Indicadores de privación/acumulación

The directors present their Report, the audited Group consolidated financial statements and the audited Company financial statements for the year ended 31 December 2006.

Business Review

A review of the development and performance of the Group, including the financial performance during the year, can be found in the Business Review on pages 12 to 37. The principal activities, financial summary and key performance indicators relating to the Group are set out on pages 2 to 9 and a description of the principal risks and uncertainties facing the Group are discussed in the Business Review on pages 22 to 25.

The Annual Report has been prepared for, and only for, the members of the Company, as a body, and no other persons. The Company, its directors, employees, agents or advisers do not accept or assume responsibility to any other person to whom this document is shown or into whose hands it may come and any such responsibility or liability is expressly disclaimed. By their nature, the statements concerning the risks and uncertainties facing the Group in this Annual Report involve uncertainty since future events and circumstances can cause results and developments to differ materially from those anticipated. The forward looking statements reflect knowledge and information available at the date of preparation of this Annual Report and the Company undertakes no obligation to update these forward looking statements. Nothing in this Annual Report should be construed as a profit forecast.

Dividends

Subject to shareholder approval, the directors have proposed a final 2006 dividend of 11.1p per ordinary share. The total dividend for the year ended 31 December 2006 is 19.0p per ordinary share (2005: 18.12p). Dividend payments Dividend per share (p) Ex-dividend date Record date Payment date Ordinary shares Interim 2006 7.9 11.10.06 13.10.06 02.11.06 Proposed final 2006 11.1 09.05.07 11.05.07 06.06.07 Preference shares 3.875 08.03.06 10.03.06 31.03.06 Preference shares 3.875 06.09.06 08.09.06 02.10.06

Principal acquisitions and disposals

Details of the Group’s acquisitions and disposals can be found in the Business Review. The following is a summary of the significant transactions.

Acquisitions

The following 2006 acquisitions were disclosed in the 2005 Directors’ Report.

The Group announced the acquisition of the Chinese beauty packaging business of FangXin Limited on 25 January 2006. The acquisition was completed on 16 June 2006 for a total consideration of £35m.

The acquisition of the Egyptian Can Making Company (Ecanco) was announced on 30 January 2006 for a cash consideration of £58m and the acquisition was completed on 6 February 2006.

On 25 April 2006, Rexam launched a public offer to acquire Airspray NV, a dispensing systems business listed on the Dutch stock exchange, for £106m. The offer was declared unconditional on 23 May 2006.

Additionally, Rexam announced on 21 August 2006 a joint venture with Hindustan Tin Works Limited in India which was completed on 14 October 2006. Rexam holds a majority stake in the acquired company, HTW Beverage Can (India) Private Limited, and has made a cash investment of £7m.

Rexam also announced on 21 August 2006 that it had acquired True Pack Private Limited, an Indian plastic packaging company, for a total cash consideration of £6m. The acquisition was completed on 25 September 2006.

Disposals

On 7 September 2006 the Group completed the disposal of its non barrier thin wall plastic packaging business in Yate, UK to Sharp Interpack Limited and on 25 October 2006 announced the completion of the disposal of its non barrier thin wall plastic packaging businesses in Lidköping, Sweden and Stilling, Denmark to Polimoon AS. These disposals were completed for an aggregate consideration of £23m including debt disposed and costs.

Directors

The Board of directors for the year ended 31 December 2006 and at the date of this report are set out on page 39.

As stated in the 2005 Directors’ Report, Christopher Clark retired as senior independent director on 8 February 2006. Carl Symon was appointed as senior independent director with effect from this date.

The following directors have been appointed to the Board during the year and up to the date of this report. With the exception of Noreen Doyle, who stood for election at the Annual General Meeting (AGM) 2006, those who will retire from the Board at the AGM 2007 are shown in the table below and, being eligible, offer themselves for election.

Appointment of directors

Name Position

Election at AGM 2007

Leslie Van de Walle Chief Executive Officer 

(appointed 17.01.07) (from 01.02.07)

Noreen Doyle Non executive director

(appointed 22.03.06)

Wolfgang Meusburger Non executive director 

(appointed 01.12.06)

Jean-Pierre Rodier Non executive director 

(appointed 07.06.06)

Leslie Van de Walle was appointed as an executive director on 17 January 2007 and succeeded Lars Emilson as Chief Executive Officer on 1 February 2007. Lars Emilson retired from the Board and as Chief Executive on 1 February 2007.

In addition to the above, the following directors will retire by rotation from the Board and, being eligible, offer themselves for re-election.

Re-election of directors

Name Position

Re-election at AGM 2007

Michael Buzzacott Non executive director  Carl Symon Non executive director  The Board’s reasons for, and recommendation of, the election or re-election of the directors identified in the tables above can be found in the Corporate Governance Report on page 47 and in the Notice of AGM 2007.

David Tucker was re-elected as a non executive director at the AGM 2006 for a further one year period as he had then served on the Board for a continuous period of nine years. He will retire from office at the AGM 2007.

The service contracts of the executive directors and the letters of appointment for the non executive directors are available for inspection at the registered office of the Company and will be made available at the AGM 2007, as specified in the Notice of AGM 2007.

Directors’ interests

None of the directors had any interest during or at the end of the year in any contract of significance in relation to the business of the Company or its subsidiary undertakings. The executive directors are deemed to have an interest in the Rexam PLC ordinary shares held by the Rexam Employee Share Trust as detailed in note 28 to the consolidated financial statements.

Full details of the share interests of those directors holding office on 31 December 2006 in the ordinary share capital of the Company, including any interest of a connected person, are set out in the Remuneration Report.

Research and development

The Group commits sufficient funds to enable it to keep in the forefront of all relevant product, process, market and system developments in the sectors in which it operates. Rexam works actively to manage a balanced innovation portfolio of custom and Rexam standard products. This has been achieved by establishing separate internal, customer led and open innovation programmes. Rexam’s leadership in this area is demonstrated by the number of new consumer packaging products launched which include Rexam standard products such as the SLEEKTM _can

and the ProdigioTM _{airless dispenser. Expenditure on research and}

development during the year amounted to £14m (2005: £12m).

Financial risk management

The financial risk management and objectives of the Group and the exposure of the Group to price, credit, liquidity and cash flow risk are set out in the Business Review and note 24 to the consolidated financial statements.

Corporate responsibility

Information relating to the Company’s policies towards environmental, social and governance areas of corporate responsibility (CR) can be found in the Corporate Responsibility section of the Business Review. During 2006 Rexam developed a comprehensive CR section on its website, where numerous case studies, policy documents, facts and figures underlining Rexam’s involvement in and commitment to the four main areas of CR that have been identified by the Company - Environment, Our People, the Community and Governance – can be found.

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Substantial shareholdings

At the date of this report, the Company had received notification from the following financial institutions in the voting rights of the Company, in accordance with the Disclosure and Transparency Rules of the UK Listing Authority. The number of shares and percentage interests stated are as disclosed at the date on which the holding was notified.

Financial institutions and their clients’ interests of 3% or more in issued ordinary share capital of the Company

Shares %

AMVESCAP PLC 64,247,356 11.01

Barclays PLC 26,987,197 4.85

Legal & General Group Plc 19,348,021 3.31 Share capital

Full details of the Company’s share capital can be found in note 27 to the consolidated financial statements.

Donations

Charitable donations made by the Group in 2006 are shown in the table, with further details provided below. No donations were made for political purposes.

Charitable donations

2006 2005

UK £61,000 £68,000

Worldwide £589,000 £790,000

In the UK, donations were given to Eco 4 The World Foundation, a United Nations sponsored educational foundation which aims to encourage young people to become more involved in environmental conservation; The Prince’s Trust, a charity helping young people to become self sufficient; and the British Occupational Health Research Foundation, which contributes to the well being of working people.

Worldwide donations included a donation to Abralatas, an aluminium can recycling organisation in Brazil; the Camp Coca-Cola Foundation in the United States; and to local community healthcare and educational initiatives in Russia.

Directors’ Report

Payments to suppliers

The Group’s operating businesses are responsible for the terms and conditions under which they conduct business transactions with their suppliers. It is Group policy to agree the terms of payment and make payments to suppliers in accordance with those terms, provided that suppliers have complied with all relevant terms and conditions.

The Company had 21 days’ (2005: 12 days) purchases outstanding at 31 December 2006 based on the average daily amount invoiced by suppliers.

Employees

The Rexam Way establishes the core values that distinguish Rexam as a market leader and employer of choice. Trust, Teamwork, Continuous Improvement and Recognition are the values that the Group has chosen and which involve, inform and motivate employees to work towards the vision of making Rexam the leading global consumer packaging company. The Rexam Way Impact Program has been designed to support these core values. Its aim is to raise performance by getting the best from empowered teams through a series of workshops and follow-up action plans.

The Group has also developed the Talent Management Program, the objective of which is to identify and systematically develop the careers of the highest potential individuals, worldwide. As part of this process selected employees attend an assessment centre which facilitates the creation of personal development plans. As a continuing part of leadership development the Group runs a series of programmes under the banner of Horizon, starting at graduate level and working its way to Board level. The Horizon programmes are run in conjunction with various globally renowned business schools.

Further information on the Group’s training and development programmes can be found in the Business Review on page 26.

The Group has active policies of equal opportunity ranging from selection and recruitment to training and development which meet the needs of its operations around the world. Disabled people are given full consideration for employment and subsequent training (including, if needed, retraining for alternative work where employees have become disabled), career development and promotion on the basis of their aptitudes and abilities.

Directors’ Report

In 2006 the Group initiated a Diversity & Inclusiveness programme to help develop its global culture. All the businesses around the world will be set a common behavioural goal to encourage employees to act ethically, fairly and with an open mind to all those they come into contact with.

Communication with employees has an important focus through team briefings when employees can participate and give their views on any aspect of the Group’s business. The Chief Executive Officer also issues online updates to employees through the Group’s intranet. The Group’s annual and interim results announcements are presented at the subsequent team briefings and employees are given the opportunity to comment on the financial and economic factors affecting the Group’s performance. The Group’s global intranet is an immediate source of information and knowledge. The in-house employee magazine, ’at rexam’, is published in fifteen languages for worldwide distribution.

The Rexam European Forum (REF) is a joint employee representative and management body created for the exchange of information and dialogue concerning issues which may impact Rexam’s employees within the European Economic Area. The REF holds an annual meeting attended by the Chief Executive Officer and other senior management. A smaller coordinating committee drawn from within the REF exists to discuss organisational issues as well as any exceptional business issues which may arise and which may have an impact on Rexam’s European employees.

The Company has well established employee share schemes to promote share ownership, as described in the Remuneration Report. Competitive retirement and benefit packages are offered and, subject to the culture, market practices and regulations in the countries where we carry out our business, benefits may be provided in whole or in part by the government, private or supplementary Rexam sponsored programmes. Financial details of the Group’s worldwide retirement arrangements can be found in the Business Review and note 25 to the consolidated financial statements.

Annual General Meeting 2007

The AGM of the Company will be held at 11.00am on 3 May 2007 at Church House, Dean’s Yard, London SW1, details of which can be found in the Notice of AGM 2007.

Purchase of own shares

At the AGM 2006, shareholders passed a special resolution renewing the authority to the Company, in accordance with the Articles of Association, to purchase its own ordinary shares in the market.

No ordinary shares have been purchased in the market, nor has any contract been made to purchase ordinary shares under the previous or existing authorities from 1 January 2006 to the date of this report. The directors are seeking to renew the authority at the AGM 2007. Further details can be found in the Notice of AGM 2007.

Share purchase authorities

AGM 2007 Proposed number AGM 2006 Number 10% of issued ordinary share capital 58.3m 55.6m Directors’ statement

Each person who is a director of the Company at the date of approval of this report confirms that:

– so far as the director is aware, there is no relevant audit information of which the Company’s auditor is unaware; and – each director has taken all the steps that he/she ought to have taken as a director to make himself/herself aware of any relevant audit information and to establish that the Company’s auditor is aware of that information.

Auditor

In accordance with the recommendation of the Audit Committee, a resolution for the re-appointment of PricewaterhouseCoopers LLP will be proposed at the AGM 2007.

On behalf of the Board David Gibson

Company Secretary 20 February 2007

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Corporate Governance Report