1996 annual report boral

1996 Annual Report BORAL

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50BORAL

Y E A R S

Five Decades of Growth 2Year in Brief 3Calendar of Significant Events 3Financial Highlights 4Chairman’s Review 5Managing Director’s Review 7Management Structure 11Summary of Operations 12• Results• Products• Performance• Significant Events• OutlookBuilding Products 14Construction Materials 18Energy 22North America 26Europe 28

Asia 30Services and Engineering 32Corporate Activities 34• Human Resources 34• Occupational Health and Safety 34• Environment 35• Community 37Corporate Governance 38Board of Directors 40Financial Review 42Ten Year Dividendand Share Issue History 441996 Accounts 45Stock Exchange Information 80Shareholder Information 81Company Information 82Ten Year Financial History IBC

CONTENTS

Boral Limited Australian Company Number 000 051 696

F INANCIAL CALENDAR

Ex dividend share trading commences 3 October

Books close for final dividend 11 October

Final dividend payable 31 October

Annual General Meeting 18 November

Annual General Meeting reportmailed to shareholders November

Half year end 31 December

Interim profit announcement 5 March

Half yearly report mailed to shareholders March

Ex dividend share trading commences 1 April

Books close for interim dividend 9 April

Interim dividend payable 30 April

Year end 30 June

The Annual General Meeting of shareholders of Boral Limited will be heldin the Grand Ballroom of The Wentworth Hotel, 61 Phillip Street, Sydneyon Monday 18 November 1996 at 10.30am. A formal notice of meeting isenclosed with this Annual Report setting out the business of the AnnualGeneral Meeting.

Front cover: Alec Martin, lorry owner driver, working out of Boral’s

Keilor concrete plant in Victoria.


2

F IVE DECADES OF GROWTH

1960s

1980s

New plants were built in Sydney and Brisbane which enabled theCompany to expand beyond bitumen into the petrochemical field.

One of Boral’s first major strategic moves came with the entry into the gasmarket through the acquisition of the Gas Supply Company. It comprised28 separate coal gas companies ranging from Cairns in Queensland toPortland in Victoria and as far west as Broken Hill. Boral made its firstquarrying acquisitions during this same period.

The acronym “Boral” was first used as the company’s shipping mark andgradually became more widely used in the industry and the press. In thegreat Australian tradition the nickname became official when shareholdersat the 1963 Annual General Meeting unanimously agreed to change thename of the company to Boral Limited.

After floating its manufacturing businesses as Azon Limited,Boral launched its bid for Sagasco Holdings Ltd. This returnedBoral to a position of major prominence in the national energymarket. The Company increased its push into Asia, focusing onplasterboard and pre-mixed concrete in Indonesia, Malaysia andChina. The acquisition of two large brick companies in the SouthEast US made Boral the largest brick manufacturer in the USA.

Having already entered the quarry business, Boral moved to quit the oilindustry and expand building materials. Warringah Brick and PipeWorks in New South Wales and Brittains Bricks and Pipes inQueensland were the first brick operations closely followed in 1970 bythe Glen Iris Brickworks in Victoria and the Besser and Jaybloxmasonry businesses.

In the late 1960’s, Boral increased its quarrying activities and enteredthe pre-mixed concrete industry.

A new corporate identity was launched with theadoption of the now familiar green and gold flaglogo. This served to unite many of the companiesthat, although part of Boral, had retained theirseparate identities.

Boral entered the United States through California Tiles and the Merry Companies brickbusinesses. In 1982, Boral made a very significant move with the acquisition of BMI, acompany of almost equal size and asset value. This reinforced Boral’s leading buildingmaterials position in Australia and added bases in the UK and Indonesia. In 1987,Boral came to control its own cement supply through its acquisition of Blue CircleSouthern Cement.

1950s

1970s

1990s

1946Bitumen and Oil Refineries (Australia) Limited, the firstAustralian owned bitumen and oil refinery, wasincorporated on 4 March 1946 under the Chairmanship ofentrepreneur David Craig. Bitumen was manufactured fromimported crude oil supplied by part-owners California TexasOil Company Limited (Caltex).


3

YEAR IN BRIEF

C A L E N D A R O F S I G N I F I C A N T E V E N T S

JULY • Acquisition of Hancock Brothers Pty Limited’s plywood and veneer business inIpswich, Queensland made Boral a leading Australian plywood manufacturer

• Completion of the Bickerstaff and Isenhour brick acquisitions in the USA

AUGUST • Signed an in-principle agreement to participate in a project to build a $170 million cogeneration power plant at Osborne in South Australia

• Joint venture to build and operate a $66 million plasterboard facility in Shanghai, China• Purchase of 55% interest in Wembley Gypsum Products Sdn. Bhd., the Malaysian plasterboard

manufacturer, was finalised

SEPTEMBER • Announcement of 10.3% increase in operating profit after tax to $309.7 million for the year ended 30 June 1995. Sales also grew to a record $4.9 billion.

• Two long term contracts announced for the supply of natural gas from the South West Queensland Cooper Basin (SWQ) to markets on the State’s east coast

• Sale of elevator and building technologies business, Boral Building Technologies, to Otis Elevator Company

DECEMBER • Announcement of a new 30 million square metre plasterboard manufacturing plant in Indonesia worth $65.8 million

• Finalised purchase of majority interest in the Tubridgi gas production and gas gathering facility in Western Australia at a cost of $35.5 million

FEBRUARY • Upgrade of Wyee, New South Wales roof tile plant completed

MARCH • Announcement of a 37% decrease in operating profit after tax and minority interests but beforeabnormals to $120 million for the half year to 31 December 1995

• Sale of the Kindisch quarry, sand and gravel interests in eastern Germany

APRIL • Sale of the UK masonry business Boral Edenhall Concrete Products Limited to ARC Concrete Limited for A$46 million

Sales decreased by 5% to $4.7 billion.

Final dividend reduced to 7.5 cents per share to reflect thelower profit (10.5 cents in 1995).

Operating profit after tax and abnormal items was$206 million, down 30% on the previous year.

Building Products and Construction Materials were severelyimpacted by a 28% decline in new dwelling starts inAustralia.

Energy sales in Australia and the Pacific increased by 8.3%.

Boral became the largest clay brickmaker in the USA throughthe Bickerstaff and Isenhour purchases. Successful integrationof the newly acquired plants and former Boral Bricksoperations has occurred.

Growth in Asia with improved Indonesian profitability andexpansion in Malaysia.

Divestment of businesses which are not market leaders or arenon-core. Sales included elevators, masonry in the UK andquarries in eastern Germany.

Restructuring and business improvement programs continuedin Australia.

Background: Boral completed the road surfacing on Sydney’s new Glebe IslandBridge during the year


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F INANCIAL HIGHLIGHTS

1996 1995 Change$’000 $’000 %

Group sales revenue 4,695,272 4,941,164 -5.0%

Operating profit before abnormals 248,633 443,413 -43.9%

Income tax expense before abnormals 70,711 127,874 -44.7%

Profit after tax but before abnormal items 170,909 309,658 -44.8%attributable to shareholders

Abnormal items after tax 34,780 -15,777 –

Operating profit after tax, abnormal items and outside equity interests 205,689 293,881 -30.0%

Dividends 201,666 231,169 -12.8%

Total assets 6,058,987 5,978,550 +1.3%

Net borrowings 1,714,173 1,562,113 +9.7%

Shareholders’ equity 2,906,540 2,877,470 +1.0%

Capital expenditure and acquisitions 717,728 517,791 +38.6%

Proceeds from divestments 284,105 77,993 –

Depreciation, depletion and amortisation 300,113 275,711 +8.9%

Return on shareholders’ equity before abnormal items 6.0% 10.9% –

Earnings per share before abnormal items 15.4 cents 28.2 cents -45.4%

Dividend per share 18.0 cents 21.0 cents -14.3%

Net tangible assets per share $2.19 $2.29 -4.4%

Gearing (net interest bearing debt to equity) 59.0% 54.3% –

Net interest cover before abnormal items 3.0x 5.2x –

Number of employees 21,735 23,295 -6.7%

Number of shareholders 152,800 148,795 +2.7%


The occasion of Boral’s 50th anniversary

coincided with a year marked by difficult

trading conditions in most operations.

n sales down by 5% from the previousyear to $4.7 billion, Boral’s consolidatedoperating profit after tax and abnormal

items attributable to shareholders was$205.7 million (a 30% decrease from$293.9 million). This includes an abnormal profitafter tax of $34.8 million.

Boral’s consolidated operating profit after tax andminority interests but excluding abnormal itemswas $170.9 million (down 44.8% from$309.7 million in the previous year). Theoperating profit before abnormal items and taxwas $248.6 million.

Profit in the second half, from January to June1996, remained under severe pressure, largelydue to the cyclical housing downturn affectingBoral’s major businesses of building andconstruction materials in Australia. Trading inthese businesses is now more difficult andsubject to stronger price pressure than at anytime since the early 1980s. A substantially lowerprofit from Europe together with higher interestcosts and depreciation also adversely affectedearnings.

Part of the decline in profit was offset byimproved earnings from Energy, the USA andAsia Pacific.

DIVIDEND

Earnings per share for the year after abnormalitems were 18.5 cents (26.8 cents last year).

When the Company announced at this time lastyear a dividend policy, which aims to ensure thatthe previous level of dividend is at leastmaintained, the severe impact of the economicdownturn on earnings was not envisaged.

Reflecting the lower profit, a reduced finaldividend of 7.5 cents per share has beendeclared (10.5 cents in 1995). The total dividendfor the year of 18 cents compares with 21 centsin the previous year.

The Company’s dividend reinvestment plans,having been reinstated earlier this year, willcontinue to operate for the final dividend. It is tobe noted that 39.7% of the Company’s issuedcapital participated in the plans for the 1996interim dividend.

The final dividend will be paid on 31 October

1996 and will be fully franked at the 36% tax rate.

OPERATIONS

In Australia, profits of all divisions in the BuildingProducts and Construction Materials Groupsdeclined.

A 28% decrease in housing starts to around120,000 severely affected both Groups. InConstruction Materials, the effect of the housingdecline was only partly offset by an increase of15.3% in the value of non-dwelling building. Thelow level of construction activity in roads,highways and subdivisions changed little fromthe previous year. Very competitive pricingcontributed to much reduced margins in most ofthe building and construction materialsbusinesses.

Exploration and production operations and gasdistribution have contributed to the ongoinggrowth of the Energy Group. Sales of the Groupincreased 8.3%. Tubridgi, the Western Australiangas field in which Boral purchased a controllinginterest and operatorship, has been a successfulacquisition. Natural gas distribution tradedsatisfactorily.

In the USA, operations benefited from a strongeconomy and from the integrated clay brickbusiness formed after the Bickerstaff andIsenhour acquisitions early in the financial year.

The poor result in Europe is a combination ofdifficult trading conditions, an extremely harshwinter and some under-performing assets.

In Asia, concrete demand in Indonesia remainsstrong and there was pleasing progress with thenew investments in concrete in Malaysia andplasterboard in Indonesia and Malaysia.

MANAGEMENT

Directors are confident that the Company has asound and committed management with thenecessary skills and experience to drive Boralforward. The difficult trading conditions maskconsiderable progress made on a wide frontincluding business rationalisation, operatingimprovements and cost savings. Strengtheningof the management team has resulted in Boralbeing well positioned to benefit from therecovery expected in Boral’s markets.

STRATEGY IMPLEMENTATION

The major acquisitions during the year were theBickerstaff and Isenhour brick operations in theUSA (making Boral the largest clay brick

Chairman’s Review

5

O


manufacturer in that country), the majority interestin the Tubridgi gas field, the plywood manufacturer,Hancock Bros., in Queensland and a 55%shareholding in Wembley Gypsum Products, theMalaysian plasterboard manufacturer.

The elevators business was sold as non-core andin addition, the quarry operations in easternGermany and the UK masonry business were sold.

An extensive strategic review of Boral’s remainingoperations in Europe has been commenced. It isconcentrating on the clay brick and tile operationsto develop strategies which will improve returns.

Restructuring of businesses continues in Australia.Blue Circle Southern Cement’s good performancereflects the benefits from a concerted businessimprovement program. The most extensiverestructuring project under way is in the WindowsDivision, where about a third of the sites havebeen closed and overheads significantly reduced.Approximately 40 sites including brick, masonry,concrete and asphalt plants, as well as windowfactories, were closed during the year.

As part of the Company’s commitment to futuregrowth, a number of major capital expenditureprojects are being undertaken.

Construction has begun on the $175 million gas-fired cogeneration plant at Osborne, SouthAustralia, in which Boral Energy will have a 50%interest. Boral’s share of plant and associatedcosts for delivering gas from South WestQueensland to East Coast markets in Queenslandand to Mt. Isa is approximately $70 million. Inaddition to ongoing expenditure on developingexisting oil and gas reserves, expenditure onexploration for new reserves in the Cooper, Surat,Otway, Bass and Carnarvon Basins will be about$10 million per annum.

The upgrade of the Boral Montoro clay roof tileplant in Wyee, New South Wales was completedin the first half. Construction of a plasterboardplant in Shanghai has commenced and theWembley plant in Malaysia was upgraded afteracquisition. Construction of a second Indonesianplasterboard plant in Jakarta will commence thisyear. Plans to build replacement masonry plants inSydney and Brisbane are well advanced. Theprogram of capital expenditure in Australianoperations to upgrade and replace plant andequipment continues.

FINANCIAL

$717.7 million was invested in capital expenditureand acquisitions during the year.

The net debt to equity ratio at 30 June 1996 was59.0% (54.3% at the previous year end).

OUTLOOK

Even though housing starts in Australia appear tohave bottomed, the lag in construction means thecurrent half year will remain challenging. However,partly reflecting seasonal patterns and the benefitof the improvement programs, profits in July andAugust are well ahead of the monthly rate earnedin the last half of 1995/96. The timing of theimprovement in housing construction is not yetclear but the upturn, expected by most forecastersby early 1997, should result in a significantimprovement in second half earnings over thecomparable period.

BOARD

Mr. Mark Rayner was appointed as a non-executiveDirector in February 1996. With his background inbusiness, Mark brings valuable experience tothe Board.

6

PETER COTTRELL, Chairman


ManagingDirector ’s

ReviewA 50th anniversary is a significant milestone.

It is a time to celebrate, it is a time to reflect

on past achievements, it is a time to re-

evaluate and it is a time to look forward.

n celebrating its first 50 years, Boral hasmuch to be proud of. From its beginnings asa green-field bitumen and oil refinery at

Matraville on Botany Bay in New South Wales,Boral (Bitumen and Oil Refineries AustraliaLimited) has grown to become an Australianhousehold name and one of Australia’s 20largest industrial companies with operationsaround the globe. It is now the largest supplierof building products and construction materialsin Australia and the largest brick manufacturerin the USA. It has developed significantpositions in some European and Asian buildingmaterials markets and in recent years hasbecome a growing force in Australia’s rapidlydeveloping energy market.

These remarkable achievements have beenrealised through the vision and dedication ofmany people. From David Craig who, afterseven years and three attempts, finally broughtBoral into existence, to the 22,000 employeestoday, these people havehelped shape the companyand left their mark on it.

Boral today is a very differentorganisation from the Boralof 1946. Over its 50 yearhistory it has dramaticallytransformed itself a numberof times to adapt to changingbusiness environments andto capitalise on opportunities.One of Boral’s first strategicmoves out of refining camein 1963 with the acquisitionof The Gas Supply Company.At around the same timeBoral embarked on astrategy of acquisition and

consolidation in the Australian building productsand construction materials sectors that lasteduntil the early 1990s when industryconsolidation was largely complete. It isinteresting to note that Boral has not beeninvolved in its original business of refiningimported crude oil for almost 25 years.

As organisations evolve and grow it is not onlynatural, but necessary, that they change. After aperiod of successful growth, the opportunitiesfor pursuing the existing strategy are oftenexhausted and it is necessary to consolidate thegains and to reposition the organisation for thenext phase of growth. Ignoring changes in thebusiness environment while holding to ‘triedand tested’ operating philosophies beyond theiruse-by date not only results in an organisationthat is inflexible and bureaucratic, but one thatstarts to lose its competitive position.

Failing to see the signs that a particular strategyfor growth is nearing the end of its useful life,or not identifying when change is required,results in competitors gaining an advantage thatis difficult to claw back. Even when the needfor change is identified, the job of

7

IN ITS 50TH YEAR, BORAL IS

DYNAMICALLY TRANSFORMING ITSELF

TO DELIVER GROWTH AND INCREASED

PROFITABILITY THROUGH TO THE END

OF THIS MILLENNIUM AND BEYOND.

I


transformation is substantial. To position anorganisation to take best advantage of a newgrowth cycle requires changes in strategies,organisational structure and culture. Thisrequires a concerted effort and becomes morechallenging the larger the organisation.

Boral is meeting the challenge head-on and it istherefore not surprising that in Boral’s 50th yearof operation it is in the middle of a significanttransformation. Much has already beenachieved after almost two years of the MagnaCarta program of realigning our strategies,developing the best people in our industries andpursuing customer focused businessimprovement.

Boral has strengthened its strategic positionthrough the divestment of selected non-coreand under-performing businesses together withthe acquisition of businesses that build oncompetitive advantage. While it has a strongtrack record of being a very successful acquirer,

Boral, like most companies that are acquisitive,was inclined not to sell businesses once withinthe fold. However, a diversified company mustcontinually examine its businesses to determinewhether they retain competitive advantage andfit the company’s strategic direction.

While a successful company should not trade inits businesses or even treat its businesses as aportfolio in the way an investment managerdoes, it must, from time to time, make thedifficult decision to sell businesses that don’t fitor that cannot earn an adequate return. Sodivestment strategy is as important as acquisition strategy.

The chart below shows how over the past twoyears Boral’s divestments have roughly coveredthe cost of acquisitions and how EBITconsequently increased by $44 million. In thelast year, divestments included the sale of BoralElevators to Otis Elevator Company, quarries ineastern Germany and masonry in the UK. On

the acquisition side, Boral’sposition in bricks in the USAwas substantiallystrengthened with thepurchase of the Bickerstaffand Isenhour BrickCompanies. Further, theEnergy Group purchased acontrolling share in theTubridgi gas field and the AsiaGroup purchased theWembley plasterboard plant inMalaysia.

Our progress in developing thebest people in our industrieshas also been significant. Wehave built on our performancemanagement systems withthe setting of objectives andperformance appraisals nowan important part of theculture. This, combined with


Review

8

DIVESTMENTS HAVE FINANCED ACQUISITIONS.STRATEGIC POSITIONS HAVE BEEN STRENGTHENEDAND EBIT SUBSTANTIALLY IMPROVED.


9

greatly expanded training and developmentopportunities for employees, successionplanning and graduate recruitment programs hasmeant that Boral is both developing people fromwithin and able to attract the best externalcandidates when necessary. The new anddynamic senior management team bringstogether a wealth of experience and the abilityto drive through the required transformation.

The notion of having the ‘best people’ requiresthat we care for them too. In this context, I ampleased with the progress that has been madeon the health and safety of our employees. TheLost Time Injury Frequency Rate (numbers ofinjuries for every million hours worked) improvedby 29% over the previous year.

I also want to thank our people, at all levels, fortheir contribution during the year. Dealing with adownturn requires an even greater commitmentnot to mention the extra demands of our changeprograms. Our employees have respondedenthusiastically to these demands and I knowthey will derive huge satisfaction from seeingthese efforts rewarded in the future.

Business improvement initiatives started tomake real contributions during the year. Wecontinue to focus on servicing customers betterwhile seeking efficiencies and updating internalprocesses. Our Performance EnhancementPrograms (PEP) covering some 220 separateinitiatives, are paying off with $16 million insavings in the June Quarter and we are ontarget to achieve well over $50 million in1996/97. Our improvement programs enabled usto close more than 40 operating sites during theyear. The Finance 2000 project is nearing theend of its Design and Configure stage and is ontrack to deliver significant benefits to Boralthrough increased efficiencies in the wayfinancial transactions and data are handled.

In its 50 years, Boral never became bloated andhas always prided itself on being lean. Despitebeing lean, there remain substantial

BORAL VALUES

Boral demands the highest ethicalstandards from all of its employees. Boral’sperformance management system,implemented two years ago, is used toassess staff and manager performanceagainst set objectives and their alignmentwith Boral’s values. Employees are assessedagainst the following behaviouralobjectives:

LeadershipCreates and contributes to an environmentin which people can excel through amanagement style which is participative,encouraging, demanding and supportive.

RespectCares about the impact of our operationsand actions on employees, customers, thecommunities and environment in which weoperate, ensuring that he/she meets boththe spirit and the letter of the law andcommunity expectations.

FocusMakes critical choices on priorities, makestimely, insightful fact-based decisions, andis determined to pick the right things anddo them well.

PerformanceGets on with the job, sets challenginggoals and standards, measures results,provides honest feedback on individualcontribution and rewards achievement.

PersistenceStrives to be the best at what he/she does,is relentless in his/her pursuit ofimprovement and of increasing targets,and is never satisfied with the status quo.


opportunities for savings. The consolidation ofaccounting and customer service functions froma number of individual sites into a central site isa typical example of where costs have beenreduced and customer service improved. As aresult, more than 50 administrative operationswere closed during the year.

The whole Magna Carta program is givendirection by Boral’s Purpose and is heldtogether by the set of values announced in myReview last year. In short, our Purposestatement tells us what we want to be andwhat we have to do to get there and our Valuesdescribe how we do things at Boral. OurPurpose and Values bind the Boral Grouptogether across a great diversity of operationsand make Boral a strong and cohesiveorganisation.

As discussed in the Chairman’s comments, theresult this year was heavily impacted by a veryweak housing market in Australia and in Europe.It is unfortunate that such a severe downturnoccurred at a time when Boral needed toimplement change on a wide front. It remainsmy conviction, however, that transformation isnecessary and that Boral is getting into shape toreally benefit from the synchronised upturnforecast to begin in the second half of 1996/97.

However, we are not waiting for the tide of theupturn to carry Boral to higher levels ofprofitability. The refocused strategy, theelimination of poorly performing businesses, thestepped up programs of business improvementoutlined in this review, are all designed toensure that Boral is better positioned toimprove profitability at all stages of theeconomic cycle.

On its 50th Anniversary Boral is dynamicallytransforming itself, as it has done on severalprevious occasions. Shareholders can be surethat Boral is being positioned to create a newplatform which will deliver growth andincreased profitability through to the end of thismillennium and well into the next.

10


Review

TONY BERG, Managing Director


11

MANAGEMENT STRUCTURE

Tony Berg *

Managing Director & Chief Executive Officer

AUSTRALIAN OPERATIONS

Rod Pearse *

Managing DirectorCONSTRUCTION MATERIALS

AsphaltCementConcreteConcrete PlacingContractingFlyashQuarriesRecyclingScaffoldingTransport

Grant King *

Managing DirectorENERGY

LPGNatural GasOil & Gas Production

Pat Ferguson

General ManagerSERVICES & ENGINEERING

Dimension StoneEngineeringTyres

Marvin Weinman *

Managing DirectorBUILDING PRODUCTS

BricksCeramicsMasonryPlasterboardRoof TilesTimberWindows

INTERNATIONAL OPERATIONS

Tony Wright

Managing Director - ASIA

ConcreteGypsumTimberWindows

Tim Tuff *

President - NORTH AMERICA & EUROPE

BricksFlyashGypsumTiles

CORPORATE STAFF

Rod Dring

General ManagerInternal Audit

Maggie Goldie

General ManagerOccupational Health& Safety

Brian Hill *

FinanceDirector

Michael Scobie *

DirectorCorporate Servicesand CompanySecretary

Rod Pearse

Rod, 50, joined Boral in 1994 after a long career withboth Shell and CSR. He was General Manager ofShell/CSR’s Drayton Coal Joint Venture. At Shell he wasCorporate Treasurer before moving to Shell Internationalto the position of Area Co-ordinator, Africa and LatinAmerica. He has a Commerce Degree (Hons) from theUniversity of NSW and an MBA from Harvard University,Boston.

Rory Deavin

Rory, 38, joined Boral in 1995 from George Weston Foodswhere he was General Manager, Corporate Strategy andBusiness Development, prior to that he was a consultantwith McKinsey & Company where he worked on strategicdevelopment and business analysis for a number of leadingcompanies. Rory has a degree in Agricultural Managementfrom the University of Natal and an MBA from theUniversity of California.

Michael Scobie

Michael, 50, has 23 years service with the Boral Group.He was a corporate lawyer, became the CompanySecretary of Boral Limited in 1983 and since 1986, hasbeen responsible for a range of corporate services inaddition to his role as Company Secretary. He has a lawdegree from the University of Sydney.

Brian Hill

Brian, 44, joined Boral in August 1996 from Arnotts wherehe was General Manager, Finance and Administration atCSR Readymix and Executive Director of Finance andAdministration at Elders Ltd. He has a Commerce degreefrom the University of Stellenbosch, South Africa and is afellow of the Australian Society of Certified PractisingAccountants.

Tim Tuff

Tim, 49, joined Boral in 1993 from Ampersand Venturesin the USA, previously he was President of AlcanAluminium’s U.S. subsidiary. He has a degree inEconomics from Dalhousie University, Canada, aMaster’s Degree in Marketing from the University ofLancaster, U.K., and attended the AdvancedManagement Program at the Harvard Business School.

Grant King

Grant, 41, joined Boral in 1994 from AGL where he heldsenior management positions including General Manager,AGL Sydney and General Manager, AGL Gas Companies.Grant has spent his whole working career in the energyfield. Grant has a degree in Civil Engineering from theUniversity of New South Wales and a Masters ofManagement from the University of Wollongong.

Marvin Weinman

Marvin, 48, joined Boral in 1996 from BTR Nylex. Hewas Group General Manager with Laminex Industriesand Formica Asia which he transformed into one of thecompany’s most profitable divisions and prior to this hewas involved in the packaging industry. Marvin has adegree in Economics and Sociology from La TrobeUniversity, Melbourne.

Stuart Yeoland

General ManagerHuman Resources

Rory Deavin *

DirectorCorporateDevelopment

* MANAGEMENT COMMITTEE


PERFORMANCEOperating performance was severely impacted bythe 28% decline in new dwelling starts which wassharper and deeper than expected.Boral's market shares remained generally stabledespite severe price competition particularly inQueensland and Victoria.Weaker selling prices, and higher unit costs (asfixed costs were absorbed over lower levels ofproduction) were the major contributors to thelower profit.Brick, roof tiles, softwood and windows wereparticularly hard hit by lower levels of housingconstruction while plasterboard and masonryresults were cushioned by broader exposure tonon-housing construction.Export business again performed well increasing to$133.3 million with woodchips, bricks and roof tilesshowing strong growth.Business restructuring programs are nearingcompletion in windows, plasterboard, roof tiles andbricks. These restructuring programs rationalisedmultiple manufacturing and administration centres,resulting in reduced overhead costs.

SIGNIFICANT EVENTSThe $20 million upgrade of the Boral Montoroterracotta tile plant at Wyee, NSW was completed.Plant upgrades enabled the rationalisation of brickproduction facilities in Victoria and Queensland. Thishas helped to match production with demand whilekeeping stock levels under control.Capital is being invested throughout the masonrybusiness to lower costs and increase productionflexibility. In addition, a new line is being installed inBrisbane to produce high value added paving slabsand a similar line is planned for Perth during1996/97.The acquisition in July 1995 of the Hancockplywood operation located at Ipswich, Queenslandmade Boral one of the largest plywoodmanufacturers in Australia.

OUTLOOK1996/97 will remain difficult for Building Productshowever, recovery in dwelling construction isexpected to commence in the second half of thefiscal year. Further benefits from restructuring andimproved management practices will beprogressively realised throughout the year. Costreductions are anticipated from capital expenditureduring the year and from further plant upgrades,rationalisation and consolidation of existingbusinesses. While some price increases wereachieved late in the second half of last financialyear, price management will continue to receivesignificant focus as will customer service initiativesand improved management systems.

PERFORMANCEConcrete Volumes and prices were lower than inthe previous year.Quarries Volumes were below the prior year with ahigher proportion of lower grade product being sold.Prices were also down due to competitivepressure.Asphalt Lower volumes and intense competitionreduced profitability especially in NSW.Transport Lower volumes in keeping withreductions in downstream Boral activities and thirdparty business. The fleet renewal program wascompleted.Cement Demand in Victoria was buoyed by theCasino project. A slight disruption to NSWoperations occurred due to industrial action.Business improvement programs are well underway and delivering benefits.Contracting Performance improved significantlyand a major upgrade of equipment improvedcompetitiveness but associated write-offs resultedin a loss for the year.Scaffolding Trading conditions improved except inQueensland. Results were similar to the previousyear.Concrete Placing (De Martin & Gasparini)Results were disappointing due to low margins andinsufficient work being available.Recycling A high specification road base producedfrom recycled concrete is gaining marketacceptance in Sydney.

SIGNIFICANT EVENTS Concrete Four batch plants in Brisbane werepurchased from Rocla and the North Melbourneplant was rebuilt.As previously reported, a Boral company and otherconcrete manufacturers in Brisbane were fined$6.6 million each for anti-competitive behaviourwhich occurred from 1989 to 1994. Boral hasapologised for the breaches of the Trade PracticesAct.Quarries A crushing plant at the Hall quarry in theACT was commissioned. Strategic quarry reserveswere purchased.Cement The Rocla dry mix business based atSeven Hills, NSW was purchased.

OUTLOOKPrices and volumes are expected to strengthenwith some recovery in housing in the second half of1996/97 and growth in the non-dwelling andinfrastructure sectors. Operational improvementinitiatives are expected to provide gains in mostbusinesses.

PERFORMANCESales volumes increased 6.6% to 131.8 petajouleequivalents.Net reserves of natural gas, ethane, LPG, crude oiland condensate increased by 2%.Boral Energy participated in the drilling of 69 wellsof which 52 were successful. Subsequent to year-end, the successful Haselgrove South well wasdrilled in the south east of South AustraliaNew LPG supply arrangements were made toremove a supply cost disadvantage Boral Energywas experiencing.Natural gas distribution profit benefited byapproximately $7.6 million from a one-off change tothe accounting treatment of unbilled gas which hasbeen delivered but not invoiced.

SIGNIFICANT EVENTS A 56.7% interest and operatorship of the Tubridgigas field in WA was purchased for $35.5 million.The sale of ethane from the South AustralianCooper Basin to ICI commenced in July 1996. New contracts for the sale of natural gas from theCooper Basin were entered into with customers inSouth East Queensland, MIM at Mt. Isa and inSouth Australia. Boral Energy's share of thesecontracts ranges from 15.66% to 16.74%.Agreements were finalised for the construction of a 180MW cogeneration plant at Osborne in SouthAustralia. Boral Energy has a 50% interest in the$175 million project which will be the largest naturalgas-fired cogeneration plant in Australia.The conversion of the distribution network in NorthBrisbane to natural gas is close to completion,ahead of schedule and under budget. Theconversion of the LPG reticulation network inLaunceston to bottled will be completed in late1996.

OUTLOOKDemand for natural gas and LPG is forecast tocontinue growing strongly. Expectations are basedprimarily on increasing use of natural gas for powergeneration and by industry and ongoing growth inthe LPG autogas market.Sales from the Cooper Basin will increase as supplybegins under new contracts including the ICIethane contract.Boral Energy's commitment to exploration, primarilyaimed at increasing gas reserves, is demonstratedby the involvement in accelerated activity in theCooper Basin and the Otway Basin.The Gas Company in South Australia will beadversely affected by capital profit contributionsfrom sale and lease-back arrangements coming toan end. These have contributed approximately$6 million to EBIT annually.

12

Summary ofOperat ions

SALES $1,121m – 12.3%

ASSETS $1,208m + 3.1%

PROFITS* $76m – 58.5%

SALES $1,412m – 7.0%

ASSETS $1,664m + 0.9%

PROFITS* $97m – 44.1%

SALES $784m + 8.6%

ASSETS $1,502m + 4.2%

PROFITS* $135m + 12.4%

PRODUCTS Bricks, Roof Tiles, Timber, Gypsum,Windows, Masonry, Woodchips.

PRODUCTS Quarries, Concrete, Cement,Transport, Asphalt, Contracting, Recycling, Flyash,Scaffolding, Concrete Placing.

PRODUCTS LPG and Natural Gas, LPG Shipping,Oil and Gas Exploration and Production.

BUILDING PRODUCTS CONSTRUCTION MATERIALS ENERGY


PERFORMANCEHousing starts for the year areestimated to have risen 4% mainlyin the last quarter.Bricks results were adverselyimpacted by high gas prices duringthe severe winter andrationalisation costs.Briar Gypsum achieved recordproduction and sales volumes forthe third year in a row but salesprices declined in the second halfof the year.Tiles continued to experience verycompetitive market conditionsthroughout the US as significantsurplus capacity overhung themarket. Nevertheless the Divisionremained profitable.Flyash achieved record sales andprofits.The lost time safety performancecontinued to improve to record lowlevels.

SIGNIFICANT EVENTS Purchase of assets of BickerstaffClay Products in July 1995.Bickerstaff plants are located inAlabama and Georgia.Purchase of Isenhour Brick and TileCompany Inc. in North Carolina inOctober 1995.The new acquisitions and theformer Boral Bricks wereintegrated.Boral is now the largest clay brickmanufacturer in the USA.

OUTLOOKBoral's strategy in the UScontinues to be leadership in eachof its businesses.All operations will benefit from anexpected increase in housingstarts.Business improvements alreadyundertaken will favourably impactresults.

PERFORMANCEAll operations were adverselyaffected by the unusually severewinter conditions.Clay Bricks The Netherlands –Housing reduced by 13% whileexports into Germany experienceda 15% downturn.Germany – Residential work donein western Germany is estimatedto have reduced 7%. Productionproblems at the Malliss plant and aweaker market significantlyreduced profit.Poland – Improved productionquality and increased salesvolumes resulted in profitabletrading for the year.German Tiles Riesa was closedduring winter to reduce stocklevels. Sales volumes are nowimproving. Sales in Bavariadeclined. Concrete tiles volumes ineastern Germany were similar to last year.German Quarries Marketconditions were competitive. UK Masonry Margins reducedthrough price pressure.UK Flyash/Lytag Flyash supplyproblems were partly offset byincreased sales of high pricedLytag material.

SIGNIFICANT EVENTS

Commissioning of the new claypaver plant at Doorwerth in TheNetherlands was completed.The quarry, sand and graveloperations in eastern Germanywere sold as at year end at a pricewell above book value.The UK masonry business wassold in April 1996 at a small profit.

OUTLOOKFurther cost improvements at theDoorwerth and Malliss brick plantsare expected to improve margins. The Polish operation will continueto grow as the domestic marketdevelops.Cost reductions in the German claytile operations should enhanceprofitability.

ASIA – PERFORMANCEThere was strong growth involumes and profitability inIndonesia.Indonesian plasterboard volumesincreased but competitor activityhampered profit improvement.Malaysian concrete results areencouraging with a move intoprofit in December 1995. Somegeographic shortages of cementand aggregates affected results.

SIGNIFICANT EVENTS A 55% shareholding in WembleyGypsum Products, the Malaysianplasterboard manufacturer, wasacquired at the beginning of theyear. Plant capacity has beenincreased 40% since acquisition.Construction of the Shanghaiplasterboard plant commenced.Market development with importsin selected regions of China isproceeding ahead of capacityinstallation.

OUTLOOKIncreased competitor activity inplasterboard is expected to restrictgrowth in Indonesia and Malaysia.Increasing volumes will continue toassist concrete in Indonesia andMalaysia.

PACIFIC – PERFORMANCELPG distribution in the PacificIslands traded satisfactorily.Profit earned by Acrow, thealuminium products andscaffolding operations in NewZealand, increased substantiallydue to the strong economy anda number of large projects.

SIGNIFICANT EVENTS Rockgas, the 50% owned LPGdistribution business in NewZealand has expanded bypurchasing Invergas, ChristchurchGas and Citigas and since yearend, BP's LPG distributionoperation.Boral became the leader inaluminium shower screens in NewZealand by acquiring Henry Brooksand Homeplus.The windows business in PapuaNew Guinea and a materialshandling operation in New Zealandwere sold.

PERFORMANCETyres Losses in tyre distributionwere similar to the previous year.Restructuring is anticipated toreverse the trend of the previoustwo years.Bandag, the retread operation,traded satisfactorily.Engineering Perry Engineeringobtained benefits fromrestructuring but incurreddevelopment costs for projectsfrom which contributions areanticipated in future years.Dimension Stone (Melocco)Losses again were significantlyreduced to almost break even levelwith the start up of a number ofhistoric building renovations and anincrease in non-dwelling activitiesprimarily in NSW.

SIGNIFICANT EVENTS Boral Building Technologies, theelevators and total propertymaintenance operation, was soldto Otis as at 31 August 1996.The manufactured buildingsbusiness has also been sold andthe Johns Perry Hayward andPower Projects engineeringoperations have been closed. Theclosure of the structural businessin Queensland was announced inJune 1996.

OUTLOOKImprovements are expected fromrestructuring and all Divisions areexpected to be profitable in1996/97.

*Profit refers to operating profit before net interest, abnormal items and tax

13

SALES $547m + 24.9%

ASSETS $603m + 27.1%

PROFITS* $45m + 14.7%

SALES $205m – 13.9%

ASSETS $416m – 23.1%

PROFITS* $7m – 73.7%

SALES $276m + 44.2%

ASSETS $250m + 15.6%

PROFITS* $17m + 23.1%

SALES $285m – 7.6%

ASSETS $193m + 0.7%

PROFITS* $(2m) – 1,093.6%

PRODUCTS Bricks, Roof Tiles,Gypsum, Flyash.

PRODUCTS Bricks, Roof Tiles,Flyash, Lytag.

PRODUCTS Concrete, Quarries,Gypsum, Timber, Windows.

PRODUCTS Engineering, Tyres,Dimension Stone.

NORTH AMERICA EUROPE ASIA/PACIFIC SERVICES & ENGINEERING


14

Bui ldingProducts


15

oral Building Products isAustralia’s largest supplier ofbuilding materials and

services to the new houseconstruction, renovation andcommercial construction markets.New dwelling construction fell by28% compared to last year. Thisreduction was much larger thanexpected and has had a significanteffect on the Group’s performance.While market shares have beenmaintained, margins were affectedby severe price competition. Salesrevenue fell by 12% to $1,213million while EBIT declined by 47%to $122 million.

Masonry and Woodchip businesseswere less affected due to theirlower exposure to new dwellingconstruction. Exports alsoperformed strongly with revenuesincreasing by 5% across the totalGroup.

During this downturn the BuildingProducts Group made some harddecisions to position the Groupstrongly for the future. Productionlevels were matched with demandto limit unplanned inventory growthwhile staff reductions have beenachieved through the integrationand amalgamation of existingbusinesses. As part of thetransformation process occurring inBoral, the Building Productsmanagement team has beenstrengthened through internalpromotion and top level externalappointments. Significant progressis being seen in customer focusedbusiness improvement initiativesand better management systems.The full benefit of these programswill be realised next financial year.

B R I C K SProduction was scaled back in linewith new housing construction andthese lower overall productionlevels have allowed for a reductionin finished goods inventories.Plants were closed in Queenslandand Victoria due to excess capacity.

The introduction of newinformation systems has improvedcustomer service while reducingthe number of East Coast servicecentres from five to three.Significant staff reductions havealso been achieved in the financeand administration areas.

Safety performance has beenstrong and the Darra brickworks inBrisbane was selected as the bestpractice standard by theQueensland Government.

New product innovation continuedstrongly with a range of valueadded pastel bricks being wellreceived in the market place.

Plants were upgraded at MidlandBrick in Western Australia leadingto improvements in both qualityand sales volume.

R O O F T I L E SThe fall in housing had a strongimpact on the overall profitability ofthe roof tile operations in Australia,particularly in Victoria and SouthAustralia. In Queensland, this wasworsened by extreme pricecompetition.Upgrading of the Wyee, NewSouth Wales clay plant wascompleted. Further improvementsare planned along with theintroduction of new products whichwill improve the overall profitabilityof the business.

1975 Hollostone in South Australia became Boral’sfirst roof tile operation. Other roof tile businesses

came with the acquisition of BMI in 1982 andMontoro Clay Rooftiles in 1991.

MASONRY HASSTRENGTHENED ITSLEADERSHIP POSITIONTHROUGH STRONG TECHNICALSUPPORT AND PRODUCTINNOVATION.

Steven Passaris, PressOperator at Boral Masonry’sWacol plant (pictured left)checking productmeasurements.

Steven Mosen, Line Operatorat the Wacol plant (picturedcentre) adjusts the automaticdestacking machine whichfeeds masonry blocks ontothe new polishing andgrinding line.

The airport runway onThevenard Island off thenorth west coast of WesternAustralia (pictured bottomleft) is made from speciallydesigned Boral Besser pavers.

B

Boral entered building products with theacquisition of Warringah Bricks in NewSouth Wales and Brittains Bricks inQueensland, followed in 1970 by Glen IrisBrickworks in Victoria and the Besser andJayblox masonry businesses in New SouthWales and Queensland.

Female palletisers atClark Brick in Sydney,

load bricks fordistribution in the mid1970s. Boral acquiredClark Brick in 1982 aspart of the BMI Group.

1969

1975

BUILDING PRODUCTS TIMELINE

From acquisitions in the brickindustry in the late 1960’s,building products have grown tobecome a major part of Boral’sbusiness today.The timeline below highlightssignificant milestones in thehistory, development and growthof Boral Building Products.


16

Export sales of clay roof tilescontinue to be strong with excitingnew market opportunities in SouthEast Asia. Boral Montoro recentlywon the contract to supply rooftiles for the new Australian HighCommission in Hanoi, Vietnam.

Improvements have been made inBoral Montoro’s concrete roof tilesto increase the strength of the tileswhile reducing the overall weight.This innovation is proving popularwith customers.

M A S O N RYBoral Masonry continues to offerhighly efficient differentiatedconcrete products. In the face of

weakened demand, the Divisionhas concentrated on achievingmanufacturing and distributionefficiencies and controlling workingcapital. Severe price competitionhas been experienced in theconcrete masonry market inQueensland and Victoria.

Despite difficult trading conditions,masonry has strengthened itsleadership position in the pavingand retaining wall market throughits strong technical support andproduct innovation. The designflexibility and aesthetic potential ofconcrete masonry in all its forms isbeing emphasised.

Significant plant upgrades tookplace in Cairns, Queensland and atDeer Park in Victoria. The Wacolplant in Queensland is beingcompletely re-equipped with theinstallation of a fully integratedproduction and finishing line forterrazzo style paving slabs. Asimilar line will be installed inWestern Australia. The recentlyupdated Prospect plant in NewSouth Wales continued to performwell and will benefit from thecapital expenditure underway tofurther improve its efficiency andits capability to manufacture highervalue-added products.

Bui ldingProducts

Boral’s hardwood timberoperations emphasise value-added products such asGeorge Hudson parquetrywhich is used extensively inCountry Road stores inAustralia and the USA.

The takeover of the very successful Australian GypsumIndustries Limited was, at the time, the largest takeoverin Australian business history. Boral Australian Gypsumcontinues to manufacture plasterboard products as partof Boral’s Building Products Group.

Boral’s first timber businesses came through theacquisition of BMI. The Allen Taylor &Company hardwood operations has beenowned by BMI since 1970 and the softwoodtimber business, Timber Industries, since 1978.

1978

The windows business was strengthened throughDowell Australia, an aluminium and timberwindow manufacturer which fitted well with

Boral KM Windows, acquired many years earlieras part of the Cyclone Company. Also in 1988,the assets of Calsil, a manufacturer of concrete

and silica bricks and blocks, were purchased.

19881982


P L A S T E R B O A R DThe Gypsum Division was able topartially offset weak demandthrough cost reduction initiatives.Market share has been held atapproximately 40% in a verycompetitive market with Gypsumcontracting services maintaining itspremier position. Continuedemphasis is being placed onquality, productivity and serviceimprovement throughout alloperations.

Internal restructuring initiativeshave begun to yield significantbenefits in cost savings andimproved management focus.

W I N D O W SThe Windows Division retained itsmarket share despite toughconditions. Lower margins inAustralia have affected profitabilityand this issue is being addressedthrough cost reduction programssuch as plant rationalisations andproduction initiatives. Innovativeproduct developments continuewith a thermally efficientaluminium awning window and aFrench door being the latestreleases.

The assets of TGAS Pty Ltd inPapua New Guinea were sold.

In New Zealand, strong trading

conditions yielded record sales andprofits. Rationalisation ofoperations included the divestmentof the materials handling businessand the acquisition of HenryBrooks Ltd. When added to theexisting Homeplus brand, thismakes Boral the largest player inthe shower and wardrobe doorbusiness in New Zealand.

T I M B E RBoral Timber performed welldespite the low demand forgeneral construction timbers andthe subsequent impact of this onthe softwood operations. Thehardwood operations continue toemphasise value-added productswith the George Hudson flooringbusiness performing very well.Timber exports grew by 21% onthe previous year.

The acquisition of the Hancockplywood business in Ipswich,Queensland complements theexisting range of products andpositions Boral Timber as thelargest plywood manufacturer inAustralia. Log supplies for plywoodare sourced from plantations.

The forestry reform packageannounced by the New SouthWales Government in September1996 has made substantial

allowances to the conservationmovement and limits hardwoodoperations to regrowth forests andplantations. The package willreduce the resource available toBoral’s operations on the NorthCoast by around 40% necessitatingclosure of some mills and otherrestructuring. The impact of therestructuring will only be partlyoffset by Governmentcompensation and some securityof resources flowing from revisedtimber supply agreements. Withdecisions now taken by theGovernment, Boral should be ableto implement plans to moderniseplants so that the changingresource is better utilised.

Boral Timber’s hardwood plantationestate in Tasmania continues toexpand. Over 13,000 hectares ofnative timber plantation are nowowned or managed.

The export woodchip operationsadd value to sawmill residues andutilise silvicultural residuesgenerated through approved forestmanagement practices. In NewSouth Wales, the transition toregrowth should facilitate theavailability of an adequate volumeof silivcultural residues to meetwoodchip supply arrangements.

17

A wide range of timber andaluminium windows aremanufactured by Boral.

1994

As part of its commitment tonew product innovation, BoralBricks developed a specialsmooth brick for this residentialdevelopment in Sydney.

1992 Boral’s timber operations more than doubledwith the acquisition of the Pacific Dunlop timber

businesses which included the Duncan’s and GeorgeHudson companies. This confirmed Boral as

Australia’s major hardwood timber producer.

1990Boral became active in the Perth brick market,with the acquisition of the Midland BrickCompany in Western Australia. Midland operatesthe largest brickworks in the world covering anarea of 119 hectares and producing 7.7 millionbricks per week.

The new Bringelly, NewSouth Wales brick plant wascommissioned at a cost of$42 million and a majorupgrade of the Camellia,New South Walesplasterboard plant increasedproduction by 50%.

Today, Boral Building Products has6,253 employees workingthroughout Australia and NewZealand. There are 14 brickmanufacturing plants and 11 selection and sales centres,5 roof tile plants, 16 masonry plantsand 8 sales offices, 6 plasterboardplants and 31 plasterboarddistribution warehouses, 8 windowplants and 30 manufacturing andsales facilities, 17 hardwoodsawmills, 7 hardwood board plants,2 softwood sawmills, 3 softwoodboard plants, a plywoodmanufacturing plant, 3 hardwoodwoodchip operations, 18 timberwarehouses and showrooms and 14 ceramics showrooms.


18

Construct ionMaterials


19

oral Construction Materialsis a major supplier ofproducts to the dwelling,

commercial construction, roads andengineering markets. Thesubstantial reduction in housingstarts and flat demand in roads andsubdivisions more than offset goodgrowth in non-dwellingconstruction. Underlying demandfell by about 4% and prices fell byabout 3% leading to a reduction inGroup sales of about 7%.Underlying is not expected toimprove until the second half of1996/97.

With the falling volumes, camevigorous price competition whichhas substantially reduced margins.In order to maintain its marketshare, Boral has been forced tomeet the prevailing market pricesin most of its businesses.

During the year, the Groupreorganised its concrete, quarries,asphalt and transport businessesalong regional lines to providecustomers with better local service.This structure will also provide thelogistical opportunities that flowfrom a vertically integrated Group,removing duplication and reducingcosts.

Initiatives are under way in many ofthe Group’s markets to identifyways in which Boral can better addvalue to its customers’ businesses.Improvement programs are alsounderway in most operationswhich should have a significantimpact in the coming year.

Q U A R R I E SDemand for quarry products wasdown on last year with lowervolumes and increased pricecompetition leading to lowerreturns. Efforts are continuing toimprove competitiveness and tobetter match quarry capacity withdemand.

Strategic reserves have beenacquired in a number of locations,such as Narangba, north ofBrisbane, which will provide manyyears of additional reserves.

Mobile and fixed plant has beenselectively upgraded. For example,a new crushing plant recentlycommissioned at Hall Quarry in theAustralian Capital Territory, has wonthe aggregate supply contract forthe Lake George Bypass Project.

C O N C R E T EPre-mixed concrete volumes werereduced, reflecting adverseconditions in the housing andsubdivision markets. This led tosignificant pricing pressures. Profitswere well below last year’s levels.

In an effort to better matchcapacity and demand, sevenconcrete plants were closed. ThreeBrisbane plants were purchasedfrom Rocla; one is to be relocatedand two will be used to replaceexisting Boral plants which wouldotherwise require substantialenvironmental upgrading. A newconcrete plant is close tocompletion in North Melbourne tobetter service customers in the cityand surrounding areas.

Boral concrete plants have won tenenvironmental awards from the

1948

BORAL CONTINUES TO WINMAJOR PROJECTS SUCH ASTHE BENNELONG POINTDEVELOPMENT AT EASTCIRCULAR QUAY IN SYDNEY.

Skilled concreters fromBoral’s De Martin & Gaspariniplace concrete via pumpdelivery hose as part of the30,000 cubic metres of Boralconcrete being used in theproject. Other Boraloperations involved atBennelong Point areScaffolding and Transport.

B

Albion Reid Pty Ltd, Boral’s first quarryingoperation was established through theacquisition of the Albion and Reid businessesin Victoria.The company’s first move into road

surfacing came through WB CarrConstructions, a company that sold

bitumen products and later manufacturedhot-mix asphalt for road construction. 1965

1963 The purchase of BHP By-Productsin New South Wales gave anotheroutlet for bituminous emulsions.

CONSTRUCTION MATERIALSTIMELINE

Right from the beginning, Boralhas manufactured productsused in the constructionmaterials industry. Many of thisgroup’s highlights are illustratedin the timeline below.


20

Australian Pre-Mixed ConcreteAssociation in New South Walesand Victoria. This was pleasingrecognition of the Group’s ongoingcommitment to environmentalexcellence.

A S P H A LTAsphalt profitability was adverselyaffected by lower demand forsubdivisional work and by reducedgovernment spending in severalStates which led to severepressure on pricing. Improvementsin efficiency and quality continuedto be made and plant upgradestook place at several locations. Inline with Boral’s focus on

environmental improvement, theuse of recycled products continuedto increase.

T R A N S P O R TSales revenues and profits werereduced in line with the overallbuilding and construction industrydownturn. An extensive three yeartruck replacement program wascompleted and subsequentefficiency and productivityimprovements are now beingexperienced in day-to-day operations.

C E M E N TSales volumes in the core bulkcement markets were down in line

with the overall downturn. BlueCircle Southern Cement hassignificantly improved its costposition by implementingcomprehensive businessimprovement programs at each ofits major works; the adverseimpact of lower demand onearnings has thereby beensignificantly reduced.

Blue Circle recently acquiredRocla’s packaging operation atSeven Hills in New South Wales.This business produces a range ofdry mix concrete products, miningand commercial grouts andspecialty sands that are

1982

Construct ionMaterials

1980 A takeover offer was made for the SouthAustralian based Quarry Industries, which culminated

in January 1981 with Boral holding some 79% of thecapital of that company.

1970The large building and construction materials company BMI

Limited was acquired giving Boral a very strong position inAustralia in quarrying, concrete, asphalt, flyash and

transport and operations in the UK and Indonesia.

A new company, Boral BasicIndustries, subsequently namedBoral Resources, was formed tooperate the Group’s quarrying,sand, pre-mixed concrete androad surfacing operations. BoralLimited owned 75% and theminority shareholders were boughtout in 1974.


complementary to Blue Circle’sbagged cement business.

C O N T R A C T I N GContracting has undergone a majorre-organisation and now consists ofthree operating divisions: Mining,Projects and Road Constructionwith a new management teamfocusing on these major marketsegments. The fleet of mobileequipment is being steadilyupgraded to reduce production andmaintenance costs. Improved salesrevenues and margins enjoyed byContracting were offset by thewrite-offs associated with thedisposal of uncompetitive

equipment resulting in a loss forthe year.

S C A F F O L D I N G A N DF O R M W O R KEncouraging results were achievedin most states, except inQueensland, which suffered fromreduced activity levels and pricecompetition. Operational gainshave been made from systemsdevelopments and furtherinvestments in this area areplanned for the coming year.A purpose built facility is currentlybeing constructed in south westernSydney to house the Sydneyscaffolding and formworkoperations, manufacturing andnational administration.

C O N C R E T E P L A C I N GDe Martin & Gasparini continued tooperate in a tight market whichwas reflected in lower thanexpected sales and margins.Restructuring of the business hascontinued; the Queenslandoperation has been closed.

R E S O U R C E R E C O V E RYResource Recovery continued itsthrust into the recycling market.Materials recovered from buildingand demolition sites are used asenvironmentally friendly substitutesfor traditional materials. Rawmaterials receivals continue to riseand the market is becomingincreasingly receptive to recycledproducts.

21

1994 Today, the ConstructionMaterials Group has 5,818employees throughoutAustralia working in 120quarry operations, 214concrete batching plants, 38asphalt and road surfacingoperations, 40 transportdepots, 8 cement operations, 20 contracting operationsand 20 scaffolding andconstruction relatedbusinesses.

Blue Circle Southern Cement’sMarulan Quarry is implementinga number of cost reduction andefficiency initiatives as part ofthe “Step Change” program.

1988 Boral entered the Western Australian marketthrough the Bell Group quarrying, concrete,asphalt and transport operations.

Boral purchased Blue Circle Southern CementLimited which gave it control of its owncement supply, a key to Boral’s future inconstruction materials.

Boral Resource Recovery Managementbegan operations to recover and recycleconstruction and demolition waste.

1987

BORAL HAS WON A NUMBER OFMAJOR ROAD SURFACING PROJECTSTHROUGHOUT AUSTRALIA.

An asphalt paver (left) at work on theWestern Ring Road Calder Interfaceproject in Victoria.


22

Energy

1 CLARENCE BASIN

OCA2 Exploration Lic.

2 BASS BASIN

BERL2 Exploration lic.1 Retention Lic.

3 OTWAY BASIN

BERL4 Exploration Lic 1 Production Lic.OCA4 Exploration Lic.

4 PERTH BASIN

BERL2 Exploration Lic.1 Production Lic.

5 AMADEUS BASIN

BERL1 Production Lic.1 Retention Lic.

6 CARNARVON BASIN

BERL5 Exploration Lic.2 Production Lic.

7 BONAPARTE BASIN

BERL4 Exploration Lic.2 Retention Lic.

8 COOPER/ EROMANGA

BASINS

BERL4 Exploration Lic.75 Production Lic.OCA4 Exploration Lic.23 Production Lic.

9 BOWEN/SURAT BASINS

OCA10 Exploration Lic.25 Production Lic.

EXPLORATION ACREAGE

23

4

5

6

7

8 91

Boral Energy hasa strong acreageposition in theCooper/Eromanga,Bowen/Surat,Perth, Otway andBass basins.


23

1968

s the only fully integratedexplorer, producer anddistributor of gas

operating nationally, Boral Energy iswell positioned to benefit from themany changes occurring in theenergy industry. These changesinclude major structural and marketreforms relating to supply whichwill lift the overall level ofcompetition.

Boral Energy has explorationinterests in all states of Australia. Itis a significant supplier to the NewSouth Wales, South Australian andQueensland gas markets throughits interests in the Cooper, Otwayand Surat Basins and the DenisonTrough. In South Australia andQueensland, Boral Energy alsoowns and operates reticulationsystems which supply gas to380,000 customers. LiquefiedPetroleum Gas (LPG) is supplied toaround 400,000 customers in allAustralian states and territories,New Zealand and the near Pacificregion.

During the year, programs wereinitiated across the Energy Groupto improve the efficiency of itsoperations while maintaining itsability to provide customers with ahigh level of service. Examplesinclude new LPG supplyarrangements which use thecombined strength of Boral’snetwork of marine terminals toaccess supply using world-scaleships thereby reducing supply costs.

E X P L O R AT I O N A N DP R O D U C T I O NThe Group has a portfolio ofexploration assets balancing riskand reward. It maintainsappropriate and sustainable levelsof activity in both onshore andoffshore domains and balancesexploration in its existing permitswith the aggressive pursuit of newacreage.

During the year Boral Energyparticipated in 69 exploration,appraisal and development wells ofwhich 52 were successful. Netreserves of natural gas, ethane,LPG, crude oil and condensatestood at 870 petajoules equivalent(PJE) at year end, an increase of2% from last year.

The production of natural gas, LPG,condensate and oil totalled 68.5PJE, an increase of 8% from lastyear. The Group’s investment innatural gas in Western Australiadoubled with the purchase of a56.65% interest in the Tubridgi gasproject for $35.5 million. Boralproduces and markets natural gasfrom the Tubridgi field and has astorage and sales arrangement foroffshore third party associated gas.

Boral, along with some other SouthAustralian Cooper Basin Producers,has contracted for the sale, inprinciple, of an additional 300 PJEof natural gas, commencing in1999. The sale of ethane to ICIcommenced after year end and willadd about $5.3 million per year torevenue. Boral’s productioninterests in the South Australian

ABORAL ENERGY DOUBLED ITSINVESTMENT IN NATURAL GASIN WESTERN AUSTRALIA WITHTHE PURCHASE OF AMAJORITY INTEREST IN THETUBRIDGI GAS PRODUCTIONAND GATHERING FACILITY.

Plant Supervisor, OllieValvasori (far left) checksequipment on a productionseparator.

Detail of some of the vesselsand pipework (top left) at theplant.

The termite moundssurrounding the Tubridgiplant (left) are a feature ofthe Carnarvon Basin, Pilbaraarea and Boral takes greatcare to ensure these moundsand other environmentalfeatures are not disturbed.

1963 The Gas Supply Company was purchased. It operatedgas manufacturing plants in regional Victoria, and

throughout New South Wales and Queensland. The Victorianoperations were later sold to Gas and Fuel Corporation.

Production of bitumen and otheroil products commenced at arefinery built at Matraville onBotany Bay, New South Wales.

Boralcommenceddistribution ofLPG to PapuaNew Guineaand the Pacificregion.

1948

ENERGY TIMELINE

Boral was originally formed torefine and produce bitumenand oil products and laterbecame a gas supplier. As thetimeline shows, the EnergyGroup has come full circle toplay an increasingly significantrole in Boral’s growth.


197324

Unit are currently 15.66% for gasand 14.66% for ethane.

The south west QueenslandProducers have entered intocontracts to supply 375 PJE ofnatural gas to customers in southeast Queensland. These contractsare for 10 and 15 year periods andBoral’s interest is 16.74%. Delaysin finalising the south westQueensland gas sale contracts andthe construction of thetransmission line are allowing OilCompany of Australia Ltd tomaintain a high level of sales fromits Surat and Denison operations.The south west QueenslandProducers have also finalised thesale of up to 375 PJE of gas tonorth west Queensland marketsfrom early 1998.

N AT U R A L G A SD I S T R I B U T I O NThe Natural Gas division distributesits product to all domestic,commercial and industrialcustomers and retails gas tocustomers with an annual usageless than 100 terajoules (TJ)throughout South Australia and inparts of Queensland.

The division continued to improveits financial performance with PBITincreasing by 31.5%, which wasassisted by changes in workpractice and other productivityimprovements.During the year Boral Energy’sbiggest cogeneration project todate, a 13 MW(e) combined cycle,dual gas turbine plant wascommissioned by BHP Long

Products Division. In addition, therenewal of the entire 110 kmnatural gas distribution systemserving the provincial city of PortPirie was completed. This willvirtually eliminate gas leakage, thecost of ongoing maintenance andproblems with inadequate supply.

The natural gas conversion ofNorth Brisbane was completed inAugust, 1996 ahead of scheduleand under budget.

Boral completed Australia’s largest,and one of the world’s biggest,natural gas vehicle projects bysupplying 100 natural gas buses forTransAdelaide.

Deregulation of the utility businessesin Australia is beginning to takeshape along with an open access

1969

Energy

1981 Boral acquired the Launceston Gas Company.In the 1980’s, Boral built a number of new LPG

terminals including those at Port Botany, New SouthWales and Townsville, Queensland.

Boral merged its petroleuminterests with those of Total, theFrench based oil producer. TheGroup’s remaining interest wassold to Total in 1972.

Boral Gas acquired Brisbane Gas Co Limited (nowknown as Gas Corporation of Queensland) and in 1973upgraded the Newstead gasworks; pictured at the openingceremony are Boral’s MD at the time, Sir Elton Griffinand the then Queensland Premier, Sir Joh Bjelke Petersen.


regime for transmission anddistribution infrastructure. BoralEnergy’s Natural Gas division hasprepared itself for the major operatingchanges that will be required.

L P G D I S T R I B U T I O NBoral Energy is a significant playerin Australian LPG, with around20% of the market, although thisvaries considerably between regions.

The operations have expandedthrough the acquisition of theParkes Council LPG business inNew South Wales, automotivebusiness in Victoria and agents’businesses in Queensland. Despitean increasingly competitive marketplace, the autogas business hascontinued to grow.

LPG Pacific division distributedLPG to 10 countries in the Pacific,including New Zealand. BoralEnergy buys LPG in Indonesia andAustralia and uses Boral ownedships to transport the LPG tomarkets in the Pacific and PapuaNew Guinea. LPG supplies for NewZealand are purchased in thatcountry.

During the year, Rockgas, (NZ),purchased Invergas (1000 tonnesper annum), Christchurch Gas(2500 tonnes per annum), andOtago Citigas (800 tonnes perannum), for $2.7 million. BP’s LPGdistribution business was alsoacquired at a cost of $12.4 million.An LPG reticulation projectcommenced in Queenstown whichshould cost $1.7 million.

Fiji Gas continued its program ofconverting diesel fuelled boilers toLPG. It is concentrating onconversions in major hotels andresorts and has already achievedan 80% success rate. Tendershave been let for the constructionof a new 130 tonne LPG terminalat Apia, Western Samoa, which isexpected to be completed inDecember 1996. The 20 tonneKimbe Depot in PNG wascommissioned during the year and

sales have exceeded forecasts bymore than 50%.

MAJOR INDUSTRY & POWERThe Major Industry and Powerdivision was established last yearto meet the energy needs of largeindustrial customers and invest inefficient and environmentally soundgas-fired power generation andcogeneration facilities.Cogeneration technology will makea major contribution to theenvironment by reducinggreenhouse gas emissions.

During the year, all agreements tobuild a $175 million cogenerationplant at Osborne in South Australiawere finalised. Boral will have a50% interest in the plant,Australia’s largest natural gas-firedcogeneration facility, which will befully operational by July 1998.

Boral Energy entered into newcontracts valued at $500 million forthe purchase of up to 180 PJE ofgas from the Cooper BasinProducers to extend natural gassupplies to 2013. This was the firsttime in 20 years buyers like theSouth Australian Gas Companyhave been able to negotiatedirectly with suppliers such as theCooper Basin Producers.

1984

25

“Gas Shops” have been establishedwithin major appliance retailoutlets in Brisbane and Adelaide aspart of Boral Energy’s retailmarketing strategy.

As demand for LPG has increased,Boral has found it more economicalto use chartered vessels to deliverLPG. Here the 40,000 tonne LPGtanker, the Lilac Princess unloads atPort Botany in New South Wales.

1991 Boral took delivery of two newLPG carriers, the MV Boral Gas and

the MV Pacific Gas, to supply LPG tothe South Pacific .

Oil Company of Australia, whichhad been successful in oil and gasexploration in Queensland, became85% owned.

Boral acquired SAGASCO Holdings for approximately$820 million making it the only fully integrated explorer,

producer and distributor of gas in Australia.

Today, Boral Energy has2,303 employees working inexploration and productioninterests throughout 8Australian on and offshorebasins, 45 LPG facilitiesincluding 8 seaboardterminals, 307 companyowned Autogas sites and 300joint venture Autogas sitesand supplies natural gas to400,000 customers inAustralia.1993


oral is now the largest claybrick manufacturer in theUSA and clear market

leader in the South. In the year,Boral shipped bricks equivalent tobuilding a solid wall seven metreshigh from Sydney to Perth. Thelocal housing market is showingencouraging growth with housingstarts up 4% on last year. Singlefamily dwellings, which are themajor market for Boral’s productsin the USA, also increased by 4%.Housing starts in the last monthsof the year were especially strong.

B R I C K SAs part of Boral’s strategy toachieve leadership in its chosenregion, it has acquired twoimportant brick companies.Bickerstaff Clay Products CompanyInc. was purchased in July, addingsignificant production capacity andexpertise to the Group’soperations. Bickerstaff has multi-kiln plants in Bessemer and PhenixCity in Alabama and Atlanta,Georgia. This was followed inOctober by the acquisition ofIsenhour Brick and Tile CompanyInc. which operates from a multi-kiln site in Salisbury, North Carolina

NorthAmerica

B

1982 Boral acquired the flyashbusiness, Western Ash.

After deciding to invest in claybricks in the US, Boralacquired the long establishedMerry Group of Companiesbased in Augusta, Georgia.1979 1980

NORTH AMERICA TIMELINEBoral began its expansion into theUnited States by acquiring CaliforniaTile Inc which operated a tile plantoutside Los Angeles. At that stageconcrete rooftiles had only a 5% shareof the California market, they nowaccount for 75% of the market.

26


which houses the world’s longesttunnel kiln.

Bickerstaff and Isenhour have beenintegrated with Boral’s existingbrick businesses to form a newbrick organisation. This new lookBoral Bricks is headquartered inAtlanta, Georgia and has amanagement team drawn from allthree companies.

By applying the best practices fromeach of the three brick companiesto the new brick organisation, Boralhas been able to achieve significantimprovements across alloperations. Products are now sold

under a common Boral Bricksidentity and new marketingprograms have been adoptedincluding the Brick Link System, abrick selection program designedfor architects. Boral Bricks has alsointroduced Boral Vision, a fullyinteractive computer imagingsystem to assist consumers tomake their brick selections.

A program aimed at improvingquality and efficiency in the formerBoral plants has been completedwith pleasing results. Rationalisingproducts and reducing inventorylevels has helped increase thecompetitiveness of all plants, aswell as reducing the fixed cost ofthe business. Decreased levels ofproduction were experiencedduring the winter months whichkept manufacturing costs high. Avery severe winter with increasednatural gas prices, also had asignificant impact on costs.

T I L E SThe roof tile business continued toexperience very competitivemarket conditions. Despite amarket suffering from surpluscapacity, Boral’s competitorcompanies continued to bring newplants on stream. Businessimprovement programs in concrete

tiles have achieved improvedmanufacturing efficiencies,however, these have not beenenough to fully offset the pricereduction in the market. A newlightweight clay tile has beenintroduced for the re-roofingmarket. This further consolidatedBoral’s market leadership positionwhilst achieving efficiencies inmanufacturing.

G Y P S U MBriar Gypsum enjoyed strongdemand throughout the year andachieved record sales volumes.The severe winter saw pricesdecline and on average these werebelow last year’s levels. Anincrease in the price of paper alsohad a negative impact on margins.

F LYA S HIt was an excellent year for theGroup flyash interests. MonexResources in which Boral has a35% holding performed toexpectations. Strong marketconditions in the western statescombined with reliable sources ofsupply helped Western Ashachieve record profitability.

27

1995

BORAL HAS INTEGRATED ALLITS US BRICK BUSINESSES ANDIS APPLYING THE BESTPRACTICES FROM EACH OF THETHREE COMPANIES TO THENEW ORGANISATION.

The Isenhour brick plant inSalisbury, North Carolina(left), where product qualityhas always been a priority.

Mark Thompson, Quality AssuranceManager at Boral’s US Tile is seenmeasuring tiles at the Corona plantin California.

Boral is a leading supplier of rooftiles in California.

1989

1987 In the late 1980s a number of additional brick works inthe south and a quarry and asphalt suppliers in SouthernCalifornia were acquired. After making losses, the quarryand asphalt businesses were sold with Boral choosing toconcentrate on brick and rooftile businesses in the US.

The plasterboard business, BriarGypsum, located in Arkansas was

acquired as well as the U.S. TileCompany, a manufacturer of

clay roofing tiles.

Bickerstaff Clay ProductsCompany Inc., which hasthree multi-kiln plants inAlabama and Georgia,and Isenhour Brick andTile Co were acquiredmaking Boral the largestmanufacturer of bricks inthe United States.

Today, Boral USAhas 2,926 employeesworking in 15 states.There are 14 brickoperations, 6 rooftile plants, oneplasterboard factoryand 7 flyashoperations.


28

Europe

n Europe, Boral’s operationshave undergone a number ofchanges including the

divestment of non-core operationsand restructuring of the remainingbusinesses.

Construction and housing activityhas declined in Boral’s majormarkets and these adverseconditions were compounded bythe severity of the Europeanwinter, which in some areas wasthe worst for 15 years.

The housing markets droppedbetween 13% and 28% with theexception of eastern Germanywhere housing constructionincreased, but at a slower rate.

Boral’s UK masonry operationswere sold during the year. InGermany a major part of theResources Division was sold to aGerman aggregates company.

B R I C K SBoral’s Dutch operations performedsatisfactorily despite adversemarket and weather conditions.Pavers was the most successfulbusiness with the newlycommissioned Doorwerth plantable to take advantage of its fullcapacity while achieving strongprice increases.

Facing bricks experienced a drop involumes due to the decline in

I

Further acquisitions of clayface brick, paver and tile

manufacturers in TheNetherlands and Germany.

1982

ENERGY TIMELINEBoral inherited its first UKoperations including flyashbusinesses, through BMI.

1989 Boral entered clay brick making inEurope through Nedusa Baksteen, aDutch clay brickmaker.

1990


housing activity in both TheNetherlands and western Germany.Price increases were, howeverachieved and as a result TheNetherlands showed a smallincrease in operating profits.

In Germany, the brick operationsperformed poorly. Among thefactors which contributed to thisresult were the sharp decline inhousing in West Germany and thesevere winter which had a negativeimpact on both volumes andprices.

A number of teething problemswere experienced at the newMalliss plant in eastern Germany,

resulting in lower than expectedvolumes.

In Poland, the brick operations areproving very successful with allproducts now certified by thePolish Institute of BuildingTechnology. The country is atraditional clay product market withmany historic brick buildings.Poland’s brick market is expectedto grow significantly in the nextfew years.

An active marketing program isshowing pleasing results with Boralnow holding the number twoposition in the market and strongbrand name recognition. TheJankowa plant is now running atfull capacity.

T I L E SAdverse market conditions were amajor factor in the poor

performance of the Tiles Division.Coupled with this was the highlycompetitive environment andquality problems encountered atBoral’s older plants. The newlycommissioned Riesa plant in eastGermany was closed for somemonths to reduce inventories.

F LYA S H A N D L I G H T W E I G H TA G G R E G AT EThese small ash businesses in theUK showed some improvement intheir performance, posting a profitas opposed to losses experiencedin the previous year. They weresold after year end.

29

The 18th century post office in Torun(top) shows the Polish tradition ofusing bricks.

The huge “Klif” supermarket at Gdyniain Poland (above) under constructionusing Boral bricks.

1996

BORAL WAS ONE OF THE FIRSTWESTERN BUILDING MATERIALSCOMPANIES TO ENTER THE POLISHBRICK MARKET WHEN IT BOUGHTTHE JANKOWA PLANT FROM THEPOLISH GOVERNMENT.

Jankowa (left) is now running at fullcapacity and showing results.

Restructuring to concentrate on claybricks as Boral’s core business in Europe.

Today, Boral Europe has 1,129employees working in 4 brickand 2 paver plants in TheNetherlands, 6 brick and 4 rooftile plants in Germany and onebrick plant in Poland.

1995 The Malliss brickworks ineastern Germany was purchased.

A closed brickworks at Jankowa, Poland, was purchased andre-opened about 12 months later after upgrade.

1993


30

Asia

ong term strategies offocused participation in theAsian region are being

progressively implemented byBoral’s Asia Group as theoperations have expanded. TheMalaysia, Indonesia and Chinamarkets continue to be attractivefor investment and buildingmaterials will be a profitableindustry as the infrastructure ofthese countries is established. TheMalaysian concrete business isnow one of the top three suppliersand continues to trade profitably.Indonesia again experienced highgrowth rates in concrete which

warranted additional investment intrucks and batch plants.

The Gresik plasterboard plant inSurabaya and the recently acquiredMalaysian plant have both beenexpanded to meet the growingdemand for this relatively newproduct in the region. AdditionalChinese joint ventures inplasterboard were concluded.

The Singapore aluminium securitymesh business was sold.

C O N C R E T EFurther improvements in marketshare and better operatingefficiencies have contributed to

L

A joint venture plasterboardbusiness, PT PetrojayaPlasterboard opened a factoryin Gresik, in Surabaya inIndonesia. The factory was thefirst plasterboard plant built inIndonesia.

ASIA TIMELINEBoral entered the Asian marketthrough BMI which owned 50% ofPT Jaya Readymix. BMI and itspartners had established PT JayaReadymix as the first pre-mixedconcrete supplier in Indonesia inthe early 1970’s.

1992

1982


Following the signing of officialdocuments with the Chinese

Government, construction of amajor plasterboard plant in

Shanghai commenced.

Today, Boral Asia has 2,064employees working inplasterboard and premixedconcrete operations inIndonesia; plasterboard andpremixed concrete operationsin Malaysia; a sales office inSingapore; establishing aplasterboard factory in China;and an aluminium extrusionplant in Vietnam.

profit growth in Indonesia in a timeof continued strength in the officetower and residential market. Therehas, however, been a considerableslowdown in forward projectcommitments and the pressurefrom competitors is increasing.Boral has taken a marketinginitiative by hosting technicalseminars to promote concrete asthe material of choice for high risedevelopments. This has led tosome major contracts for highstrength concrete and confirmedPT Jaya Readymix as the industryleader.

By consolidating the Malaysiaconcrete acquisitions andexpanding the truck fleet and batchplant locations, Boral has achieveda significant increase in volume,market share and profitability.Cement and aggregate shortagescontinued to have some adverseimpact. Although the outlook is forsome slowing in the constructionof commercial property, theinfrastructure developmentsforeshadowed in the Malaysiangovernment’s seventh Five YearPlan are encouraging.

P L A S T E R B O A R DThe expansion of the GresikIndonesia plant was successfullyimplemented and the business hastraded profitably despite theinterruption to production duringthe capacity upgrade. A trainingcentre was established forcontractors and installers to raiseindustry standards and this hasbeen successful in maintainingBoral’s market share in the face ofincreasing competition.

A second plant will be built inWest Java and is expected to becompleted by mid 1997.

The acquisition of WembleyGypsum Products Sdn Bhd inMalaysia was followed by anumber of initiatives to improveprofitability including newtechnology, industry training andan upgrade of capacity. Newdistribution arrangements and therelease of new products shouldimprove the business inthe next year.

In China, construction of theShanghai plant has commenced.This plant will have a capacity of30 million metres squared ofplasterboard and will be completedin 1998.

The Vietnam powder coatingbusiness has expanded itsactivities into the installation anddistribution of plasterboard.

Boral Asia will soon establish salesoffices in India and the Philippinesin addition to that already operatingin Vietnam.

31

Plasterboard is a major product for Boral in Asia.At the Parit Buntar plant in Malaysia, a newlaminated plasterboard has been developed for theAsian market.

BORAL’S MALAYSIAN CONCRETEBUSINESS IS ONE OF THECOUNTRIES TOP THREESUPPLIERS.

Over the next two years theDivision will supply concrete tothe new international airportproject in Kuala Lumpur, one of thelargest engineering projects in theworld.

1995 Boral bought into the Malaysian premix concrete industrywith the acquisition of Qualimix and Metromix Sdn. Bhd. and alsoentered the Malaysian plasterboard industry through WembleyGypsum Products Sdn. Bhd.

1996


32

he Services and EngineeringGroup encompasses tyresand retreading, engineering,

fabricated construction anddimension stone, which are allindependent companies withinBoral, operating in nichebusinesses.

The Elevator Division, which hadbeen the Group’s major businessbut was non-core, was sold to OtisElevator Company early in the year.

Services andEngineering

SERVICES ANDENGINEERING TIMELINEAcquisition of Cyclone Companyof Australia, renamed as BoralCyclone Limited.

Bandag, the tyre retreadingbusiness, was acquired through theBMI purchase. In 1985 hhe Grouppurchased the whole of the issuedcapital in Johns Perry Limited. Most of these companies have since been sold.

T

19821975


T Y R E S A N D R E T R E A D I N GTyre distribution continued to beaffected by the depressed ruralsector and generally difficulttrading conditions. These werecharacterised by very competitivepricing, low industry sales and, inparticular, supply delays and ordershortfalls from major overseassuppliers. The operation wasconsolidated and restructuredduring the year. As a result of thisrestructure, a common reportingsystem was introduced for

business performance indicatorswhich will enable national stockassets to be managed moreeffectively. However, the benefitsfrom this and the new computersystem will only be realised in1996/97.

Bandag, the retreading businessexperienced a slight fall inprofitability despite a reduction inoverheads. Equipment to enablethe manufacture of conveyorbelting is being installed with theaim of building markets in non-tread products and is expected toincrease sales next year.

E N G I N E E R I N GPerry Engineering had a smallincrease in sales, howeverprofitability suffered due to anumber of jobs incurring losses. In the Special Vehicles segment of the Division, which developsequipment for defence relatedprojects, the costs of a majordevelopment project wereexpenses rather than carried inwork in progress.

The Johns Perry Hayward business

at Launceston, Tasmania, was soldduring the year to a local fabricatorwho is now operating from theHayward’s site. Difficult tradingconditions resulted in thepermanent closure of the BoralStructural operation at Geebung,Queensland.

D I M E N S I O N S T O N EDespite a depressed market andstrong competition, there was asmall increase in sales andoperations were close to breakingeven.

A strategic review of the businesshas resulted in a change of focusto concentrate on the traditionallyprofitable segments and exit smallunprofitable work.

While margins continue to be tightthere are signs of an improvementin the restoration, office and hotelsectors which are consistent usersof dimension stone. Melocco wonsome work on the MelbourneCasino project and work related tothe Sydney Olympics is expectedsoon.

33

Boral’s dimension stone supplier, Melocco hashad considerable success exporting itsAustralian sandstone and granite rangethroughout Asia. Pictured is the jinnai-Teibuilding in Tokyo, Japan, which used Somersbybrown sandstone as a cladding.

BANDAG MANUFACTURING INWACOL, QUEENSLAND ISBORAL’S TYRE RETREADINGBUSINESS.

Plant Operator, Jose Garcia(left) is supervising the rollingof treads for despatch while(above) Garry Mott carries outfinal tread inspection. In theforeground are cured Bandagtreads awaiting inspection.

1992 Boral Cyclone rural and fencingoperations sold.

1993The manufacturing division wasdivested by The Azon public floatwhich raised $300 million.

1988Boral became the owner of

Bell Tyres, the retail tyrebusiness now named

Boral Tyres. Today, Boral’s Services andEngineering Group has1,245 employees throughoutAustralia in 76 tyre depots,retail outlets and servicecentres, a tyre retreadingfactory, an engineering plant,and 3 dimension stonefactories and sales offices.


H U M A N R E S O U R C E Soral has continued todevelop, implement andrefine ‘best people’

initiatives during the year. Therehave been significant changes inmanagement style and philosophy,in line with Boral’s Purposestatement and values. Particularnoteworthy is the clear linkagebetween the various HumanResources initiatives and businessactivity.

Performance ManagementThe second cycle of Boral’sperformance appraisal process wascompleted in March 1996. Thiscovered some 2,500 managers andprofessional employees globally,and is seen as an essential activityto sustain a performance basedculture. This initiative will beextended further within theorganisation as time progresses.

Remuneration and IncentivesThe remuneration strategy for theCompany has been further refinedwith particular focus onperformance related reward.Remuneration practices are nowmarket competitive and muchmore carefully managed.

Training and Development Boral’s Professional DevelopmentPrograms, which was launched inJuly 1995, has proven verysuccessful with some 1,300employees participating in the50 programs available. Theinternally designed and conductedSupervisors and ManagersPrograms were introduced to theUSA and European operations in1995 and to Asia in 1996.

Succession PlanningSuccession planning sessions arenow incorporated into the standard

business planning cycle and areheld at corporate and Group levelon a regular basis. Boral isensuring that there are peoplewith sufficient talent and skills atall levels to meet future staffingneeds and expansionopportunities. This includesparticular initiatives to attract andrecruit younger people to betrained and developed as futureleaders in the company.

Women in ManagementBoral is committed to the creationof career opportunities for womenat all levels. Training activitiessupport this commitment.

O C C U PAT I O N A L H E A LT H & S A F E T YBoral experienced its best evergroup safety performance with aLost Time Injury Frequency Rate of15 representing a 29%improvement on last year’s results.Boral’s measure of time lost frominjury is a comparison of hours lostexpressed as a percentage ofhours worked. A result of 0.33 forthe year shows an 18%improvement, and furtherimprovements are achievablethrough better management ofinjuries and workers’ compensationclaims.

These pleasing results spring fromthe more proactive approach beingtaken in safety managementthroughout Boral. Internationaltrends show the focus movingaway from measuring safetyperformance solely on negativeoutcomes such as lost time injuriesand lost hours. Health and safetyobjectives are now incorporatedinto strategic planning withmanagers selecting performancemeasures based on positiveoutcomes in order to achieve

business safety objectives.

Boral’s employees have workedhard to achieve their excellentsafety results, introducinginnovative ideas to reduce injuriesand ill health at their sites. Duringthe year two operations wereformally recognised for safetyexcellence. Lifetile at Lathrop in theUSA was awarded the best safetyperformance and Boral Energy,Southern & Central Queenslandhad the most improved safetyperformance.

Some of the initiatives that arebeing taken around the company toimprove the health and safety ofpeople at work include theintroduction of warm up exercisesat Boral Timber at Killafaddy andWestern Junction in Tasmaniawhich have helped reduce manualhandling injuries. Boral Plasterboardin Western Australia has promotedthe use of fall arrestors foremployees loading and unloadingtrucks who often have to climb on

CorporateAct iv it ies

34

1989

1990

1991

1992

1993

1994

1995

Fre

qu

en

cy

ra

te

Pe

rce

nta

ge

ho

urs

10

0

20

30

40

0.2

0.4

0.0

0.6

0.8B

Boral Group Summary

HEALTH AND SAFETY AREVITALLY IMPORTANT IN ALLBORAL OPERATIONS.

Employees at work (right)wearing safety clothing, hearingand eye protection.

The following graph tracks theimprovement in Boral’s safetyrecord over the last seven years.The Frequency Rate is a measureof lost time injuries per millionmanhours worked and thePercentage Hours lost indicatesthe amount of time lost throughinjury as a percentage of thehours worked.


top of the load to makeadjustments. They have been givenlocal recognition for the ingenioussystem they have developed forhooking up the harnesses. BoralMasonry in Somersby, New SouthWales has reduced employeeexposure to noise by buildingacoustic barriers around noisyequipment using their ownproduct. At Boral Energy inSouthern Queensland, a computerbased training program has beendeveloped for employees at LPGterminals which addresses safetyas well as technical issues. Thishas subsequently been installedthroughout Australia and the PacificIslands.

Boral’s good results were marredby the tragedy of three fatalities,one was due to a forklift accidentin Germany and two were driversinvolved in single vehicle heavygoods accidents in Australia. Thevehicle accidents have spurred aninternal campaign to encourage

truck drivers and mobile plantoperators to wear their seat beltsat all times.

OH&S training programs have beenrevised to promote furtherunderstanding of legislativerequirements including control ofmanual handling and hazardoussubstances.

Joint auditing of sites involvingBoral’s OH&S, EnvironmentalServices and Insurance functionshas been introduced to focus on amore integrated approach tomanaging all aspects of risk.

E N V I R O N M E N TBoral’s environmental policycontains a commitment to pursuebest practice in environmentalperformance and embraces theprinciple of sustainabledevelopment, i.e. developmentwhich meets the needs of thepresent without compromising theability of future generations tomeet their own needs. The policy

also includes commitments to:

• comply with the law as a minimum requirement

• minimise negative environmental impacts

• continual improvement of environmental performance

• conduct business with environmentally responsible suppliers

• remediate historically contaminated sites to international standards over time.

To support these commitments,Boral is basing its environmentalmanagement systems on theinternational standard ISO14001.Training of all personnel is a keyelement of the standard and 300senior staff will have attended in-house environmental trainingcourses during 1996.

Regular reporting of both positiveand negative performanceindicators has been instigated to

35


track progress and to alertmanagers to any deficiencies andthe need for additional resources.

In recent years, Boral’senvironmental efforts have movedfrom being relativelyunsophisticated and reactive to theproactive development andintroduction of comprehensivemanagement systems forenvironmental performance. This isa slow and detailed process whichsubstantially reduces the risk ofadverse environmental impacts andalso seeks ways to minimise thegeneration of waste and, wherepracticable, to re-cycle as much ofany waste produced as is possible.Innovative environmental initiativesin this regard include theConstruction Materials Group’sconcrete reclaimer and water re-cycling systems.

Boral companies own a number ofhistorically contaminated sites. Themost severely impacted sites arethe former manufactured gas plantsites of Sagasco in South Australiaand Gas Corporation ofQueensland. These were subjectto on-site waste disposal practicesover a period of up to 100 yearsand which would not be acceptabletoday. A systematic assessment ofremediation and containmentrequirements of contaminated sitesis being undertaken.

When it comes to the perceptionof Boral’s environmentalperformance however, thedominant and overriding influenceon the public is our timberbusinesses. The Group has beensubject to targeted campaigns andmisinformation about the state ofAustralia’s forest reserves.

Timber is a significant part ofBoral’s overall resource businessand a very sensitive environmentalissue in the community. As part ofthe philosophy of always aiming todo better than the minimum legalobligation, Boral has developed itsown Forest Resource Policy foremployees and contractors whichis strictly upheld in conjunctionwith State and Federal regulations.The policy is to:

• Obtain supply from State Forestsonly when these forests arebeing managed on a long-termsustainable basis.

• Comply with all environmentalrequirements and codes ofpractice in both State Forestsand on private land.

• Manage company-owned foreststo maximise wood production ina manner which is consistent

CorporateAct iv it ies

36


A river protection and water conservationscheme operates at Boral’s Blue CircleSouthern Cement plant in Berrima, New SouthWales. Water is recycled through a closedsystem of settling ponds and storage dams,conserving water and protecting the localWingecarribee river.

BORAL IS ONE OF THELARGEST CONCRETERECYCLERS IN AUSTRALIA.

Pictured is a BoralTransport B Double at theGreystanes, New SouthWales, Resource Recoverycomplex. In the foregroundis steel which has beenrecovered from concretewhich will be recycledalong with any othermaterials such as plastic or timber.

37

with sustained yield and the long-term protection of fauna, flora,soil, water and sensitive scenicvalues.

• Develop and promote diverseregrowth forest and bothhardwood and softwoodplantations as the main futuresource of log supplies; and.

• Support and assist in thedevelopment of acomprehensive, adequate andrepresentative reserve systemfor Australia’s forests, andRegional Forest Agreements(RFA’s) to provide a long-termapproach to conservation andsustainable management and useof Australia’s native forests.

C O M M U N I T YBoral has long recognised theimportance of contributing to thecommunity through sponsorships

and donations to charities, non-profit organisations, arts,environmental and communitygroups.

This year Boral sponsored theAustralian Olympic Team for theAtlanta Games. The excellentreputation and high public interestin the Olympic Games made thissponsorship a very effectivemarketing tool for Boral throughoutAustralia. Customer contests wererun with winners receiving trips tothe Olympic Games and Boral’sNorth American operations whichare headquartered in Atlanta.

Among the other organisationsBoral has assisted during the yearare: The Victor Chang CardiacResearch Institute, The NewEngland Regional Art Museum, TheAustralian Graduate School ofManagement, The Schools Visits to

Industry Program, Musica Viva, TheQueensland Arts Council, TheAustralian Trust For ConservationVolunteers, MicrosearchFoundation of Australia, TheBotanic Gardens of Adelaide, andthe Museum of Contemporary Art.

The Directors believe it isappropriate for leading companiesto contribute to the politicalprocess and therefore Boral has apolicy of making modest donationsto political parties. In 1995/96, thedonations totalled $150,000 andboth the Australian Labor Party andthe Liberal/National Parties coalitionwere supported.


38

he Boral Board of Directorsis responsible for thedirection and oversight of

the Company’s businesses onbehalf of the shareholders. TheBoard has endorsed and adoptedstatements of corporate mission(the ”Purpose” statement) andvalues intended to determine theCompany’s strategic direction andto ensure that its operations areconducted at a high level ofbusiness ethics and suitablestandards of probity.

The Board reviews and approvesthe Company’s strategic plans andguiding policies. Day to daymanagement of the Company’saffairs and implementation of itsstrategy and policy initiatives aredelegated to the Managing Directorand senior managers.

The Board has policies in place tomaintain an appropriate balance ofqualifications, experience andexpertise among its members tomeet the needs of the Company.When vacancies for non-executiveDirectors need to be filled, theBoard as a whole participates inthe selection process, sometimeswith the assistance of externalconsultants.

During the year, the Boardconducted a review of the paper it had produced setting outguidelines on a number ofsignificant corporate governanceissues and for the first time,undertook a process of assessingits own performance. Following theassessment, additional matters arebeing included in the Board Agendafor the purpose of increasing theeffectiveness of the Board.

The Board has endorsed the coreprinciples set out in the Australian

Institute of Company Directors’Code of Conduct for directors.

Non-executive Directors arerequired by the Company’s Articlesof Association to hold a minimumof 2,000 shares in the Company.Directors and officers of theCompany may not trade in Boralsecurities other than in a briefinterval after publicannouncements of the Company’scurrent position and results and theAnnual General Meeting.

Apart from regular monthly Boardmeetings, non-executive Directorsalso participate in annual strategyconferences with seniormanagement. These conferencestypically extend over a number ofdays and involve in-depth reviewsof the position and strategicoutlook of each of the Company’sprincipal businesses. The Directorsalso familiarise themselves withday to day operational conditions ina variety of the Company’sbusinesses by undertaking sitevisits to operating locations.

A particular concern in recent yearshas been for the Board tofamiliarise itself with issuesrelating to sawmilling and forestryoperations in recognition of theenvironmental sensitivity of timberfelling and woodchip activities. InJuly 1996, the Directors visitedhardwood forests and a timber millon the North Coast of New SouthWales. The Board supports thepolicy that all Boral forestryoperations be conducted inaccordance with best practice andminimal environmental impactconsistent with long termsustainable development.

The Board has procedures in placefor Directors to seek clarification of

advice to the Company fromprofessional advisers/consultantsand for seeking independentprofessional advice in carrying outtheir duties.

Procedures have been establishedto enable the Company’s assets tobe safeguarded and its records andreporting to be accurate andreliable. These include financial andaccounting procedures and controlmeasures. The Company’s policy isto only use derivative financialinstruments to hedge interestrates, exchange rates andcommodity price risks and not touse such instruments for tradingpurposes. There are alsoprocedures in place for riskmanagement processes in areasother than financial risk. Theseprocedures are reported to theBoard by corporate and businessGroup management and aremonitored by the Board.

While overall responsibility isaccepted by the Board as a whole,the Board is assisted in itsdecisions on some issues byspecialised sub-committees of theBoard, in particular the AuditCommittee and the CompensationCommittee. These committees arecomprised entirely of non-executive Directors but haveaccess to the Managing Director,internal and external auditors andsenior executives to assist them intheir deliberations.

A U D I T C O M M I T T E EThe Audit Committee has anumber of functions. It reviews theaudit functions of the Company,both internal and external. KPMG,the Company’s external auditors,attend all meetings of the AuditCommittee and each year, the

CorporateGovernance

T


39

Committee reviews and agreeswith the external auditor the natureand extent of the audit to beundertaken.

The Company has for many yearsplaced emphasis on the internalaudit function which monitorscompliance with internalaccounting controls and proceduresand conformity with Companypolicy. The Audit Committeemonitors and reviews the conductof the internal audit function.

The Audit Committee reviews andreports to the Board of Directorson the annual and half-yearlyfinancial statements and anycomments on them made by theexternal auditors.

C O M P E N S AT I O NC O M M I T T E EThe Compensation Committeeestablishes policy and proceduresfor executive remuneration,performance appraisal, recruitmentand termination, incentive schemesand superannuation.

The Committee has specificfunctions in relation toremuneration arrangements for theManaging Director and the mostsenior executives in the Company,including annual reviews and theallocation of incentives based onindividual performance and thepractices adopted by comparableorganisations.

Fees paid to individual non-executive Directors are determinedby the Board as a whole with inputfrom the Compensation Committeewithin the current maximumaggregate of $650,000 approved byshareholders at the 1989 AnnualGeneral Meeting and having regardto the level of fees paid to non-executive Directors by other

companies of similar size andstature. Non-executive Directors donot receive any performancerelated remuneration.

C O M P L I A N C EThe Board has adopted policieswhich require the Company and itsexecutives to observe both theletter and spirit of regulationsconcerning occupational health andsafety, environmental protectionand trade practices.

There is an ongoing program foraudit of the large number of Boraloperating sites. Occupationalhealth and safety, environmentaland other risk matters are coveredby these audits. Boral also hasstaff to monitor and advise onworkplace health and safety andenvironmental issues and inaddition, education programsprovide training and information onregulatory issues.

Despite the efforts to avoidoccurrences which infringeregulations, there have regrettablybeen a small number ofprosecutions against subsidiarycompanies for breach ofoccupational health and safetylegislation and environmentaloffences such as substanceescapes or spillages. Some fineshave been incurred with the largestfine imposed during 1995/96 being$85,000.

During the year, a major tradepractices issue was resolvedconcerning improper conduct in theSouth East Queensland pre-mixedconcrete market which occurredfrom 1989 to 1994. On the issuebeing raised, the Company co-operated fully with the AustralianCompetition & ConsumerCommission (formerly the Trade

Practices Commission) and agreedpenalties totalling $6,800,000 wereimposed on a subsidiary of theCompany and certain executives.The Company issued a publicapology for its involvement in thismatter and its complianceprocedures were reviewed andreinforced to prevent anyrepetition. As part of the review, acomputer based Trade Practicestraining program has beenintroduced for managers and salesstaff.

H U M A N R E S O U R C E SThe conduct of the Company’sbusiness depends on its ability toattract, retain and motivatetalented executives in aninternationally competitive marketplace. The Board recognises thisand conducts ongoing reviews ofhuman resources practices andsuccession plans.

Background: The original prospectusof Bitumen and Oil Refineries ofAustralia Limited signed by theDirectors in February 1946


40

Peter J.W. Cottrell, AO, OBE

Mr. Cottrell, 68, non-executive Chairman, joinedthe Board in 1992 and became Chairman in late1994. He is a member of the CompensationCommittee. Mr. Cottrell is the Chairman of EmailLimited, Scania Australia Pty. Limited and, since1992, the companies in the Adelaide SteamshipGroup. He is also a Director of National AustraliaBank Limited. He was formerly the ManagingDirector of Email. He holds a master ofengineering degree from the University of Sydneyand a post graduate diploma in management fromthe University of Birmingham. Mr. Cottrell hasbeen awarded an honorary doctorate in businessfrom Charles Sturt University, New South Walesand an honorary fellowship by The Institution ofEngineers, Australia.

Anthony R. Berg, AM

Mr Berg, 50, Managing Director, joined Boral andwas appointed a Director in 1993 and has beenManaging Director since early 1994. Beforejoining Boral, Mr Berg worked in investmentbanking and was Managing Director of MacquarieBank Limited. He has an economics degree fromthe University of Sydney and a MBA fromHarvard University. Mr. Berg is the Chairperson ofMusica Viva Australia, a Director of the SydneyInstitute and a Member of the Board ofManagement of the Australian Graduate Schoolof Management at the University of New SouthWales.

Elizabeth A. Alexander, AM

Ms Alexander, 53, a non-executive Director,joined the Board in 1994. She is a member of theAudit Committee. Ms. Alexander is a Director ofAmcor Limited and CSL Limited. A charteredaccountant, she is a partner in Price Waterhouseand in charge of Management AssuranceServices in the Melbourne office. She has acommerce degree from the University ofMelbourne. Ms. Alexander is a member of theCouncil of the Australian Defence Force Academyand the Corporations and Securities Panel of theAustralian Securities Commission. She is a formerNational and State President of the AustralianSociety of Certified Practising Accountants andearlier this year, was a member of the FederalGovernment’s National Commission of Audit.

Rodney T. Halstead

Mr Halstead, 53, a non-executive Director, joinedthe Board in 1991. He is a member of the AuditCommittee. Mr. Halstead is a Director of AmcorLimited. He is a lawyer who has practised incorporate law and in particular, mergers andacquisitions for over 25 years. Mr. Halstead is asenior partner in the law firm Clayton Utz inSydney and is head of that firm’s NationalMergers and Acquisitions Practice Group. Beforejoining Clayton Utz, he was a partner in the lawfirm Mallesons Stephen Jaques and was theChairman of that firm in 1991 and 1992. He holdsa law degree (Honours) from the University ofSydney and a master of law degree from theUniversity of London.

Board ofDirectors

Peter Cottrell Anthony Berg

Elizabeth Alexander Rodney Halstead Donald Hughes


41

Donald J. Hughes, AM

Mr Hughes, 65, a non-executive Director, joinedthe Board in 1988. He is the Chairman of theAudit Committee. Mr. Hughes is a Director ofGoodman Fielder Limited. His career was in theconsumer goods industry both in Australia andinternationally and was the Chief Executive ofCadbury Schweppes Australia Limited when heretired in 1988. Mr. Hughes is a past President ofthe Victorian Chamber of Manufactures and theConfederation of Australian Industry. He has alsobeen a member of Government advisorycouncils/committees including the PrimeMinister’s Economic Planning Advisory Councilfrom 1983 to 1987.

Gilles T. Kryger, AM

Mr Kryger, 68, a non-executive Director, joinedthe Board in 1992. He is a member of the AuditCommittee. Mr. Kryger is the Chairman of LangCorporation Limited, Jamison Equity Limited, TheMercantile & General Reinsurance Group ofAustralia and the GPT Supervisory Board. Hiscareer has been in investment banking andstockbroking. He was a partner, director orexecutive Chairman of Ord Minnett for 35 years.He has an economics degree from the Universityof Sydney. Mr. Kryger is a Trustee of theAustralian Cancer Foundation for MedicalResearch. He was a part time Commissioner ofthe National Companies and SecuritiesCommission from 1983 to 1991.

Mark R. Rayner

Mr. Rayner, 58, a non-executive Director, joinedthe Board in February 1996. He is a member ofthe Compensation Committee. Mr. Rayner is theChairman of Pasminco Limited, the DeputyChairman of Comalco Limited and a Director ofLeighton Holdings Limited, National AustraliaBank Limited and Mayne Nickless Limited.Mr. Rayner was the Chief Executive of Comalcofrom 1979 to 1989 and an executive Director ofCRA Limited until he retired in 1995. He has a

chemical engineering degree (Honours) from theUniversity of New South Wales. Mr. Rayner is amember of the Corporations and SecuritiesAdvisory Committee, a Councillor of DeakinUniversity, Victoria and the Treasurer of theAcademy of Technological Sciences andEngineering.

Sir Bruce Watson

Sir Bruce, 68, a non-executive Director, joined the Board in 1990. He is the Chairman of theCompensation Committee and is also theChairman of Boral’s wholly owned utility, GasCorporation of Queensland Limited. Sir Bruce is aDirector of National Australia Bank Limited. Hewas formerly the Chairman and Chief Executiveof MIM Holdings Limited. He has engineering andeconomics degrees from the University ofQueensland. Sir Bruce is the Chairman of twoCo-operative Research Centres and has served asthe National President of the AustralasianInstitute of Mining and Metallurgy and theAustralian Institute of Company Directors.He has been awarded an honorary doctorate inengineering from the University of Queenslandand an honorary doctorate (University) fromGriffith University, Queensland.

Gilles Kryger Mark Rayner Sir Bruce Watson


42

Sales revenue for the year was $4,695.3 million, a decrease of 5.0% fromthe previous year, and whilst sales inAustralia fell, sales in North America andthe Asia/Pacific regions increased.

Operating profit before abnormal items

and tax declined 43.9% to $248.6 millionwith the profits for Building Products andConstruction Materials being impacted bythe dwelling market downturn and reducedmargins due to increased unit costs andpricing pressures. European results werealso adversely impacted by a dwellingmarket downturn and by an unusuallysevere winter.

Abnormal items for the year amounted to a profit of $16.6 million before tax ($34.8 million after tax). The abnormalitems included a provision for restructuringcovering write offs, closures, downsizingand other costs within core businessesand profits from the sale of the elevatoroperations, the masonry business in theUK and the Kindisch quarry interests inGermany.

Income tax expense was reduced by nontaxable capital profits and the accounting

for past tax losses and explorationexpenditure.

Funds provided from divestments of noncore businesses, such as elevators andmasonry and quarries in Europe, wereused to finance strategic acquisitions suchas the Bickerstaff and Isenhour brickbusinesses in the USA.

Triennial valuations of land and buildingswere carried out during the year andresulted in a decrement to the assetrevaluation reserve of $52.5 million. Thevaluation of land and buildings is on thebasis of open market for continuedexisting use of the properties concerned atthe time of valuation or open market valuewith vacant possession where appropriate.Further information in respect of thetriennial revaluation is disclosed in note 6of the financial statements.

Debt (net) to equity at year end was59.0% (1995: 54.3%). Details of derivativefinancial instruments used by theeconomic entity are set out in thestatement of significant accounting policiesand in note 8 of the financial statements.Derivatives are only used for hedging and

FinancialReview


43

not for speculative trading purposes. Creditfacilities and standby arrangementsavailable to the economic entity aredetailed in note 21 of the financialstatements. A natural balance sheet hedgeis maintained by matching investments inoverseas assets with foreign currencyborrowings. Short term/long term ratingsfrom Moody’s (P1/A2 ) and Standard &Poors (A1/A) remain unchanged at yearend. However, subsequent to year end,Standard & Poors have placed BoralLimited on credit watch with negativeimplications.

Recommended final dividend of7.5 cents a share (fully franked) brings thefull year dividend to 18.0 cents a sharewhich is 3.0 cents lower than the previousyear and represents a payout ratio of98.0%. Boral Limited anticipates to be ableto continue paying fully franked dividendsduring the year ended 30 June 1997.Thedividend reinvestment and bonus shareplans were reinstated during the year toprovide equity capital for the growth of theCompany.

Currency conversions at balance datewere as follows: A$1 = US dollar 0.7888

UK pound 0.5097Netherlands guilder 1.3453German Deutschmark 1.2002

New business and financial systems arein the detailed Design and Configurephase, to be completed in December1996, with roll out of the new systemsinto the business groups from early 1997to mid 1998. This major project will involvethe installation of new computer hardwareand communications network and newapplication software.

Form 20F filing will be lodged with theUS Securities and Exchange Commissionby 31 December 1996. Copies of the Form20F, which includes a reconciliation of thefinancial statements with US generallyaccepted accounting principles togetherwith supplementary information, may beobtained by writing to the CompanySecretary, Boral Limited in Sydney or toBoral Industries Inc., 2859 Paces FerryRoad, Suite 1520, Atlanta, Georgia 30339USA.


44

TEN YEAR DIVIDEND AND SHARE ISSUE HISTORY

Issue DRP/BSP*Date Action Share Issue Details Price Dividend Price

30 September 1985 bonus issue 1 for 5 from share premium reserve Nil29 September 1986 bonus issue 1 for 4 from share premium reserve Nil30 April 1987 dividend $0.090 $4.550002 December 1987 rights issue 1 for 10 renounceable $5.0013 November 1987 dividend $0.090 $4.000029 April 1988 dividend $0.095 $3.900029 September 1988 bonus issue 1 for 5 from share premium reserve Nil02 November 1988 rights issue 1 for 8 renounceable $3.1525 November 1988 dividend $0.100 $3.300028 April 1989 dividend $0.140 $3.030003 October 1989 bonus issue 1 for 10 from share premium reserve Nil17 November 1989 dividend $0.110 $3.340030 April 1990 dividend $0.120 $3.050016 November 1990 dividend $0.130 $2.830030 April 1991 dividend $0.120 $3.250015 November 1991 dividend $0.080 $3.140030 April 1992 dividend $0.080 $2.857520 November 1992 dividend $0.080 $2.447730 April 1993 dividend $0.080 $2.743029 October 1993 dividend $0.100 $3.391029 April 1994 dividend $0.100 $3.445706 May 1994 rights issue 1 for 10 renounceable $3.6028 October 1994 top up offer Top Up Offer to nearest 100 shares $3.2131 October 1994 dividend DRP/BSP suspended $0.10028 April 1995 dividend DRP/BSP suspended $0.10531 October 1995 dividend DRP/BSP suspended $0.10514 May 1996 dividend DRP/BSP reinstated $0.105 $3.2281

*DRP refers to the Dividend Reinvestment Program and BSP refers to the Bonus Share Plan where shareholders forgo dividends and receive shares instead


Ten YearFinancial History

Boral Limited and Controlled Entities

1996 1995 1994 1993 1992 1991 1990 1989 1988 1987$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000

Sales Revenue 4,695,272 4,941,164 4,646,913 4,215,126 3,697,837 3,839,341 3,955,751 3,625,382 2,777,119 2,372,071Other Operating Revenue 305,689 103,991 371,043 90,648 76,003 145,612 111,227 95,910 25,160 45,425Total Group Revenue 5,000,961 5,045,155 5,017,956 4,305,774 3,773,840 3,984,953 4,066,978 3,721,292 2,802,279 2,417,496

Operating Profit before Depreciation, Interest Paid, Tax and Abnormals 686,198 831,428 760,036 656,789 561,052 638,177 766,493 728,738 543,806 448,876Abnormal Items 16,612 – (205,408) – – – – – – –Depreciation, Depletion and Amortisation (300,113) (275,711) (235,642) (203,020) (186,159) (177,791) (149,410) (125,023) (89,154) (66,399)Interest Paid (137,452) (112,304) (99,684) (98,711) (96,838) (121,768) (97,684) (86,360) (66,897) (50,947)Income Tax Expense (52,543) (143,651) (90,225) (119,641) (121,437) (122,225) (192,393) (198,707) (163,748) (144,923)

Operating Profit after income tax but before outside equity interests 212,702 299,762 129,077 235,417 156,618 216,393 327,006 318,648 224,007 186,607Outside equity interests 7,013 5,881 7,260 6,496 4,629 5,019 4,819 9,680 15,431 8,550Operating Profit after income tax attributable to members of Boral Limited 205,689 293,881 121,817 228,921 151,989 211,374 322,187 308,968 208,576 178,057Extraordinary Items of Profit/(Loss)

Goodwill written off – – – – – – – – – (269,591)Other Items – – – – – – – – 27,052 9,458

Operating Profit/(Loss) after extraordinary items and income tax attributable to members of Boral Limited 205,689 293,881 121,817 228,921 151,989 211,374 322,187 308,968 235,628 (82,076)

Total Assets 6,058,987 5,978,550 5,609,511 4,785,523 4,375,480 4,238,733 4,046,570 3,404,892 2,648,920 2,326,408Total Liabilities 3,152,447 3,101,080 2,822,911 2,343,831 2,073,491 2,034,279 1,993,682 1,767,148 1,391,322 1,222,305Net Assets 2,906,540 2,877,470 2,786,600 2,441,692 2,301,989 2,204,454 2,052,888 1,637,744 1,257,598 1,104,103Outside equity interest in controlled entities 57,273 38,907 31,206 47,442 41,066 39,735 36,798 30,546 101,690 94,445Shareholders’ equityattributable to members

of Boral Limited 2,849,267 2,838,563 2,755,394 2,394,250 2,260,923 2,164,719 2,016,090 1,607,198 1,155,908 1,009,658

Paid Up Ordinary Capital 564,087 550,403 547,667 482,963 467,536 454,075 434,688 379,421 270,895 267,272Dividend paid or declared 201,666 231,169 207,797 172,700 148,509 179,436 214,873 195,831 116,218 95,989

Dividend per Ordinary Share 18.0¢ 21.0¢ 20.0¢ 18.0¢ 16.0¢ 20.0¢ 25.0¢ 25.0¢ 19.5¢ 18.0¢Dividend per Ordinary Share (adjusted for issues)* 18.0¢ 21.0¢ 20.0¢ 18.0¢ 16.0¢ 20.0¢ 25.0¢ 23.7¢ 16.3¢ 13.6¢Dividend Cover (times covered) 1.0 1.3 0.6 1.3 1.0 1.2 1.5 1.6 1.8 1.9Dividend Payout Ratio 98.0% 78.7% 170.6% 75.4% 97.7% 84.9% 66.7% 63.4% 55.7% 53.9%Earnings per Ordinary Share (weighted average) 18.5¢ 26.8¢ 12.3¢ 24.2¢ 16.6¢ 23.9¢ 38.0¢ 43.3¢ 38.8¢ 36.3¢Earnings per Ordinary Share (adjusted for issues)* 18.5¢ 26.8¢ 12.3¢ 24.2¢ 16.6¢ 23.9¢ 38.0¢ 39.4¢ 29.4¢ 27.5¢Profit Earning Rate on Capital and Reserves 7.2% 10.4% 4.4% 9.6% 6.7% 9.8% 16.0% 19.2% 18.0% 17.6%Operating Profit on Sales 5.3% 9.0% 9.1% 8.4% 7.5% 8.8% 13.1% 14.3% 14.0% 14.0%Net Interest Cover (times covered) 3.0 5.2 3.4 4.8 4.1 4.0 7.6 7.7 7.4 11.4Income tax expense (effective rate) 19.8% 32.4% 41.1% 33.7% 43.7% 36.1% 37.0% 38.4% 42.2% 43.7%Net Debt to Equity ratio 59.0% 54.3% 47.2% 48.4% 45.7% 50.2% 47.5% 49.8% 51.2% 50.0%Net Tangible Asset Backing per Share $2.19 $2.29 $2.23 $2.08 $2.03 $1.98 $2.02 $1.82 $2.05 $1.89Net Tangible Asset Backing per Share (adjusted for issues)* $2.19 $2.29 $2.23 $2.08 $2.03 $1.98 $2.02 $1.65 $1.55 $1.44

* 1 for 4 bonus issue – 19861 for 5 bonus issue – 19881 for 10 bonus issue – 1989

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1996 Accounts BORALBoral Limited and Controlled Entities

Directors’ Report 46

Balance Sheets 48

Profit and Loss Accounts 49

Statements of Cash Flows 50

Statement of Significant Accounting Policies 51

Notes to the Financial Statements 53

Statutory Statements 79

Stock Exchange Information 80

Shareholder Information 81

Company Information 82

Ten Year Financial History IBC

45


46

Directors ’Report

In accordance with the Corporations Law, the Directors of BoralLimited (“the Company”), a company that is a chief entity inrelation to the accounting period being the financial year ended30 June 1996 (the “financial year”), report on the Company forthe financial year:

(1) Names of Directors

The names of the Directors of the Company in office on theday this report is made out are:

Peter J.W. Cottrell (Chairman)Anthony R. Berg (Managing Director)Elizabeth A. AlexanderRodney T. HalsteadDonald J. HughesGilles T. KrygerMark R. RaynerSir Bruce Watson

(2) Review of Operations

The Directors review:

(a) the operations, during the financial year, of the economicentity constituted by the Company and the entities it controlledfrom time to time during the period (“the economic entity”); and

(b) the results of those operations

as stated in the Chairman’s Review on pages 5 and 6 of theAnnual Report and the Summary of Operations on pages12 and 13 of the Annual Report.

(3) State of Affairs

In the opinion of the Directors, there were no significantchanges in the state of affairs of the economic entity thatoccurred during the financial year other than the abnormalprofit after tax of $34,780,000. Such profit comprised profit onthe sale of businesses of $105,439,000 and a write back of aprovision for natural gas conversion costs not required of$2,874,000 less a provision for restructuring of $73,533,000.

(4) Principal Activities and Changes

(a) The principal activities, during the financial year, of theeconomic entity are stated in the Summary of Operationson pages 12 and 13 of the Annual Report.

(b) No significant changes in the nature of those activitiesoccurred during the financial year except that the elevators,escalators and cranes operations, the manufactured buildingsoperations, the masonry operations in the United Kingdom andthe majority of the quarrying operations in Germany were sold.

(5) Net Consolidated Profit

The net amount of the consolidated profit, for the financial year,of the economic entity after:

(a) provision for income tax; and

(b) deducting any amounts that should properly be attributedto an entity that is neither the Company nor an entity that theCompany controlled at the relevant time

was $205,689,000. Such net amount was $293,881,000 inthe previous financial year.

(6) Dividends Paid or Declared

The amounts that have been paid or declared by way ofdividend since the start of the financial year are:

TotalDividend

$’000

As shown in the Directors’ Report for the financial year ended 30 June 1995, a final dividend of 10.5 cents per ordinary share (fully franked at the 33% corporate tax rate) for the year ended 30 June 1995 was paid on 31 October 1995 116,805

TotalDividend

$’000

An interim dividend of 10.5 cents per ordinary share (fully franked at the 36% corporate tax rate) for the year ended 30 June 1996 was paid on 14 May 1996 108,532*

A final dividend of 7.5 cents per ordinary share (fully franked at the 36% corporate tax rate) for the year ended 30 June 1996 has been declared by the Directors and is payable on 31 October 1996 84,613**

* net of the operation of the Company’s Bonus Share Planby which shareholders elect to forgo the right to share in thedividend and receive bonus shares in lieu thereof.** subject to the operation of the Company’s Bonus Share Plan.(7) Events After End of Financial Year

There are no matters or circumstances that have arisen sincethe end of the financial year that have significantly affected, ormay significantly affect:

(a) the operations in financial years after the financial year,of the economic entity constituted by the Company and theentities it controls from time to time; or

(b) the results of those operations; or

(c) the state of affairs, in financial years after the financial year,of that economic entity.

(8) Future Developments and Results

Other than matters referred to under the headings “Outlook”in the Chairman’s Review on page 6 of the Annual Report andthe Summary of Operations on pages 12 and 13 of the AnnualReport, the Directors have no reference to make to:

(a) likely developments in the operations referred to inparagraph (7); and

(b) the expected results of those operations.

(9) Directors’ Qualifications, Experience and Special

Responsibilities

Particulars of the qualifications, experience and specialresponsibilities (if any) of each of the Directors are set outon pages 40 and 41 of the Annual Report.

(10) Directors’ Shareholdings

Particulars as at the date this report is made out of shares inthe Company or in a related body corporate required to benotified to Australian Stock Exchange Limited are set out onpage 80 of the Annual Report.

(11) Meetings of Directors

The number of Meetings of the Company’s Directors (includingMeetings of Committees of Directors) held during the financialyear and the attendance of Directors at those Meetings was:

Board of Audit CompensationDirectors Committee Committee

Meetings Meetings Meetings Meetings Meetings Meetingsheld Attended held Attended held Attendedwhile a while a while aDirector Director Director

Directors throughout the financial year:P.J.W. Cottrell 12 12 – – 7 7A.R. Berg 12 12 – – – –E.A. Alexander 12 11 4 3 – –R.T. Halstead 12 12 4 4 – –D.J. Hughes 12 11 4 4 – –G.T. Kryger 12 11 4 4 – –Sir Bruce Watson 12 10 – – 7 7Director for not all of the financial year:M.R. Rayner 6 6 – – 3 3(appointed 7 February 1996)



47

Mr. Berg, the Managing Director, is not a member of the Auditand Compensation Committees but attended all Meetings heldby the Audit Committee and 6 of the 7 Meetings held by theCompensation Committee.

A Meeting of the Board of Directors which was not attendedby Mr. Kryger and Sir Bruce Watson was unscheduled.

(12) Options

Neither the Company nor any body corporate that the Companycontrolled at the end of the financial year has granted to aperson an option to have shares in the Company or the bodyissued to the person other than:

2,500,000 options to subscribe for fully paid ordinary sharesin the capital of the Company (“Shares”) which were grantedby the Company to Mr. A.R. Berg, the Managing Director, on31 January 1994 and 500,000 options to subscribe for Shareswhich were granted by the Company to Mr. Berg pursuant tothe Boral Senior Executive Option Plan on 18 January 1996.Particulars of the 2,500,000 options were stated in theDirectors’ Report for a previous financial year.

2,530,000 options to subscribe for Shares which were grantedby the Company to 10 senior executives pursuant to the BoralSenior Executive Option Plan. 1,980,000 of the options weregranted on 18 January 1996, 300,000 of the options weregranted on 27 February 1996 and 250,000 of the options weregranted on 16 August 1996.

In regard to the options granted pursuant to the Boral SeniorExecutive Option Plan, each option entitles the holder thereofto subscribe for one fully paid ordinary share in the capital ofthe Company, the options are exercisable at any time after thethird anniversary of grant and prior to the fifth anniversary ofgrant and the subscription price payable on exercise of theoptions is $3.60 per share. An exercise hurdle that the averageof the last sale price of the Company’s ordinary shares tradedon Australian Stock Exchange Limited for any twentyconsecutive trading days at any time after the date of grantof the options must have been greater than or equal to $3.94must be met before the options may be exercised. Thepersons entitled to exercise the options have, by virtue of theoptions, no rights to participate in the share issue of any bodycorporate other than the Company. The establishment of theBoral Senior Executive Option Plan and the grant of 500,000options to Mr. Berg pursuant to the Plan were approvedby shareholders at the Annual General Meeting held on13 November 1995.

No shares were issued, during or since the financial year, byvirtue of the exercise of any of the abovementioned options.

In addition, the Company has made offers dated 20 September1996 of a further 586,000 options to subscribe for fully paidordinary shares in the capital of the Company to 7 seniorexecutives pursuant to the Boral Senior Executive OptionPlan. The offers expire on 21 October 1996. The options whengranted will be on the same terms and conditions as thosedescribed above for the options already granted pursuantto the Plan.

The names of all persons who currently hold options areentered on the Company’s register of option holders atCoopers & Lybrand, 580 George Street, Sydney, NSW andthe register may be inspected free of charge. Full details ofpersons to whom options have been granted pursuant to theBoral Senior Executive Option Plan have not been disclosedby virtue of relief granted by Australian Securities CommissionClass Order 94/284 dated 8 March 1994.

(13) Directors’ Benefits

During or since the financial year, no Director exceptMs. E.A. Alexander and Mr. R.T. Halstead has received, or hasbecome entitled to receive a benefit because of a contract that:

(a) the Director; or

(b) a firm of which the Director is a member; or

(c) an entity in which the Director has a substantial financialinterest;

has made (during that or any other financial year) with:

(d) the Company; or

(e) an entity that the Company controlled, or a body corporatethat was related to the Company, when the contract was madeor when the Director received, or became entitled to receive,the benefit (if any).

other than:

(i) a benefit included in the aggregate amount of emolumentsreceived, or due and receivable, by Directors shown in theCompany’s financial statements for the financial year; or

(ii) the fixed salary of a full-time employee of:

(aa) the Company; or

(bb) an entity that the Company controlled, or a bodycorporate that was related to the Company, at a relevant time.

The economic entity paid fees to Price Waterhouse,Accountants, and Clayton Utz, Solicitors of Sydney, during thefinancial year for services rendered to the economic entity inthe ordinary course of business. Ms. Alexander is a partner ofPrice Waterhouse and Mr. Halstead is a partner of Clayton Utz.

(14) Insurance of Directors and Officers

During the financial year, the Company paid premiums inrespect of Directors’ and Officers’ Liability and Legal Expensesinsurance contracts for the year ended 30 June 1996 and sincethe financial year, the Company has paid, or agreed to pay,premiums in respect of such insurance contracts for the yearending 30 June 1997. Such insurance contracts insure againstcertain liability (subject to exclusions) persons who are or havebeen directors or officers of the Company or of related bodiescorporate. A condition of such insurance contracts is that thenature of the liability indemnified, the premium payable andcertain other details of the policy not be disclosed.

(15) Amounts in this report have been rounded off to thenearest one thousand dollars in accordance with section 311of the Corporations Law and the Regulations unless otherwiseindicated.Signed in accordance with a resolution of the Directors.

P.J.W. Cottrell, Director

A.R. Berg, Director

Sydney, 23 September 1996


48

BalanceSheets


as at 30 June Consolidated Boral Limited

Note 1996 1995 1996 1995Number $’000 $’000 $’000 $’000

Current Assets

Cash 100,444 58,332 1,172 6,269Receivables 1 792,110 731,432 1,835,056 1,496,417Inventories 2 615,763 623,932 – –Other 4 50,585 48,837 6,634 4,293

Total Current Assets 1,558,902 1,462,533 1,842,862 1,506,979

Non-Current Assets

Receivables 1 41,510 32,183 100 100Investments 5 72,183 74,209 2,829,326 2,834,298Property, plant and equipment 6 3,506,090 3,549,854 8,457 8,111Intangibles 3 384,111 319,431 – –Other 4 496,191 540,340 23,437 32,346

Total Non-Current Assets 4,500,085 4,516,017 2,861,320 2,874,855

Total Assets 6,058,987 5,978,550 4,704,182 4,381,834

Current Liabilities

Creditors and borrowings 7 966,775 903,113 845,839 936,158Provisions 11 346,718 476,653 151,415 170,723

Total Current Liabilities 1,313,493 1,379,766 997,254 1,106,881Non-Current Liabilities

Creditors and borrowings 7 1,375,932 1,266,052 895,892 880,823Provisions 11 463,022 455,262 15,425 340

Total Non-Current Liabilities 1,838,954 1,721,314 911,317 881,163

Total Liabilities 3,152,447 3,101,080 1,908,571 1,988,044

Net Asssets 2,906,540 2,877,470 2,795,611 2,393,790

Shareholders’ Equity

Share capital 12 564,087 550,403 564,087 550,403Reserves 13 1,564,555 1,591,544 1,405,733 1,339,300Retained profits 720,625 696,616 825,791 504,087

Shareholders’ equity attributable to members of Boral Limited 2,849,267 2,838,563 2,795,611 2,393,790Outside equity interest in controlled entities 14 57,273 38,907 – –

Total Shareholders’ Equity 2,906,540 2,877,470 2,795,611 2,393,790

The balance sheets should be read in conjunction with the accompanying notes, set out on pages 51 to 78, which form an integral part of thefinancial statements.


49

Profitand Loss Accounts


for year ended 30 June Consolidated Boral Limited

Note 1996 1995 1996 1995Number $’000 $’000 $’000 $’000

Operating profit before abnormal items and income tax 17 248,633 443,413 565,009 180,999Abnormal items 17 16,612 – (26,786) 22,808

Operating profit before income tax 265,245 443,413 538,223 203,807

Income tax expense/(benefit) attributable to operating profit 70,711 127,874 31,217 (16,968)Abnormal items 17 (18,168) 15,777 (7,843) 5,940

Income tax expense/(benefit) for the year 18 52,543 143,651 23,374 (11,028)

Operating profit after income tax 212,702 299,762 514,849 214,835Outside equity interests in operating profit after income tax 7,013 5,881 – –

Operating profit after income tax attributable to members of Boral Limited 205,689 293,881 514,849 214,835

Retained profits at the end of the previous financial year 696,616 510,857 504,087 493,323Adjustment due to a related entity becoming a controlled entity during the financial year – 868 – –Adjustment due to adoption of accounting standard AASB 1028:Accounting for Employee Entitlements – (8,786) – (172)

Retained profits at the beginning of the financial year 696,616 502,939 504,087 493,151Aggregate of amounts transferred from reserves 13 11,465 132,396 – 27,270

Total available for appropriation 913,770 929,216 1,018,936 735,256

Dividends provided for or paid 19 193,145 231,169 193,145 231,169Aggregate of amounts transferred to reserves 13 – 1,431 – –

193,145 232,600 193,145 231,169

Retained profits at the end of the financial year 720,625 696,616 825,791 504,087

Basic earnings per share:The weighted average number of ordinary shares used in the calculation of basic earnings per share was 1,111,538,445 (1995 1,098,508,534) 18.5c 26.8c – –

Diluted earnings per share are not materially different from basic earnings per share.

The profit and loss accounts should be read in conjunction with the accompanying notes, set out on pages 51 to 78, which form an integralpart of the financial statements.


50

Statementsof Cash F lows


for year ended 30 June Consolidated Boral Limited

Note 1996 1995 1996 1995Number $’000 $’000 $’000 $’000

Cash Flows from Operating Activities

Cash received from customers 4,683,196 4,936,668 18,941 18,181Cash paid to suppliers and employees (4,109,137) (4,198,486) (56,187) (27,975)Dividends received 9,723 9,883 471,062 239,742Interest received 5,928 10,351 150,863 108,997Interest paid (139,118) (115,457) (119,201) (87,554)Income taxes paid (127,907) (133,850) (2,659) (366)

Net Cash provided by Operating Activities 27 322,685 509,109 462,819 251,025

Cash Flows from Investing Activities

Capital expenditure 27 (466,090) (464,629) (1,291) (4,898)Purchase of additional shares in controlled entities – – – (175,056)Purchase of businesses (193,813) (14,596) – –Purchase of controlled entities (51,681) (25,243) (508) –Purchase of outside equity interestin controlled entities (2,196) – – –Purchase of other equity investments (3,948) (13,323) – –Proceeds from disposal of controlled entities 175,029 24,965 5,674 –Proceeds from disposal of non-current assets 93,655 68,836 377 218

Net Cash (used in)/provided by Investing Activities (449,044) (423,990) 4,252 (179,736)

Cash Flows from Financing Activities

Share issue 41,848 16,996 41,848 16,996Dividends paid (188,422) (226,309) (186,061) (225,118)Net movement in loans with controlled entities – – (554,491) 45,255New borrowings 505,606 280,316 216,831 197,477Repayment of loans (192,984) (181,523) (30,815) (95,464)

Net Cash (used in)/provided by Financing Activities 166,048 (110,520) (512,688) (60,854)

Effect of exchange rate changes on cash (1,627) 4,166 – –

Net Change in Cash and Cash Equivalents 38,062 (21,235) (45,617) 10,435

Cash and cash equivalents at beginning of the year 27 11,383 32,618 (14,536) (24,971)Cash and cash equivalents at end of the year 27 49,445 11,383 (60,153) (14,536)

The statements of cash flows should be read in conjunction with the accompanying notes set out on pages 51 to 78, which form an integralpart of the financial statements.


51

Statement of S ignif icantAccounting Pol ic ies


The following is a summary of significant accounting policieswhich have been adopted in the presentation of these financialstatements which is a general purpose financial reportprepared in accordance with Accounting Standards, the UrgentIssues Group Consensus Views, the Corporations Law andSchedule 5 to the Corporations Regulations. The financialstatements have been prepared on a conventional historicalcost accounting basis except for certain non-current assetswhich, as noted in the financial statements, are at valuation.

Principles of Consolidation: The consolidated financialstatements of the economic entity include the financialstatements of Boral Limited and all entities in which it has acontrolling interest. The effects of transactions betweenentities incorporated in the consolidated financial statementsare eliminated. Outside interests in the reserves and profits ofentities that are under the control of Boral Limited are shownas a separate item in the consolidated financial statements.Where control of entities commenced or ceased during theyear, the results are included only from the date controlcommenced or up to the date control ceased.

Non-Current Assets: The carrying amounts of non-currentassets, excluding exploration and development expenditure(refer below), are reviewed annually to ensure that the carryingamounts are not in excess of recoverable amounts. Inassessing recoverable amounts the relevant cash flows havenot been discounted to their present value.

Investments: Interests in listed and unlisted companies whichare not controlled entities are treated as investments and onlydividend income is brought into the consolidated results.

Joint Ventures: The economic entity’s interests inunincorporated joint ventures are brought to account byproportionate consolidation which involves including thefollowing amounts in the appropriate categories in the balancesheet and profit and loss accounts:

– the economic entity’s interest in each of the individual assetsemployed in the joint ventures;

– liabilities incurred by the economic entity in relation to thejoint ventures and the economic entity’s share of anyliabilities for which it is jointly and/or severally liable; and

– the economic entity’s share of the expenses incurred inrelation to the joint ventures.

Inventories and Work in Progress: Inventories and work inprogress are valued at the lower of cost (including factoryoverheads where applicable) and net realisable value. Cost isdetermined predominantly on the first-in-first-out basis ofvaluation.

Exploration and Development Expenditure: Exploration,evaluation and development expenditure in relation to separateareas of interest is accumulated and carried forward in thebalance sheet. The ultimate recoupment of exploration andevaluation expenditure is dependent on successfuldevelopment and/or commercial exploitation of the areas ofinterest. Each area is reviewed annually to determine whetherexpenditure should continue to be carried forward in respect ofthat area of interest. Where an area of interest is abandoned orthere is uncertainty regarding the recoupment of costs or thereis considered to be a permanent diminution in the value of thearea of interest, the costs in respect to that area of interest arewritten off or a provision raised for tenement write down.

On commencement of production in an area of interest,accumulated exploration and development expenditure isamortised over the life of the area of interest based on the rateof depletion of the economically recoverable reserves. During

the course of production in an area of interest, a provision isprogressively created to cover anticipated restorationexpenditure on cessation of production, the unit of productionbasis is used so that each year bears a proportionate share ofthe ultimate restoration costs. The provision for restoration isbased on current costs which are undiscounted and theadequacy of the provision is reassessed every year.

Employee Benefits: Provision is made in the financialstatements for benefits accruing to employees in relation tolong service leave and annual leave. The provision foremployee entitlements to annual leave has been calculated atnominal amounts. The provision for employee entitlements tolong service leave represents an estimation of the presentvalue of the future cash outflows. Related on-costs have alsobeen included in respect of annual leave and long serviceleave. Employee contributory superannuation funds exist toprovide benefits for employees and their dependants onretirement, disability or death.

Depreciation and Amortisation: Depreciation andamortisation are charged on property, plant and equipment atrates which provide for the write down from cost or valuationover the anticipated period of their economic lives.Predominantly the straight line method of calculation has beenused.

Leased Plant and Equipment: Leases of plant and equipmentwhich are classified as finance leases are capitalised andamortised over the period during which benefits areanticipated. Other leases are classified as operating leases andthe lease costs are expensed as incurred.

Capitalisation of Interest: Interest on capital projects, theinstallation of which occurs over an extended period of time, iscapitalised in the financial statements of the entity concerneduntil commencement of operations. The capitalised interest issubsequently amortised over the economic life of the project.

Deferred Expenses: Deferred expenses are amortised over theperiod in which the related benefits are expected to berealised.

Disposal of Revalued Assets: The gain or loss on disposal ofrevalued assets is calculated as the difference between thecarrying amount of the asset at the time of disposal and theproceeds of disposal, and is brought to account as profit or lossin the period in which the disposal occurs. Any realisedrevaluation increment relating to the disposed asset standing inthe asset revaluation reserve at the time of disposal istransferred to retained earnings.

Income Tax: The liability method of tax effect accounting hasbeen adopted whereby income tax expense for the period hasbeen matched with accounting profit after allowing forpermanent differences relating to deductibility or assessabilityfor income tax purposes of certain items. No liability has beenprovided in the financial statements in respect of possiblefuture capital gains tax in Australia that may arise on thedisposal of assets acquired after 19 September 1985. Suchliability is provided at the time of disposal of assets.

Derivatives: The economic entity is exposed to changes ininterest rates, foreign exchange rates and commodity pricesfrom its activities. It is the economic entity’s policy to only usederivative financial instruments to hedge these risks. Theeconomic entity’s policy is to not enter, hold or issue derivativefinancial instruments for trading purposes.

Derivative financial instruments that are designated as hedgesand are effective as hedges of underlying exposures areaccounted for on the same basis as the underlying exposure.


52

Statement of S ignif icantAccounting Pol ic ies


Gains/losses relating to hedges of specific purchase/salecommitments are deferred and recognised as adjustments tothe hedged transactions.

Foreign Currencies: Transactions in foreign currencies arerecorded in the financial statements at rates of exchangeapplicable at the dates of the transactions. Amounts receivableand payable in foreign currencies at balance date are convertedto Australian dollars at the exchange rates ruling at balancedate. Where forward currency contracts have been arrangedthe contract settlement rate has been used. Exchangedifferences arising from amounts receivable and payable aretreated as operating revenue or expense in the period in whichthey arise. Exchange differences in respect of overseascontrolled entities, resulting from the translation of assets andliabilities at exchange rates ruling at balance date and revenueand expense items at average rates for the period, togetherwith exchange differences in respect of long term foreigncurrency borrowings of Boral Limited which have beendesignated as being hedged against the net assets of overseascontrolled entities have been taken to the foreign currencytranslation reserve on consolidation, net of income tax whereapplicable.

Long Term Contracts: Construction contracts in progress arevalued at cost plus profit determined by the percentage ofcompletion method where the profit can be reliably determinedor otherwise when a contract is completed. Allowance is madein the financial statements for actual or anticipated losseswhere appropriate at balance date. Payments received inadvance of performance of contracts and services are notbrought to account as income.

Goodwill: Goodwill, being the excess of the cost of acquisitionincurred over the fair value of the identifiable net assetsacquired, is amortised to the profit and loss account using thestraight line method of calculation over the period of timeduring which the benefits are expected to arise, but notexceeding twenty years. Where the balance exceeds the valueof expected future benefits, the difference is charged to theprofit and loss account.

Comparative Amounts: Where necessary, the figures for theprevious period have been reclassified to facilitate comparison.

Rounding of Amounts to the nearest $’000: Boral Limited,being a company of the kind referred to in Regulation 3.6.05(6),has in accordance with Section 311 of the CorporationsRegulations adopted the rounding off of amounts to thenearest thousand dollars in the consolidated financialstatements.


53

Consolidated Boral Limited

1996 1995 1996 1995$’000 $’000 $’000 $’000

1 RECEIVABLES

Current

Trade debtors 650,988 660,172 – –Associated entities 19,158 22,951 28 25

670,146 683,123 28 25Less: Provision for doubtful debts 9,866 9,484 – –

660,280 673,639 28 25Less: Provision for unearned income 408 10,169 – –

659,872 663,470 28 25

Wholly owned controlled entities – – 1,826,041 1,495,402

Other debtors 122,022 59,494 8,987 990Less: Provision for doubtful debts 545 413 – –

121,477 59,081 8,987 990

Bills of exchange and promissory notes 10,761 8,881 – –

792,110 731,432 1,835,056 1,496,417

Non-Current

Associated entities 20,436 15,922 – –Other debtors 21,074 16,261 100 100

41,510 32,183 100 100

Amounts Receivable:

not later than one year 792,110 731,432 1,835,056 1,496,417later than one year but not later than two years 7,686 11,798 – –later than two years but not later than five years 18,512 7,423 – –later than five years 15,312 12,962 100 100

833,620 763,615 1,835,156 1,496,517

2 INVENTORIES

Current

Raw materials and stores – at cost 178,854 196,278 – –Less: Provision for diminution 1,469 2,481 – –

177,385 193,797 – –

Finished goods – at cost 359,265 336,595 – –Less: Provision for diminution 1,876 1,336 – –

357,389 335,259 – –

Finished goods – at net realisable value 15,934 16,798 – –

Work in progress 59,120 66,204 – –

Construction contracts in progress:Gross amount 127,373 201,414 – –Less: Progress claims 121,438 187,395 – –

5,935 14,019 – –Less: Provision for losses – 2,145 – –

5,935 11,874 – –

615,763 623,932 – –

Construction contracts in progress:Cash received and receivable as progress billings (including retention allowances) and advances 130,102 200,106 – –

Notes to theFinancial Statements



54

Notes tothe F inancial StatementsBoral Limited and Controlled Entities


1996 1995 1996 1995$’000 $’000 $’000 $’000

3 INTANGIBLES

Goodwill 501,518 419,504 – –Less: Accumulated amortisation 118,104 101,251 – –

383,414 318,253 – –

Establishment expenses 1,864 1,734 – –Less: Accumulated amortisation 1,302 1,172 – –

562 562 – –

Patents,trade marks and licences 320 2,062 – –Less: Accumulated amortisation 185 1,446 – –

135 616 – –

384,111 319,431 – –

4 OTHER ASSETS

Current

Prepayments 42,605 42,268 6,589 3,794Trade deposits 1,482 1,371 – –Deferred expenses 6,498 5,198 45 499

50,585 48,837 6,634 4,293

Non-Current

Exploration and development expenditure:Book value of areas of interest in the exploration and evaluation phase 32,436 35,692 – –Book value of areas of interest in the development phase 200 200 – –

32,636 35,892 – –

Book values of areas of interest in the production phase 395,316 349,976 – –Less: Amounts amortised 127,430 98,149 – –

267,886 251,827 – –

300,522 287,719 – –

Deferred expenses 12,938 12,078 180 199

Future income tax benefit:Future income tax benefit comprises the estimated benefit at current income tax rates in respect of the following items:Provisions and accrued employee entitlements not currently deductible 115,939 130,108 22,945 13,989Tax losses carried forward # 47,244 85,399 – –Exploration expenditure carried forward 14,469 1,541 – –Unrealised foreign exchange losses 248 18,444 – 17,855Other items 4,831 5,051 312 303

182,731 240,543 23,257 32,147

496,191 540,340 23,437 32,346

Future income tax benefit not recognised:

The potential future income tax benefit in controlledentities has not been taken into account in respect of:(i) tax losses where recovery is not virtually certain 23,619 29,856 – –

(ii) unrecouped exploration expenditure where sufficientassessable income of a kind that is appropriate to the expenditure is not currently derived by the controlled entitiesconcerned or recovery is not virtually certain 12,430 23,413 – –

# The potential future income tax benefit will only be obtained if:(i) the relevant entities derive future assessable income of a nature and an amount sufficient to enable the benefit to be realised;(ii) the relevant economic entities continue to comply with the conditions for deductibility imposed by the law; and(iii) no changes in tax legislation adversely affect the relevant entities in realising the benefit.


55


1996 1995 1996 1995$’000 $’000 $’000 $’000

5 INVESTMENTS

Non-Current

Shares in Controlled Entities – at cost – – 2,829,326 2,834,298Unlisted shares:Associated entities – at cost 43,968 44,763 – –Less: Provision for diminution 1,848 1,680 – –

42,120 43,083 – –

Other Corporations – at cost 461 458 – –Less: Provision for diminution 4 – – –

457 458 – –

42,577 43,541 – –

Listed shares – at cost # 18,400 22,971 – –Less: Provision for diminution – 3,500 – –

18,400 19,471 – –

Listed shares – at directors valuation 31.12.92 # 11,036 11,036 – –

29,436 30,507 – –

Investments in listed shares which are not controlled entities were valued as at 31 December 1992 based on market value at that time.Government and semi-government stocks and bonds – at cost ## 170 161 – –

72,183 74,209 2,829,326 2,834,298

# Market value of shares in listed corporations 42,655 39,050 – –

## Market value of government and semi-government stocks and bonds 281 285 – –

6 PROPERTY, PLANT AND EQUIPMENT

Land and buildings:At cost 21,345 117,138 137 137Less: Provision for depreciation,depletion and amortisation 3,900 4,442 40 34

17,445 112,696 97 103

At independent valuations 30.06.96 1,032,382 – 1,557 –30.06.93 7,450 1,059,184 – 1,26630.06.90 5,191 6,085 – –

1,045,023 1,065,269 1,557 1,266Less: Provision for depreciation,depletion and amortisation 6,313 23,490 – 3

1,038,710 1,041,779 1,557 1,263

At directors valuation 30.06.96 4,869 – – –

1,061,024 1,154,475 1,654 1,366

Timber licences,plantation costs and mineral reserves:At cost 90,194 80,754 – –Less: Provision for amortisation 10,184 8,346 – –

80,010 72,408 – –

Plant and equipment:At cost 3,750,393 3,555,150 8,144 6,233Less: Provision for depreciation 1,459,075 1,364,936 2,491 986

2,291,318 2,190,214 5,653 5,247

Leased plant and equipment capitalised 114,777 180,704 1,556 2,332Less: Accumulated amortisation 41,039 47,947 406 834

73,738 132,757 1,150 1,498

3,506,090 3,549,854 8,457 8,111

Land and buildings (including quarry properties) are subject to triennial revaluations. Leasehold land and buildings have not beenrevalued where the unexpired period of the lease is less than ten years, such land and buildings are carried forward at cost or at priorindependent valuations and amortised over the remaining period of the lease. The valuation of land and buildings at independentvaluations is on the basis of open market for continued existing use of the properties concerned at the time of valuation or openmarket value with vacant possession where appropriate. The majority of sites were valued on the aforementioned basis, however, theDirectors consider that the value of certain freehold land which is contaminated as a result of prior activities conducted should bevalued at market value less the estimated cost of remediation and is shown at Directors’ valuation.


56


6 PROPERTY, PLANT AND EQUIPMENT CONTINUED

The names and qualifications of the valuers used in determining the independent valuations during the financial yearwere as follows:Australia: – RG Auckett, AVLE (Val), BBus United Kingdom: – P Snow, BSc, FRICS

– BR Nicholson, FVLE (Val), FVLE (Econ) – A Ward, ARICS– JB Corbin, FVLE (Val), FVLE (Econ) Germany: – J Turner, BA (Hons), BSc, ARICS

New Zealand: – EB Smithies, FNZIV – JG Haket, Registered Real Estate Valuer– MR Cummings, DipUrbVal ANZIV Poland: – P Snow, BSc, FRICS

Papua New Guinea: – K Potuan, AAIVLE, PNGIVLA Dip in Val – J Turner, BA (Hons), BSc, ARICSFiji: – K Dakuidreketi, BAppSc (Prop Mgmt) – JG Haket, Registered Real Estate ValuerAmerican Samoa: – HG Thew, ARICS, Chartered Quantity Surveyor Netherlands: – JG Haket, Registered Real Estate ValuerSolomon Islands: – JCD Moore, BA (Hons) Malaysia: – JKO Wong, MIS(M), BA (Hons)North America: – R Effinger, MAI, ASA Indonesia: – Ir H Ratmoko, Registered Valuer

– N Lioga, Registered Valuer


1996 1995 1996 1995$’000 $’000 $’000 $’000

7 CREDITORS AND BORROWINGS

Current

Secured:Bank loans – 3,319 – –Bank overdrafts 261 98 – –Other loans 104 311 – –

365 3,728 – –

Unsecured:Bank loans 56,988 34,801 27,000 –Bank overdrafts 50,738 46,851 61,325 20,805Trade creditors 518,529 540,036 19,617 14,158Wholly owned controlled entities – – 427,074 650,440Partly owned controlled entities – – 64,333 64,819Associated entities 9,561 8,684 1,600 50Lease liabilities 28,603 58,888 500 774Other loans 301,991 210,125 244,390 185,112

966,410 899,385 845,839 936,158

966,775 903,113 845,839 936,158

Non-Current

Secured:Bank loans – 30,270 – –Other loans 1,692 1,936 – –

1,692 32,206 – –

Unsecured:Bank loans 806,422 794,931 582,688 603,522Associated entities 837 955 – –Lease liabilities 39,327 46,807 638 699Other loans 527,654 391,153 312,566 276,602

1,374,240 1,233,846 895,892 880,823

1,375,932 1,266,052 895,892 880,823

Debts Payable:

not later than one year 966,775 903,113 845,839 936,158later than one year but not later than two years 165,900 269,979 101,110 188,101later than two years but not later than five years 998,570 757,774 594,782 478,610later than five years 211,462 238,299 200,000 214,112

2,342,707 2,169,165 1,741,731 1,816,981


57


1996 1995 1996 1995$’000 $’000 $’000 $’000

7 CREDITORS AND BORROWINGS CONTINUED

Secured Borrowings:

The bank loans are secured by charges over certain assets of the economic entity.The bank overdrafts are secured by registered mortgages and floating charges over certain assets of the economic entity.Other loans are secured by charges over certain assets of the economic entity and registered mortgages.Interest Rates applicable to:

Bank loans 3.2% to 18.0% per annum at a weighted average of 7.6% per annumLease liabilities 3.1% to 21.0% per annum at a weighted average of 9.4% per annumOther loans 4.5% to 14.0% per annum at a weighted average of 7.6% per annumThe applicable weighted average interest rate for interest bearing debt as at 30 June 1996 was approximately 7.6%.

8 DERIVATIVE F INANCIAL INSTRUMENTS

Interest Rate Risk

The economic entity enters into interest rate swaps, to control funding costs on the group’s external debt. Interest rate swaps allowthe economic entity to raise long term borrowings at floating rates and swap them into fixed rates. Maturities of swap contracts areprincipally between two and five years.Foreign Exchange Risk

The economic entity enters into forward exchange and options contracts to hedge certain firm purchase and sale commitmentsdenominated in foreign currencies (principally US dollars and Deutschmarks). The term of these derivatives and commitments is rarelymore than one year.Commodity Price Risk

The economic entity enters into forward sales and option contracts to hedge a portion of commodity sales prices on firm andanticipated sales commitments. The terms of these contracts are rarely more than one year. Deferred gains or losses on thosecontracts are included as part of the sale transaction when it is recognised.Credit Risk

Credit risk represents the accounting loss that would be recognised if counterparties failed to perform as contracted. Swap and optionagreements are subject to credit worthiness of counterparties, which are principally large banks.

9 FOREIGN CURRENCY MONETARY ITEMS

The following are Australian dollar equivalents at balance date of foreign currency monetary items, in aggregate for each foreign currency. These amounts are deemed to be effectively hedged against the net assets of overseas controlled entities on consolidation.Payable beyond twelve months in respect of:U.S. Dollars – – 272,566 276,602

U.K. Pounds – – 64,744 76,370

N.Z. Dollars – – 22,946 22,597

Deutschmarks – – 159,140 218,056

10 LEASE LIABILITIES

Finance Leases:

Lease commitments in respect of finance leases of plant and equipment are payable as follows:not later than one year 33,043 66,194 595 881later than one year but not later than two years 24,430 23,202 455 460later than two years but not later than five years 19,807 29,919 251 316later than five years 131 165 – –

77,411 119,480 1,301 1,657Deduct: Future finance charges and executory costs 9,481 13,785 163 184

Total Lease Liability 67,930 105,695 1,138 1,473


58



1996 1995 1996 1995$’000 $’000 $’000 $’000

10 LEASE LIABILITIES CONTINUED

Operating Leases:

Lease commitments in respect of operating leases are payable as follows:not later than one year 36,992 37,806 1,776 1,644later than one year but not later than two years 28,160 31,844 2,034 2,028later than two years but not later than five years 42,302 49,840 6,858 5,933later than five years 29,784 34,971 8,442 7,491

137,238 154,461 19,110 17,096

11 PROVISIONS

Current

Rationalisation and restructuring* 97,963 49,709 55,666 28,881Specific commitments and contingencies** 56,496 96,665 6,810 18,826Taxation 2,160 104,487 1,316 4,529Dividend 84,613 115,584 84,613 115,584Employee entitlements 105,486 110,208 3,010 2,903

346,718 476,653 151,415 170,723

Non-Current

Provision for deferred income tax:Provision for deferred income tax comprises the estimated expense at the current income tax rates in respect of the following items:Difference in depreciation and amortisation of fixed assets for accounting and income tax purposes 317,763 341,990 – –Expenditure currently deductible but deferred and amortised for accounting purposes 56,101 55,178 – 95Unrealised foreign exchange gains 15,234 136 15,160 –Other items 15,332 3,831 – 27

404,430 401,135 15,160 122

Specific commitments and contingencies** 44,383 39,623 – –Employee entitlements 14,209 14,504 265 218

58,592 54,127 265 218

463,022 455,262 15,425 340

* The economic entity’s original provision for restructuring of $170,822,000 has been reduced by $139,232,000 being actual charges againstthe provision since its creation. A further provision of $93,317,000 has been raised during the current period for additional restructuringprograms. As at 30 June 1996 $26,944,000 has been utilised by actual charges against the provision raised in the current year.The Boral Limited provision of $55,666,000 (1995 $28,881,000) represents amounts to be utilised by other Australian entities which areincluded in the economic entity.** Provision for specific commitments and contingencies consists of amounts set aside for commitments for deferred maintenance,restoration, royalties, claims and other contingencies.

12 SHARE CAPITAL

Authorised Capital

2,000,000,000 ordinary shares of 50 cents each 1,000,000 1,000,000 1,000,000 1,000,000

Issued Capital

1,128,174,992 (June 1995: 1,100,804,439) shares of 50 cents, each fully paid 564,087 550,403 564,087 550,403

Boral Limited has granted the following options to senior executives to subscribe for fully paid ordinary shares in the capital of BoralLimited. No options have been exercised.

Issued date Number issued Exercise price Expiry date31.01.94 2,500,000 $3.14 31 January 199918.01.96 2,480,000* $3.60 18 January 200127.02.96 300,000* $3.60 27 February 2001

* issued pursuant to the Boral Senior Executives Option Plan


59


1996 1995 1996 1995$’000 $’000 $’000 $’000

13 RESERVES

Share premium 1,402,723 1,336,590 1,402,723 1,336,590Capital redemption 1,000 1,000 1,000 1,000Asset revaluation 170,331 234,296 2,010 1,710Foreign currency translation (9,499) 19,658 – –

1,564,555 1,591,544 1,405,733 1,339,300

Movements in Reserves

Share Premium Reserve:

Issue of 11,762,405 shares at a premium in accordance with the dividend reinvestment plan 32,089 – 32,089 –Issue of 1,343,500 (1995:1,364,440) shares at a premium in accordance with the employee share plan 3,395 3,461 3,395 3,461Issue of 2,639,648 shares at a premium in accordance with the bonus share election plan (1,320) – (1,320) –Issue of 4,106,794 shares at a premium in accordance with the top up share issue (Net of expenses of $266,240) – 10,800 – 10,800Issue of 11,625,000 shares at a premium pursuant to the acquisition of Isenhour Brick and Tile Company Inc. 31,969 – 31,969 –

66,133 14,261 66,133 14,261

Capital Reserve:

Transfer to retained earnings – (108,062) – (20,270)Transfer from retained earnings – 740 – –

– (107,322) – (20,270)

Asset Revaluation Reserve:

Adjustment due to a related entity becoming a controlled entity during the financial year – 18 – –Transfer to retained earnings relating to sale of property (11,465) (14,573) – –Surplus/(deficit) on revaluation of land and buildings (52,500) – 300 –

(63,965) (14,555) 300 –

Foreign Currency Translation Reserve:

Adjustment due to related entity becoming a controlled entity during the financial year – (509) – –Net gain/(loss) on translation of assets and liabilities of overseas controlled entities (83,810) 45,167 – –Net gain/(loss) on translation of long term borrowings net of income tax benefit/(expense) where applicable $(30,742,000); (1995 $16,400,000) 54,653 (33,298) – –

(29,157) 11,360 – –

General Reserve:

Transfer to retained earnings – (9,761) – (7,000)Transfer from retained earnings – 691 – –

– (9,070) – (7,000)

(26,989) (105,326) 66,433 (13,009)

Aggregate of Amounts Transferred to Retained Earnings from:

Capital reserve – 108,062 – 20,270Asset revaluation reserve 11,465 14,573 – –General reserve – 9,761 – 7,000

11,465 132,396 – 27,270

Aggregate of Amounts Transferred from Retained Earnings to:

Capital reserve – 740 – –General reserve – 691 – –

– 1,431 – –


60



1996 1995 1996 1995$’000 $’000 $’000 $’000

14 OUTSIDE EQUITY INTEREST IN CONTROLLED ENTITIES

Share capital 29,781 16,342 – –Share premium reserve 561 564 – –Asset revaluation reserve 3,874 1,047 – –Retained profits 23,057 20,954 – –

57,273 38,907 – –

15 CONTINGENT LIABILITIES

Unsecured:Bank guarantees 5,794 8,123 – –Loan guarantees for Boral Industries Inc – – 235,801 112,899Other items 2,839 4,551 – –

8,633 12,674 235,801 112,899

Boral Limited has given to its bankers letters of responsibility in respect of accommodation provided from time to time by the banksto Boral Limited’s wholly or partly-owned controlled entities.Boral Limited has guaranteed the performance of Boral Industries Inc. to meet its obligations under its U.S. Commercial Paper andMedium Term Note programmes.Warranties and indemnities have been given by entities in the economic entity in relation to environmental liabilities for certainproperties as part of the terms and conditions of divestments.A number of sites within the Boral Group have been identified as contaminated as a result of prior activities conducted and review ofthe clean-up requirements of these sites is ongoing. For sites where the requirements can be assessed or estimated, land has beenvalued by the Directors at market value less the estimated cost of remediation (refer note 6) or clean-up costs have been expensedor provided for. For some sites, the requirements cannot at this stage be accurately assessed.Certain controlled entities within the economic entity are subject to various lawsuits and claims. It is the opinion of management thatany liabilities arising from such litigation would not have a material adverse effect on the consolidated financial statements.Under the terms of ASC Class Order 95/1530 dated 31 October 1995 certain wholly owned controlled entities have been grantedrelief from the requirement to prepare audited financial statements. Boral Limited has entered into an approved deed of indemnity forthe cross-guarantee of liabilities with those controlled entities (refer note 23). At balance date Boral Limited and the controlled entitieswhich are a party to the Deed have aggregate assets of $5,098,695,000 (1995: $5,026,543,000); aggregate liabilities of$2,257,547,000 (1995: $2,252,713,000); and their contribution to the consolidated operating profit after income tax for the financialperiod was $174,195,000 (1995: $248,762,000).

16 COMMITMENTS

Capital Expenditure Commitments:

not later than one year 88,858 113,539 – –later than one year but not later than two years 18,177 23,234 – –later than two years but not later than five years 27,719 36,726 – –later than five years – 2,400 – –

134,754 175,899 – –

The capital expenditure commitments are in regards to the purchase of plant and equipment and exploration and developmentexpenditure.

Superannuation Commitments:

At 30 June 1996, there were in existence a number of superannuation plans established by the economic entity, or in which theeconomic entity participates, for the benefit of employees, in Australia and overseas.The major plans are Boral Superannuation Plan, Boral Employees Provident Fund, Blue Circle Southern Employees SuperannuationFund and Boral Industries Inc. Pension Plan.The principal types of benefit provided for under the plans are lump sums payable on retirement, termination, death or total disability.Contributions to the plans by both employees and entities in the economic entity are based on percentages of the salaries or wagesof employees. In the case of the Boral Employees Provident Fund and the Blue Circle Southern Employees Superannuation Fund,entities in the economic entity being associated employers are obliged to contribute to the plan and such obligation is legallyenforceable. In the case of Boral Superannuation Plan and Boral Industries Inc. Pension Plan, entities in the economic entitycontribute to the plans in accordance with the governing Trust Deeds subject to certain rights to vary, suspend or terminate suchcontributions and thus are not legally obliged to contribute to those plans.


61

16 COMMITMENTS CONTINUED

The date as at which the last actuarial assessments, if any, of the abovementioned major plans were made and the names andqualifications of the actuaries who made those assessments are:Plan Date Name and Qualifications

Boral Superannuation Plan 1 July 1995 MA Stevenson, FIA FIAABoral Industries Inc. Pension Plan 1 January 1996 J Looney, FSA EA MAAAThe accrued benefits, fund assets at net market value and vested benefits of the funds are as follows,

Boral Boral Industries IncSuperannuation Pension Consolidated

Plan Plan Total$’000 $’000 $’000

Fund assets at net market value 223,178 23,564 246,742Accrued benefits 220,553 30,369 250,922

Excess/(Deficit) of fund assets over accrued benefits 2,625 (6,805) (4,180)

Vested benefits 218,756 27,335 246,091Employer contributions to the fund during the year 5,520 3,032 8,552Employer contributions payable to the fund at 30 June 215 4,317 4,532Accrued benefits, fund assets and vested benefits have been determined based on the amount calculated by the actuary adjusted tothe date of the most recent trustees review, being 30 June 1995 for Boral Superannuation Plan and 31 March 1996 (projectedforward to 30 June 1996) for Boral Industries Inc. Pension Plan.In respect of the Boral Industries Inc. Pension Plan, amounts payable to the fund are sufficient to cover any shortfall in the vestedbenefits at balance date.Boral Employees Provident Fund and the Blue Circle Southern Employees Superannuation Fund are accumulation type plans (asopposed to defined benefit type plans) and therefore actuarial assessments are not applicable to them.Based on the abovementioned actuarial assessments and the market values of assets after meeting liabilities, funds are available tosatisfy all benefits that would have been vested under the Boral Superannuation Plan in the event of:(i) termination of the plan,(ii) voluntary termination of the employment of each employee on the initiative of that employee, or(iii) compulsory termination of the employment of each employee by an entity in the economic entity.The Boral Industries Inc Pension Plan is not required by law to be fully funded at all times, however the funding regulations aredesigned to catch up on any shortfall over time through increased contributions.


1996 1995 1996 1995$’000 $’000 $’000 $’000

17 OPERATING PROFIT

Sales revenue 4,695,272 4,941,164 – –Other revenue 305,689 103,991 728,795 369,302

5,000,961 5,045,155 728,795 369,302Operating costs 4,037,447 3,948,143 288 49,900Administrative expenses 577,429 541,295 45,163 48,434Abnormal items (16,612) – 26,786 (22,808)

402,697 555,717 656,558 293,776Interest expense 137,452 112,304 118,335 89,969

Operating Profit before Tax and Outside Equity Interest 265,245 443,413 538,223 203,807

Other Revenue:

Interest received or receivable from:Wholly owned controlled entities – – 150,184 106,930Partly owned controlled entities – – 21 –Associated entities 1 13 1 2Other sources 7,699 7,502 721 1,148

7,700 7,515 150,927 108,080

Dividends received or receivable from:Controlled entities – – 471,062 239,742Associated entities 11,423 10,345 – –Other sources 1,742 1,322 – –

13,165 11,667 471,062 239,742

Gross proceeds on sale of non-current assets 98,078 53,028 627 218


62



1996 1995 1996 1995$’000 $’000 $’000 $’000

17 OPERATING PROFIT CONTINUED

Net foreign exchange gain – 1,772 85,162 –

The net foreign exchange gain in respect of Boral Limited principally relates to long term borrowings which on consolidation is taken to the Foreign Currency Translation Reserve.Government subsidies received and receivable 719 5,044 – –

Proceeds from sale of controlled entities 186,027 24,965 – –

Other income – – 21,017 21,262

Total Other Revenue 305,689 103,991 728,795 369,302

Profit from disposal of non-current assets 24,731 12,813 89 13

Abnormal items (before tax):

Profit on sale of businesses 105,439 – – –Provision for restructuring (93,317) – (26,786) 22,808Write back of provision for natural gas conversion costs not required 4,490 – – –

16,612 – (26,786) 22,808

The provision for restructuring relates to costs associated with the commitment to implement plans and initiatives throughout Boral’sbusinesses which will deliver operating cost savings and other benefits.

Tax expense/(benefit) applicable to abnormal items:

Profit on sale of businesses – – – –Provision for restructuring (19,784) – (7,843) 7,527Write back of provision for natural gas conversion costs not required 1,616 – – –Restatement of deferred tax balances due to change in income tax rate – 15,777 – (1,587)

(18,168) 15,777 (7,843) 5,940

Interest Paid or Payable to:

Wholly owned controlled entities – – 25,916 12,049Partly owned controlled entities – – 4,585 3,768Associated entities 275 417 275 417Other sources 128,722 103,198 87,422 73,599

128,997 103,615 118,198 89,833

Finance charges on capitalised leases 8,455 8,689 137 136

Total Interest Expense 137,452 112,304 118,335 89,969

In addition, interest of $39,000 (1995: $2,616,000) was paid to others and capitalised in the accounts of controlled entities.Depreciation, Depletion and Amortisation:

Property, plant and equipment 226,543 209,444 1,157 1,418Exploration and development expenditure 29,277 25,499 – –Rights – timber, mining, quarrying and other 2,916 2,093 – –Goodwill 24,485 20,829 – –Other Intangibles 393 551 – –Leased assets capitalised 16,499 17,295 288 349

300,113 275,711 1,445 1,767

Deferred expenditure written off 8,774 7,277 697 706

Transfers to/(from) Other Provisions:

Specific commitments and contingencies (10,725) 20,970 (12,016) 15,642Employee entitlements 17,555 14,860 (48) 966Doubtful debts 61 1,765 – –Diminution in value of inventories 1,981 1,185 – –Unearned income (31) 36 – –Losses on construction contracts in progress (595) 82 – –

8,246 38,898 (12,064) 16,608

Net foreign exchange loss 1,209 – – 49,666

The net foreign exchange loss in respect of Boral Limited principally relates to long term borrowings which on consolidation is taken to the Foreign Currency Translation Reserve.


63


1996 1995 1996 1995$’000 $’000 $’000 $’000


Auditors’ Remuneration

Amounts received or due and receivable for audit services by:Auditors of Boral Limited 2,218 2,349 82 84Other auditors 89 111 – –Amounts received or due and receivable for other services by:Auditors of Boral Limited* 4,594 3,896 742 1,205Other auditors** 3,774 930 3,726 761

10,675 7,286 4,550 2,050

* includes $3,266,000 (1995: $2,654,000) in respect of taxation services** includes consultancy and share registry fees paid to Coopers & Lybrand,

who also provide audit services for which they received fees amountingto $45,000 (1995: $41,000)

Other Services – Capitalised:Auditors of Boral Limited 803 363 – –

The auditors received no other benefitsBad Debts Written Off:

Trade debtors 13,423 11,341 – –Other debtors 3,229 406 6,962 –

16,652 11,747 6,962 –

All bad debts were written off to the profit and loss accountsExploration and development expenditure written off 13,885 10,636 – –

Government royalties paid and payable 63,274 55,037 – –

Research and development costs 10,990 13,477 – –

Operating leases – rental charges 38,225 37,657 1,839 623

Loss on disposal of non-current assets 8,943 11,762 – 29

Remuneration of Executives:

The number of executive officers of the economic entity whose total income received, or due and receivable, directly or indirectly,from the entities in the economic entity or any related bodies corporate, in connection with the management of the affairs of theentities in the economic entity, whether as executive officers or otherwise, excluding amounts included under retirement payments,fell within each band of income after $100,000 is set out below.The disclosure is of those executives responsible for the operational management or strategic direction of Boral Limited and relatedbodies corporate including executives who report directly to general managers of divisions and executive directors. 1995 figures havebeen reclassified to facilitate comparison.


1996 1995 1996 1995

$100,001 - $110,000 12 16 2 2$110,001 - $120,000 15 19 1 1$120,001 - $130,000 14 14 1 2$130,001 - $140,000 14 8 1 –$140,001 - $150,000 13 8 1 –$150,001 - $160,000 10 4 2 –$160,001 - $170,000 8 5 – –$170,001 - $180,000 1 2 – 2$180,001 - $190,000 6 2 1* 1$190,001 - $200,000 4 3 – –$200,001 - $210,000 5 – 2 –$210,001 - $220,000 5 4 1 1$220,001 - $230,000 1 – – –$230,001 - $240,000 – 1 – –$240,001 - $250,000 1 1 – 1$250,001 - $260,000 3 2 2 –$260,001 - $270,000 1* 1 – –$270,001 - $280,000 1* 1 – 1$280,001 - $290,000 3 1 1 1

* These and certain other disclosures of remuneration, totalling 21 disclosures, include payments on termination (redundancypayments, accrued annual and long service leave entitlements, the value of any benefits under the Boral Executive Share Plan and/orbenefits under a long term incentive plan of SAGASCO Holdings Limited).

** This disclosure of remuneration includes payments in the 1996 year being a cash incentive for the 1995 year referable to theeconomic entity‘s performance in that year and entitlements in lieu of superannuation for the 1995 year.


1996 1995 1996 1995

$300,001 - $310,000 – 1 – –$310,001 - $320,000 1* – – –$340,001 - $350,000 1* 1 – –$350,001 - $360,000 1 – 1 –$360,001 - $370,000 1* 2 1* 2$370,001 - $380,000 1* – – –$380,001 - $390,000 – 2 – –$390,001 - $400,000 1 – – –$410,001 - $420,000 1 – – –$450,001 - $460,000 1 – – –$470,001 - $480,000 1* – – –$510,001 - $520,000 1* – – –$680,001 - $690,000 – 1* – –$780,001 - $790,000 – 1 – 1$950,001 - $960,000 1* – – –

$1,060,001 - $1,070,000 1* – – –$1,070,001 - $1,080,000 1* – – –$1,290,001 - $1,300,000 1** – 1** –

131 100 18 15


64



1996 1995 1996 1995$’000 $’000 $’000 $’000


Total income received, or due and receivable, by those executive officers from the entities in the economic entity or any related bodies corporate, excluding amounts included under retirement payments, whose income was at least $100,000. 26,610 16,895 4,659 3,664

Average remuneration of those executive officers $203,000 (1995: $169,000).The significant increases in remuneration in 1996 and the number of executives in the disclosure are mostly due to employeecontributions made to the defined benefit superannuation fund and the payments on termination previously referred to in thedisclosure.Executives who work wholly or mainly outside Australia are excluded from the above disclosure.

Remuneration of Directors:

The number of Directors of Boral Limited, including any executive Director, whose total income received, or due and receivable,directly or indirectly, from Boral Limited or from any related corporation, excluding amounts included under retirement payments, fellwithin each band of income of $10,000 is:

1996 1995

$20,000 - $29,999 1*** –$30,000 - $39,999 – 1****$40,000 - $49,999 – 1***$50,000 - $59,999 – 1****$60,000 - $69,999 5 4

$100,000 - $109,999 – 1$140,000 - $149,999 1 –$780,000 - $789,999 – 1

$1,290,000 - $1,299,999 1** –

8 9

** See ** under Remuneration of Executives on page 63*** Director appointed during the year**** Director who retired during the year

Total income received, or due and receivable (including Directors’ fees paid by Boral Limited of $470,000 (1995: $495,000)) by all Directors of each entity in the economic entity, including executive Directors except those who are Directors of wholly owned controlled entities only, directly or indirectly, from the entities of which they are Directors or from any related corporation, excluding amounts included under retirement payments. 8,520 6,271 1,777 1,280

Retirement Payments:

Retiring allowances paid in connection with the retirement of persons from the office of Director or principal executive officer of Boral Limited or its controlled entities. 56 805 – 769

The amounts under the heading “Retirement Payments” are disclosed in the aggregate only as the Directors believe, having regardto the number of persons to whom particulars of the payments would relate and the nature of those particulars, that the provision offull particulars would be unreasonable.Disclosure of amounts under Remuneration of Executives, Remuneration of Directors and Retirement Payments is in accordance withASC Class Order 96/1171 dated 25 July 1996.


65


1996 1995 1996 1995$’000 $’000 $’000 $’000

18 INCOME TAX EXPENSE

Income tax payable on operating profit 30,247 109,584 1,785 4,425Restatement of deferred tax balances due to change in tax rates – 15,777 – (1,587)Income tax, the payment/(benefit) of which is deferred 33,547 35,559 23,926 (10,602)Over provision for tax in previous years (11,251) (17,269) (2,337) (3,264)

Income tax expense/(benefit) for the year 52,543 143,651 23,374 (11,028)Income tax expense on pretax accounting profit at standard rates 86,156 149,256 193,760 67,256

Permanent differences 33,613 5,605 170,386 78,284

Tax effect of major items causing permanent differences:Restatement of deferred tax balances due to change in tax rates – (15,777) – 1,587Rebateable dividend income 4,123 2,087 169,582 79,115Past tax losses and exploration expenditure recouped 29,658 8,623 – –Current tax losses not tax effected (1,042) (924) – –Depreciation and amortisation (17,108) (14,539) (3) (3)Capital profits 32,673 1,854 88 –(Under)/Over provision for tax in previous years (2,435) 10,120 (499) 396Other items (12,256) 14,161 1,218 (2,811)

33,613 5,605 170,386 78,284

Income tax, the payment of which has been deferred, representing the difference in treatment for accounting and income tax purposes in respect of:Provisions and accrued employee entitlements not currently deductible (9,298) 6,083 (8,956) 4,863Tax losses recovered 8,027 3,256 – –Tax losses carried forward (3,246) (33,159) – –Difference in depreciation and amortisation of fixed assets for accounting and income tax purposes 29,001 35,663 – (301)Expenditure currently deductible but deferred and amortised for accounting purposes 3,496 13,958 (101) (127)Unrealised foreign exchange profits/(losses) (529) (2,926) 30,131 (19,252)Over provision for tax in previous years 13,686 7,149 2,836 2,868Other items (7,590) 5,535 16 1,347

33,547 35,559 23,926 (10,602)

19 DIVIDENDS

Interim fully franked dividend of 10.5 cents franked at 36% (1995: 10.5 cents, franked at 39% for 8.1 cents and 33% for 2.4 cents) paid 14 May 1996 117,053 115,585 117,053 115,585Interim dividend satisfied pursuant to bonus share election plan (8,521) – (8,521) –

108,532 115,585 108,532 115,585Final fully franked dividend of 7.5 cents franked at 36% (1995: 10.5 cents,franked at 33%) per share payable 31 October 1996. 84,613 115,584 84,613 115,584

193,145 231,169 193,145 231,169

As at 30 June 1996 there was $199,997,000 franking credits available. Boral Limited anticipates to be able to continue paying fullyfranked dividends during the year ended 30 June 1997.


66


1996 1995 1996 1995 1996 1995$’000 % $’000 % $’000 % $’000 % $’000 % $’000 %

20 SEGMENTS

Sales Revenue* Operating Profit** Assets

Industry Segments

Building products 1,869,211 39.8 1,919,946 38.8 127,087 51.1 246,264 55.5 2,288,551 37.8 2,124,365 35.6Construction materials 1,659,737 35.3 1,712,420 34.6 107,467 43.2 182,337 41.1 1,791,307 29.6 1,831,294 30.6Energy 817,782 17.4 755,054 15.3 143,085 57.5 130,340 29.4 1,564,905 25.8 1,506,906 25.2Services and engineering 285,441 6.1 308,999 6.3 (2,065) (0.8) (742) (0.1) 193,953 3.2 192,630 3.2Discontinued activities 63,101 1.4 244,745 5.0 (3,412) (1.3) (7,650) (1.7) – – 144,949 2.4

Segment Total 4,695,272 100.0 4,941,164 100.0 372,162 149.7 550,549 124.2 5,838,716 96.4 5,800,144 97.0Corporate – – (14,723) (5.9) (14,014) (3.2) 47,644 0.8 45,865 0.8Dividends Received – – 13,165 5.3 11,667 2.6 – – – –Profit on Sale of Investments – – 7,781 3.1 – – – – – –Net Interest – – (129,752) (52.2) (104,789) (23.6) – – – –Cash and Investments – – – – – – 172,627 2.8 132,541 2.2

4,695,272 100.0 4,941,164 100.0 248,633 100.0 443,413 100.0 6,058,987 100.0 5,978,550 100.0

Geographical Segments

Australia 3,603,345 76.7 3,828,256 77.5 306,514 123.3 477,535 107.7 4,567,900 75.4 4,455,177 74.5North America 547,562 11.7 438,536 8.9 45,063 18.1 39,287 8.9 603,932 10.0 475,043 7.9Europe 204,716 4.4 237,902 4.8 7,007 2.8 26,685 6.0 416,454 6.9 541,695 9.1Other overseas 276,548 5.9 191,725 3.9 16,990 6.8 14,692 3.3 250,430 4.1 183,280 3.1Discontinued activities 63,101 1.3 244,745 4.9 (3,412) (1.3) (7,650) (1.7) – – 144,949 2.4

Segment Total 4,695,272 100.0 4,941,164 100.0 372,162 149.7 550,549 124.2 5,838,716 96.4 5,800,144 97.0Corporate – – (14,723) (5.9) (14,014) (3.2) 47,644 0.8 45,865 0.8Dividends Received – – 13,165 5.3 11,667 2.6 – – – –Profit on Sale of Investments – – 7,781 3.1 – – – – – –Net Interest – – (129,752) (52.2) (104,789) (23.6) – – – –Cash and Investments – – – – – – 172,627 2.8 132,541 2.2

4,695,272 100.0 4,941,164 100.0 248,633 100.0 443,413 100.0 6,058,987 100.0 5,978,550 100.0

* Sales revenue represents external sales only as intersegment sales are considered not material.** Operating profit represents profit before abnormal items and income tax expense.

Depreciation, Depletion Capitaland Amortisation Expenditure***

Building products 95,721 31.9 74,439 27.0 128,238 26.3 124,036 25.1Construction materials 105,682 35.2 98,875 35.9 190,208 38.9 207,459 42.0Energy 90,029 30.0 91,114 33.0 159,921 32.7 141,147 28.6Services and engineering 6,560 2.2 6,055 2.2 7,207 1.5 12,519 2.5Discontinued activities 618 0.2 3,461 1.3 567 0.1 3,180 0.6Corporate 1,503 0.5 1,767 0.6 2,236 0.5 5,717 1.2

300,113 100.0 275,711 100.0 488,377 100.0 494,058 100.0

*** Includes capitalised leased assets of $22,287,000 (1995 $29,429,000)

Building products Bricks, plasterboard, timber, rooftiles, aluminium products, concrete products.Construction materials Quarrying, road surfacing, premix concrete, flyash, cement, transport, concrete placing, scaffolding.Energy Oil, gas.Services and engineering Tyre retreading and retailing, engineering and natural stoneDiscontinued activities Elevators, escalators, cranes, manufactured buildings, road surfacing/quarrying in North America and

masonry in the U.K.


67

21 DETAILS OF CREDIT FACILITIES AND STANDBY ARRANGEMENTS AVAILABLE TO THE ECONOMIC ENTITY

Commercial Paper

US Commercial Paper Facility – US$200m (1995: US$200m) non underwritten facility whereby issuances are conducted through atwo dealer arrangement. Commercial Paper Notes are issued for periods not exceeding 270 days from the date of issue, with theapplicable interest rate benchmark being referenced to the US Federal Reserve Composite Index. Boral Limited and Boral IndustriesInc. are dual issuers under this facility, and as at 30 June 1996, US$117m has been utilised (as at 30 June 1995, this facility wasunutilised).European Commercial Paper Facility – US$250m (1995: US$250m) non underwritten facility whereby issuances by Boral Limited areconducted on a two dealer arrangement. Commercial Paper Notes are issued for periods not exceeding 365 days from the date ofissue, with the applicable interest rate benchmark being referenced to Libor. As at 30 June 1996, US$152m has been utilised (as at30 June 1995, US$111m utilised).Australian Promissory Note Facility – A$200m (1995: A$200m) non underwritten facility whereby issuances by Boral Limited areconducted through a four dealer arrangement. Notes can be issued for periods not exceeding 185 days from the date of issue, withthe applicable interest rate benchmark being referenced to the Bank Bill Rate. As at 30 June 1996, A$200m has been utilised (as at30 June 1995, A$60m utilised).Hong Kong Note Issuance Facility – A$75m (1995: A$75m) non underwritten facility whereby issuances by Boral Limited areconducted through a four dealer arrangement. Notes can be issued for periods not exceeding 365 days from the date of issue, withthe applicable interest rate benchmark referenced to the Bank Bill Rate. As at 30 June 1996, A$56.5m has been utilised (as at 30June 1995, A$32.5m utilised).Term Facilities

US Medium Term Note Facility – US$250m (1995: US$250m) non underwritten private placement facility whereby issuances areconducted through a two placement agent arrangement. Note maturity dates can vary from 9 months to 30 years from the date ofissue, with the applicable interest rate being agreed to between the purchaser of the note and the issuer. This facility allows forNotes to be issued on either a fixed or floating interest rate basis. Boral Limited and Boral Industries Inc. are dual issuers under thisfacility and as at 30 June 1996, US$154m has been utilised (as at 30 June 1995, US$175m utilised).Cash Advance – A$200m (1995: A$200m) fully drawn cash advance facility provided by an international bank was outstanding as at30 June 1996. This facility has a fixed maturity date being June 2004.Term Loan Facilities – Fully drawn multi-currency direct bank loans are arranged for use by the economic entity, the general Termsand Conditions being set and agreed to with the respective banks on an activation and/or annual review basis. As at 30 June 1996A$663m equivalent has been utilised (as at 30 June 1995, A$665m utilised).Credit Standby Arrangements

Note Issuance Facility – Committed US$300m (1995: US$250m) arrangement underwritten by a panel of international banks. Thisfacility matures April 2001. The applicable interest rate benchmark is based upon Libor and as 30 June 1996, this facility wasunutilised (as at 30 June 1995, unutilised).

22 ACQUISITION/DISPOSAL OF CONTROLLED ENTITIES

The following Controlled Entities were acquired or disposed of during the financial period.

Net (Profit)/LossAssets at date on Beneficial

Consideration of Acquisition/ Disposal OwnershipPaid/(Received) Disposal

$’000 $’000 $’000 %

Entities Acquired:

Isenhour Brick & Tile Company Inc. 36,534 31,015 – 100Wembley Gypsum Products Sdn Bhd 9,057 5,774 – 28Metromix Sdn Bhd 1,809 (832) – 43Metrovilla Sdn Bhd – – – 43Henry Brooks & Co Ltd 6,116 1,745 – 100Quality Powder Coaters Ltd 520 149 – 100Entities Sold:

Boral Johns Perry Industries Pty Ltd (115,717) 15,329 (100,388)Johns and Waygood Ltd. (8,018) 13,846 5,828Lifts Building Technologies Ltd (Formerly Boral Building Technologies Ltd.) (1,716) 465 (1,251)Boral Tuwu Elevator Co. Ltd. (1,423) 1,522 99Juralco Asia 1993 Pte Ltd – (78) (78)Boral Edenhall Concrete Products Ltd and controlled entity (36,547) 34,898 (1,649)Boral Resources GmbH and controlled entity (22,606) 14,525 (8,081)Entities Incorporated:

Boral Energy (Vic) Pty. Ltd. Boral Quarries (Malaysia) Sdn BhdBoral Asia (China) Ltd. Boral Bricks (Malaysia) Sdn BhdBoral Shanghai Building Materials Company Limited Boral Building Systems (Malaysia) Sdn BhdBoral Tongling Building Materials Company Limited De Martin & Gasparini Pumping Pty LimitedBoral Resources (Malaysia) Sdn Bhd De Martin & Gasparini Contractors Pty LimitedBoral Building Materials (Malaysia) Sdn Bhd


68


22 ACQUISITION/DISPOSAL OF CONTROLLED ENTITIES CONTINUED

Entities Disposed of by Liquidation:

Albury Brickworks Pty. Ltd. Ireland Timms Forest Products Pty. Ltd.All Products Haulage Pty. Ltd. Karreman Bros. Pty. Ltd.Amadeus Inc. L&M Minerals LimitedAztec Haulage Limited Martins Transport Pty. Ltd.Boral Johns Perry Packaging Pty. Ltd. Piphurst LimitedB&H Constructions (Holdings) Pty. Ltd. Quiet Comfortable Homes Pty. Ltd.Calverton Products plc Southern Portland Cement Pty. Ltd.Country & Western Homes Pty. Ltd. The Avon Quarries Pty. Ltd.Haxton Contracting Pty. Ltd. The Kandos-Coomber Mining Co Pty. Ltd.Huddart Parker Industries Ltd. Via Tasbond Pty. Ltd.

Entities Merged:

Boral Dach-Produkte Dresden GmbH into Boral Dach-Produkte GmbH

Boral Advent Beteiligungs GmbH into Boral Mecklenburer Ziegel GmbHBoral Malliss GmbH

Boral Nedusa Baksteen B.V. into Boral Investments B.V.Hollandse Duitse Steenfabrieken B.V. Boral Industrie B.V.Boral Doorwerth Straatschteen B.V. Boral Nedusa Transport B.V.Vlamovensteenfabriek Doorwerth B.V. Steenhandel Oost Nederland B.V.Vlamovensteenfabriek Koppenwaard B.V.Steenfabriek Heuff B.V.Grondexploitatie Timmer B.V.Verkoopkantoor Doorwerth B.V.Steenhandel - Doorwerth B.V.Steengroothandel Hofman B.V.Smeijers en Voortman B.V.Smevo Beheer B.V.Maatschappij Tot Exploitatie Van Onroerende

Goederen Twente B.V.

23.CONTROLLED ENTITIES

Carrying on business in a place other than Australia:NORTH AMERICA

United States of America:

Boral Industries Inc.Boral Gypsum Inc.Briar Gypsum Inc.Boral Lifetile Inc.Mission TileUnited States Tile Co.California Lifetile Inc.California Tile Inc.Western Ash CompanyBoral Bricks Inc.Baltimore Brick.Isenhour Brick & Tile Co. Inc.Claycon Transport Corp.Cascade Culvert CorporationSTI Holdings Inc.FBR Inc.Boral Ash Inc.WAC Holdings Inc.Mexico:

Western Ash Company de Mexico SA deCVEUROPE

United Kingdom:

Boral (U.K.) Ltd.Boral Edenhall Transport Ltd.

Pozzolanic Lytag Ltd.Lytag Ltd.Boral Energy Northwest Ltd.Netherlands:

Boral Investments B.V.Boral Industrie B.V.Boral Nedusa Transport B.V.Steenhandel Oost Nederland B.V.France:

Boral Industries S.A.Poland:

Boral Polska Spolka ZooGermany:

Boral Industrie GmbHBoral Dach-Produkte GmbHBoral Keramik Wand Und Boden GmbHBoral Calcit GmbH & Co KGBoral Mecklenburger Ziegel GmbHOTHER OVERSEAS

Indonesia:

PT Jaya ReadymixPT Petrojaya Boral PlasterboardBermuda:

Boral Asia (China) Ltd.China:

Boral Shanghai Building MaterialsCompany Ltd.

Boral Tongling Building Materials CompanyLtd.American Samoa:

Boral Gas American SamoaWestern Samoa:

Boral Gas (Western Samoa) Ltd.Cook Islands:

Boral Gas Cook Islands Ltd.Fiji:

The Fiji Gas Co Ltd.Hong Kong:

Onoda Hong Kong Ltd.Malaysia:

Boral Parcon (Malaysia) Sdn BhdBoral Resources (Malaysia) Sdn BhdBoral Quarries (Malaysia) Sdn BhdBoral Bricks (Malaysia) Sdn BhdBoral Building Systems (Malaysia) Sdn BhdBoral Concrete (Malaysia) Sdn BhdMetromix Sdn BhdMetrovilla Sdn BhdBoral Building Materials (Malaysia) SdnBhdWembley Gypsum Products Sdn BhdWestaflex Sdn BhdNetherlands Antilles:

Boralgas N.V.


69

23 CONTROLLED ENTITIES CONTINUED

Name Changes during the financial period:

Amadeus Oil NL To Boral Energy Amadeus NLBoral Building Technologies Ltd. To Lifts Building Technologies Ltd. [sold]Boral Concrete Products Inc. To Boral Lifetile Inc.Boral Investments Pte. Ltd. To Boral Asia Pacific Pte. Ltd.Boral SGB Pty. Ltd. To De Martin & Gasparini Concrete Placers Pty. Ltd.Derite Pty. Ltd. To Boral Plaster Fixing Pty. Ltd.Gerrard Nominees Ltd. To Boral Industries Nominees Ltd.Sagasco Bonaparte Pty. Ltd. To Boral Energy Bonaparte Pty. Ltd.Sagasco Developments Ltd. To Boral Energy Developments Ltd.Sagasco Northwest Ltd. To Boral Energy Northwest Ltd.Sagasco Petroleum Ltd. To Boral Energy Petroleum Ltd.Sagasco Resources Ltd. To Boral Energy Resources Ltd.Sagasco ZOCA 91-08 Pty. Ltd. To Boral Energy ZOCA 91-08 Pty. Ltd.

Dividends Contribution toBeneficial Boral Ltd.’s Received by Economic Entity

Ownership by Investment Boral Ltd. from Operating ProfitThe financial statements of the following Inc. Economic Boral in Controlled Controlled after Tax & Outsideentities have been consolidated to determine in Entity Ltd. Entities Entities Equity Interestthe results of the economic entity.

1996 1995 1996 1995 1996 1995% % $’000 $’000 $’000 $’000 $’000 $’000

Boral Limited. NSW (10,191) 8,391Huddart Parker Ltd.*< Vic 100 100 508 – – – – –

Boral Resources Ltd.*< NSW 100 100 30,375 30,375 12,000 21,100 270 (22)Boral Resources (W.A.) Ltd.*< WA 100 971 5,239

Boral Contracting Pty. Ltd.*< WA 100 (7,500) (6,322)Boral Resources (Vic.) Pty. Ltd.*< Vic 100 2,913 8,588

Deane & Runge Pty. Ltd.*< Vic 100 (66) (66)Miners Rest Quarries Pty. Ltd.*< Vic 100 (67) (67)P. Kennedy Pty. Ltd.*< Vic 100 (19) –Avon Quarries (Holdings) Pty. Ltd.*< Vic 100 – –

Boral Resources (Qld.) Pty. Ltd.*< Qld 100 (15,224) 10,162Ramsay Dredging Co. Pty. Ltd.*< Qld 100 – –Australian Chemical Company Pty. Ltd.

(In Voluntary Liquidation)*< Qld 100 – 77Boral Resources (N.S.W.) Pty. Ltd.*< NSW 100 393 2,670

Brisbane Water Concrete Pty. Ltd.(In Voluntary Liquidation)*< NSW 100 – (15)

Bitumax Pty. Ltd.*< SA 100 504 1,026Cascade Culvert Corporation> USA 100 133 112Boral Resources Recovery

Management Pty. Ltd.*< NSW 100 (1,300) (4,230)Pt Jaya Readymix> Indonesia 50 4,075 2,501

Pt Petrojaya Boral Plasterboard> Indonesia 42.5 284 81

BEC Pty. Ltd.*< NSW 100 100 – – – – (62) –

Boral Resources (SA) Ltd.*< SA 100 100 51,677 51,677 4,300 12,383 4,339 9,164Road Surfaces Group Pty. Ltd.*< Qld 100 385 632BRES Pty. Ltd.

(In Voluntary Liquidation)*< SA 100 (361) (176)

New Zealand:

Boral Industries Ltd.Boral Gas Industries Ltd.Boral Acrow Ltd.Boral Aluminium Building Products Ltd.Boral Industries Nominees Ltd.Henry Brooks & Co Ltd.Quality Powder Coaters Ltd.Papua New Guinea:

The Glass and Aluminium Suppliers Pty. Ltd.

Boral Acrow (P.N.G.) Pty. Ltd.Boral Gas (P.N.G.) Pty. Ltd.Sagini Pty. Ltd.Singapore:

Boral Asia Pacific Pte. Ltd.Boral Building Services Pte. Ltd.Solomon Islands:

Boral Gas Solomons Ltd.Tonga:

Boral Gas Tonga Ltd.

Vanuatu:

Boral Gas (Vanuatu) Ltd.Panama:

Sagasco Southeast Inc.Marshall Islands:

Boral Gas MEC Inc.


70





1996 1995 1996 1995 1996 1995% % $’000 $’000 $’000 $’000 $’000 $’000

Bayview Ltd.*< Vic 100 100 12,801 12,801 – – – –Bayview Quarries Pty. Ltd.*< Vic 100 9 (25)Dandenong Quarries Pty. Ltd.*< Vic 100 – –

Boral Johns Perry Ltd.*< Vic 100 100 157,572 157,572 100,000 6,437 91,968 98Raenniks Ltd.

(In Voluntary Liquidation)*< Vic 100 – (8,540)Mavis Properties Pty. Ltd.*< Vic 100 3,761 (1,044)

Boral Energy Ltd.*< Vic 100 95.39∆ 59,545 59,545 7,072 4,865 1,066 (823)Boral Energy (Vic) Pty. Ltd.*## Vic 100 – –Boral Gas (P.N.G.) Pty. Ltd.> PNG 66.7 1,306 1,420Gas Corporation of Tasmania Ltd.*< Tas 100 (65) 1,622The Fiji Gas Co. Ltd.+ Fiji 51 384 554

Boral Gas Tonga Ltd.+ Tonga 51 33 13Gas Corporation of Queensland Ltd.*< Qld 100 (3,989) 2,190

Brisbane Gas Co. Ltd.*<(In Voluntary Liquidation) Qld 100 – –

Boral Gas (Qld.) Pty. Ltd.*< Qld 100 464 346Boral Gas (N.S.W.) Pty. Ltd.*< NSW 100 (2,075) (2,334)

Boral (L.G.C.) (Aust.) Ltd.*< NSW 100 (455) (58)Boral Gas (W.A.) Pty. Ltd.*< WA 100 1,431 1,398Boral Gas Solomons Ltd.+ Solomon Is. 80 289 275Boral Gas Cook Islands Ltd.+ Cook Is. 100 173 75Boral Gas (Vanuatu) Ltd.> Vanuatu 100 451 445Boralgas N.V.> Netherlands 100 1,265 2,700

AntillesBoral Gas MEC Inc.+ Marshall Is. 66.7 (23) (11)Boral Gas (Western Samoa) Ltd.+ Western

Samoa 100 – –Boral Gas American Samoa+ Am. Samoa 99.9 960 903

Boral Transport Ltd.*< NSW 100 100 223,435 223,435 93,950 44,436 9,501 15,805Haxton Haulage Pty. Ltd.*< NSW 100 313 176Boral Tyres Pty. Ltd.*< WA 100 (8,105) (3,692)Belltread Pty. Ltd.*< WA 100 (2,328) (355)FRL Pty. Ltd.*< WA 100 (1,796) 2,019

B.T.S. Pty. Ltd.*< WA 100 800 286Woodwards Tyres Pty. Ltd.*< Tas 100 (2,199) (244)Allen Taylor & Company Ltd.*< NSW 100 3,223 1,688

Sawmillers Exports Pty. Ltd. NSW 80 3,394 3,669Westaflex Sdn Bhd> Malaysia 100 (1,489) (893)Duncan’s Holding Ltd.*< NSW 100 603 7,391

Duncan’s (Eden) Pty. Ltd.*< NSW 100 (7) (7)Herons Creek Timber Mills

Pty. Ltd.*< NSW 100 (3) (3)George Hudson Parquetry Flooring (Sales) Pty. Ltd. (In Voluntary Liquidation)< NSW 100 2,651 –Southport Ceramics Ltd.*< NSW 100 (1,165) 1,295

Brandon Timbers Ltd.*< Qld 100 – (35)Standard Properties Pty. Ltd.*< NSW 100 (12) (12)

Boral Timber Tasmania Ltd.*< Tas 100 7,317 8,666Northern Forest Investments Pty. Ltd.*< Tas 100 4,022 983STI Holdings Inc.> USA 100 205 289

Tasmanian Board Mills Ltd.*< Tas 100 629 2,393Bitupave Ltd.*< NSW 100 (4,398) 3,179Boral Resources (Tasmania) Ltd.*< NSW 100 (90) 841

BMI Mining Pty. Ltd.*< NSW 100 686 532


71




1996 1995 1996 1995 1996 1995% % $’000 $’000 $’000 $’000 $’000 $’000

Boral Resources (Country) Pty. Ltd.*< NSW 100 (901) 3,774Bandag Manufacturing Pty. Ltd.*< NSW 100 2,379 2,504Clark Brick Pty. Ltd.*< NSW 100 – –BR Tiles Ltd.*< Vic 100 221 261De Martin & Gasparini Pty. Ltd.*< NSW 100 (4,306) (530)

De Martin & Gasparini Concrete Placers Pty Ltd*< NSW 100 – 23

De Martin & Gasparini Pumping Pty Ltd NSW 100 – –

De Martin & Gasparini Contractors Pty Ltd NSW 100 – –

EPM Concrete Pty. Ltd.*< Vic 100 (1,821) (1,272)Melocco Pty. Ltd.*< NSW 100 (2,731) (3,104)Onoda Hong Kong Ltd.> Hong Kong 100 – –Timber Industries Ltd.*< NSW 100 (818) 3,810

Wagga Wagga Holdings Ltd.*< NSW 100 – –Hardy’s Properties Pty. Ltd.*< NSW 100 – –Hardy’s Timber Pty. Ltd.*< Vic 100 – –

Hardy’s Pty. Ltd.*< NSW 100 (9,223) (2,292)A. Dunstan Timber Sales

Pty. Ltd.*< Vic 100 3,467 –

Sagasco Holdings Ltd+*< SA 100 100 819,822 819,822 79,750 29,587 5,755 6,257Boral Energy Resources Ltd*< SA 100 15,968 12,768

Boral Energy Bonaparte Pty Ltd*< SA 100 1 (28)Boral Energy Developments Ltd*< Qld 100 3,985 2,737Boral Energy Zoca 91-08 Pty Ltd*< SA 100 (1,317) (14)Boral Energy Petroleum Ltd*< Qld 100 300 (1)Boral Energy Northwest Ltd.> UK 100 (238) (52)Sagasco Southeast Inc.> Panama 100 9,724 1,063Sagini Pty Ltd.> PNG 100 (2) (67)

Sth Australian Gas Company Ltd*## SA 100 29,792 21,400Sagasco LPG Pty Ltd*< SA 100 1,654 1,570Gas Investments Pty Ltd* SA 100 – –

GCR Collections Pty Ltd*< SA 100 – –Centre Gas Pty Ltd*< SA 100 239 233

Sagasco NT Pty Ltd*< SA 100 (1,814) (2,120)Sagasco Amadeus Pty Ltd*< SA 100 10,388 695Boral Energy Amadeus NL*< Qld 100 245 207Amadeus US Ltd*< Qld 100 125 138

Boral International Pty. Ltd.*< NSW 100 100 742,557 742,613 – – (282) 10Boral Asia (China) Ltd.> Bermuda 100 – –

Boral Shanghai Building Materials Company Limited> China 60 – –

Boral Tongling Building Materials Company Limited> China 60 – –

Boral Asia Pacific Pte Ltd.> Singapore 100 (2,212) (1,869)Boral Building Services Pte. Ltd.> Singapore 100 (636) –

Boral Parcon (Malaysia) Sdn Bhd> Malaysia 51 (527) (329)Boral Resources (Malaysia) Sdn Bhd> Malaysia 51 – –Boral Building Materials (Malaysia)

Sdn Bhd> Malaysia 51 – –Wembley Gypsum Products

Sdn Bhd> Malaysia 28.05 94 –Boral Quarries (Malaysia) Sdn Bhd> Malaysia 51 – –Boral Bricks (Malaysia) Sdn Bhd> Malaysia 51 – –


72





1996 1995 1996 1995 1996 1995% % $’000 $’000 $’000 $’000 $’000 $’000

Boral Building Systems (Malaysia) Sdn Bhd> Malaysia 51 – –

Boral Concrete (Malaysia) Sdn Bhd> Malaysia 43.35 (542) (309)Metromix Sdn Bhd> Malaysia 43.35 (185) –Metrovilla Sdn Bhd> Malaysia 43.35 – –

Boral Industries Inc.> USA 100 19,908 (223)Boral Gypsum Inc.> USA 100 11,038 15,236

Briar Gypsum Inc.> USA 100 – –Boral Lifetile Inc.> USA 100 (1,094) 3,579

Mission Tile> USA 100 – –United States Tile Co.> USA 100 66 (670)

California Lifetile Inc.> USA 100 – –California Tile Inc.> USA 100 – –

Isenhour Brick & Tile Co. Inc.> USA 100 – –Boral Bricks Inc.> USA 100 2,282 3,296

Baltimore Brick> USA 100 – –Claycon Transport Corp.> USA 100 – –

Boral Ash Inc.> USA 100 – –Western Ash Company> USA 100 1,656 28WAC Holdings Inc.> USA 100 – –

Western Ash Company de Mexico SA de CV> Mexico 100 – –

FBR Inc.> USA 100 – –Boral (U.K.) Ltd.> UK 100 113 409

Boral Edenhall Transport Ltd.> UK 100 – –Pozzolanic Lytag Ltd.> UK 100 842 (1,547)

Lytag Ltd.> UK 100 (687) 136Boral Investments B.V.> Netherlands 100 (399) (1,327)

Boral Industries S.A. (In Voluntary Liquidation)> France 100 – –

Boral Industrie B.V.> Netherlands 100 8,224 9,800Boral Nedusa Transport B.V.> Netherlands 100 – –Steenhandel Oost Nederland B.V.> Netherlands 100 – –

Boral Industrie GmbH> Germany 100 (23,994) (3,342)Boral Dach-Producte GmbH> Germany 100 (5,760) 1,270

Boral Keramik Wand Und Boden GmbH> Germany 100 1,257 2,916Boral Mecklenburger Ziegel

GmbH> Germany 100 (4,195) (965)Boral Calcit GmbH & Co KG> Germany 100 (718) (164)

Boral Polska Spolka Zoo> Poland 100 260 (504)Boral Industries Ltd.> NZ 100 3,991 702

Boral Gas Industries Ltd.> NZ 100 (35) 28Boral Acrow Ltd.> NZ 100 1,779 276

Boral Acrow (P.N.G.) Pty. Ltd.> PNG 74 – –Boral Industries Nominees Ltd.> NZ 100 – –Boral Aluminium Building Products Ltd> NZ 100 (164) (243)Henry Brooks & Co Ltd> NZ 100 (67) –Quality Powder Coaters Ltd> NZ 100 6 –

Oil Co. of Australia Ltd. NSW 84.96 62.04** 66,790 66,790 3,785 3,785 12,563 12,869Angari Pty. Ltd. SA 84.96 2,354 442Oil Investments Ltd. SA 84.96 768 487

Mount Lyell Investments Ltd.*< Vic 100 100 13,129 13,129 800 143 582 267Boral Insurance Ltd. NSW 100 134 276

Boral Provident Fund Ltd. Vic – – – – – – – –


73




1996 1995 1996 1995 1996 1995% % $’000 $’000 $’000 $’000 $’000 $’000

Parbond Pty. Ltd. NSW 100 100 – – – – – –

Boral Superannuation Pty Limited NSW 100 100 – – – – – –Circle ESF Pty Ltd NSW 100 – –

Blue Circle Southern Cement Ltd.*< ACT 100 100 546,786 546,786 82,500 54,000 37,435 58,353Hi-Quality Concrete Industries Ltd.*< NSW 100 (43) (130)

Trisamba Pty. Ltd.*< NSW 100 (234) (35)B.C.S.C. Services Pty. Ltd.*< ACT 100 – 489

Mainland Cement Ltd.*< NSW 100 2,423 5,065

Boral Building Products Pty Ltd.*< NSW 100 100 20,000 20,000 50,794 25,797 (115) (27)Boral Bricks (N.S.W.) Pty. Ltd.*< NSW 100 (6,175) 3,101Boral Bricks (Vic.) Ltd.*< Vic 100 20.08# 5,338 5,338 2,791 321 16 4,560

Boral Bricks (Qld.) Ltd.*< Qld 100 1,150 6,339Midland Brick Company Pty. Ltd.*< WA 100 16,066 26,227Boral Montoro Pty. Ltd.*< NSW 100 (999) 10,620

Boral Metal Products Ltd.*< Vic 100 100 18,489 18,489 – 3,870 9 (87)Dowell Australia Ltd.*< Vic 100 (6,010) 3,823

Wunderlich Windows Pty. Ltd.*< Qld 100 (2,242) 770Ampliform Pty. Ltd.*## SA 100 84 8The Glass and Aluminium

Suppliers Pty. Ltd.> PNG 53.33 (272) 31Boral Windows Pty. Ltd.*< Vic 100 356 4,994

Robb & Brown Pty. Ltd.*< Qld 100 (409) 108Boral Building Services Pty. Ltd.*< Vic 100 (7,501) (11,521)

Boral Concrete Products Pty. Ltd.*< NSW 100 100 5,050 5,050 1,850 – 84 (241)Spancrete of Australia Pty. Ltd.*< NSW 100 6,821 (2,486)Boral Hollostone Masonry

(South Aust.) Pty. Ltd.*< SA 100 1,147 1,534Boral Besser Masonry Ltd.*< NSW 100 (3,054) (1,884)

Boral Australian Gypsum Industries Ltd.*< Vic 100 100 55,452 55,452 31,470 32,800 3,563 3,886Boral Australian Gypsum Ltd.*< Vic 100 13,789 31,866Boral Plaster Fixing Pty. Ltd.*< Vic 100 (374) (1,992)Waratah Gypsum Pty. Ltd.*< Vic 100 94 172

Consolidation adjustments (344) 1,621Controlled entities liquidated or sold

since the last period – 5,424 – 218 (765) 131Amortisation/writeoff of goodwill (24,485) (20,829)

TOTAL 2,829,326 2,834,298 471,062 239,742 205,689 293,881

## Entered into a cross guarantee with Boral Limited during the year.+Not Audited by the Auditors of Boral Limited.<Entered into a cross guarantee with Boral Limited. (refer note 15).>Audited by overseas firm of KPMG.*Granted relief by the Australian Securities Commission from specified accounting requirements in accordance with a Class Order.#A further 79.92% ownership (Cost 1996: $11,636,000;1995: $11,636,000) of Boral Bricks (Vic.) Ltd is held by other controlledentities.∆ A further 4.61% ownership (Cost 1996: $2,395,000;1995: $2,395,000) of Boral Energy Ltd is held by other controlled entities.**A further 22.92% ownership (Cost 1996: $15,423,000;1995: $15,423,000) of Oil Company of Australia Ltd is held by ControlledEntities.The quoted market value of Oil Company of Australia Ltd was $113,562,000 (1995: $138,238,000).All the shares held by Boral Limited in Controlled Entities are ordinary shares except in the case of Boral Metal Products Ltd. andHuddart Parker Ltd. which are ordinary and preference shares.


74


24 ASSOCIATED ENTITIES

Principal Place Beneficial Carrying Dividends ReceivedActivity of Inc. Ownership Amount and Receivable

1996 1995 1996 1995 1996 1995% % $’000 $’000 $’000 $’000

Ampliform Pty.Ltd.** Extrusions S.A. – – – – – 121Bauzuschlagsstoffe und

Recycling GmbH. Quarrying Germany 50 50 3526 4,312 – 259BSC Engineering Sdn Bhd* Elevators Malaysia – 30 – 421 – –Central Queensland Natural

Gas Pty Ltd. Gas distribution Qld 50 50 – – – –Derwent Forestry Company

Pty. Ltd. Timber Tas 25 25 – – – –Flyash Australia Pty. Ltd. Flyash collection NSW 50 50 50 50 1,075 790Gascogen Pty. Ltd. Power Generation S.A. 50 50 – – – –Gypsum Resources Australia

Pty. Ltd. Gypsum mining S.A. 50 50 – – – –Harcourt Granite Pty. Ltd. Quarrying Vic 20 20 1 1 2 –LPG Distributors Pty. Ltd. Autogas distributor NSW 50 50 – – 400 600Monex Resources Inc.*** Flyash U.S.A. 34.3 29.4 – – – –Penrith Lakes Development

Corporation Pty. Ltd. Quarrying NSW 40 40 2,359 2,527 – –RCM Sdn Bhd Timber Malaysia 33.3 33.3 4 4 – –Resources Holdings Inc. Flyash Processing U.S.A. 34.3 29.4 15,780 15,141 623 –Rockgas Ltd. LPG distributor N.Z. 50 50 2,598 2,825 3,379 –Rondo Building Services Pty. Ltd. Rollform system NSW 50 50 687 687 3,508 3,364Sunstate Cement Ltd. Cement manufacturer Qld 50 50 13,670 13,670 2,211 4,711Western Quarries Pty. Ltd. Quarrying W.A. 50 50 3,445 3,445 225 500Wunderlich Pty. Ltd. Windows NSW 50 50 – – – –

TOTAL 42,120 43,083 11,423 10,345

* Sold during the 12 month period.** Became a controlled entity during the year.*** This is a controlled entity of Resources Holdings Inc.

25 RELATED PARTY DISCLOSURES

Controlled Entities

Interests held in controlled entities are set out in note 23.Partly Owned Controlled Entities

Details of Interests in partly owned controlled entities are also set out in note 23.During the year, the Company entered into transactions with certain of these entities primarily involving loans to the Company whichwere conducted on the same terms and conditions as loans from wholly owned controlled entities. All other transactions are in theordinary course of business and on normal terms and conditions.Associated Entities

Interests held in associated entities are set out in note 24. The business activities of a number of these entities are conducted underjoint venture arrangements. These entities conduct business transactions with various controlled entities. Such transactions andresulting year end balances, which are immaterial in amount, include purchases and sales of certain products, dividends and interest.All such transactions are conducted on the basis of normal commercial terms and conditions.Directors

The following persons held the position of Director of Boral Limited during the financial year:EA Alexander DJ HughesAR Berg GT KrygerPJW Cottrell MR Rayner (appointed 7 February 1996)RT Halstead Sir Bruce WatsonRemuneration received or receivable by Directors of each entity in the economic entity and aggregate amounts paid in connectionwith the retirement of Directors and executive officers of entities in the economic entity are disclosed in note 17.At the Annual General Meeting of Boral Limited held on 13 November 1989, the shareholders approved an increase in the maximumamount of fees payable to the Directors of Boral Limited by Boral Limited and its unlisted entities to $650,000. The non-executiveDirectors of Boral Limited have entered agreements with Boral Limited providing for benefits to be paid on their retirement or death.The agreements are in accordance with an authority for Boral Limited to enter such agreements given by the shareholders in generalmeeting.


75


1996 1995 1996 1995$’000 $’000 $’000 $’000

25 RELATED PARTY DISCLOSURES CONTINUED

Loans made to Directors:

Aggregate amount of Employee Share Plan loans made to executive Directors of controlled entities: 101 89 14 13

No loans other than Employee Share Plan loans were made to executive Directors of controlled entities and no loans were made to executive or non-executive Directors of Boral Limited during the financial year.Aggregate amount of outstanding loans to executive Directors (there are no outstanding loans to non-executive Directors) 50 44 7 7

Loan Repayment from Directors:

Aggregate amount of Employee Share Plan loan repayments received from executive Directors 95 84 15 9

Employee Share Plan loans are interest free.The names of executive Directors of controlled entities who received Employee Share Plan loans and/or made loan repaymentsduring the financial year were:IG Anderson+*, MJ Barry+*, WR Batstone+*, MK Bembrick*, RG Biggar+*, GA Bodle+*, TE Bray+*, I Brown+*, RJ Byrne+*,PW Cain*, JC Cappelen*, RH Cole+*, C Condo+*, EJ Cook+*, MG Cormack*, C Curtis*, AB Dagger+*, NG Daniells+*,BJ Donohue*, AJ Evans+*, GB Faber+*, PJ Fels+*, PAP Fergusson*, WM Fowler+*, PS Gallagher+*, LJ Heale+*, RS Henry*,TJ Hill*, RT Hindley+*, DR Hughes*, JR Hunt+*, PJ Jobe+*, FE Kerr+*, GA King+*, PF Kinsella*, IL Kovarik+*, J Kuner+*,AJ Kyle+*, AJ Laslett*, RJ Lenstra+*, M Lewis+*, PJ Mahoney+*, JL Malempre+*, E McLean+*, MAP Middleton+*, DF Olling+*,P Ousby*, GE Pallister+*, R Parkes+*, DH Patterson*, RE Paulsen+*, RT Pearse+*, DC Petherick+*, JM Piper+*, SA Piscetek+*,PC Pollitt*, OW Poole+*, RG Pysden*, AR Randerson+*, AH Ratering+*, KN Richards+*, TP Richards+*, B Roberts+*,JK Sambrook+*, BH Saunders*, E Schmitt-Walter*, MB Scobie +*, E Severin+*, JS Shaw*, AW Sive+*, JD Smallacombe+*,AM Stock+*, KT Sullivan+*, RJ Town+*, DF Trowse*, TC Tuff+*, AP Vogt+*, RF Waining+*, GJ Walker+*, GL Wearne*,ML Weinman+*, GL White+*, BS Williams+*, RJ Willink+*, IM Wilson+*, RL Winten+*, AR Wood+*, FA Wooller+*, AW Wright*,SA Yeoland+*.+Employee Share Loans*Employee Share Plan Loan RepaymentsOther Transactions with Directors:

Transactions entered into during the year with Directors of Boral Limited and controlled entities which are within normal employee,customer or supplier relationships on terms and conditions not more favourable than dealings in the same circumstances on an arm’slength basis include:* the receipt of dividends from Boral Limited* participation in the Employee Share Plan, the Executive Share Plan and the Senior Executive Option Plan* terms and conditions of employment* reimbursement of expenses* purchases of goods and services.Certain non-executive Directors of Boral Limited and controlled entities are associated with legal or accounting firms, which derivefees for work done for Boral Limited and controlled entities. Ms. EA Alexander, a Director of Boral Limited, is a partner of PriceWaterhouse, Accountants, Mr. RT Halstead, a Director of Boral Limited, is a partner of Clayton Utz, Solicitors of Sydney, Mr. ACFreeleagus, a Director of Gas Corporation of Queensland Limited, Oil Company of Australia Limited, Angari Pty Limited and OilInvestments Limited, controlled entities, is associated with Clayton Utz, Solicitors of Brisbane and Mr. RW Piper, a Director of SouthAustralian Gas Company Limited, a controlled entity, is a partner in Piper Alderman, Solicitors of Adelaide. During the financial year,Boral Limited and controlled entities paid fees of $73,493 to Price Waterhouse, $71,919 to Clayton Utz of Sydney, $150,451 toClayton Utz of Brisbane and $25,712 to Piper Alderman. The work is done within a normal adviser and client relationship on termsand conditions not more favourable than dealings in similar circumstances.Consolidated Gas Pty Limited, a company in which Mr. GA Cugley, a Director of Midland Brick Company Pty Limited, a controlledentity, has an interest, supplied gas to the value of $7,215,485 to Midland Brick Company Pty Limited during the financial year. TheFederated Gas Employees’ Industrial Union, a union in which Mr. DJ Moriarty, a Director until 31 December 1995 of South AustralianGas Company Limited, a controlled entity, has an interest, was paid $205,180 for equipment hired by the South Australian GasCompany Limited during the financial year. The products and services were supplied within a normal customer and supplierrelationship on terms and conditions not more favourable than dealings in similar circumstances.Boral Asia Pacific Pte Ltd, a controlled entity, at the request of Mr. R Tay, an employee of the economic entity and a Director of BoralAsia Pacific Pte Ltd and certain other controlled entities, provided a guarantee to The Hongkong and Shanghai Banking CorporationLimited during the financial year. The guarantee accommodated the issue by the Bank of a guarantee in the sum of S$251,000.Mr Tay has indemnified Boral Asia Pacific Pte Ltd against all liability arising out of the guarantee provided by it.


76


25 RELATED PARTY DISCLOSURES CONTINUED

Particulars of dealings in Boral Limited shares by Directors of Boral Limited and their Director-related entities during the financial yearare shown on page 80 of the Annual Report. Particulars of options granted by Boral Limited to Mr. AR Berg, the Managing Director ofBoral Limited, to subscribe for fully paid ordinary shares in the capital of Boral Limited are given in clause 12 of the Directors’ Reporton page 47 of the Annual Report.


1996 1995 1996 1995$’000 $’000 $’000 $’000

26 INTEREST IN JOINT VENTURES

Included in the assets and liabilities of the Company and the economic entity are the following items which represent the Company’sand the economic entity’s interest in the assets and liabilities employed in joint ventures, recorded in accordance with the accountingpolicies described in the Statement of Significant Accounting Policies:Current Assets

Cash 1,372 3,566 – –Receivables 19,472 7,560 – –Inventories 5,665 9,935 – –Other 643 423 – –

Total Current Assets 27,152 21,484 – –

Non-Current Assets

Property, plant and equipment 355,291 341,864 – –Intangibles 1,501 1,604 – –Other 301,964 289,043 – –

Total Non-Current Assets 658,756 632,511 – –

Total Assets 685,908 653,995 – –

Current Liabilities

Creditors and borrowings 16,437 13,503 – –Provisions 1,002 11,303 – –

Total Current Liabilities 17,439 24,806 – –

Non-Current Liabilities

Creditors and borrowings 408 330 – –Provisions 10,714 – – –

Total Non-Current Liabilities 11,122 330 – –

Total Liabilities 28,561 25,136 – –

Net Investment in Joint Ventures 657,347 628,859 – –

The economic entity holds interests in a number of unincorporated joint ventures. Whilst none of these interests are material to theeconomic entity individually, the total for the economic entity of certain items is as follows:– Sales value of products directly received 195,992 177,424– Contribution to operating profit before tax 67,182 67,739– Contingent liabilities (included in Note 15) 360 205– Capital commitments (included in Note 16) 23,101 113,408

Major areas Interest range

1996 1995% %

SA & SWQ Coopers basin 5.0/30.0 5.0/30.0Bowen basin 50.0 50.0Perth basin 49.2/67.0 49.2/67.0The principal activities of most of these joint ventures is oil and/or gas exploration, development and production.


77


1996 1995 1996 1995$’000 $’000 $’000 $’000

27 NOTES TO STATEMENTS OF CASH FLOWS

1. Reconciliation of cash and cash equivalents.Cash as at the end of the financial period as shown in the Statements of Cash Flows is reconciled to the related items in the Balance Sheets as follows:Cash 100,444 58,332 1,172 6,269Bank overdrafts (50,999) (46,949) (61,325) (20,805)

49,445 11,383 (60,153) (14,536)

2. The following non cash financing and investing activities have not been included in the Statements of Cash Flows:Capital expenditure acquired by means of finance leases (22,287) (29,429) (464) (762)

Issue of shares in respect of:dividend reinvestment plan 37,970 – 37,970 –

bonus share plan 8,521 – 8,521 –

Deferred receipt in respect of the sale of assets including settlement of loans 62,800 – – –

3. Details of credit standby arrangements and loan facilities are included in Note 21.

4. Reconciliation of operating profit to net cash provided by operating activitiesOperating profit after income tax attributable to members of Boral Limited 205,689 293,881 514,849 214,835

Adjustments to reconcile operating profit to net cash provided by operating activities

Abnormal (Gain)/Loss (16,612) – 26,786 (22,808)Depreciation, Depletion and Amortisation 300,113 275,711 1,445 1,767Deferred expenditure written off 8,774 7,277 697 706Transfers to Provisions 8,246 38,898 (12,064) 16,608Increase/(decrease) in deferred taxes 56,442 34,936 23,926 (12,189)(Gain)/loss on sale of assets (15,788) (1,051) (89) 16(Gain)/loss on translation of long term borrowings – – (85,406) 49,666Changes in assets and liabilities net of effects from acquisitions/disposals

– Receivables (95,118) (2,766) (8,000) 612– Inventories (16,136) (69,295) – –– Creditors 48,896 16,069 6,704 6,736– Provisions (236,605) (67,895) (17,977) (3,077)– Other 63,405 (22,537) 11,948 (1,847)

Increase in outside equity interests 11,379 5,881 – –

Total Adjustments 116,996 215,228 (52,030) 36,190

Net cash provided by operating activities 322,685 509,109 462,819 251,025


78


Fair Value of Fair Value ofNet Assets Net Assets

Acquired Sold

27 NOTES TO STATEMENTS OF CASH FLOWS CONTINUED

5. The assets and liabilities in respect of controlled entities acquired/disposed during the financial year are:Current Assets

Cash 2,355 –Receivables 10,509 35,593Inventories 6,177 29,096Other 1,690 10,685Non-Current Assets

Property, plant and equipment 38,388 121,496Investments 8,180 1,543Current Liabilities

Bank overdraft – (11,608)Creditors and borrowings (20,221) (86,646)Provisions (2,853) (14,451)Other (2,008) (5,201)

42,217 80,507Outside equity interest acquired (4,366) –Goodwill on acquisition 16,185 –Profit on sale – 105,520Deferred consideration – (22,606)

Cash consideration 54,036 163,421


79

StatutoryStatements

to the Members of Boral Limited

STATEMENT BY DIRECTORS

1. In the opinion of the Directors of Boral Limited:

(a) the financial statements set out on pages 48 to 78 aredrawn up so as to give a true and fair view of the resultsand cash flows for the financial year ended 30 June1996, and the state of affairs as at 30 June 1996, of theCompany and the economic entity;

(b) the consolidated financial statements have been madeout in accordance with Divisions 4A and 4B of Part 3.6of the Corporations Law; and

(c) at the date of this statement, there are reasonablegrounds to believe that the Company will be able to payits debts as and when they fall due.

2. The financial statements have been made out in accordancewith applicable Accounting Standards and Urgent IssuesGroup Consensus Views.

3. There are reasonable grounds to believe that the Companyand certain controlled entities will, as an economic entity,be able to meet any obligations or liabilities to which theyare or may become subject by virtue of the Deed of CrossGuarantee between the Company and those controlledentities pursuant to a Class Order. At the date of thisstatement the Company is within the class of companiesaffected by Class Order 95/1530. Refer to note 15 forfurther details.

Signed in accordance with a resolution of the Directors:

PJW Cottrell

Director

AR Berg

Director


INDEPENDENT AUDITORS’ REPORT TO THE

MEMBERS OF BORAL LIMITED

Scope

We have audited the financial statements of Boral Limited forthe financial year ended 30 June 1996, consisting of the profitand loss accounts, balance sheets, statements of cash flows,accompanying notes, and statement by directors set out onpages 48 to 79. The financial statements comprise theaccounts of the Company and the consolidated accounts of theeconomic entity, being the Company and its controlled entities.The Company’s directors are responsible for the preparationand presentation of the financial statements and theinformation they contain. We have conducted an independentaudit of these financial statements in order to express anopinion on them to the members of the Company.

Our audit has been conducted in accordance with AustralianAuditing Standards to provide reasonable assurance as towhether the financial statements are free of materialmisstatement. Our procedures included examination, on a testbasis, of evidence supporting the amounts and otherdisclosures in the financial statements, and the evaluation ofaccounting policies and significant accounting estimates. Theseprocedures have been undertaken to form an opinion as towhether, in all material respects, the financial statements arepresented fairly in accordance with Accounting Standards andother mandatory professional reporting requirements (UrgentIssues Group Consensus Views) and statutory requirements soas to present a view which is consistent with our understandingof the Company’s and the economic entity’s financial positionand the results of their operations and their cash flows.

The names of the controlled entities of which we have notacted as auditors are set out in Note 23. We have receivedsufficient information and explanations concerning thesecontrolled entities to enable us to form an opinion on theconsolidated accounts.

The audit opinion expressed in this report has been formed onthe above basis.

Audit opinion

In our opinion, the financial statements of Boral Limited areproperly drawn up:

(a) so as to give a true and fair view of:

(i) the state of affairs of the Company and the economicentity as at 30 June 1996, the results and cash flows ofthe Company and the economic entity for the financialyear ended on that date; and

(ii) the other matters required by Divisions 4, 4A and 4B ofPart 3.6 of the Corporations Law to be dealt with in thefinancial statements;

(b) in accordance with the provisions of the Corporations Law;and

(c) in accordance with applicable Accounting Standards andother mandatory professional reporting requirements.

KPMG

Chartered Accountants

CM Jackson

Partner



80

Stock ExchangeInformation


Statement of Holders of Equity Securities

as at 23 September 1996Ordinary SharesNumber of holders 153,597Distribution schedule of the number of holders –

Number of % ofShareholders Ordinary

Shares

(a) in the categories –

1 – 1,000 46,811 2.13

1,001 – 5,000 78,612 16.68

5,001 – 10,000 16,726 10.41

10,001 – 100,000 10,995 20.44

100,001 and over 453 50.33

(b) holding less than a marketable parcel of 100 shares 2,693 0.01

Percentage of total holding of 20 largest holders 32.75

Options

There are eleven holders of options to subscribe for ordinaryshares.

Voting Rights – Ordinary Shares

On a show of hands every person present, who is a memberor proxy, attorney or representative of a member, shall haveone vote and on a poll every member who is present in personor by proxy, attorney or representative shall have one vote foreach share held by him.

Ownership of Boral

The Company has not been given any substantial shareholdernotices which are current.

Twenty Largest Shareholders

Ordinary % ofShares Ordinary

Shares

ANZ Nominees Limited 65,443,066 5.8Westpac Custodian Nominees Limited 49,047,355 4.35National Nominees Limited 47,074,983 4.17Australian Mutual Provident Society 36,026,812 3.19Chase Manhattan NomineesLimited 30,094,420 2.67Queensland Investment Corporation 20,472,427 1.81State Authorities SuperannuationBoard 18,183,039 1.61MLC Limited 17,284,459 1.53Perpetual Trustees Nominees Limited 11,404,728 1.01NRMA Investments Pty Limited 11,139,333 0.99Citicorp Nominees Pty Limited 9,349,873 0.83Barclays Australia Custodian Services Limited 8,063,028 0.71GIO Personal Investment ServicesLimited 7,231,465 0.64Perpetual Trustees Australia Limited 7,092,640 0.63Australian Foundation Investment Co Limited 6,970,310 0.62Sethold Nominees Pty Limited 6,700,000 0.59Pendal Nominees Pty Limited 4,949,084 0.44QBE Securities Pty Limited 4,641,300 0.41The National Mutual LifeAssociation of Australasia Limited 4,223,500 0.37Argo Investments Limited 4,165,329 0.37

369,557,151 32.75

Directors’ Holdings of Securities

Particulars of ordinary shares in the Company of eachDirector of the Company or their Director-related entities as at23 September 1996 and particulars of shares acquired by eachDirector in office or their Director-related entities during thefinancial year to 30 June 1996 are:

Acquired During Holdings as Holdings as atFinancial at 30 June 23 September

Year 1996 1996

Director

P.J.W. Cottrell 28,329 51,706 51,706

A.R. Berg 117,198 545,880 645,880

E.A. Alexander 66 2,066 2,066

R.T. Halstead 104 3,280 3,280

D.J. Hughes 29,000 37,470 37,470

G.T. Kryger 18,221 38,745 38,745

M.R. Rayner 10,000 10,000 10,000

Sir Bruce Watson 264 63,368 63,368

The shares are held in the name of the Director except inthe case of Mr. A.R. Berg, 634,222 shares in which he has arelevant interest are held by Lutovi Investments Pty Limited,a family company of Mr. Berg, in the case of Mr. D.J. Hughes,29,000 shares in which he has a relevant interest are heldby Donald J. Hughes Investments Pty Limited, in the case ofMr. M.R. Rayner, 8,000 shares in which he has a relevantinterest are held in the names of M.R. Rayner and C.M. Rayner(Rayner Family A/C) and in the case of Sir Bruce Watson,44,000 shares in which he has a relevant interest are held byMacquarie Investment Management Limited and 11,000 sharesin which he has a relevant interest are held by Kilgour HoldingsPty Limited.

Mr. Berg also has 67,635 shares in the Company allocated tohis account in the Boral Executive Share Plan. Mr. Berg willonly be entitled to a transfer of those shares in accordancewith the terms and conditions of the Plan.

Mr. Berg holds 2,500,000 options to subscribe for ordinaryshares which were granted on 31 January 1994 and 500,000options to subscribe for ordinary shares which were grantedpursuant to the Boral Senior Executive Option Plan on18 January 1996. Further information about the optionsis given in clause (12) of the Directors’ Report.

Equity securities or other securities with rights of conversionto equity in the Company or in a related body corporate are nototherwise held by any Directors of the Company. There wereno disposals of such securities by any Directors or theirDirector-related entities during the financial year.


81

ShareholderInformation


Shareholder Communications

Enquiries or notifications by shareholders regarding theirshareholdings or dividends should be directed to Boral’s shareregistry, Coopers & Lybrand, Locked Bag A14, Sydney South,NSW 1232, Australia.

Telephone (02) 9285 7111 International + 61 2 9285 7111

Facsimile (02) 9261 8489 International + 61 2 9361 8489

Shareholders communicating with the share registry shouldadvise them that the enquiry relates to Boral shares and inaddition, when writing to the share registry should quote theirshareholder reference number as it appears on their sharecertificate/s, CHESS statements or correspondence from theshare registry along with their current address. For securityreasons, shareholders should keep their shareholder referencenumbers confidential.

Dividends

The final dividend for the 1995/96 year of 7.5 cents per sharewill be paid by the Company on 31 October 1996. The dividendwill be fully franked for Australian tax purposes at the corporatetax rate of 36% and Australian withholding tax will not bededucted from payments to overseas shareholders.

Shareholders who wish dividends to be paid directly to bank,building society or credit union accounts in Australia shouldtelephone the share registry for an application form. Thepayments are electronically credited on the dividend paymentdate and confirmed by payment advices sent through the mail.

Please note that instructions received remain in force untilamended or cancelled in writing.

Shareholders who receive dividends by cheque are requestedto bank these payments as soon as possible. This will avoid thepossibility of shareholders losing cheques or overlookingbanking of them.

Dividend Alternatives

As alternatives to receiving cash dividends, shareholders mayelect by notification to the share registry in writing toparticipate in the Dividend Reinvestment Plan (DRP) and/or theBonus Share Plan (BSP). The DRP enables shareholders to usecash dividends to purchase additional fully paid Boral ordinaryshares. The BSP enables shareholders to elect not to receivedividends but to receive instead additional fully paid Boralordinary shares issued as bonus shares out of the sharepremium account. The price at which shares are issued underboth the DRP and the BSP is at a discount of 2.5% frommarket value.

Under current Australian law, shares issued under the BSP arenot treated as dividends for the purpose of dividend imputationsystem and therefore such shares are not subject to Australianincome tax or dividend withholding tax. If the shareholder’sBSP entitlements arise from shares acquired, or deemed tohave been acquired, prior to September 1985, shares receivedunder the BSP will not be subject to Australian capital gainstax. As a consequence and subject to shareholders’ owninvestment advice, the BSP may not be of interest toshareholders who acquired their shares after capital gains taxwas introduced.

Annual Report Mailing List

Shareholders not wishing to receive the Annual Report shouldadvise the share registry in writing so that their names can beremoved from the mailing list.

Change of Address

Shareholders should notify any change of address to the shareregistry promptly in writing quoting their shareholder referencenumber, previous address and new address. It is not necessaryfor shareholders to return their share certificate/s whennotifying a change of address. Uncertificated holderssponsored by a broker should advise their sponsoring brokerof the change.

Information on Boral

The Annual Report is the main source of information forshareholders. Other sources of information include:

March – the interim results announcement for the Decemberhalf year. This announcement is sent to shareholders in midMarch

September – the annual results announcement

November – the Annual General Meeting. The Chairman’sAddress to the Meeting is sent to shareholders shortly afterthe Meeting.

Requests for publications and other enquiries about Boral’saffairs should be communicated to:

The Manager, Corporate AffairsBoral LimitedGPO Box 910SYDNEY NSW 2001

Share Trading and Price

Boral Limited shares are traded on Australian Stock ExchangeLimited (ASX). The symbol under which they are traded is“BOR” and the details of trading activity are published in mostdaily newspapers under that abbreviation.

The most recent market price of Boral shares on ASX maybe accessed by telephoning the Share Price Service on0055 16741. Available 24 hours per day, 7 days per week,the cost to the caller is 25 cents from anywhere withinAustralia.

Share Registry Developments

Traditionally companies have issued share certificates toshareholders as evidence of ownership. In recent years, thetrend towards international investment in Australia hasincreased the need for a system that allowed major investorsto settle share deals more rapidly than is possible with thephysical exchange of certificates. This need has resulted insystems whereby traders are able to register theirshareholdings in an uncertificated mode.

In September 1994, ASX commenced the introduction of its“CHESS” system to further speed settlement by largelyeliminating paper transfers and replacing them with electronicmessages between stockmarket participants and companyshare registries. Boral shares became CHESS eligible on25 February 1995.

Shareholders who wish to have their holdings recorded inuncertificated form are able to do so through entering intoa sponsoring agreement with a stockbroker. Alternativearrangements for recording holdings in uncertificated formbetween shareholders and the Company known as “issuersponsorship” have not to date been introduced by Boral.

Shareholders who prefer to keep share certificates for securityor other reasons are able to maintain their holdings incertificated form and receive certificates when purchasingshares.

Dividend and Share Issue History

The ten year history appears on page 44.


82

CompanyInformation


Boral Limited

Australian Company Number 000 051 696Level 39, AMP Centre50 Bridge Street Sydney NSW 2000GPO Box 910 Sydney NSW 2001Telephone (02) 9220 6300International +61 2 9220 6300Facsimile (02) 9233 6605International +61 2 9233 6605

Stock Exchange Listings

Australian Stock Exchange LimitedThe New Zealand Stock Exchange(listing for Overseas Listed Issuer)National Association of Securities Dealers AutomatedQuotation System (NASDAQ) National Market System(listing of American Depositary Receipts for ordinary shares)

Share Registers

C/- Coopers & LybrandSydney: 580 George StreetMelbourne: 333 Collins StreetBrisbane: 1 Eagle StreetPerth: 1 William StreetAdelaide: 91 King William StreetCanberra: 53 Blackall Street, BartonLaunceston: C/- L.A. Johnson & Co.10 Cameron Street

Telephone enquiries (02) 9285 7111International +61 2 9285 7111

Depositary for American Depositary

Receipts for Ordinary Shares

The Bank of New York101 Barclay StreetNew York, N.Y., USATelephone 212 815 2729

Secretary

M.B. Scobie

Auditors

KPMGChartered Accountants

Bankers

AustraliaNational Australia Bank LimitedWestpac Banking CorporationUSAStandard Chartered PLCEuropeMidland Bank PLCDresdner Bank AGCredit Lyonnais BankNederland NVABN AMRO Bank NVSouth-East AsiaThe Hongkong and Shanghai Banking Corporation Limited

Non-Executive Directors (other than Directors of

Boral Limited) of Australian Operating Subsidiaries

Gas Corporation of Queensland LimitedA.C. Freeleagus, AO, CBE, RFD, AE

J.T. Woods, ISO

Oil Company of Australia LimitedA.C. Freeleagus, AO, CBE, RFD, AE

P.E. GreenSouth Australian Gas Company LimitedR.W. PiperGas Corporation of Tasmania LimitedJ.K. Edwards, AO

P.G. MorganSawmillers Exports Pty. LimitedH. OhkawaT. Mitsui


1996 annual report boral

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