 1

9 I E Webber - 61,365 - 4,295 65,660 9

9 Officers of the Company and the Group A W Stobart (i) 353,882 - 704,000 (c) 63,312 1,121,194 375,000 T O Minner (j) 729,411 - 256,351 (b) - 985,762 H Boon (j) 870,425 - - 96,410 966,835 J P Farnik 484,371 - 75,000 (d) - 559,371 600,000 P R Gay 435,988 - - 78,263 514,251 J A Eady 428,079 - - 72,530 500,609 450,000 I D Veal 413,379 - - 74,506 487,885

(a) Comprises the cost to the Company of cash salary, non-cash benefits, such as motor vehicles, housing loans and home office expenses, and expatriate assignment costs. Fringe benefits tax is included where applicable. (b) Performance-based incentive. (c) lncludes performance-based incentive and incentive relating to facilitation of sale of business. (d) Sign-on incentive. (e) lmputed notional contribution calculated at an actuarial rate or to satisfy Superannuation Guarantee requirements. No amounts were required to be paid to the superannuation fund in respect of the year ended 30 June 1999 upon advice of the Trustee. These amounts do not form part of the remuneration of Directors and Executives set out in Note 28 to the Financial Statements. (f) Options granted during the year under the Executive Share Option Plan were issued in three equal tranches at an exercise price of $3.30 when the market value was $2.85 and will expire if not exercised by 11 December 2002. As noted below, 375,000 of these Options have already lapsed. Details of the Exercise Conditions that must be satisfied before the Options vest and the Exercise Periods are set out in Note 25. The value of each Option using a Monte Carlo simulation model, as referred to in Note 25, is approximately 45 cents, but they will have no value if the performance hurdles are not met. (g) lncludes provision of vehicle and office facilities. (h) Retired 30 June 1999. (i) Transferred 31 May 1999 upon sale of business. (375,000 Options, plus 225,000 previously allocated, lapsed at that date). (j) US-based officers.

Indemnity No Director or Officer of the Company has received the benefit of an indemnity from the Company during or since the end of the year, except that, as stated in previous reports, Article 138 of the Company's Articles of Association also provides an indemnity in favour of officers (including the Directors and Company Secretary) of the Company against liabilities incurred while acting as such officers to persons (excluding Group companies) to the extent permitted by law.

Convertible Bonds The Company has no Convertible Bonds on issue.

Share Buy-Back The Company did not buy back any shares during the year, and there is not a current on-market buy-back program.

Rounding Pacific Dunlop Limited is a company of the kind referred to in Australian Securities and Investments Commission Class Order 98/100 (as in force on 30 June 1999) and, unless otherwise shown, amounts in this Report have been rounded off to the nearest one hundred thousand dollars.

This Report is made in accordance with a resolution of the Board of Directors and is signed for and on behalf of the Directors.

J T Ralph R L Chadwick Director Director

Dated at Melbourne this 10th day of September 1999.

Printed: 29/09/99 15:16 Sheet: AA1B Brought to you by Global Reports Discussion and analysis of the financial statements 8 P

A The following discussion and analysis is provided to Liquidity and Capital Reserves C assist members in understanding the financial The Australian dollar strengthened against most I F

I report. currencies over the year, benefiting net debt (borrowings, C

including trade bills less cash) by $156 million, D

U Consolidated Operations compared with a deterioration of $289 million the previous

N Sales revenue for 1998/99 was $6,150 million, a 2.8 year. This, plus the improvement in cash from operations L

O percent increase over 1997/98, with sales from and the sale of Cables, improved the ratio of net debt to

P continuing operations increasing by 5.9 percent. shareholders’ equity, decreasing it from 75.4% last year

A to 64.5% this year. Net liabilities to equity improved from N

N Earnings Before Interest and Tax (EBIT) in 1998/99 172% in 1997/1998 to 154.7% in the current year. U were $360 million, compared with $326 million in A

L 1997/98. The result includes 11 months of the The Group maintained substantial cash reserves, at 30

R Cables Group which was sold effective 2 June 1999. June 1999 of $1,021 million, compared with $945 million E

P the previous year. A significant amount of cash reserves O Income tax expense, as a percentage of operating result from the Group's overseas investment hedge policy, R

T profit before goodwill amortisation and abnormal whereby foreign currency is borrowed on a dollar for dollar

1 items, was 17.2 percent compared with 17.3 percent basis, equal to the net assets of foreign investments. By far 9

9 in the previous year. the largest component currency is U.S. dollars and the 9 proceeds of the borrowings are converted to Australian Profit after tax attributable to shareholders, before dollars and deposited in the local money market. This abnormal items, increased by 10.5 percent to $199.8 policy reduces the impact of the volatile Australian dollar on million. Group shareholders’ funds. This policy means it is more appropriate to base assessment of the Group’s An abnormal loss after tax of $94 million was debt position on a net rather than gross debt basis. recorded in relation to GNB Technologies. This has been applied in writing down the value of the loss The Company has declared a final unfranked dividend making Columbus Smelter in the US and of 7 cents, in line with last year, making a full year other impaired assets. dividend of 14 cents unfranked.

The Parent Company had retained earnings of $284 As detailed in the Business Segments Report, million at 30 June 1999. international operations in 1998/99 contributed sales of $2,851 million, or 46 percent of total sales, Ratings compared with $2,567 million, or 43 percent of total During the year, the Moody’s rating was downgraded from sales in the previous year. In addition, international A2 long term to Baa1 and P1 short term to P2. The outlook operating results were $234.1 million, or 51 percent of remains stable. Standard & Poor’s rating is unchanged total operating results, compared with last year's $253 at A- (long term), and A2 (short term) with a negative outlook. million, or 58 percent of total operating results. Profits The Company continues to seek ratings from these agencies from New Zealand and Asia declined 19 percent to enable it to access the international debt markets. The during the year, whilst improvement of 7 percent in current ratings remain strong investment grade. the Americas reflected a continuing strong return from Ansell. Interest Cost At year end, the borrowing portfolio was in the process Liquidity and Capital Reserves of being lengthened as the GNB sale did not proceed. Net cash provided by Operating Activities was the The Olex proceeds have been used to initially reduce debt most significant source of funds for the Company where possible, with the remainder added to cash on and improved over the year, with $379 million deposit. Average maturity of the borrowing portfolio was produced in 1998/1999, compared with $281 million 470 days at 30 June 1999, down marginally on the 475 in 1997/1998, a 35% improvement. This was after days at 30 June 1998. a one - off payment of $116 million into the Accufix Settlement Fund. Borrowings continue to be accessed through the Company issuing its own debt instruments in the form Net cash used in Investing Activities was $3.2 million. of commercial paper and medium term notes in a This included an inflow of $245 million from the sale number of international markets. The facilities of businesses, primarily related to the sale of the continued to be well received. Cables Group. An additional $28.1 million was received from the sale of plant and equipment. In order to ensure continuous access to funds, the Group had bank facilities totalling US$350 million and These net proceeds were offset by cash outflows of NZ$60 million (A$578 million) as fully committed long $58.1 million for the purchase of businesses. Capital term backup facilities. expenditure for the year (excluding South Pacific Tyres) was $223 million compared with $192 million in The total interest cost increased from A$100.1 million 1997/98. This represents an increase of $31 million, to A$103.3 million primarily as a result of higher the majority of which was invested in Ansell to expand borrowings for part of the year. Both interest rate and capacity in respect of new products and to lower the foreign exchange movements were beneficial. The cost base of existing manufacturing facilities. average cost of interest from all sources for the year was 6.16%, compared with 6.77% for the previous year.

Interest cover, before goodwill amortisation, was 3.9 times, an improvement on the previous year's 3.7 times.

Brought to you by Global Reports 9 Discussion and analysis of the financial statements P

A Working Capital Sales Revenue $ billion C

I The Company's average working capital to sales F

I ratio in 1998/99 was 21.5 percent compared with C

20.9 percent in 1997/98. 1997 5.8 D

U 1998 6.0

N This is comprised of the following : 1999 6.1 L O

P 1999 1998 Capital Expenditure $ million

C O N C

I Average Inventory to Sales (%) 16.9% 16.5% 1997 198 S

E Average Debtors to Sales (%) 14.7% 14.4% 1998 192

F Average Creditors to Sales (%) 10.1% 10.0% 1999 223 I N A

N The Company continues to actively pursue strategies Factories by Region 1999 1998

C to reduce investment in working capital and increase I A stockturns. L

Australia 57 77 R

E Cash Value Added SE Asia and New Zealand 41 38 P

O Cash Value Added analysis continues to receive a Americas 31 27

R high profile within monthly reporting at each Europe 1 1 T

business unit. For 1998/99, only GNB did not Total 130 143 1

9 achieve returns in excess of the Company's weighted 9

9 average cost of capital. The creation of Shareholder Value remains our primary objective. Average Working Capital to Sales

Capital Expenditure During 1998/99, the Company's capital expenditure 1997 22.3% totalled $223 million (excluding South Pacific Tyres), 1998 20.9% compared with the depreciation for the year of $156 1999 21.5% million and the previous year's capital expenditure of $192 million. During the last fiscal year the Net Liabilities to Shareholders' Equity Ratio Company has invested in property, plant and equipment at a rate 1.4 times its annual depreciation charge. In the previous fiscal years 1997 138% 1998 and 1997 the figure was 1.2 and 1.3 times 1998 172% respectively. 1999 154%

Research and Development Assets Employed by Region 1999 Pacific Dunlop does not operate a central research and development function. Each business segment undertakes research and development appropriate Australia 45% for its needs. All associated costs are expensed as SE Asia and New Zealand 14% incurred. Americas 36% Europe 5% Research and Development expenditure for continuing operations (excluding South Pacific Tyres) was $37 million in 1998/99, a 16 percent increase on the $32 million spent last year.

Capital Expenditure 1999 1998 (including finance leases) $ million $ million

GNB Technologies 77 58 Ansell 93 50 South Pacific Tyres (100%) 45 40 Pacific Distribution 15 26 Pacific Brands 16 26 Other 22 32

Depreciation 1999 1998 (including amortisation lease assets) $ million $ million

GNB Technologies 45 49 Ansell 36 30 South Pacific Tyres (100%) 39 36 Pacific Distribution 21 21 Pacific Brands 25 27 Other 29 28

Brought to you by Global Reports Profit and Loss Statements 10

of Pacific Dunlop Limited and Controlled Entities for the year ended 30th June 1999 P A C I F I C Consolidated The Company

U 1999 1998 1997 1999 1998 1997 N Notes $ million $ million $ million $ million $ million $ million L O P

A Revenue N

N Sales revenue 6,150.0 5,983.5 5,782.9 1,933.1 2,004.5 2,534.0 U Other revenue 4 333.8 122.9 364.6 466.5 314.5 215.2 A

L Total revenue 6,483.8 6,106.4 6,147.5 2,399.6 2,319.0 2,749.2

E Costs and expenses P

O Cost of goods sold 4,277.5 4,173.2 4,116.3 1,246.1 1,339.6 1,693.5 R

T Selling, general and administrative 1,806.7 1,553.8 1,619.5 973.2 949.2 784.9

1 Total costs and expenses 6,084.2 5,727.0 5,735.8 2,219.3 2,288.8 2,478.4 9

9 Interest expense 3 142.9 153.6 145.9 110.2 113.4 174.6 9 Operating profit/(loss) before abnormal items and income tax 256.7 225.8 265.8 70.1 (83.2) 96.2 Abnormal items before income tax 7 (94.0) (157.5) 0.6 54.8 (15.4) (5.1) Operating profit/(loss) before income tax 162.7 68.3 266.4 124.9 (98.6) 91.1 Income tax attributable to operating profit/(loss) 8 51.2 44.5 81.5 (8.5) (91.7) 7.6 Operating profit/(loss) after income tax 111.5 23.8 184.9 133.4 (6.9) 83.5

Outside equity interests in operating profit after income tax 5.7 (1.0) 7.1 Operating profit/(loss) after income tax attributable to Pacific Dunlop Limited shareholders * 105.8 24.8 177.8 133.4 (6.9) 83.5 (Accumulated losses)/Retained profits at the beginning of the financial year (38.2) 116.1 (257.6) 295.9 449.8 169.9 Adjustment to retained profits at the beginning of the financial year on initial adoption of revised AASB1016 Accounting for Investments in Associates 1 - (23.3) - Aggregate of amounts transferred from reserves 6 12.1 (11.6) 339.7 (0.8) (2.8) 340.2 Total available for appropriation 79.7 106.0 259.9 428.5 440.1 593.6

Dividends provided for or paid Redemption of Bonds Preference Shares 0.6

Interim and final dividends 9 144.4 144.1 143.7 144.4 144.1 143.7 Under provision for prior year interim and final dividends 0.1 0.1 0.1 0.1 0.1 0.1 (Accumulated losses)/retained profits at end of financial year (65.4) (38.2) 116.1 284.0 295.9 449.8

Summary of operating profit for the year * Operating profit/(loss) after income tax attributable to Pacific Dunlop Limited shareholders 105.8 24.8 177.8 133.4 (6.9) 83.5 Abnormal items after income tax attributable to Pacific Dunlop Limited shareholders 7 (94.0) (156.0) 2.2 54.9 (15.4) (7.1) Operating profit after income tax before abnormal items attributable to Pacific Dunlop Limited shareholders 199.8 180.8 175.6 78.5 8.5 90.6

Earnings per share based on operating profit after income tax attributable to Pacific Dunlop Limited shareholders cents cents cents Basic earnings per share before goodwill amortisation and abnormal items 36 23.2 21.1 20.3 Basic earnings per share before abnormal items 36 19.4 17.6 17.2 Basic earnings per share inclusive of abnormal items 36 10.3 2.4 17.4

The above profit and loss statements should be read in conjunction with the accompanying notes.

Printed: 29/09/99 15:16 Sheet: AA 2 Brought to you by Global Reports 11 Balance Sheets

of Pacific Dunlop Limited and Controlled Entities for the year ended 30th June 1999 F i n a n c i

Consolidated The Company a l

1999 1998 1997 1999 1998 1997 R e

Notes $ million $ million $ million $ million $ million $ million v i e w

Current Assets Notes on the Accounts Cash 11 1,072.3 997.3 1,191.8 30.7 31.2 33.3 Receivables 12 987.5 978.7 952.4 2,404.1 2,243.4 2,753.6 Inventories 13 952.2 1,021.9 954.0 175.8 210.7 217.3 Prepayments 58.9 58.5 68.1 28.1 13.6 15.6 Total Current Assets 3,070.9 3,056.4 3,166.3 2,638.7 2,498.9 3,019.8 Non-Current Assets Receivables 12 45.8 69.8 77.9 34.5 48.6 49.6 Investments 14 148.4 166.9 188.7 3,034.6 3,065.2 2,942.8 Property, plant and equipment 15 1,065.8 1,257.7 1,242.5 120.9 212.1 240.3 Intangibles 16 607.8 683.4 640.0 14.5 46.4 50.2 Future income tax benefit 17 280.2 363.8 277.5 154.5 142.4 66.5 Total Non-Current Assets 2,148.0 2,541.6 2,426.6 3,359.0 3,514.7 3,349.4 Total Assets 5,218.9 5,598.0 5,592.9 5,997.7 6,013.6 6,369.2 Current Liabilities Accounts payable 18 725.7 795.8 777.7 1,957.5 1,853.6 2,560.3 Borrowings 19 1,340.3 1,419.4 1,382.4 1,107.1 1,167.0 850.1 Provisions 20 508.3 562.4 452.6 209.3 230.6 199.7 Other 21 7.1 2.4 17.5 2.9 2.6 1.4 Total Current Liabilities 2,581.4 2,780.0 2,630.2 3,276.8 3,253.8 3,611.5 Non-Current Liabilities Accounts payable 18 14.0 14.2 6.3 0.4 0.7 0.7 Borrowings 19 781.0 848.1 825.3 627.0 656.1 497.1 Provisions 20 174.9 228.2 249.5 4.6 5.9 5.8 Other 21 33.3 35.8 34.8 18.9 20.3 21.6 Total Non-Current Liabilities 1,003.2 1,126.3 1,115.9 650.9 683.0 525.2 Total Liabilities 3,584.6 3,906.3 3,746.1 3,927.7 3,936.8 4,136.7 Net Assets 1,634.3 1,691.7 1,846.8 2,070.0 2,076.8 2,232.5 Shareholders' Equity Share Capital 5 1,776.0 514.9 513.6 1,776.0 514.9 513.6 Reserves 6 (102.1) 1,188.9 1,181.8 10.0 1,266.0 1,269.1 (Accumulated losses)/retained profits 6 (65.4) (38.2) 116.1 284.0 295.9 449.8 Shareholders' equity attributable to Pacific Dunlop Limited shareholders 1,608.5 1,665.6 1,811.5 2,070.0 2,076.8 2,232.5 Outside equity interests in controlled entities 10 25.8 26.1 35.3 Total Shareholders' Equity 1,634.3 1,691.7 1,846.8 2,070.0 2,076.8 2,232.5

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

Printed: 29/09/99 15:16 Sheet: AA 3 Brought to you by Global Reports Business Segments 12

of Pacific Dunlop Limited and Controlled Entities for the year ended 30th June 1999 P A C I F I C Operating Revenue Assets Employed Operating Result

U 1999 1998 1997 1999 1998 1997 1999 1998 1997 N Notes $ million $ million $ million $ million $ million $ million $ million $ million $ million L O P

A INDUSTRIES N

N Protective & Healthcare Products U

A Ansell 1,184.8 1,078.1 856.1 876.1 830.7 723.0 169.5 162.2 110.7 L

R Industrial & Automotive Batteries E

P GNB 1,386.2 1,235.3 1,144.4 945.5 1,083.5 936.4 50.9 55.4 34.1 O

R Tyres T

1 South Pacific Tyres 1,070.3 1,049.2 1,075.4 686.4 658.2 663.8 72.6 79.6 91.6 9

9 Less: Goodyear Share (50%) 535.2 524.6 537.7 343.2 329.1 331.9 36.3 39.8 45.8 9 30(a) 535.1 524.6 537.7 343.2 329.1 331.9 36.3 39.8 45.8 Consumer Goods Pacific Brands 1,204.4 1,177.4 1,214.1 600.9 617.6 623.9 97.1 94.6 105.4 Automotive & Electrical Distribution Pacific Distribution 1,494.2 1,467.8 1,486.0 578.7 588.3 594.9 77.0 64.5 80.0 5,804.7 5,483.2 5,238.3 3,344.4 3,449.2 3,210.1 430.8 416.5 376.0 Non-Core/Discontinued Businesses 410.4 514.8 602.9 254.0 456.3 577.7 30.8 19.7 68.6 6,215.1 5,998.0 5,841.2 3,598.4 3,905.5 3,787.8 461.6 436.2 444.6 Tyre Partnership Adjustment 30(b) (65.1) (14.5) (58.3) (211.5) (198.6) (186.0) (11.4) (11.3) (11.8) Y2K Compliance Costs (6.3) (3.3) - Unallocated Items 30(c) 87.4 122.9 364.6 151.9 210.4 159.3 (43.4) (56.1) (60.1) Operating EBIT 400.5 365.5 372.7 Goodwill and Brand names 607.8 683.4 640.0 (40.6) (39.6) (35.4) Earnings before Net Interest and Tax (EBIT) 359.9 325.9 337.3 Net Consolidated Interest Expense (103.2) (100.1) (71.5) Tax (51.2) (46.0) (83.1) Outside Equity Interests (5.7) 1.0 (7.1) Operating Results 6,237.4 6,106.4 6,147.5 4,146.6 4,600.7 4,401.1 199.8 180.8 175.6 Abnormals after tax and outside equity interests 30(d) 246.4 (94.0) (156.0) 2.2 Cash 30(e) 1,072.3 997.3 1,191.8 Total Consolidated 6,483.8 6,106.4 6,147.5 5,218.9 5,598.0 5,592.9 105.8 24.8 177.8

REGIONS Australia 3,364.2 3,431.0 3,489.0 1,615.3 1,790.4 1,881.6 227.5 183.2 264.7 Asia and New Zealand 613.6 574.2 614.7 508.7 567.5 635.2 88.4 109.0 96.3 America 1,870.6 1,695.2 1,487.7 1,284.2 1,375.6 1,160.8 145.8 135.9 59.9 Europe 366.7 297.6 249.8 190.2 172.0 110.2 (0.1) 8.1 23.7 6,215.1 5,998.0 5,841.2 3,598.4 3,905.5 3,787.8 461.6 436.2 444.6

Prior year comparatives have been adjusted for reclassification of former Industry Segment businesses which are now subject to sale or abandonment and hence classified as Non Core / Discontinued. The above business segments report should be read in conjunction with the accompanying notes.

Printed: 29/09/99 15:16 Sheet: AA 4 Brought to you by Global Reports 13 Statements of Cash Flows

of Pacific Dunlop Limited and Controlled Entities for the year ended 30th June 1999 F i n a n c i

Consolidated The Company a l

1999 1998 1997 1999 1998 1997 R e

Notes $ million $ million $ million $ million $ million $ million v i e

w Cash Flows from Operating Activities Notes on the Accounts Receipts from customers (excluding medical) 6,243.2 6,023.6 5,777.6 1,847.9 2,035.3 2,508.8 Payments to suppliers and employees (excluding medical) (5,683.1) (5,637.0) (5,241.2) (1,779.4) (2,048.0) (2,374.1) Net receipts from customers (excluding medical) 560.1 386.6 536.4 68.5 (12.7) 134.7 Payments to suppliers and employees net of customer receipts (medical) (22.5) (42.9) (86.1) (2.1) (6.5) (1.2) 537.6 343.7 450.3 66.4 (19.2) 133.5 Income taxes (paid)/refunded (42.8) (62.7) (79.1) (2.2) 6.8 (26.3) Dividends received 0.5 0.4 7.0 210.7 275.2 103.4 Net Cash Provided by Operating Activities Before Settlement Funds Payments 495.3 281.4 378.2 274.9 262.8 210.6 Amounts paid into Accufix Settlement Funds (United States) by ARI and Pacific Dunlop Ltd (116.0) -- (16.0) -- Net Cash Provided by Operating Activities 31(d) 379.3 281.4 378.2 258.9 262.8 210.6 Cash Flow from Investing Activities

Payments for businesses, net of cash 31(a) acquired (58.1) (23.8) (87.6) - -- Payments for property, plant and equipment (222.6) (192.3) (190.2) (33.7) (44.0) (66.3) Payments for brand names (1.3) (1.3) Payment for redemption of preference shares (0.6) Payments for acquisition of previously held finance leased assets - - (80.1) - - (22.3) Proceeds from sale of businesses, net of cash disposed 31(a) 245.2 36.0 303.3 205.3 24.9 85.3 Proceeds from sale of plant and equipment in the ordinary course of business 28.1 31.9 29.6 6.4 11.9 4.0 Loans repaid 4.5 23.6 21.6 7.2 5.2 12.5 Net loans from controlled entities 31(f) (143.3) (345.5) 309.6 Proceeds from sale of other investments 3.4 0.8 0.2 4.4 Payments for investments in controlled entities (3.2) (134.8) - Payments for other investments (1.8) (3.1) (5.8) (0.1) - - Net Cash (Used in)/Provided by Investing Activities (3.2) (126.9) (9.0) 41.7 (482.3) 322.8 Cash Flows from Financing Activities Proceeds from borrowings 9,746.3 8,025.5 5,094.6 9,254.4 6,497.5 2,230.7 Repayments of borrowings (9,754.2) (8,190.7) (5,353.6) (9,336.7) (6,030.8) (2,535.0) Net (repayments of)/ proceeds from borrowings (7.9) (165.2) (259.0) (82.3) 466.7 (304.3) Proceeds from issues of shares 3.4 3.6 8.4 3.4 3.6 8.4 Lease payments (1.3) (1.4) (9.9) (0.2) (0.2) (5.4) Dividends paid (148.7) (148.7) (147.7) (143.4) (143.8) (143.1) Interest received 39.3 53.4 74.4 40.1 4.5 87.0 Interest and borrowing costs paid (149.5) (156.5) (163.8) (112.4) (115.5) (177.5) Net Cash (Used in)/Provided by Financing Activities (264.7) (414.8) (497.6) (294.8) 215.3 (534.9)

Net Increase/(Decrease) in Cash Held 111.4 (260.3) (128.4) 5.8 (4.2) (1.5) Cash at the beginning of the financial year 944.5 1,171.7 1,294.1 23.0 27.2 28.7 Effects of exchange rate changes on the balances of cash held in foreign currencies at the beginning of the financial year (34.6) 33.1 6.0 Cash at the End of the Financial Year 31(e) 1,021.3 944.5 1,171.7 28.8 23.0 27.2

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

Printed: 29/09/99 15:16 Sheet: AA 5 Brought to you by Global Reports Notes to the Financial Statements 14 P A C I F I C Note 1

U Summary of Significant Accounting Policies N L

O General P

N Pacific Dunlop Limited is a multinational manufacturing and The financial report has been prepared in accordance N

U retailing concern. The Company's principal lines of business, with the conventions of historical cost accounting except,

A determined and reported on the basis of differing products for certain non-current assets which, as noted, are L

R and services, are automotive and electrical product distribution included at valuation.

E (Distribution Group); manufacture of latex protective products P

O (Ansell); branded clothing, footwear and sporting goods; (Pacific The carrying amounts of non-current assets have been R

T Brands) manufacture, marketing and distribution of tyres reviewed to ensure that such assets are not carried at a

1 (South Pacific Tyres); and manufacture of automotive and value in excess of their recoverable amount. In 9

9 industrial batteries (GNB). Its Cable manufacturing operation determining recoverable amounts the relevant cash flows 9 was disposed of during the year ended 30 June 1999. have not been discounted to their present value.

The Ansell group manufactures industrial gloves, medical The accounting policies adopted in preparing the gloves and consumer products including household gloves financial report have been consistently applied by each and condoms in Australia, the Asia Pacific region, and the entity in the consolidated entity and, except where there is United States, and markets these products in Europe. a change in accounting policy, are consistent with those Over 95% of sales are outside Australia. of the previous year.

GNB manufactures and markets automotive batteries in Comparative information is reclassified where North America, Australia and New Zealand and markets its appropriate to enhance comparability. industrial batteries globally achieving sales of 92% outside Australia. Principles of Consolidation The consolidated financial statements of the Pacific South Pacific Tyres manufactures a range of passenger car, Dunlop Group ("the consolidated entity") include the truck, agricultural vehicle and aircraft tyres and uses the financial statements of Pacific Dunlop Limited ("the major brands of "Dunlop", "Goodyear" and "Olympic". Company"), being the parent entity, and its controlled SPT has factories in Australia and New Zealand and achieves entities. more than 12% of sales outside Australia. The consolidated financial statements incorporate the Pacific Brands manufactures and markets a range of branded assets and liabilities of all entities controlled by the clothing, footwear and sporting goods sold throughout Australia, Company as at balance date and the results of all Asia-Pacific, New Zealand and Europe. It also manufactures and controlled entities for the year then ended. The effects of markets foam components and bedding products. More than all transactions between entities in the consolidated 12% of sales are obtained outside Australia. entity are eliminated in full. Outside interests in the results and equity of controlled entities are shown Pacific Distribution operates in Australia and New Zealand separately in the consolidated Profit and Loss Statement supplying electrical and automotive products to end and Balance Sheet respectively. user markets. Electrical parts are distributed to industrial and contractor end users while automotive parts are supplied to Where control of an entity is obtained during a financial the repair industry and resellers. year, its results are included in the consolidated Profit and Loss Statement from the date on which control The Cables and Engineered products business manufactured commences. Where control of an entity ceases during a and marketed aluminium, copper and optical fibre cables for financial year, its results are included for that part of the manufacturing, mining, building and construction, power and year during which control exists. telecommunications. Cables had production facilities in China, Sri Lanka, Indonesia and New Zealand and achieved Income Tax more than 15% of sales outside Australia. Minor components of this business, which were not sold at 30 June 1999, have Income tax expense is calculated at current rates on the been reported within discontinued businesses. accounting profit adjusted for permanent differences and income tax over/under provided in the previous year. The The significant policies which have been adopted in the estimated liability for income tax outstanding in respect preparation of this financial report are: of the period's operations is included in the Balance Sheet as a current liability. Basis of Preparation of Financial Statements

The financial report is a general purpose financial report prepared in accordance with Accounting Standards, Urgent Issues Group Consensus Views, other authoritative pronouncements of the Australian Accounting Standards Board and the Corporations Law.

Printed: 29/09/99 16:07 Sheet: AA 6 Brought to you by Global Reports 15 Notes to the Financial Statements F i n a n c i

Note 1 a l

Summary of Significant Accounting Policies (continued) R e v i e

Future income tax benefits and liabilities arising Investments w because some items are included in accounting profit in a period different from that in which the items are Controlled Entities Notes on the Accounts assessed for income tax, are included in the Balance Investments in controlled entities in the books of the Sheet as a non-current asset and a non-current liability Company that were acquired prior to 1 July 1987 were respectively. As provided for in Accounting Standard valued by the Directors at 30 June 1987 based upon their AASB 1020, these deferred tax balances have been net tangible asset value at that date. Dividends and offset, where applicable, in the financial statements distributions are brought to account in the Profit and Loss of the individual entities. Statement when they are declared by the controlled entities. The eventual recoverability of future income tax benefits and payment of the non-current tax liability is contingent Associated Companies upon taxable income being earned in future periods, An associate is an entity, other than a partnership, over continuation of the relevant taxation laws and each which the consolidated entity exercises significant relevant company continuing to comply with the influence, where the investment in that entity is material appropriate legislation. and has not been acquired with a view to disposal in the near future. Future income tax benefits attributable to tax losses (including capital losses) are only recorded where Prior to 1 July 1997, the consolidated entity's investment virtual certainty of recovery exists. in associated entities were accounted for under the cost method of accounting and dividends were recognised in Provision is made for overseas taxes, which may arise the profit and loss statement when declared by the in the event of retained profits of foreign controlled associate in a general meeting. The investments were entities being remitted to Australia, when the dividend is subject to annual review by directors to ensure the book declared. Provision is made for capital gains tax, which value of such investments did not exceed their may arise in the event of sale of revalued assets, only recoverable amount. In accordance with the Australian when such assets are sold. Securities and Investment Commission (ASIC) Class Order 97/0798, the consolidated entity adopted the Receivables revised accounting standard AASB 1016: Accounting for Investments in Associates on 1 July 1997. Since that Trade Debtors date, the equity method of accounting has been applied Trade debtors are recognised as at the date they are in accounting for investments in associated entities in the invoiced and are principally on 30 day terms. A provision consolidated financial statements of the consolidated for doubtful debts is recognised when collection of the entity. The cost method is still applied in the Company's full nominal amount is no longer probable. financial statements.

Other Amounts Receivable In the consolidated financial statements investments in Other amounts receivable comprise amounts due as a associates are accounted for using equity accounting result of transactions outside the normal course of principles. Investments in associates are carried at the trading. lower of the equity accounted amount and recoverable amount. The consolidated entity's share of the Inventories associates' net profit after tax is recognised in the consolidated Profit and Loss Statement after adjusting Stock on hand and work in progress are consistently for: revisions in depreciation of depreciable assets and valued on the basis of the lower of cost and net amortisation of goodwill arising from adjustments made realisable value. The methods generally adopted as at the date of acquisition; dissimilar accounting throughout the consolidated entity in determining costs policies; and the elimination of unrealised profits and are: losses on transactions between the associate and any entities in the consolidated entity, or another associate of Raw Materials and Other Stock the consolidated entity. Other movements in reserves Actual costs, determined on a first in, first out basis or are recognised directly in consolidated reserves. To standard costs approximating actual costs. recognise the equity accounted amount of the investments on the initial application of the standard, Finished Goods and Work in Progress adjustments were made to the opening balance of the Standard costs approximating actual costs include an consolidated entity's retained profits and reserves at appropriate allocation of overheads. Merchant lines are that time. valued at actual cost into store, determined on a first in, first out or average cost basis. Other Companies Investments in other listed and unlisted companies are Obsolete and slow moving stocks are written down carried at cost less any amount provided for diminution to net realisable value where such value is below cost. in value as determined by the Directors. Dividends are recognised when they are received.

Printed: 29/09/99 16:18 Sheet: AA 7 Brought to you by Global Reports Notes to the Financial Statements 16 P 1 9 A 9 C 9 I

F Note 1 I C

Summary of Significant Accounting Policies (continued) D U N

L Interest in Partnerships Accounts Payable O The interest in a partnership is carried at cost plus the P

A consolidated entity's share of the partnership's result Trade and Other Creditors

N less drawings. The consolidated entity's share in the Trade and other creditors are recognised for amounts to N

U partnership's result for the year is included in the be paid in the future for goods and services received,

A consolidated Profit and Loss Statement. whether or not billed to the Company or the consolidated L

entity. Trade liabilities are normally settled on 60 day R

E Property, Plant and Equipment terms. P O

R Acquisition Bills Payable T

Items of property, plant and equipment are initially Bills payable are carried at the principal amount plus recorded at cost and depreciated as set out below. The accrued interest. cost of property, plant and equipment constructed by the consolidated entity includes the cost of materials and Borrowings direct labour and capitalised interest. Bank and other loans are carried at their principal Revaluations amount, subject to set-off arrangements. Interest is Freehold and leasehold land and buildings are charged as an expense as it accrues. independently valued every three years using the bases of valuation set out in Note 15 and included in the Other Liabilities financial statements at the revalued amounts. Amounts due under contract Consideration of a provision for capital gains tax is not Amounts due under contract are carried at the taken into account in determining revaluation amounts outstanding consideration payable. unless it is known that the asset is intended for sale. Provisions Any related revaluation increment remaining in the asset revaluation reserve at the time of disposal is Wages, Salaries and Annual Leave transferred to Retained Profits. The provisions for employee entitlements to wages, salaries and annual leave represent the amount which Depreciation and Amortisation the consolidated entity has a present obligation to pay Depreciation and amortisation is calculated on a resulting from employees' services provided up to the straight line basis so as to write off the net cost or balance date. The provisions have been calculated at revalued amount of each item of property, plant and nominal amounts based on current wage and salary equipment, excluding land, over its estimated useful life. rates and include related on-costs.

The expected useful lives are as follows: Long Service Leave and Post Retirement Health Benefits Freehold buildings of the Company and all Australian The liability for employee entitlements to long service controlled entities - 40 years leave and post retirement health benefits represents the Freehold buildings of overseas controlled present value of the estimated future cash outflows to be entities - Allowable taxation rates made by the Company and the consolidated entity resulting Leasehold buildings - Life of lease from employees' services provided up to the balance Owned and leased plant date. Related on-costs have also been included in the and equipment - 3 to 10 years liability. Leases Finance leases are capitalised at the present value of Superannuation Contributions the minimum lease payments. A corresponding lease The Company and other controlled entities contribute to liability is also established and each lease payment is various defined benefit and accumulation allocated between the liability and finance charges. superannuation funds as set out in Note 24. Employer contributions to these funds are charged against the Operating lease payments are expensed as incurred. operating profit as they are made.

Brand names Employee and Executive Share Plans The Company currently maintains two plans for Brand names acquired since 1 July 1987 are recorded employees of the consolidated entity - the Pacific Dunlop in the financial statements at cost. No amortisation is Employee Share Plan and the Pacific Dunlop Executive provided against the carrying value of these brand Share Option Plan. A further Plan, the Pacific Dunlop names on the basis that the lives of these assets are Executive Share Plan, was discontinued in 1996. Further considered unlimited at this point in time. information on these plans is set out in Note 25. Other than the costs incurred in administering the plans which Brand names have an unlimited legal life and the brand are expensed as incurred, the plans do not result in any names recorded in the financial statements are not expense to the Company or the consolidated entity. currently associated with products which are likely to become commercially or technically obsolete.

Printed: 29/09/99 15:16 Sheet: AA 8 Brought to you by Global Reports 17 Notes to the Financial Statements

F Accounts i n a n c i

Note 1 a l

Summary of Significant Accounting Policies (continued) R e

Derivatives v i e

Contingencies, Rationalisation and Restructure, Patient w Monitoring, Explantation and Legal, Environmental The Company and consolidated entity use derivative Remediation and Insurance Claims financial instruments, principally foreign exchange and Notes on the The consolidated entity provides for certain specifically interest rate forwards, commodity and interest rate identified or obligated costs when these amounts are options and futures, forward rate agreements and reasonably determinable. interest rate and currency swaps to reduce its exposure to movements in foreign exchange rates, interest rates Accounting for Acquisitions (Goodwill & Brand names) and commodity prices.

Acquired businesses are accounted for on the basis of The consolidated entity has adopted certain principles in the cost method. Fair values are assigned at date of relation to derivative financial instruments: acquisition to all the identifiable underlying assets acquired and to the liabilities assumed. Specific (i) it does not trade in a derivative that is not used in the assessment is undertaken at the date of acquisition of hedging of an underlying business exposure of the any appropriate additional costs to be incurred. A liability consolidated entity; for restructuring costs is only recognised as at the date (ii) derivatives acquired must be able to be recorded on of acquisition when there is a demonstrable the consolidated entity's treasury management systems, commitment to restructuring together with a detailed which contain extensive internal controls; and plan. Further the liability is only recognised when there (iii) the consolidated entity does not deal with counter- is little or no discretion to avoid payment to other parties parties rated lower than A- by Standard and Poor's or to settle such costs and a reliable estimate of the A3 by Moody's Investors Service for any overnight amount of the liability can be made. transactions.

Brand names acquired are recorded in the financial The Company and consolidated entity follow the same credit statements at cost. Acquired goodwill is capitalised and policies, legal processes, monitoring of market and amortised to the Profit and Loss Statement on a operational risks in the area of derivative financial straight line basis over the future period of expected benefit. instruments, as it does in relation to on-balance sheet financial assets and liabilities, where internal controls The benefits from the goodwill acquired may exceed 20 operate. years but the goodwill is written off over periods not exceeding 20 years in compliance with Australian Derivative instruments are not recorded on the Balance Accounting Standards. The unamortised balance of Sheet. goodwill is reviewed at least at each reporting date and any material diminution in value is charged to the Profit Derivative Financial Instruments held or issued for purposes and Loss Statement. other than Trading On a continuing basis, the consolidated entity monitors The bases of valuation of goodwill are detailed in Note its anticipated future exposures and on some occasions 16. hedges all or part of these exposures. The transactions which may be covered are future profits of overseas Foreign Currency Translations controlled entities and future foreign exchange and commodity requirements. Transactions in foreign currencies are recorded at the rate of exchange ruling on the date of each transaction. These exposures are then monitored against continuing At balance date, amounts payable and receivable in analysis of anticipated positions and may be modified foreign currencies are converted at the rates of from time to time. These transactions do not exceed 18 exchange ruling at that date. Where forward currency months duration and hedge transactions the contracts have been arranged, the contract settlement consolidated entity expects to occur in this time frame. rate (approximating the spot rate) is used. Gains and losses on derivatives used as hedges are The financial statements of overseas controlled entities accounted for on the same basis as the underlying that are self sustaining foreign operations are converted physical exposures they hedge. Accordingly, hedge using the current rate method. Variations occurring from gains and losses are included in the Profit and Loss year to year arising from this translation method are Statement when the gain or loss arising on the related transferred to the foreign currency translation reserve. physical exposures are recognised in the Profit and Loss Statement. Exchange differences arising on foreign currency amounts payable and receivable are brought to account When hedging an underlying interest rate exposure, in the Profit and Loss Statement. On consolidation, with a derivative financial instrument, all gains and exchange differences on long term foreign currency losses are accounted for on an accrual basis, thereby amounts payable and receivable that hedge a net adjusting the underlying physical cost to the hedged investment in an overseas controlled entity are rate over the life of the transaction. Gains or losses transferred to the foreign currency translation reserve on resulting from the termination of an interest rate swap a net of tax basis. contract where the underlying borrowing remains, are

Printed: 29/09/99 15:16 Sheet: AA 9 Brought to you by Global Reports Notes to the Financial Statements 18 P F i A n C a I n

F Note 1 c I i C a Summary of Significant Accounting Policies (continued)

l D

R U e N

v deferred on the Balance Sheet and then amortised Revenue recognition L i e O over the life of the borrowing. Where the transaction is w P

a single event, such as a foreign exchange or Sales Revenue

A Notes on the Accounts

N commodity exposure, the hedge gain or loss is taken Sales revenue comprises revenue earned (net of N to account on the actual exposure date. returns, discounts and allowances) from the provision U

A of products to entities outside the consolidated entity. L

Gains and losses on derivative financial instruments Sales revenue is recognised when the goods are R

E which hedge anticipated transactions are in the first provided. P

O instance deferred and later recognised in the Profit and

R Loss Statement when the hedged transaction occurs. Interest income T

Such deferrals only occur where the future transaction Interest income is recognised as it accrues. 1

9 remains assured. Where an actual or anticipated 9

9 transaction is modified or extinguished any associated Asset sales derivative financial instrument is also modified or The gross proceeds of asset sales are included as extinguished and any gain or loss that no longer revenue of the consolidated entity. The profit or loss on relates to an actual or anticipated exposure is disposal of assets is brought to account at the date a immediately taken to the Profit and Loss Statement. contract of sale is signed.

Derivative Financial Instruments held or issued for Use of estimates Trading purposes The Company and the consolidated entity also enter The preparation of consolidated financial statements into a limited number of exchange rate, interest rate in conformity with generally accepted accounting and commodity related derivative contracts for trading principles requires management to make estimates purposes. These transactions are undertaken under and assumptions that affect the reported amounts of strict guidelines, limits and internal controls and with assets and liabilities and disclosure on contingent appropriate stop loss parameters. Trading activities assets and liabilities at the date of the consolidated include taking positions within authorised and clearly financial statements and the reported amounts of defined limits to benefit from expected movements in revenues and expenses during the reported period. prices. The portfolio of derivative financial instruments Actual results could differ from these estimates. held for trading purposes is valued at market rates with all gains and losses being recognised in the Profit and Loss Statement for the current period.

Note 2 Reinstatement of GNB

The 1998 comparatives set out in these financial to sale. Accordingly the net assets of GNB were statements differ from those published in the Pacific reclassified under one caption "Proceeds Dunlop 1998 Annual Report. Comparatives for the Receivable on Sale of GNB" and included within Company and the consolidated entity have been current receivables. amended to include the assets and liabilities of the GNB (Batteries) Group ("GNB") following the 1999 Annual Report abandonment of the sale to Quexco Inc. of the USA. The 1998 comparatives have been restated to allocate 1998 Annual Report the "Proceeds Receivable on Sale of GNB" amount back into the appropriate asset and liability captions. The 1998 Annual Report accounted for GNB as a No gain or loss arises from this process, as the business sold during that year. This accounting environmental and other amounts provided for in treatment was adopted as the sale process, 1998 have been expended, or remain as liabilities. at 30 June 1998, was substantially complete and the signing of the contract on 6 July 1998 Furthermore the incremental loss reported in the provided further evidence of a condition precedent. consolidated entity's 31 December Half Year Financial Report, of $94 million arising from the renegotiation of the sale After providing for additional environmental costs price has not been reversed following abandonment attributable to the business and which arose from of the sale. This loss arose from price negotiation the various due diligence processes, and after in respect of certain GNB assets. The Company providing for other costs and asset adjustments considers that the renegotiation was a clear indication of associated with the transaction, the Profit and Loss impairment of value of those assets and accordingly for the 1998 year included a loss of $88 million. those balances have been fully provided for as an The amount receivable under the contract of sale Abnormal Loss in the 1999 Profit and Loss. was equal to the carrying value of the net assets subject

Printed: 29/09/99 15:16 Sheet: AA 10 Brought to you by Global Reports 19 Notes to the Financial Statements F i n a n c i

Note 3 Consolidated The Company a l

Operating Profit 1999 1998 1997 1999 1998 1997 R e

$ million $ million $ million $ million $ million $ million v i e

Operating Profit inclusive of abnormal items w

and before income tax is arrived at after Notes on the Accounts charging/(crediting) the following items:

Borrowing Costs Interest Paid or Due and Payable To wholly owned controlled entities 3.4 8.2 74.4 To others * 142.5 153.2 144.4 106.8 105.2 99.3

Finance Charges on Finance Leases 0.4 0.4 1.5 - - 0.9

Other Borrowing Costs 3.3 2.9 3.3 2.4 2.1 2.9

146.2 156.5 149.2 112.6 115.5 177.5 Depreciation Buildings 7.3 5.7 6.6 0.5 0.6 0.5 Plant & equipment 142.3 144.4 134.4 47.2 47.0 42.3

Amortisation Leasehold land and buildings 6.1 4.6 4.7 0.6 0.9 0.6 Leased plant and equipment 0.2 0.3 3.5 0.2 0.3 2.7 Goodwill 40.6 39.6 35.4 3.4 4.3 5.2

Write-down in value of inventories 1.1 7.3 4.4 1.1 5.7 0.6

Reversals of write-down in value of inventories 0.1-- ---

Research and Development Costs Expensed as Incurred 37.1 32.0 22.3 0.6 1.9 0.9

Net Bad Debts Expense 1.9 5.3 3.7 1.0 3.1 13.8

Amounts Set Aside to Provision for Doubtful trade debts 7.2 10.4 7.5 5.2 2.0 0.1 Doubtful amounts owing by wholly owned controlled entities 118.8 85.9 - Employee entitlements 86.9 85.3 93.7 36.1 36.8 37.6 Contingencies 1.5 1.4 14.8 (5.6) - (2.1) Rationalisation and restructuring costs 10.5 9.9 0.5 - (0.9) (0.5) Net charge following creation of Accufix Settlement Funds in the United States of America - 69.5 - Rebates, allowances and warranty claims 3.3 1.9 8.4 1.2 1.0 0.9 Environmental remediation 4.8 88.3 1.0 - 0.4 -

Net foreign exchange gain/(loss) 6.3 10.4 0.5 (32.2) (18.5) (4.2) Losses Arising from Sale of Property, Plant and Equipment ** 101.1 17.8 11.9 13.1 5.5 2.6

Operating Lease Rentals 103.5 96.1 84.4 51.7 49.2 43.4

* Excludes interest of Telectronics charged against the provision for holding losses of $14.6 million in 1997. ** Includes abnormal write down of certain GNB assets

Printed: 29/09/99 15:16 Sheet: AA 11 Brought to you by Global Reports Notes to the Financial Statements 20 P A C I F I C Note 3 Consolidated The Company

U Operating Profit (continued) 1999 1998 1997 1999 1998 1997 N $ thousand $ thousand $ thousand $ thousand $ thousand $ thousand L O P

Auditors' Remuneration A

N Amounts received and receivable for audit services N

U Auditors of Pacific Dunlop Limited and Australian entities 2,710 2,758 2,706 1,894 1,928 2,231 A

L Other member firms of KPMG 2,577 2,497 2,273 - 1-

E For other services P

O Auditors of Pacific Dunlop Limited and Australian entities 3,745 2,170 2,977 1,449 1,628 2,315 R

T Other member firms of KPMG 1,603 1,157 475

1 9 9 9 No other benefits were received by the auditors of Pacific Dunlop Limited or by the auditors of its controlled entities

Note 4 Consolidated The Company Other Operating Revenue 1999 1998 1997 1999 1998 1997 $ million $ million $ million $ million $ million $ million

Revenue from Other Operating Activities

Dividend income From shares in wholly owned controlled entities 210.1 274.2 93.0 From shares in partly owned controlled entities - - 4.9 From shares in associated companies - - 6.7 0.6 1.0 3.0 From shares in other companies 0.5 0.4 0.3 - - 2.5

Share of Associates' Net Profit 3.6 3.0 -

Interest Received or Due and Receivable From wholly owned controlled entities 33.9 0.5 76.4 From partly owned controlled entities - - 1.9 From Directors of Pacific Dunlop Limited and controlled entities - - 0.1 - - 0.1 From others 39.7 53.5 74.3 6.2 4.0 8.6 Total Revenue from Other Operating Activities 43.8 56.9 81.4 250.8 279.7 190.4

Revenue from Outside Operating Activities Proceeds from the Sale of other Non-Current Assets 28.1 31.9 29.5 6.4 11.9 11.0 Proceeds Received and Receivable from the Sale of Businesses and Investments 261.9 34.1 253.7 209.3 22.9 13.8

Total Revenue from Outside Operating Activities 290.0 66.0 283.2 215.7 34.8 24.8

Total - Other Revenue 333.8 122.9 364.6 466.5 314.5 215.2 Gains from the Sale of Property, Plant and Equipment in the Normal Course of Business 4.3 7.2 3.7 0.6 2.6 2.7

Printed: 29/09/99 15:16 Sheet: AA 12 Brought to you by Global Reports 21 Notes to the Financial Statements F i n a n c i

Note 5 Consolidated The Company a l

Share Capital 1999 1998 1997 1999 1998 1997 R e

Notes $ million $ million $ million $ million $ million $ million v i e w Issued and Paid up Capital

1,026,781,984 (1998 - 1,024,071,526 of 50 cents par value Notes on the Accounts each; 1997 - 1,020,537,166 of 50 cents par value each) ordinary shares, fully paid + 1,773.4 512.0 510.3 1,773.4 512.0 510.3 4,975,187 (1998 - 5,582,645 of 50 cents par value each; 1997 - 6,280,505 - of 50 cents par value each) ordinary plan shares, fully paid + 2.5 2.8 3.1 2.5 2.8 3.1 11,433,400 (1998 - 13,536,400 of 50 cents par value each; 1997 - 16,372,900 of 50 cents par value each) ordinary plan shares, paid to 1 cent + 0.1 0.1 0.2 0.1 0.1 0.2

1,776.0 514.9 513.6 1,776.0 514.9 513.6

Options On 22 July 1998 the Company granted options to subscribe for up to 1,545,000 unissued ordinary shares to certain executives in accordance with the specific terms of issue approved at the Annual General Meeting held on 4 November 1998. Refer Note 25 for further information.

+ The Company Law Review Act 1998 ("the Act") came into effect on 1 July 1998. The Act abolished par value shares, and any amount standing to the credit of the share premium reserve and capital redemption reserve became part of the Company's share capital on 1 July 1998. As a result the balance of the share premium reserve and capital redemption reserve amounting to $1,229.6 million and $28.0 million respectively became part of the share capital account on 1 July 1998 increasing the share capital on that date to $1,772.5 million. From 1 July 1998 share capital does not have a nominal (par) value.

Note 6 Consolidated The Company Reserves and Retained Profits 1999 1998 1997 1999 1998 1997 Notes $ million $ million $ million $ million $ million $ million

Share premium reserve - 1,229.6 1,227.4 - 1,229.6 1,227.4 Capital redemption reserve - 28.0 28.0 - 28.0 28.0 Asset revaluation reserve 8.6 20.7 32.8 10.0 9.2 7.2 General reserve 4.8 4.8 4.8 Foreign currency translation reserve (115.5) (94.2) (108.8) - (0.8) 6.5 Equity reserve in associate companies - - (2.4) (102.1) 1,188.9 1,181.8 10.0 1,266.0 1,269.1 (Accumulated losses)/retained profits (65.4) (38.2) 116.1 284.0 295.9 449.8 (167.5) 1,150.7 1,297.9 294.0 1,561.9 1,718.9

Movements during the year Share Premium Reserve Balance at the beginning of the financial year 1,229.6 1,227.4 1,561.7 1,229.6 1,227.4 1,561.7 Premium on plan shares converted - 2.2 5.9 - 2.2 5.9 Transfer to retained profits - - (340.2) - - (340.2) Included with share capital 5 (1,229.6) --(1,229.6) -- Balance at the end of the financial year - 1,229.6 1,227.4 - 1,229.6 1,227.4

Capital Redemption Reserve Balance at the beginning of the financial year 28.0 28.0 28.0 28.0 28.0 28.0 Included with share capital 5 (28.0) - - (28.0) - - Balance at the end of the financial year - 28.0 28.0 - 28.0 28.0

Printed: 29/09/99 15:16 Sheet: AA 13 Brought to you by Global Reports Notes to the Financial Statements 22 P A C I F I C Note 6 Consolidated The Company

U Reserves and Retained Profits (continued) 1999 1998 1997 1999 1998 1997 N

L Notes $ million $ million $ million $ million $ million $ million O P

Asset Revaluation Reserve A

N Balance at beginning of the financial year 20.7 32.8 32.7 9.2 7.2 7.8 N U

A Adjustment to asset revaluation reserve at the

L beginning of the financial year on initial

R adoption of revised AASB 1016 Accounting E

P for Investments in Associates 1 - 1.5 - O

R Net decrement arising from revaluation of properties * - (25.2) - - (0.8) - T

Transfer to retained profits (12.1) 11.6 0.7 0.8 2.8 - 1 9

9 Revaluation decrement for property revalued to 9 recoverable amount * - - (0.6) - - (0.6) Balance at the end of the financial year 8.6 20.7 32.8 10.0 9.2 7.2

General Reserve Balance at beginning of the financial year 4.8 4.8 5.0 Transfer to retained profits - - (0.2) Balance at the end of the financial year 4.8 4.8 4.8

Foreign Currency Translation Reserve Balance at the beginning of the financial year (94.2) (108.8) (123.7) (0.8) 6.5 12.0 Adjustment to foreign currency translation reserve at the beginning of the financial year on initial adoption of revised AASB 1016 Accounting for Investments in Associates 1 - (0.5) - Transfers to profit and loss 0.8 Exchange fluctuations on assets and liabilities held in foreign currencies net gain/(loss) on translation of net assets (119.2) 150.7 48.1 net (loss)/gain on hedge borrowings 97.9 (135.6) (33.2) - (7.3) (5.5) Balance at the end of the financial year (115.5) (94.2) (108.8) - (0.8) 6.5

Equity Reserve in Associated Companies Balance at the beginning of the financial year - (2.4) (2.4) Adjustment to equity reserve in associated companies at the beginning of the financial year on initial adoption of revised AASB 1016 Accounting for Investments in Associates 1 - 2.4 - Balance at the end of the financial year --(2.4)

(Accumulated Losses)/Retained Profits Balance at the beginning of the financial year (38.2) 116.1 (257.6) 295.9 449.8 169.9 Adjustment to retained profits at the beginning of the financial year on initial adoption of revised AASB1016 Accounting for Investments in Associates 1 - (23.3) - Transfer from reserves (net) 12.1 (11.6) 339.7 (0.8) (2.8) 340.2 Trading profits 199.8 180.8 175.6 78.5 8.5 90.6 Abnormal items (94.0) (156.0) 2.2 54.9 (15.4) (7.1) Dividends provided + (145.1) (144.2) (143.8) (144.5) (144.2) (143.8) Balance at the end of the financial year (65.4) (38.2) 116.1 284.0 295.9 449.8

+ The interim dividends and final dividends include under provision for dividends arising from movements in share capital after balance date but prior to books closing date of $102,000 (1998 - $92,000 under provision; 1997 - $50,000 under provision). In addition the 1999 consolidated balance includes $564,775 for the redemption of Bonds Industries preference shares.

* This item has not been brought to account in determining the profit/(loss) for the year.

Printed: 29/09/99 16:07 Sheet: AA 13a Brought to you by Global Reports 23 Notes to the Financial Statements F i n a n c i

Note 7 Consolidated The Company a l

Abnormal Items (a) 1999 1998 1997 1999 1998 1997 R e

$ million $ million $ million $ million $ million $ million v i e w GNB Environmental and fair value adjustments (94.0) (88.0) (16.3)

Gain on disposal of the Cables Group 71.1 Notes on the Accounts Net charge following creation of Accufix Settlement Funds in the United States of America (69.5) (15.4) Income tax benefit 1.5 Net gain on sale of controlled entities and businesses 4.6 0.1 Income tax benefit 6.3 2.6 Provision for rationalisation, restructuring* and relocation (4.0) (4.0) Income tax benefit 0.5 0.5 Write down in value of: Receivables (0.8) Write off quarantined foreign tax losses (5.2) (5.2) Other (0.2) Abnormal Items after Income Tax attributable to Pacific Dunlop Limited shareholders (94.0) (156.0) 2.2 54.9 (15.4) (7.1)

Analysis of Abnormal Items Abnormal items before income tax (94.0) (157.5) 0.6 54.8 (15.4) (5.1) Income tax benefit/(expense) on abnormal items - 1.5 1.6 0.1 - (2.0) Abnormal Items after Income Tax attributable to Pacific Dunlop Limited shareholders (94.0) (156.0) 2.2 54.9 (15.4) (7.1)

(a) Certain amounts within abnormal items are also included in the Note 3 statutory disclosures * These expenses have not been tax effected

Note 8 Consolidated The Company Income Tax 1999 1998 1997 1999 1998 1997 $ million $ million $ million $ million $ million $ million

Tax at Standard Rates on Operating Profit/(Loss) 58.6 24.6 95.9 45.0 (35.5) 32.8 Increased taxation arising from: Goodwill amortisation 8.8 8.8 9.8 1.2 1.6 1.9 Net charge following creation of Accufix Settlement Funds in the United States of America - 23.5 - - 5.5 - Other non-allowable permanent differences - - 19.5 - 9.8 12.3 GNB Environmental and fair value adjustments 33.8 31.7 - Foreign losses and costs not deductible 2.2 Income tax under provided in prior years - -- - 0.1 - Provision against amounts owing by wholly owned 42.6 30.9 - controlled entities Reduced taxation arising from: Tax rebate on dividends from investments 0.1 0.1 0.4 75.8 104.1 37.8 Tax exempt dividends from foreign companies 0.5 0.1 2.2 Income tax over provided in previous years 10.9 6.6 1.8 7.2 - 1.6 Investment and export incentive allowances 16.8 7.8 0.1 Net capital receipts not assessable - (0.1) 6.7 11.6 -- Net lower overseas tax rates 15.1 18.2 27.3 Other allowable permanent differences 7.5 10.3 5.2 2.7 -- Share of associates' net profit 1.3 1.1 -

Attributable to Operating Profit/(Loss) 51.2 44.5 81.5 (8.5) (91.7) 7.6

Provision attributable to current year 6.4 83.0 108.1 3.2 (14.1) 7.1 (Over)/Under provision in respect of previous years (10.9) (6.6) (1.8) (7.2) 0.1 (1.6) Provision attributable to future years Deferred tax liability 0.3 2.1 (16.9) - -- Future income tax benefit 55.4 (34.0) (7.9) (4.5) (77.7) 2.1 51.2 44.5 81.5 (8.5) (91.7) 7.6

Printed: 29/09/99 15:16 Sheet: AA 14 Brought to you by Global Reports Notes to the Financial Statements 24 P A C I F I C The Company

Note 9 D

U Dividends Paid and Proposed 1999 1998 1997 N

L $ million $ million $ million O P

A Dividends paid or declared by the Company are: N

N (a) an interim dividend of 7 cents (1998 - 7 cents; 1997 - 7 cents) U

A unfranked (1998 - franked to 60%; 1997 - 60%) was paid on 1 July 1999 72.2 72.0 71.8 L

(b) a final dividend of 7 cents (1998 - 7 cents; 1997 - 7 cents) R

E unfranked (1998 - unfranked; 1997 - 60%) has been declared by the Directors 72.2 72.1 71.9 P O R

T Dividend Franking Account

9 The balance of available franking credits in the franking account as at 30 June 1999 was Nil (1998 - $1.3 million; 9

9 1997 - $0.3 million). The final dividend is unfranked.

Note 10 Consolidated Outside Equity Interests 1999 1998 1997 $ million $ million $ million

Outside equity interests comprise: Issued capital 23.7 24.1 24.5 Reserves (4.8) (3.9) (1.6) Retained profits at the beginning of the financial year 5.9 12.4 8.1 Profits/(losses) for the year 5.7 (1.0) 7.1 Dividends provided for during the year (5.3) (4.9) (4.7) Outside equity interests (disposed)/acquired during the year 0.6 (0.6) 1.9 Retained profits at the end of the financial year 6.9 5.9 12.4 Total Outside Equity Interests 25.8 26.1 35.3

Note 11 Consolidated The Company Cash 1999 1998 1997 1999 1998 1997 $ million $ million $ million $ million $ million $ million

Cash on hand 1.0 1.6 2.4 0.1 0.1 0.2 Cash at bank 181.0 134.4 124.3 29.5 31.1 33.1 Short-term deposits 890.3 861.3 1,065.1 1.1 - 1,072.3 997.3 1,191.8 30.7 31.2 33.3

Printed: 29/09/99 15:16 Sheet: AA 15 Brought to you by Global Reports 25 Notes to the Financial Statements F i n a n c i

Note 12 Consolidated The Company a l

Receivables 1999 1998 1997 1999 1998 1997 R e

$ million $ million $ million $ million $ million $ million v i e w Current

Trade debtors 887.8 951.8 892.7 132.3 169.5 187.9 Notes on the Accounts Less provision for doubtful debts 40.2 38.0 29.2 9.5 7.9 6.8 Less provision for rebates, allowances and 41.3 40.8 34.4 12.0 10.1 8.0 warranty claims 806.3 873.0 829.1 110.8 151.5 173.1 Amounts owing by wholly owned controlled entities 2,437.9 2,157.9 2,503.3 Less provision for doubtful debts 204.7 85.9 - Amounts owing by partly owned controlled entities - 4.2 33.2 Other amounts receivable 181.2 105.7 123.3 60.1 15.7 44.0 987.5 978.7 952.4 2,404.1 2,243.4 2,753.6

Non-Current Trade debtors - 16.2 20.3 - -- Other amounts receivable 45.9 71.0 74.8 34.6 66.0 66.8 Less provision for doubtful debts 0.1 17.4 17.2 0.1 17.4 17.2 45.8 69.8 77.9 34.5 48.6 49.6 1,033.3 1,048.5 1,030.3 2,438.6 2,292.0 2,803.2

Bad Debts Written Off against Provision for Doubtful Debts Trade debtors 1.9 5.3 6.0 1.0 3.1 0.4

1999 1998 1997 1999 1998 1997 $ thousand $ thousand $ thousand $ thousand $ thousand $ thousand Included in other amounts receivable are: (i) Loans to employees in relation to the employee share plan - current 698 782 879 698 782 879 - non-current 11,807 14,088 16,710 11,807 14,088 16,710 (ii) Loans to Executive Directors of Pacific Dunlop Limited and Executives who are Directors of certain controlled entities secured under the Pacific Dunlop Housing Scheme repayable at a future date at concessional interest rates - current - -42- -42 - non-current 1,050 1,050 1,575 1,050 1,050 1,575 Repayments received - 767 1,352 767 1,352 (iii) Other loans to Directors of controlled entities - current - -14- -- Repayments received - 14 780 - --

Printed: 29/09/99 15:16 Sheet: AA 17 Brought to you by Global Reports Notes to the Financial Statements 26 P A C I F I C Note 13 Consolidated The Company

U Inventories 1999 1998 1997 1999 1998 1997

N Notes $ million $ million $ million $ million $ million $ million L O

P At Cost

N Raw materials 107.0 121.0 129.3 38.8 35.5 34.2 N

U Work in progress 96.7 90.7 101.3 18.9 26.1 32.1 A

L Finished goods 723.0 724.9 682.7 114.0 143.2 144.0

E Other stock 13.9 67.4 14.3 3.8 0.7 0.9 P

O 940.6 1,004.0 927.6 175.5 205.5 211.2 R

T Net Realisable Value

9 Raw materials 0.3 3.9 3.8 0.3 2.3 2.7 9

9 Work in progress - 0.9 0.6 - - 0.4 Finished goods 11.0 12.5 22.0 - 2.9 3.0 Other stock 0.3 0.6 - - - 11.6 17.9 26.4 0.3 5.2 6.1 952.2 1,021.9 954.0 175.8 210.7 217.3

Note 14 Investments

Shares in Controlled Entities Not quoted on a prescribed stock exchange: Pre 01/07/1987 - Directors' valuation 30/06/1987 393.3 393.5 394.5 Post 01/07/1987 - At cost 2,641.1 2,645.3 2,521.9 Total investment in controlled entities 3,034.4 3,038.8 2,916.4

Shares in Other Companies Not quoted on a prescribed stock exchange: At cost 16.1 22.5 9.9 - -- Directors' valuation - - 6.7 - -- Shares in Unlisted Associated Companies - Equity Accounted Equity Accounted 39 17.3 26.5 Directors' valuation - - 46.4 0.2 26.4 26.4 Investment in Partnerships South Pacific Tyres 34 115.0 115.0 123.0 - -- Dunlop Skega - 2.9 2.7 - -- 148.4 166.9 188.7 0.2 26.4 26.4 148.4 166.9 188.7 3,034.6 3,065.2 2,942.8

Printed: 29/09/99 16:06 Sheet: AA 18 Brought to you by Global Reports 27 Notes to the Financial Statements F i n a n c i

Note 15 Consolidated The Company a l

Property, Plant and Equipment 1999 1998 1997 1999 1998 1997 R e

$ million $ million $ million $ million $ million $ million v i e w (a) Freehold Land

Independent valuation 31/12/1997 55.3 66.5 4.2 10.0 Notes on the Accounts Directors' valuation 31/12/1997 27.7 27.2 0.4 1.0 Independent valuation 31/12/1994 60.7 6.0 Directors' valuation 31/12/1994 15.1 At cost 2.4 1.4 16.4 - - 3.7 85.4 95.1 92.2 4.6 11.0 9.7 (b) Freehold Buildings Independent valuation 31/12/1997 102.1 147.9 11.8 21.9 Directors' valuation 31/12/1997 31.4 39.1 - - Independent valuation 31/12/1994 96.6 11.0 Directors' valuation 31/12/1994 16.4 0.7 133.5 187.0 113.0 11.8 21.9 11.7 Less provision for depreciation 13.9 10.8 9.1 0.4 0.5 1.2 119.6 176.2 103.9 11.4 21.4 10.5 At cost 41.0 35.5 112.8 1.3 0.8 5.4 Less provision for depreciation 9.0 6.3 10.8 0.4 - 0.1 32.0 29.2 102.0 0.9 0.8 5.3 151.6 205.4 205.9 12.3 22.2 15.8 (c) Leasehold Land and Buildings Independent valuation 31/12/1997 38.0 49.1 - - Directors' valuation 31/12/1997 9.8 6.7 - - Independent valuation 31/12/1994 61.7 Directors' valuation 31/12/1994 3.4 47.8 55.8 65.1 - - Less provision for amortisation 3.4 1.1 3.8 - - 44.4 54.7 61.3 - - At cost 38.0 26.9 37.7 5.8 6.7 3.5 Less provision for amortisation 17.2 14.5 14.4 2.2 2.3 1.5 20.8 12.4 23.3 3.6 4.4 2.0 65.2 67.1 84.6 3.6 4.4 2.0 (d) Plant and Equipment At cost 1,526.9 1,758.7 1,638.9 247.8 404.1 405.2 Less provision for depreciation 880.5 976.7 854.7 153.6 240.8 231.2 646.4 782.0 784.2 94.2 163.3 174.0 (e) Leased Plant and Equipment At cost 1.3 1.6 1.8 0.7 0.7 1.0 Less provision for amortisation 1.1 1.3 1.0 0.5 0.4 0.4 0.2 0.3 0.8 0.2 0.3 0.6 (f) Buildings and Plant under construction At cost 117.0 107.8 74.8 6.0 10.9 38.2 1,065.8 1,257.7 1,242.5 120.9 212.1 240.3

The independent valuations of freehold and relevant leasehold land and buildings were undertaken as at 31 December 1997 by Richard Ellis (Victoria) Pty. Ltd., on the basis of Market Value - Existing Use, subject to continued occupation by the operating entity or, where this was not the case, Market Value - Alternative Use. However, certain other freehold and leasehold properties, including both operative and idle sites, were valued at amounts different to these independent valuations. A valuation of freehold and leasehold land and buildings is obtained every three years.

Printed: 29/09/99 15:16 Sheet: AA 19 Brought to you by Global Reports Notes to the Financial Statements 28 P A C I F I C Note 16 Consolidated The Company

U Intangibles 1999 1998 1997 1999 1998 1997 N $ million $ million $ million $ million $ million $ million L O P

Brand Names A

N At cost 205.3 218.9 171.5 3.7 4.8 4.8 N U

A Goodwill L

R Directors' valuation 30/06/1992 47.9 48.3 39.2 E

P Directors' valuation 30/06/1996 2.9 3.0 4.1 O

R 50.8 51.3 43.3 - -- T

1 Less provision for amortisation 14.7 11.3 7.7 9

9 36.1 40.0 35.6 - -- 9 At cost 536.5 593.1 550.5 19.9 62.9 62.9 Less provision for amortisation 170.1 168.6 117.6 9.1 21.3 17.5 366.4 424.5 432.9 10.8 41.6 45.4 Total Goodwill 402.5 464.5 468.5 10.8 41.6 45.4 Total Intangibles 607.8 683.4 640.0 14.5 46.4 50.2

Capitalised brand names were subject to an independent valuation by Interbrand U.K. Limited as at 30 June 1997. The bases of the valuation used by the independent valuer were the earnings multiple basis and discounted cash flow basis. Both bases valued the brand names at a value in excess of the book value at 30 June 1997. The increment has not been booked and the brand names remain at cost.

Certain goodwill values were revalued downwards by the Directors at 30 June 1992 and at 30 June 1996. This resulted from the annual review of carrying values of goodwill performed as at those dates. The basis of valuation used to determine recoverable amount was the discounted cash flow basis.

Note 17 Future Income Tax Benefit

Future income tax benefit arising from: Accumulated timing differences 137.5 194.9 141.2 154.6 142.4 63.4 Accumulated tax losses 142.7 168.9 136.3 (0.1) - 3.1 280.2 363.8 277.5 154.5 142.4 66.5

The Group has unrecognised capital tax losses relating to controlled entities of $29.1 million (1998 - $13.9 million: 1997 - Nil). Future income tax benefits of $169.5 million '(1998 - $125.2 million; 1997 - $131.8 million) relating to trading tax losses of controlled entities have not been recognised in the financial statements. The benefit of those trading losses will only be obtained if: (a) the controlled entities derive future assessable income of a nature and an amount sufficient to enable the benefits from the deductions for the losses to be realised; (b) the controlled entities continue to comply with the conditions for deductibility imposed by tax legislation; and (c) no changes in tax legislation adversely affect the controlled entities in realising the benefits from the deductions for the losses.

The tax effect of temporary differences that give rise to significant portions of the future income tax benefit are presented below:

Trading stock tax adjustments 24.0 34.6 29.0 Depreciation on plant adjustments (4.5) 0.1 (2.6) Provisions 107.4 96.8 80.8 Accruals 10.5 (20.0) 17.7 Unrealised foreign exchange losses 37.2 57.0 3.0 Income taxed before/after books (33.5) 30.1 (1.2) Costs allowed before/after books 3.0 (5.1) 2.7 Accumulated tax losses 142.7 168.9 136.3 Other (6.6) 1.4 11.8 Total temporary differences 280.2 363.8 277.5

Printed: 29/09/99 15:16 Sheet: AA 20 Brought to you by Global Reports 29 Notes to the Financial Statements F i n a n c i

Note 18 Consolidated The Company a l

Accounts Payable 1999 1998 1997 1999 1998 1997 R e

$ million $ million $ million $ million $ million $ million v i e w Current

Amounts owing to wholly owned controlled entities 1,711.5 1,582.2 2,370.0 Notes on the Accounts Amounts owing to partly owned controlled entities 5.4 Trade creditors 598.3 645.0 604.5 98.5 131.3 109.0 Bills payable 0.1 4.2 7.4 0.1 - - Other creditors 125.2 145.1 164.5 147.2 139.9 75.7 Lease liabilities 2.1 1.5 1.3 0.2 0.2 0.2 725.7 795.8 777.7 1,957.5 1,853.6 2,560.3 Non-Current Trade creditors 0.3 0.3 0.8 0.1 0.3 0.2 Other creditors 11.7 11.8 2.5 0.2 0.1 - Lease liabilities 2.0 2.1 3.0 0.1 0.3 0.5 14.0 14.2 6.3 0.4 0.7 0.7 739.7 810.0 784.0 1,957.9 1,854.3 2,561.0

Note 19 Borrowings

Current Bank overdrafts 51.0 52.8 20.1 1.9 8.2 6.1 Subordinated convertible bonds - U.S. dollars 97.0 97.0 Bank loans repayable in: Belgian francs 23.2 -- - -- Canadian dollars 8.7 8.9 - - -- New Zealand dollars 5.9 8.5 0.5 - -- U.S. dollars 47.3 22.9 1.5 25.6 - Other currencies 5.3 5.0 6.3 - 2.0 - Other loans repayable in: Australian dollars 21.3 155.0 380.3 21.3 155.0 349.7 Belgian francs 23.2 - 19.8 23.2 - 19.8 Canadian dollars 17.4 -- 17.4 -- French francs 8.7 24.3 20.6 8.7 24.3 20.6 Malaysian ringgits 0.2 0.2 16.0 - - 16.0 New Zealand dollars 34.2 55.5 29.1 12.5 55.5 20.9 Sterling Pounds 11.9 29.4 - 11.9 29.4 - Thai baht - - 29.0 - - 29.0 U.S. dollars 1,066.9 1,056.4 746.2 970.9 892.6 275.2 Other currencies 15.1 0.5 16.0 13.7 - 15.8 1,340.3 1,419.4 1,382.4 1,107.1 1,167.0 850.1 Non-Current Bank loans repayable in: Other currencies 1.3 0.9 19.0 - -- Other loans repayable in: Malaysian ringgits - 0.2 33.2 - - 33.2 New Zealand dollars 79.1 33.2 48.2 79.1 33.2 48.2 Sterling Pounds 45.9 -- 45.9 -- Thai baht - - 27.4 - - 27.4 U.S. dollars 642.1 800.0 649.7 490.9 610.3 342.1 Other currencies 12.6 13.8 47.8 11.1 12.6 46.2 781.0 848.1 825.3 627.0 656.1 497.1 2,121.3 2,267.5 2,207.7 1,734.1 1,823.1 1,347.2

The long-term foreign currency monetary liabilities predominantly represent the acquisition cost of investments in overseas countries and are therefore matched by assets in matching currencies. There are no material monetary assets or liabilities that are not effectively hedged for the next 12 months, except where this is not legally or economically feasible.

Printed: 29/09/99 15:16 Sheet: AA 21 Brought to you by Global Reports Notes to the Financial Statements 30 A P P A A N C C N I I U F F A I I C C

L Note 19

D D R U U

E Borrowings (continued) N N P O L L O O R The Group borrows funds from time to time for working capital purposes and also borrows funds in foreign currencies P P T

principally to hedge the Group's investment in the net assets of foreign controlled entities. The Group does not, as a rule, A 1 9 N pledge assets as security for borrowings, however, at June 30, 1999 bank overdrafts and other loans totaling $5.6 million 9 N

8 (1998$ 1.8 million, 1997: $11.1 million) were secured, principally against Group property, plant and equipment items having U

A carrying values slightly in excess of the secured amounts payable. These security arrangements relate to acquired controlled L

entities and were in place prior to the companies concerned becoming part of the Pacific Dunlop Limited Group. R E P

O The following table sets out detail in respect of the major components of Bank and Other Borrowings at June 30, 1999. R T

1 9

9 Amount Interest Rate Maturity Date 9 Nature of Borrowing $ million % p.a.

Bank Overdrafts Australian dollars 42.9 6.06 to 7.95 At Call Indian rupees 0.8 10.0 to 14.53 2000 Malaysian ringgit 1.3 8.50 1999 New Zealand dollars 0.8 5.90 At Call Sterling pounds 0.7 6.00 to 6.50 At Call United States dollar 3.1 6.06 to 7.35 At Call Other currencies 1.5 Various At Call Total Bank Overdrafts 51.0

Amount Interest Rate Maturity Date

Bank Loans $ million % p.a. Current Belgian francs 23.2 3.05 1999 Canadian dollars 8.7 5.10 to 5.20 1999 New Zealand dollars 5.9 4.75 At Call United States dollars 47.3 6.10 to 8.28 1999 Other currencies 5.3 3.90 to 15.30 1999 90.4 Non-Current Other Currencies 1.3 4.22 to 6.18 2001 Total Bank Loans 91.7

Printed: 29/09/99 16:06 Sheet: AA 22 Brought to you by Global Reports 31 Notes to the Financial Statements

F Accounts i Note 19 n a

Borrowings (continued) n c i Amount Interest Rate Maturity Date a l

Nature of Borrowing $ million % p.a. e v i e Other Loans w

Current Notes on the Australian dollars 21.3 5.00 1999 Belgian francs 23.2 3.85 1999 Canadian dollars 17.4 5.29 1999 French francs 8.7 3.80 1999 Malaysian ringgit 0.2 8.00 1999 New Zealand dollars 12.5 4.60 1999 New Zealand dollars 4.0 4.76 1999 New Zealand dollars 8.0 4.73 1999 New Zealand dollars 1.6 4.88 1999 New Zealand dollars 8.1 4.84 1999 Pounds sterling 11.9 5.18 2000 United States dollars 790.4 5.22 1999 United States dollars 180.5 5.70 1999 United States dollars 60.5 5.4 1999 United States dollars 24.2 5.87 1999 United States dollars 11.3 5.35 1999 Other currencies 15.1 3.09 2000

1,198.9 Non-Current Pounds sterling 45.9 5.69 2001 New Zealand dollars 79.1 7.11 Various United States dollars 151.2 9.75 2000 United States dollars 136.1 5.68 2004 United States dollars 81.0 5.23 2001 United States dollars 75.6 7.00 2005 United States dollars 73.2 5.56 2000 United States dollars 49.1 6.37 2002 United States dollars 48.7 5.57 2003 United States dollars 27.2 5.31 2006 Other currencies 12.6 3.44 to 3.48 2000 Total Other Loans 779.7 Total Bank and Other Borrowings 1,978.6

Consolidated The Company 1999 1998 1997 1999 1998 1997 $ million $ million $ million $ million $ million Net Interest Bearing Debt

Cash at bank and short-term deposits 1,071.3 995.7 1,189.4 30.6 31.1 33.1

Current borrowings 1,340.3 1,419.4 1,382.4 1,107.1 1,167.0 850.1 Current bills payable 0.1 4.2 7.4 0.1 - Current finance lease liabilities 2.1 1.5 1.3 0.2 0.2 0.2 Non-current borrowings 781.0 848.1 825.3 627.0 656.1 497.1 Non-current finance lease liabilities 2.0 2.1 3.0 0.1 0.3 0.5 Net interest bearing debt 1,054.2 1,279.6 1,030.0 1,703.9 1,792.5 1,314.8

Printed: 29/09/99 15:16 Sheet: AA22a Brought to you by Global Reports Notes to the Financial Statements 32 P D A P A A U N C C N N I I L U F F O A I I C C P L Consolidated The Company

U Note 20 1999 1998 1997 1999 1998 1997 N

L Provisions $ million $ million $ million $ million $ million $ million O P

A Current N

N Provision for employee entitlements 121.8 132.0 118.3 32.8 37.4 38.7 U

A Provision for contingencies 49.0 47.4 35.0 27.8 32.5 14.9 L

R Provision for rationalisation and restructuring costs 109.1 48.9 50.5 1.9 4.1 5.1 E

P Provision with respect to creation of Accufix Settlement O

R Funds in the United States of America 12.3 106.6 - T

1 Provision for non-reimbursable patient monitoring costs, 9

9 (where appropriate) non-reimbursable explantation 9 costs, legal defence and other former Telectronics costs 5.0 4.1 26.1 0.2 16.4 0.4 Provision for environmental remediation 49.0 57.0 7.7 - 0.1 0.1 Provision for claims 17.9 9.7 10.5 0.1 1.6 1.6 Provision for dividend 144.4 144.1 143.7 144.4 144.1 143.7 Provision for income tax (0.2) 12.6 60.8 2.1 (5.6) (4.8) 508.3 562.4 452.6 209.3 230.6 199.7 Non-Current Provision for employee entitlements 61.3 61.5 61.2 4.5 5.9 5.8 Provision with respect to creation of Accufix Settlement Funds in the United States of America 8.7 38.1 - Provision for non-reimbursable patient monitoring costs, (where appropriate) non-reimbursable explantation costs, legal defence and other former Telectronics costs 8.0 19.3 80.4 Provision for environmental remediation 28.2 30.6 25.1 Provision for deferred income tax 68.7 78.7 82.8 0.1 -- 174.9 228.2 249.5 4.6 5.9 5.8 683.2 790.6 702.1 213.9 236.5 205.5

The tax effect of temporary differences that give rise to significant portions of the deferred tax liabilities are presented below:

Trading Stock tax adjustments (0.4) (0.1) (1.5) Depreciation on plant adjustments (45.9) (48.2) (60.2) Provisions 4.1 4.4 8.1 Accruals 0.5 0.4 0.5 Unrealised foreign exchange gains (0.1) (0.1) (6.9) Income taxed before/after books (0.8) (13.5) (0.7) Costs allowed before/after books (27.0) (21.0) (20.6) Other 0.9 (0.6) (1.5) Total (68.7) (78.7) (82.8) Note 21 Other Liabilities

Current Deferred income 5.6 1.0 1.6 1.4 1.2 - Amounts due under contractual arrangements 1.5 1.4 15.9 1.5 1.4 1.4 7.1 2.4 17.5 2.9 2.6 1.4 Non-Current Deferred income - - 0.5 - -- Amounts due under contractual arrangements 33.3 35.8 34.3 18.9 20.3 21.6 33.3 35.8 34.8 18.9 20.3 21.6 40.4 38.2 52.3 21.8 22.9 23.0

Printed: 29/09/99 15:16 Sheet: AA22b Brought to you by Global Reports 33 Notes to the Financial Statements

F F Accounts i i n n a a n n c c i i

Note 22 Consolidated The Company a a l l

Dissection of Liabilities 1999 1998 1997 1999 1998 1997 R R e e

$ million $ million $ million $ million $ million $ million v v i i e e w w

Secured Notes on the Accounts Bank overdrafts and other loans 5.6 1.8 11.1 Notes on the

Unsecured Amounts owing to wholly owned controlled entities 1,711.5 1,582.2 2,370.0 Amounts owing to partly owned controlled entities - - 5.4 Bank overdrafts 50.2 52.8 20.1 1.9 8.2 6.1 Bank loans 89.9 46.2 27.3 - 2.0 - Subordinated convertible bonds (i) - - 97.0 - - 97.0 Other loans 1,975.6 2,166.7 2,052.2 1,732.2 1,812.9 1,244.1 Lease liabilities 4.1 3.6 4.3 0.3 0.5 0.7 Trade creditors 598.6 645.3 605.3 98.6 131.6 109.2 Bills payable 0.1 4.2 7.4 0.1 -- Other creditors 136.9 156.9 167.0 147.4 140.0 75.7 Provisions (as per Note 20) 683.2 790.6 702.1 213.9 236.5 205.5 Other liabilities (as per Note 21) 40.4 38.2 52.3 21.8 22.9 23.0 3,579.0 3,904.5 3,735.0 3,927.7 3,936.8 4,136.7 3,584.6 3,906.3 3,746.1 3,927.7 3,936.8 4,136.7

(i) Subordinated Convertible Bonds: The Company on 2 July, 1997 repaid the subordinated convertible bonds of US$75 million, the terms and conditions of which have been previously disclosed.

Note 23 Expenditure Commitments

(a) Contracts for Capital Expenditure for which no amounts have been provided Land and buildings 2.9 1.1 1.5 0.7 0.1 1.5 Plant 17.8 12.8 15.1 0.6 0.9 1.9 20.7 13.9 16.6 1.3 1.0 3.4 Payable within one year 20.7 12.1 16.6 1.3 1.0 3.4 Later than one but within two years - 1.8 - - -- 20.7 13.9 16.6 1.3 1.0 3.4 (b) Lease Commitments Finance Leases: Expenditure contracted and provided for Payable within one year 1.9 2.1 1.6 0.2 0.2 0.3 Later than one but within two years 1.7 1.0 1.5 0.1 0.2 0.2 Later than two but within five years 0.7 0.7 1.9 - 0.1 0.3 Minimum lease payments 4.3 3.8 5.0 0.3 0.5 0.8 Less future finance charges 0.2 0.2 0.7 - 0.0 0.1 Lease Liability 4.1 3.6 4.3 0.3 0.5 0.7 Current portion (as per Note 18) 2.1 1.5 1.3 0.2 0.2 0.2 Non-Current portion (as per Note 18) 2.0 2.1 3.0 0.1 0.3 0.5 4.1 3.6 4.3 0.3 0.5 0.7 Operating leases: Expenditure contracted but not provided for Payable within one year 49.9 56.2 63.2 14.5 16.6 17.1 Later than one but within two years 39.0 44.3 48.6 13.0 13.2 14.4 Later than two but within five years 69.9 69.2 70.5 22.2 23.5 29.8 Later than five years 46.8 64.9 72.8 21.2 25.8 45.6 205.6 234.6 255.1 70.9 79.1 106.9

Printed: 29/09/99 15:16 Sheet: AA 23 Brought to you by Global Reports Notes to the Financial Statements 34 P A C I F I C Note 24

D Superannuation U N L

O Pacific Dunlop Limited and certain controlled entities contribute to certain defined benefit and accumulation Superannuation

P Funds maintained to provide superannuation benefits for employees. A total of 20 Superannuation Funds have been

A established worldwide. The major defined benefit funds are listed below. Where applicable, amounts shown have been N

N proportionately determined and are based on values extracted from the most recent financial reports of the respective funds. U A L

Pacific Dunlop Pacific Dunlop GNB Total of R

E Superannuation Executive Incorporated Major P O Fund Superannuation Pension Funds R

T Fund Plan

1 9 9

9 $ million $ million $ million $ million Consolidated Net assets 30/06/1996 167.3 163.8 (1) 231.5 562.6 Accrued benefits 30/06/1996 163.4 124.7 (1) 175.6 463.7 Excess 3.9 39.1 (1) 55.9 98.9 Net assets 30/06/1998 204.2 193.7 (2) 204.9 602.8 Vested benefits 30/06/1998 182.1 133.0 (2) 172.7 487.8

The Company Net assets 30/06/1996 66.9 121.1 - 188.0 Accrued benefits 30/06/1996 63.0 82.0 - 145.0 Excess 3.9 39.1 - 43.0 Net assets 30/06/1998 90.3 143.5 - 232.8 Vested benefits 30/06/1998 68.6 82.7 - 151.3

Country Australia Australia USA

Benefit type Defined benefit/ Defined Benefit Defined Benefit Accumulation

Basis of contribution Balance of cost/ Balance of Cost Balance of Cost Defined Contribution

Date of last actuarial valuation 01/07/1996 01/07/1996 31/03/1998

Actuary William M. Mercer William M. Mercer Towers Perrin Pty. Ltd Pty. Ltd

(1) Amounts shown are based on values as at 31 March 1998. (2) Amounts shown are based on values as at 31 March 1999. Accrued benefits as at 31 March 1999 were $203.3 million resulting in the fund having an excess of $1.6 million of net assets over accrued benefits.

In addition to the defined benefit plans described above, the GNB Incorporated Retirement Saving and Profit Sharing Plan operates in the U.S. and provides Accumulation type benefits on a defined contribution basis. The liabilities of the Superannuation Funds in the event of termination of the funds or the voluntary or compulsory termination of employment of each employee are covered by the assets in the funds. The consolidated entity is obliged to contribute to the Superannuation Funds as a consequence of Legislation or Trust Deeds; legal enforceability is dependent on the terms of the Legislation or the Trust Deeds.

Printed: 29/09/99 15:16 Sheet: AA 24 Brought to you by Global Reports 35 Notes to the Financial Statements F i n a n c i a

Note 24 l

Superannuation (continued) e v i e

Definitions w Balance of cost The consolidated entity's contribution is assessed by the actuary by taking into account the members' Notes on the Accounts contribution and the values of the assets. Defined contribution The consolidated entity's contribution is set out in the appropriate fund rules, usually as a fixed percentage of salary. Accrued benefits The present value of benefits which the fund is presently obliged to transfer in the future to members and beneficiaries as a result of membership of the fund to the calculation date. Vested benefits Benefits which are not conditional upon the continued membership of the respective fund or any factor other than resignation from the fund.

Consolidated The Company 1999 1998 1997 1999 1998 1997 $ million $ million $ million $ million $ million $ million

Contributions made to defined benefit funds during the year 21.7 22.2 31.8 10.8 9.2 13.3 Contributions made to accumulation funds during the year 6.5 5.6 6.8 0.6 0.3 0.4

Note 25 Ownership-Based Remuneration Schemes

Executive and Employee Share Plans The Company has operated two share plans for no entitlement to dividends (but are entitled to employees and Directors of the consolidated entity: participate in bonus or rights issues as if fully paid). The - the Pacific Dunlop Executive Share Plan price payable for shares issued under the Executive ("Executive Plan"), and Plan varies according to the event giving rise to a call - the Pacific Dunlop Employee Share Plan being made. Market price at the date of the call is ("Employee Plan"). payable if an Executive ceases employment within the consolidated entity (other than for death, retrenchment No issue of shares has been made under either Plan or retirement) prior to expiration of the restriction period. since February 1994 and the Board determined during Once restrictions cease the price payable upon a call 1996 that no further issues of shares will be made under being made will be the lesser of $2.00 ($0.50 for issues the Executive Plan. prior to 13 September 1991) and the last sale price of the Company's ordinary shares on Australian Stock The employee plan permits full time and part time Exchange Limited. No further issues of shares will be employees, who have completed three or more years made under this Plan following a decision of the Board continuous service within the consolidated entity and who in 1996. The aggregate number of Executive Plan do not participate in the Executive Plan (which at 30 June Shares on issue could not exceed 5% of the total 1999 numbered 4,243), to acquire 100 ordinary shares of issued capital of the Company. 50 cents each in the capital of the Company for each completed year of service. The shares are issued at The Company's accounting policy in respect of the market value as at the date of issue, payable as to 10 Employee Plan is to recognise the paid up capital upon cents per share by the employee, the balance financed by allotment and the receivable created by the loan to an interest free loan from the Company repayable, at employees to acquire the shares. In respect of the latest, on cessation of employment. The shares are not Executive Plan, no amount was recognised upon issue, transferable while a loan remains outstanding, but carry apart from the capital paid up on the shares, as the a voting right and an entitlement to dividends (although amount of the call payable was not quantifiable at the dividends are applied in reduction of the loan). Invitations time of issue. Once a call had been made upon the are made under the Employee Plan from time to time. As shares and paid, the Company recognised the increase at reporting date no offer to employees was outstanding. in paid up capital. The number of Employee Share Plan The aggregate number of Employee Plan Shares on Shares (ordinary plan shares paid to 50 cents) and the issue may not exceed 5% of the total issued capital of the number of Executive Plan Shares (ordinary plan shares Company. paid to one cent) as at balance date are shown in Note 5. A loss of $186,585 after tax in respect of the Employee As stated above, the Executive Plan is no longer available Share Plan was recognised in the Company and the for new issues. Shares issued under that Plan to consolidated financial statements for 1999 (1998 - selected employees ("Executives") were paid up to 1 cent $90,000 loss after tax, 1997 $611,000 loss after tax). and were subject to restrictions for a determined period (for the 1993/1994 issue- 81/4 years). While partly paid, The market price of the Company's shares as at 30 the shares are not transferable, carry no voting right and June 1999 was $2.18.

Printed: 29/09/99 15:16 Sheet: AA 25 Brought to you by Global Reports Notes to the Financial Statements 36 P A C I F I

C Note 25

D Ownership-Based Remuneration Schemes (continued) U N

L Options - Generally O

P At the date of this report 8,835,000 unissued ordinary condition or ‘hurdle’ that must be satisfied before the

A shares in the Company remain under option. options can be exercised is that the total return to N

N shareholders (i.e. growth in share price plus dividends U Options to Managing Director reinvested) in respect of Pacific Dunlop shares exceeds A

L Options to subscribe for up to 1,800,000 unissued the simple average total return to shareholders in a

R ordinary shares in the Company remain on issue to the selected group of major listed companies over E

P Managing Director, in accordance with an approval comparable periods in respect of each tranche of options. O received from shareholders at the Annual General R

T Meeting on 15 November 1996, at an exercise price of Upon exercise the options carry the right to any bonus

1 $2.80 per share. The options expire on 14 November share issued by the Company during the life of the 9

9 2001 and are exercisable in three separate tranches of option, but do not carry any right to participate in any 9 600,000 options between 1 and 14 November 1999, other share issue of the Company or any other body 2000 and 2001, only where, in relation to each separate corporate and no options have been exercised tranche of options, two separate performance at the date of this Report. conditions are satisfied, details of which were set out in last year's Report. No determinable value has been ascribed to these options, nor included within the disclosed Executive Executive Share Option Plan remuneration details set out in Note 28 to the Financial 7,035,000 unissued ordinary shares are subject to Statements under Australian Generally Accepted options granted under the Pacific Dunlop Executive Share Accounting Principles (GAAP). Under United States GAAP Option Plan, including 600,000 options granted to Mr R B the compensation fair value of all options which are Hershan, an Executive Director. The exercise price of each outstanding has been calculated at $4.6 million. The option, which may be increased by the amount (if any) by fair value of the options granted was estimated on the which the increase in the Consumer Price Index over the dates of grant using a Monte Carlo simulation model with period of the options exceeds the dividend yield upon the the following assumptions for 1999, 2000, 2001 and 2002 Company's shares, was $3.30. The options expire on 11 respectively: risk free interest rate of 5.94% for all years; December 2002, and are exercisable in three tranches of Pacific Dunlop (PDL) dividend yield of 4.91% for all years; equal amount during a period commencing, in the case expected lives of three years, four years and five years; of tranche 1 on 13 November 2000; in the case of tranche volatility of PDL share price of 27.8 % for all years; and a 2 on 13 November 2001; and in the case of tranche 3 on volatility of the average gross shareholder return 13 November 2002, and in each case ending on the (including dividend) for the hurdle condition of 13.08% for expiry date, subject to satisfaction of a separate all years. performance hurdle attaching to each tranche. The

Note 26 Consolidated The Company Contingent Liabilities 1999 1998 1997 1999 1998 1997 $ million $ million $ million $ million $ million $ million Secured Other amounts arising in the ordinary course of business 0.8 4.8 2.0 Unsecured Other amounts arising in the ordinary course of business 1.2 31.2 37.1 - 22.3 21.1 2.0 36.0 39.1 - 22.3 21.1

Pacific Dunlop Limited has guaranteed the performance Broadly, plans cover 4 categories: Business systems, of certain controlled entities that participate in facilities and equipment, suppliers and customers. commercial paper, medium term note and bond issues. Potential exposures for each category have been The extent of the paper issued by these controlled identified and analysed, and appropriate compliance entities as at 30 June 1999 was $268.9 million (1998 - plans developed to address Year 2000 compliance. $355.6 million, 1997 $805.9 million). The additional expenditure for the replacement and modification of existing systems is estimated at Pacific Dunlop Limited has also guaranteed the approximately $19 million over the three years to performance of certain wholly owned controlled entities December 1999. which have negative shareholders' funds. The consolidated entity anticipates that its Year 2000 Year 2000 Systems Operations plans will be substantially complete however cannot The consolidated entity has plans in place to minimise guarantee that all of its internal systems or the any adverse impact in servicing its customers due to businesses of its customers, suppliers and utility date-related issues to beyond the Year 2000. providers will be Year 2000 ready. The Group is undertaking Business Continuity Planning across all groups to further mitigate risk.

Printed: 29/09/99 16:05 Sheet: AA 26 Brought to you by Global Reports 37 Notes to the Financial Statements F i n a n c i

Note 26 a l

Contingent Liabilities (continued) R e v i Indemnities and Guarantees persons in Australia whose Accufix Pacing Leads have e As previously disclosed, a wholly owned controlled entity been, or will be, removed. This settlement was granted w

provided indemnities in favour of Directors of entities formal approval by the Federal Court of Australia sitting Notes on the Accounts involved in the float of Cochlear Limited during 1996 in Sydney, on August 11, 1998. It is expected that this against civil liabilities that may be incurred through settlement will be covered by insurance, some of which participation in the float and signing of the prospectus may be borne by Pacific Dunlop Insurances Pte Ltd. and, in one case, from continuing to act as a Director of a controlled entity. The Company provided a guarantee in The Australian settlement does not resolve the claims support of certain of these indemnities. of persons with working leads (“the Australian Monitoring Class”) who are expected to seek monetary As disclosed previously, the Company has entered damages. into Deeds of Indemnity with each of the Directors of the Company and with certain officers of controlled entities, United States in relation to liabilities that they may incur (other than On March 5, 1999, the United States District Court for the to Group companies) as Directors of the Company Southern District of Ohio, Western Division, granted and Directors of certain controlled entities, respectively approval to a settlement intended to resolve all current to the extent permitted by law and the Company's and future litigation in the United States arising out of the Constitution. Accufix Pacing Leads. As part of this approval process, the Court issued an order preliminarily enjoining all 495 pending At this time, no liabilities the subject of any such lawsuits in the United States. The settlement provides indemnity have been identified and, accordingly, it is not that it will bind all citizens or residents of the United possible to quantify any financial obligation of the States implanted with an Accufix Pacing Lead and their consolidated entity under these indemnities and of the families and will ensure that no further lawsuits relating Company pursuant to its guarantee. to the Accufix Pacing Leads can be brought in the future.

Accufix Litigation ARI will contribute US$78.5 million to the four funds comprising the settlement, thus applying all of its General available cash resources. Pacific Dunlop Limited will Claims have been made against Accufix Research contribute US$10 million. Institute, Inc. (formerly TPLC, Inc.) (“ARI”), certain other wholly owned controlled entities of Pacific Dunlop Limited Appeals against approval of the settlement and, in some instances, Pacific Dunlop Limited have been filed with the United States Court of Appeals (collectively “the Defendants”) relating to the Accufix for the Sixth Circuit. Whilst the Appellate Court has Pacing leads models 329-701, 330-801 and 033-812 indicated it will expedite the hearing of the appeals, as manufactured by ARI which were withdrawn in late 1994 the briefing schedule is not yet completed it is not following reports of fracture of the “J” shaped retention presently possible to estimate when the appeals will be wire, which forms part of the lead (the “Accufix Pacing heard or when any decision on the appeals will be Leads”). handed down.

Approximately 40,500 Accufix Pacing Leads were Rest of World implanted worldwide between 1987 and 1994. The first As of June 30, 1999, 8 suits by individual plaintiffs are lawsuit arising out of these claims was filed on January pending; two of these suits are in the United Kingdom, 18, 1995 in the United States. Lawsuits were two in France, and one each in Japan, Germany, subsequently filed in Canada, Australia, France, Argentina and Turkey. Germany, Japan, Argentina, the United Kingdom and Turkey. In Canada, Australia and the United States some Impact of these lawsuits took the form of class or representative The settlement in the United States should it proceed actions. requires payments totalling US$88.5 million (A$144.6 million) to be made. It is expected that the exposure (if Canada any) of Pacific Dunlop Insurances Pte Ltd to the On October 3, 1997 the Ontario Court of Justice in Australian explant settlement will not exceed Canada approved a settlement between ARI and the A$4 million. These sums were fully provided for plaintiffs in the Canadian class action comprising all by provisions made in the financial statements for the year persons (and their families) implanted with an Accufix ended 30 June 1998. Pacing Lead and resident in Canada, and also the plaintiffs in related litigation brought by certain hospitals Product liability of the nature faced by the Defendants in Canada. The settlement closed on 8 January 1999. worldwide with respect to the Accufix Pacing Lead is The total amount paid under the settlement was complex, and in the case of the Australian Monitoring C$22,061,266 and it has been met from proceeds Class, appears to break new ground and to be far from received from ARI’s insurers. certain in its outcome. Taking these factors into account, and recognising that appeals with respect to the Australia settlement in the United States remain pending, it is not On June 16, 1998, the Defendants’ insurers reached possible to quantify further the exposure of the preliminary agreement to resolve all the claims of Defendants (if any), to the present claims.

Printed: 29/09/99 15:16 Sheet: AA 27 Brought to you by Global Reports Notes to the Financial Statements 38 P A C I F I

C Note 26

D Contingent Liabilities (continued) U N L

O Encor Lead Litigation P Edmont Industrial Inc. (now known as Ansell Protective

N United States Products Inc.), certain other wholly owned controlled

N On March 17, 1997, a putative class action lawsuit was entities of Pacific Dunlop Limited, and, in some U

A filed in the United States District Court for the Eastern instances, Pacific Dunlop Limited (collectively “the

L District of California, sitting in Sacramento, California, Ansell Defendants”) (along with a wide variety of

R against ARI and affiliates, including Pacific Dunlop, manufacturers and distributors of natural rubber latex E

P on behalf of all United States implantees of Encor 330-854 gloves), are defendants in lawsuits filed in the United O

R and Encor 033-856 bipolar Telectronics passive fixation States since 1993 on behalf of individuals alleging T atrial “J” pacemaker leads manufactured by ARI ("Encor wrongful death, personal injuries and lost wages as a

9 Pacing Leads"). 9,049 Encor 330-854 bipolar passive leads result of their exposure to natural rubber latex gloves. 9

9 were distributed in the United States between 1989 and their The lawsuits claim that the Ansell Defendants and voluntary withdrawal from the market in September 1995. No other manufacturers of natural rubber latex gloves, Encor 033-856 bipolar passive leads were distributed were negligent in the design and manufacture of the in the United States. gloves and failed to give adequate warnings of the possibility of allergic reactions. As of July 30, 1999, The Court in Sacramento denied the application for there were approximately 261 such cases pending class certification on 3 May 1999. The plaintiffs have against one or more of the Ansell Defendants, filed a petition for permission to appeal with the representing some 50.5 percent of cases filed against United States Court of Appeals for the Ninth Circuit, and all defendants. Of these cases 166 have been the preliminary question as to whether the appeal ought consolidated for discovery and deposition pursuant to to be heard is now fully briefed. No indication has been the rules on multi-district litigation before the United given by the Appellate Court as to when a decision may States District Court for the Eastern District of be expected. Pennsylvania. The remaining 95 cases are spread through State Courts in 31 States, with the greatest With the uncertainty surrounding the class certification concentration in California (16 cases). matter in California, the liability (if any) of the Defendants in relation to the claims in the United States relating to All of the latex glove cases are still in the discovery Encor Pacing Leads, cannot be quantified. phase of litigation. With the uncertainty created by the multiplicity of defendants in these cases and the Ansell Latex Allergy Litigation difficulty of determining whose natural rubber latex gloves were utilised by particular plaintiffs, the liability of Ansell Incorporated and Ansell Perry Inc. (together, now the Ansell Defendants if any, in relation to these claims known as Ansell Healthcare Products Inc.) and Ansell cannot be quantified.

Note 27 Financial Instruments

Derivative Financial Instruments The consolidated entity is involved in a range of derivative financial instruments, which can be defined in the following broad categories: (i) Forward / Future Contracts These transactions enable the consolidated entity to buy or sell specific amounts of foreign exchange, financial instruments or commodities at an agreed rate/price at a specific future date. Maturities of these contracts are principally between six months and two years.

(ii) Options This is a contract between two parties, which gives the buyer of a put or call option the right, but not the obligation, to transact at a specified interest rate/exchange rate or commodity price at a future date, generally for a premium. Maturities of these contracts are principally between three months and two years.

(iii) Swaps These agreements enable parties to swap interest rate (from or to a fixed or floating basis) or currency (from one currency to another currency) positions for a defined period of time. Maturities of the contracts is principally between two and five years.

Printed: 29/09/99 16:05 Sheet: AA 28 Brought to you by Global Reports 39 Notes to the Financial Statements F i n a n c i

Note 27 a l

Financial Instruments (continued) R e v i

Interest Rate Risk e

Interest Rate Risk Exposures w The consolidated entity's exposure to interest rate risk and the effective weighted average interest rate for classes of financial Notes on the Accounts assets and financial liabilities is set out below:

Weighted Interest rate Average Fixed Maturities Non Effective Floating 1 year 2 to 5 Over Interest Total Interest or less years 5 years Bearing Rate % $ million $ million $ million $ million $ million $ million Net Financial Assets/(Liabilities) 1999 Financial Assets On-Balance Sheet Cash on hand and at bank 4.3% 174.1 6.9 - - 1.0 182.0 Short-term deposits 4.8% 156.6 733.7 - - - 890.3 Receivables - trade n/a----806.3 806.3 Receivables - other 0.1% 1.0 - 1.0 0.4 224.6 227.0 Investments (excl. associated companies) 0.6% 12.2 - - - 118.9 131.1 Total Financial Assets 1999 343.9 740.6 1.0 0.4 1,150.8 2,236.7 Financial Liabilities On-Balance Sheet Payables - trade n/a----598.6 598.6 Payables - other n/a----136.9 136.9 Payables - bills n/a----0.10.1 Lease liabilities 6.0% - 1.0 3.1 - - 4.1 Bank overdraft 7.0% 51.0 ----51.0 Bank and other loans 6.4% 1,096.7 820.4 152.8 - 0.4 2,070.3 Provisions n/a----392.0 392.0 Amounts due under contractual arrangements n/a----34.8 34.8 Off-Balance Sheet Net forward rate agreements 4.6% 30.0 (30.0) ---- Net interest rate swaps 5.5% 201.6 (24.2) (235.0) 57.6 - - Total Financial Liabilities 1999 1,379.3 767.2 (79.1) 57.6 1,162.8 3,287.8

Net Financial Assets/(Liabilities) 1999 (1,035.4) (26.6) 80.1 (57.2) (12.0) (1,051.1)

Net Financial Assets/(Liabilities) 1998 Financial Assets On-Balance Sheet Cash on hand and at bank 3.2% 134.4 - - - 1.6 136.0 Short-term deposits 5.4% 193.2 668.1 - - - 861.3 Receivables - trade n/a ----889.2 889.2 Receivables - other 0.2% 1.9 - 2.4 0.2 154.8 159.3 Investments (excl. associated companies) 1.3% 10.0 - - - 130.3 140.3 Total Financial Assets 1998 339.5 668.1 2.4 0.2 1,175.9 2,186.1 Financial Liabilities On-Balance Sheet Payables - trade n/a ----645.3 645.3 Payables - other n/a ----156.9 156.9 Payables - bills n/a ----4.24.2 Lease liabilities 6.0% - 1.9 1.6 0.1 - 3.6 Bank overdraft 8.5% 52.8 ----52.8 Bank and other loans 6.3% 1,700.5 87.9 254.3 171.6 0.4 2,214.7 Provisions n/a ----520.6 520.6 Amounts due under contractual arrangements n/a ----37.2 37.2 Off-Balance Sheet Net forward rate agreements 6.0% 25.0 (25.0) ---- Net interest rate swaps 6.2% 30.6 (191.2) 176.9 (16.3) - - Total Financial Liabilities 1998 1,808.9 (126.4) 432.8 155.4 1,364.6 3,635.3

Net Financial Assets/(Liabilities) 1998 (1,469.4) 794.5 (430.4) (155.2) (188.7) (1,449.2)

Printed: 29/09/99 15:16 Sheet: AA 29 Brought to you by Global Reports Notes to the Financial Statements 40 P A C I F I C

D Note 27 U Financial Instruments (continued) N L O

P Interest Rate Risk (continued)

A Provisions, including amounts contained within income tax, deferred income tax, contingencies, rationalisation and N

N restructure, patient monitoring, explantation and legal, environmental remediation, insurance claims and certain employee U

A entitlements amounting to $291.2 million (1998 - $270.0 million, 1997 - $405.2 million) are not included within the table

L above as it is considered that they do not meet the definition of a financial instrument.

R E

P A separate analysis of debt by currency can be found at Note 19 - Borrowings. O R

T Credit Risk and Net Fair Value

1 9

9 On-Balance Sheet Financial Instruments 9

(i) Credit Risk The credit risk on financial assets, excluding investments, of the consolidated entity which have been recognised on the balance sheet, is the carrying amount, net of any provision for doubtful debts.

The consolidated entity minimises concentrations of credit risk by undertaking transactions with a large number of customers and counter parties in various countries.

The consolidated entity is not materially exposed to any individual overseas country or individual customer.

(ii) Net Fair Value The Directors consider that the carrying amount of recognised financial assets and financial liabilities approximates their net fair value.

Off-Balance Sheet Financial Instruments

Credit risk on off-balance sheet derivative contracts is minimised as counterparties are recognised financial intermediaries with acceptable credit ratings determined by a recognised rating agency. It is not felt that there is a material exposure to any single counterparty or group of counterparties. The consolidated entity's exposure is almost entirely (over 99%) to banks.

The following table displays: (i) Face Value This is the contract's value upon which a market rate is applied to produce a gain or loss which becomes the settlement value of the derivative financial instrument.

(ii) Credit Risk This is the maximum exposure to the consolidated entity in the event that all counterparties who have amounts outstanding to the consolidated entity under derivative financial instruments, fail to honour their side of the contracts. The consolidated entity's exposure is almost entirely to banks (see (iv) below). Amounts owed by the consolidated entity under derivative financial instruments are not included.

(iii) Net Fair Value This is the amount at which the instrument could be extinguished between willing parties in a normal market in other than a liquidation or forced sale environment. The net amount owing to financial institutions under all derivative financial instruments would have been $26.0 million (1998 - $21.9 million, 1997 - $48.1 million) if all contracts were closed out on 30 June 1999.

Printed: 29/09/99 15:16 Sheet: AA 30 Brought to you by Global Reports 41 Notes to the Financial Statements F i n a n c i

Note 27 a l

Financial Instruments (continued) R e v i e

Face Value Credit Risk Net Fair Value w

1999 1998 1997 1999 1998 1997 1999 1998 1997 Notes on the Accounts $ million $ million $ million $ million $ million $ million $ million $ million $ million Foreign Exchange Contracts Purchase/Sale Contracts: - U.S. dollars 821.5 1,278.0 1,854.1 0.1 95.7 53.0 (26.0) 10.3 (13.8) - Australian dollars 823.7 746.5 1,083.8 ------Malaysian ringgits - 119.3 101.6 - 2.9 2.2 - (2.9) (1.5) - Other currencies 247.3 204.2 542.5 1.0 17.5 23.9 (7.7) (0.1) 0.3

Cross Currency Swaps: - U.S. dollars 207.2 145.3 200.0 14.2 18.3 9.0 12.8 (14.0) (14.8) - New Zealand dollars 90.4 107.9 142.5 - -- (4.5) (3.2) (3.1) - Other currencies 132.5 66.2 194.5 3.9 -- 3.9 (8.8) (5.1)

Interest Rate Contracts Interest Rate Swaps: - U.S. dollars 862.4 514.9 393.3 1.0 0.6 - (6.2) (3.3) (4.7) - Australian dollars 550.0 500.0 800.0 1.1 1.2 2.3 1.1 1.2 3.5 - New Zealand dollars 123.6 83.8 87.3 1.9 0.3 - 1.0 - (0.3) - Other currencies - - 20.4 - -- - - (0.6)

Forward Rate Agreements: - Australian dollars 260.0 75.0 10.7 - 0.1 - - 0.1 -

Commodity Contracts Commodity Futures: - U.S. dollars 38.8 43.0 132.4 1.2 0.9 - (0.4) (1.2) (7.4) - Other currencies - - 5.6 - -- - - (0.6) Total 4,157.4 3,884.1 5,568.7 24.4 137.5 90.4 (26.0) (21.9) (48.1)

(iv) Credit Risk by Maturity The following table indicates the value of amounts owing by counterparties by maturity. Based on the Group policy of not having overnight exposures to an entity rated lower than A- by Standard & Poor's or A3 by Moody's Investors Service, it is felt the risk to the consolidated entity of the counterparty default loss is not material.

Foreign Exchange Interest Rate Commodity Total Related Contracts Contracts Contracts 1999 1998 1997 1999 1998 1997 1999 1998 1997 1999 1998 1997 $ million $ million $ million $ million $ million $ million $ million $ million $ million $ million $ million $ million Term 0 to 6 mths 5.2 106.8 63.8 0.6 1.0 1.5 0.9 0.9 - 6.7 108.7 65.3 6 to 12 mths 1.1 14.9 19.2 0.1 0.4 - 0.3 -- 1.5 15.3 19.2 1 to 2 yrs 9.6 3.6 - 2.1 - 0.8 - -- 11.7 3.6 0.8 2 to 5 yrs 0.1 9.1 3.5 1.2 0.5 - - -- 1.3 9.6 3.5 5 to 10 yrs 3.2 - 1.6 - 0.3 - - -- 3.2 0.3 1.6 Total 19.2 134.4 88.1 4.0 2.2 2.3 1.2 0.9 - 24.4 137.5 90.4

(v) Market/Liquidity Risk The consolidated entity seeks to reduce the risk of: (a) being forced to exit derivative financial instrument positions at below their real worth; or (b) finding it cannot exit the position at all, due to lack of liquidity in the market; by: (a) dealing only in liquid contracts dealt by many counterparties; and (b) dealing only in large and highly liquid and stable international markets.

Printed: 29/09/99 16:04 Sheet: AA 31 Brought to you by Global Reports Notes to the Financial Statements 42 P A C I F I C Note 27

U Financial Instruments (continued) N L O (vi) Historical Rate Rollovers P

A It is the consolidated entity's policy not to engage in historical rate rollovers except in circumstances where the maturity N date falls on a bank holiday. In these instances, settlement occurs on the next trading day. N U A

L Hedges and Anticipated Future Transactions

R E

P The following table shows the consolidated entity's deferred gains and (losses), both realised and unrealised, that are O currently held on the Balance Sheet and the expected timing of recognition as revenue or expense: R T

1 9

9 Interest Rate Foreign Exchange Commodity 9 1999 1998 1997 1999 1998 1997 1999 1998 1997 $ million $ million $ million $ million $ million $ million $ million $ million $ million Term

Anticipated Exposures Less than 1 year 3.5 0.3 1.4 (0.4) 0.9 (1.2) 1 to 2 years

Realised Swaps Deferred Less than 1 year --(0.4) 1 to 2 years 4.2 - 0.1 2 to 5 years 0.1 7.2 7.0 Greater than 5 years - (0.9) (1.0)

There were no amounts of unrecognised gains or losses at year end (1998 - Nil, 1997 - Nil)

Note 28 The Company Directors' and Executives' remuneration 1999 1998 1997 $ thousand $ thousand $ thousand Directors Aggregate remuneration paid or payable to Directors: (a)(c)(d) Directors' fees and salaries of Pacific Dunlop Limited Executive Directors 1,944 2,333 2,372 Performance-based bonuses 89 129 56 Other benefits (d) 75 620 3,211 Total remuneration of Directors of Pacific Dunlop Limited 2,108 3,082 5,639

Consolidated remuneration of directors of all Group Companies 1999 $32,206,000 1998 $27,495,000 1997 $32,284,000 (d) Consolidated The Company 1999 1998 1997 1999 1998 1997 $ thousand $ thousand $ thousand $ thousand $ thousand $ thousand Executives Aggregate remuneration of the twelve Senior Executives: (a)(b)(c)(d)(e) Salaries 5,272 5,141 4,642 3,915 3,825 3,865 Performance-based bonuses 389 632 652 133 129 423 Other benefits (d) 1,260 2,473 1,254 1,017 2,205 1,127 Total remuneration of Executives 6,921 8,246 6,548 5,065 6,159 5,415

Printed: 29/09/99 15:16 Sheet: AA 32 Brought to you by Global Reports 43 Notes to the Financial Statements F i n a n

Note 28 c i a l

Directors' and Executives' Remuneration (continued) R e v

(a)(b)(c)(d)(e) i

The number of Directors and Senior Executives whose total remuneration fell within the following bands . e w

Executives Directors Notes on the Accounts Consolidated The Company The Company (Dollars) 1999 1998 1997 1999 1998 1997 1999 1998 1997

0 to 10,000 1 10,001 to 20,000 1 20,001 to 30,000 1 40,001 to 50,000 1 50,001 to 60,000 11 60,001 to 70,000 4 43 70,001 to 80,000 1 80,001 to 90,000 1 90,001 to 100,000 1 11 140,001 to 150,000 1 160,001 to 170,000 1 200,001 to 210,000 1 1 310,001 to 320,000 1 1 340,001 to 350,000 1 1 350,001 to 360,000 1 1 1 1 380,001 to 390,000 2 2 390,001 to 400,000 1 1 1 1 400,001 to 410,000 11 410,001 to 420,000 11 420,001 to 430,000 11 430,001 to 440,000 11 440,001 to 450,000 2 2 480,001 to 490,000 1 1 500,001 to 510,000 2 2 530,001 to 540,000 1 550,001 to 560,000 11 570,001 to 580,000 1 1 1 1 1 1 590,001 to 600,000 1 650,001 to 660,000 1 1 1 720,001 to 730,000 1 1 1 830,001 to 840,000(d) 1 1 1 1 1 870,001 to 880,000 1 880,001 to 890,000 1 1 1 890,001 to 900,000 1 1 1 950,001 to 960,000(d) 1 1 1 980,001 to 990,000 1 1,030,001 to 1,040,000 1 1,040,001 to 1,050,000 1 1,050,001 to 1,060,000 11 1,070,001 to 1,080,000(d) 1 1 2,620,001 to 2,630,000(d) 1 Total number of Directors 11 12 12 9 10 10 9 13 13 and Executives

Printed: 29/09/99 15:16 Sheet: AA 33 Brought to you by Global Reports Notes to the Financial Statements 44 P A C I F I C Note 28

D Directors' and Executives' Remuneration (continued) U N L

O (a) The above values for Directors and Executives include amounts actually paid to superannuation funds in respect of their retirement.

P (b) Includes Executive Directors of the Company disclosed within the remuneration of Directors.

A (c) Any benefit arising from the grant of options to the Managing Director or other Executives which may subsequently be derived is not quantified and accordin N

N has not been included in remuneration disclosed above. For details in relation to the options, refer Note 35(c).

U (d) Includes retirement and/or statutory benefits paid to Directors and Executives. A

L (e) Executives for this disclosure include only those persons who are members of the reconstituted Executive Committee which determines the operational

R management and strategic direction of the consolidated entity. These executives numbered eleven in 1999, and twelve in both 1998 and 1997. E

P The disclosure includes two permanently overseas-based Executives whose total remuneration in 1999 was $1.9 million (1998 - $2.1 million, 1997 - $1.1

O million). R T

1 9

9 Note 29 9 Service Agreements

Provided for in the Financial Statements The Company at 30 June 1999 had agreements with each of the Non-executive Directors which provide for benefits upon termination. The full extent of the liabilities of the Company under these agreements has been undertaken by a superannuation fund of which the Company is employer sponsor.

Printed: 29/09/99 16:03 Sheet: AA 34 Brought to you by Global Reports 45 Notes to the Financial Statements F i n a n c i

Note 30 a l

Notes to the Business Segments Report R e v i

(a) Tyre Operations e

Includes the consolidated entity's 50% partnership share, viz: w Notes on the Accounts Total Australia Asia 1999 1998 1997 1999 1998 1997 1999 1998 1997 $ million $ million $ million $ million $ million $ million $ million $ million $ million

Operating revenue 469.2 457.5 471.7 464.9 453.0 466.6 4.3 4.5 5.1 Assets employed 306.6 291.1 293.9 304.5 288.3 290.3 2.1 2.8 3.6 Operating profit 29.2 31.9 37.9 29.1 31.7 37.8 0.1 0.2 0.1

and the consolidated entity's interest in the underlying revenue, assets and profit of the New Zealand operation.

(b) Tyre Partnership Adjustments Represents, in accordance with the requirements of Accounting Standards: - the elimination of the consolidated entity's 50% partnership share of the underlying total assets employed in such businesses; - the recognition of the consolidated entity's 50% partnership share of the underlying interest costs of such businesses; - the elimination of the consolidated entity's interest in the underlying revenue and assets of the New Zealand operation; and the recognition of the consolidated entity's investment in the Partnership and the New Zealand operation.

(c) Unallocated Revenue and Costs Represents corporate costs and other costs not allocated to Operating Groups and non-sales revenue.

(d) Abnormal items The amount reported as Operating Revenue in respect of abnormal items represents the proceeds received/receivable from the sale of Businesses.

(e) Cash Includes Cash of Operating Groups.

(f) Industry Segments Details of industry segments are described in the Review of Operations section of the Annual Report.

(g) Inter-Segment Transactions Operating revenue is shown net of inter-segment values. Accordingly, the Operating revenues shown in each segment reflect only the external sales made by that segment. The only significant inter-segment sales were made by Non Core Businesses - $81.0 million (1998 - $88.0 million, 1997 - $100.2 million), Asia & New Zealand - $308.1 million (1998 - $300.3 million, 1997 -$267.2 million), America - $61.7 million (1998 - $58.7 million, 1997 -$45.0 million). Inter-segment sales are predominantly made at the same prices as sales to major customers.

(h) Regions The allocations of Operating Revenue, Assets Employed and Operating Results reflect the geographical regions in which the relevant assets are employed and products manufactured.

. 1999 1998 1997 $ million $ million $ million (i) Segment Capital Expenditure GNB 76.9 58.0 38.0 Ansell 92.9 50.0 40.0 South Pacific Tyres 45.0 40.0 35.0 Pacific Brands 16.0 26.0 28.0 Pacific Distribution 15.1 26.0 27.0 Non-Core/Discontinued Businesses 19.6 28.7 59.9

(j) Segment Depreciation GNB 45.3 49.0 45.0 Ansell 35.9 30.0 25.0 South Pacific Tyres 39.1 36.0 36.0 Pacific Brands 24.6 27.0 25.0 Pacific Distribution 21.0 21.0 17.0 Non-Core/Discontinued Businesses 20.3 22.2 24.1

Printed: 29/09/99 15:16 Sheet: AA 34a Brought to you by Global Reports Notes to the Financial Statements 46 P A C I F I C Note 31 Consolidated The Company

D Acquisitions DisposalsAcquisitions Disposals U Notes to the Statements of Cash Flows

N $ million $ million$ million $ million L O P

(a) Businesses Acquired and Disposed A

N During the year a number of controlled entities and N

U businesses were acquired and disposed.

A The details are as follows: L

E Net assets acquired/(disposed) P

O Property, plant and equipment 23.3 (100.9) - (67.8) R

T Investments 1.8 - - -

1 Future income tax benefit - (3.5) - (3.3) 9

9 Trade debtors and other amounts receivable 6.7 (10.0) - (0.8) 9 Inventories 6.7 (55.1) - (48.7) Cash (net of bank overdraft) (0.6) - - - Goodwill - (27.4) (27.3) Other assets 0.1 (2.4) - - Bank and other loans 7.9 - - - Creditors and other liabilities (15.7) (59.5) - 5.7 30.2 (258.8) - (142.2) Goodwill 27.3 - - - Net loss/(gain) - 8.3 - (67.1) 57.5 (250.5) - (209.3) Consideration Cash paid/(received) 57.5 (245.2) - (205.3) Cash payable/(receivable) - (5.3) - (4.0) 57.5 (250.5) - (209.3) Outflow/(inflow) of cash Cash consideration 57.5 (245.2) - (205.3) Less: Balances (acquired)/disposed Cash (net of overdrafts) 0.6 - - - 58.1 (245.2) - (205.3)

Consolidated The Company 1999 1998 1997 1999 1998 1997 $ million $ million $ million $ million $ million $ million (b) Non-Cash Financing and Investing Activities (i) Plant and Equipment Fair value of assets acquired under finance leases - - 0.5 - - 0.5

(ii) Convertible Bonds In 1997, Convertible Bonds of $2,533 were converted to 1,185 fully paid ordinary 50 cent shares. No Convertible Bonds were converted during the financial years ended 30 June 1998 and 1999.

(c) Financing Facilities The consolidated entity and the Company have fully committed long-term finance facilities of U.S.$350 million - A$529 million (1998 - U.S.$350 million - A$572 million, 1997 - US$350 million - A$470 million) and N.Z.$60 million - A$49 million (1998 - N.Z.$60 million - A$50 million,1997 - NZ$80 million - A$73 million). At the end of the financial year, these facilities were unused. The U.S. dollar long-term facilities are all available as swingline or Euro Notes. They are underwritten by 15 banks and are all available to the Company and partially available to three wholly owned controlled entities. The N.Z. dollar facilities are available in the form of bank bill borrowings. In addition, the consolidated entity has cash reserves (net of bank overdrafts) of $1,021.3 million (1998 - $944.5 million, 1997 - $1,171.7 million) available to support borrowings. The Company has cash reserves of $28.8 million (1998 - $23.0 million, 1997 - $27.2 million). See Note 31(e) for more details.

Printed: 29/09/99 15:16 Sheet: AA 35 Brought to you by Global Reports 47 Notes to the Financial Statements F i n a n c i

Note 31 Consolidated The Company a l

Notes to the Statements of Cash Flows 1999 1998 1997 1999 1998 1997 R e

(continued) Notes $ million $ million $ million $ million $ million $ million v i e w (d) Reconciliation of net cash provided by Operating Activities to Operating Profit/(Loss) after Income Notes on the Accounts Tax and Abnormal Items

Operating profit/(loss) after income tax and abnormal items 111.5 23.8 184.9 133.4 (6.9) 83.5 Depreciation 149.6 150.1 141.0 47.7 47.6 42.8 Amortisation 46.9 44.5 43.6 4.2 5.5 8.5 Provision for doubtful debts - trade 7.2 12.3 15.9 5.2 3.0 1.0 Provision for doubtful debts - wholly owned controlled entities 118.8 85.9 - Write down of non-current assets - - 12.3 Items classified as financing activities Interest received (39.7) (53.5) (74.4) (40.1) (4.5) (87.0) Interest and borrowing costs paid 146.2 156.5 163.8 112.6 115.5 177.5 Change in assets and liabilities net of effect from acquisitions and disposals of controlled entities and businesses: (Increase)/Decrease in trade debtors 39.8 (92.0) (6.4) (9.4) 17.9 (23.1) (Increase)/Decrease in inventories 21.3 (76.3) 65.4 (13.8) (1.5) 29.6 Decrease/(Increase) in prepaid expenses (0.4) 9.5 (1.2) (7.3) 2.1 2.0 Increase/(Decrease) in creditors and bills payable (19.4) 40.4 (13.2) (4.6) (6.9) 3.8 (Decrease)/Increase in provisions and other liabilities (218.6) 62.9 (132.4) (57.1) 91.9 (10.8) Increase/(Decrease) in provision for deferred income tax (10.0) (16.2) (7.0) - -- (Increase)/Decrease in future income tax benefit 80.1 (57.8) (15.8) (15.4) (76.4) 3.2 (Decrease)/Increase in provision for income tax (61.7) 55.8 25.2 4.7 (8.5) (21.9) Other non-cash items Investing Activities: Loss/(Gain) on sale of investments, properties, plant and equipment 105.6 10.6 (4.1) 12.5 2.9 (0.1) Loss/(Gain) on sale of controlled entities and businesses 8.3 (6.1) (19.3) (67.1) (4.5) 0.7 Other 12.6 16.9 (0.1) 34.6 (0.3) 0.9 Net cash provided by operating activities 379.3 281.4 378.2 258.9 262.8 210.6

(e) Components of Cash For the purposes of the Statements of Cash Flows, cash includes cash on hand and in banks and investments in money market instruments, net of outstanding bank overdrafts. Cash, at the end of the financial year, as shown in the Statements of Cash Flows, comprises: Cash on hand 11 1.0 1.6 2.4 0.1 0.1 0.2 Cash at bank 11 181.0 134.4 124.3 29.5 31.1 33.1 Short-term deposits 11 890.3 861.3 1,065.1 1.1 -- Bank overdrafts 19 (51.0) (52.8) (20.1) (1.9) (8.2) (6.1) 1,021.3 944.5 1,171.7 28.8 23.0 27.2

(f) Net Loans from Controlled Entities In the Statements of Cash Flows of the Company, loan movements with controlled entities are disclosed as a net movement due to such transactions being large in number and rapid in turnover.

(g) Cash Held Not Available for Use Details of cash held not available for use are as follows: Nature of restriction Proceeds from the sale of Telectronics under - 136.6 118.7 control of Court

Printed: 29/09/99 15:16 Sheet: AA 36 Brought to you by Global Reports Notes to the Financial Statements 48 P A C I F I C Note 32

D Acquisition of Material Controlled Date of Voting Cost of Net Tangible Description U

N Entities and Businesses Acquisition Shares Acquisition Assets of Purchase L

O During the year the following Acquired Acquired Consideration P

businesses were acquired: % $ million $ million A N N

U Suretex Group 31/7/98. 100% 41.7 22.0 Cash A L

R E P O

R Note 33 Proceeds Net Tangible (Loss)/Gain T

1 Disposal of Controlled Entities and Material Businesses Assets on Disposal 9

9 Disposed after Tax 9 Plus Costs of Disposal $ million $ million $ million

During the year the following controlled entities and material businesses were disposed of:

The Olex Cables Australian and New Zealand Businesses 246.4 246.4 Nil

Note 34 Business Undertakings

Pacific Dunlop Tyres Pty. Ltd. carries on a partnership with Goodyear Tyres Pty. Ltd. in Australia and Papua New Guinea under the name of South Pacific Tyres. The principal activity of the partnership is the manufacture and sale of tyres and related products within the above territory. The partnership became operative on April 1, 1987, and is jointly controlled by the Partners under contractual arrangements. The Group’s 50% interest in the South Pacific Tyres unincorporated partnership is accounted for on the following basis:

Income Statement - Revenues, expenses and abnormal items are proportionately consolidated after elimination of intercompany items. Income tax expense on the share of Partnership earnings is accounted for in accordance with generally accepted accounting principles. Balance Sheet - The Group’s investment in the Partnership is accounted for under the equity method as detailed above.

Summarised financial data in respect of the Partnership is as follows:

1999 1998 1997 $ million $ million $ million

Income Statement Items Sales Revenue 951.2 930.2 968.8 Operating profit before Income Tax 39.5 44.7 57.1 Income Tax Expense 12.5 17.3 12.7 Minority Interests Net Profit after tax attributable to Partners 27.0 27.4 44.4

These items have been proportionately consolidated in the Group financial statements and income tax expense has been charged on Pacific Dunlop’s Share of Net Profit.

Balance Sheet Data Current Assets 338.0 322.5 317.7 Non-Current Assets 314.8 312.7 317.3 Total Assets 652.8 635.2 635.0 Current Liabilities 385.8 398.1 327.3 Non-Current Liabilities 40.9 10.9 65.3 Total Liabilities 426.7 409.0 392.6 Net Assets 226.1 226.2 242.4 Minority Interest 0.5 0.6 0.8 Net Assets Attributable to Partners 225.6 225.6 241.6

Brought to you by Global Reports 49 Notes to the Financial Statements F i n a n c i

Note 35 a l

Related Party Disclosures R e v i e

Pacific Dunlop Limited is the parent entity of all those entities detailed in Note 38 to these financial statements and from time to w time has dealings on normal commercial terms and conditions with those related entities, the effects of which are eliminated Notes on the Accounts in the consolidated financial statements. Disclosures in respect of certain transactions with controlled entities and related parties and amounts paid to or received therefrom are as set out in the details below. Other transactions with related entities, which are eliminated on consolidation, include the lease of certain properties, the supply of materials and labour and the provision of both short and long term finance in the form of varying financial instruments, all of which are conducted on normal commercial terms and conditions. The Directors of the Company during the year were:

John T. Ralph Charles B. Goode Margaret A. Jackson David G. Penington

Rodney L. Chadwick Robert B. Hershan Robert J. McLean Ian E. Webber

Anthony B. Daniels

and details of transactions with these Directors or other Directors of other related entities (including entities deemed to be related to such Directors) and details of other related party transactions and amounts are set out in:

Note 3 as to interest paid to controlled entities. Note 4 as to interest and dividends received from controlled entities and interest received from Directors of entities in the consolidated entity. Note 12 as to amounts receivable from controlled entities and loans to directors of entities in the consolidated entity. Note 18 as to amounts payable to controlled entities. Note 28 as to remuneration paid or payable to Directors of the Company and the allocation of those amounts to individual directors within the bands of $10,000. Note 29 as to agreements with certain Non-Executive Directors. Note 34 as to material related parties not being controlled entities or Directors.

(a) Transactions with Associated Companies

The Company and the consolidated entity hold investments in associated companies as set out in Note 39

During the course of the year, the Company and the consolidated entity conducted financial transactions with these associated companies on normal commercial terms and conditions. The nature and amounts of these transactions are detailed as follows:

Consolidated The Company 1999 1998 1997 1999 1998 1997 $ million $ million $ million $ million $ million $ million

Sale of goods and services South Pacific Tyres N.Z. Ltd. 2.0 7.6 7.4 2.0 7.6 7.4 - --

Royalty revenue South Pacific Tyres N.Z. Ltd. 2.0 2.1 2.1

Dividend revenue Pacific Marine Batteries Pty. Ltd. 0.6 1.0 3.0 0.6 1.0 3.0 South Pacific Tyres N.Z. Ltd. 1.6 1.4 3.7 2.2 2.4 6.7 0.6 1.0 3.0

Aggregate current amounts receivable (a) Pacific Marine Batteries Pty. Ltd. - - 1.7 - - 1.7 South Pacific Tyres N.Z. Ltd. 0.2 0.5 4.7 0.2 0.5 6.4 - - 1.7

Aggregate non-current amounts receivable (a) Meadow Gold Investment Co. Ltd. - 17.2 17.2 - 17.2 17.2

(a) Amounts included within Trade debtors and other Amounts Receivable (Note 12).

Printed: 29/09/99 15:16 Sheet: AA 39 Brought to you by Global Reports Notes to the Financial Statements 50 P A C I F I

C Note 35

D Related Party Disclosures (continued) U N L

O (b) Transactions with Partnerships

P As detailed in Note 34, the consolidated entity carries on a partnership with Goodyear in Australia and Papua New Guinea

N under the name of South Pacific Tyres. The consolidated entity also carried on a partnership with Skega Pty. Ltd. in Australia

N under the name of Dunlop Skega. During the course of the year, the Company and the consolidated entity conducted financial U

A transactions with these partnerships on normal commercial terms and conditions being: L

E Consolidated The Company P

O 1999 1998 1997 1999 1998 1997 R

T $ million $ million $ million $ million $ million $ million

1 Sales of goods and services 9 9

9 South Pacific Tyres 29.2 70.2 116.5 0.1 4.8 12.8 Purchases of goods and services South Pacific Tyres 1.6 1.8 2.0 1.7 1.8 Other revenue Dunlop Skega 0.3 0.3 0.3 0.3 Other expenses South Pacific Tyres 0.4 0.7 1.1 0.1 0.6 1.1 Aggregate current amounts receivable (a) South Pacific Tyres 1.6 5.3 11.4 0.1 4.4 1.7 Dunlop Skega - 0.1 - - 0.1 - 1.6 5.4 11.4 0.1 4.5 1.7 Aggregate current amounts payable (b) South Pacific Tyres 0.3 0.2 0.4 - 0.2 0.4

(a) Amount included within Other Amounts Receivable (Note 12). (b) Amount included within Other creditors (Note 18).

Aggregate amounts less than $50,000 were paid to and received from the South Pacific Tyres partnership in respect of interest in the period.

In addition, under the partnership agreement, South Pacific Tyres leases certain properties on a basis of equitable rentals mutually agreed by the partners. Lease payments of $0.3 million (1998 - $0.3 million, 1997 - $0.3 million) were made by South Pacific Tyres to the consolidated entity. The Company, through its corporate treasury operations, also provided on the basis of normal commercial terms and conditions, forward exchange cover on behalf of the partnership.

(c) Transactions of Directors and Director-Related Entities Concerning Shares or Option Shares The aggregate number of shares acquired (1) by Directors of the Company and their director-related entities in entities in the consolidated entity during the year ended 30 June 1999 was:

The Company - Nil fully paid ordinary shares (1998 - Nil, 1997 - Nil).

The aggregate number of shares and share options disposed of by Directors of the Company and their director-related entities in the Company was nil (1998 - 203,575, 1997-Nil).

The aggregate number of shares and share options held directly, indirectly or beneficially by the Directors of the Company and their director-related entities in the Company as at balance date were:

931,331 fully paid ordinary shares (1998 - 881,331, 1997 - 2,260,770) 630,000 ordinary plan shares paid to one cent (1998 - 680,000, 1997 - 965,000) 2,400,000(2) share options (1998 - 2,400,000, 1997 - 1,800,000).

(1) The above reflects the position in the financial statements of the Company and upon consolidation of the controlled entities. It only includes shares acquired from or disposed to an entity in the consolidated entity. (2) Refer Note 25 for details on 600,000 options granted to Mr R.B. Hershan under the executive Share Options Plan and for 1,800,000, options granted separately to Mr R.L. Chadwick, the Managing Director.

Printed: 29/09/99 16:02 Sheet: AA 40 Brought to you by Global Reports 51 Notes to the Financial Statements

F Accounts i n a n c i

Note 35 a l

Related Party Disclosures (continued) R e v i e

(d) Other Transactions of Directors and Director-Related Entities w In addition to the transactions referred to above, the consolidated entity entered into the following transactions with Directors and former Directors and their director-related entities. All transactions were on normal commercial terms and conditions Notes on the except where otherwise stated: - A. Pellen is a Director of Pacific Dunlop Insurances Pte Ltd. A director-related entity of A. Pellen, Richard Oliver International Pte. Ltd. provided management services to Pacific Dunlop Insurances Pte. Ltd.; - R. Wilczek is a Director of Pacific Dunlop Holdings Inc. A director-related entity of R. Wilczek, Gardner, Carton & Douglas, provided legal services to numerous controlled entities within the consolidated entity; - G. Szalmuk is a Director of Vita Pacific Ltd. A director-related entity of G. Szalmuk, Singan Investments Pty. Ltd. leased premises to Vita Pacific Ltd. In addition consulting services were provided to the latter entity by Szalmuk Capital Limited - a director related entity of G. Szalmuk. - G. Boyd is a Director of Boydex International Pty. Ltd. A director-related entity of G. Boyd, Frank Boyd Nominees Pty. Ltd. leased premises to Boydex International Pty. Ltd.

Consolidated The Company 1999 1998 1997 1999 1998 1997 $ miilion $ million $ million $ million $ million $ million Aggregate amounts of each of the above types of other transactions with Directors and their director-related entities were as follows:

Transaction Type Provision of management and consulting services 0.4 0.2 1.2 0.1 0.2 0.6 Restraint payment - - 0.5 - - 0.5 Rent of premises received by Directors and their director-related entities 0.9 1.4 0.9 Sales of goods to Directors and their - - 2.2 director-related entities Purchases of goods from Directors and their - - 2.2 - - 2.0 director-related entities Provision of legal services 14.8 12.8 8.0 0.8 4.5 -

Other receivables from and payables to Directors of the Company and controlled entities and their director-related entities

Aggregate amounts receivable from Directors and their director-related entities (a) Current - - 0.2 Aggregate amounts payable to Directors and their director-related entities (b) Current 0.4 9.8 3.4 - 0.5 0.3

(a) Amount included within Other Amounts Receivable (Note 12). (b) Amount included within Other Creditors (Note 18).

Printed: 29/09/99 15:16 Sheet: AA 41 Brought to you by Global Reports Notes to the Financial Statements 52 P A C I F I C Note 35

D Related Party Disclosures (continued) U N L

O In addition to the transactions referred to above, transactions were entered into during the year with Directors of the Company P

and its controlled entities or with director-related entities which: A

N - occurred within a normal employee customer or supplier relationship on terms and conditions no more favourable than N those which it is reasonable to expect would have been adopted if dealing with the Director or director-related entity at U

A arm's length in the same circumstances; L

- do not have the potential to affect adversely decisions about the allocation of scarce resources or the discharge of R

E accountability of the Directors; and P

O - are trivial or domestic in nature;

R include: T

- provision of company services which have been fully reimbursed; 1

9 - minor purchases of goods at discount rates which are also available to other employees; 9

9 - purchases of Company owned motor vehicles at a value or net return to the Company or the consolidated entity of written down value; - contracts of employment with relatives of Directors on either full time, casual or work experience basis on normal commercial terms and conditions.

Note 36 Consolidated Earnings per Share 1999 1998 1997 $ million $ million $ million

Earnings used in the calculation of basic earnings per share: Before Goodwill Amortisation and Abnormal items 239.4 216.4 208.2 Before Abnormal Items 199.8 180.8 175.6 After Abnormal Items 105.8 24.8 177.8

Weighted average number of ordinary shares used in the calculation of basic earnings per share 1,030.4 1,028.0 1,024.2

Diluted Earnings per Share Diluted earnings per share have not been disclosed as it is not materially different from basic earnings per share. Conversion, Call, Subscription or issue after 30 June 1999 Since the end of the financial year and pursuant to the Company's Executive Share Plan 481,000 ordinary plan shares have been converted to fully paid ordinary shares. Options Options to purchase ordinary shares not exercised at 30 June 1999 have not been included in the determination of basic earnings per share, but have been included in the determination of diluted earnings per share.

Printed: 29/09/99 15:16 Sheet: AA 42 Brought to you by Global Reports 53 Notes to the Financial Statements F i n a n c i

Note 37 a l

Environmental Matters R e v i The consolidated entity manufactures and markets a GNB Technologies has developed several e w diverse range of products in many countries and recycling programmes. Recycling helps

consequently, must comply with a variety of regulatory overcome the threat to the environment posed by Notes on the Accounts controls, mainly environmental regulations, product discarded batteries and reduces the amount of virgin manufacturing and performance standards, (ie. newly-mined) lead that is introduced into the occupational health and safety laws and regulations, environment by making secondary (ie. recycled) lead import/export regulations, tariffs and quotas. The available to manufacturers of batteries (including GNB consolidated entity believes it is in substantial Technologies) and other products incorporating lead. compliance with all applicable regulatory controls, and In the United States, GNB Technologies' "Total any lack of compliance is not expected to have a Battery Management" recycling programme collects materially adverse effect on its financial condition. used batteries and converts them into lead and plastic components for new battery manufacturing. As a manufacturer of, among other products, automotive During the year GNB Technologies' three US recycling and industrial batteries, polyurethane foam and tyres, as plants had capacity for recycling approximately 250,000 an operator of secondary lead and recycling smelters tons of lead per year. The Colombus smelter, with and plastic moulding facilities, environmental protection a capacity of 90,000 tons, will be idled effective has been and will continue to be an important factor October 1999. GNB Technologies also provides affecting the consolidated entity's operations. recycling programmes for major customers, which encourage consumers to return used batteries for The consolidated entity provides for identified collection and reclamation of lead, plastic and acid by environmental costs when the amounts of such are GNB Technologies. The Total Battery Management reasonably determinable. GNB Technologies incurred System is also being implemented in Australia and New expenditure for environmental remediation and Zealand. compliance activities of approximately $13 million during 1998/99. A provision of $41.2 million was In addition, regular review of the consolidated entity's made in the 1995/96 financial statements in respect of GNB land and buildings, which are mainly manufacturing Technologies' expenses associated with the environmental sites, is undertaken based on advice of independent remediation of previously closed sites in the US, appraisers. Within various business segments the some of them closed many years ago. The provision consolidated entity monitors emerging environmental was increased by a further $47.4 million in 1997/98. legislation and its anticipated impact on the applicable The balance of the provision at 30 June 1999 was industries worldwide. For example, the Household $77.2 million. Products Division has monitored initiatives regarding elimination of Chlorofluorocarbons ("CFCs"), which GNB received a Notice of Violation and Proposed historically were involved in the manufacture of Consent Order dated August 20, 1998, from the Georgia polyurethane foam. The primary initiative has been Department of Natural Resources (“Georgia DNR”), an international accord signed in 1993/94 by numerous relating to certain alleged violations of the Columbus, member nations of the United Nations (the "Montreal Georgia facility’s Hazardous Waste Facility Permit No. Protocol") which bans the production or use of CFCs HW-057-(S&T), the Georgia Hazardous Waste from its operations. Elimination of CFC usage in 1993 Management Act and the Georgia Rules for Hazardous has not had a material adverse effect upon the Waste Management. Georgia DNR proposed a penalty consolidated entity's financial condition or operations of U.S.$546,000. On or about June 30, 1999, GNB because it's principal competitors are also subject to resolved its alleged liability. Under the terms of the the requirements of the Montreal Protocol. In the ordinary settlement, GNB will pay U.S.$200,000 and perform course of business, the consolidated entity has certain environmental projects over the next year for maintained comprehensive general liability insurance U.S.$1.7 million. policies covering its operations and assets. Generally such policies exclude coverage for most environmental The consolidated entity has closely followed the liabilities. development of U.S. Environmental Protection Agency ("EPA") initiatives related to lead batteries. Management believes that the US regulations regarding lead and smelter operations will not have a materially adverse effect on the competitive position of GNB Technologies, because the principal competitors of GNB Technologies in the areas of battery production and lead smelting are subject to similar regulatory requirements and because certain regulations encourage the recycling of lead.

Printed: 29/09/99 15:16 Sheet: AA 43 Brought to you by Global Reports Notes to the Financial Statements 54 P A C I F I C Beneficial Interest Note 38 Country of D

U Particulars Relating to Controlled Entities Incorporation 1999 1998 1997 N

L %%% O Pacific Dunlop Ltd. Australia P

A Ansell GmbH *Germany 100 100 100

N Ateb Pty. Ltd. Australia 100 100 100 N

U Australian Battery Co. (Aust.) Pty. Ltd. Australia 100 100 100

A Bonds Industries Ltd. Australia 100 100 100 L

R Mt Waverley Estates Pty. Ltd. Australia 100 100 100

E Boydex International Pty. Ltd. Australia 100 100 100 P

O Cliburn Investments Pty. Ltd. Australia 100 100 100 R

T Click Pty. Ltd. Australia 100 100 100

1 Dunlop Olympic Manufacturing Pty. Ltd. (formerly Universal 9

9 Holdings Pty. Ltd.) Australia 100 100 100 9 Duratray Pty. Ltd. Australia 100 100 100 FGDP Pty. Ltd. Australia 100 100 100 H.C. Sleigh Investments Pty. Ltd. Australia 100 100 100 H.C. Sleigh Services Pty. Ltd. Australia 100 100 100 PSL Industries Ltd. Australia 100 100 100 Gardenland Frozen Food Pty. Ltd. Australia 100 100 100 General Jones Pty. Ltd. Australia 100 100 100 Herbert Adams Holdings Pty. Ltd. Australia 100 100 100 Softwood Towns Pty. Ltd. Australia 100 100 100 Robur Tea Company Pty. Ltd. Australia 100 100 100 F.J.'s Auto Plus Ltd. Australia 100 100 100 GNB Battery Technologies Ltd. Australia 100 100 100 International Better Brands Pty Ltd Australia 100 100 100 Niblick Pty. Ltd. Australia 100 100 100 Nucleus Ltd. Australia 100 100 100 AMBRI Pty. Ltd. Australia 100 100 100 Pellias Pty. Ltd. Australia 100 100 AMBRI Project Pty. Ltd. Australia 100 100 100 AMBRI R & D Pty. Ltd. Australia 100 100 100 Maspas Pty. Ltd. Australia 100 100 100 Project Array Pty. Ltd. Australia 100 100 100 Medical TPLC Pty. Ltd. Australia 100 100 100 N&T Pty. Ltd. Australia 100 100 100 Nucleus Trading Pte. Ltd. *Singapore 100 100 100 THLD Ltd. Australia 100 100 100 Jetbase Pty. Ltd. Australia 100 100 100 Project (X92) Pty. Ltd. Australia 100 100 100 TNC Holdings Pte. Ltd. *Singapore 100 100 100 TPLC Pty. Ltd. Australia 100 100 100 Societe de Management Financier S.A. *France 100 100 100 TPLC S.A. *France 100 100 100 Olex Pty. Ltd. Australia 100 100 100 Olex Focas Pty. Ltd. Australia 100 100 100 Olympic General Products Pty. Ltd. Australia 100 100 100 Foamlite (Australia) Pty. Ltd. Australia 100 100 100 Park Avenue Furniture Pty. Ltd. Australia 100 100 100 Optix Australia Ltd. Australia 51 51 51 Pacific Distribution Properties Ltd. Australia 100 100 100 Pacific Dunlop (Asia) Ltd. *Hong Kong 100 100 100 Dunlop Shelter Hong Kong Ltd. *Hong Kong 100 100 100 Grosby (China) Ltd. *Hong Kong 100 100 100 Pacific Dunlop Garments Ltd. *Hong Kong 100 100 100 Dongguan Pacific Dunlop Garments Co. Ltd. *China 80 80 80 Pacific Dunlop Insurances Pte. Ltd. *Singapore 100 100 100 Shenzhen Olex Cables Ltd. *China 100 100 100 Shoe Talk Ltd. *Hong Kong 100 100 100 Pacific Dunlop Belting Pty. Ltd. Australia 100 100 100 Pacific Dunlop Finance Pty. Ltd. (formerly Dunlop Olympic Manufacturing Pty. Ltd.) Australia 100 100 100

Printed: 29/09/99 15:16 Sheet: AA 44 Brought to you by Global Reports 55 Notes to the Financial Statements F i n a n c i

Note 38 Country of Beneficial Interest a l

Particulars Relating to Controlled Entities (continued) Incorporation 1999 1998 1997 R e

%%%v i e w Pacific Dunlop Holdings (China) Co. Ltd. *China 100 100 100

Beijing Pacific Dunlop Textiles Ltd. *China 71 71 71 Notes on the Accounts Pacific Dunlop Shanghai Ltd. *China 100 100 100 Shanghai Holeproof Garments Ltd. *China 100 100 100 Tianjin Olex Cables Ltd. *China 70 70 70 Pacific Dunlop Holdings (N.Z.) Ltd. *New Zealand 100 100 100 Holeproof Corporation Ltd. *New Zealand 100 100 100 Pacific Dunlop Japan K.K. *Japan 100 100 100 Pacific Dunlop Linings Pty. Ltd. Australia 100 100 100 Pacific Dunlop Tyres Pty. Ltd. Australia 100 100 100 Pacific Dunlop (U.K.) Ltd. *UK 100 100 100 P.D. Holdings Pty. Ltd. Australia 100 100 100 P.D. International Pty. Ltd. Australia 100 100 100 Ansell Canada Inc. *Canada 100 100 100 Ansell Kemwell Ltd. *India 74.9 Ansell Lanka (Pvt.) Ltd. *Sri Lanka 100 100 100 Ansell S.A. *France c 100 100 100 Ansell (Thailand) Ltd. *Thailand 100 100 100 Ansell Protective Products Europe N.V. (formerly Edmont *Belgium 100 100 100 Europe N.V.) GNB Technologies NV *Belgium 100 100 GNB Technologies Coy *Finland 100 100 GNB Technologies GmbH *Germany 100 100 GNB Technologies S.A.R.L. *France 100 100 GNB Technologies SpA *Italy 100 100 Lanka Olex Cables (Pvt.) Ltd. *Sri Lanka 85 85 85 Kelani Cables Ltd. *Sri Lanka 64 64 64 Kelani Olex Telecommunications Cables (Pvt.) Ltd. *Sri Lanka 64 64 64 Kelani Electrical Accessories (Pvt.) Ltd. *Sri Lanka 64 64 64 Luxafoam (Fiji) Ltd. *Fiji 100 100 Medical Telectronics N.V. *Netherlands Ant. 100 100 100 Medical Telectronics Holding & Finance (Holland) B.V. *Netherlands 100 100 100 Pacific Dunlop Investments (USA) Inc. *USA 100 100 100 Ansell Edmont Industrial de Mexico S.A. de C.V. *Mexico 100 100 100 Ansell Perry de Mexico S.A. de C.V. *Mexico 100 100 100 Commercializadora GNK S.A de C.V *Mexico 100 Golden Needles de Mexico S.A de C.V *Mexico 100 Pacific Dunlop Capital Inc *USA 100 100 Pacific Dunlop Holdings (USA) Inc. *USA 100 100 100 Ansell Healthcare Products Inc. (formerly Ansell *USA 100 100 100 Incorporated) Ansell Protective Products Inc. (formerly Ansell *USA b 100 100 100 Edmont Industrial Inc.) Ansell Services Inc. (formerly Olex Cables USA *USA 100 100 100 Inc.) PACBRANDS USA Inc. *USA 100 Pacific Dunlop GNB Corporation *USA 100 100 100 GNB Technologies Inc. *USA 100 100 100 GNB Industrial Battery Company *USA 100 100 100 GNB Battery Technologies Japan Inc. *USA 100 100 100 New Enpak Inc. *USA 100 100 100 Pacific Chloride Inc. *USA 100 100 100 Pacific Dunlop Holdings Inc. *USA 100 100 100 Pacific Dunlop Footwear Inc. *USA 100 100 100 Pacific Dunlop USA Inc. *USA 100 100 100 TPLC Holdings Inc. *USA 100 100 100 Accufix Research Institute Inc. *USA 100 100 100 Cotac Corporation *USA 100 100 100 TPL Holdings Inc. *USA 100 100 100 Pacific Dunlop Finance Company Inc. *USA 100 100 100

Printed: 29/09/99 15:16 Sheet: AA 45 Brought to you by Global Reports Notes to the Financial Statements 56 P 1 9 A 9 C 9 I F I C Note 38 Country of Beneficial Interest

D Particulars Relating to Controlled Entities (continued) Incorporation 1999 1998 1997 U

N %%% L O

P Pacific Dunlop Holdings (Europe) Ltd. (formerly Pacific

N Dunlop (Holdings) Ltd.) *U.K. 100 100 100

N Ansell Glove Company Ltd. *U.K. 100 100 100 U

A Golden Needles Knitting & Glove Co. Ltd. *U.K. 100 100 100 L GNB Technologies Ltd. *U.K. 100 100

E Ansell UK Limited (formerly Mates Healthcare Ltd.) *U.K. 100 100 100 P Mates Vending Ltd. *U.K. 100 100 100 O

R Pacific Brands (UK) Ltd. *U.K. 100 100 99 T

Pacific Dunlop Holdings (Singapore) Pte. Ltd. *Singapore 100 100 100 GNB Technologies (India) Private limited *India 100 100 JK Ansell Ltd. *India 50 50 P.T. Berlei Indonesia *Indonesia 100 100 P.T. Olex Cables Indonesia *Indonesia 60 60 60 P.D. Holdings (Malaysia) Sdn. Bhd. *Malaysia 100 100 100 Ansell Ambi Sdn. Bhd. *Malaysia 100 100 100 Ansell (Kedah) Sdn. Bhd. *Malaysia 100 100 100 Ansell (Kulim) Sdn. Bhd. *Malaysia 100 100 100 Ansell Malaysia Sdn. Bhd. *Malaysia 75 75 75 Ansell Medical Sdn. Bhd. *Malaysia 75 75 75 Ansell N.P. Sdn. Bhd. *Malaysia 75 75 75 Restonic (M) Sdn. Bhd. *Malaysia 50 50 50 Dream Crafts Sdn. Bhd. *Malaysia 50 50 50 Dream Products Sdn. Bhd. *Malaysia 50 50 50 Dreamland Corporation (M) Sdn. Bhd. *Malaysia 50 50 50 Dreamland (Singapore) Pte. Ltd *Singapore 50 50 50 Dreamland Spring Manufacturing Sdn. Bhd. *Malaysia 50 50 50 Eurocoir Products Sdn. Bhd. *Malaysia 50 50 50 Sleepmaker Sdn. Bhd. *Malaysia 50 50 50 Roberts Flooring (Malaysia) Sdn. Bhd. *Malaysia 100 100 100 PDOCB Pty. Ltd. Australia 100 100 100 Ansell Medical Products Pvt. Ltd. *India 100 100 100 Serenity Asia (Pvt.) Ltd. *Pakistan 100 100 100 Suretex Ltd. *Thailand 100 GP Prophylactics SA *Sth Africa 100 Latex Investments Ltd. Mauritius 100 Suretex Prophylactics India Ltd. *India 100 TPLC Ltd. *UK 100 100 100 TPLC Medizinptodkte GmbH *Germany 100 100 100 TPLC Pty. (Canada) Ltd. *Canada 100 100 100 Pacific Dunlop Finance (Aust.) Pty. Ltd. Australia 100 100 100 PD Licensing Ltd. Australia 100 100 100 Siteprints Pty. Ltd. Australia 100 100 100 S.T.P. (Hong Kong) Ltd. *Hong Kong 100 100 100 Pacific Dunlop Holdings N.V. *Netherlands Ant. 100 100 100 Pacific Dunlop (Netherlands) B.V. *Netherlands 100 100 100 Slumberland (Australia) Pty. Ltd. Australia 100 100 100 Sport Australia (Export) Pty. Ltd. Australia 100 100 100 Textile Industrial Design & Engineering Ltd. Australia 100 100 100 The Distribution Group Holdings Ltd. Australia 100 100 100 Repco Auto Parts Pty. Ltd. Australia 100 100 100 The Distribution Group Ltd. Australia a 100 a 100 a 100 The Distribution Trust Australia 100 100 100 Ashdown Enterprises (Wholesale) Pty. Ltd. Australia 100 100 100 Union Knitting Mills Pty. Ltd (formerly Red Robin Pty. Ltd.) Australia 100 100 91 Vision Cables Pty. Ltd. Australia 51 51 51 Vita Pacific Ltd. Australia 100 100 100 Sleepmaker Europe S.A.R.L. *France 100 100 100 Wattmaster Alco Pty. Ltd. Australia 100 100 100 Xdds Pty. Ltd. Australia 100 100 100

Printed: 29/09/99 15:16 Sheet: AA 46 Brought to you by Global Reports 57 Notes to the Financial Statements F i n a n c i

Note 38 Country of Beneficial Interest a l

Particulars Relating to Controlled Entities (continued) Incorporation 1999 1998 1997 R e

%%%v i e w

Controlled Entities Sold in Year Ended 30th June 1999 Notes on the Accounts There were no controlled entities sold during the financial year.

Controlled Entities in Voluntary Liquidation at 30th June 1999 ACN 000 757 924 Pty. Ltd. (formerly Domedica) Australia 100 100 100 Der Nibor Pty. Ltd. Australia 100 100 100 Fair King Properties Ltd. *Hong Kong 100 100 100 Four 'N Twenty Pies (Vic.) Pty. Ltd. Australia 100 100 100 International Canners Pty. Ltd. Australia 100 100 100 International Sea Products Pty. Ltd. Australia 100 100 100 J. Hargreaves & Sons Pty. Ltd. Australia 100 100 100 N. Harvesters Pty. Ltd. Australia 100 100 100 Raynfine Pty. Ltd. Australia 100 100 100 Big Sister Foods Pty. Ltd. Australia 100 100 100 Patron Trading Ltd *Hong Kong 100 100 100 Driburn Pty. Ltd. Australia 100 100 100 Project Defib Pty. Ltd. Australia 100 100 100 Project Sub Pectoral Pty. Ltd. Australia 100 100 100 Pacific Dunlop Finance (No 2) Pty. Ltd. (formerly Pacific Dunlop Finance Pty. Ltd.) Australia 100 100 100 Pacific Dunlop Investments Pty. Ltd. Australia 100 100 100 Super Cycle Pty. Ltd. Australia 100 100 - Winigarap Pty. Ltd. Australia 100 100 100

Controlled Entities Voluntarily Liquidated During the Year Gracemount Ltd. *Hong Kong - 100 100 Xagb Pty. Ltd. Australia - 100 100 Xal Pty. Ltd. Australia - 100 100 Xbb Pty. Ltd. Australia - 100 100 Xdde Pty. Ltd. Australia - 100 100

* Controlled Entities incorporated outside Australia carry on business in those countries.

(a) The trustee of The Distribution Trust is The Distribution Group Ltd. The beneficiary of the trust is Pacific Dunlop Limited. The profit for the year arising from the trust has been included in the financial statements of Pacific Dunlop Limited and this treatment is consistent with previous years. (b) Ansell Balloon Company and Ansell Perry Inc. have been merged into this renamed entity. (c) Laboratories Degan S.A has been merged into this entity.

Printed: 29/09/99 15:16 Sheet: AA 47 Brought to you by Global Reports Notes to the Financial Statements 58 F i n a n c

Consolidated i

Note 39 a l

Investments in Associates 1999 1998 1997 R

$ million $ million $ million e v i e Results of associates w

Share of associates' operating profit before income tax 5.6 5.2 - Notes on the Accounts Share of associates' income tax expense attributable to operating profit (2.0) (2.2) - Share of associates' net profit - as disclosed by associates 3.6 3.0 -

Share of post acquisition retained profits and reserves attributable to associates Retained profits Share of associates' retained profits at the beginning of the financial year 12.7 12.6 - Share of associates' net profit 3.6 3.0 - Dividends from associates (3.9) (2.9) - Retained profits of Associates disposed of during the financial year (7.4) Share of associates' retained profits at the end of the financial year 5.0 12.7 - Asset revaluation reserve Share of associates' asset revaluation reserve at the beginning of the financial year 0.9 1.5 - Share of decrement in asset revaluation reserves of associates - (0.6) - Share of associates' assets revaluation reserve at the end of the financial year 0.9 0.9 - Foreign currency translation reserve Share of associates' foreign currency translation reserve at the beginning of the financial year 0.8 1.9 - Share of exchange fluctuations on assets and liabilities held in foreign currencies 0.8 (1.1) - Share of associates' foreign currency translation reserve at the end of the financial year 1.6 0.8 -

Movements in carrying value of investments Carrying amount of investments in associates at beginning of the financial year 26.5 46.4 - Adjustment on initial adoption of equity accounting - (18.2) - 26.5 28.2 - Share of associates' net profit 3.6 3.0 - Dividends received from associates (3.9) (2.9) - 26.2 28.3 - Share of decrement in associates' asset revaluation reserve - (0.6) - Share of movement in associates' foreign currency translation reserve 0.8 (1.2) - Less carrying value of investment in Associate disposed of during the financial year (9.7) Carrying amount of investment in associates at the end of the financial year 17.3 26.5 -

Commitments Share of associates' capital expenditure commitments contracted but not provided for and payable: Payable within one year 1.1 0.8 - Later than one but within two years - 0.3 - Later than two but within five years - 0.6 - Later than five years - - - 1.1 1.7 -

Share of associates' operating lease commitments payable: Payable within one year 1.8 2.1 - Later than one but within two years 1.4 1.4 - Later than two but within five years 2.5 2.2 - Later than five years 0.6 0.7 - 6.3 6.4 - Contingent liabilities There are no material contingent liabilities in respect of associates at 30 June 1999

Printed: 29/09/99 16:02 Sheet: AA 50 Brought to you by Global Reports 59 Notes to the Financial Statements P A C I F I C Note 39

D Investments in Associates (continued) U N L

O Details of investments in associates are as follows P

A N Consolidated Consolidated N

U Name Principal Balance Ownership Investment A

L Activities Date Interest Carrying Amount

E 1999 1998 1997 1999 1998 1997 P % % % $ million $ million $ million O R T

South Pacific Tyres N.Z. Ltd. Manufacturing 30 June 50 50 50 16.7 15.6 20.0 1

9 Meadow Gold Investment Co. Ltd. Manufacturing 31 December - 50 50 - 10.5 26.2 9

9 Pacific Marine Batteries Pty. Ltd. Manufacturing 30 June 50 50 50 0.6 0.4 0.2 17.3 26.5 46.4

As equity accounting for investments in associates was applied for the first time in 1998, the carrying amount for 1997 is not calculated in accordance with the equity method, but is based on cost or valuation.

Dividends received from associates for the year ended 30 June 1999 by the consolidated entity amounted to $3.9 million (1998 - $2.9 million, 1997 - $6.7 million), and by the Company $0.6 million (1998 - $1.0 million, 1997 - $3.0 million).

Consolidated 1999 1998 Summary performance and financial position of associates $ million $ million The consolidated entity's share of aggregate assets, liabilities and profits of associates are as follows: Net profit - as reported by associates 3.6 3.0 Adjustments necessary to ensure consistency with PDL accounting policies - - Net profit - equity adjusted 3.6 3.0

Current assets 24.3 29.8 Non-current assets 22.5 34.0 Total assets 46.8 63.8 Current liabilities 18.8 24.0 Non-current liabilities 12.7 15.3 Total liabilities 31.5 39.3 Net assets - as reported by associates 15.3 24.5 Adjustments arising from equity accounting Preference Share adjustment 2.0 2.0 Net assets - equity adjusted 17.3 26.5

Printed: 29/09/99 15:16 Sheet: AA 51 Brought to you by Global Reports Notes to the Financial Statements 60 F i n a n c i

Note 40 a l

Major differences between Australian GAAP and US GAAP R e v i

Australian generally accepted accounting principles (AGAAP) vary in certain significant respects from generally accepted e accounting principles in the United States. (US GAAP). Application of US GAAP would have affected shareholders' equity as at w

30 June 1999, 1998, and 1997 and operating profit after income tax expense attributable to the Pacific Dunlop Limited Notes on the Accounts shareholders for each of the years in the three year period ended 30 June 1999, to the extent quantified below. A description of the material differences between AGAAP, as followed by Pacific Dunlop Limited, and US GAAP are as follows:

(a) Property, Plant and Equipment

Certain property, plant and equipment has been revalued by Pacific Dunlop Limited at various times in prior financial periods. Revaluation increments have increased the carrying value of the assets and accordingly the depreciation charges have been increased above those which would be required on an historical cost basis. These adjustments eliminate this effect.

The above policy also causes differences in reported gains and losses on the sale of property, plant and equipment. Since 1983, gains and losses for Australian GAAP are based on consideration less revalued amounts net of accumulated depreciation and amortisation. For US GAAP purposes gains and losses are determined having regard to depreciated historical cost, and revaluation reserves applicable to assets sold are reported as Income.

In March 1995, the United States Financial Accounting Standards Board issued SFAS 121, “Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of”. SFAS 121 requires entities to perform separate calculations for assets to be held and used to determine whether recognition of an impairment loss is required, and if so, to measure the impairment.

If the sum of expected future cash flows, undiscounted and without interest charges, is less than an asset’s carrying value, an impairment loss is recognised; if the sum of the expected future cash flows is greater than an asset’s carrying value, an impairment loss cannot be recognised.

Measurement of an impairment loss is based on the fair value of the asset. SFAS 121 also generally requires long-lived assets and certain identifiable intangibles to be disposed of to be reported at the lower of the carrying value or fair value less cost to sell. The Company adopted SFAS 121 for the Group’s 1997 fiscal year end. An adjustment of $11.5 million was made at 30 June 1998 (following an assessment of the fair values of properties at 31 December 1997) to reflect the total amount by which certain properties were revalued below their depreciated historical cost. Properties were sold in 1999 which had previously been revalued below depreciated historical cost by $3.5 million. Therefore the adjustment has been reduced to $8.0 million as at 30 June 1999.

(b) Extraordinary Items

Certain adjustments associated with significant transactions can be treated as extraordinary in Australia which do not qualify as extraordinary under US GAAP guidelines. The Net Profit per AGAAP can differ from the Net Profit per US GAAP and if so is set out in the detailed Profit and Loss reconciliation included in Note 41.

Significantly, Net Profit per AGAAP, through to June 30, 1989, has been lower than is reported per US GAAP due to Pacific Dunlop policy of writing off goodwill and intangibles on acquisition during the year of acquisition. This has been adjusted to comply with US GAAP by capitalising and amortising the goodwill (Refer Note 40(l)). Subsequent changes to AGAAP have minimised the incidence of such differences.

Minority interests are frequently included as part of total Shareholders Equity under AGAAP. The reconciliation to US GAAP in Note 41 has excluded these from Shareholders’ Equity consistent with US GAAP treatment.

(d) Provisions

The term “provisions” is used in AGAAP to designate accrued expenses with no definitive payment date. Classification between current and non-current is generally based on management assessments, as subject to audit.

As a manufacturer of among other products, automotive and industrial batteries, environmental protection has been and will continue to be an important factor affecting the consolidated entity. The Group has closely followed the development of Environmental Protection Authority (“EPA”) initiatives related to lead batteries. The activity by the EPA in this area combined with the cost expended on environmental remediation in recent periods has identified the need for environmental remediation at a number of locations.

The Group has provided for identified environmental costs where such amounts are reasonably determinable. The Group has identified all previously closed manufacturing sites where it has a potential exposure and reasonably determined the cost of environmental remediation. The Group is presently committed to meeting these costs and therefore the amounts provided for in the financial statements are considered to satisfy the US GAAP criteria for recognition in all material respects.

For AGAAP purposes dividends declared by the Company are provided for in the financial statements at year end if declaration date is prior to financial statements being signed. For US GAAP these amounts provided are added back to shareholders’ equity where declaration has not occurred within the financial year.

Printed: 29/09/99 15:16 Sheet: AA 52 Brought to you by Global Reports 61 Notes to the Financial Statements P A C I F I C Note 40

D Major differences between Australian GAAP and US GAAP (continued) U N L

O (d) Provisions (continued) P

A Included within the result for AGAAP are amounts charged to income in respect of future costs associated with rationalisation N and restructuring within existing business segments (Provision for rationalisation and restructuring costs). Any plans to N

U reorganise or exit a business are approved by the Board of Directors. Once committed to, accruals are made for the A

L estimated costs associated with the reorganisation or exit. (Refer Note 40(q) for additional disclosure). The US GAAP criteria

R for accruing costs associated with business restructure are consistent with those of AGAAP other than the requirement for E

P any plan to specifically identify the expected date of completion and that changes to the plans are not likely. Where this O criteria is not satisfied an adjustment to earnings is included in the reconciliation to US GAAP. R T

1 (e) Executive Share Plan and Options 9 9

9 Company executives participate in an executive share plan scheme which allows them to purchase allocated shares at par value of $0.50 per share, or in respect of approximately 35% of the shares, at $2.00 per share. Shares issued under the plan are not listed, cannot be traded and do not rank for dividends until the above amounts have been paid.

The adjustment to reported net profit represents the amortisation of the compensation expense difference, between the market value of shares at the date of issue and the minimum amount payable, over an estimate of the executives remaining working lives having regard to the vesting periods. Appropriate adjustments are made in respect of early retirement of executives. At June 30, 1996 cumulative compensation expense has been fully amortised.

The Company adopted, for financial years ending after June 30, 1997, the provision of SFAS 123 to determine compensation cost. This expense is amortised over the employees’ remaining working life or the vesting period, whichever is the shorter.

(f) Earnings Per Share

Under Australian Stock Exchange conventions earnings per share is calculated by dividing operating profit after tax, minority shareholders interest and preference dividend by the weighted average number of shares on issue for the year. Methods of computing Earnings per Share in accordance with US GAAP is documented in SFAS 128. For consistency all Earnings per Share computations included in this report have been calculated in accordance with US GAAP requirements, including computations in respect of Net Earnings calculated using Australian generally accepted accounting principles. In this regard Earnings per Share computations may vary from those shown in historic information released by the Company. Earnings per Share computations recognised the effect of all bonus issues (stock splits) and bonus elements of rights issues made up to June 30, 1999.

The US$ Convertible Bonds issued in August 1986 were considered to be dilutive securities and have been included in Earnings per Share computations as from their date of issue until June 30, 1996, being the point in time when they were all converted to ordinary shares. The Convertible Bonds issued in July 1987 and outstanding at June 30, 1997 were repaid on July 2, 1997. These have not been included in the diluted Earnings per Share calculation for 1997.

(g) Finance Leases

Finance leases have been capitalised and recorded in the Group accounts as from July 1, 1987

(h) Pension Plans

The Company and its subsidiaries are party to 20 pension plans worldwide, principally established by trust deed, covering substantially all of their employees. Of the pension plans within the Group, three plans have been considered material for the year ended June 30, 1999. The Group sponsors contributory and non-contributory accumulation and defined benefit pension plans covering substantially all employees. The defined benefit plans generally provide benefits based on salary in the period prior to retirement. All defined benefit plans are funded based on actuarial advice on a regular basis.

The major plans within the Group have been determined as follows:

USA Funds - GNB Incorporated and subsidiaries Australian Funds - Pacific Dunlop Superannuation Fund and Pacific Dunlop Executive Superannuation Fund

Actuarial calculations have been carried out for the above funds and are as detailed in Note 24. The majority of assets of the funds are invested in pooled superannuation trusts in the case of the Australian funds and equity securities for other major funds.

A detailed level of reporting in respect of pension plans is not presently required by AGAAP. Under AGAAP the contributions to the various pension plans are recorded as an expense in the income statement. The disclosure requirements of Statement of Financial Accounting standards No. 87 and No. 132 (SFAS 87,SFAS 132) have been included in these financial statements. The Group reports pension plans aggregated where allowed by SFAS 87. Additionally, an adjustment is made to recognise the measurement principles of SFAS 87 in determining net income and shareholders’ equity under US GAAP.

Printed: 29/09/99 15:16 Sheet: AA52a Brought to you by Global Reports Notes to the Financial Statements 62 F i n a n c i

Note 40 a l

Major differences between Australian GAAP and US GAAP (continued) R e v i (i) Statement of Cash Flows e w

Profit from operations determined under AGAAP differs in certain respects from the amount determined in accordance with Notes on the Accounts US GAAP. A reconciliation of US GAAP profits to Cash Flows from operations is provided.

(j) Tax losses on Acquisition of Subsidiaries

In determining the fair value of net tangible assets acquired on acquisition of subsidiaries, future benefits of tax losses are capitalised if they meet the criteria specified under AGAAP. For US GAAP purposes certain benefits attributable to such losses were only recorded on realisation. Certain components of the value of the Future Income Tax Benefit recorded under AGAAP relating to acquired tax losses were reclassified as goodwill on acquisition of subsidiaries and amortised under a systematic amortisation policy under US GAAP. After adjustments for Discontinued Businesses, no such classification differences remain at June 30, 1999.

(k) Income Taxes

Accounting under AGAAP is under the liability method, and is equivalent in all material respects to Statement of Financial Accounting Standards No. 109 (SFAS 109). For each tax jurisdiction, after reclassification of Deferred Tax liabilities (net of Deferred Tax assets arising from timing differences) the net tax asset meets the criteria set out in SFAS 109. There have been no variations in the application of the qualifying criteria under US GAAP and AGAAP.

Valuation allowances of approximately $169.5 million (1998: $125.2 million, 1997: $131.8 million) in respect of trading and abnormal losses and $29.1 million of capital losses (1998: $13.9 million; 1997: Nil) have effectively been recorded, in that deferred tax assets, to these extents, have not been brought to account. Reversal of these valuation allowances and the realisation of the unrecorded assets is dependent upon the realisation of qualifying assessable income in the relevant tax jurisdictions.

At June 30, 1999 the expiry dates of gross tax losses for which future tax benefits (deferred tax assets) have been brought to account are as follows - in respect of financial years ending on June 30;

A$ Year million 1999 0.4 2000 0.6 2001 2.6 2005 43.1 2006 66.6 2007 59.7 2009 6.3 2010 2.1

Additionally, certain deferred tax assets have been brought to account in respect of losses which have no prescribed expiry date.

(l) Accounting for Goodwill

Shares in subsidiary companies are valued on acquisition at the holding company’s interest in the fair value of the net assets acquired of the subsidiary company at the date of acquisition. Any difference between the fair value of net assets and cost is recognised as an asset. Under AGAAP, goodwill is amortised on a straight line basis over varying periods not exceeding 20 years. Although the benefits from the goodwill acquired may exceed 20 years the goodwill is written off over periods not exceeding 20 years to comply with AGAAP.

In 1989 and prior years, for AGAAP, goodwill was written off in the year of acquisition. For US GAAP purposes, such goodwill has been reinstated and is being amortised. For US GAAP, where the useful life is considered to be 20 years or longer, the Group has adopted the method of straight-line amortisation over a maximum of 40 years. The unamortised balance of goodwill is reviewed semi-annually and any material diminution in value is charged to the Profit and Loss Statement.

Goodwill attributable to sold businesses is brought to account in determining the gain or loss on sale (Refer Note 40(p)).

Printed: 29/09/99 15:16 Sheet: AA52b Brought to you by Global Reports 63 Notes to the Financial Statements P A C I F I

C Note 40

D Major differences between Australian GAAP and US GAAP (continued) U N L

O (m) Brand names P

A Brand names acquired since July 1, 1990, are recorded in the accounts at cost based on independent valuation. No

N amortisation has been charged on these assets under Australian GAAP as no event has occurred to cause a reduction in the N

U values or limit their useful lives. This was a change in policy to previous years when such assets were written off as an

A Extraordinary Item in the year of acquisition. L

E For US GAAP purposes and for purposes of this reconciliation brand names are, effective July 1, 1994 amortised over a

P period of 40 years using the straight line method. Brand names attributable to sold businesses are brought to account in O

R determining the gain or loss on sale (Refer Note 40(p)). T

9 (n) Financial Instruments 9 9 Disclosures in the Australian financial statements are consistent with the disclosure requirements of SFAS 119 “Disclosure about Derivative Financial Instruments and Fair Value of Financial Instruments”.

(o) Hedging of Anticipated Transactions

Included within Note 27 is detail of amounts deferred related to hedging of anticipated exposures. For US GAAP purposes certain of these transactions (primarily related to forward exchange contracts) do not qualify as hedges as they relate to anticipated transactions. These amounts are adjusted in determining US GAAP income. The amount adjusted, by increasing US GAAP net income by $3.4 million (1998 $0.9 million decrease, 1997: $3.8 million increase), is in respect of forward contracts in respect of hedging of sales of product denominated in foreign currency attributable to future foreign currency sales of product. The contracts are related to budgeted sales and are not in relation to firm commitments.

(p) Discontinued Operations

Certain retained liabilities relating to patient care and monitoring and legal defence provisions are reported in Note 20 to the financial statements as provisions of $5.0 million (current) and $8.0 million (non current). As set out in Note 26 to the financial statements the expected outcome of the material litigation actions outstanding in respect of the Medical Products Group have been provided for as set out in Note 20, being $12.3 million (current) and $8.7 (non-current).

Certain deferred tax assets previously reported in respect of the results of the Medical Products Group were written off in 1996, and income tax benefits attributable to the 1996, 1997 and 1998 losses from operations and loss from sale have not been brought to account as recovery is not, at this time, considered to be more likely than not.

Segment results presented are as determined under Australian GAAP and may differ to the results determined in accordance with US GAAP.

(q) Provisions for Rationalisation and Restructuring

As part of the ongoing rationalisation and restructuring, the Company had initiated actions in 1995/1996 in respect of the sale of Telectronics, the restructure and sale of a footwear manufacturing plant, the closedown of two clothing manufacturing plants and the relocation of another, the reduction of personnel at several operations within the Pacific Brands Group, the scrapping of excess plant at an offshore latex plant, and the closedown or reorganisation of three cable plants.

At June 30, 1996 detailed plans had not been finalised in respect of two of the plants identified by management, and accordingly, the amounts provided in respect thereto of $22 million (before and after tax) was added back in the determination of the Net Loss under United States GAAP.

Costs of $2 million (before and after tax) associated with the closure of one of the above plants was incurred during 1997 and were charged to the rationalisation provision in the Australian GAAP financial statements. This amount has been deducted in the determination of Net Profit under US GAAP. The remaining provision relating to these plants is $20 million and due to the finalisation of plans at June 30, 1999 it has been deducted in the determination of Net Profit under US GAAP.

Printed: 29/09/99 16:01 Sheet: AA52c Brought to you by Global Reports Notes to the Financial Statements 64 F i n a n c i

Note 40 a l

Major differences between Australian GAAP and US GAAP (continued) R e v i (r) Recent Changes in US GAAP e w

In June 1997, the United States Financial Accounting Standards Board issued Statement No. 130, “Reporting Notes on the Accounts Comprehensive Income" and Statement No. 131, “Disclosures about Segments of an Enterprise and Related Information”. Both statements become effective for fiscal years beginning after December 15, 1997. These statements require disclosure of comprehensive income and its components and certain information about operating segments and geographic areas of operation.

In February 1998, the United States Financial Accounting Standards Board issued Statement No. 132, “Employees Disclosures about Pensions and Other Post Retirement Benefits”. The statement is effective for fiscal years beginning after December 15, 1997. The Statement revises employers’ disclosures about pension and other post-retirement benefit plans. It does not change the measurement or recognition of those plans. In principle, it standardises the disclosure requirements for pensions and other post-retirement benefits to the extent practicable, requires additional information on changes in the benefit obligations and fair values of plan assets that will facilitate financial analysis, and eliminates certain disclosures that are no longer as useful as they were when FASB Statements No. 87, “Employers’ Accounting for Pensions”, No. 88, “Employers’ Accounting for Settlements and Curtailments of Defined Benefit Pension Plans and for Termination Benefits”, and No. 106, “Employers’ Accounting for Post-retirement Benefits Other Than Pensions”, were issued. The Statement suggests combined formats for presentation of pension and other post-retirement benefit disclosures.

In June 1998, the United States Financial Accounting Standards Board issued SFAS 133 “Accounting for Derivative Instruments and Hedging Activities”. The Statement establishes accounting (measurement) and reporting (disclosure) Standards for derivative instruments and hedging activities. The standard requires that an entity recognise all derivatives as either assets or liabilities in the Statement of financial position and measure those instruments at fair value. The Company will be analysing this statement in conjunction with monitoring the progress of the harmonisation of International Accounting Standards and thus is not yet in a position to determine its impact on the Company’s financial statements. In June 1999, the United States Financial Accounting Standards Board issued SFAS 137 which effectively postpones the effective date of SFAS 133 until fiscal years beginning after 15 June 2000.

Printed: 29/09/99 15:16 Sheet: AA52d Brought to you by Global Reports 65 Notes to the Financial Statements P A C I F I C Note 41 Consolidated

U Reconciliation to United States Generally Accepted Accounting 1999 1998 1997 N $ million $ million $ million L Principles (U.S. GAAP) O P

Profit and Loss Statement (for years ended 30th June) A N

N Net profit of the consolidated entity before abnormal items per Australian GAAP 205.5 179.8 182.7 U

A Less interest of outside equity holders 5.7 (1.0) 7.1

L Operating profit after income tax before abnormal items attributable to Pacific Dunlop

R Limited shareholders as reported in the consolidated profit and loss statement 199.8 180.8 175.6 E P

O Adjustment required to accord with US GAAP: R

T add/(deduct);

1 Total Adjustments 12.9 (1.2) 6.2 9

9 Profit before abnormal items and 9 cumulative effect of accounting changes 212.7 179.6 181.8

Abnormal items after tax attributable to Pacific Dunlop Limited shareholders as reported in the consolidated profit and loss statement (94.0) (156.0) 2.2 Adjustment required to accord with U.S. GAAP: add/(deduct); Goodwill written off - GNB (Batteries) Group - (118.3) - Abnormal items after tax (94.0) (274.3) 2.2

(Loss)/profit after abnormal items before cumulative effect of accounting changes 118.7 (94.7) 184.0 Adoption of Australian Accounting Standard AASB1016 "Accounting for Investments in Associates" - (23.3) - (Loss)/profit according to U.S. GAAP 118.7 (118.0) 184.0

Weighted average number of shares per basic EPS calculations (millions) 1,030.4 1,028.0 1,024.2 Weighted average number of Executive shares (millions) 12.5 12.4 15.6 Weighted average number of Executive options (millions) - -- Weighted average number of shares per diluted EPS calculations (millions) 1,042.9 1,040.4 1,039.8

Continuing Operations Income from continuing operations Before income tax 156.8 (3.3) 232.3 Income tax expense (39.7) (38.9) (67.2) Discontinued Operations Income/(Loss) from discontinued operations 15.0 (45.9) 32.7 Income tax benefit (13.4) (6.6) (13.8) Cumulative effect of accounting changes - (23.3) - Net (loss)/profit per US GAAP 118.7 (118.0) 184.0

Earnings per share - basic and diluted (Australian Cents) Continuing operations - basic 11¢ (4)¢ 16¢ - diluted 11¢ (4)¢ 16¢

Discontinued operations - basic - (5)¢ 2¢ - diluted - (5)¢ 2¢

Cumulative effect of accounting changes - basic - (2)¢ - - diluted - (2)¢ -

Condensed US GAAP Consolidated Statement of Income Data excluding Discontinued Operations (see Note 40(p)) Revenues 5,953.1 6,990.5 6,147.5 Total costs and expenses 5,653.3 6,840.2 5,769.4 Interest expense 143.0 153.6 145.8 Tax expense 39.7 38.9 67.2 Income from continuing operations before cumulative effect of accounting changes 117.1 (42.2) 165.1

Printed: 29/09/99 15:16 Sheet: AA 53 Brought to you by Global Reports Notes to the Financial Statements 66 F i n a n c i

Note 41 Consolidated a l

Reconciliation to United States Generally Accepted Accounting 1999 1998 1997 R e

Principles (U.S. GAAP) (continued) Notes $ million $ million $ million v i e w

Adjustments to reflect U.S. GAAP Notes on the Accounts

Add: Amortisation of goodwill capitalized 40 (l) 15.5 13.5 5.4

(Deduct): Amortisation of brand names capitalized 40 (m) (5.6) (5.6) (4.2)

(Deduct): Amortisation of compensation component of executive share plan 40 (e) (1.0) (0.6) (0.1) and options

Add: Pension Plans 40 (h) 4.7 4.2 10.4

Add: Depreciation of asset increment included in depreciation charge 40 (a) 0.2 0.3 0.5

Add/(Deduct): Revaluation of asset increment realized 40 (a) 15.7 (0.6) -

Add/(Deduct): Net hedge gains (brought to account)/ deferred for Australian 40 (o) 3.4 (0.9) (3.8) GAAP - after tax

(Deduct): Rationalisation and restructuring provision 40 (q) (20.0) - (2.0)

(Deduct): Reduction in the carrying value of certain properties below 40 (a) - (11.5) - depreciated historical costs 12.9 (1.2) 6.2

Shareholders' Equity of the Group

As at 30th June 1,634.3 1,691.7 1,846.8 (Deduct): Outside equity interests 40 (c) (25.8) (26.1) (35.3) Shareholders' equity attributable to Pacific Dunlop Limited 1,608.5 1,665.6 1,811.5

Adjustments required to accord with U.S. GAAP: Add / Goodwill not capitalised for Australian GAAP - net of amortisation (Deduct): and amortisation adjustments on Australian GAAP goodwill 40 (l) 161.9 149.5 273.2 Amortisation of brand names - cumulative 40 (m) (32.6) (28.1) (27.7) Future Income Tax Benefit attributable to tax losses 40 (j) - - (26.2) Pension Plans 40 (h) 6.1 1.4 (2.8) Dividends provided 40 (d) 72.2 72.1 71.9 Hedging adjustments - after tax 40 (o) 3.4 - 0.9 Reserves attributable to Asset Revaluation 40 (a) (32.2) (47.8) (47.8) Rationalisation and Restructuring provisions 40 (d), (q) - 20.0 20.0 Depreciation charged on Revaluation increments 40 (a) 11.7 11.5 11.1 Total Adjustments 190.5 178.6 272.6 Pacific Dunlop Limited Shareholders' Equity according to U.S. GAAP 1,799.0 1,844.2 2,084.1

Statement of Comprehensive Income: Net profit per U.S. GAAP 118.7 (118.0) 184.0 Foreign Currency Translation Reserve: Movement per A GAAP (21.3) 14.6 14.9 Movement per U.S. GAAP (1.7) 3.8 - Comprehensive Income 95.7 (99.6) 198.9

Printed: 29/09/99 15:16 Sheet: AA 53a Brought to you by Global Reports 67 Notes to the Financial Statements P A C I F I C Note 41 Consolidated

D Reconciliation to United States Generally Accepted Accounting 1999 1998 1997 U

N Principles (U.S. GAAP) (continued) $ million $ million $ million L O P

A Information for United States Investors N N

U Goodwill: A

L Australian GAAP goodwill - June 30 402.5 464.5 468.5

R Add: Goodwill recognized for US GAAP only 109.4 113.5 257.1 E

P Add: Adjustment for different amortisation basis 52.5 36.0 16.1 O

R 161.9 149.5 273.2 T

1 US GAAP goodwill - June 30 564.4 614.0 741.7 9 9 9 Brand names Australian GAAP brand names - June 30 205.3 218.9 171.5 (Deduct): US GAAP amortisation (32.6) (28.1) (27.7) US GAAP Brand names - June 30 172.7 190.8 143.8

Property, plant & equipment Property, plant & equipment at cost and valuation (net of accumulated depreciation) 1,065.8 1,257.7 1,242.5 (Deduct): Asset revaluation reserves applicable 32.2 47.8 47.8 Add: Adjustment to add back depreciation charged on the revaluation increments (cumulative) 11.7 11.5 11.1 Property, plant & equipment at cost (net of accumulated depreciation) 1,045.3 1,221.4 1,205.8

Reconciliation of Net Cash Provided by Operating Activities per Australian GAAP financial statements, to Profit after Tax, Abnormal Items and Extraordinary Items - Under US GAAP

Net Cash Provided by Operating Activities: 379.3 281.4 378.2 Writedown of non-current assets - (11.5) (12.3) Depreciation (149.4) (149.8) (140.5) Amortisation (37.0) (37.1) (42.6) Provision for doubtful debts (7.2) (12.3) (15.9) Items classified as financing activities: Interest received 39.7 53.5 74.4 Interest paid (146.2) (156.5) (163.8) Change in assets and liabilities net of effect from acquisitions and disposals of subsidiaries and businesses: Increase in trade debtors (39.8) 92.0 6.4 Increase/(Decrease) in inventories (21.3) 76.3 (65.3) (Decrease)/Increase in prepaid expenses 0.4 (9.5) 1.2 (Increase)/Decrease in creditors and bills payable 19.4 (40.4) 13.2 Decrease in lease liabilities, provisions, and other liabilities 205.7 27.8 134.9 Decrease/(Increase) in provision for deferred income tax 10.0 16.2 7.0 Increase/(Decrease) in future income tax benefit (80.1) 58.3 17.9 (Increase)/Decrease in provision for income tax 61.7 (55.8) (25.2) (Loss)/Gain on sale of investments, properties, plant and equipment (89.9) (11.2) 4.1 (Loss)/Gain on sale of subsidiaries and businesses (8.3) (81.9) 19.3 Outside equity interest in loss/(profit) for the year (5.7) 1.0 (7.1) Goodwill written-off - (118.3) - Other (12.6) (16.9) 0.1 Adoption of accounting standards for investments in associates - (23.3) - (Loss)/Profit after tax, abnormal items and extraordinary items 118.7 (118.0) 184.0

Printed: 29/09/99 15:16 Sheet: AA 53b Brought to you by Global Reports Notes to the Financial Statements 68 F i n a n c i

Note 41 1999 1998 1997 a l

Reconciliation to United States Generally $ million $ million $ million R e

Accepted Accounting Principles (U.S. Major Major Major v i e

GAAP) (continued) Australian GNB Inc. Australian GNB Inc. Australian GNB Inc. w Funds Funds Funds Information for United States Investors Notes on the Accounts

Pension Plan data supporting Note 40 (h) Plan’s funded status at June 30 is summarised as follows: Actuarial present value of accumulated obligations: - Vested 464.6 172.7 468.7 175.6 452.7 118.3 - Non-vested 2.9 15.8 3.0 18.5 2.9 10.8 Total accumulated benefit obligation 467.5 188.5 471.7 194.1 455.6 129.1

Projected benefit obligation 482.1 203.3 486.2 199.5 469.9 134.4 Plan assets at fair value 545.4 204.9 558.8 231.5 527 152.7

Excess of assets over benefit obligations 63.3 1.6 72.6 32 57.1 18.3

Unrecognised net (gain) (45.3) (22.4) (57.9) (48.0) (45.2) (29.7) Unrecognised prior service costs 0.2 11.1 1.3 6.7 2.3 6.1 Unrecognised net transition obligation/(asset) (12.1) 1.6 (14.6) 2.4 (17.0) 2.6 and other deferrals Net Pension (Liability)/Asset 6.1 (8.1) 1.4 (6.9) (2.8) (2.7)

NET PENSION COST Defined Benefit Plans: - Service cost-benefits earned during the year 43.2 5.1 40.4 4.4 38.6 4.0 - Interest cost on projected benefit obligation 31.7 13.1 30.4 13.3 31.4 9.7 - Actual return on plan assets (41.6) (18.0) (60.1) (16.6) (84.6) (20.2) - Net amortisation and deferral (3.4) 1.6 16.6 2.3 43.1 10.6 Net Pension Cost of Defined Benefit Plans 29.9 1.8 27.3 3.4 28.5 4.1

ASSUMPTIONS Weighted average discount rate 6.00% 7.00% 6.00% 7.00% 7.00% 8.00% Rate of increase in compensation level 3.50% 5.00% 3.50% 5.00% 4.50% 5.00% Expected long term rate of return 7.50% 11.00% 7.50% 11.00% 8.50% 10.25%

CHANGE IN BENEFIT OBLIGATION Projected Benefit Obligation at beginnning of year 486.2 199.5 469.9 134.4 429.0 127.5 Service cost 43.2 5.1 40.4 4.4 38.6 4.0 Interest cost 32.0 13.1 36.6 13.3 54.2 10.4 Transfers from other funds 4.2 - 4.5 - 3.5 - Member contributions 13.6 - 14.4 - 15.2 - Actuarial (gain)/loss 7.9 3.7 3.2 26.1 - (2.7) Plan Amendments - 5.6 - - 2.6 Benefits paid (98.3) (8.6) (75.7) (8.6) (62.9) (7.4) Expenses and tax paid (6.7) - (7.1) 0.7 (7.7) - Foreign currency exchange rate changes - (15.1) - 29.2 - - Projected Benefit Obligation at end of year 482.1 203.3 486.2 199.5 469.9 134.4

CHANGE IN PLAN ASSETS Market value of assets at beginning of year 554.6 231.5 527.0 152.7 455.4 138.6 Member/Employer Contributions 50.0 - 45.8 - 54.1 0.1 Transfers from other funds 4.2 - 4.5 - 3.5 - Benefits paid (98.3) (8.6) (75.7) (8.6) (62.9) - Expenses and tax paid (6.7) - (7.1) - (7.7) (7.4) Actual return on plan assets 41.6 (0.6) 60.1 54.2 84.6 21.4 Foreign currency exchange rate changes - (17.4) - 33.2 - - Market value of assets at end of year 545.4 204.9 554.6 231.5 527.0 152.7

Printed: 29/09/99 15:16 Sheet: AA 53c Brought to you by Global Reports 69 Notes to the Financial Statements P A C I F I

C Note 41

D Reconciliation to United States Generally Accepted Accounting U

N Principles (U.S. GAAP) (continued) L O P

Information for United States Investors A N N

U Executive Share Option Data Supporting Note 40 (e) A L

R On December 11 1997, The Company granted to twenty Executives options to subscribe for up to 7,290,000 unissued

E ordinary shares in the Company (including 600,000 options granted to Mr. R.B. Hershan, an Executive Director), in P

O accordance with approvals received from shareholders at the Annual General Meeting on November 14, 1997, at an R exercise price of $3.30 per share. This price may be increased by the amount (if any) by which the increase in the T

1 Consumer Price Index over the period of the options exceeds the dividend yield upon the Company’s shares. The options 9 expire on December 11, 2002 and are exercisable in three tranches of equal amount during a period commencing, in the 9

9 case of tranche 1, on November 13, 2000; in the case of tranche 2, on November 13, 2001; and in the case of tranche 3, on November 13, 2002, and in each case ending on the expiry date, subject to satisfaction of a separate performance hurdle attaching to each tranche. The condition or ‘hurdle’ that must be satisfied before the options can be exercised is that the total return to shareholders (ie. growth in share price plus dividends reinvested) in respect of Pacific Dunlop shares exceeds the simple average total return to shareholders in a selected group of major listed companies over comparable periods in respect of each tranche of options. Subsequent to the grant, options in respect of 1,800,000 unissued ordinary shares in the Company have lapsed, the three Executives concerned having ceased to be employed by the Company.

Since the end of the financial year, on July 22, 1998, options in respect of 1,545,000 further unissued ordinary shares in the Company were granted to four Executives on the same terms and conditions (including exercise price) as the grant on December 11, 1997.

None of the options described above carry any right to participate in a share issue of any other body corporate and none of those options has been exercised at the date of this report.

Options to subscribe for up to 1,800,000 unissued ordinary shares in the Company remain on issue to the Managing Director, in accordance with an approval received from shareholders at the Annual General Meeting on November 15, 1996, at an exercise price of $2.80 per share. The options expire on November 14, 2001 and are exercisable in three separate tranches of 600,000 options between November 1 and 14 in 1999, 2000 and 2001, only where, in relation to each separate tranche of options, two separate performance conditions are satisfied, details of which were set out in last year’s financial statements. The options do not carry any right to participate in a share issued of any other body corporate.

SFAS 123 “Accounting for Stock Based Compensation” encourages the adoption of a fair value based method of determining compensation costs. For US GAAP purposes, the company has adopted the fair value provision of SFAS 123. As a result, the requirements of this standard have resulted in stock compensation expense being recognized in the US GAAP profit.

In accordance with the requirements of SFAS 123, the compensation fair value of all options which are outstanding has been calculated at $4.6 million which will be amortized over the period to December 11, 2002 which equates to a $1.0 million amortization charged per annum.

The fair value of the options granted was estimated on the date of grant using a Monte Carlo simulation model with the following assumptions for 1999, 2000, 2001 and 2002 respectively: risk free interest rate of 5.94% for all years; dividend yield of 13.08% for all years: expected lives of three years, four years and five years; and volatility of 27.8% for all years.

Printed: 29/09/99 16:01 Sheet: AA53d Brought to you by Global Reports Directors' Declaration 70 F i n a n c

The Directors of Pacific Dunlop Limited ("the Company") declare that the financial statements and notes set out on i a l

pages 10 to 69: R e v

(a) comply with the Accounting Standards. i e w

(b) give a true and fair view of the Company and the Group's financial position as at 30 June 1999 and Notes on the Accounts of their performance for the year ended on that date.

(i) the financial statements and notes are made out in accordance with the Corporations Law, including: (A) section 296; and (B) section 297; (ii) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.

This declaration is made in accordance with a resolution of Directors.

John T. Ralph Chairman Rodney L. Chadwick Director

Dated at Melbourne this 10th day of September 1999

Printed: 29/09/99 15:16 Sheet: AA 54 Brought to you by Global Reports 71 Independent Auditors' Report to the members of Pacific Dunlop Limited P A C I F

I Scope C

U We have audited the financial report of Pacific Dunlop Limited, consisting of the profit and loss statements, balance sheets,

N statements of cash flows, accompanying notes, and the directors' declaration set out on pages 10 to 70. L

O The financial report includes the consolidated financial statements of the consolidated entity, P comprising the Company and the entities it controlled at the end of the year or from time to time during the financial year. The

N Company's Directors are responsible for the financial report. We have conducted an independent audit of this financial report

N in order to express an opinion on it to the members of the Company. U A

L Our audit has been conducted in accordance with Australian Auditing Standards, which are consistent in all material

R respects with auditing standards generally accepted in the United States of America, to provide reasonable assurance E

P whether the financial report is free of material misstatement. Our procedures included examination, on a test basis, of

O evidence supporting the amounts and other disclosures in the financial report, and the evaluation of accounting policies and R

T significant accounting estimates. These procedures have been undertaken to form an opinion whether, in all material

1 respects, the financial report is presented fairly in accordance with Accounting Standards and other mandatory professional 9

9 reporting requirements and statutory requirements so as to present a view which is consistent with our understanding of the 9 Company's and the consolidated entity's financial position, and performance as represented by the results of their operations and their cash flows. The audit opinion expressed in this report has been formed on the above basis.

Audit Opinion

In our opinion, the financial report of Pacific Dunlop Limited is in accordance with: (a) the Australian Corporations Law, including: i) giving a true and fair presentation of the Company's and consolidated entity's financial position as at 30 June 1999, 1998 and 1997, and of their performance for the financial years ended on those dates; and ii) complying with Accounting Standards and the Corporations Regulations; and (b) other mandatory professional reporting requirements in Australia.

Accounting principles generally accepted in Australia vary in certain respects from accounting principles generally accepted in the United States of America. An explanation of the major differences between the two sets of principles is presented in Note 40 to the consolidated financial statements. In so far as there are significant differences between such principles, the application of the United States principles would have affected the determination of consolidated net profit/loss for the years ended June 30, 1999, 1998 and 1997 and the determination of the consolidated shareholders' equity at June 30, 1999, 1998 and 1997 to the extent summarised in Note 41 to the consolidated financial statements.

KPMG

Dated in Melbourne this 10th day of September 1999 William J. Stevens Partner

Printed: 29/09/99 16:00 Sheet: AA 55 Brought to you by Global Reports