CSR to put demerger proposal to shareholders

CSR Limited (CSR)announced today that it is proceeding with plans to put a demerger proposal toshareholders.

CSR’s 112,000 shareholders willbe asked to vote on the demerger at meetings to be held in Sydney on 25March.

The Federal Court of Australiatoday approved the convening of the meetings and the dispatch of an explanatorybooklet for shareholders.

The demerger is in line with theCSR strategy over the past five years and involves spinning off the group’sheavy building materials assets (primarily aggregates, premix concrete, cementand concrete pipe & products) from the other CSR group businesses.

The demerger wouldresult in two separate Australian companies, both listed on the AustralianStock Exchange:

Rinker Group Ltd (RGL) – afocused, heavy building materials group, comprising Rinker MaterialsCorporation in the US and the Readymix and Humes businesses in Australia andAsia.RGL is expected to be one of thetop 10 heavy building materials stocks in the world, based on a number ofmeasures, including cash flow.It willcontinue its growth strategy of building strong regional market positions forits key products. RGL should also bebetter positioned to participate in the ongoing consolidation of theinternational heavy building materials sector.With around 85% of earnings* from Rinker Materials in the US, it isexpected that over time, investors will value RGL more in line with its USpeers.

CSR Limited, after thedemerger, will be a diversified, Australian company, holding some of the bestknown household brands in the country.The group will comprise three businesses- CSR Building Products, Aluminium and CSR Sugar.CSR is expected to focus more effectively onthe respective strengths of these businesses and to pursue value-adding, lowrisk growth options, which have previously ranked as a lesser priority for theCSR group. CSR, after the demerger, isexpected to distribute a higher level of its profits as dividends than it doescurrently.A high level of franking isgenerally expected.

The explanatory booklet forshareholders will be lodged with the Australian Stock Exchange prior to the commencementof trading on Monday 10 February.It isscheduled to be mailed to shareholders after printing in approximately twoweeks.

*Businessearning before corporate costs, interest and tax for the year ended 30September 2002