ACCT3610 Business Analysis and Valuation

ACCT3610 Business Analysis & Valuation Group Project Cover Sheet

We declare that all syndicate members contributed equally to the completion of the Project.

We declare that this assessment item is our own work, except where acknowledged, and has not been submitted for academic credit elsewhere, and acknowledge that the assessor of this item may, for the purpose of assessing this item:

Reproduce this assessment item and provide a copy to another member of the University; and/or, Communicate a copy of this assessment item to a plagiarism checking service (which may then retain a copy of the assessment item on its database for the purpose of future plagiarism checking). We certify that we have read and understood the University Rules in respect of Student Academic Misconduct.

Student Name 1 2 3 Kay Limwattana Changyu Liu Monica Trieu

Student Number z3375025 z3369246 z3375031

ALL syndicate members must sign this statement

Signature KL CL MT

* This percentage (an amount less than 100%) will be the percentage of your syndicates project mark awarded to the named student.

Complete and submit this form with the Project Report

BUSINESS ANALYSIS AND VALUATION REPORT

Business Analysis & Valuation Report

KAY LIMWATTANA z3375025 CHANGYU LIU z3369246 MONICA TRIEU z3375031

On

CSR Limited

BUSINESS ANALYSIS AND VALUATION REPORT

Executive Summary
Stock Recommendation Last Price (25 May 2013) HOLD AUD 2.02 Forecast Price Base Case AUD 1.44 Forecast Price Best Case AUD 2.22 Forecast Price Worst Case AUD 1.25

CSR$ Limited$ is$Australias$sixth$ largest$ capital $goods $company$ by$ total$ revenue $(BuySellSignals$2013).$ The$ company$operates$across$building$products,$glass,$aluminium$and$property$investment$industries $in$Australia,$ New$Zealand$and$Asia.$The $purpose$of$this $report$is$to$make$a $stock$recommendation$for$CSR$Limited$based$ on$the$estimated$fundamental$value$of$the$company.$This$was$performed$through: Company$and$Industry$analysis Financial$analysis DFCF$and$CCA$Valuation Sensitivity$and$Scenario$Analysis Our$recommendation$is $ primarily$grounded$on$our$estimated$best$target$price$of$2.22$AUD,$9.9%$higher$than$the$ current$share $price$of$2.02$AUD$(25$May$2013)$as $we$believe $it$is$the$most$likely$outcome.$This $is$due$to$CSRs$ leading$ position$ in$ the $ improving$ market$ and$ RBAs $ expansionary$ monetary$ policy$ which$ weakens $ the$ international $competition$and$stimulates$the $domestic$demand$of$building$products.$Different$ evidence$has$ shown$positive$future$prospects$for$CSR.$ Our! HOLD $ recommendation$ is $conservative,$ due $to$the$high$ sensitivity$ of$ CSR$to$ the $global$demand$and$ competition,$thus$advising$to$hold$rather$than$buy$CSRs$shares.$The $details$of$our$findings $are$further$discussed$ throughout$this$report,$explaining$the$rationale$for$our$HOLD$recommendation$for$CSRs$share.

BUSINESS ANALYSIS AND VALUATION REPORT

Table of Contents
Introduc.on!
Company(Descrip/on( Industry(Overview( Industry(Future(Prospects( Corporate(Strategy(

4
4 5 6 7

Accoun.ng!and!Financial!Analysis!
Performance(Analysis( Produc/vity(Analysis( Protability(Analysis( Leverage(Analysis( Liquidity(Analysis( SWOT(Analysis(

9
9 9 10 11 12 13

Forecasts!and!Valua.ons!
Forecast(Assump/on( DFCF(Valua/on( Sensi/vity(Analysis( CCA(Valua/on(

14
14 17 20 22

Conclusion!and!Recommenda.on! Appendices!
1.(Aluminium(Price(Movement( 2.(Michael(Porters(FIve(Forces(Analysis( 3.(Standardized(Financial(Reports( 4.(Industry(Growth(Rates( 5.(Elas/city(of(the(Sensi/vity(Analysis( 6.(CCA(Valua/on(

23 24
24 24 26 27 27 28

List!of!Abbrevia.ons! Bibliography!

29 30

BUSINESS ANALYSIS AND VALUATION REPORT

Introduction
Company Description
CSR$Limited$(ASX:CSR)$was $originally$founded$as$a $sugar$company$in$ 1855.$CSR$has$since $undergone$significant$restructuring$and$is $now$ more$focused$ on$the $manufacturing$ and$ distribution$ of$ building$ products,$glass $ and$aluminium$in$Australia,$New$Zealand$and$Asia.$Of$ CSRs$revenue,$92%$is$generated$from$its $operations$within$Australia,$ with$only$8%$from$its$international$operations.1
Figure 1-CSRs Share Performance and Share Volume, May 2010 to May 20131

As $a $leading$ building$ products$manufacturer$ and$ distributor,$ CSR$ shares $ significant$ portions$ of$ the$ Australian$ market.$ Its $ building$ products $sector$became$its $primary$business $after$the$company$sold$ its $ sugar$ business,$ Sucrogen,$ in$ 2010$ and$ caused$ a$ permanent$ decline$of$30%$of$CSRs$total$revenue. 2
Others Building Products Aluminium Glass Property Investment

53.4% 22.5% 27.3% 84.4% 16.5% -19.4% 1.5% 64.5% 1.4% -52% -60% -16% 28%
Prots

71%

115%

The$ Gove $Aluminium$ segment,$ as $a $joint$ venture$ participant$ in$ Tomago$ Aluminium$ Smelter,$ has $ a $ 6.3%$ market$ share$ of$ the$ Australian$ aluminium$ production.$ This $ segments$ revenues$ are$ declining$ due$ to$ a $30%$ fall $of$ global $aluminium$ prices $in$ 2012$ (Appendix!1).

Revenue

Figure 2-CSRs 2012 Revenue and Prot Sector Contribution2

50%

41.7% 23.7% 7.5% 4.3%

25%

0% -4.1%-1.9%

CSRs$ Viridian$ glass $is$ Australias $largest$ glass $provider.$ However,$ Viridian$ has$ recorded$ losses$ in $recent$ years $associated$ with$ the$ appreciation$of$the $Australian$dollar,$increased$import$competition$ and$construction$downturn.$CSR$is $currently$restructuring$Viridian$to$ achieve$cost$savings$and$growth$in$this$sector.

-25%

2010
ROE

2011
ROA

2012

Figure 3-CSRs 3 years Return on Assets / Equity

30% 20% 10% 0% -10% $1,972.1m 2010

Revenue

$1,944.7m 2011
EBITDA Margin

$1,861.9m 2012
EBIT Margin

-20% -30%
NPAT Margin

Figure 4-CSRs 3 years Protability Overview

1$Yahoo!7$Finance$2013,$Yahoo!7'Finance,$Australia,$viewed$29$May$2013,$<hap://au.nance.yahoo.com/q?s=csr&ql=1>. 2IBISWorld'Company'Report:'CSR'Limited'31'March'2012,$2012,$Premium$Report,$IBISWorld,$viewed$29$May$2013,$<$hap://www.IBISWorld.com.au/car/

default.aspx?enkd=10>. Page 4 of 33

BUSINESS ANALYSIS AND VALUATION REPORT

Industry Overview
Despite$CSRs $involvement$in$various$manufacturing$industries,$ it$tends $to$be$sensitive$to$cyclical$movements$ within$ the $ construction$ market.$ For$ example,$ the$ GFC$ in$ 2008$ caused$ the $ residential$ and$ commercial$ construction$markets$performance$to$weaken$to$its $lowest$levels $of$the $decade.$This$downturn$was $felt$by$the$ whole $industry,$where$CSR$and$its $competitors$experienced$declining$levels$of$profit.$Relevant$key$threats $and$ competitive$opportunities $prominent$in$the$industries $have $been$analysed$via $the$Michael $Porters $Five $Forces$ Framework$(Appendix!2).

Figure 5-CSRs Markets Share and Industries Key Players 3

Figure 6-Share Performance for CSR and the ASX200 Index and its major competitors, May 2012 to May 2013 4

3IBISWorld'Company'Report:'CSR'Limited'31'March'2012,$2012,$Premium$Report,$IBISWorld,$viewed$29$May$2013,$<$hap://www.IBISWorld.com.au/car/

default.aspx?enkd=10>.
4$Yahoo!7$Finance$2013,$Yahoo!7'Finance,$Australia,$viewed$29$May$2013,$<hap://au.nance.yahoo.com/>.

Page 5 of 33

BUSINESS ANALYSIS AND VALUATION REPORT

Industry Future Prospects

Construction! Market! Recovery:! A$ key$ focus$of$ the $manufacturing$ industrys$future$ prospects $involves$the$ recovery$ of$ the $residential $and$ commercial $construction$market.$ Current$ statistics $indicate $an$ unfavourable$ outlook$in$the $near$future,$with$housing$starts $are $expected$to$be$135,000,$compared$to$the$previous $148,3005.$ Furthermore,$the$growth$in$turnover$from$commercial $construction$is$expected$to$be$4.0%,$compared$to$5.0%$in$ 20126.$Similarly,$the $Australian$monthly$ PCI 7$ and$PMI 8$for$nonmmetallic$mineral $products $and$metal $products$ have$declined$(to$39$points,$23$ points $and$40$ points $respectively)$with$the$PCI $remaining$below$the $critical$ benchmark$of$50$points$for$34$consecutive$months.$This$suggests $the$declining$productivity$of$these$industries.$ In$addition,$the $sudden$termination$of$the$Federal$Governments$ceiling$$insulation$rebate $scheme$in$2010$will$ also$affect$the$pricing$of$Insulation$products$and$services$in$the$future. However,$there $are$also$good$signs $of$future$recovery.$IBISWorld$has $predicted$Australian$GDP$to$grow$at$2.5%$ per$year$together$with$positive $growth$in$the$Glass$(3.4%),$Aluminium$(2.8%)$and$most$of$the$building$products$ industries $over$the$next$4$years.$The$ABS$has$also$released$encouraging$housing$finance$figures $for$this $year$that$ indicate$that$the $number$of$commitments$for$the$construction$and$purchases $of$new$dwellings $has $risen$by$ 13.5% 9$from$February$2012.$In$addition,$the$Australian$government$has $recently$announced$two$new$funding$ rounds$ for$ the$ National $Rental $Affordability$ Scheme $ which$ aims $to$ stimulate$ the$ construction$ of$ 50,000$ affordable,$high$quality$rental$dwellings$across$Australia 10. Carbon!Tax:$As $one $of$the$largest$building$products$manufacturers$in$Australia,$CSRs$yearly$ carbon$emissions$ amount$to$1$million$tonnes$resulting$in$an$annual $cost$of$AUD$23$million,$almost$30%$of$CSRs $profit$(2012).$This$ exerts $pressure$on$the$company$to$maintain$its $profitability.$CSR$states $that$it$has$increased$its$products$prices $to$ cover$the$imposition$of$the$carbon$tax$which$is $common$practice$in$the $industry.$As$this$can$cause$domestic$fuel$ bills$to$rise,$quantity$demanded$may$fall,$negatively$impacting$the$industrys$future$growth$and$profitability.

5$Brindal,$R.$(2012).$CSR$faces$tough$condikons$across$its$operakons,$The'Wall'Street'Journal,$11$July,$viewed$20$April,$2013,$<hap://

www.marketwatch.com/story/csrmfacesmtoughmcondikonsmacrossmitsmoperakonsm2012m07m11>.
6$Australian'Industry'Group,'ConstrucHon'Outlook'K'October'2012$(2012),$viewed$21st$March$2013,$<hap://www.aigroup.com.au/portal/binary/

com.epicentric.contentmanagement.servlet.ContentDeliveryServlet/LIVE_CONTENT/Economic%2520Indicators/Construckon%2520Survey/2012/ ACA_outlook_report_Oct2012.pdf>.
7$Australian'Industry'Group,'Performance'of'ConstrucHon'Index'm$March$2013$(2013),$viewed$21st$March$2013,$<hap://www.aigroup.com.au/portal/binary/

com.epicentric.contentmanagement.servlet.ContentDeliveryServlet/LIVE_CONTENT/Economic%2520Indicators/PCI/2013/pci_march_13%2520report.pdf>.
8$Australian'Industry'Group,'Performance'of'Manufacturing'Index$m$March$2013$(2013),$viewed$21st$March$2013,$<hap://www.aigroup.com.au/portal/

binary/com.epicentric.contentmanagement.servlet.ContentDeliveryServlet/LIVE_CONTENT/Economic%2520Indicators/PMI/2013/ PMI_nal_report_march_2013.pdf>.
9$Jones,$P.$(2013),$PosiHve'Signs'in'Housing'Finance,$viewed$17th$Apr$2013,$<hap://www.masterbuilders.com.au/newsarkcles/posikvemsignsminmhousingm

nance>.
10$Queensland'Government,'NaHonal'Rental'Aordability'Scheme$(2013),$Department$of$Housing$and$Public$Works,$viewed$21st$March$2013,$<hap://

www.communikes.qld.gov.au/housing/housingmservices/renkngminmthemprivatemmarket/nakonalmrentalmaordabilitymscheme>. Page 6 of 33

BUSINESS ANALYSIS AND VALUATION REPORT

Glass Plastic Foam Clay Brick Ceramic Tile & Pipe Plaster Board Concrete Products Non-Metallic Products Aluminium Production Residential Property Investment

-2.4% 1.4% 0.1% -0.3% 0.5% 2% 1.8% 1.8% 2% -0.1% 0.8% 2.1% 2.8% 1.3% 1.4% 2.6% 2.2%

3.4%

-4%

-2.667%

-1.333%

0%

1.333%

2.667%

4%

Historical Growth Rates(2008-2012) Figure 7-Industries Growth Rates by IBISWorld Research

Forecast Growth Rates (2013-2017)

Corporate Strategy

Figure 8-Building Products Sector Strategies

Figure 9-Viridian Glass Strategies

Figure 10-Separation and Acquisition Strategies Implemented between 2009-2012

Building! Products:! CSRs$building$products$are$Australias$most$ recognised$and$trusted$brands.$It$ continually$ invests $in$ its $Innovation$Centre $to$ develop$energy$ efficient$ building$ products $and$ solutions $targeting.$ CSR$ operates $ low$ cost$ manufacturing$ facilities $ and$ strong$ distribution$ networks.$ Despite$ the$ current$ market$ conditions,$ its$Lightweight$ Systems $is $performing$strongly$ with$high$operational $efficiencies,$ tight$control$on$ overhead$expenditures$and$prompt$alignment$of$manufacturing$capacity$to$current$weaker$market$conditions. Aluminium:! As$the$aluminium$ industry$ is$characterised$by$ undifferentiated$products,$ high$capital$intensity,$ increased$input$prices $and$increasing$competitiveness,$cost$reducing$strategies $are$necessary$to$remain$globally$ competitive.$Tomago$aluminium$has $undertaken$this$by$restructuring$and$adjusting$maintenance$and$working$

Page 7 of 33

BUSINESS ANALYSIS AND VALUATION REPORT

capital$budgets$in$2012,$allowing$ a$$28m$reduction$in$operating$ costs 11.$ Hedging$strategies$have$also$been$ undertaken$to$offset$the$low$Aluminium$prices,$where$it$compensated$80%$of$EBIT$declines$by$28%$in$201212. Viridian!Glass:! CSR$has $established$two$joint$ventures $for$Viridian$glass $operation.$The$joint$venture$structure $is$ expected$to$be$more $operationally$efficient$through$ongoing$technological $cost$synergies $and$site$rationalisation$ savings.$ CSR$ has $also$ ceased$the$manufacture $of$ uneconomical,$ lowmmargin$products$and$reduced$ offmline$ cutting$at$the $Dandenong$and$Ingleburn$facilities.$ $This$has$reduced$the$capacity$at$Ingleburn$by$32%.$Further$ efficiencies $include$ switching$ imports$ of$ certain$ goods $to$ manufacturing$ and$ replacing$ two$ operations $in$ Melbourne $with$more$efficient$lines $at$Dandenong.$This $restructuring$is$expected$to$bring$cost$savings$of$approx.$ $10$million$once$complete 13.$ Separation!and!Acquisition!Strategy:$The $sale$of$Sucrogen$and$an$Asian$insulation$and$panels$business$in$2010$ for$a $total $of$$1.87$billion$was$undertaken$to$focus$on$its$building$and$manufacturing$divisions.$The$proceeds$of$ the $sale$of$Sucrogen$was $used$to$repay$CSRs $debt$and$pay$dividends $to$revive$shareholders$confidence.$This$ decreased$CSRs$leverage$to$complement$its$natural$growth$with$business$development$opportunities.

11$Tomago$Aluminium$2012,$Tomago'Aluminium'announces'restructure,$media$release,$Tomago$Aluminium,$accessed$10$May$2013,$<hap://

www.tomago.com.au/images/stories/Tomago_Aluminium_Announces_Restructure_11012012.pdf>.
12$CSR$Limited.$(2011).$Maintaining'global'cost'compeHHveness.$Available:$hap://www.csr.com.au/InvestormCentremandmNews/AnnualmMeekngsmandmReports/

Annual%20Report%202012/aluminiummoverview.html.$Last$accessed$12th$May$2013.$
13$CSR'Limited,'Responding'to'Dicult'Market'CondiHons$(2013),$Viridian,$viewed$25th$March$2013,$<hap://www.csr.com.au/InvestormCentremandmNews/

AnnualmMeekngsmandmReports/Annual%20Report%202012/viridianmoverview.html>. Page 8 of 33

BUSINESS ANALYSIS AND VALUATION REPORT

Accounting and Financial Analysis14

The$financial $analysis $assesses$the$companys$performance$through$comparison$with$its$major$ competitors,$ Boral$Ltd$and$Brickworks$Ltd$over$the$years$2010$to$2012,$to$determine $what$has $driven$CSRs $financial$successes$ and$failures.

Performance Analysis
CSRs$dividend$payout$ratio$increased$in$2010mm11$due $to$ the $sale$ of$ Sucrogen$ enabling$ the$ one$ time $ increased$ dividend$payment$to$shareholders,$ before $recovery$ to$a$ more$stable$payout$ratio$in$2011m12.$ As $Borals $negative$ dividend$payout$ratio$in$2009m10$was$due $to$slow$demand,$ requiring$ impairment$ charges$ from$ asset$ writemmdowns$ and$Brickworks$2012$restructuring$causing$the$decline $in$ its $EPS.$Despite$the$varied$movement$of$dividend$payout$ levels $of$these$companies,$it$was$influenced$by$the$cost$ reduction$strategies $and$as $CSRs$performance$was$close$ to$the $industry$average,$it$suggests$the $high$sensitivity$of$ the$company's$performance$to$industry$movements.
Figure 11-Dividend Payout Ratio

Productivity Analysis
Declines $in$the$operating$efficiency$ratio$indicate$increased$ productivity.$CSRs$ratio$has $been$declining,$from$1.17$ to$ 0.88$ in$ 2011$ and$ 2012,$ due $ to$ declining$ operating$ expenses,$ after$ the$ restructuring$ of$ its $aluminium$ and$ glass $ segments.$ The$ processes$ involved$ with$ the$ production$of$the$firms$major$products$have $caused$the$ varying$production$levels,$with$CSR$having$a$diverse$range,$ Borals$focus $on$building$products $ and$Brickworks$clay$and$ concrete$products.
Figure 12-Operating Efciency Ratio

14$Note$that$the$rakos$analysis$in$this$seckon$includes$the$comparisons$between$CSR$and$its$major$compektors$Brickworks$and$Boral,$where$they$all$have$

dierent$accounkng$periods$end$and$dierent$operakons$and$structures. Page 9 of 33

BUSINESS ANALYSIS AND VALUATION REPORT

Profitability Analysis
We$have $determined$the$ROE$ with$ operating$income$ (EBIT)$to$reduce $the$impact$of$CSRs$sale $of$Sucrogen$on$ its $profitability.$CSR$and$Boral $are$close$to$the$industry$ average,$7.74%,$ in$2012$ due $to$the$increasing$foreign$ competition.$The $sharp$increase $of$CSRs $asset$turnover$ from$ 0.50$ to$ 0.85$ in$ 2011$ was$mainly$ caused$by$ the$ decrease$ of$ the $ companys $ assets $ from$ the$ sale$ of$ Sucrogen.$However$from$2011$to$2012,$the$decreasing$ trend$ of$ all $ three$ companies$ are$ almost$ identical,$ suggesting$the$decline$of$its$asset$turnovers $was $purely$ due$to$the$deterioration$of$sales.$ The$leverage$ratio$of$CSR$experienced$a $steep$decline$ from$2.13$to$1.76$in$2011$and$stayed$constant$in$2012$as$ CSR$ used$ the$proceeds $from$ the$sale$of$Sucrogen$ to$ repay$its $outstanding$debts.$The $leverage$ratios $of$Boral$ and$Brickworks $were $relatively$more $stable$during$2010$ to$2012. The$ ROE$ trend$ was $ driven$ by$ the$ ROA,$ rather$ than$ leverage,$ suggesting$ the$ major$ contributor$ to$ CSRs$ profitability$ was $its$net$ income.$ Therefore$ the$similar$ 2012$ ROEs$for$ the $three$companies$indicate$the$large$ impact$of$global$demand$for$the$industrys$success.
Figure 15-ROE Figure 14-ROA Figure 13-Prot Margin

Figure 16-Asset Turnover

Figure 17-Leverage

Page 10 of 33

BUSINESS ANALYSIS AND VALUATION REPORT

Leverage Analysis
In$2011$ and$2012,$ CSR$used$its $Sucrogen$proceeds $to$ repay$ its $debts,$ which$ significantly$ decreased$ interest$ obligations.$Also,$in$2012,$interest$rates $were$as $low$as$ that$of$post$GFC$in$2009,$reducing$the$amount$of$CSRs$ interest$obligations,$causing$a $higher$interest$coverage,$ which$surpassed$the$industry$ average.$For$ Brickworks,$ their$level $of$cash$flow$from$operating$activities $in$2011$ declined$by$ $60$ million,$while $the$2012$interest$costs$ increased$to$$20.8$million,$resulting$in$a$lower$ability$to$ pay$ debt$ obligations.$However,$they$ still$maintained$a$ ratio$ higher$ than$ the$ industry$ average.$ Borals$ ratio$ increased$ in$ 2011$ due$ to$ their$ net$ debt$ position$ decreasing$by$ $500$ million,$half$of$its $debt$position$in$ 2010.$However,$it$has $begun$to$decline$to$due $increased$ interest$ expenses$ and$ declining$ operating$ cash$ flow.$ Therefore$ CSR$ is $ in$ a$ relatively$ strong$ position$ in$ covering$its$interest$obligations. Boral$and$CSR$demonstrate$a$similar$trend$in$their$debt$ to$equity$ ratios.$CSRs $debt$ decreased$in$2011$as $they$ used$proceeds $from$the $sale$of$Sucrogen$to$repay$debts$ and$return$$800$ million$back$to$shareholders.$ Despite$ the $ improved$ leverage,$ S&P$ maintained$ CSRs$ credit$ rating$at$BBB+.$In$Borals $case,$they$were$able$to$repay$ debt$ of$$670$ million$from$capital $raising$in$2010$ and$ benefit$from$favourable $exchange$translations $of$ their$ US$borrowings.$All $maintain$a $debt$to$equity$ratio$close$ to$or$ lower$ than$the$industry$ average,$ indicating$ that$ these$ companies $ have$ effective $ debt$ and$ equity$ management.$As$CSR$has$maintained$a$debt$to$equity$ ratio$ close$ to$the$industry$ average,$ it$ suggests$it$ has$ sustainable$debt$levels.
Figure 20-Debt to Equity Ratio Figure 19-Interest Coverage Ratio

Page 11 of 33

BUSINESS ANALYSIS AND VALUATION REPORT

Liquidity Analysis
CSRs$current$ratio$has$been$stable$at$over$the $2010mm12,$ with$a$peak$in$2011$of$1.77$due$to$the $sale$of$Sucrogen,$ which$ reduced$ the$ amount$ of$ payables,$ while $ the$ restructuring$ of$ Tomago$ Aluminium$ smelter$ reduced$ provisions 15.$Borals$high$liquidity$ during$2010mm11,$was$ caused$ by$ the $ closure $ of$ nonmmprofitable $ operations$ while$Brickworks$ liquidity$ is $moving$ towards $a $more$ stable$level$after$the$large $costs$involving$redundancies$ and$ writemmoffs$ from$ the$ closure$ of$ its$ unsuccessful$ kilns 16. The$similar$ trend$with$its$competitors,$was $due$to$the$ industrys$impact$ on$these $companies$liquidity.$As $the$ major$ influence$on$these $firms $was $the$lower$housing$ starts $and$ increasing$ electricity$ and$gas$prices,$ which$ required$cost$reduction$strategies,$ it$suggests $the$high$ relevance$ of$ global $ demand$ on$ the$ liquidity$ of$ the$ industry.
Figure 18-Current Ratio

15$Williams,$M.$2013,$Alumina'ProducHon'in'Australia,$IBISWorld$Industry$Report$C2131,$viewed$30$May$2013,$<hap://clients1.ibisworld.com.au.wwwproxy0.$

library.unsw.edu.au/reports/au/industry/default.aspx?enkd=226>.
16$Smith,$M.$(2013).$Rivals'may'cement'beXer'relaHons.$Available:$hap://www.afr.com/p/rivals_may_cement_beaer_relakons_a7pqAV4MzMoOsjgzuYRQFL.$

Last$accessed$20th$April$2013. Page 12 of 33

BUSINESS ANALYSIS AND VALUATION REPORT

SWOT Analysis
The$SWOT$analysis $explores$CSRs$internal $and$external $environment,$determining$the$potential$impacts$on$its$ future$performance.

17!18 !19 !20!21 22

17$CSR'Limited'submission'on'Australias'Clean'Energy'Future'LegislaHonKBills'2001,2012,$CSR$Limited$ocial$website,$viewed$28$April$2013,$<hap://

www.csr.com.au/>.
18$Kirkwood,$I.$(2013).Budget'2013:'Hunter'misses'the'gravy'train.$Available:$hap://www.theherald.com.au/story/1502341/budgetm2013mhuntermmissesmthem

gravymtrain/?cs=12.$Last$accessed$16th$May$2013.
19$Wen,$P$2011,$'Cracks$appear$in$a$besieged$glass$industry',$The'Sydney'Morning'Herald,$viewed$26th$April$2013,$<hap://www.smh.com.au/business/cracksm

appearminmambesiegedmglassmindustrym20110802m1i9xd.html>.
20$Kwek,$G$2013,$RBA$cuts$rates$to$record$low,'The'Sydney'Morning'Herald,$viewed$7th$May$2013,$<hap://www.smh.com.au/business/themeconomy/rbam

cutsmratesmtomrecordmlowm20130507m2j52m.html>.
21$Schwarten,$E.$2013,$Home$loan$approvals$surge$in$March,$The'Sydney'Morning'Herald,$13$May,$<hap://news.smh.com.au/breakingmnewsmbusiness/homem

loanmapprovalsmsurgeminmmarchm20130513m2jh85.html>.
22$Brocklehurst,$E.$(2013).$China's'TransformaHon'Of'The'Aluminium'Industry.$Available:$hap://nance.ninemsn.com.au/newscolumnists/other/8644677/

chinasmtransformakonmofmthemaluminiummindustry.$Last$accessed$1st$May$2013. Page 13 of 33

BUSINESS ANALYSIS AND VALUATION REPORT

Forecasts and Valuations

Forecast Assumption
To$ forecast$ CSRs $future$performance,$ the$ DFCF$ model$is$used$to$ estimate$ the $fundamental$ value $of$ the$ company.$For$the$base$case$scenario,$the$IBISWorlds $forecasts $for$the $industries $have$been$used$to$estimate$the$ sales $growth$rates $for$ CSRs$building$ products,$ aluminium$ and$glass $divisions $(Appendix! 4).$ This $is$a $valid$ $ assumption$because$as $discussed$in$our$financial$analysis,$CSRs $past$performances$were$always$similar$to$that$of$ the $industry$averages $and$CSR$is $also$very$sensitive $to$the$industry$trends.$The $other$growth$rates$such$as $NOPAT$ margin,$ NWC$ and$Longmterm$Assets $have$been$forecasted$based$on$percentage$of$the$sales$figures.$ This$is$ because$sales$is $always$the$force$that$drives$the$growth$of$CSR.$ For$ simplicity$ purposes,$ the $majority$ of$the$ growth$rates $are$forecasted$to$be$constant$over$the $period$2013m18.$NOPAT$margin$%$of$Sales$is $assumed$to$be$ mean$reverse$over$the$longmrun$due$to$strong$competition$within$the$manufacturing$industry.
March+2012 Sales+growth+rates: Building$Products Aluminium Glass Weighted$Average Other+rates: NOPAT$margin$%$of$Sales NWC$to$Sales$% Longmterm$Assets$to$Sales$%$ $Net$Debt$to$Net$Capital$% 4.14% 12.09% 53.10% m4.74% 4.11% 12.09% 52.58% m4.74% 4.09% 12.09% 52.07% m4.74% 4.07% 12.09% 51.55% m4.74% 4.05% 12.09% 51.03% m4.74% 4.02% 12.09% 50.52% m4.74% 4.00% 12.09% 50.00% m4.74% m5.52% m2.15% m12.24% m5.55% m0.04% 1.60% m2.10% 0.07% 1.26% 1.00% 2.50% 1.36% 3.71% m2.10% 0.00% 1.41% 3.85% 3.00% 1.60% 3.14% 2.38% m3.90% 3.20% 0.74% 0.37% 5.50% 2.70% 2.14% March+2013 March+2014 March+2015 March+2016 March+2017 March+2018

Figure 21 - Base Case Assumption Input Sheet

CSRs$cost$of$equity$is $determined$using$the $CAPM$model.$The$risk$free$rate$is $estimated$using$the$latest$available$ 3$years $ treasury$bill $rate 23.$The $15%$effective $tax$rate$comes $from$CSRs $half$yearly$report 24$and$it$is $estimated$to$ be$constant$for$future$forecast.$The$equity$beta$is$calculated$based$on$the$correlation$between$CSR$and$ASX200s$ $ shares$performance$in$the$past$3$years 25.$ CSRs$cost$ of$capital$is$measured$using$the $WACC$model.$The$8%$cost$of$debt$comes $from$CSRs$bank$loans$ interest$rate$in$2012.$The$weighting$of$debt$and$equity$are $determined$by$CSRs $capital $structure$in$2012$and$it$is$ assumed$to$be$invariant$between$2013$and$2018.
23$Bloomberg$2013,'Australian'Government'Bonds,$Australia,$viewed$30$May$2013,$<hap://www.bloomberg.com/markets/ratesmbonds/governmentmbonds/

australia/>.
24$CSR$Limited$half$year$ended$30$September$2012$Results$Presentakon 25$Yahoo!7$Finance$2013,$Yahoo!7'Finance,$Australia,$viewed$29$May$2013,$<hap://au.nance.yahoo.com/q?s=csr&ql=1>.

Page 14 of 33

BUSINESS ANALYSIS AND VALUATION REPORT

March+2012 Cost+of+Capital+parameters: Expected$market$return Risk$free$rate Eeckve$Tax$rate Cost$of$debt Equity$beta Azer$tax$cost$of$debt Cost$of$equity WACC 12% 3% 7.88% 8% 0.77 7.09% 9.96% 8.72%

March+2013 12% 3% 15% 8% 0.77 6.55% 9.96% 8.49%

March+2014 12% 3% 15% 8% 0.77 6.55% 9.96% 8.49%

March+2015 12% 3% 15% 8% 0.77 6.55% 9.96% 8.49%

March+2016 12% 3% 15% 8% 0.77 6.55% 9.96% 8.49%

March+2017 12% 3% 15% 8% 0.77 6.55% 9.96% 8.49%

March+2018 12% 3% 15% 8% 0.77 6.55% 9.96% 8.49%

Figure 22 - Cost of Capital Calculation Sheet

The$future$FCFE$growth$rates $after$2018$are$estimated$by$the $average $of$the $FCFE$growth$rates $between$2013m18$ (2.95%).$This $is$a $reasonable$assumption$because $CSR$does $not$have$large$expansionary$plan$in$the$near$future.$ The$average$of$the $FCFC$growth$rate $between$2013m18$is $m1.28%$which$indicates $that$CSRs$acquisition$strategy$ would$be$more $effective$than$its $separation$strategy$in$the $next$6$years.$Since$a$longmterm$negative$FCF$growth$ rate$is $not$ realistic$as$CSR$would$not$ invest$ in$capitals$continuously,$ and$a $high$FCF$growth$rate$is$also$not$ sustainable$as$it$would$indicate $CSRs$longmterm$inefficiency$in$capital $management,$a$low,$positive$and$constant$ growth$rate$(2.00%)$has$been$chosen$for$the$future$FCFC$growth$rates$after$2018.
Free+Cash+Flow+to+Equity+(FCFE)+Growth+Rate FCF+Growth+Rate+for+2013I18 FCF+Growth+Rate+aJer+2018 Figure 23 - FCF Growth Rate 2.95% 2.95% Free+Cash+Flow+to+Capital+(FCFC)+Growth+Rate m1.28% 2.00%

To$incorporate$the $uncertainty$in$IBISWorlds $forecasted$sales $growth$rates,$Best$Case$and$Worst$Case$scenarios$ have$been$analysed$to$determine $the$variations $in$CSRs $fundamental $values$if$segments $sales $growth$rates$and$ NOPAT$margin$%$of$Sales$are$forecasted$differently$from$Base$Case.$

Figure 24 - Revenue Growth Rate Forecast under Best/ Base / Worst Case Scenario

Page 15 of 33

BUSINESS ANALYSIS AND VALUATION REPORT

The$Best$Cases $forecasts$are $based$on$the$assumption$that$RBA$will $continue$to$cut$interest$rates$and$AUD$will$ depreciate $in$accordance 26.$Demand$for$domestic$manufactured$products $will $then$increase$to$drive$sales$to$ grow$by$1m6%$higher$than$the $IBISWorlds $forecasts.$The $NOPAT$margin$%$of$Sales $is$estimated$to$be $increasing$ over$time.$
March+2012 Sales+growth+rates: Building$Products Aluminium Glass Weighted$Average Other+rates: NOPAT$margin$%$of$Sales NWC$to$Sales$% Longmterm$Assets$to$Sales$%$ $Net$Debt$to$Net$Capital$% 4.14% 12.09% 53.10% m4.74% 4.61% 12.09% 52.58% m4.74% 5.09% 12.09% 52.07% m4.74% 5.57% 12.09% 51.55% m4.74% 6.05% 12.09% 51.03% m4.74% 6.52% 12.09% 50.52% m4.74% 7.00% 12.09% 50.00% m4.74% m5.52% m2.15% m12.24% m5.55% 1.96% 4.6% 0.9% 2.45% 2.26% 3% 4.5% 2.77% 4.71% m0.1% 2% 2.82% 4.85% 5% 3.6% 4.55% 5.38% m1.9% 5.2% 3.21% 6.37% 7.5% 4.7% 6.22% March+2013 March+2014 March+2015 March+2016 March+2017 March+2018

Figure 25 - Best Case Assumption Input Sheet

The$Worst$Cases$forecasts $are$based$on$the$assumption$that$the$RBA$will$not$ cut$the$cash$rate$further$and$ therefore$AUD$remains$high.$All $the$sales$growth$rates$are$adjusted$to$be$2m4%$lower$ than$the$IBISWorlds$ forecasts.$The$NOPAT$margin$%$of$Sales $is$estimated$to$be$decreasing$over$time$as $profit$margin$declines $due$to$ increasing$foreign$competition.
March+2012 Sales+growth+rates: Building$Products Aluminium Glass Weighted$Average Other+rates: NOPAT$margin$%$of$Sales NWC$to$Sales$% Longmterm$Assets$to$Sales$%$ $Net$Debt$to$Net$Capital$% 4.14% 12.09% 53.10% m4.74% 3.78% 12.09% 52.58% m4.74% 3.42% 12.09% 52.07% m4.74% 3.07% 12.09% 51.55% m4.74% 2.71% 12.09% 51.03% m4.74% 2.36% 12.09% 50.52% m4.74% 2.00% 12.09% 50.00% m4.74% m5.52% m2.15% m12.24% m5.55% m3.04% m1.40% m4.10% m2.68% m1.74% m2.00% m0.50% m1.56% 1.71% m5.10% m2.00% m0.81% 1.85% 0.00% m0.40% 0.92% 0.38% m6.90% 0.20% m1.65% m1.63% 2.50% m1.30% m0.40% March+2013 March+2014 March+2015 March+2016 March+2017 March+2018

Figure 26 - Worst Case Assumption Input Sheet

26$Greber,$J.$(2013).'Overvalued''$A'forces'rates'to'record'low.$Available:$hap://www.afr.com/p/nakonal$overvalued_forces_rates_to_record_$

B22ORDFtA5L1lDmXpUcwcK.$Last$accessed$8th$May$2013. Page 16 of 33

BUSINESS ANALYSIS AND VALUATION REPORT

DFCF Valuation
The$Base$Case$scenario$reflects $the $assumptions$that$CSR$will$maintain$its $competitive $advantages$given$the$ upswing$ residential$ construction$ activities.$ CSRs $ Lightweight$ Systems $ are$ expected$ to$ continue$ its$ strong$ performance$with$its$high$operational$efficiencies.$CSRs $aluminium$would$also$grow$through$the$increase$in$ aluminium$price$and$the $global$demand$since$the$recovery$ of$the$Eurozone $and$the$US$markets.$Viridian$is$ expected$ to$ start$ having$ positive$ sales$ growths$ even$ though$ the$ import$ penetration$ would$ maintain$ its$ momentum.$Nevertheless,$there$will $be$some$pressure$come $from$the$high$AUD,$which$might$drive $CSRs $sales$ growth$to$slow$down$in$the$near$future.$The $aggregated$outcomes $are$illustrated$in$Figure!27.$The$forecasted$ share$price$would$become$$1.44,$which$means $shareholders $are$expected$to$have$a$29%$depreciation$in$share$ value$from$the$latest$available$market$price$$2.02.

March+2012 Income+Statement+ Sales Net$operakng$prot$azer$tax Net$interest$expense$azer$tax Net+income Balance+sheet Beg.$net$working$capital Beg.$net$longmterm$assets Net+operaPng+assets Net$Debt Cash+ow Net$Income ()Change$in$net$working$capital ()Change$in$net$longmterm$assets (+)Change$in$net$debt FCFE Terminal$value PV Fundamental$Value Number$of$Share$Outstanding Forecast$Price 53.15 0.15 (8.65) 0.40 62.06 217.90 956.80 1174.70 (55.70) 1801.9 74.53 (21.37) 53.15

March+2013 1803.15 74.17 (3.62) 70.55

March+2014 1827.64 74.76 (3.64) 71.12

March+2015 1853.39 75.40 (3.66) 71.74

March+2016 1911.59 77.33 (3.74) 73.59

March+2017 1925.67 77.46 (3.74) 73.72

March+2018 1966.93 78.68 (3.79) 74.89

218.05 948.15 1166.20 (55.30)

221.01 951.59 1172.60 (55.60)

224.13 955.42 1179.54 (55.93)

231.16 975.55 1206.71 (57.22)

232.87 972.78 1205.65 (57.17)

237.86 983.46 1221.32 (57.91)

70.55 2.96 3.44 (0.30) 63.85 58.07 727.34 506.00 1.44

71.12 3.11 3.83 (0.33) 63.85 52.81

71.74 7.04 20.13 (1.29) 43.28 32.55

73.59 1.70 (2.76) 0.05 74.70 51.09

73.72 4.99 10.68 (0.74) 57.31 35.65

74.89 3.51 14.52 (0.85) 56.01 822.80 497.16

Figure 27 - Valuation Model - Base Case Scenario

Page 17 of 33

BUSINESS ANALYSIS AND VALUATION REPORT

The$Best$Case $scenario$reflects $the$assumptions $that$demand$for$CSRs $products$will$increase $due $to$a $growth$in$ consumer$ confidence$and$lower$ threats$from$international $imports$associated$with$the $low$AUD.$ The$R&D$ investments $would$also$enhance$revenue $growth$through$higher$demand$for$ distinct$building$products $and$ energymefficient$glass.$Revenue$of$CSRs $aluminium$would$be$boosted$further$through$the $increased$aluminium$ price.$ $Strong$distribution$networks $and$increased$output$would$satisfy$this $upward$shift$in$demand$and$would$ complement$operating$low$cost$manufacturing$facilities$in$generating$higher$profit.$Revenue$growth$would$no$ longer$ be$constrained$in$the $glass$industry$ as$the$demand$for$ glass $in$nonmresidential$construction$would$ increase$along$with$residential$construction.$These$positive$outcomes$are $illustrated$in$Figure!28$through$the$ average$increases $in$revenue $growth$for$the$years$2013m18.$The $predicted$share $price $would$become$$2.22,$and$ the $maximum$gain$for$shareholders$would$be $a$54%$appreciation$in$the$share$price$compared$to$the$base$case$ scenario.

March+2012 Income+Statement+ Sales Net$operakng$prot$azer$tax Net$interest$expense$azer$tax Net+income Balance+sheet Beg.$net$working$capital Beg.$net$longmterm$assets Net+operaPng+assets Net$Debt Cash+ow Net$Income ()Change$in$net$working$capital ()Change$in$net$longmterm$assets (+)Change$in$net$debt FCFE Terminal$value PV Fundamental$Value Number$of$Share$Outstanding Forecast$Price Figure 28 - Valuation Model - Best Case Scenario 53.15 5.34 13.92 (0.91) 32.98 217.90 956.80 1174.70 (55.70) 1801.90 74.53 (21.37) 53.15

March+2013 1846.08 85.17 (3.71) 81.46

March+2014 1897.18 96.58 (3.78) 92.80

March+2015 1950.65 108.61 (3.85) 104.76

March+2016 2039.41 123.29 (4.00) 119.29

March+2017 2104.97 137.30 (4.09) 133.21

March+2018 2235.95 156.52 (4.31) 152.21

223.24 970.72 1193.96 (56.61)

229.42 987.79 1217.21 (57.72)

235.89 1005.56 1241.45 (58.86)

246.62 1040.78 1287.40 (61.04)

254.55 1063.36 1317.91 (62.49)

270.39 1117.98 1388.37 (65.83)

81.46 6.18 17.07 (1.10) 57.11 51.94 1124.26 506.00 2.22

92.80 6.47 17.77 (1.15) 67.42 55.76

104.76 10.73 35.22 (2.18) 56.63 42.59

119.29 7.93 22.58 (1.45) 87.34 59.74

133.21 15.84 54.62 (3.34) 59.41 36.96

152.21 9.93 41.04 (2.42) 98.83 1451.86 877.27

Page 18 of 33

BUSINESS ANALYSIS AND VALUATION REPORT

The$Worst$Case$scenario$has $been$determined$through$risks$quantification,$by$the$associated$revenue$declines$ for$each$underlying$division$of$CSR$from$2013m2018.$These$growth$rates $incorporate $the$case$of$continued$low$ levels $of$consumer$ demand$for$ building$products $due $to$low$housing$starts $despite$the$R&D$investment$in$ distinct$building$products.$For$Viridian,$if$the$consumers$preference $for$cheaper$and$lower$quality$products $from$ international $competitors$occurs,$despite$the$attempt$to$boost$sales $through$R&D$investment$to$increase $energy$ efficient$glass 27,$it$would$strain$revenue$growth.$If$AUD$remains$high$or$increases $further,$the$aluminium$sector$ would$continue$suffering$the$low$aluminium$prices,$which$may$ cause$increase $in$demand$for$ substitutes $or$ international $ companies$ products.$ A$ reduction$ in$ output$ of$ Tomago$ Aluminium$ would$ also$ decrease$ competitiveness $and$thus $revenue $generation 28.$ These $negative $outcomes $have $been$incorporated$into$the$ average$declines $in$revenue$growth$from$2013m2018$as $shown$in$Figure!29,$$resulting$in$a $predicted$share$price$ of$$1.25.$ This$suggests $the$maximum$ loss $to$shareholders $would$be$13.8%$depreciation$in$the $share$price$ relative$to$the$base$case$scenario.

March+2012 Income+Statement+ Sales Net$operakng$prot$azer$tax Net$interest$expense$azer$tax Net+income Balance+sheet Beg.$net$working$capital Beg.$net$longmterm$assets Net+operaPng+assets Net$Debt Cash+ow Net$Income ()Change$in$net$working$capital ()Change$in$net$longmterm$assets (+)Change$in$net$debt FCFE Terminal$value PV Fundamental$Value Number$of$Share$Outstanding Forecast$Price 53.15 (5.84) (34.71) 1.92 95.64 217.90 956.80 1174.70 (55.70) 1801.90 74.53 (21.37) 53.15

March+2013 1753.58 66.29 (3.52) 62.77

March+2014 1726.27 59.11 (3.44) 55.67

March+2015 1712.31 52.53 (3.38) 49.15

March+2016 1728.12 46.87 (3.39) 43.48

March+2017 1699.69 40.04 (3.30) 36.74

March+2018 1692.81 33.86 (3.26) 30.59

212.06 922.09 1134.14 (53.78)

208.75 898.80 1107.56 (52.52)

207.07 882.69 1089.76 (51.67)

208.98 881.92 1090.89 (51.73)

205.54 858.62 1064.16 (50.46)

204.71 846.41 1051.11 (49.84)

62.77 (3.30) (23.28) 1.26 90.61 82.41 632.35 506.00 1.25

55.67 (1.69) (16.11) 0.84 74.31 61.46

49.15 1.91 (0.78) (0.05) 47.96 36.08

43.48 (3.44) (23.29) 1.27 71.48 48.89

36.74 (0.83) (12.22) 0.62 50.41 31.36

30.59 (2.11) (8.71) 0.51 41.92 615.91 372.15

Figure 29 - Valuation Model - Worst Case Scenario

27$Dowse,$J$2011,$'Carbon:$it's$just$a$pane$in$the$glass',$Climate'Spectator,$viewed$1st$May$2013,$<hap://www.businessspectator.com.au/arkcle/2011/9/28/

climate/carbonmitsmjustmpanemglass#ixzz2S5iD03B0>.
28$Bartholomeusz,$S.$(2013).$Chinese'heat'bends'aluminium'out'of'shape.$Available:$hap://www.businessspectator.com.au/arkcle/2013/5/2/resourcesmandm

energy/chinesemheatmbendsmaluminiummoutmshape.$Last$accessed$17th$May$2013. Page 19 of 33

BUSINESS ANALYSIS AND VALUATION REPORT

Sensitivity Analysis
The$DFCF$valuation$predicts$a $share$price $of$$1.44$under$the$base$case$scenario$by$assuming$the$cost$of$equity$to$ be$9.96%$p.a.$and$the $FCF$growth$rate$to$be $2.95%$p.a..$Nevertheless,$these$rates $are $subjected$to$uncertain$ events,$which$will $bring$unexpected$variations$in$CSRs $predicted$share$price.$Hence$sensitivity$analysis$can$be$ useful $for$assessing$the $relationship$between$the $three$variables.$Under$all $three$scenarios,$the$predicted$share$ price$moves$in$the$opposite$direction$as$the$cost$of$equity$and$in$the$same$direction$as$the$FCF$growth$rate.
Cost+of+Equity 9.96% 1.14 1.22 1.31 1.44 1.60 1.83 2.17

6.96% FCF+Growth+ Rate I0.05% 0.95% 1.95% 2.95% 3.95% 4.95% 5.95% 1.62 1.81 2.07 2.46 3.12 4.43 8.32

7.96% 1.42 1.56 1.73 1.99 2.36 2.99 4.23

8.96% 1.27 1.37 1.49 1.67 1.91 2.26 2.86

10.96% 1.04 1.10 1.17 1.27 1.38 1.54 1.76

11.96% 0.96 1.00 1.06 1.13 1.22 1.33 1.48

12.96% 0.88 0.92 0.97 1.02 1.09 1.17 1.28

Figure 30 - Base Case Sensitivity Analysis

6.96% FCF+Growth+ Rate I0.05% 0.95% 1.95% 2.95% 3.95% 4.95% 5.95% 2.52 2.85 3.31 4.01 5.16 7.47 14.34

7.96% 2.18 2.41 2.73 3.17 3.84 4.94 7.14

8.96% 1.91 2.09 2.32 2.62 3.04 3.67 4.73

Cost+of+Equity 9.96% 1.70 1.84 2.00 2.22 2.51 2.91 3.52

10.96% 1.53 1.64 1.76 1.93 2.13 2.41 2.79

11.96% 1.39 1.47 1.57 1.70 1.85 2.05 2.31

12.96% 1.27 1.34 1.42 1.51 1.63 1.78 1.97

Figure 31 - Best Case Sensitivity Analysis

6.96% FCF+Growth+ Rate I0.05% 0.95% 1.95% 2.95% 3.95% 4.95% 5.95% 1.40 1.54 1.73 2.03 2.52 3.50 6.41

7.96% 1.24 1.35 1.48 1.67 1.95 2.42 3.35

8.96% 1.13 1.20 1.30 1.42 1.60 1.87 2.32

Cost+of+Equity 9.96% 1.03 1.09 1.16 1.25 1.37 1.54 1.80

10.96% 0.95 0.99 1.05 1.12 1.21 1.32 1.49

11.96% 0.88 0.92 0.96 1.01 1.08 1.16 1.27

12.96% 0.83 0.86 0.89 0.93 0.98 1.04 1.12

Figure 32 - Worst Case Sensitivity Analysis

Page 20 of 33

BUSINESS ANALYSIS AND VALUATION REPORT

As $shown$in$Figure!33,$when$the $cost$of$equity$is $low$(6.96%),$the $forecasted$share $price $is$very$sensitive$to$$the$ change$of$the$FCF$growth$rate.$ As $the$cost$of$equity$ increases,$the $sensitivity$ of$ the $forecasted$share $price$ decline$with$the$change $of$the$FCF$growth$rate 29.$It$is $the $opposite $when$comparing$share $price $in$respect$to$the$ $ FCF$growth$rate.
9 6.75 4.5 2.25 0 6.96% 7.96% 8.96% 9.96% 10.96% 11.96% 12.96% -0.05% 0.95% 1.95% 2.95% 3.95% 4.95% 5.95%

Figure 33 - Example:Base Case Sensitivity-Share Price vs Cost of Equity

9 6.96% 7.96% 8.96% 9.96% 10.96% 11.96% 12.96% 6.75 4.5 2.25 0 -0.05% 0.95% 1.95% 2.95% 3.95% 4.95% 5.95%

Figure 34 - Example:Base Case Sensitivity Plot-Share Price vs Free Cash Flow Growth Rate

29$See$Appendix$5$for$Elaskcity$Analysis$of$the$Sensikvity$Analysis

Page 21 of 33

BUSINESS ANALYSIS AND VALUATION REPORT

CCA Valuation
CCA$valuation$have$been$used$to$account$for$market$expectations$for$CSRs$segments.$As $shown$in$Figure!35,$the$ high$P/E$ratio$and$low$P/B$ratio$indicate$that$CSR$and$its$peers $are $turnaround$companies,$where$future$earnings$ are$expected$to$grow$quickly$relative $to$current$level$and$ROE$is $expected$to$be $low.$The$estimated$forecast$ prices,$based$on$these$two$ratios $indicate$serious$undervaluations$of$CSR$compared$to$its $closet$peer.$Similar$ results $are $obtained$when$the$forecast$prices$are$estimated$based$on$the$enterprise$value$multiples $EV/Revenue$ and$EV/EBITDA.$However,$CCA$valuation$is $only$useful $when$the$peer$companies$are $vary$similar$to$CSR$in$size,$ companys$structure$and$market$shares.$Therefore,$CSRs $lack$of$close$peers$in$the $Australian$economy$reduces$ the $relevance$ of$ these$measures$and$suggests$that$ we$should$ focus$on$ the$DFCF$ valuation$for$ our$ stock$ recommendation.$The$overly$ optimistic$scenarios$implied$by$ CCA$valuation$are$incorporated$in$the $Best$Case$ scenario$by$enhancing$the$sales$growth$rates$and$slightly$increasing$the$profit$margins.
Inter-quartile Range of Multiples

Valuation Method

Forecast Price (AUD)

DFCF

P/E

20.62x-33.70x

P/B

1.17x-3.15x

Figure 35 - Forecast Price under CCA Valuation compared to DFCF Valuation

Valuation Method

Inter-quartile Range of Multiples

Enterprise Value (AUD million)

DFCF

EV/Revenue

1.00x-3.12x

EV/EBITDA

6.25x-19.12

Figure 36 - Enterprise Value under CCA Valuation compared to DFCF Valuation

Page 22 of 33

BUSINESS ANALYSIS AND VALUATION REPORT

Conclusion and Recommendation

Stock Recommendation Last Price (25 May 2013) HOLD AUD 2.02 Forecast Price Base Case AUD 1.44 Forecast Price Best Case AUD 2.22 Forecast Price Worst Case AUD 1.25

Based$on$our$findings,$there$is $a $possible$m75.5%$downside$captured$by$ the $worst$case$scenario,$however$we$ believe$that$the$best$case$scenario$is$the $most$probable$future $outcome$due $to$the$companys$position$in$the$ improving$market.$Based$on$the$SWOT$analysis,$the$major$sources $of$CSRs $weaknesses$and$threats $are$caused$ by$the$deteriorating$global$demand$and$increasing$pressure $from$international$competitors.$Therefore,$as $the$ Eurozone$and$US$recover$and$the$RBA$adopts $an$expansionary$monetary$policy,$there$is$a $greater$potential $for$ CSR$to$take$advantage$of$its $strengths $and$opportunities,$increasing$its $competitiveness.$ As $seen$in$Michael$ Porters $Five $Force$analysis $(Appendix!2),$the$manufacturing$industry$has $few$key$players$and$by$grasping$these$ opportunities$and$applying$its$strengths,$CSR$will$improve$its$performance$and$surpass$its$main$competitors.$ In$addition,$despite$CSRs $positive $outlook,$the$recovery$of$the$current$market$is $expected$to$be$slow.$Therefore,$ we$have$adopted$a$more$conservative$perspective$by$recommending$HOLDING,$rather$than$buying$CSR$shares.

Page 23 of 33

BUSINESS ANALYSIS AND VALUATION REPORT

Appendices
1. Aluminium Price Movement
5 Years Global Aluminum Price Movement from Jan 2008 to May 2013 30

2. Michael Porters FIve Forces Analysis

Michael Porters Five Forces Analysis: The Building Products Industry

30$InvestmentMine$2013,$5'Years'Aluminium'Prices'and'Price'Charts,$Australia,$viewed$29$May$2013,$<$http://www.infomine.com/investment/metalmprices/

aluminum/5myear/>. Page 24 of 33

BUSINESS ANALYSIS AND VALUATION REPORT Michael Porters Five Forces Analysis: The Aluminum Industry31

Michael Porters Five Forces Analysis: The Glass Industry32

31$Williams,$M.$2013,$Alumina'ProducHon'in'Australia,$IBISWorld$Industry$Report$C2131,$viewed$30$May$2013,$<hap://

clients1.ibisworld.com.au.wwwproxy0.library.unsw.edu.au/reports/au/industry/default.aspx?enkd=226>.
32$European'Commission,'Mining,'metals'and'minerals'K'Glass$(2013),$Enterprise$and$Industry,$viewed$1st$April$2013,$<hap://ec.europa.eu/enterprise/

sectors/metalsmminerals/nonmmetallicmmineralmproducts/glass/index_en.htm>. $$$$Kelly,$A.$2012,$Glass'and'glass'product'manufacturing'in'Australia,$IBISWorld$Industry$Report$C2010,$viewed$1$April$2013,$<hap:// clients1.ibisworld.com.au.wwwproxy0.library.unsw.edu.au/reports/au/industry/default.aspx?enkd=206>. Page 25 of 33

BUSINESS ANALYSIS AND VALUATION REPORT

3. Standardized Financial Reports

Standardized Balance Sheet of CSR Limited As At 31 March 2010-2012 ($ million) 2010 Assets Cash and cash equivalents Trade and other receivables Inventories Other CA Total Current Assets Non current tangible assets Non current intangible assets Deffered Tax Assets Other NCA Total Non-Current Assets Total Assets Liabilities Current debt trade payables other current liabilities Total Current Liabilities Non-current debt trade payables Other NCL Total Non-Current Liabilities Total Liabilities Equity Shareholders equity Minority interest Total Equity Total Liabilities and Equity 1682.6 135.6 1818.2 3874.6 1233.7 47.6 1281.3 2258.2 1230.4 48.3 1278.7 2247.8 25.6 429.7 282.4 737.7 785.2 0.6 532.9 1318.7 2056.4 3.1 221.3 206.2 430.6 1.4 2.5 542.4 546.3 976.9 0 220.1 199.3 419.4 0.1 16.4 533.2 549.7 969.1 43.9 491.9 455.9 157.8 1149.5 2278.5 135.2 164.8 146.6 2725.1 3874.6 143.6 302.4 281.9 34.4 762.3 1152.1 72.9 236.9 34 1495.9 2258.2 55.8 263.5 309.5 64.3 693.1 1174.9 106.5 213.7 59.6 1554.7 2247.8 2011 2012

Standardized Income Statement of CSR Limited For Periods Ended 31 March 2010-2012 ($ million) Year ended 31 March (million) Sales Cost of sales Gross prot Other operating income SG&A expenses Other operating expenses EBIT (operating prot) Other net prot Net interest expense Prot before tax Income tax expense Net Income 2010 1,936.3 (1,341.8) 594.5 45.2 (415.8) (279.5) (55.6) 88.8 (94.4) (61.2) (14.1) (75.3) 2011 1,913.6 (1,323.0) 590.6 30.4 (406.2) (222.3) (7.5) 589.0 (57.0) 524.5 9.5 534.0 2012 1,801.9 (1,278.8) 523.1 64.1 (409.8) (50.1) 127.3 (23.2) 104.1 (8.2) 95.9

Page 26 of 33

BUSINESS ANALYSIS AND VALUATION REPORT Standardized Statement of Cash Flow of CSR Limited For Periods Ended 31 March 2010-2012 ($ million) 2010 Operating cash ows Investing cash ows Net interest cost Net debt issuance Dividends Net issuance of shares Net (decrease) increase in cash 376.8 (207.4) (57.6) (383.7) (65.7) 363.7 26.1 2011 172.0 1,719.2 (28.1) (794.5) (307.2) (658.7) 102.7 2012 97.0 (98.6) (7.1) (3.1) (75.0) 0.0 (86.8)

4. Industry Growth Rates

IBISWorld Research for Industry33

5. Elasticity of the Sensitivity Analysis

Cost+of+Equity 6.96% 7.96% 8.96% 9.96% 10.96% 11.96% 12.96% FCF+ I0.05% m0.85 Growth+ 0.95% m0.97 Rate 1.95% m1.13 2.95% m1.35 3.95% m1.69 4.95% m2.26 5.95% m3.42 m0.87 m0.97 m1.10 m1.28 m1.54 m1.93 m2.58 m0.88 m0.97 m1.08 m1.23 m1.43 m1.72 m2.16 m0.88 m0.97 m1.07 m1.19 m1.36 m1.58 m1.90 m0.89 m0.96 m1.05 m1.16 m1.30 m1.48 m1.73 m0.90 m0.96 m1.04 m1.14 m1.26 m1.41 m1.61 FCF+ I0.05% m0.01 Growth+ 0.95% 0.14 Rate 1.95% 0.37 2.95% 3.95% 4.95% 5.95% 0.78 1.66 4.36 Cost+of+Equity 6.96% 7.96% 8.96% 9.96% 10.96% 11.96% 12.96% m0.00 0.11 0.28 0.56 1.05 2.07 m0.00 0.09 0.22 0.42 0.74 1.31 m0.00 0.07 0.18 0.34 0.56 0.93 m0.00 0.06 0.15 0.27 0.45 0.70 m0.00 0.05 0.13 0.23 0.36 0.56 m0.00 0.05 0.11 0.19 0.30 0.45

Base Case Elasticity-Forecasted Share Price vs Cost of Equity

Forecasted Share Price vs FCF Growth Rate

33$Kelly,$A$2012,$IBISWorld'Industry'Report'C2021'Clay'Brick'Manufacturing'in'Australia,$IBISWorld,$viewed$20$May$2013,$<hap://

clients1.ibisworld.com.au.wwwproxy0.library.unsw.edu.au/reports/au/industry/default.aspx?enkd=208>. $$$$Kelly,$A$2012,$IBISWorld'Industry'Report'C2029'Ceramic'Product'Manufacturing'in'Australia,$IBISWorld,$viewed$20$May$2013,$<hap:// clients1.ibisworld.com.au.wwwproxy0.library.unsw.edu.au/reports/au/industry/default.aspx?enkd=209>. $$$$Kelly,$A$2012,$IBISWorld'Industry'Report'C2032'Plaster'Product'Manufacturing'in'Australia,$IBISWorld,$viewed$20$May$2013,$<hap:// clients1.ibisworld.com.au.wwwproxy0.library.unsw.edu.au/reports/au/industry/default.aspx?enkd=214>. $$$Kelly,$A$2012,$IBISWorld'Industry'Report'C2034'Concrete'Product'Manufacturing'in'Australia,$IBISWorld,$viewed$20$May$2013,$<hap:// clients1.ibisworld.com.au.wwwproxy0.library.unsw.edu.au/reports/au/industry/default.aspx?enkd=216>. $$$Kelly,$A$2012,$IBISWorld'Industry'Report'C2090'Glasswool,'Stone'and'NonKMetallic'Mineral'Products'Manufacturing'in'Australia,$IBISWorld,$viewed$20$May$ 2013,$<hap://clients1.ibisworld.com.au.wwwproxy0.library.unsw.edu.au/reports/au/industry/default.aspx?enkd=219>. Page 27 of 33

BUSINESS ANALYSIS AND VALUATION REPORT

Cost+of+Equity 6.96% 7.96% 8.96% 9.96% 10.96% 11.96% 12.96% FCF+ I0.05% m0.94 Growth+ 0.95% m1.06 Rate 1.95% m1.22 2.95% m1.45 3.95% m1.79 4.95% m2.36 5.95% m3.49 m0.97 m1.07 m1.21 m1.39 m1.65 m2.04 m2.69 m0.99 m1.08 m1.20 m1.36 m1.56 m1.85 m2.29 m1.00 m1.09 m1.20 m1.33 m1.50 m1.73 m2.05 m1.02 m1.10 m1.19 m1.31 m1.45 m1.64 m1.89 m1.03 m1.10 m1.19 m1.29 m1.42 m1.58 m1.78 FCF+ I0.05% m0.01 Growth+ 0.95% 0.15 Rate 1.95% 0.41 2.95% 3.95% 4.95% 5.95% 0.85 1.76 4.55

Cost+of+Equity 6.96% 7.96% 8.96% 9.96% 10.96% 11.96% 12.96% m0.01 0.12 0.32 0.62 1.14 2.21 m0.00 0.10 0.25 0.48 0.82 1.42 m0.00 0.09 0.21 0.38 0.64 1.03 m0.00 0.07 0.18 0.32 0.51 0.79 m0.00 0.07 0.15 0.27 0.42 0.64 m0.00 0.06 0.13 0.23 0.36 0.53

Best Case Elasticity-Forecasted Share Price vs Cost of Equity

Forecasted Share Price vs FCF Growth Rate

Cost+of+Equity 6.96% 7.96% 8.96% 9.96% 10.96% 11.96% 12.96% FCF+ I0.05% m0.76 Growth+ 0.95% m0.87 Rate 1.95% m1.02 2.95% m1.24 3.95% m1.58 4.95% m2.15 5.95% m3.32 m0.76 m0.86 m0.99 m1.16 m1.41 m1.79 m2.45 m0.77 m0.85 m0.96 m1.10 m1.29 m1.57 m2.01 m0.77 m0.84 m0.93 m1.05 m1.21 m1.43 m1.74 m0.77 m0.83 m0.91 m1.02 m1.15 m1.32 m1.56 m0.77 m0.83 m0.90 m0.99 m1.10 m1.24 m1.42 FCF+ I0.05% m0.01 Growth+ 0.95% 0.12 Rate 1.95% 0.33 2.95% 3.95% 4.95% 5.95% 0.71 1.53 4.13

Cost+of+Equity 6.96% 7.96% 8.96% 9.96% 10.96% 11.96% 12.96% m0.00 0.09 0.25 0.50 0.95 1.91 m0.00 0.08 0.19 0.37 0.66 1.18 m0.00 0.06 0.15 0.29 0.49 0.82 m0.00 0.05 0.13 0.23 0.38 0.61 m0.00 0.04 0.11 0.19 0.31 0.48 m0.00 0.04 0.09 0.16 0.25 0.38

Worst Case Elasticity-Forecasted Share Price vs Cost of Equity

Forecasted Share Price vs FCF Growth Rate

6. CCA Valuation 34
EV CSR BLD BKW JHX OI RIO BHP FBU Mean Min Q1 Median Q3 Max 719,850,000 5,440,000,000 1,780,000,000 23,000,000,000 7,420,000,000 104,790,000,000 208,740,000,000 6,520,000,000 44,801,231,250 719,850,000 4,525,000,000 6,970,000,000 43,447,500,000 208,740,000,000 EBITDA 197,030,000 448,700,000 44,380,000 227,500,000 1,170,000,000 17,540,000,000 27,210,000,000 623,280,000 5,932,611,250 44,380,000 219,882,500 535,990,000 5,262,500,000 27,210,000,000 Revenue 1,760,000,000 5,300,000,000 570,780,000 1,300,000,000 7,000,000,000 50,970,000,000 66,980,000,000 7,150,000,000 17,628,847,500 570,780,000 1,645,000,000 6,150,000,000 18,105,000,000 66,980,000,000 P/E 11.30 21.23 33.43 38.71 22.45 26.20 18.80 34.52 25.83 11.30 20.62 24.33 33.70 38.71 P/B 0.96 1.18 1.13 291.39 4.63 1.72 2.66 1.68 38.17 0.96 1.17 1.70 3.15 291.39 EV/EBITDA 3.65 12.12 40.11 101.10 6.34 5.97 7.67 10.46 23.43 3.65 6.25 9.07 19.12 101.10 EV/Revenue 0.41 1.03 3.12 17.69 1.06 2.06 3.12 0.91 3.67 0.41 1.00 1.56 3.12 17.69

34$Macroaxis$2013,$Compare'EquiHes,$Australia,$viewed$30$May$2013,$<hap://www.macroaxis.com/invest/compare/CSRLF,BOALY,BRKWF,JHX,OI,AMC,RIO,$

BHP,FBU.AX>. Page 28 of 33

BUSINESS ANALYSIS AND VALUATION REPORT

List of Abbreviations
ABS AUD CAPM CCA DFCF EBIDTA EPS EV FCF FCFE FCFC GDP GFC NOPAT NWC P/B PCI P/E PMI RBA ROA ROE R&D SWOT SMH WA WACC Australian$Bureau$of$Statistics Australian$Dollar Capital$Asset$Pricing$Model Company$Comparable$Analysis Discounted$Free$Cash$Flow Earning$Before$Interest,$Depreciation,$Tax$and$Amortisation Earning$Per$Share Enterprise$Value Free$Cash$Flow Free$Cash$Flow$to$Equity Free$Cash$Flow$to$Capital Gross$Domestic$Product Global$Financial$Crisis Net$Operating$Profit$After$Tax Net$Working$Capital Price$to$Book$Ratio Performance$of$Construction$Index Price$to$Earning$Ratio Performance$of$Manufacturing$Index Reserve$Bank$of$Australia Return$on$Asset Return$on$Equity Research$and$Development Strengths,$Weaknesses,$Opportunity$and$Threats$Analysis Sydney$Morning$Herald Western$Australia Weighted$Average$Cost$of$Capital

Page 29 of 33

BUSINESS ANALYSIS AND VALUATION REPORT

Bibliography
1. Australia $introduces$controversial$carbon$tax$2012,$BBC#News#Asia,$1$July.,$<http://www.bbc.co.uk/news/ worldmasiam18662560>. 2. Australian# Industry#Group,#Construckon#Outlook#:#October#2012$(2012),$viewed$21st$March$2013,$<http:// www.aigroup.com.au/portal/binary/com.epicentric.contentmanagement.servlet.ContentDeliveryServlet/ LIVE_CONTENT/Economic%2520Indicators/Construckon%2520Survey/2012/ACA_outlook_report_$ Oct2012.pdf>. 3. Australian#Industry#Group,#Performance#of#Construckon#Index#:#March#2013$(2013),$viewed$21st$March$2013,$ <http://www.aigroup.com.au/portal/binary/com.epicentric.contentmanagement.servlet.$ ContentDeliveryServlet/LIVE_CONTENT/Economic%2520Indicators/PCI/2013/pci_march_13%2520report.$ pdf>. 4. Australian# Industry#Group,#Performance#of#Manufacturing#Index#:#March#2013$(2013),$viewed$21st$March$ 2013,<http://www.aigroup.com.au/portal/binary/com.epicentric.contentmanagement.servlet.$ ContentDeliveryServlet/LIVE_CONTENT/Economic%2520Indicators/PMI/2013/$ PMI_final_report_march_$ 2013.pdf>. 5. Australian$Stock$Exchange$(ASX)$2013,$Australian#Stock#Exchange,$Australia,$viewed$29$May$ 2013,$<http:// www.asx.com.au>. 6. Bartholomeusz,$ S.$ (2013).$ Chinese# heat# bends# aluminium# out# of# shape.$ Available:$ http:// www.businessspectator.com.au/article/2013/5/2/resourcesmandmenergy/chinesemheatmbendsmaluminiumm outmshape.$Last$accessed$17$May$2013. 7. Bloomberg$ 2013,$ Australian# Government# Bonds,$ Australia,$ viewed$ 30$ May$ 2013,$ <http://www.$ bloomberg.com/markets/ratesmbonds/governmentmbonds/$australia/>. 8. Boral$Limited$(2013),$ Annual#and# Sustainability# Reports,$viewed$5$April$2013,$<http://www.boral.com.au/ promolist/annual_sustainability_reports.asp>. 9. Brickworks#Limited#2013,#Annual# Reports,$viewed$5$ April $2013,$ <http://www.brickworks.com.au/investorm centre/annualmreports>. 10. Brindal,$R.$(2012).$CSR$faces $tough$conditions$across $its $operations,$The#Wall#Street#Journal,$11$July,$viewed$ 20$ April $ 2013,$ <http://www.marketwatch.com/story/csrmfacesmtoughmconditionsmacrossmitsm operationsm2012m07m11>. 11. Brocklehurst,$ E.$ (2013).$ China's# Transformation# Of# The# Aluminium# Industry.$ Available:$ http:// finance.ninemsn.com.au/newscolumnists/other/8644677/chinasmtransformationmofmthemaluminiummindustry.$ Last$accessed$1$May$2013.$

Page 30 of 33

BUSINESS ANALYSIS AND VALUATION REPORT

12. BuySellSigncals $2013,$CSR#buy#ad#sell#signals,#29$April,$BuySellSigncals$Financial $Research$(Pty)$Ltd,$Melbourn,$ Victoria,$viewed$12$May$2013,$$<http://buysellsignals.com>. 13. Courtney,$ T.$ 2010,$ Insulation$scheme$a $victim$ of$ its$own$ popularity,$ Brisbane# Times,$ 11$ Feb.,$ <http:// www.brisbanetimes.com.au/queensland/insulationmschememamvictimmofmitsmownmpopularitym20100210m nrvz.html>. 14. CSR$Limited$(2013),$ Annual# Meetings#&# Reports,$ viewed$5$April $2013,$ <http://www.csr.com.au/Investorm CentremandmNews/AnnualmMeetingsmandmReports/Pages/default.aspx>. 15. CSR$Limited$2012,$CSR#Limited,$Australia,$viewed$28$April$2013,$<http://www.csr.com.au/>. 16. CSR#Limited#Sustainability#Report# 2011$ 2012,$CSR$Limited$official$website,$ viewed$28$ April $2013,$ <http:// www.csr.com.au/CommunitymandmSustainability/Sustainability%20Report%202011/safetymhealthmandm environmentmenvironment.html>. 17. CSR# Limited:# Annual# Report# 2008# 2012,$ CSR$ Limited$ official $website,$ viewed$ 28$ April$ 2013,$ <http:// www.csr.com.au/InvestormCentremandmNews/AnnualmMeetingsmandmReports/Pages/Annualm Reportm2008.aspx>. 18. CSR# Limited:# Annual# Report# 2009$ 2012,$ CSR$ Limited$ official $website,$ viewed$ 28$ April$ 2013,$ <http:// www.csr.com.au/InvestormCentremandmNews/AnnualmMeetingsmandmReports/Pages/Annualm Reportm2009.aspx>. 19. CSR# Limited:# Annual# Report# 2010$ 2012,$ CSR$ Limited$ official $website,$ viewed$ 28$ April$ 2013,$ <http:// www.csr.com.au/InvestormCentremandmNews/AnnualmMeetingsmandmReports/Pages/Annualm Reportm2010.aspx>. 20. CSR# Limited:# Annual# Report# 2011# 2012,$ CSR$ Limited$ official $website,$ viewed$ 28$ April$ 2013,$ <http:// www.csr.com.au/InvestormCentremandmNews/AnnualmMeetingsmandmReports/Pages/Annualm Reportm2011.aspx>. 21. CSR# Limited:# Annual# Report# 2012# 2012,$ CSR$ Limited$ official $website,$ viewed$ 28$ April$ 2013,$ <http:// www.csr.com.au/InvestormCentremandmNews/AnnualmMeetingsmandmReports/Pages/Annualm Reportm2012.aspx>. 22. CSR$ Limited.$ (2011).$ Maintaining# global# cost#competitiveness.$ Available:$ http://www.csr.com.au/Investorm CentremandmNews/AnnualmMeetingsmandmReports/Annual%20Report%202012/aluminiummoverview.html.$ Last$accessed$12$May$2013. 23. CSR# Ltd.,# Responding# to# Difficult# Market# Condikons$ (2013),$ Viridian,$ viewed$25th$March$2013,$ <http:// www.csr.com.au/InvestormCentremandmNews/AnnualmMeekngsmandmReports/Annual%20Report%202012/ viridianmoverview.html>. 24. CSR#Limited# submission# on#Australias#Clean# Energy# Future#Legislation:Bills#2001,2012,$CSR$Limited$official$ website,$viewed$28$April$2013,$<http://www.csr.com.au/>.
Page 31 of 33

BUSINESS ANALYSIS AND VALUATION REPORT

25. Clean#Energy#Act#2011#2012,$Australian$Government$ComLaw$official $website,$viewed$28$April$2013,$<http:// www.comlaw.gov.au/Details/C2011A00131>. 26. Dowse,$ J$ 2011,$ 'Carbon:$ it's $just$ a$pane $in$the$glass',$ Climate# Spectator,$ viewed$1st$ May$ 2013,$ <http:// www.businessspectator.com.au/arkcle/2011/9/28/climate/carbonmitsmjustmpanemglass#ixzz2S5iD03B0>. 27. European#Commission,#Mining,#metals#and#minerals#:#Glass $(2013),$Enterprise$and$Industry,$viewed$1st$April$ 2013,$ <http://ec.europa.eu/enterprise/sectors/metalsmminerals/nonmmetallicmmineralmproducts/glass/ index_en.htm>. 28. Greber,$ J.$ (2013).'Overvalued'# $A# forces# rates# to# record# low.$ Available:$ http://www.afr.com/p/nakonal$ overvalued_forces_rates_to_record_$B22ORDFtA5L1lDmXpUcwcK.$Last$accessed$8th$May$2013. 29. Greenhouse#and#Energy#Information#2009:10$2012,$Australian$Government$Department$of$Climate$Change$ and$ Energy$ Efficiency,$ viewed$ 28$ April$ 2013,$ <http://www.climatechange.gov.au/~/media/publications/ greenhousemreport/ngermpublicationm0411.pdf>. 30. IBISWorld#Company#Report:#CSR#Limited#31#March#2012,#2012,$Premium$Report,$IBISWorld,$viewed$29$May$ 2013,$<$http://www.IBISWorld.com.au/car/default.aspx?entid=10>. 31. InvestmentMine$2013,$5#Years#Aluminium#Prices#and#Price#Charts,$Australia,$viewed$29$May$2013,$<$http:// www.infomine.com/investment/metalmprices/aluminum/5myear/>. 32. Jones,$ P.$ (2013),$ Posikve# Signs# in# Housing# Finance,$ viewed$17th$Apr$ 2013,$ <http://www.masterbuilders.$ com.au/newsarkcles/posikvemsignsminmhousingm$finance>. 33. Kelly,$A.$2012,$Glass#and#glass#product#manufacturing#in#Australia,$IBISWorld$Industry$Report$C2010,$viewed$ 1$ April $ 2013,$ <http://clients1.ibisworld.com.au.wwwproxy0.library.unsw.edu.au/reports/au/industry/ default.aspx?enkd=206>. 34. Kelly,$ A$ 2012,$ IBISWorld# Industry# Report# C2021# Clay# Brick# Manufacturing# in# Australia,$ IBISWorld,$ viewed$20$May$ 2013,$<hap://clients1.ibisworld.com.au.wwwproxy0.library.unsw.edu.au/reports/au/ industry/default.aspx?enkd=208>. 35. Kelly,$ A$ 2012,$ IBISWorld# Industry# Report# C2029# Ceramic# Product# Manufacturing# in# Australia,$ IBISWorld,$ viewed$ 20$ May$ 2013,$ <http://clients1.ibisworld.com.au.wwwproxy0.library.unsw.edu.au/reports/au/ industry/default.aspx?enkd=209>. 36. Kelly,$A$2012,$IBISWorld#Industry#Report#C2032#Plaster#Product#Manufacturing#in#Australia,$IBISWorld,$viewed$ 20$ May$ 2013,$ <http://clients1.ibisworld.com.au.wwwproxy0.library.unsw.edu.au/reports/au/industry/ default.aspx?enkd=214>. 37. Kelly,$ A$ 2012,$ IBISWorld# Industry# Report# C2034# Concrete#Product# Manufacturing# in# Australia,$IBISWorld,$ viewed$ 20$ May$ 2013,$ <http://clients1.ibisworld.com.au.wwwproxy0.library.unsw.edu.au/reports/au/ industry/default.aspx?enkd=216>.

Page 32 of 33

BUSINESS ANALYSIS AND VALUATION REPORT

38. Kelly,$ A$ 2012,$ IBISWorld# Industry# Report# C2090# Glasswool,# Stone# and# Non:Metallic# Mineral# Products# Manufacturing# in# Australia,$ IBISWorld,$ viewed$ 20$ May$ 2013,$ <http://clients1.ibisworld.com.au.$ wwwproxy0.library.unsw.edu.au/reports/au/industry/default.aspx?enkd=219>. 39. Kirkwood,$I.$(2013).$ Budget#2013:#Hunter#misses#the#gravy#train.$Available:$http://www.theherald.com.au/ story/1502341/budgetm2013mhuntermmissesmthemgravymtrain/?cs=12.$Last$accessed$16$May$2013. 40. Kwek,$G$2013,$RBA$cuts$rates$to$record$low,$ The#Sydney#Morning#Herald,$viewed$7th$May$ 2013,$<http:// www.smh.com.au/business/themeconomy/rbamcutsmratesmtomrecordmlowm20130507m2j52m.html>. 41. Macroaxis $2013,$ Compare# Equi^es,$ Australia,$ viewed$ 30$ May$ 2013,$ <hap://www.macroaxis.com/ invest/compare/CSRLF,BOALY,BRKWF,JHX,OI,AMC,RIO,$BHP,FBU.AX>. 42. National#Greenhouse#and#Energy#Reporting#Act#2007$2012,$Australian$Government$ComLaw$official $website,$ viewed$28$April$2013,$<http://www.comlaw.gov.au/Details/C2007A00175/Html/Text#param14>. 43. Philip,$ W.$ 2011,$ Jobs$at$ risk$ from$ carbon$ tax:$ CSR$ chief,$ The# Sydney# Morning# Herald,$ 7$ July,$ <http:// www.smh.com.au/business/jobsmatmriskmfrommcarbonmtaxmcsrmchiefm20110707m1h3yf.html#ixzz27n8anx$qu>. 44. Queensland# Government,#Nakonal#Rental#Affordability# Scheme $(2013),$Department$of$Housing$and$Public$ Works,$viewed$21st$March$2013,$ <http://$www.communikes.qld.gov.au/housing/housingmservices/renkngm inmthemprivatemmarket/nakonalmrentalmaffordabilitymscheme>. 45. Schwarten,$E.$2013,$Home $loan$approvals $surge$in$March,$ The#Sydney#Morning#Herald,$13$May,$<http:// news.smh.com.au/breakingmnewsmbusiness/homemloanmapprovalsmsurgeminmmarchm20130513m2jh85.html>. 46. Smith,$ M.$ (2013).$ Rivals# may# cement# better# relations.$ Available:$ http://www.afr.com/p/ rivals_may_cement_better_relations_a7pqAV4MzMoOsjgzuYRQFL.$Last$accessed$20$April$2013. 47. Tomago$Aluminium$2012,$ Tomago#Aluminium#announces#restructure,$media $release,$ Tomago$Aluminium,$ accessed$ 10$ May$ 2013,$ <http://www.tomago.com.au/images/stories/Tomago_Aluminium$ _Announces_Restructure_11012012.pdf>. 48. The# Australia# Building# Codes# Board# (ABCB)# 2012,$ ABCB,$ Australia,$ viewed$ 28$ April$ 2013,$ <http:// www.abcb.gov.au/>. 49. Wen,$P$2011,$'Cracks $appear$in$a$besieged$glass$industry',$The#Sydney# Morning#Herald,$viewed$26th$April$ 2013,$ <http://www.smh.com.au/business/cracksmappearminmambesiegedmglassmindustrym20110802m$ 1i9xd.html>. 50. Williams,$M$2013,$IBISWorld#Industry#Report#C2132#Aluminium#Smelting#in#Australia,$IBISWorld,$viewed$28$ April$2013. 51. Yahoo!7$Finance$2013,$Yahoo!7#Finance,$Australia,$viewed$29$May$2013,$<http://au.finance.yahoo.com/q? s=csr&ql=1>.

Page 33 of 33