Building solutions
for a better future
CSR LIMITED | ANNUAL REPORT 2024
CSR LIMITED | CONTENTS
1
CONTENTS
2
FINANCIAL OVERVIEW
3
OPERATING AND FINANCIAL REVIEW
7
BOARD OF DIRECTORS
9 CORPORATE GOVERNANCE STATEMENT AND RISK
24
DIRECTORS’ REPORT
26 AUDITOR’S INDEPENDENCE DECLARATION
27
REMUNERATION REPORT
47
CONSOLIDATED FINANCIAL REPORT
89
DIRECTORS’ DECLARATION
90
INDEPENDENT AUDITOR’S REPORT
93
SHAREHOLDER INFORMATION
ABOUT CSR
CSR is a building products company operating in Australia and New Zealand.
Formed in 1855 CSR is the company behind some of Australia’s most trusted and well-known building products brands, and now has a
distribution network across Australia and New Zealand.
CSR’s range of building products and systems serve a range of building and construction segments backed by technical expertise across
building technology, compliance, energy efficiency and architectural design.
CSR also generates additional earnings from its property division typically from the sale of former operating sites, and through its interest in the
Tomago aluminium smelter.
CSR services more than 17,000 customers through 29 manufacturing sites and over 100 branded outlets and distribution centres across
Australia and New Zealand with a team of approximately 2,800 employees.
HIGHLIGHTS FOR THE YEAR ENDED MARCH 2024 (YEM24)
$2.6b
CSR Group Revenue
$332m
CSR Group EBIT1
$240m
Net profit after tax1
50.5 cents
Earnings per share1
$294m
Building Products
EBIT1
15.5%
Building Products
EBIT margin
2,800
CSR employees
17,000+
Customers across
Australia and NZ
1 Before significant items
CSR Limited ABN 90 000 001 276
CSR LIMITED | FINANCIAL OVERVIEW
2
FINANCIAL OVERVIEW
Net profit after tax (before significant items) of $240 million, up 7% which reflects strong operational
performance and continued cost management
FIVE YEAR PERFORMANCE SUMMARY
Year ended 31 March ($million) unless stated
2024
2023
2022
2021
2020
Operating results
Trading revenue
2,625.1
2,613.3
2,311.6 2,122.4
2,212.5
Earnings before interest and tax (EBIT)
Building Products
294.2
273.4
228.2
184.3
170.5
Property
91.1
71.7
46.9
54.2
(1.5)
Aluminium
(29.4)
8.0
39.7
23.4
59.6
Segment total
355.9
353.1
314.8
261.9
228.6
Corporate and restructuring and provisions1
(23.7)
(23.4) (23.4)
(24.0)
(11.8)
CSR EBIT
332.2
329.7
291.4
237.9
216.8
Statutory net profit after tax
231.0
218.5
270.6
146.1
125.3
Net profit after tax (before significant items)
240.4
225.0
192.6
160.4
134.8
Financial position
Total equity
1,299.9
1,176.6
949.4
1,157.8
1,125.5
Total assets
2,223.7
2,231.1
2,447.0 2,176.8
2,404.5
Net cash
138.1
131.6
177.7
250.8
94.8
Key data per share
Earnings before significant items (cents)
50.5
46.9
39.7
33.1
27.3
Earnings after significant items (cents)
48.5
45.5
55.8
30.1
25.4
Dividend ordinary (cents)
15.0
36.5
31.5
23.0
10.0
Dividend special (cents)
–
–
–
13.5
4.0
Payout ratio on ordinary dividends (%)
29.7
77.8
79.4
69.5
36.6
Key measures
EBIT margin (EBIT/trading revenue) (%)
12.7
12.6
12.6
11.2
9.8
Return on funds employed (ROFE) (%)2
26.7
28.9
27.3
21.1
17.8
Employees (number of people employed)
2,846
2,785
2,573
2,538
2,823
1 Represents unallocated overhead expenditure and other revenues.
2 ROFE is calculated as EBIT before significant items for the 12 months to 31 March divided by average funds employed which excludes cash, tax balances and certain other
non-trading assets and liabilities as at 31 March. A reconciliation of funds employed to net assets is contained in note 2 to the financial statements.
CSR LIMITED | OPERATING AND FINANCIAL REVIEW
3
OPERATING AND
FINANCIAL REVIEW
Group EBIT before significant items of $332.2 million, up 1% with improved earnings from Building Products and Property
Trading revenue of $2.6 billion for the year ended 31 March 2024 (YEM24), in line with prior year.
Earnings before interest and tax (EBIT before significant items) of $332.2 million, up 1%, included the following results:
Building Products: EBIT of $294.2 million, up 8% reflecting strategy execution with price discipline to recover higher input costs as well as
improved factory efficiency and operational performance.
Property: EBIT of $91.1 million, up from $71.7 million following the settlement of two contracted Horsley Park, NSW sales.
Aluminium: EBIT loss of $29.4 million, down from a profit of $8.0 million, with significantly higher energy and coal pass-through costs.
Statutory net profit after tax of $231.0 million, up from $218.5 million.
Earnings per share (before significant items) of 50.5 cents, up 8%.
Total dividends for the year of 15 cents per share represent the interim dividend paid. Given the proposed acquisition of CSR by Compagnie de
Saint-Gobain by way of scheme of arrangement (Scheme), as announced to the ASX on 26 February 2024, the CSR board has not declared a final
dividend. Please refer to the Scheme Booklet released to the ASX on 26 April 2024 for further information in relation to the Scheme.
A$m unless stated1
2024
2023
change
Trading revenue
2,625.1
2,613.3
0%
EBIT
Building Products
294.2
273.4
8%
Property
91.1
71.7
27%
Aluminium
(29.4)
8.0
n/m
Corporate (including restructure and provisions)
(23.7)
(23.4)
(1%)
Group EBIT
332.2
329.7
1%
Net finance costs
(7.2)
(14.7)
Tax expense
(91.2)
(90.3)
Non-controlling interests
6.6
0.3
Net profit after tax before significant items1
240.4
225.0
7%
Significant items after tax
(9.4)
(6.5)
Statutory net profit after tax
231.0
218.5
6%
1 All references are before significant items unless stated. These are non-IFRS measures and are used internally by management to assess the performance of the business
and have been extracted or derived from CSR’s financial statements for the year ended 31 March 2024 (YEM24). All comparisons are to the year ended 31 March 2023
(YEM23) unless otherwise stated.
Net profit after tax (before significant items) of $240.4 million for the year ended 31 March 2024, up 7% following an increase in earnings from
Building Products and Property.
Statutory net profit after tax of $231.0 million includes significant items expense after tax of $9.4 million.
Tax expense of $91.2 million (before significant items) was up from $90.3 million due to higher pre-tax profits. CSR’s effective tax rate for the
year (before significant items) was 28%, down from 29% due to a higher proportion of profits from associates.
Cash flow from operating activities of $280.7 million were up from $113.8 million due to higher operating cash flows.
Capital expenditure (excluding Property and acquisitions) was $138.6 million up from $84.5 million as the environment to execute on capital
projects has improved. Total capital expenditure during the year comprised $60.9 million in development and $77.7 million in operating spend.
The staged $65 million Martini Villawood commercial interiors’ capacity and site expansion was progressed, and an adjacent site at Wetherill Park,
NSW as well as a property in Queanbeyan, NSW were acquired.
Net cash of $138.1 million increased from the net cash position of $131.6 million and included the Woven Image acquisition of $42.5 million
(net of cash acquired).
Product liability – As at 31 March 2024, the asbestos provision fell to $183.3 million from $193.4 million as at 31 March 2023. This provision
included a prudential margin of $34.1 million. CSR paid asbestos related claims of $18.9 million (including legal costs) compared to $25.3
million in the prior year.
CSR LIMITED | OPERATING AND FINANCIAL REVIEW
4
STRATEGY
Building solutions for a better future
CSR’s purpose is “Building solutions for a better future” for customers by investing in new building systems to reduce construction time and
deliver better energy efficiency, comfort, and design and for CSR’s people and the environment by creating a safe, diverse and sustainable place
to work and grow.
CSR’s strategy is focused on providing a platform for growth and resilience to deliver improved performance through the cycle. In 2020 the
organisational structure was streamlined and aligned to the strategy, with the central customer solutions and logistics teams formed, together
with the establishment of CSR’s transformation function to govern delivery of the strategy. This has been a key enabler to drive two of the key
focus areas of CSR’s strategy.
Providing complete customer solutions through:
provision of technical support through digital tools (e.g. Thermal Calculator, Gyprock’s Red Book, System Selector) and centralisation of CSR
technical expertise including CSR’s Design-Link team;
streamlined interactions that deliver value for customers and CSR through investment in customer relationship management systems across
the sales function and alignment of marketing strategies across key end market segments (e.g. detached residential, alterations and
additions, social and infrastructure);
identification of more large and complex project opportunities and driving a consistent CSR customer experience through CSR’s digital
Project Tracking system; and
providing complete solutions to customers leveraging CSR’s product suite.
Building an optimised supply chain network and centralised logistics capability that provides scale benefits and improves efficiency and
customer service, including:
delivery of an Integrated Business Planning platform and centralised team;
roll-out of the Transport Management System supported by a centralised transport capability;
delivery of transport optimisation projects to leverage group scale to procure, plan and execute transport;
development of network strategies to incorporate long term planning across the network for manufacturing and distribution efficiency; and
completion of master planning for plants and distribution sites and implementing leading warehouse optimisation practices.
CSR LIMITED | OPERATING AND FINANCIAL REVIEW
5
BUILDING PRODUCTS
Building Products earnings grew 8% reflecting price, cost and operational discipline
A$m unless stated1
2024
2023
change
Revenue
1,893.7
1,833.0
3%
EBIT
294.2
273.4
8%
Funds employed2
1,064.1
938.2
13%
EBIT/revenue
15.5%
14.9%
Return on funds employed3
29.4%
30.9%
1 Before significant items.
2 Excludes cash and tax balances and certain other non-trading assets and liabilities as at 31 March. A reconciliation of funds employed is included in note 2 in the
financial report.
3 Based on EBIT (before significant items) for the 12 months to 31 March divided by average funds employed.
Trading revenue from Building Products was $1,893.7 million, up 3% on the prior year driven largely by price discipline to recover input costs.
Building Products earnings of $294.2 million were up 8% reflecting strategy execution, disciplined cost management as well as improved factory
efficiency and operational performance.
EBIT margin of 15.5% was up from 14.9% and reflects the strategic work to deliver improved margin performance through the cycle. Return on
funds employed of 29.4% decreased from 30.9%.
INTERIOR SYSTEMS
MASONRY & INSULATION
CONSTRUCTION SYSTEMS
YEM24 revenue of $773m, 7% above the
previous year.
Gyprock generated strong revenue and
earnings growth which reflects the
strength of the brand, its market position
as well as price increases to offset higher
production and distribution costs. This
resulted in an improved margin which also
demonstrates the continued focus on
operational efficiency and cost discipline.
Strategic goals were achieved with the
Gyprock Wetherill Park upgrade now
operational, the Gyprock Coopers Plains
investment underway, and enhanced
customer experiences at Gyprock Trade
Centres.
Commercial fit out earnings grew,
represented by Himmel, Potters, Martini,
and Woven Image. This reflects both
increased market share in acoustic
systems and the benefits of CSR’s project
tracking initiative. It also demonstrates
CSR’s strategy to diversify end market
exposures to improve performance
through the cycle.
YEM24 revenue $768m, down 1% on the
previous year.
Revenue was marginally lower
notwithstanding the solid operational
performance across the product suite with
a focus on safety, productivity, quality, and
cost management.
Bradford delivered earnings and margin
growth through price, strong operational
performance, and improved customer
service.
Bradford Brendale capacity upgrade
project was completed, and low margin
energy business exited.
Monier performance was steady after
normalising for the cost associated with
the pending closure of the Rosehill, NSW
manufacturing site.
PGH bricks business was impacted by
lower demand and higher energy costs.
Following busy production years, a more
comprehensive brick factory maintenance
program was undertaken with a planned
longer shut down period to also manage
inventory.
YEM24 revenue $353m, 6% above the
previous year.
Hebel delivered solid volume, revenue and
earnings performance with market and
category share gains.
To take advantage of this market
penetration, an extra shift was added at
the Hebel, Somersby NSW factory to make
it a 5-day, 24-hour operation.
AFS margins improved with price
increases, factory efficiencies and
procurement benefits contributing to the
positive outcome.
Cemintel performance was slightly down
on the prior year due to lower volumes.
40%
19%
41%
CSR LIMITED | OPERATING AND FINANCIAL REVIEW
6
PROPERTY
Property earnings and strong cash flow contribution
A$m unless stated1
2024
2023
change
EBIT
91.1
71.7
27%
Funds employed2
109.8
153.1
(28%)
Return on funds employed3
69.3%
44.9%
1 Before significant items.
2 Excludes cash and tax balances and certain other non-trading assets and liabilities as at 31 March. A reconciliation of funds employed is included in note 2 in the
financial report.
3 Based on EBIT (before significant items) for the 12 months to 31 March divided by average funds employed.
Property delivered EBIT of $91.1 million compared to $71.7 million in the previous year. Property generated strong cash flows with a net
contribution of $142 million including proceeds of $177 million which primarily related to the settlement of the penultimate stages 3A and 3B at
Horsley Park, NSW. The final Horsley Park tranche Stage 3C remains on track.
ALUMINIUM
Earnings impacted by cost volatility
A$m unless stated1
2024
2023
change
Sales (tonnes)
209,923
212,649
(1%)
A$ realised price2
3,484
3,670
(5%)
Revenue
731.4
780.3
(6%)
EBIT
(29.4)
8.0
n/m
Funds employed3
138.9
163.3
(15%)
EBIT/revenue
(4.0%)
1.0%
Return on funds employed4
(19.5%)
5.6%
1 Before significant items.
2 Realised price in A$ per tonne (including hedging, premiums, value added product and spot sales).
3 Excludes cash and tax balances and certain other non-trading assets and liabilities as at 31 March. A reconciliation of funds employed is included in note 2 in the
financial report.
4 Based on EBIT (before significant items) for the 12 months to 31 March divided by average funds employed.
The realised aluminium price in Australian dollars (including hedging and premiums) of A$3,484 was down 5% following a decrease in the A$
aluminium price.
Gove Aluminium Finance (GAF – 70% CSR) sales volumes of 209,923 tonnes were down 1% from the previous year. Trading revenue of $731.4
million was down 6% due to lower LME aluminium prices.
The Australian dollar averaged 66 US cents compared to 69 US cents in the prior year, while the average MJP ingot premium for the year was
US$110 per tonne, compared to US$121 per tonne in the prior year (Platts Metals Week – Main Japanese Port ingot premium).
EBIT loss of ($29.4) million due to significantly higher energy and coal pass-through costs. While the loss was within the estimated range
provided at the half year, it was down from a profit of $8 million in the previous year (which included a $13 million net RERT1 payment).
1 Reliability and Emergency Reserve Trader payment for power disruption to support national energy market stability
CSR LIMITED | BOARD OF DIRECTORS
7
BOARD OF DIRECTORS
The Board of Directors are responsible for and oversee the governance, culture and management of
CSR. CSR’s shareholders approve the appointment of Directors and hold them accountable for the
performance of the Company.
JOHN GILLAM
BCom, MAICD, FAIM
Chair of the board since June 2018,
non-executive director since December
2017
Other current CSR responsibilities: Member of the Remuneration & Human Resources
Committee and the Safety & Sustainability Committee.
Experience and expertise: John joined Wesfarmers Limited in 1997 and held a number of
senior leadership roles in the company over 20 years, including CEO of the Bunnings Group from
2004 to 2016, Managing Director of CSBP from 2002 to 2004 and Chairman of Officeworks
from 2007 to 2016.
Other directorships/offices held:
Chairman of Nufarm Limited (2020 to current)
Chairman of BlueFit Pty Limited (2018 to current)
Chairman of VetPartners (2024 to current)
Director of Clontarf Foundation (2017 to current)
JULIE COATES
BA, DipE, MAICD
Managing Director and CEO since
September 2019
Other current CSR responsibilities: Attends committee meetings by invitation.
Experience and expertise: Julie was formerly the managing director of Goodman Fielder
Australia and Goodman Fielder New Zealand. Julie has also held several senior roles at
Woolworths Limited, including managing director of Big W, chief logistics officer and human
resources director, working closely on business strategy and major transformational change
programs. Julie has proven leadership skills, a strong understanding of manufacturing, safety
and operational processes and deep experience in supply chain efficiency, optimisation and
digitisation.
Other directorships/offices held:
None
CHRISTINA (CHRISTY) BOYCE
BEcon, MBA (Kellogg), GAICD
Non-executive director since
March 2023
Other current CSR responsibilities: Member of the Remuneration & Human Resources
Committee and the Safety & Sustainability Committee.
Experience and expertise: Christy was formerly a Director (Senior Partner) of Port Jackson
Partners and a Partner at McKinsey & Co, working in the firm’s Sydney, New York and Chicago
offices. Christy has over 25 years of strategy advisory experience in both Australia and the
United States. She has led strategic transformation programs with a range of multinational and
Australian-based corporates, working with senior leadership to redefine their business models,
strengthen their value propositions and rejuvenate their sales and marketing.
Other directorships/offices held:
Non-executive director of JB Hi-Fi Limited (September 2023 to current)
Chair of SCEGGS Darlinghurst Trust (Director since 2018 and Chair since April 2023 to
current)
Non-executive director of BAI Australia (July 2023 to current)
Non-executive director of EMM Consulting (July 2023 to current)
CSR LIMITED | BOARD OF DIRECTORS
8
NIGEL GARRARD
BEcon, CA, MAICD
Non-executive director since
December 2020
Other current CSR responsibilities: Chair of the Safety & Sustainability Committee and
member of the Risk & Audit Committee.
Experience and expertise: Nigel was formerly managing director and CEO of leading packaging
manufacturing company Orora Limited from 2013 to 2019. Nigel has also held a number of
senior positions in a range of manufacturing industries including managing director/president of
Amcor Australasia & Packaging Distribution, managing director Coca-Cola Amatil Food &
Services Division and managing director of the then listed SPC Ardmona.
Other directorships/offices held:
Chairman of Ansell Limited (Director since March 2020 and Chair since October 2023 to
current)
Deputy Chairman and Non-executive director of ALS Limited (Director since June 2023 and
Deputy Chairman since February 2024 to current)
Chairman of McMahon Services Aust. Group advisory board (2019 to current)
Chairman of Flinders Port Holdings Limited (2021 to current)
Director of Detmold Group advisory board (2020 to current)
ADAM TINDALL
BEng (Hons), Cert App Fin, FAICD
Non-executive director since
January 2023
Other CSR current responsibilities: Chair of the Remuneration & Human Resources Committee
and Member of the Risk & Audit Committee.
Experience and expertise: Adam was formerly chief executive officer AMP Capital from 2015 to
2020 leading a global team overseeing funds across a range of investment asset classes.
Adam's prior roles at AMP Capital included Director and Chief Investment Officer for Property,
managing a $19 billion portfolio of real estate and development investments. Prior to 2009,
Adam held senior leadership roles at Macquarie Capital and Lendlease. Adam has 35 years of
industry experience in investment management, real estate and infrastructure.
Other directorships/offices held:
Non-executive director of Stockland Corporation Limited (2021 to current)
Previously a non-executive director of Bennelong Funds Management Ltd and Bennelong
Funds Management Group Pty Ltd (2021 to 2023)
PENNY WINN
BCom, MBA, GAICD
Non-executive director since
November 2015
Other CSR current responsibilities: Chair of the Risk & Audit Committee and member of the
Remuneration & Human Resources Committee.
Experience and expertise: Penny was formerly director Group Retail Services with Woolworths
responsible for leading the Logistics and Information Technology divisions and the Customer
Engagement teams, a position held until October 2015. Penny has over 30 years of experience in
retail in senior management roles in Australia and overseas.
Other directorships/offices held:
Non-executive director of Ampol Limited, previously Caltex Australia Limited (2015 to
current)
Non-executive director of Super Retail Group Limited (December 2023 to current)
Board member of the ANU Foundation (2020 to current)
Previously a non-executive director of Coca-Cola Amatil Limited (2019 to 2021)
Previously a non-executive director of Goodman Limited and Goodman Funds Management
Limited (2018 to 2021)
Previously a non-executive director of Z Energy Limited, a wholly owned NZ subsidiary of
Ampol Limited (2022 to 2023)
CSR LIMITED | CORPORATE GOVERNANCE STATEMENT AND RISK
9
CORPORATE GOVERNANCE
STATEMENT
Corporate Governance is the framework of rules, relationships,
systems and processes by which CSR is directed and managed. It
underpins the company’s values and behaviours, the way we conduct
business and provides clear guidance for effective decision making in
all areas through:
the role of the board of directors and their accountability to
shareholders for the operations, financial performance and growth
of the company;
strategic and operational planning;
ethical business practices and high standards of personal conduct;
effective risk management and compliance; and
constructive engagement with stakeholders.
This Corporate Governance Statement is current as at 15 May 2024
and has been approved by the board.
CSR actively reviews Australian and international developments in
corporate governance and considers the views of shareholders,
regulators and other stakeholders. The CSR board adopts those
arrangements which it considers are in the best interests of CSR and
its shareholders.
The directors of CSR are committed to ensuring that the company
maintains an effective system of corporate governance as it is an
integral part of the culture and business practices of the CSR group.
Throughout the reporting period, being 1 April 2023 through to 31
March 2024, CSR complied with the recommendations contained in
the ASX Corporate Governance Council’s Corporate Governance
Principles and Recommendations (4th edition) (ASX CGC Principles).
Charters and policies referred to in this corporate governance
statement are available on CSR’s website in the ‘Investors and News’
section under Corporate Governance.
THE BOARD
The board strives to build sustainable value for shareholders whilst
protecting the assets and reputation of the company.
CSR's Constitution sets out the provisions that govern the
management of the company and can only be amended by special
resolution of shareholders. Under the constitution, shareholders elect
directors, whose function is to represent shareholders and to act in
the best interests of the company.
Role of the board
The board has adopted a formal board charter, available on CSR’s
website on the Corporate Governance page which establishes those
matters reserved for the board and authority delegated to
management. The board’s functions, as summarised in the board
charter, include:
approving CSR strategies, budgets, plans and policies;
assessing performance against business plans to monitor both the
performance of management as well as the continuing suitability
of business strategies;
reviewing operating information to understand the current status
of the company;
considering management recommendations on proposed
acquisitions, divestments and significant capital expenditure;
considering management recommendations on capital
management, the issue or allotment of equity, borrowings and
other financing proposals, guarantees of non-group liabilities, and
restructures;
ensuring that the company operates an appropriate corporate
governance structure and culture, in particular ensuring that CSR
acts legally and responsibly on all matters and that the highest
ethical standards are maintained;
approving CSR’s risk framework and appetite, as well as CSR's risk
management strategy and monitoring whether the company is
operating within that framework and appetite;
considering the social, ethical and environmental impact of CSR’s
activities and monitoring compliance with CSR’s sustainability
policies and practices;
ensuring that the company’s governance processes, in particular,
the remuneration and other reward structures, align with the
company’s values and risk appetite;
maintaining a constructive and ongoing relationship with the
Australian Securities Exchange (ASX) and regulators, and approving
policies regarding disclosure and communications with the market
and shareholders; and
monitoring internal governance including delegated authorities,
and monitoring resources available to senior executives.
Appointment and election of directors
CSR undertakes a rigorous process when selecting new directors and
is committed to bringing together the best possible combination of
individuals so it can serve shareholders and customers now and into
the future.
The company aims to have a board which, as a whole, has the range
of skills, knowledge, background and experience to govern CSR, made
up of individuals of high integrity, with sound commercial judgement,
inquiring minds and the ability to work cohesively with other directors.
When considering director candidates, CSR seeks a combination of
former chief executives and individuals experienced in manufacturing,
finance, the law and, ideally, the industries in which CSR participates
as well as the areas in which it hopes to grow. CSR undertakes
background checks on prospective candidates, covering the
candidate’s character, experience, education, criminal record and
bankruptcy history.
External consultants are engaged, where appropriate, to advise on
potential appointees. The potential appointees must have a strong
reputation and high ethical standards. Prospective directors are
required to confirm that they will have sufficient time to meet their
obligations and that they will keep the company informed of their
other commitments.
Non-executive directors are subject to re-election by rotation at least
every three years. Newly appointed directors must seek election at the
first general meeting of shareholders following their appointment. The
relevant notice of meeting contains all material information for
shareholders in relation to the election or re-election of a director.
CSR LIMITED | CORPORATE GOVERNANCE STATEMENT AND RISK
10
Directors’ independence
The board believe that director independence contributes to good governance and delivers superior outcomes for all our stakeholders by
encouraging the constructive challenging of management. The board’s framework for determining director independence is included in the
board charter and operates in accordance with the considerations set out in the ASX CGC Principles.
At all times throughout YEM24, the board comprised a majority of independent directors. Each of the non-executive directors, including the chair,
has been determined by the board to be independent of CSR and its management, having no current material business or other relationships
that could compromise his or her autonomy as a director.
Any past or present relationship with the company is examined carefully to assess the likely impact on a director’s ability to be objective and
exercise independent judgement. Directors are required to disclose, on an ongoing basis, circumstances that may affect their ability to exercise
independent judgement enabling the board to determine independence on a regular basis. The length of tenure of each director is set out below.
Table 1: Director tenure
Director
Date appointed
Date last re-elected
John Gillam (chair of the board)
December 2017
2021 Annual Meeting
Julie Coates (managing director)
September 2019
2020 Annual Meeting
Christina Boyce
March 2023
2023 Annual Meeting
Nigel Garrard
December 2020
2021 Annual Meeting
Adam Tindall
January 2023
2023 Annual Meeting
Penny Winn
November 2015
2021 Annual Meeting
The board charter states that non-executive directors will not seek re-election after serving for ten years.
Director letters of appointment
Letters of appointment are prepared for non-executive directors
covering duties, time commitments, induction, company policies and
corporate governance.
The managing director’s responsibilities and terms of employment,
including termination entitlements, are set out in a formal executive
service agreement. A summary of the main elements and terms of the
managing director service agreement is set out in the Remuneration
Report and is disclosed to the ASX when the managing director is
appointed.
Directors’ induction, education and access to information
The board strives to ensure that directors and key executives have the
knowledge and information needed to operate effectively.
The chair briefs new directors on their roles and responsibilities. New
directors receive a comprehensive information pack as part of this
induction, as well as briefings from management and visits to key
operating sites to assist them to rapidly understand CSR’s businesses,
strategic direction and associated material risks.
Time is allocated at board and committee meetings for continuing
education on significant issues facing the company and changes to
the regulatory environment.
To help directors maintain their understanding of the businesses and
to assess the people managing them, directors are briefed regularly
by members of the senior management team. Directors also have
access to a wide range of employees at all levels during inspections of
operations and in other meetings.
Directors receive a comprehensive monthly business performance
report regardless of whether a board meeting is scheduled. Directors
have unrestricted access to company records and information.
Directors may obtain independent professional advice, at CSR’s
expense, on matters arising in the course of their board and
committee duties, after obtaining the chair’s approval. The board
charter requires that all directors be provided with a copy of such
advice and be notified if the chair’s approval is withheld.
The board appoints and removes the company secretary. The
company secretary acts as secretary to the board and all the board
committees. All directors have direct access to the company secretary
who is accountable to the managing director and, through the chair, to
the board, on all governance matters.
The work of directors
In addition to attending board and committee meetings, non-executive
directors allocate time for, amongst other things, strategy and budget
sessions, preparing for meetings and inspecting operations.
The chair commits additional time and meets regularly with the
managing director to review business and strategic issues and to
agree board meeting agendas. The directors usually meet with no
management present at the commencement of board meetings and
on other occasions as required. Non-executive directors also meet
without the managing director present where it is appropriate to do so.
Except where the directors need to meet privately, the company
secretary and chief financial officer attend all board meetings. Other
members of management, such as business unit executive general
managers, or other functional managers also attend board meetings
by invitation, where appropriate. The board also invites external
experts to present to it on key matters, where appropriate.
The directors regularly visit the company’s operations to better
understand the issues facing each of the businesses and their people.
These visits are conducted either as a full board, a board committee
or with one or two directors.
Each meeting of the Safety & Sustainability Committee is held at a
CSR site, when it is practicable to do so, with those meetings held
onsite also involving a site tour.
In addition, directors may meet customers, business partners,
suppliers and other stakeholders of the company as requested by
management.
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Size, composition and skills of the board
The board comprises directors with an appropriate mix of skills,
experience and personal attributes that allow the directors
individually, and the board collectively, to:
discharge their responsibilities and duties under the law effectively
and efficiently;
understand the suite of CSR businesses and the external
environment in which CSR operates so as to be able to agree with
management the objectives, goals and strategic direction to
maximise shareholder value; and
assess the performance of management in meeting those
objectives and goals.
The board currently comprises five non-executive directors and one
executive director. Information about directors, including their skills,
experience, expertise and their period in office is set out on pages 7 to
8 and is also available on CSR’s website on the Corporate Governance
page.
The chair is appointed by the board and provides leadership to ensure
that a high standard of values, processes and constructive interaction
is maintained by the board. The chair represents the views of the
board to shareholders and canvasses the views of stakeholders,
including through the annual general meeting.
In YEM24 Matthew Quinn retired from the board on 31 May 2023,
having served as a non-executive director for ten years.
CSR has developed a matrix of required skills and experience of the
board. This matrix is developed by taking into account CSR’s desire to
ensure a diverse range of gender, background and experience is
maintained on the board at all times, and also ensuring directors are
appropriately qualified.
The board keeps the balance of skills, capabilities and experience of
its members, as well as their independence, under review and
acknowledges that these areas continually evolve. The board strives
to achieve diversity in its composition as evidenced by the charts
below.
The table on the following page sets out the skills and experience the
board considers essential for effective governance, including the
current representation of those skills and experience on the board.
Figure 1: Board diversity
CSR LIMITED | CORPORATE GOVERNANCE STATEMENT AND RISK
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Size, composition and skills of the board (continued)
Table 2: Summary of board skills and experience
Skills
Relevant experience
Directors with skill/experience
Leadership and Governance
Executive
leadership
Sustainable success in business at a senior executive level and a proven track record of
leadership to create long-term shareholder value.
5
Governance and
Compliance
Commitment to the highest standards of governance, including demonstrated
experience with a major organisation that is subject to rigorous corporate governance
standards, and an ability to assess the effectiveness of senior management.
6
Finance and Risk
Financial Acumen
Experience as a senior executive or equivalent experience in financial accounting and
reporting, corporate finance and internal financial controls, including an ability to probe
the adequacies of financial and risk controls.
5
Strategy and
Transformation
Track record of developing and implementing a successful strategy, including
appropriately questioning and challenging management on the delivery of agreed
strategic planning objectives.
6
Risk Management
Track record in developing a business portfolio over the long term that remains resilient
to systemic risk, including an ability to anticipate and identify key business risks (both
financial and non-financial) and mitigation strategies, as well as monitoring the
effectiveness of risk management frameworks and controls.
5
Capital Projects
Experience working in an industry with projects involving large-scale capital outlays and
long-term investment horizons, with optimal digital enablement and information security.
6
Operations and Technology
Operations and
Supply Chain
Experience having led or overseen the management of complex operating assets, with a
focus on business operations, end to end supply chain, the oversight of key processes,
and the application of technology, including data analytics, to substantially enhance
operations.
4
Health, Safety and
Environment
Experience related to workplace health and safety, environmental and social
responsibility, including implementing and monitoring systems to ensure safe working
conditions.
5
Sustainability and
Climate Change
Expertise and experience in managing and driving environmental management and
social responsibility initiatives, including community concerns, carbon emissions
reduction, climate change risks and the governance of these impacts, as well as human
rights and responsible sourcing to create long-term sustainable value.
3
Digitisation and
Innovation
Proven success creating efficient and effective business processes, products and ideas,
leading to new growth platforms and competitive advantage including, experience
leveraging digital platforms to unlock long-term growth opportunities and improve
customer experience.
5
People
Human Resources
and Remuneration
Board remuneration committee membership or management experience in relation to
remuneration, including incentive programs and relevant legislation and contractual
frameworks governing remuneration.
5
Culture and People
Experience and ability to develop succession plans, develop and retain talent, oversee
people management, monitor culture and improve diversity and inclusion.
5
Marketing and
Customers
Senior executive experience in consumer and customer marketing and customer service
delivery.
5
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Dealing with conflicts of interest
The board has a process in place to ensure that conflicts of interest
are managed appropriately. If a potential conflict of interest is
identified the relevant director, or the board, may determine that they
should not receive documents related to or take part in discussions or
decisions in respect of that matter.
At all times, directors are required to keep the company secretary
informed of all relevant interests and directors must advise the board
immediately of any interests that could potentially conflict with those
of CSR.
Performance evaluation of the board, its committees
and individual directors
The performance of the board is reviewed regularly. The board
undertakes a self-assessment of its collective performance and that
of individual directors and its committees and seeks specific feedback
from the executive management team on particular aspects of its
performance.
The board establishes procedures and oversees this performance
assessment program. The process may be assisted by an independent
third party facilitator. The results and any action plans flowing from
this assessment are documented, together with specific performance
goals that are agreed for the coming year.
The performance of the managing director is reviewed, at least
annually, through a formal performance appraisal process conducted
by the non-executive directors.
In YEM24, planning was in place to undertake an external review of
the board and its committees, with this review work paused following
announcement that CSR had entered into a Scheme Implementation
Deed with Compagnie de Saint-Gobain (Saint-Gobain) for the
acquisition of all of the issued shares in CSR by way of a scheme of
arrangement. Whilst no formal board or committee reviews were
undertaken in YEM24, the directors and executive management
continued to provide regular feedback to the chair in relation to the
processes and operation of the board and its committees.
Board Committees
To increase its effectiveness, the board has three committees
consisting of the Risk & Audit Committee, Safety & Sustainability
Committee and Remuneration & Human Resources Committee.
It is the policy of the board that a majority of the members of each
committee be independent directors, that all Risk & Audit Committee
members be independent directors and that the Remuneration &
Human Resources Committee and the Safety & Sustainability
Committee be chaired by an independent director.
Each committee has a charter which includes a more detailed
description of its duties, responsibilities and specific composition
requirements. The charters are available on CSR’s website on the
Corporate Governance page. The Risk & Audit Committee, the
Remuneration & Human Resources Committee and the Safety &
Sustainability Committee each comprise at least three non-executive
directors and are chaired by a director who is not the chair of the
board. All committees meet at least four times per year.
The managing director attends meetings of board committees by
invitation. Other members of management also attend committee
meetings by invitation. All directors are welcome to attend committee
meetings even though they may not be a member.
Committee papers are made available to all directors before the
meetings. Minutes of committee meetings are included in the papers
for the next board meeting and the chair of each committee reports to
the board on matters addressed by the committee.
The specific responsibilities allocated to each committee are set out
below and on the following page.
Risk & Audit Committee
The Risk & Audit Committee advises the board on all aspects of
internal and external audit, the adequacy of accounting and risk
management procedures, systems, controls and financial reporting. A
summary of CSR’s material economic, environmental and social risks
is set out on pages 19 to 21 of this statement.
The members of the Risk & Audit Committee during the reporting
period were:
Table 3: Risk & Audit Committee membership
Name
Membership status
Penny Winn (chair)
Member and chair for the entire period
Nigel Garrard
Member for the entire period
Adam Tindall
Member for the entire period
Each of these directors is deemed to be independent and their
qualifications and experience are set out on pages 7 and 8 of the
Annual Report, available on CSR’s website on the Annual Reports
page.
The external audit firm partner in charge of the CSR audit attends all
Risk & Audit Committee meetings by invitation, together with the
managing director, chief financial officer and relevant senior
managers (also by invitation). The internal audit firm partner also
attends all Risk & Audit Committee meetings by invitation.
The Risk & Audit Committee Charter sets out the committee’s specific
responsibilities, and include:
reviewing the scope of the annual audit plans of the external
auditor and internal auditor and oversight of the work performed
by the auditors throughout the year;
considering and recommending to the board significant accounting
policies and material estimates and judgements in financial
reports;
reviewing and monitoring internal controls and risk management
across the group, including the risk management framework and
risk appetite statements;
reviewing and recommending to the board the adoption of the
company’s full-year and half-year financial statements; and
reviewing the performance and effectiveness of the internal and
external auditors.
The committee is a direct link for providing the views of internal and
external auditors to the board, when necessary, independently of
management influence. Time is allocated for detailed questioning of
the material presented and for separate sessions with each of the
external auditor, internal auditor, executive general manager risk and
chief financial officer.
CSR LIMITED | CORPORATE GOVERNANCE STATEMENT AND RISK
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Board Committees (continued)
Remuneration & Human Resources Committee
The Remuneration & Human Resources Committee considers
independent advice on policies and practices to attract, motivate,
reward and retain strong performers.
The members of the Remuneration & Human Resources Committee
during the reporting period were:
Table 4: Remuneration & Human Resources Committee membership
Name
Membership status
Adam Tindall (chair)
Member for the entire period and chair
from 1 June 2023
Matthew Quinn
Member and chair to 31 May 2023
Christy Boyce
Member for the entire period
John Gillam
Member for the entire period
Penny Winn
Member for the entire period
Each of these directors is deemed to be independent and their
qualifications and experience are set out on pages 7 and 8 of the
Annual Report, available on CSR’s website on the Annual Reports
page.
The managing director and other members of management attend
meetings of the Remuneration & Human Resources Committee by
invitation.
The committee’s specific responsibilities are set out in the
Remuneration & Human Resources Committee Charter, and include:
advising the board on remuneration policies and practices;
assessment of culture within the company;
evaluating the performance of the managing director against pre-
agreed goals;
making recommendations to the board on remuneration for the
managing director and executive managers reporting to the
managing director; and
overseeing CSR’s human resources strategy, particularly
succession and development planning for executive managers.
Safety and Sustainability Committee
An important part of CSR’s governance commitments includes
protection of its people’s workplace health and safety, and protection
of the environment (WHS&E). The board endorsed WHS&E Policy
details the company’s and individuals’ obligations in respect of
WHS&E.
The board’s Safety & Sustainability Committee oversees and reports
to the board on the management of the company’s WHS&E
responsibilities and on the company’s sustainability objectives and
commitments.
The members of the Safety & Sustainability Committee during the
reporting period were:
Table 5: Safety & Sustainability Committee membership
Name
Membership status
Nigel Garrard (chair)
Member and chair for the entire period
Christy Boyce
Member from 1 June 2023
John Gillam
Member for the entire period
Matthew Quinn
Member until 31 May 2023
The managing director and other members of management attend
meetings of the Safety & Sustainability Committee by invitation.
The committee’s specific responsibilities are set out in the Safety &
Sustainability Committee Charter, and include:
receiving regular performance reports from management on
WHS&E matters;
monitoring the effectiveness of the WHS&E risk management
framework and overseeing the risk management of WHS&E
matters;
reviewing the adequacy and effectiveness of CSR’s WHS&E
management systems and ensuring appropriate improvement
objectives and targets are set and monitored;
monitoring the adequacy and effectiveness of CSR’s sustainability
framework and mechanisms to track progress to sustainability
objectives and targets; and
monitoring potential liabilities, changes in legislation, community
expectations, research findings and technological changes.
The committee conducted three meetings during YEM24 at CSR sites,
with these meetings including a presentation from local management
and a site tour, with one meeting held at head office.
Nominations Committee
The company’s size is not considered sufficient to warrant a separate
nominations committee.
The board takes on the role of the nominations committee, which
includes the following functions:
determining the appropriate size and composition of the board (in
accordance with the company’s constitution);
determining the appropriate criteria (necessary and desirable
skills and experience) for the appointment of directors;
addressing board succession, including recommending the
appointment and removal of directors;
assessing the independence of each non-executive director;
defining the terms and conditions of appointment to and
retirement from the board;
overseeing induction and continuing education programs for non-
executive directors; and
evaluating the board’s performance.
Attendance at board and committee meetings during YEM24
Details of director attendance at board and board committee
meetings held during the year are provided on page 25 of the
Directors’ Report.
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SENIOR MANAGEMENT
Delegations to management
Day-to-day management of the company’s affairs and the
implementation of strategy and policy initiatives are formally
delegated by the board to the managing director and senior
executives.
The company has an executive leadership team, comprised of the
managing director and direct reports. The executive team meets
weekly and is responsible for:
implementing the strategic objectives as set by the board;
operating within the risk framework as approved by the board;
instilling and reinforcing values as set by the board;
all other aspects of the day-to-day management of the company;
and
ensuring timely and accurate reporting to the board and board
committees.
During YEM24, steering committees continued to operate across a
number of key functional areas, bringing together the executive
leadership team and subject matter experts, providing an opportunity
for regular cadence to drive collaboration and initiatives, enabling
successful project delivery, in accordance with the strategy set by the
board.
Senior executive appointments and service agreements
CSR undertakes background checks on prospective senior executives,
covering the candidates’ character, experience, education, criminal
record and bankruptcy history.
Senior executives’ responsibilities and terms of employment, including
termination entitlements, are set out in a formal executive service
agreement. A summary of the main elements and terms of the
managing director’s and chief financial officer’s service agreements
are set out in the Remuneration Report.
Induction of senior executives
New executives undertake a structured induction program when they
join the company. This includes comprehensive briefings and
information on the company’s businesses, and its policies and
procedures. Additionally, the program includes site visits and
meetings with people in key internal and external roles in order to
build the relationships necessary to meet the requirements of their
roles.
As discussed further below, and in the Remuneration Report, key
performance indicators are agreed with each executive to ensure
goals and performance measures are fully and accurately understood
and disclosed.
Performance evaluation of senior executives
CSR’s performance management framework requires that a balanced
scorecard of annual key performance indicators (including financial
and non-financial measures) is set for each senior executive. Every
half year, each senior executive discusses their performance with
their manager.
At the end of the year, as part of a formal review process, each senior
executive’s performance is reviewed against the performance
indicators. Also, each individual’s performance and behaviour are
internally and externally benchmarked and assessed. CSR conducted
evaluations of its senior executives in accordance with this process in
October 2023, as well as in March 2024.
Senior leaders are accountable for driving change to deliver on CSR’s
purpose and strategy, with CSR’s reward strategy kept under review to
align and standardise remuneration, reward practices and incentives
to drive a high-performance culture.
Further details of the process for evaluating the performance of key
management personnel and the remuneration policy for key
management personnel are provided in the Remuneration Report.
CODE OF BUSINESS CONDUCT, ETHICS AND CULTURE
Code of business conduct and ethics
CSR has a Code of Business Conduct and Ethics (the code) which
underpins its goals and values. CSR is committed to conducting
business honestly, with integrity, and in accordance with our
standards of expected behaviour. The code sets out the standards for
dealing with external stakeholders.
The underlying principle of CSR’s code is that lawful, ethical and
responsible behaviour is required of directors, executives and all other
employees, as well as advisers, consultants and contractors. The
board has endorsed the Code of Business Conduct and Ethics.
The code formalises the longstanding obligation of all CSR’s
employees (including directors) and contractors, to behave ethically,
act within the law, avoid conflicts of interest and act honestly and
responsibly in all business activities.
The code articulates how employees are expected to operate in line
with CSR’s fundamental values. CSR's Values, also referred to as
behaviours, are set out both in the code and separately on CSR’s
website and guide the day-to-day interactions of employees and
supports the delivery of CSR’s strategy. The code incorporates CSR’s
anti-bribery and corruption policy as well as all relevant whistle-blower
protection laws.
The code reinforces the company’s commitment to giving proper
regard to the interests of people and organisations dealing with the
company. Each CSR employee and contractor is required to respect
and abide by the company’s obligations to employees, shareholders,
customers, suppliers and the communities in which it operates.
CSR employees, directors and major contractors are required to
submit a certificate of compliance each year signifying that they have
read and complied with the code and are not aware of any breaches
of that code.
Further, CSR employees are encouraged to report concerns they may
have regarding conduct in a number of ways, including via a
confidential telephone service. The company's Incident Reporting
Policy provides that an employee will not be subject to retaliation by
CSR for reporting in good faith a possible violation of the code of
business conduct and ethics. The board is advised of all material
breaches of the code and incidents reported under the policy via the
Risk & Audit Committee.
To ensure that CSR employees and stakeholders are made (and kept)
aware of incident reporting methods and policies, a Speak Up @ CSR
program is accessible to all employees and external stakeholders on
CSR’s website.
CSR is committed to conducting business honestly and fairly and in
compliance with all laws and regulations. The company’s Supplier
Code of Conduct sets out the expectations of CSR’s suppliers, and
applies to all suppliers, including all organisations and sub-contractors
providing goods and services to CSR, based in Australia, New Zealand
and overseas.
During YEM24, the company submitted a Modern Slavery Statement
in accordance with the Commonwealth Modern Slavery Act 2018. The
Statement addresses the company’s key modern slavery risks and
how these risks have been identified and assessed, as well as
information on the actions being taken to mitigate those risks and
how the effectiveness of these mitigating actions is assessed.
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Culture
Throughout YEM24, CSR has continued to promote and develop the
culture and behaviours required to align with our purpose – Building
Solutions for a Better Future.
CSR acknowledges that culture plays a key role in driving company
performance. There has been regular engagement with employees
during YEM24 to obtain insights and feedback relating to culture and
engagement, with continued progress against key metrics.
Attracting diverse talent and motivating the right behaviours are key
elements of CSR’s remuneration and reward framework, which is
reviewed regularly.
DIVERSITY AND INCLUSION
CSR has policies and practices designed to improve diversity and
inclusion. The company’s Fairness, Respect & Diversity Policy and
Respect at Work Policy are available on CSR’s website.
CSR remains committed to increasing diversity and inclusion in the
workplace by applying policies and practices designed to attract,
retain and develop diverse talent. Teams that are diverse will provide
new and different perspectives to foster innovation and ultimately
provide better solutions for our customers.
As part of this commitment, initiatives are underway to increase the
number of women at all levels of the organisation, particularly in
operations and line management positions. This will be achieved
through ongoing improvement of our recruitment, retention and
development frameworks to attract and promote diverse talent.
We have maintained regular reporting on attraction, selection and
retention of female employees by tracking metrics on:
The number of women that have joined CSR;
Women who have left CSR and the reason for leaving;
The gender participation ratio for CSR and each business unit; and
Gender pay equity.
During YEM24 CSR continued to participate in the Champions of
Change Coalition for best practice to improve gender diversity and
inclusion. A number of diversity and inclusion initiatives were put in
place based on learnings from a series of ‘Listen and Learn’ sessions
conducted during YEM23.
CSR workplace profile
In accordance with the requirements of the Workplace Gender
Equality Act 2012 (Cth), CSR submits its Gender Equality Indicators
with the Workplace Gender Equality Agency. The report can be viewed
at the website of the Workplace Gender Equality Agency and also on
CSR’s website.
At the end of YEM24, the percentage of women in the CSR workforce
was 22%, up 1% on YEM23. During YEM24, 30% of new hires were
women, an increase of 2% from YEM23.
Key changes to CSR’s workforce profile during YEM24 include:
Senior management – The total number of women in senior
management roles, CEO-2, has shown a slight decrease at
the time of reporting. This group is an important source of
succession for business leadership positions;
Executives – In YEM24, the number of women in executives
increased by one, with the appointment of a female CFO to
the executive leadership team; and
Board of Directors – In YEM24, the number of directors
decreased from seven to six, following a temporary increase
to facilitate board transition.
In YEM24, the proportion of CSR’s workforce currently represented by
women in leadership roles is set out below:
Figure 2: Women in leadership
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Measurable objectives
Our progress in diversity and inclusion is guided by a data-driven approach, focusing on various stages of the employee lifecycle to prioritise
diversity, inclusion, and belonging initiatives. The commitment of our leaders and CSR’s active participation in industry forums like Champions of
Change empowers us to implement these initiatives with depth and rigour, ensuring that our efforts are meaningful, impactful and have
sustainable long-term impact. The achievements for YEM24 and the initiatives for YEM25 are set out below:
Table 6: Diversity measurable objectives
Measurable objective
YEM24 achievements
Overview of YEM25 initiatives
Leadership
and culture
Conducted a targeted leader-specific culture and engagement
survey to better understand and support the leaders driving
culture change in our business
Strengthened and simplified our behaviours to further embed
through the organisation
Continued to provide access to on-the-job training and
upskilling through strategic projects
Provided a $1,000 share grant to our team to drive a sense of
ownership in all levels of the business
Continued membership and participation in the Champions of
Change Coalition
Continued to measure culture and engagement ensuring that
line managers have an action plan to address areas of focus
Organisation-wide talent review completed to identify emerging
female talent at all levels and in operational roles
Established an internal mobility forum, enhancing our ability to
identify and support diverse talent for internal opportunities
Informed by Listen & Learns, launched Built to Lead mentoring
program focused on developing emerging female talent
Celebrated events that bring CSR people together in a
‘belonging at CSR’ context, acknowledge and celebrate cultural
occasions and significant days, such as International Women’s
Day, and provide a starting point for our teams to participate in
inclusion, learn more about their colleagues and increase
visibility of diverse and underrepresented groups within CSR
Formation of a Reconciliation Working Group
Respect at Work Phase 1 completed, including policy launch,
mandatory training, and risk-assessment at a site level
Establish a leadership program for
operational female talent, including
establishing communities
Conduct further analysis to better understand
the barriers to career advancement for
females and diverse groups
Progress Reconciliation through development
of agreed goals and action plan
Continue the momentum with Phase 2 of
Respect at Work to create a safe, respectful,
supportive and inclusive environment at CSR
through leadership assessment, education
and action plan associated with high-risk
areas identified
Plan for self-ID initiative to capture other
forms of diversity which will further inform our
strategy and initiatives
Understand forms of flexibility valued by
women in operational roles at CSR through
Listen and Learn sessions
Policy and governance
Continued to review and address gender pay parity for females
across all salaried roles
Employer Statement (CSR commitment & actions to close the
Gender Pay Gap) submitted to accompany WGEA reporting
Changes have been made to the parental leave policy, enabling
more men at CSR to take primary carer’s parental leave and
furthering CSR’s commitment to gender equality
Continued monitoring of gender pay parity
and action to address where required
Further review of CSR policies to ensure they
are inclusive and adapt to meet any future
legislative changes
Recruitment
and retention
Designed a diversity-focused recruitment policy to improve
hiring practices & internal applications
Job advertisements redesigned to better communicate our
commitment to diversity and inclusion within the marketplace
Built future female talent pipelines with tertiary institutions for
women in engineering and technology roles
Reviewing labour hire arrangements to create a higher intake
of diverse temporary labour which will result in temporary to
permanent conversions
Identify opportunitiess in operational
environments to ensure that amenities, team
culture and behaviours are welcoming for
diverse new hires
Complete comprehensive analysis of hiring
practices across functions to understand
barriers for entry of diverse talent
Enhance hiring manager capability to ensure
they are well-equipped to conduct interviews
that are not only fair and diverse, but also
promote diversity and inclusion practices
Build manager capability to better onboard
new employees, enabling increase in new hire
retention and a greater sense of belonging
REMUNERATION
CSR’s policy is to reward executives with a combination of fixed remuneration and short and long-term incentives structured to drive
improvements in shareholder value. Non-executive directors receive no incentive payments and there are no retirement benefit schemes in
place. Executives and directors may forgo a small part of their cash salary or, for non-executive directors, their directors’ fees, to acquire shares
in CSR. Further details are included on page 42 of the Remuneration Report. Employees cannot approve their own remuneration. Any
adjustment to the remuneration of direct reports, must comply with CSR’s remuneration policies and approvals process.
The Remuneration Report, commencing on page 27 of the Annual Report, includes further details on CSR’s remuneration policy and its
relationship to the company’s performance. It also includes details of the remuneration of directors and key management personnel for YEM24
and clearly distinguishes between the structure of non-executive director remuneration from that of the executive director and other key
management personnel.
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RISK MANAGEMENT
There are many risks in the markets in which CSR operates. A range of
factors, some of which are beyond CSR’s control, can influence
performance across CSR’s businesses. CSR constantly and
deliberately assumes certain levels of risk in a calculated and
controlled manner. CSR has in place a range of policies and
procedures to monitor the risk in its activities as well as defined limits
of authority for all levels of management and these are periodically
reviewed by the board. CSR’s Risk Management Policy sets out the
framework for risk management, internal compliance and control
systems.
There are several layers that assist the board in ensuring the
appropriate focus is placed on the risk management framework:
Risk & Audit Committee – reviews and reports to the board in
relation to the company’s financial reporting, internal control
structure, risk management systems including the risk framework
and risk appetite statements and the internal and external audit
functions;
Remuneration & Human Resources Committee – reviews and
reports to the board on the company’s organisational capability to
deliver on the strategy and create value for shareholders;
Safety & Sustainability Committee – reviews and reports to the
board on the management of the company’s safety, health and
environment liabilities and legal responsibilities as well as
addressing the risks and opportunities of climate change and the
company’s involvement in the communities in which it operates;
Executive leadership team – manages and reports to the board on
business and financial risks and overall compliance; and
Steering Committees – established across a number of key areas,
including sustainability, customer solutions, transformation and
logistics to provide ongoing governance and monitoring.
Risk management is sponsored by the board and is a priority for
senior managers, starting with the managing director. The board
oversees the risk profile of CSR and ensures that business
developments are consistent with the goals of CSR. The board
receives monthly assurances from the management team that
significant risks are being managed appropriately.
CSR is committed to improving risk management to protect and
enhance shareholder value. CSR’s risk management framework is
intended to provide the basis for a systematic approach to the
identification and management of risks. The risk management
framework requires current and emerging risks across the businesses
to be identified, evaluated, monitored and controlled. The framework
also includes evaluation of risk mitigation strategies.
CSR’s Risk Appetite Statements, approved by the board, are core to
the Risk Management Policy and defines (within practical boundaries)
the amount of risk the organisation is willing to accept in pursuing its
strategic objectives. By expressly articulating and documenting its
Risk Appetite Statements, CSR aims to ensure that:
risks can be measured, managed and monitored;
risk appetites can be consistently articulated and understood by all
relevant stakeholders; and
day-to-day operations are undertaken in alignment with CSR’s
tolerance for risk.
The board, through the Risk & Audit Committee, receives
recommendations in relation to the risk profile of CSR, breaches of
the policy framework and external developments which may impact on
the effectiveness of the risk management framework. It also approves
significant changes to the risk management framework, risk appetite
statements and related policies.
The Risk & Audit Committee has responsibility for monitoring
compliance with the risk management framework approved by the
board for internal control and compliance matters. In this role, the
Risk & Audit Committee monitors and reviews the effectiveness of the
internal audit and compliance functions.
CSR’s Corporate Governance and Disclosure Committee has
responsibility for any governance matters. Committees exist at the
executive management level to ensure the necessary elements of
expertise are focused on specific risk areas. Beneath this level, other
committees exist where subject matter experts focus on specific risks
as appropriate.
Risk management accountability
As part of the process of approving the financial statements, at each
reporting date, the managing director and other responsible senior
executives provide statements in writing to the board on the quality
and effectiveness of the company’s risk management and internal
compliance and control systems. The Risk & Audit Committee reviews
the risk management framework annually to confirm that the
framework continues to be appropriate and effective. The most recent
assessment of the risk management framework took place in
September 2023.
The board has also received statements from the managing director
and the chief financial officer certifying that, having made all
reasonable enquiries and to the best of their knowledge and belief:
the statements made in relation to the financial integrity of the
CSR group financial reports are founded on a sound system of
effective and efficient risk management and internal compliance
and control;
the system of risk management in operation throughout YEM24
was operating effectively; and
the systems relating to financial reporting were operating
effectively in all material respects.
In YEM24 the board received the relevant declarations required under
section 295A of the Corporations Act 2001 from the managing
director and chief financial officer as well as the relevant reports and
assurances that their opinions were formed on the basis of a sound
system of risk management and internal controls which are operating
effectively.
Financial report accountability
CSR’s managing director and chief financial officer, who are present
for board discussion of financial matters, declare to the board, in
writing, that the company’s financial statements are in accordance
with relevant accounting standards, give a true and fair view in all
material respects of the company’s and the group’s financial condition
and operational results and comply with the Corporations Act 2001
and associated regulations.
The chief financial officer oversees a robust internal process, where
business unit financial managers regularly meet with representatives
from the corporate finance team to discuss the financial aspects of
each business. This includes a review of the business unit profit and
loss statement, balance sheet and all other relevant matters.
Non-financial report accountability
For those periodic corporate reports that are not audited or reviewed
by the external auditor, a rigorous internal review process is
implemented. This process is led by the internal subject matter
experts with reviews undertaken by management and key internal
stakeholders, enabling management to verify that the report is
balanced and materially accurate and provides stakeholders with
appropriate information. External advice is obtained as required.
Non-audited periodic reports include the annual Sustainability Report,
the Modern Slavery Statement and this corporate governance
statement. These periodic reports are approved by the board.
CSR LIMITED | CORPORATE GOVERNANCE STATEMENT AND RISK
19
Economic, environmental and social risks
CSR’s risk management framework is intended to provide the basis for a systematic approach to the identification and management of risks. The
matters below reflect CSR’s material economic, environmental and social risks.
Table 7: Material economic, environmental and social risks
Key areas of materiality
Risks
Monitor and manage risk
Aluminium investment
CSR’s financial results may be impacted by
movements in the global US dollar price for
aluminium and currency fluctuations.
Some risks related to CSR’s Aluminium
investment cannot be hedged including, but
not limited to, regional price premiums, global
relativity of the price of electricity and inputs
into aluminium production such as petroleum
coke and pitch.
CSR’s aluminium investment is also subject to
changes to the Tomago joint venture structure
or potential operational issues at the Tomago
aluminium smelter, including electricity
curtailments.
CSR has a policy of hedging its aluminium sales (net of
any linked exposure inputs such as alumina), where
acceptable pricing is available, to reduce the volatility of
its Aluminium earnings when exchanged into Australian
dollars. This policy is overseen by CSR’s Finance
Committee which includes CSR’s Managing Director and
CEO, Chief Financial Officer, Group Treasurer and the
General Manager Aluminium.
Climate change
CSR’s business may be affected by the
transition to a low carbon economy and
mitigating the potential impacts of climate
change, as well as government policy and
regulations, which may also impact the
availability and nature of energy supply that
CSR uses. This may also impact how CSR
manages its property and land assets and
business processes.
CSR, if unable to understand and respond
effectively to climate change, may see reduced
revenues, increased costs, asset impairment
and/or business supply disruption as a result.
CSR’s Sustainability Steering Committee was formed to
provide focused oversight, with external advisors
engaged as necessary to provide specialist
sustainability advice.
CSR’s Safety & Sustainability Committee is a sub-
committee of the CSR Board, and oversees, and reports
to the CSR Board on CSR’s sustainability objectives.
Energy and security of
supply
CSR’s manufacturing operations use
significant amounts of energy including
electricity and gas.
CSR is subject to the risk that an inability to
anticipate, and manage fluctuations in, its use
of energy may have a negative impact on
CSR’s earnings and therefore, potentially its
shareholder value.
Where possible, CSR enters into long-term contracts
with the aim to provide greater security of energy supply
for its factories.
CSR’s Finance Committee oversees risks related to
electricity and gas pricing and management.
To reduce CSR’s exposure to this risk, alternative energy
sources including solar power systems are installed at
some CSR sites in addition to certain site-specific
energy reduction initiatives.
Financial and capital
management
There is a risk that CSR’s inability to effectively
and efficiently manage short and long term
capital may lead to excessive leverage, an
increase in costs, a limit in competitiveness
and/or a reduction in financial capacity.
CSR has financial planning processes which set out key
requirements relating to operational and capital
investments.
CSR has secured credit facilities sized and tenured with
the aim to ensure availability to an appropriate level of
liquidity.
CSR’s capital allocation framework provides a
prioritised approach to capital allocation, including
financial return metrics and aims to maintain an
investment grade credit rating.
Information and cyber
security
Digital services are increasingly used by the
construction sector in which CSR operates.
CSR has a digital development program which
is critical to helping CSR to achieve growth in
its key markets.
CSR is subject to the risk that a failure to
protect information systems and data from
unauthorised access, use, and disclosure, or
otherwise prevent a disruption, may
compromise the confidentiality, integrity or
availability of information systems, may result
in business interruption, regulatory or financial
impacts on CSR or may have a negative impact
on CSR’s reputation.
CSR has regular security awareness training, and such
training includes simulated phishing campaigns as well
as implementation of advanced threat protection.
CSR conducts periodic penetration testing and patching
across its information systems.
System redundancy is implemented by CSR where
considered appropriate.
CSR LIMITED | CORPORATE GOVERNANCE STATEMENT AND RISK
20
Economic, environmental and social risks (continued)
Table 7: Material economic, environmental and social risks (continued)
Key areas of materiality
Risks
Monitor and manage risk
Legacy product
obligations
From the early 1940s, CSR was involved in
asbestos mining and the manufacture and
marketing of products containing asbestos in
Australia and exporting asbestos to the United
States.
CSR’s involvement with asbestos ceased with
the divestment of the Wunderlich asbestos
cement business in 1977.
As a result of these activities, CSR has been
named as a defendant in litigation in Australia
and the United States.
CSR has been settling asbestos related claims since
1989.
CSR includes in its financial statements a product
liability provision covering all known claims and
reasonably foreseeable future asbestos related claims
and such provision is impacted by movements in claim
numbers, settlement rates and values.
In determining the product liability provision, at each
financial year end CSR obtains independent expert
advice in relation to the future incidents and value of
asbestos related claims.
Market structure and
volatility
Approximately 70% of CSR’s total revenue is
generated from products and services
supplied into the construction sector of
Australia and New Zealand. CSR’s revenue
may be impacted by several macro-economic
factors within this sector and market including,
for example, changes in construction activity
may impact CSR’s sales volumes and
corresponding financial performance.
The release of future land supply for
residential development, which can improve
CSR’s ability to generate revenue, relies on the
coordination of government and regulatory
bodies together with builders and developers
to deliver infrastructure and services for new
projects.
As a supplier to the construction market, CSR
is subject to a number of competitive forces
including other domestic and international
suppliers entering the market and new
technologies which could, in the future,
replace existing building methods.
Review of market activity in the construction sector is
factored into CSR’s regular reporting and included in
CSR’s weekly executive meetings, monthly reporting,
quarterly forecasting and annual budget and planning
cycles, which in turn informs CSR’s capacity and capital
planning.
CSR regularly monitors and engages with government
and regulatory bodies to encourage release of
residential land supply.
The nature of CSR’s building products is that they are
typically sold late in the construction process, giving
CSR some visibility of changes in market conditions
before specifically impacting demand for CSR’s
products.
CSR is actively developing and acquiring new products,
services and distribution networks to improve its
position in the market and with an aim of being able to
provide its customers a comprehensive service offering.
CSR’s strategy is focused on delivering improved
performance through the cycle to mitigate market
structure and volatility risks.
Organisational behaviours
CSR is subject to the risk of not developing,
maintaining or having access to the people
which may be required to deliver CSR’s
strategy.
Should officers, employees or contractors at
CSR not behave in accordance with the CSR
behaviours and/or CSR’s Code of Business
Conduct this may result in a decline in
workplace culture, an inability to attract and
retain talent in the business or poor
performance.
There is the risk that inappropriate behaviours
in the business are not reported and managed
appropriately.
CSR’s Code of Business Conduct and Ethics is
communicated to CSR’s officers, employees, and
contractors periodically.
CSR has implemented a separate Respect at Work
policy and communicated this to CSR’s officers,
employees and contractors.
CSR conducts culture and engagement surveys, the
results of which help to inform CSR’s reporting and
review of workplace behaviours.
CSR behaviours, the CSR story and its communication
plan are used with an aim of engaging the team and
building culture to support CSR’s purpose and strategy.
Product quality
Changes in legislation and building codes
requires ongoing assessment to ensure CSR’s
building products are fit for purpose and
compliant with all relevant codes applicable to
CSR’s products. This also includes those risks
associated with supply and install services
offered by CSR.
CSR is subject to the risk that it is supplied
defective or non-compliant raw materials
impacting its own products and systems which
may have a negative impact on CSR’s
reputation, may result in financial loss from
potential product recalls and claims, may have
regulatory impacts or otherwise may cause
injury or harm to CSR’s customers.
CSR has a quality management system which aims to
ensure that all products manufactured or supplied
consistently meet the requirements and specifications
of quality standards which apply to CSR’s products.
CSR actively implements its sustainable procurement
strategy, which includes raw material and product
testing, as well as compliance and certification. This
process also aims to align CSR with the requirements of
applicable Australian modern slavery legislation
(including the Modern Slavery Act 2018 (Cth)).
CSR’s Supplier Code of Conduct sets out CSR’s
expectations of its suppliers, and applies to all suppliers
of the business, including, but not limited to, all
organisations and sub-contractors providing goods and
services to CSR, based in Australia, New Zealand and
overseas.
CSR LIMITED | CORPORATE GOVERNANCE STATEMENT AND RISK
21
Economic, environmental and social risks (continued)
Table 7: Material economic, environmental and social risks (continued)
Key areas of materiality
Risks
Monitor and manage risk
Reputation
CSR operates a number of factories across
Australia and New Zealand and employs
approximately 2,800 employees.
CSR’s activities may impact the community
and environment in which it operates.
CSR is subject to the risk that failure to comply
with a legal or governance requirement, or a
breach of CSR’s social licence to operate, may
result in damage to CSR’s reputation,
potentially impacting CSR’s revenue and
earnings, ability to access capital, or secure
talent. As part of this, there is a risk that fraud
or ethical misconduct may result in large fines,
financial loss, damage to reputation, exposure
to criminal sanctions, legal action or
revocation of licences.
CSR’s Code of Business Conduct and Ethics sets out the
behaviours expected of all officers, employees,
suppliers, and contractors. Compliance with the Code is
measured annually by CSR.
CSR has a dedicated, external and confidential hotline
available 24/7 to employees and other stakeholders for
reporting misconduct to the business.
CSR has a central technical team established to
maintain product governance within the business.
CSR has governance processes in place to deal with
workplace health, safety and environment matters.
CSR has systems in place to monitor media and online
content about CSR to identify potential reputational
threats.
Site obligations
CSR’s Property segment rehabilitates and
develops former Building Products operating
sites which have become surplus to
operational requirements.
The cost and time required to complete the
property rehabilitation and development may
be higher than expected and impact the
financial result.
CSR dedicates experienced internal and external
resources to assess and manage site remediation.
Strategy and execution
There is a risk that CSR does not have access
to the people or resources required to deliver
on its strategy or otherwise fails to identify
and successfully execute opportunities which
may affect CSR’s pursuit of its strategic
objectives or its ability to deliver shareholder
value in the long run.
CSR has dedicated Steering Committees, comprising
the executive leadership team and subject matter
experts from within the business to regularly monitor
progress.
Through the Steering Committees, CSR undertakes
regular reviews of progress against business cases and
project plans to mitigate this risk.
CSR has a human resources strategy and plan to
ensure it has continued access to the right people to
deliver CSR’s strategy.
CSR also has a resource planning and recruitment
program.
Workplace Health, Safety
and Environment (WHSE)
There is a risk of potential harm to the health,
safety and wellbeing of CSR’s employees,
contractors or customers arising from
exposure to hazards in CSR’s workplace or
sites which are under CSR’s control.
There is also the risk that an uncontrolled
release of product or contaminants to land, air
or water during manufacturing may result in
harm to the environment, create regulatory
impacts, or may result in financial penalties or
may have a negative impact on CSR’s
reputation.
•
CSR’s Safety & Sustainability Committee regularly
reviews potential initiatives targeting improved safety
and environmental performance across CSR.
•
CSR has an established WHSE risk management
framework which aims to support CSR’s WHSE
commitments.
•
Regular and effective reporting of incidents and near
misses.
•
CSR employs dedicated and experienced WHSE
personnel which are embedded within each business
segment.
•
CSR uses regular auditing of the business to test the
effectiveness of key WHSE controls.
Note: Material Risks are listed alphabetically.
CSR LIMITED | CORPORATE GOVERNANCE STATEMENT AND RISK
22
Role of the external auditor
The Risk & Audit Committee seeks to ensure the independence of
the external auditor. The policy on auditor independence applies to
services supplied by the external auditor and their related firms to
CSR. Under the policy on auditor independence:
the external auditor is not to provide non-audit services under
which the auditor assumes the role of management, becomes
an advocate for the group, or audits its own professional
expertise;
significant permissible non-audit assignments awarded to the
external auditor must be approved in advance by the committee
or, between committee meetings by the chair of the committee;
the external audit engagement partner and review partner must
be rotated every five years;
procedures for selection and appointment of the external
auditor, and for the rotation of external audit engagement
partners, are set out in the committee charter; and
the external auditor confirms its independence within the
meaning of applicable legislation and professional standards at
each half-year and full-year.
The external auditor attends the company’s annual general
meeting so shareholders are given the opportunity to ask questions
relevant to:
the conduct of the audit;
the preparation and content of the auditor’s report;
the accounting policies adopted by the company in relation to
the preparation of the financial statements; and
the independence of the auditor in relation to the conduct of the
audit.
Role of internal audit
The Risk & Audit Committee recommends to the board the
appointment or dismissal of the internal audit partner, who is
independent of the external auditor.
The internal audit function utilises external expertise to provide
objective independent assurance to management and the board
on the effectiveness of CSR’s internal control, risk management
and governance systems and processes. The internal audit lead
has direct access to the chair of the Risk & Audit Committee and
oversees the execution of the internal audit plan, as approved by
the Risk & Audit Committee.
The internal audit service provider supports management efforts
to:
report to the board through the Risk & Audit Committee on
CSR’s compliance against its governance framework and
policies, including investigating, and advising on, any potential
or actual breaches;
provide objective assurance over the adequacy and
effectiveness of controls;
oversee the implementation of CSR’s risk framework across the
organisation; and
recommend improvements to the company’s risk management
framework.
Internal audit has full access to all CSR businesses, records and
personnel.
The annual internal audit plan is formulated using a risk-based
approach to align assurance with CSR’s identified key risks. The
Risk & Audit Committee approves the internal audit plan which is
reviewed throughout the year to ensure it remains appropriate.
Internal audit activity and outcomes are reported to the Risk &
Audit Committee at each meeting.
ENGAGEMENT WITH STAKEHOLDERS
CSR has a number of stakeholders including shareholders,
employees, customers, suppliers and local communities. The board
identifies and prioritises CSR’s key stakeholders, develops a
strategy for engagement with stakeholders and supports
management to engage with key stakeholders to understand,
consider and respond to issues.
Continuous disclosure
CSR believes that shareholders, regulators, ratings agencies and
the investment community generally, should be informed of all
major business events and risks that influence CSR, in a factual,
timely and widely available manner. CSR has a long established
practice of providing relevant and timely information to
stakeholders, supported by its Share Market Disclosure Policy
which details comprehensive procedures to ensure compliance
with all legal obligations. Under this policy, any price sensitive
material for public announcement, including full-year and half-year
results announcements, release of financial reports, presentations
to investors and analysts and other prepared investor briefings for
CSR, will be:
lodged with the ASX as soon as practical and before external
disclosure elsewhere; and
posted on CSR’s website.
The policy limits external briefings in the periods between the end
of a full-year and half-year and the release to the ASX of the
relevant results.
The board has responsibility for compliance with CSR’s continuous
disclosure obligations to keep the market fully informed of
information that may have a material effect on the price or value of
CSR’s securities. Internal procedures and guidelines for continuous
disclosure and communications have been developed. These
procedures sit together with CSR’s Share Market Disclosure Policy
to ensure the board and the Corporate Governance and Disclosure
Committee is made aware of any information that should be
considered for release to the market.
CSR’s Corporate Governance and Disclosure Committee meets as
required, and often on very short notice, to ensure compliance with
disclosure requirements. Members of this committee are the
managing director, chief financial officer, chair of the Risk & Audit
Committee, company secretary and head of investor relations.
The managing director approves all disclosures before they are
released. The board approves all disclosures that are significant. All
announcements include a statement identifying the title of the
body, or the name and title of the officer of the company, who
approved the disclosure. Directors receive a copy of all ASX
disclosures promptly following release.
The Share Market Disclosure Policy is reviewed regularly to ensure
compliance with the ASX Listing Rules and guidance on continuous
disclosure.
The company secretary is responsible for communications with the
ASX.
CSR LIMITED | CORPORATE GOVERNANCE STATEMENT AND RISK
23
Commentary on financial results
CSR provides a review of operations and financial performance in
the full-year and half-year results, which also includes the
company’s financial report. Results announcements to the ASX,
analyst presentations and the full text of the chair’s and managing
director’s addresses at the company’s annual general meeting, and
any extraordinary meeting that may be held, are made available on
CSR's website.
Other engagement activities
CSR strives to communicate effectively with shareholders about
the company’s performance, presenting the Annual Report and
other corporate information in clear language, supported by
descriptive graphics and tables. This approach is outlined in the
company’s Shareholder Communication Policy.
Where practicable, the company uses the latest widely available
electronic technology to communicate openly and continuously
with shareholders, and the share market in general. The company
encourages shareholders to embrace the benefits of electronic
communication and to provide email addresses so that company
information can be provided to shareholders electronically.
Announcements to the ASX, significant briefings, presentations,
notices of meetings and speeches at annual general meetings and
any extraordinary general meetings are promptly posted on the
Investors and News section of CSR’s website. An email alert system
is available from the CSR website enabling shareholders and
stakeholders to be advised when announcements are released to
the ASX.
Shareholders can register to receive shareholder information and
can lodge proxies electronically for the annual general meeting and
any extraordinary general meetings. The annual general meeting,
results announcements and other major briefings are available via
a live webcast from CSR’s website, for access by all interested
parties.
Shareholders are encouraged to submit questions or comments
ahead of, or during, the company’s annual general meeting and
any extraordinary general meeting. Members of senior
management are present at the annual general meeting, along
with directors, to answer questions about the company’s
operations. On occasions when the annual general meeting or
extraordinary general meeting may be held as a hybrid meeting, an
opportunity for shareholders to ask questions orally and in writing
and to vote in real time will be made available. All resolutions at
these meetings are decided by a poll rather than on a show of
hands.
The company’s Sustainability Report provides information on CSR’s
sustainability record across a number of priority areas including the
environment, people and safety, community and supply chain.
The company’s Supplier Code of Conduct sets out the expectations
of CSR’s suppliers, and applies to all suppliers, including all
organisations and sub-contractors providing goods and services to
CSR, based in Australia, New Zealand and overseas.
During YEM24, the company submitted a Modern Slavery
Statement in accordance with the Commonwealth Modern Slavery
Act 2018. The Statement addresses the company’s key modern
slavery risks and how these risks have been identified and
assessed, as well as information on the actions being taken to
mitigate those risks and how the effectiveness of these mitigating
actions is assessed.
Details of the company’s engagement with the community are
available in the Sustainability Report found on CSR’s website.
Role of the investor relations function
CSR’s investor relations function is designed to ensure that the
market is kept informed of all aspects relevant to the company and
also to provide an opportunity for investors and other stakeholders
to express views on the company. The program includes lodgement
of information on the ASX platform, managing and updating the
CSR website, investor roadshows, conferences and other briefings
with all materials lodged with the ASX prior to distribution.
CSR utilises the following activities to promote effective
communication with the market:
comprehensive and up to date company website;
investor briefings, presentations, conferences and other events;
encouraging questions via the company’s website and ahead of
the AGM as outlined in the Notice of Meeting; and
webcasting important company events.
SHARE TRADING POLICY
Under the company’s Share Trading Policy, directors, senior
managers and identified designated employees may only buy or
sell CSR shares, or give instructions to the trustee of CSR’s
employee share acquisition plan (ESAP), or vary their participation
in the dividend reinvestment plan (DRP) during one month periods
commencing 24 hours after the date of the full-year and half-year
results announcements and the annual general meeting. Also, they
are prohibited from dealing in any financial products relating to
CSR securities or entering into hedging arrangements in respect of
CSR securities they hold, or which are held on their behalf.
Additional clearance requirements apply to directors of CSR
Limited, the managing director, chief financial officer as well as
senior executives who are eligible to participate in CSR’s long-term
incentive plan. Each of these individuals must obtain clearance for
any proposed dealing in CSR’s securities.
Under the policy, and as required by law, all directors and
employees are prohibited from buying or selling CSR securities at
any time if they are aware of any market sensitive information that
has not been made public. All CSR share dealings by directors are
notified to the ASX within the required time. Additional trading
restrictions apply to key management personnel.
OTHER IMPORTANT POLICIES
In addition, the board has adopted specific internal policies in key
areas, including trade practices; workplace health, safety and the
environment; fairness, respect and diversity in employment; capital
investment; dealing with price sensitive and other confidential
information; privacy; indemnification of employees; and
requirements for authorising and entering into business
transactions on behalf of CSR.
DISCLOSURE
CSR considers that the above corporate governance practices
comply with the ASX CGC Principles and Recommendations (4th
edition).
The company’s corporate governance framework is kept under
review, with a report provided to the board by the company
secretary at least annually, recommending any improvements
necessary to respond to changes to the company’s business or
applicable legislation and standards.
CSR LIMITED | DIRECTORS’ REPORT
24
DIRECTORS’ REPORT
The board of directors of CSR Limited (CSR) presents its report of the
consolidated entity, being CSR and its controlled entities (CSR group),
for the year ended 31 March 2024. The information appearing on
pages 24 to 46 forms part of the Directors’ Report and is to be read in
conjunction with the following information:
Principal activities
The principal activities of entities in the CSR group during the year
included the manufacture and supply of building products in Australia
and New Zealand.
In Australia, the CSR group has an interest in the smelting of
aluminium through its 70% interest in Gove Aluminium Finance
Limited, which owns 36.05% of the Tomago aluminium smelter
located near Newcastle, NSW.
CSR also maximises returns from the sale of its surplus land by
advancing sites through stages of the development process.
Review of operations and financial results
A review of the CSR group operations and results for the year ended
31 March 2024 is set out on pages 1 to 6 of the Annual Report and
forms part of the Directors’ Report. This includes the summary of
consolidated results, an overview of the group’s strategy and future
prospects.
Significant changes
On 26 February 2024, CSR announced that it had entered into a
Scheme Implementation Deed with Saint-Gobain for the acquisition of
all of the issued shares in CSR by way of scheme of arrangement at
an offer price of $9.00 cash per share (Scheme).
On 26 April 2024, CSR announced that the Supreme Court of New
South Wales had made orders that CSR convene a meeting of its
shareholders to vote on the Scheme (Scheme Meeting) and that the
Scheme Booklet had been registered with the Australian Securities
and Investment Commission (ASIC). A copy of the Scheme Booklet
was also made available through an ASX announcement and on CSR’s
website.
There have been no other significant changes to the CSR group in the
financial year ended 31 March 2024.
Events after balance sheet date
Except for the significant changes noted above, no other matters or
circumstances have arisen since the end of the financial year that
have significantly affected or may significantly affect the CSR group’s
operations, the results of those operations or the CSR group’s state of
affairs in future financial years.
Dividends and distributions to shareholders
Dividends through the year have been as follows:
a final ordinary dividend of 20.0 cents per ordinary share (100%
franked at the 30% corporate tax rate), with respect to the financial
year ended 31 March 2023, was paid on 3 July 2023; and
an interim ordinary dividend of 15.0 cents per ordinary share
(100% franked at the 30% corporate tax rate) was paid on 7
December 2023 (as set out in note 19 to the financial statements
on page 69).
No other distributions were paid during the year.
In the context of the proposed Scheme, the CSR board has not
declared a final dividend for YEM24.
Options over share capital
Other than as disclosed in the Remuneration Report:
no CSR options were granted to executives or non-executive
directors during the year;
there were no unissued shares or interests in CSR subject to
options at the date of this report; and
no CSR shares or interests were issued pursuant to exercised
options during or since the end of the year.
Indemnities and insurance
Under rule 10 of CSR’s constitution, CSR indemnifies every person
who is or has been a director or officer of CSR, to the extent permitted
by law and subject to the restrictions in sections 199A and 199B of
the Corporations Act 2001 against:
liability incurred by that person as an officer of CSR (including
liabilities incurred by the officer as a director of a subsidiary of CSR
where CSR requested the officer to accept appointment as
director); and
reasonable legal costs incurred in defending an action for a liability
or an alleged liability incurred by that person as such an officer of
CSR (including such legal costs incurred by the officer as a director
of a subsidiary of CSR where CSR requested the officer to accept
appointment as director).
For the purposes of rule 10 of CSR’s constitution, ‘officer’ means a
director, secretary and executive officer of CSR (as defined in the
Corporations Act 2001).
CSR has entered into a deed of indemnity, insurance and access with
current and former directors of CSR and its subsidiaries. Under each
director’s deed, CSR indemnifies the director against all costs, losses
or liabilities, including without limitation, legal costs and expenses, on
a full indemnity basis, incurred by the director in their capacity as a
director of CSR or, in some cases as a director of a CSR subsidiary.
The deeds also provides directors certain rights of access to board
papers and require CSR to maintain insurance cover for directors. No
director or officer of CSR has received benefits under an indemnity
from CSR during or since the end of financial year.
CSR’s external auditor is not indemnified under rule 10 of CSR’s
constitution or any agreement.
During the year, CSR paid premiums in respect of insurance contracts
for the year ended 31 March 2024. The insurance contracts insure
against certain liability (subject to exclusion) incurred by persons who
are or have been directors or officers of CSR and its controlled
entities.
In accordance with normal commercial practice, the insurance
contract prohibits disclosure of the nature of the liability covered by,
or the premium payable under, the contract of insurance. No claims
under the indemnities have been made against CSR during or since
the end of the year.
CSR LIMITED | DIRECTORS’ REPORT
25
Performance in relation to environmental regulation
The board places a high priority on environmental issues and is
satisfied that adequate systems are in place for the management of
CSR’s compliance with applicable environmental regulations under
the laws of the Commonwealth, States and Territories of Australia and
of New Zealand. CSR is not aware of any pending prosecutions
relating to environmental issues, nor is CSR aware of any
environmental issues, not provided for, which would materially
affect the business as a whole.
Political donations
CSR’s businesses are often involved in a degree of interaction with all
levels of government. CSR assists all sides of politics in the
development of policy in fields where CSR has specific expertise. No
fees were paid to attend any political events (2023: $nil) and as such
disclosure to the Australian Electoral Commission was not required.
Auditor independence
There is no current or former partner or director of Deloitte Touche
Tohmatsu, CSR’s auditor, who is, or was at any time during the year
ended 31 March 2024, an officer of the CSR group. No auditor who
played a significant role in the CSR group audit for the year ended 31
March 2024 has done so for a period exceeding the extended audit
involvement period of five successive financial years. The auditor’s
independence declaration (made under section 307C of the
Corporations Act 2001) is set out on page 26.
Non-audit services
Details of the amounts paid or payable to the CSR group auditor,
Deloitte Touche Tohmatsu, for non-audit services provided by that firm
during the year are shown in note 34 to the financial statements on
page 88. In accordance with written advice provided by the Risk &
Audit Committee, the directors are satisfied that the provision of non-
audit services during the year by Deloitte Touche Tohmatsu:
is compatible with the general standard of independence for
auditors imposed by the Corporations Act 2001; and
did not compromise the auditor independence requirements of the
Corporations Act 2001 in view of the materiality of the amounts,
the nature of the services and the processes established to
monitor the independence of the auditors.
Proceedings on behalf of CSR
No proceedings have been brought, or intervened in, on behalf of
CSR, nor has any application for leave been made in respect of CSR
under section 237 of the Corporations Act 2001.
Remuneration of directors and key management personnel
(KMP)
The Remuneration Report on pages 27 to 46 provides: a summary of
the board’s remuneration policy and practices during the past year as
they apply to directors and other KMP (as defined by the Accounting
Standard AASB 124 Related Party Disclosures); the relationship
between remuneration policy and the CSR group’s performance; and
the remuneration details for each director and other KMP.
Directors and company secretary
On 31 May 2023 Mr Matthew Quinn retired from the board. There
were no other changes to the board in the year ended 31 March
2024.
The names of directors who held office at 15 May 2024, as well as
details about current directors’ period of appointment, qualifications,
experience, special responsibilities, current directorships and
directorships for the past three years of other listed companies, are
on pages 7 and 8 and forms part of the Directors’ Report.
The qualifications and experience of the company secretary at 15 May
2024 are as follows:
Jill Hardiman, AGIA
Jill joined CSR in 2002 and has worked within the Company
Secretariat team since 2003, and as Assistant Company Secretary
since 2018. In 2021 Jill was appointed Company Secretary and has
broad secretariat and corporate governance experience. Jill holds a
Graduate Diploma in Applied Corporate Governance and is an
Associate of the Governance Institute of Australia.
The number of meetings of the company’s board of directors and each
board committee held during the year ended 31 March 2024, and the
number of meetings attended by each director are detailed in Table 1
below. The directors’ relevant interests in shares in CSR or a related
body corporate as at the date of this report are detailed in the
Remuneration Report on page 46. Other than as disclosed elsewhere
in this report, no director:
has any relevant interest in debentures of, or interests in a
registered scheme made available by, CSR or a related body
corporate;
has any rights or options over shares in, debentures of or interests
in a registered scheme made available by, CSR or a related body
corporate; or
is a party to or entitled to a benefit under any contracts that confer
a right to call for or deliver shares in, debentures of or interests in
a registered scheme made available by CSR or a related body
corporate.
Table 1: Meetings of directors
Year ended
31 March 2024
CSR Board
Risk & Audit
Committee
Safety &
Sustainability
Committee
Remuneration &
Human Resources
Committee
Due Diligence
Committee
Held1
Attended2
Held1
Attended2
Held1
Attended2
Held1
Attended2
Held1
Attended2
John Gillam
14
14
-
3*
4
4
4
4
-
1*
Christina Boyce
14
13
-
2*
3
3
4
4
-
-
Nigel Garrard
14
14
4
4
4
4
-
4*
-
-
Matthew Quinn3
1
1
-
1*
1
1
1
1
-
-
Adam Tindall
14
14
4
4
-
4*
4
4
3
3
Penny Winn
14
14
4
4
-
3*
4
4
3
3
Julie Coates
14
14
-
4*
-
4*
-
4*
3
3
1
Number of meetings held while a member.
2
Number of meetings attended. Board committee meetings are open to all directors to attend. Where a director attended a meeting of a committee of which they were not
an appointed member, this is indicated with an asterisk.
3
Director retired 31 May 2023.
John Gillam
Chair of the board
Julie Coates
Managing Director and CEO
15 May 2024
15 May 2024
CSR LIMITED | AUDITOR’S INDEPENDENCE DECLARATION
26
15 May 2024
The Board of Directors
CSR Limited
Triniti 3, 39 Delhi Road
North Ryde NSW 2113
Dear Directors
Auditor’s Independence Declaration to CSR Limited
In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the following declaration of independence to the directors
of CSR Limited.
As lead audit partner for the audit of the financial statements of CSR Limited for the year ended 31 March 2024, I declare that to the best of my
knowledge and belief, there have been no contraventions of:
The auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
Any applicable code of professional conduct in relation to the audit.
Yours faithfully
DELOITTE TOUCHE TOHMATSU
Sandeep Chadha
Partner
Chartered Accountants
Liability limited by a scheme approved under Professional Standards Legislation.
Member of Deloitte Asia Pacific Limited and the Deloitte organisation.
Deloitte Touche Tohmatsu
A.B.N. 74 490 121 060
Quay Quarter Tower
50 Bridge Street
Sydney, NSW, 2000
Australia
Tel: +61 (0) 2 9322 7000
Fax: +61 (0) 2 9322 7001
www.deloitte.com.au
CSR LIMITED | REMUNERATION REPORT
27
REMUNERATION REPORT
Shareholder letter
Dear Shareholder
As the Chair of the Remuneration & Human Resources Committee and on behalf of the board, I am pleased to present CSR’s Remuneration Report
for the year ended 31 March 2024 (YEM24).
The CSR board proactively oversees the implementation of the remuneration framework, ensuring that our senior executives and employees
receive reward that is equitable, fair, and motivates them to deliver strong performance. Central to our remuneration strategy is the principle of
aligning executive incentives with shareholder interests.
We regularly engage with major shareholders and their advisors to review and seek feedback on the framework, ensuring its relevance and
effectiveness in a dynamic and evolving business landscape.
On 26 February 2024, CSR announced that it had entered into a Scheme Implementation Deed with Compagnie de Saint-Gobain (Saint-Gobain)
under which Saint-Gobain has agreed to, through Saint Gobain BidCo Pty Ltd (Saint-Gobain Sub) (an indirect wholly-owned subsidiary of Saint-
Gobain), acquire all of the issued shares in CSR by way of scheme of arrangement at an offer price of $9.00 cash per share (Scheme). Shareholders
will have the opportunity to vote on the Scheme at the Scheme Meeting. In deciding whether to vote in favour of the Scheme, shareholders should
read the Scheme Booklet in full. The Scheme will only become effective and be implemented if it is approved by the requisite majorities of
shareholders at the Scheme Meeting, it is approved by the Court at the second court hearing and the other conditions precedent to the Scheme
are satisfied or waived (as applicable) (which includes FIRB approval). The Scheme Booklet provides additional information on how incentives will
be treated in connection with the Scheme, if it becomes effective.
YEM24 performance
CSR has delivered strong performance in YEM24, advancing strategic initiatives aimed at delivering the most competitive product and service
solutions for our valued customers and the market. Under the guidance of our executive leadership team, the company has been exceptionally
well managed, resulting in pleasing financial performance and favourable outcomes for our shareholders.
The Building Products business segment delivered another solid EBIT result and the Property segment delivered their highest earnings over the
last 16 years, while the Aluminium result was impacted by volatility in costs.
Remuneration outcomes
Challenging and motivating short-term incentive (STI) targets were set by the board at the start of the year to incentivise performance. We are
pleased to report that CSR’s group YEM24 EBIT performance delivered at stretch.
The board also reviewed significant items and, to ensure alignment between the actual earnings and the targets set, reduced the EBIT for the
purpose of STI outcomes to incorporate the transformation system implementation costs. There were no other adjustments required for the EBIT
financial component of STI.
The STI payout reflects performance between target and stretch and the management team and employees have been appropriately rewarded for
their efforts and results, including contribution to the overall financial result, and delivery of individual non-financial KPIs.
Other than as necessary in consideration of the Scheme, there have been no major changes to CSR’s remuneration framework for YEM24.
In summary
YEM24 proved to be a successful year for CSR, highlighted by strong financial performance and continued progress in the delivery of strategic
initiatives. The board is confident that our remuneration framework has appropriately incentivised our executives to generate value for our
shareholders. Management should take pride in their achievements in delivering these strategic initiatives, which have resulted in significant and
rewarding shareholder returns.
Adam Tindall
Chair, Remuneration & Human Resources Committee
REMUNERATION REPORT | REMUNERATION REPORT OVERVIEW
28
Overview
1
Basis of preparation of the Remuneration Report
This Remuneration Report provides a summary of CSR’s remuneration policy and practices during the past financial year as they apply to CSR
directors and executives.
The Remuneration Report has been prepared in accordance with the requirements of section 300A of the Corporations Act 2001 and
Corporations Regulation 2M.3.03 and has been audited by CSR’s external auditor.
The report contains an overview which is intended to provide a ‘plain English’ explanation for shareholders of the key management personnel
(KMP) actual remuneration outcomes for the year ended 31 March 2024 (YEM24) and the remuneration framework.
Consistent with prior years, actual remuneration of executive KMP has been included in the Remuneration Report in section 3.
Remuneration implications as a result of the Scheme Implementation Deed
As announced on 26 February 2024, CSR and Saint-Gobain entered into a Scheme Implementation Deed for the acquisition of all of the issued
shares in CSR by Saint-Gobain Sub, a wholly-owned subsidiary of Saint-Gobain. The CSR board has made necessary adjustments to CSR’s usual
remuneration approach for YEM24 in consideration of the Scheme, as follows:
YEM24 short-term incentive (STI) plan – the YEM24 STI award for executive KMP will be paid in cash with no deferred share component
consistent with the terms of the Scheme Implementation Deed. In previous years, 40% of any STI earned by executive KMP was converted to
CSR shares and deferred.
YEM25 long-term incentive (LTI) plan – given the proposed timing of the Scheme, no YEM25 LTI award is intended to be granted to executive
KMP. If the Scheme does not become effective, the board will consider the appropriate incentive arrangements to be put in place for YEM25,
which are likely to be consistent with LTI grants made in previous years.
Non-executive director (NED) fees – in accordance with CSR’s Constitution and the Scheme Implementation Deed, CSR’s non-executive directors
Adam Tindall and Penny Winn have each received a one-off fee of approximately $8,000 (inclusive of applicable superannuation) for their
preparation for, attendance and participation in the work of a due diligence subcommittee in relation to the Scheme Booklet. The relevant fees
were paid when the Scheme Booklet was lodged with ASIC.
Also, as set out in the Scheme Booklet, and in general terms, the board currently intends, subject to the Scheme becoming effective and the
exercise of the board’s discretion, to treat outstanding equity incentives in place as follows:
determine the early vesting of all performance rights; and
release all shares subject to restrictions from those restrictions,
and take all other actions incidental or required to effect this.
Other than the above, there have been no major changes to the remuneration framework during YEM24.
2
Key management personnel (KMP) and senior executives
KMP for YEM24 are detailed in the table below. KMP are as defined by the Accounting Standard AASB 124 Related Party Disclosures (AASB
124).
The Managing Director and CEO and Chief Financial Officer are the only two senior executives who qualify as executive KMP consistent with prior
years.
Table 1: Key management personnel
Name
Position
Term as KMP
Non-executive directors (NEDs)
John Gillam
Director and chair of the board
Full year
Christina Boyce
Director
Full year
Nigel Garrard
Director
Full year
Matthew Quinn
Director
To 31 May 2023
Adam Tindall
Director
Full year
Penny Winn
Director
Full year
Executive KMP
Julie Coates
Managing Director and CEO
Full year
Sara Lom
Chief Financial Officer
From 4 September 2023
David Fallu1
Chief Financial Officer and Executive General Manager, Property
and Aluminium
To 13 September 2023
1
On 16 March 2023, David Fallu announced his intention to resign from CSR and it was announced on 14 June 2023 that Sara Lom had been appointed as CFO following
Mr Fallu's resignation. Mr Fallu ceased to be a KMP from 13 September 2023. Further detail is included in section 9.
REMUNERATION REPORT | REMUNERATION AND PERFORMANCE OUTCOMES
29
Remuneration and performance outcomes
3
Actual remuneration
The actual remuneration disclosure has been prepared to provide shareholders with a view of CSR’s remuneration structure and how
remuneration was paid to the executive KMP for YEM24. The board believes presenting information in this way provides shareholders with clarity
and transparency of executive KMP remuneration, showing the amounts awarded for each remuneration component (fixed, short and long-term)
within the financial year. This disclosure differs from the statutory remuneration disclosures contained in section 10, with a summary of the
differences detailed in the table below.
Table 2: Comparison of actual and statutory remuneration disclosures
Fixed annual
remuneration
Short-term incentive (STI)
Long-term incentive (LTI)
Leave
accruals
Other benefits
Actual
remuneration
disclosures
Cash salary,
superannuation
contributions and
other eligible salary
sacrifice benefits
STI award for YEM24 will
be paid fully in cash.
STI award for YEM23
expressed as the full
value, inclusive of the
40% STI deferral into CSR
shares.
Value of LTIs that have
vested during the year,
calculated based on the
number of shares valued
using the five-day volume
weighted average price
(VWAP) prior to issue of the
shares. Excludes the value of
unvested LTIs at 31 March
2024.
Not
included
Includes YEM23
Employee Share Grant
and other costs relating to
company business or
contractual obligations,
where the benefit has
been received.
Statutory
remuneration
disclosures
As above
STI award for YEM24 paid
fully in cash, plus
amortisation of STI
deferrals into CSR shares
relating to prior two years.
Value of LTIs recorded in
accordance with accounting
standards (based on fair
value determined at grant
date expensed over the
vesting period). The amount
for YEM24 relates to LTI
grants from YEM22 to
YEM24.
Included
As above, except where
Performance Rights Plan
(PRP) rights are granted
as part of contractual
obligations. These are
expensed over the vesting
period.
Executive KMP actual remuneration
Actual remuneration received by executive KMP is set out in table 3 below and is prepared on the basis summarised in table 2. Commentary on
the key components of remuneration is set out in table 4 below.
Table 3: Actual remuneration received by executive KMP
1
In YEM24, the short-term incentive represents the full cash value. In YEM23, the short-term incentive represents the full value of the STI, inclusive of 40% deferral into CSR
shares.
2
Long-term incentive remuneration includes the vesting outcome of the YEM21 LTI. The long-term incentive amount is based on the number of shares valued using the five-
day VWAP prior to issue of the shares.
3
Other benefits include the Employee Share Grant for YEM23 and other expenditure, all of which related directly to company business.
Year ended 31 March
$
Fixed
remuneration
Short-term
incentive1
Long-term
incentive2
Other
benefits3
Total
31 March 2024
Julie Coates
1,217,875
1,235,145
2,187,166
–
4,640,186
Sara Lom
353,413
365,353
–
–
718,766
David Fallu
337,024
–
665,659
–
1,002,683
Total
1,908,312
1,600,498
2,852,825
–
6,361,635
31 March 2023
Julie Coates
1,175,875
942,151
1,366,823
–
3,484,849
David Fallu
738,750
430,207
592,009
3,074
1,764,040
Total
1,914,625
1,372,358
1,958,832
3,074
5,248,889
REMUNERATION REPORT | REMUNERATION AND PERFORMANCE OUTCOMES
30
3
Actual remuneration (continued)
Table 4: Commentary on actual remuneration received by executive KMP
Area
Explanation
Fixed
remuneration
Ms Coates’ fixed remuneration was increased from 1 July 2023 from $1,184,500 to $1,229,000 per annum, through
CSR’s annual remuneration review.
Mr Fallu’s fixed remuneration was not increased during the year.
Short-term
incentives
(STI)
The board assessed Ms Coates’ performance against the objectives set and determined that Ms Coates would be
awarded a STI at between target and stretch. The STI outcome recognises Ms Coates’ leadership of the business over the
last year, including the significant efforts to deliver financial results above the target while progressing on CSR’s strategy.
The CSR strategy, which focuses on developing market leading customer solutions, industry best practice supply chain
and digitisation of systems and processes is well-progressed and delivering benefits. The STI award represents 91% of
Ms Coates’ maximum STI opportunity for YEM24.
The board assessed Ms Lom’s performance against the objectives set and determined that Ms Lom would be awarded a
STI at between target and stretch. The STI outcome recognises Ms Lom’s individual performance and financial
stewardship of the business since her promotion to Chief Financial Officer in September 2023. The STI award represents
80% of Ms Lom’s maximum STI opportunity for YEM24.
Further detail on the STI outcomes is included in sections 4 and 7.
Long-term
incentives
(LTI)
In YEM24, long-term incentives represent the partial vesting of the YEM21 LTI for Ms Coates and Mr Fallu.
Further detail is included in sections 4, 8 and 12.
Other benefits
Other benefits include the YEM23 Employee Share Grant and other expenditure (all of which related directly to company
business).
REMUNERATION REPORT | REMUNERATION AND PERFORMANCE OUTCOMES
31
4
Performance outcomes
Summary of performance outcomes for YEM24
A summary of the YEM24 short-term and long-term incentive outcomes is set out in tables 5 to 7 below, with further detail on the plans included
in sections 7 and 8 respectively.
The Scheme Booklet provides additional information on how incentives will be treated in connection with the Scheme, including in sections 9.1
and 9.2, which describes that the CSR board currently intends, subject to the Scheme becoming effective and the exercise of the CSR board’s
discretion, to determine the early vesting of all performance rights prior to the business day before the Scheme record date or the Scheme being
implemented (among other actions).
i)
Short-term incentive outcomes
Table 5: YEM24 STI CSR group financial targets and assessment of performance outcomes
Area
Explanation
YEM24 financial
targets for STI
purposes
At the start of each year, the board sets challenging financial targets taking into account the relevant factors for each
business segment including forecasts for building activity, inventory targets, aluminium pricing and the property
market, as well as considering investor requirements for a certain level of sustainable returns.
The financial targets for YEM24 were set by the board in March 2023, with earnings before interest and tax (EBIT) the
primary STI financial measure. Consistent with previous years, the board has elected not to disclose detailed financial
and/or individual targets due to commercial sensitivities.
Assessment of
performance
against targets
The CSR group, Building Products and Property business segments YEM24 EBIT exceeded the financial targets set.
Further detail on the business segment targets and performance is summarised in table 6.
An assessment of significant items was completed by the board and, to ensure consistency against the targets set, the
EBIT used for assessing CSR group and Building Products STI financial performance was reduced by the
transformation costs relating to Software-as-a-Service of $7 million which are treated as ‘significant items’. Details of
this assessment are set out in table 7.
The CSR group EBIT for STI assessment purposes of $325 million was significantly above the financial target set. As a
result, the CSR group EBIT financial component of STI was awarded at stretch.
The CSR group financial performance for YEM24 reflected:
‒
Building Products solid earnings, with strong operational performance and continued pricing and cost disciplines
to manage inflationary cost pressures.
‒
Continued progress and benefits realised from the CSR strategy including improved supply chain capability and
development of customer-driven, integrated solutions to drive the most competitive product and service solutions
for the market.
‒
Property earnings of $91 million, a 16-year high and net cash contribution of $142 million.
‒
Lower Aluminium earnings with the business impacted by volatility in costs.
The board did not exercise any discretion in relation to STI outcomes.
STI awarded
as a % of EBIT
The total STI awarded amounts to a payout ratio of 7.0% of YEM24 EBIT for STI assessment purposes (YEM23: 5.4%
of YEM23 EBIT).
The increase in the STI payout ratio reflects the YEM24 group EBIT outcome, which was awarded at stretch compared
to the YEM23 group EBIT outcome which was awarded at between target and stretch.
Table 6: YEM24 STI business financial targets and assessment of performance outcomes
Business
Explanation of STI EBIT financial targets
Assessment of performance outcomes
Outcome
Building
Products
The targets were established having regard to
forecast construction activity for YEM24, including
the expected capacity constraints of the
construction industry. These forecasts are
formulated with reference to external data sources
and independent economic models.
The business was tasked to deliver earnings
growth, while maintaining a continued focus on
operational leverage, cost disciplines and
managing the economic environment including
inflationary pressures. In addition, the business
was tasked with the continued implementation of
the strategy and the realisation of benefits during
YEM24.
Building Products EBIT of $294 million was up $21
million or 8% on YEM23. EBIT margin of 15.5%
represented an increase compared to 14.9%
delivered in YEM23.
The earnings growth was driven through a
combination of factors including realisation of
strategy benefits, strong operational performance
and continued pricing and cost disciplines.
As noted above and detailed in table 7, Building
Products EBIT for STI purposes was lowered by $7
million for transformation costs relating to
Software-as-a-Service recorded in ‘significant
items’ to $287 million.
Overall, Building Products earnings for STI
purposes exceeded the target set and the EBIT
financial STI component was awarded at between
target and stretch.
Between
target and
stretch
Stretch
Between target
and stretch
At target
Between threshold
and target
Below threshold
Financial STI outcomes
REMUNERATION REPORT | REMUNERATION AND PERFORMANCE OUTCOMES
32
4
Performance outcomes (continued)
i)
Short-term incentive outcomes (continued)
Table 6: YEM24 STI business financial targets and assessment of performance outcomes (continued)
Business
Explanation of STI EBIT financial targets
Assessment of performance outcomes
Outcome
Property
A challenging earnings target was set for the
Property business in YEM24, which included
the sale of Horsley Park stage 3a.
The earnings target for YEM24 was set below
YEM23 due to the sale of both Horsley Park
stage 2.2b and the sale of the site at Warner
QLD during YEM23, as well as a number of
smaller transactions.
The Property business generated earnings of $91 million,
the highest earnings recorded in the past 16 years.
In addition to completing Horsley Park stage 3a during
YEM24, the sale of Horsley Park stage 3b was also
finalised.
The business also continued to strategically advance the
long-term property portfolio, including quarry rehabilitation
at Badgerys Creek and progressing rezoning of the
Schofields site.
Overall, the YEM24 Property business earnings exceeded
the financial targets set and the financial STI component
was awarded at stretch.
Stretch
Aluminium
In the context of volatile aluminium prices and
higher raw material and energy costs, the
Aluminium business was set a target which
would see earnings decrease compared to
YEM23.
The financial target reflected the hedging held
at the time and forecast production costs.
The earnings of the Aluminium business have been
negatively impacted by higher production costs due to an
increase in energy prices.
Given the escalation in energy costs, the Aluminium EBIT
loss of $29 million was below threshold. The financial
component of the STI was not awarded for the Aluminium
business segment and the 40% non-financial component of
STI was halved in line with the STI plan.
Below
threshold
Consideration of significant items recorded in YEM24
The STI financial targets are set based on EBIT before significant items. The CSR board reviews all significant items at the end of each
performance period and considers whether it is appropriate to adjust for their impact on incentive outcomes.
Table 7: Assessment of significant items for remuneration purposes
Item
Amount
(pre-tax)
$million
Remuneration
outcomes
adjusted
Rationale for treatment for remuneration purposes
Transformation
implementation
costs relating to
Software-as-a-
Service
(7)
Yes
These costs relate to the transformation implementation costs that involve
Software-as-a-Service and are required to be expensed.
As these costs were contemplated in the earnings targets set for YEM24, the costs
incurred during the year should also be included in the earnings used to assess STI
remuneration outcomes. As a result, Building Products and CSR group EBIT used to
assess the STI outcome has been lowered by this cost.
Transaction
costs
(8)
No
These costs relate to transaction costs incurred associated with the proposed
acquisition of CSR by Saint-Gobain.
As these costs were not contemplated in the earnings targets set for YEM24, the
costs incurred during the year should not be included in the earnings used to
assess STI remuneration outcomes.
Recognition of
tax losses
8
No
This benefit relates to legacy carried forward tax losses which are now expected to
be utilised and the tax benefits were not contemplated when the YEM24 financial
targets were set.
The board has consistently treated these amounts as significant items with no
adjustment to STI.
Product liability
provision
(9)
No
The product liability expenses relate to matters pre-dating current management
and the board has consistently treated these amounts as significant items with no
adjustment to STI.
STI non-financial measures
Business segments including CSR group, Building Products and Property met their business segment EBIT financial targets and as a result their
non-financial STI component was awarded. As the Aluminium business segment did not reach financial threshold, the non-financial component
of STI was halved. This treatment is in accordance with the STI plan as detailed in table 11. The board has not exercised any discretion, as
outlined in table 5.
Stretch
Between target
and stretch
At target
Between threshold
and target
Below threshold
Financial STI outcomes
REMUNERATION REPORT | REMUNERATION AND PERFORMANCE OUTCOMES
33
4
Performance outcomes (continued)
ii)
Long-term incentive outcomes
LTIs have been linked to company performance as follows:
the value of performance rights (under the PRP) ultimately depends on share price performance; and
awards vest subject to EPS growth and TSR performance as measured through the movement in the share price and dividends paid.
Table 8: YEM24 long-term incentive outcomes
LTI measure
Explanation
Overall
The YEM21 LTI performance hurdles were partially met resulting in 90% of the YEM21 PRP grant vesting in March
2024.
The value of LTI that vested in YEM24 increased compared to YEM23 due to a higher number of rights vesting.
Further detail is contained in section 8.
TSR
Total shareholder return (TSR) target: 40% vested out of 50% potential.
EPS
Earnings per share (EPS) target: 50% vested out of 50% potential.
iii)
Overall financial performance and variable remuneration
The following table summarises the link between company performance and incentives awarded to executive KMP:
Table 9: Summary of financial performance and STIs and LTIs awarded
Financial performance6
STI
LTI
EBIT
($million)1
TSR
(%)2
EPS
(cents)1
ROFE (%)3
Share price
($)4
Executive
KMP
($million)
All eligible
employees
STI as a % of
EBIT
Vested value
– Executive
KMP
($million)5
YEM24
332.2
97.9
50.5
26.7
8.82
1.6
7.0%8
2.9
YEM23
329.7
(16.9)
46.9
28.9
4.75
1.4
5.4%
2.0
YEM22
291.4
13.4
39.7
27.3
6.15
1.8
7.3%
0.1
YEM21
237.9
87.3
33.1
21.1
5.78
1.8
7.5%
0.1
YEM20
216.8
1.5
27.3
17.8
3.17
0.57
2.6%
0.7
1 EBIT and EPS are calculated before significant items.
2 TSR for 12 months to 31 March sourced from Bloomberg. Relative TSR performance is disclosed in table 17 along with the LTI vesting outcomes.
3 Return on Funds Employed (ROFE) as defined in note 2 to the CSR group financial statements.
4 Closing share price at 31 March. The opening share price for YEM20 on 1 April 2019 was $3.47.
5 Represents the value of PRPs vested in the period, calculated based on the number of shares issued, valued using the five-day VWAP prior to issue.
6 Dividends paid for the last five years are disclosed on page 2.
7 An STI was not awarded to executive KMP for YEM20, except for the special incentive paid to the retiring CEO Mr Sindel based on goals set by the board and determined for
services up to 31 August 2019.
8 Total STI awarded for YEM24 represents 145% of the target STI opportunity. Further detail on the STI awarded is outlined in tables 5 and 6 and remuneration governance
in section 5.
REMUNERATION REPORT | REMUNERATION GOVERNANCE
34
Remuneration & Human Resources Committee
CSR Board
•
Overall responsibility for the remuneration strategy and outcomes for executives and non-executive directors.
•
Reviews and, as appropriate, approves recommendations from the CSR Remuneration & Human Resources Committee.
5
Remuneration governance
CSR’s remuneration governance framework is set out below. While the board retains ultimate responsibility, CSR’s remuneration policies and
procedures are implemented through the Remuneration & Human Resources Committee. The composition and functions of the Remuneration &
Human Resources Committee, which oversees remuneration issues and human resources matters, are set out in the charter available from the
CSR website.
Figure 1: CSR’s remuneration governance framework
Management & Board Remuneration Policy
Human Resources, Talent Management and Culture
External Advisors
•
Provide independent advice and recommendations
relevant to remuneration decisions.
•
Throughout the year, the Remuneration & Human
Resources Committee and management received
information from external providers Ernst & Young,
Korn Ferry Hay Group and Herbert Smith Freehills
related to remuneration market data and analysis,
market practice on the structure and design of incentive
programs (both long-term and short-term), performance
testing of existing long-term incentives and legislative
and regulatory requirements.
•
There were no remuneration recommendations made
by remuneration consultants during the year.
Managing Director & Executive General Manager –
Human Resources
Provides information to the Remuneration & Human
Resources Committee for the Committee to recommend
on:
•
Incentive targets and outcomes.
•
Remuneration policy.
•
Long and short-term incentive participation.
•
Individual remuneration and contractual
arrangements for executives.
Monitors, recommends and reports to the board on:
•
Remuneration guidelines and incentive policies for
management, executives and KMP, aligned to
long-term growth, shareholder value and CSR’s
company behaviours.
•
Superannuation arrangements.
•
Employee share plans.
•
Recruitment, retention and termination policies and
procedures for senior management.
•
Board remuneration including the terms and
conditions of appointment, retirement and non-
executive remuneration within aggregate total
amounts approved by shareholders.
Monitors, recommends and reports to the board on:
•
The quality of talent pools for senior management
succession.
•
The effectiveness of CSR's diversity policies and
initiatives, including an annual assessment against
measurable objectives and proportion of women at
all levels of management.
•
Leadership development frameworks and individual
development progress for key talent.
•
Monitoring surveys conducted by the company in
relation to the culture of the organisation.
•
Initiatives to improve and drive a strong
performance culture.
•
CSR's compliance with external reporting.
REMUNERATION REPORT | COMPONENTS OF REMUNERATION
35
6
Summary of the fixed and ‘at risk’ components of remuneration
The core elements of CSR’s remuneration strategy for the executive KMP and senior executives are outlined below.
The Scheme Booklet provides additional information on how incentives will be treated in connection within the Scheme, including in sections 9.1
and 9.2, which describes that the CSR board currently intends, subject to the Scheme becoming effective and the exercise of the CSR board’s
discretion, to treat equity incentives in place as follows:
determine the early vesting of all performance rights; and
release all shares subject to restrictions from those restrictions,
and take all other actions incidental or required to effect this, in each case prior to the business day before the Scheme record date or the
Scheme being implemented.
Figure 2: CSR’s remuneration strategy and structure
Fixed annual remuneration for KMP is
targeted at or above the median of a
custom peer group that falls within 50%
to 200% of CSR’s market capitalisation,
revenue and EBIT. Reference is also
made to CSR’s major competitors who
compete directly for the services of
KMP.
Fixed
Total target remuneration
At risk
Fixed annual remuneration
Short-term incentive
CSR’s executives participate in an STI
plan. The STI plan is weighted 60% to
financial metrics and 40% to
individual performance metrics. Prior
to YEM24, under the STI deferral plan,
40% of any STI earned by executive
KMP was converted to CSR shares.
Refer to section 7 for further detail.
LTIs have been provided through the
Performance Rights Plan (PRP) and
have been linked to:
Total shareholder return (TSR); and
Growth in CSR’s EPS
Refer to section 8 for further detail.
Equity with performance assessed
over three years.
From the YEM21 LTI grant onwards,
there was a 12-month holding lock
for all shares awarded under the LTI.
Base salary
Superannuation
Other eligible salary sacrifice benefits
Reviewed annually or on promotion,
with no guaranteed increases
included in any executives’ contracts.
CSR’s STI framework aligns with
CSR’s purpose and strategy,
building solutions for a better
future.
Long-term incentive
Performance-driven
Alignment with shareholder interests
Market competitive remuneration
REMUNERATION REPORT | COMPONENTS OF REMUNERATION
36
6
Summary of the fixed and ‘at risk’ components of remuneration (continued)
The key principles on which CSR’s executive remuneration is based on are outlined below.
Table 10: Key principles of CSR’s executive remuneration
Objective
Explanation
Market
competitive
remuneration
Remuneration, including those elements which can be earned subject to business performance, is set at competitive
levels that retain, motivate and attract high quality executives.
Executive remuneration is reviewed annually. CSR aims to provide market competitive remuneration compared with roles
of a similar size, responsibility and complexity. For executive KMP, analysis is completed against a custom peer group
that falls within 50% to 200% of CSR’s market capitalisation, revenue and EBIT and a group of industry peers.
At risk remuneration (through STI and LTI) provides the opportunity to earn reward that reaches the top quartile of the
market for superior performance.
Performance
driven and
aligned with
shareholder
interests
Fixed remuneration is designed to attract and retain executives based on their experience and capability to deliver the
CSR strategy. The ‘at risk’ components of remuneration (both STI and LTI) are driven by challenging targets, focused on
both external and internal measures of financial and non-financial performance and are aligned with shareholder
returns. Prior to YEM24, under the STI deferral plan, 40% of any STI earned by executive KMP was converted to CSR
shares. For YEM24, in accordance with the terms of the Scheme, any STI will be paid in cash with no deferral.
KMP are required to hold or make progress towards a minimum CSR shareholding. The requirement for KMP is 100% of
fixed annual remuneration, acquired over a reasonable timeframe. Further detail on this policy are set out in section 13.
Ownership of CSR shares has been encouraged and enabled through the LTI plan for executive KMP. Other share
acquisition programs included the YEM24 Employee Share Grant and the ability to forgo part of fixed remuneration to
acquire shares annually through the Employee Share Acquisition Plan (ESAP).
A significant proportion of executive remuneration is 'at risk'. The following chart sets out the remuneration mix as fixed
annual remuneration, target STI and the maximum value of the LTI granted during the year for the executive KMP.
48%
32%
24%
24%
28%
44%
Fixed
STI
LTI
Managing
Director and CEO
CFO
REMUNERATION REPORT | COMPONENTS OF REMUNERATION
37
7
At risk remuneration – short-term incentive
(i)
Table 11: Details of the short-term incentive plan
Purpose
Motivates and rewards individuals and teams to deliver the business strategy aligned to CSR’s performance objectives
and financial performance to increase shareholder value.
Frequency and
timing
Awards are determined on an annual basis with performance measured over the year to 31 March, with payment
made following the release of CSR’s annual financial results.
Equity deferral
As set out in the Scheme Booklet, under the terms for the Scheme agreed with Saint-Gobain, any STI paid to executive
KMP for YEM24 will be paid in cash, with no deferral. Prior to YEM24, under the STI deferral plan, 40% of any STI
earned by executive KMP was converted to CSR shares.
Minimum EBIT
financial
performance
requirements
STI EBIT financial performance targets are set out in the table below.
Performance component
Threshold2
Target
Stretch
Percentage of EBIT target achieved
95%
100%
110%
Percentage of target STI payable1
0%
100%
200%
1 Managing Director and CEO’s STI for stretch performance is equivalent to 110% of fixed annual remuneration.
2 The financial threshold is calculated based on the EBIT financial target plus the amount of STI payable if the budget is achieved.
The STI accrues on a straight-line basis for EBIT financial performance between threshold and target and between
target and stretch.
No STI is payable in relation to the EBIT financial component unless the threshold is exceeded.
If either the CSR group or business segment EBIT financial threshold is not met, the non-financial component is
discounted by 50%. Should both CSR and the applicable business segment not reach the financial threshold, any
payment will be at the discretion of the board.
Significant
items
The board reviews items classified as significant at the end of each financial year to determine the extent, if any, by
which reported EBIT should be adjusted for STI purposes depending on whether the items were influenced by or within
the control of management.
Performance
measures
Performance measures are based on a combination of financial and non-financial measures:
Performance component
Corporate roles
Business segment roles
CSR group financial component
60%
30%
Business segment financial component
–
30%
Individual objectives
40%
40%
Total
100%
100%
Financial measures are based on the board approved budget for YEM24. Given the cyclical nature of the building
industry, it is not appropriate to set financial targets based on year-on-year linear growth. Instead, at the start of each
year, the board sets challenging financial targets taking into account the relevant factors for each business segment
including forecasts for building activity, inventory targets, aluminium pricing and the property market, as well as
considering investor requirements for sustainable returns.
The maximum STI payable is 200% of a participant’s target STI opportunity (target STI opportunity varies based on
seniority) except for the Managing Director and CEO, whose maximum STI opportunity is 157% of target, equivalent to
110% of fixed annual remuneration.
Non-financial
objectives
Individual objectives are set at the start of each financial year in CSR’s performance management system
ACHiEVE@CSR. Performance is monitored during the year, with a final assessment at year-end. The non-financial
objectives are aligned to the business strategy and CSR’s defined culture and behaviours. These objectives include
relevant KPIs such as safety and sustainability, customer experience, leadership and development of people,
operational improvement and growth and delivery of CSR’s strategic initiatives.
For individuals whose behaviour and performance does not meet minimum requirements, the non-financial STI will be
forfeited and the financial STI component may be reduced or forfeited.
Assessment of
performance
against measures
Individual performance assessments and recommendations are made by the participant’s immediate manager, based
on the delivery of set objectives and behaviour in achieving these objectives. All performance ratings are reviewed and
calibrated by the business unit Executive General Manager. The Managing Director and CEO approves STI allocations
based on the overall performance outcomes. The Remuneration & Human Resources Committee recommends to the
board executive KMP STIs and the overall STI pool in aggregate.
REMUNERATION REPORT | COMPONENTS OF REMUNERATION
38
7
At risk remuneration – short-term incentive (continued)
(i)
Table 11: Details of the short-term incentive plan (continued)
Board discretion
The board’s philosophy is to minimise discretionary adjustments to the plan outcomes. However, the board and the
Managing Director and CEO retain discretion in certain circumstances to alter payments having regard to:
CSR’s overall financial performance, including consideration of significant items;
occurrence of a fatality, regardless of fault;
poor individual performance;
inadequate WHSE leadership or WHSE performance improvement;
maintenance and preservation of the company’s assets and reputation;
any short-term action which causes market share loss or other damage to CSR;
other special circumstances (e.g. acquisitions and divestments); and
any breach of CSR’s Business Code of Conduct and Ethics and other policies.
Service condition
New starters or people promoted into eligible roles may participate in the STI scheme with pro-rata entitlements.
Employees must be employed at time of payment to be eligible for any reward.
REMUNERATION REPORT | COMPONENTS OF REMUNERATION
39
8
At risk remuneration – long-term incentive
(i)
Purpose of the long-term incentive (LTI) plan
CSR’s long-term incentive program aims to:
drive the delivery of strategic objectives that create long-term shareholder value;
retain, motivate and attract executive talent to deliver and sustain business performance and increase shareholder returns; and
enable executives to build their interests in CSR equity.
(ii)
Details of the LTI plan
The long-term incentive plan is delivered through the CSR Performance Rights Plan (PRP). Details of the PRP grants from YEM21 to YEM24 are
set out below.
Table 12: Details of the long-term incentive plan
Participation
KMP, senior executives and selected key roles are eligible subject to approval by the board.
Grant frequency
Grants have been made on an annual basis.
Type of award
LTI awards are delivered in the form of performance rights. These are rights to receive fully paid ordinary shares in CSR
Limited. Grants of performance rights have been subject to service requirements and performance vesting criteria. If
performance conditions are met, CSR shares will be purchased on market and transferred to participants. As the rights
are an element of remuneration, no amount is payable by employees to be allocated the rights. If the rights vest, no
consideration or exercise price is payable for the allocation of shares. Refer to section 8(iii) for more detail.
Vesting and
performance
period
Awards have been subject to a three-year performance period. The performance conditions are tested to determine
whether, and to what extent, awards vest. To the extent that performance rights have not vested following the testing,
they will lapse (i.e. participants forfeit their interests in the performance rights).
Dividends
There is no entitlement to dividends on performance rights during the performance period.
At vesting
For all PRP grants, rights are eligible for one CSR Limited share per one performance right on vesting.
Holding lock
A 12-month holding lock on shares awarded under the LTI applies to aid senior executive retention and strengthen CSR’s
clawback provisions.
During the holding lock period, provided the participant remains employed by CSR, they have full voting rights and are
entitled to receive dividends.
Sales restrictions
post vesting
Shares transferred to participants on the vesting of performance rights are subject to the CSR Share Trading Policy.
Treatment on
cessation of
employment
Unvested awards: Generally, if a participant ceases to be employed prior to the performance conditions being met, any
unvested shares will be forfeited. If the cessation of employment is the result of retirement, redundancy, total or
permanent disablement, death or any other special circumstances, the treatment of the rights will be determined at the
board’s discretion.
Vested awards: Awards that have vested are not subject to accelerated transfer to participants at the time of cessation
of employment.
Treatment on
change of control
Unvested awards: The board has discretion to allow awards to vest on a change of control of CSR (e.g. a takeover or
merger). The Scheme Booklet provides additional information on how incentives will be treated in connection within the
Scheme, including in sections 9.1 and 9.2, which describe that the CSR board currently intends, subject to the Scheme
becoming effective and the exercise of the CSR board’s discretion, to determine the early vesting of all performance
rights prior to the business day before the Scheme record date or the Scheme being implemented (among other actions).
Prohibition of
hedging
arrangements
Participants will forfeit their interests in unvested shares if they enter into any hedging transaction in relation to those
shares in breach of CSR’s Share Trading Policy.
At 31 March 2024, executive KMP confirmed in writing their beneficial interest in CSR shares, including confirming that
they had not entered into any hedging arrangements over vested or unvested CSR shares.
Board discretion
The board retains discretion to reduce or lapse performance rights (or recover the net proceeds where vested shares
have been sold) in several circumstances including, but not limited to, material financial misstatements, the
performance and conduct of the participant, the performance of the business unit the participant is employed in, CSR
group performance, fraudulent or dishonest acts, bringing CSR or any business unit into disrepute or breach of duties or
obligations to CSR (including acting in breach of the terms and conditions of their employment and/or CSR’s Code of
Business Conduct and Ethics).
REMUNERATION REPORT | COMPONENTS OF REMUNERATION
40
8
At risk remuneration – long-term incentive (continued)
(iii) PRP performance conditions
A summary of the performance hurdles for each PRP grant, along with further detail on how each hurdle is measured, is set out below. The
Scheme Booklet provides additional information on how incentives will be treated in connection with the Scheme.
Table 13: Weights of performance hurdles for PRP granted for YEM21-YEM24
Note
YEM24
YEM23
YEM22
YEM21
Relative TSR (Tranche A)
1
50%
50%
50%
50%
Earnings per share (Tranche B)
2
50%
50%
50%
50%
1.
Relative TSR
TSR is the percentage growth in shareholder value, which measures the changes in share price, taking into account dividends and capital
returns.
The board believes relative TSR is an appropriate measure for the PRP as it directly aligns with shareholder interests and provides
transparency and focus of eligible executives in driving dividends, capital management and share price growth.
Absolute TSR is a gateway to vesting to ensure that participants are only rewarded for positive shareholder returns. If absolute TSR is negative
over the performance period, no rights will vest in this tranche.
The comparator peer group used to calculate relative TSR is those companies comprising the S&P/ASX51 – ASX150 defined at the start of
each performance period. This peer group is sufficiently broad to measure relativity and the market capitalisation has greater alignment to
CSR than the S&P ASX200. The board may adjust the comparator group to take into account events including, but not limited to, takeovers,
mergers or de-mergers that might occur during the performance period.
In measuring TSR, share prices are calculated based on a 90-calendar-day VWAP at the start and end of the performance period.
Assuming the absolute TSR gate is met, the proportion of the Tranche A performance rights that vest will be determined based on CSR’s
relative TSR, in accordance with the vesting schedule in table 14 below.
Table 14: Vesting schedule for all Relative TSR PRP grants
TSR of CSR relative to the Peer Group
Proportion of Tranche A to vest
Below the 50th percentile
0%
At the 50th percentile
50%
Between the 50th percentile and the 75th percentile
Straight-line vesting between 50% and 100%
75th percentile or greater
100%
REMUNERATION REPORT | COMPONENTS OF REMUNERATION
41
8
At risk remuneration – long-term incentive (continued)
(iii)
PRP performance conditions (continued)
2.
Earnings per share (EPS)
Compound growth in EPS measures the success of the business in generating continued growth in earnings and aligns the effort of executive
KMP and senior executives with shareholder interests. The use of EPS as a long-term performance measure is also consistent with market
practice. EPS is defined as net profit after tax per share before significant items. The board reviews all ‘significant items’ at the end of each
performance period and considers whether it is appropriate to adjust for the impact on incentive outcomes. A consistent treatment is applied for
both STI and LTI assessments, with the YEM24 outcome summarised in section 4(i) and table 7. In addition, the board may adjust EPS to
exclude the effects of material business acquisitions or divestments.
EPS is measured on an averaged basis over the three-year performance period rather than point to point to reflect the cyclical nature of the
business. Target performance is calculated by taking the total EPS from the performance period using actual EPS of the base year and
compounding 5% per annum for three years and dividing the result by three. Stretch performance is calculated using the same methodology,
except the growth is compounded by 10% per annum.
Table 15: Performance hurdles for the YEM21 to YEM24 PRP grants
Table 16: EPS PRP vesting schedule
CAGR of EPS
Proportion of Tranche B to vest
Below 5%
0%
At 5%
50%
Between 5% and 10%
Straight-line vesting between 50% and 100%
10% and above
100%
EPS performance hurdle
YEM24
YEM23
YEM22
YEM21
Target
Stretch
Target
Stretch
Target
Stretch
Target
Stretch
Cumulative EPS required over three
years (cents per share)
155.2
170.8
131.4
144.5
109.6
120.5
85.4
93.9
Average EPS required over three years
(cents per share)
51.7
56.9
43.8
48.2
36.5
40.2
28.5
31.3
REMUNERATION REPORT | COMPONENTS OF REMUNERATION
42
8
At risk remuneration – long-term incentive (continued)
(iv) Details of the PRP awards outstanding
Table 17: Status and key dates of PRP awards
Grant
date
Valuation
per right1
Holding
period
Performance
testing period
Expiry date
(if hurdle
not met)
Performance status
21 July 2020
(YEM21)
Tranche A (TSR)
$1.06
Tranche B (EPS)
$3.08
21 July 2020 to
31 March 2023
1 April 2020 to 31
March 2023
1 April 2023
Tranche A (TSR): Relative TSR was 65%.
Performance condition was met, resulting in
80% vesting of the allocation grant.
Tranche B (EPS): Actual average EPS of 39.5
cents compared to a stretch target of 31.3
cents. Compound growth performance
condition was met at stretch and all rights
vested.
Total award was 90%.
21 July 2021
(YEM22)
Tranche A (TSR)
$2.32
Tranche B (EPS)
$4.67
21 July 2021 to
31 March 2024
1 April 2021 to 31
March 2024
1 April 2024
Subsequent to 31 March 2024: The Scheme
Booklet provides additional information on
how incentives will be treated in connection
with the Scheme including in sections 9.1
and 9.2.
29 July 2022
(YEM23)
Tranche A (TSR)
$1.45
Tranche B (EPS)
$3.87
29 July 2022 to
31 March 2025
1 April 2022 to 31
March 2025
1 April 2025
27 July 2023
(YEM24)
Tranche A (TSR)
$3.31
Tranche B (EPS)
$4.87
27 July 2023 to
31 March 2026
1 April 2023 to 31
March 2026
1 April 2026
1 The value of performance rights at grant date calculated in accordance with AASB 2 Share-based Payments. Valuations are performed by a third party, Ernst & Young.
(v)
Other equity incentive plans
The Employee Share Grant and Employee Share Acquisition Plan (ESAP) was offered to all eligible employees during YEM24. The Scheme
Booklet provides additional information on how incentives will be treated in connection with the Scheme. Shareholders are encouraged to
consult the Scheme Booklet for more details.
Table 18: Other equity incentive plans
Employee Share Grant
Employee Share Acquisition Plan (ESAP)
Eligibility
All executives and employees (except directors),
as at 1 April in the year the shares were granted.
All full and part-time salaried employees and
directors within Australia.
Form and quantum of award
The board may elect to grant eligible employees
CSR shares. The maximum value of the
Employee Share Grant is $1,000 (being the limit
of the tax exemption) for each eligible
participant.
Directors and employees could forgo up to
$5,000 of their cash remuneration annually to
acquire shares in the company. The shares were
purchased on market by the CSR Share Plan
trustee, who acts on instructions given in
accordance with the plan rules and the
company’s Share Trading Policy.
Vesting period
Shares vest immediately upon acquisition by
participants. The shares can only be sold three
years after the date of grant, unless the
participant’s employment ceases before then.
The shares are held in trust while the participant
is employed by CSR, unless board approval is
granted to sell or transfer shares under specific
circumstances (e.g. financial hardship). Under
current Australian tax law, the maximum period
of income tax deferral on the shares purchased
is 15 years.
Absence of a performance condition
These plans are designed to encourage share ownership for employees and therefore do not have
any performance conditions attached.
Dividends and voting rights
Participants are entitled to dividends and other distributions and have full voting rights.
REMUNERATION REPORT | REMUNERATION IN DETAIL
43
Remuneration in detail
9
Service agreements
Managing Director and CEO – Executive service agreement
Julie Coates was appointed as Managing Director and CEO effective 2 September 2019. Ms Coates’ contractual remuneration package is
summarised below:
Table 19: Managing Director and CEO’s remuneration package
Fixed annual
remuneration
Fixed annual remuneration of $1,229,000 inclusive of superannuation contributions effective from 1 July 2023. Fixed
annual remuneration is reviewed annually and increases are not guaranteed.
Notice period
Under the Executive Service Agreement there is no fixed term and Ms Coates’ employment can be terminated by:
the company giving her 12 months’ notice of termination; or
Ms Coates giving six months’ notice of resignation.
STI
There is no guaranteed entitlement to an STI payment and the maximum STI opportunity is 110% of fixed annual
remuneration for exceptional performance. Achievement of target performance would result in 70% of the maximum STI
being paid. The STI is weighted 60% to financial performance, and 40% to non-financial performance. Under the STI deferral
plan, 40% of any STI earned by executive KMP was converted to CSR shares. Under the terms for the Scheme, any STI paid
to executive KMP for YEM24 will be paid in cash, with no deferral.
LTI
The potential value of any award of performance rights is set at a maximum of 140% of fixed annual remuneration. Grants
of performance rights are subject to performance hurdles and vesting criteria set by the board (refer to section 8(iii) for
details) and are subject to shareholder approval at the AGM. The Scheme Booklet provides additional information on how
incentives will be treated in connection with the Scheme including in sections 9.1 and 9.2.
Chief Financial Officer – Executive service agreement
Sara Lom was appointed as Chief Financial Officer on 4 September 2023. Ms Lom’s contractual remuneration package is summarised below:
Table 20: Chief Financial Officer’s remuneration package (Ms Lom from 4 September 2023)
Fixed annual
remuneration
Fixed annual remuneration of $610,000 inclusive of superannuation contributions. Fixed annual remuneration is reviewed
annually and increases are not guaranteed.
Notice period
Under the Executive Service Agreement there is no fixed term and Ms Lom’s employment can be terminated by:
the company giving her six months’ notice of termination; or
Ms Lom giving six months’ notice of resignation.
STI
There is no guaranteed entitlement to an STI payment and the maximum STI opportunity is 100% of fixed annual
remuneration for exceptional performance. Achievement of target performance would result in 50% of the maximum STI
being paid. The STI is weighted 60% on financial performance and 40% on individual performance. Under the STI deferral
plan, 40% of any STI earned by executive KMP was converted to CSR shares. Under the terms for the Scheme, any STI paid
to executive KMP for YEM24 will be paid in cash, with no deferral.
LTI
The potential value of any award of performance rights is set at a maximum of 60% of fixed annual remuneration. Grants of
performance rights are subject to performance hurdles and vesting criteria set by the board (refer to section 8(iii) for
details). The Scheme Booklet provides additional information on how incentives will be treated in connection with the
Scheme including in sections 9.1 and 9.2.
Former Chief Financial Officer and Executive General Manager, Property and Aluminium – Executive service agreement
David Fallu resigned from his position of Chief Financial Officer and Executive General Manager, Property and Aluminium on 16 March 2023 and
served his contractual notice period of six months, leaving the business on 13 September 2023. Mr Fallu’s remuneration package is
summarised below:
Table 21: Former Chief Financial Officer and Executive General Manager, Property and Aluminium’s remuneration package
Fixed annual
remuneration
Mr Fallu’s fixed annual remuneration was not increased in YEM24.
STI
The board exercised discretion with regard to Mr Fallu and allowed him to retain all of his deferred STI shares held on foot.
Mr Fallu did not participate in the YEM24 STI plan.
LTI
Given the YEM24 PRP was granted after Mr Fallu resigned, Mr Fallu did not participate in the grant.
The board determined that it was appropriate for Mr Fallu to remain eligible for the YEM21 PRP, which resulted in 123,865
rights meeting their performance condition and 13,763 failing to meet their performance condition and lapsed effective 31
March 2023.
The remaining 219,459 rights in relation to YEM22 and YEM23 PRP lapsed as a result of cessation of employment of Mr
Fallu on 13 September 2023.
REMUNERATION REPORT | REMUNERATION IN DETAIL
44
9
Service agreements (continued)
Table 22: Treatment of the Managing Director and Chief Executive Officer’s and Chief Financial Officer’s incentives on termination
Circumstance
Short-term incentive1
Long-term incentive – unvested performance rights and
shares under holding lock2
Immediate termination for cause
No STI payable and clawback provisions may
apply (including deferred STI).
Rights and shares are forfeited.
Resignation
STI is forfeited unless board determines
otherwise.
Rights and shares are forfeited unless the board
determines otherwise. While an employee is serving a
notice period, no new grants are issued.
Notice by company, retirement,
redundancy, death or permanent
disability
Board discretion to award STI on a pro-rata
basis (including deferred STI).
Board discretion to allow awards to vest or remain
subject to performance hurdles after termination on a
pro-rata basis.
Shares remain subject to relevant holding lock unless
the board determines otherwise.
1 Any STI payments will be paid according to the normal annual STI payment time frame (i.e. payment timing will not be accelerated).
2 Shares allocated in respect of vested performance rights are subject to restrictions after vesting.
10
Statutory remuneration
Managing Director and Chief Executive Officer’s and Chief Financial Officer’s remuneration
The remuneration table below shows an increase in total remuneration expensed for accounting purposes for executive KMP in YEM24
compared with YEM23.
Table 23: Executive KMP statutory remuneration
1 Post-employment benefits as per Corporations Regulation 2M.3.03.
2 Other long-term benefits as per Corporations Regulation 2M.3.03.
3 Other benefits for YEM23 includes the Employee Share Grant and other expenditure, all of which related directly to company business.
4 Amortisation of STI deferrals relating to prior years’ grants.
5 LTI expense is as defined in the accounting standards. PRP grants are expensed over the vesting period at a valuation determined on grant date. Valuations are performed
by a third party and are detailed in table 17.
6 STI and LTI as a percentage of total remuneration.
11 Deferred shares
Table 24: STI deferred shares for executive KMP
Number of STI deferred shares
Balance
1 April 2023
Granted1
Vested1
Lapsed
Balance
31 March 2024
Julie Coates
35,508
78,961
(74,988)
–
39,481
Sara Lom
–
–
–
–
–
David Fallu
21,484
36,055
(39,511)
–
18,028
1 The value of deferred shares provided at grant date was $5.37 per share based on the VWAP of five-days up to and including to 31 March 2023. These shares related to the
YEM23 STI and were granted in May 2023, with half vesting on 31 March 2024. For the remaining balance due to vest on 31 March 2025, the Scheme Booklet provides
additional information on how incentives will be treated in connection with the Scheme.
$ Year
ended
31
March
Fixed
Variable
‘At risk’
Cash
salary
Super-
annuation1
Leave
benefits2
Other
benefits3
STI
expense4
LTI
expense5
Total
STI6
LTI6
Managing Director and CEO – Julie Coates
2024
1,191,003
26,872
(2,136)
–
1,465,157
1,000,581
3,681,477
40%
27%
2023
1,151,014
24,861
30,006
–
978,382
940,851
3,125,114
31%
30%
Chief Financial Officer – Sara Lom
2024
339,714
13,699
55,056
–
365,353
96,265
870,087
42%
11%
2023
–
–
–
–
–
–
–
–
–
Former Chief Financial Officer and Executive General Manager, Property and Aluminium – David Fallu
2024
323,851
13,173
(78,142)
–
115,861
(297,199)
77,544
–
–
2023
713,889
24,861
74,219
3,074
486,892
23,897
1,326,832
37%
2%
REMUNERATION REPORT | REMUNERATION IN DETAIL
45
12 Performance rights
Table 25: Executive KMP performance rights
Number of performance rights
Balance
1 April 2023
Granted1
Vested2
Lapsed2
Balance
31 March 2024
Julie Coates
996,853
360,508
(406,985)
(45,221)
905,155
Sara Lom3
123,115
–
–
–
123,115
David Fallu
357,087
–
(123,865)
(233,222)
–
1 The accounting value of Ms Coates’ rights granted was $1,474,478. The minimum possible total value of rights granted under the YEM24 LTI grant for future financial years
is nil and the maximum possible total value is the number of rights multiplied by the market price of CSR shares on the date of vesting.
2 The following rights vested to ordinary shares during the year ended 31 March 2024:
Ms Coates: YEM21 Tranche A and Tranche B rights vested of 180,882 and 226,103, respectively, while Tranche A rights of 45,221 lapsed. A total of 406,985 shares were
allocated on 31 May 2023, and the value of each of these shares was $5.37, representing a total value to Ms Coates of $2,187,166.
Mr Fallu: YEM21 Tranche A and Tranche B rights vested of 55,051 and 68,814, respectively, while Tranche A rights of 13,763 lapsed. A total of 123,865 shares were
allocated on 31 May 2023, and the value of each of these shares was $5.37, representing a total value to Mr Fallu of $665,859. The remaining 219,459 rights in relation
to the YEM22 and YEM23 PRP lapsed as a result of cessation of employment of Mr Fallu on 13 September 2023.
Rights that vest are automatically exercised. Fully paid ordinary shares that are allocated on vesting of rights are granted for nil consideration.
3 Ms Lom’s opening balance reflects the number of performance rights on issue on her appointment date as Chief Financial Officer.
13 Shareholdings
Minimum shareholding requirements
All non-executive directors and executive KMP are expected to acquire a beneficial interest in CSR shares equivalent in value to one year's fixed
remuneration. Fixed remuneration is calculated as being inclusive of superannuation. The minimum shareholding requirements are required to
be met by non-executive directors within four years of appointment and by executive KMP within a reasonable time frame and are to be valued
at the greater of either the cost at the time of purchase, or the current value.
Table 26: Executive KMP shareholdings
Number of CSR shares1
Balance
1 April 2023
Acquired2
Sold or
transferred
Other3
Balance
31 March 2024
Julie Coates
438,382
520,986
(110,000)
–
849,368
Sara Lom4
49,674
–
–
–
49,674
David Fallu
274,220
36,055
–
(310,275)
–
1 CSR shares in which the executive KMP has a beneficial interest, including shares held by the CSR share plan trustee for vested shares from the PRP and shares held in
respect of the STI deferral plan, by the ESAP trustee or via their related parties. It also includes spouse shareholdings.
2 Represents shares allocated upon vesting of rights under the PRP and shares acquired under the STI deferral plan as detailed earlier in this report. Ms Coates’ acquired
shares include 891 shares acquired under ESAP, 78,961 shares acquired under the STI deferral plan, 406,985 shares issued on vesting of PRPs and 34,149 shares
acquired under the Dividend Reinvestment Plan. Mr Fallu’s acquired shares include 36,055 shares acquired under the STI deferral plan.
3 Following Mr Fallu’s resignation as CFO on 13 September 2023, he is no longer a KMP. The ‘other’ change represents a shareholding balance that no longer requires
disclosure and does not represent a disposal of shares whilst a KMP.
4 Ms Lom’s opening balance reflects her shareholding prior to her appointment date as Chief Financial Officer.
14 Other transactions with KMP
The CSR group offers staff discounts on certain products which are also made available to KMP.
There were no other transactions, including loans between CSR and KMP (including their related parties), during YEM24.
REMUNERATION REPORT | NON-EXECUTIVE DIRECTORS
46
Non-executive directors
15 Arrangements
Non-executive directors are paid a base fee for service to the board, with additional fees for service to each board committee. The fees are set
with consideration to the fees paid by companies of a similar size and complexity and are inclusive of superannuation. The shareholder approved
fee pool is currently $1,450,000 per annum including superannuation.
Table 27: Non-executive director arrangements
Role
Annual fee for YEM24 (including superannuation guarantee)
Chair base fees (including all committee memberships)
$432,900
Other NED base fees
$160,300
Committee chair (Risk & Audit Committee, Remuneration & Human
Resources Committee or Safety & Sustainability Committee)
$30,100
Committee memberships
$12,900 per committee
No retirement allowances are payable to NEDs. NEDs do not participate in the company’s STI or LTI plans or Employee Share Grant or receive
any variable remuneration but may forgo fees for CSR shares under the ESAP. Further information is detailed in section 13.
16 Non-executive director fees and shareholdings
Table 28: Non-executive directors’ fees
Year ended 31 March
Directors’ fees
Termination
benefits
Superannuation
Total
John Gillam (chair of the board)
YEM24
406,028
–
26,872
432,900
YEM23
392,439
–
24,861
417,300
Christina Boyce (from 15 March 2023)
YEM24
165,902
–
18,048
183,950
YEM23
7,114
–
747
7,861
Nigel Garrard
YEM24
198,470
–
4,830
203,300
YEM23
167,341
–
17,367
184,708
Christine Holman (to 16 November 2022)
YEM24
–
–
–
–
YEM23
111,004
–
11,433
122,437
Matthew Quinn (to 31 May 2023)
YEM24
30,664
–
3,220
33,884
YEM23
177,486
–
18,414
195,900
Adam Tindall (from 16 January 2023)
YEM24
180,766
–
19,668
200,434
YEM23
34,419
–
3,614
38,033
Penny Winn
YEM24
183,360
–
19,940
203,300
YEM23
177,486
–
18,414
195,900
Total non-executive directors
YEM24
1,165,190
–
92,578
1,257,768
YEM23
1,067,289
–
94,850
1,162,139
Table 29: Non-executive directors’ shareholdings
Number of CSR shares1
Balance
1 April 2023
Acquired
Other2
Balance
31 March 2024
John Gillam (chair of the board)
253,510
–
–
253,510
Christina Boyce
–
20,000
–
20,000
Nigel Garrard
75,000
–
–
75,000
Matthew Quinn
88,558
–
(88,558)
–
Adam Tindall
20,000
20,000
–
40,000
Penny Winn
51,248
–
–
51,248
1
CSR shares in which the director has a beneficial interest, including shares held under the ESAP trust or via related parties.
2
Following Mr Quinn’s retirement from the CSR board on 31 May 2023, he is no longer a KMP. The ‘other’ change represents a shareholding balance that no longer
requires disclosure and does not represent a disposal of shares.
CONSOLIDATED FINANCIAL REPORT
47
FINANCIAL REPORT
Consolidated financial report
Statement of financial performance
48
Statement of comprehensive income
49
Statement of financial position
50
Statement of changes in equity
51
Statement of cash flows
52
Notes to the consolidated financial report
53
Directors’ declaration
89
Independent auditor’s report
90
Shareholder information
93
Notes to the consolidated financial report
53
1
Basis of preparation
53
Financial performance overview
54
2
Segment information
54
3
Significant items
56
4
Earnings per share
56
5
Revenue
57
6
Expenses
58
7
Net finance costs
58
8
Income tax expense
59
9
Business combinations
60
Balance sheet items
61
10
Working capital
61
11
Property holdings
62
12
Property, plant and equipment and intangible assets
63
13
Net deferred income tax assets
65
14
Leases
66
15
Provisions
67
16
Product liability
68
Capital structure and risk management
69
17
Credit facilities
69
18
Issued capital
69
19
Dividends and franking credits
69
20
Reserves
70
21
Financial risk management
71
Group structure
77
22
Subsidiaries
77
23
Deed of cross guarantee
77
24
Non-controlling interests
80
25
Interest in joint operations
80
26
Equity accounting information
81
27
Parent entity disclosures
82
Other
83
28
Employee benefits
83
29
Related party disclosures
87
30
Proposed acquisition by Saint-Gobain
87
31
Subsequent events
87
32
Commitments and contingencies
87
33
Other non-current assets
88
34
Auditor’s remuneration
88
35
Other accounting policies
88
CONSOLIDATED FINANCIAL REPORT
48
Statement of financial performance
$million
Note
2024
2023
Trading revenue – sale of goods
2,5
2,625.1
2,613.3
Cost of sales
(1,847.7)
(1,855.2)
Gross profit
777.4
758.1
Other income
5
98.7
89.6
Warehouse and distribution costs
(253.7)
(263.1)
Selling, administration and other operating costs
(306.0)
(274.2)
Share of net profit of joint venture entities
26
22.3
19.3
Other expenses
6
(21.8)
(15.1)
Profit before net finance costs and income tax
316.9
314.6
Interest income
7
3.2
2.5
Finance costs
7
(19.2)
(22.5)
Profit before income tax
300.9
294.6
Income tax expense
8
(76.5)
(76.4)
Profit after tax
224.4
218.2
Profit after tax attributable to:
Non-controlling interests
24
(6.6)
(0.3)
Shareholders of CSR Limited
2
231.0
218.5
Profit after tax
224.4
218.2
Earnings per share attributable to shareholders of CSR Limited
Basic (cents per share)
4
48.5
45.5
Diluted (cents per share)
4
48.1
45.3
The above statement of financial performance should be read in conjunction with the accompanying notes.
CONSOLIDATED FINANCIAL REPORT
49
Statement of comprehensive income
$million
Note
2024
2023
Profit after tax
224.4
218.2
Other comprehensive income (expense), net of tax
Items that may be reclassified to profit or loss
Cash flow hedge gain recognised in equity
21
67.3
226.4
Cash flow hedge loss reclassified to profit or loss
21
33.0
80.3
Exchange differences arising on translation of foreign operations
20
(0.5)
0.8
Income tax expense relating to these items
13
(30.0)
(92.0)
Items that will not be reclassified to profit or loss
Actuarial loss on superannuation defined benefit plans
28
(3.6)
(1.9)
Income tax benefit relating to these items
13
1.1
0.7
Other comprehensive income – net of tax
67.3
214.3
Total comprehensive income
291.7
432.5
Total comprehensive income attributable to:
Non-controlling interests
18.9
67.1
Shareholders of CSR Limited
272.8
365.4
Total comprehensive income
291.7
432.5
The above statement of comprehensive income should be read in conjunction with the accompanying notes.
CONSOLIDATED FINANCIAL REPORT
50
Statement of financial position
$million
Note
2024
2023
Current assets
Cash and cash equivalents
35
138.1
131.6
Receivables
10
253.4
285.9
Inventories
10
404.0
425.2
Property holdings
11
2.7
36.0
Other financial assets
21
32.5
29.2
Income tax receivable
3.3
16.8
Prepayments and other current assets
23.5
13.4
Total current assets
857.5
938.1
Non-current assets
Receivables
33
13.3
12.3
Property holdings
11
106.4
109.4
Investments accounted for using the equity method
26
33.2
45.0
Other financial assets
21
29.1
20.9
Property, plant and equipment
12
769.3
692.2
Right-of-use lease assets
14
126.6
128.8
Goodwill
12
99.6
59.9
Other intangible assets
12
13.2
9.3
Deferred income tax assets
13
170.9
206.7
Other non-current assets
33
4.6
8.5
Total non-current assets
1,366.2
1,293.0
Total assets
2,223.7
2,231.1
Current liabilities
Payables
10
258.2
293.5
Lease liabilities
14
33.6
32.5
Other financial liabilities
21
55.5
69.7
Tax payable
20.8
14.5
Provisions
15
147.4
134.3
Total current liabilities
515.5
544.5
Non-current liabilities
Lease liabilities
14
121.1
131.1
Other financial liabilities
21
82.4
165.0
Provisions
15
203.8
213.2
Other non-current liabilities
28
1.0
0.7
Total non-current liabilities
408.3
510.0
Total liabilities
923.8
1,054.5
Net assets
1,299.9
1,176.6
Equity
Issued capital
18
930.3
930.3
Reserves
20
(104.9)
(147.9)
Retained profits
446.1
384.7
Equity attributable to shareholders of CSR Limited
1,271.5
1,167.1
Non-controlling interests
24
28.4
9.5
Total equity
1,299.9
1,176.6
The above statement of financial position should be read in conjunction with the accompanying notes.
CONSOLIDATED FINANCIAL REPORT
51
Statement of changes in equity
$million
Note
Issued
capital
Reserves
Retained
profits
CSR
Limited
interest
Non-
controlling
interests
Total
equity
Balance at 1 April 2023
930.3
(147.9)
384.7
1,167.1
9.5
1,176.6
Profit for the year
–
–
231.0
231.0
(6.6)
224.4
Other comprehensive income (expense)
– net of tax
–
44.3
(2.5)
41.8
25.5
67.3
Total comprehensive income
–
44.3
228.5
272.8
18.9
291.7
Dividends paid
19
–
–
(167.1)
(167.1)
–
(167.1)
Acquisition of treasury shares
20
–
(6.0)
–
(6.0)
–
(6.0)
Share-based payments – net of tax
20
–
4.7
–
4.7
–
4.7
Balance at 31 March 2024
930.3
(104.9)
446.1
1,271.5
28.4
1,299.9
Balance at 1 April 2022
966.7
(293.7)
334.0
1,007.0
(57.6)
949.4
Profit for the year
–
–
218.5
218.5
(0.3)
218.2
Other comprehensive income (expense)
– net of tax
–
148.1
(1.2)
146.9
67.4
214.3
Total comprehensive income
–
148.1
217.3
365.4
67.1
432.5
Dividends paid
19
–
–
(166.6)
(166.6)
–
(166.6)
On-market share buy-back
18
(36.4)
–
–
(36.4)
–
(36.4)
Acquisition of treasury shares
20
–
(5.0)
–
(5.0)
–
(5.0)
Share-based payments – net of tax
20
–
2.7
–
2.7
–
2.7
Balance at 31 March 2023
930.3
(147.9)
384.7
1,167.1
9.5
1,176.6
The above statement of changes in equity should be read in conjunction with the accompanying notes.
CONSOLIDATED FINANCIAL REPORT
52
Statement of cash flows
$million
Note
2024
2023
Cash flows from operating activities
Receipts from customers
2,940.2
2,840.5
Payments to suppliers and employees
(2,648.3)
(2,694.9)
Dividends and distributions received
26
33.9
15.0
Interest received
3.3
2.2
Income tax paid
(48.4)
(49.0)
Net cash inflow from operating activities
280.7
113.8
Cash flows from investing activities
Proceeds from sale of property holdings and other assets
176.8
140.3
Purchase relating to property holdings
(35.0)
(47.4)
Purchase of property, plant and equipment and other intangible assets
12
(138.6)
(84.5)
Purchase of controlled entities and businesses, net of cash acquired
9
(47.5)
–
(Payments) receipts for financial assets
(9.0)
74.3
Loans and receivables (advanced) repaid
(2.7)
7.5
Net cash (outflow) inflow from investing activities
(56.0)
90.2
Cash flows from financing activities
On-market share buy-back
18
–
(36.4)
Dividends paid1
19
(167.1)
(166.6)
Acquisition of treasury shares
20
(6.0)
(5.0)
Lease payments
14
(35.5)
(32.7)
Interest and other finance costs paid2
(9.5)
(9.5)
Net cash outflow from financing activities
(218.1)
(250.2)
Net increase (decrease) in cash held
6.6
(46.2)
Net cash at the beginning of the financial year
131.6
177.7
Effects of exchange rate changes
(0.1)
0.1
Net cash at the end of the financial year
138.1
131.6
Reconciliation of net profit attributable to shareholders of CSR Limited
to net cash from operating activities
Profit after tax attributable to shareholders of CSR Limited
2
231.0
218.5
Loss after tax attributable to non-controlling interests
24
(6.6)
(0.3)
Depreciation and amortisation
6
87.1
84.9
Share of profits of associates not received as dividends or distributions
11.6
(4.3)
Share-based payments
20
4.3
4.3
Finance cost net of discount unwind
9.5
9.5
Net gain on disposal of property holdings
5
(94.8)
(75.6)
Net change in current receivables
32.2
(47.8)
Net change in current inventories
27.9
(51.1)
Net change in current payables
(42.0)
(20.9)
Net change in product liability provision
(10.1)
(19.9)
Net change in other provisions
10.4
(3.3)
Net change in current and deferred tax balances
27.0
26.7
Net change in other assets and liabilities
(6.8)
(6.9)
Net cash inflow from operating activities
280.7
113.8
1 During the year ended 31 March 2024 of the $167.1 million in dividends paid to CSR Limited shareholders, $12.4 million was used to purchase CSR shares on-market to
satisfy obligations under the Dividend Reinvestment Plan (DRP), and the remaining $154.7 million was paid in cash.
2 In accordance with AASB 16 Leases, interest and other finance costs paid for the year ended 31 March 2024 includes finance costs relating to leases of $6.6 million
(2023: $6.8 million). Refer to notes 7 and 14 for further details.
The above statement of cash flows should be read in conjunction with the accompanying notes.
NOTES TO THE CONSOLIDATED FINANCIAL REPORT | BASIS OF PREPARATION
53
Notes to the consolidated financial report
1
Basis of preparation
This section sets out the basis upon which the CSR group’s financial
statements are prepared as a whole. Material and other accounting
policies that summarise the measurement basis used and are relevant
to an understanding of the financial statements are provided throughout
the notes to the financial statements. All other accounting policies are
outlined in note 35.
Statement of compliance: CSR Limited is a limited company
incorporated in Australia whose shares are publicly traded on the
Australian Securities Exchange.
This general purpose financial report is prepared in accordance with the
Corporations Act 2001 and applicable Accounting Standards and
Interpretations, and complies with other requirements of the law. CSR
Limited is a ‘for profit’ entity. The financial report includes the
consolidated financial statements of CSR Limited and its controlled
entities (CSR group).
Accounting Standards include Australian Accounting Standards.
Compliance with Australian Accounting Standards ensures that the
financial statements and notes of the company and the CSR group
comply with International Financial Reporting Standards.
Basis of preparation: The financial report is based on historical cost,
except for certain financial assets and liabilities which are at fair value.
As at the date these financial statements are authorised for issue, the
directors of CSR Limited consider it appropriate that the group is able to
continue as a going concern and pay its debts as and when they
become due and payable.
Basis of consolidation: The consolidated financial statements have been
prepared by aggregating the financial statements of all the entities that
comprise the CSR group, being CSR Limited and its controlled entities.
In these consolidated financial statements:
results of each controlled entity are included from the date CSR
Limited obtained control and until such time as it ceased to control
an entity; and
all inter-entity balances and transactions are eliminated.
Control is achieved where CSR Limited is exposed to, or has rights to,
variable returns from its involvement with an entity and has the ability to
affect those returns through its power to direct the activities of the
entity. Entities controlled by CSR Limited are under no obligation to
accept responsibility for liabilities of other common controlled entities
except where such an obligation has been specifically undertaken.
Rounding: Unless otherwise shown in the financial statements, amounts
have been rounded to the nearest tenth of a million dollars and are
shown by $million. CSR Limited is a company of the kind referred to in
the Australian Securities and Investments Commission (ASIC)
Corporations (Rounding in Financial/Directors’ Reports) Instrument
2016/191, dated 24 March 2016.
Currency: Unless otherwise shown in the financial statements, amounts
are in Australian dollars, which is the CSR group’s functional currency.
New or revised accounting standards: The CSR group has adopted all
amendments to Australian Accounting Standards which became
applicable for the CSR group from 1 April 2023. Refer note 27 for
further detail on AASB 17 Insurance Contracts.
New standards not yet applicable: Other standards not yet applicable
are not expected to have a material impact on the CSR group.
Critical accounting judgments and key sources of estimation
uncertainty: Critical judgments and key assumptions that management
has made in the process of applying the CSR group's accounting policies
and that have the most significant effect on the amounts recognised in
the financial statements are detailed in the notes below:
Note
Judgment/Estimation
8
Treatment of tax losses
12
Asset impairment
15
Provision for uninsured losses and future claims
15, 16
Product liability
25
Classification of joint arrangements
NOTES TO THE CONSOLIDATED FINANCIAL REPORT: The notes are
organised into the following sections.
Financial performance overview: provides a breakdown of individual line
items in the statement of financial performance, and other information
that is considered most relevant to users of the Annual Report.
Balance sheet items: provides a breakdown of individual line items in
the statement of financial position that are considered most relevant to
users of the Annual Report.
Capital structure and risk management: provides information about the
capital management practices of the CSR group and shareholder
returns for the year. This section also discusses the CSR group’s
exposure to various financial risks, explains how these affect the CSR
group’s financial position and performance and what the CSR group
does to manage these risks.
Group structure: explains aspects of the CSR group structure and the
impact of this structure on the financial position and performance of the
CSR group.
Other: provides information on items which require disclosure to comply
with Australian Accounting Standards and other regulatory
pronouncements and about items that are not recognised in the
financial statements but could potentially have a significant impact on
the CSR group’s financial position and performance.
NOTES TO THE CONSOLIDATED FINANCIAL REPORT | FINANCIAL PERFORMANCE OVERVIEW
54
Financial performance overview
2
Segment information
Operating and reportable segments
The CSR group has identified its operating segments based on the
internal reports that are reviewed and used by the board of directors
in their role as the chief operating decision makers (CODM) in
assessing performance and in determining the allocation of
resources. Operating segments are identified by management and the
board of directors based on the nature of the products sold and
production processes involved. Reportable segments are based on
operating segments determined by the similarity of the products
produced and sold as these are the sources of the CSR group's major
risks and have the most effect on the rates of return.
Each of the business units disclosed below has been determined as a
reportable segment.
Building
Products
The Building Products business unit comprises Interior
Systems (Gyprock plasterboard, Martini, Himmel
Interior Systems, Woven Image and Rondo rolled
formed steel products joint venture), Construction
Systems (Hebel autoclaved aerated concrete products,
AFS walling systems and Cemintel fibre cement), and
Masonry and Insulation (Bradford insulation, Bradford
energy solutions, Edmonds ventilation systems, Monier
roofing, PGH Bricks and Pavers and New Zealand Brick
Distributors joint venture).
Property
The Property business unit generates returns
typically from the sale of former operating sites. In
addition, this business is currently involved in a
small number of large-scale developments in New
South Wales and Queensland. These projects, in
most cases, are in-fill developments (currently
vacant land or discontinued operating sites within
otherwise built up areas) located in metropolitan
regions.
Aluminium The Aluminium business unit relates to the CSR
group’s 70% interest in Gove Aluminium Finance
Limited, which in turn holds a 36.05% interest in the
Tomago aluminium smelter (i.e. an effective interest of
25.24%). Gove Aluminium Finance Limited sources
alumina, has it toll manufactured by Tomago and then
sells aluminium into predominantly the Asian market.
Products from the aluminium business include
aluminium ingot, billet and slab.
Accounting policies and inter-segment transactions
The accounting policies used by the CSR group in reporting segments
internally are the same as those disclosed in the material accounting
policies, with the exception that significant items (i.e. those items
which by their size and nature or incidence are relevant in explaining
financial performance) are excluded from trading profits. This
approach is consistent with the manner in which results are reported
to the CODM.
Transfers of assets between segments are recognised at book value.
It is the CSR group's policy that if items of revenue and expense are
not allocated to operating segments, then any associated assets and
liabilities are also not allocated to segments. This is to avoid
asymmetrical allocations within segments which management
believes would be inconsistent. Reporting provided to the board of
directors in respect of earnings is primarily measured based on
earnings before interest and tax (EBIT), excluding significant items,
with significant items reviewed and reported separately to the CODM.
The following items are not allocated to operating segments as they
are not considered part of the core trading operations of any segment:
corporate overheads;
restructuring and provisions;
net finance costs; and
significant items.
Geographical information
The CSR group operates principally in Australia. For the year ended 31
March 2024, the CSR group's trading revenue from external
customers in Australia amounted to $2,554.3 million (2023:
$2,542.3 million), with $70.8 million (2023: $71.0 million) of trading
revenue related to other geographical areas.
The CSR group's non-current assets excluding investments accounted
for using the equity method, deferred tax assets and other financial
assets in Australia amounted to $1,117.3 million at 31 March 2024
(2023: $1,005.9 million), with $15.7 million (2023: $14.5 million)
related to other geographical areas.
NOTES TO THE CONSOLIDATED FINANCIAL REPORT | FINANCIAL PERFORMANCE OVERVIEW
55
2
Segment information (continued)
$million
Trading revenue1
EBITDA before
significant items2
Depreciation and
amortisation
Earnings before
interest, tax and
significant items
Business segment
2024
2023
2024
2023
2024
2023
2024
2023
Building Products
1,893.7
1,833.0
368.5
344.7
(74.3)
(71.3)
294.2
273.4
Property
–
–
91.1
71.7
–
–
91.1
71.7
Aluminium
731.4
780.3
(18.6)
19.6
(10.8)
(11.6)
(29.4)
8.0
Corporate3
–
–
(21.7)
(19.5)
(2.0)
(2.0)
(23.7)
(21.5)
Restructuring and provisions4
–
–
–
(1.9)
–
–
–
(1.9)
Total CSR group
2,625.1
2,613.3
419.3
414.6
(87.1)
(84.9)
332.2
329.7
Reconciliation of earnings before interest, tax and significant items to profit after tax
$million
Note
2024
2023
Earnings before interest, tax and significant items
332.2
329.7
Net finance costs
(7.2)
(14.7)
Income tax expense
(91.2)
(90.3)
Profit after tax before significant items (before non-controlling interests)
233.8
224.7
Non-controlling interests
24
6.6
0.3
Profit after tax before significant items attributable to shareholders of CSR Limited
240.4
225.0
Significant items after tax attributable to shareholders of CSR Limited
3
(9.4)
(6.5)
Profit after tax attributable to shareholders of CSR Limited
231.0
218.5
Funds employed ($million)5
Return on funds employed (%)6
Business segment
As at 31 March 2024
As at 31 March 2023
As at 31 March 2024
As at 31 March 2023
Building Products
1,064.1
938.2
29.4%
30.9%
Property
109.8
153.1
69.3%
44.9%
Aluminium
138.9
163.3
(19.5%)
5.6%
Corporate
(42.0)
(41.3)
–
–
Total CSR group
1,270.8
1,213.3
26.7%
28.9%
1 Trading revenue excludes net gain on disposal of assets, interest income, dividend income from other entities, share of net profit of joint venture entities and other income.
Inter-segment sales are negligible.
2 EBITDA before significant items is earnings before interest, tax, depreciation, amortisation and significant items.
3 Represents unallocated overhead expenditure and other revenues.
4 Represents restructuring and provisions. Includes legal and managerial costs associated with long-term product liabilities and minor product liability claims that arise from
time to time, certain defined benefit superannuation liabilities and expenses, other payables, non-operating revenue and other costs (excluding those categorised as
significant items).
5 Funds employed is net assets of the CSR group less certain non-trading assets and liabilities. Funds employed at 31 March 2024 is calculated as net assets of $1,299.9
million (2023: $1,176.6 million), excluding the following assets: cash of $138.1 million (2023: $131.6 million), net tax assets of $153.4 million (2023: $209.0 million) and
net superannuation assets of $3.1 million (2023: $6.5 million). In addition, the following liabilities have been excluded from funds employed: asbestos product liability
provision of $183.3 million (2023: $193.4 million), net financial liabilities of $81.8 million (2023: $190.1 million) and interest payable of $0.4 million (2023: $0.3 million).
6 Return on funds employed (ROFE) is calculated based on EBIT before significant items for the 12 months to year end divided by average funds employed. ROFE is not a
measure used for Corporate costs which are considered in the context of the CSR group result. Property ROFE varies due to timing of projects.
NOTES TO THE CONSOLIDATED FINANCIAL REPORT | FINANCIAL PERFORMANCE OVERVIEW
56
3
Significant items
$million (expense) income
Note
2024
2023
System implementation projects relating to Software-as-a-Service
(i)
(7.1)
(15.1)
Transaction costs
(ii)
(8.2)
–
Significant items before finance costs and income tax
6
(15.3)
(15.1)
Discount unwind and hedging relating to product liability provision
7
(8.8)
(5.3)
Recognition of tax losses
(iii)
7.5
7.8
Income tax benefit on significant items
7.2
6.1
Significant items after tax
(9.4)
(6.5)
Significant items attributable to non-controlling interests
–
–
Significant items attributable to shareholders of CSR Limited
(9.4)
(6.5)
Net profit after tax attributable to shareholders of CSR Limited
231.0
218.5
Significant items after tax attributable to shareholders of CSR Limited
9.4
6.5
Net profit after tax before significant items attributable to shareholders of CSR Limited
240.4
225.0
Earnings per share attributable to shareholders of CSR Limited before significant items1
Basic (cents per share)
50.5
46.9
Diluted (cents per share)
50.1
46.6
1 The basis of calculation is consistent with the earnings per share disclosure in the statement of financial performance. Refer to note 4.
Note
Description
Further explanation
(i)
System
implementation
projects relating to
Software-as-a-
Service
During the year ended 31 March 2024, the Building Products segment incurred system implementation
project costs of $7.1 million (2023: $15.1 million) in relation to Software-as-a-Service arrangements.
(ii)
Transaction costs
During the year ended 31 March 2024, the CSR group incurred transaction costs of $8.2m associated with
the proposed acquisition of CSR by Saint-Gobain by way of a Scheme of Arrangement. Refer to note 30 for
further detail.
(iii)
Recognition of tax
losses
During the year ended 31 March 2024, the CSR group recognised a deferred tax asset of $7.5 million in
relation to carry forward revenue tax losses.
During the year ended 31 March 2023, a deferred tax asset of $7.8 million was recognised in relation to
carry forward capital and revenue tax losses.
Refer note 8 for further detail.
Recognition and measurement
Significant items are those which by their size and nature or incidence are relevant in explaining the financial performance of the CSR group,
and as such are disclosed separately.
4
Earnings per share
2024
2023
Weighted average number of ordinary shares used in the calculation of basic EPS (million)1
476.5
479.8
Weighted average number of ordinary shares used in the calculation of diluted EPS (million)2
479.8
482.4
Profit after tax attributable to shareholders of CSR Limited ($million)
231.0
218.5
Basic EPS (cents per share)
48.5
45.5
Diluted EPS (cents per share)
48.1
45.3
1 Calculated by reducing the total weighted average number of shares on issue of 477.4 million (2023: 481.0 million) by the weighted average number of shares purchased
on market and held in trust to satisfy incentive plans as these plans vest of 906,711 (2023: 1,201,525).
2 Calculated by increasing the weighted average number of shares used in calculating basic EPS by outstanding performance rights of 3,323,874 (2023: 2,584,517).
Performance rights granted under the LTI plan are included in the determination of diluted earnings per share to the extent to which they are dilutive.
NOTES TO THE CONSOLIDATED FINANCIAL REPORT | FINANCIAL PERFORMANCE OVERVIEW
57
5
Revenue
$million
Note
2024
2023
Trading revenue
2
2,625.1
2,613.3
Other income
Net gain on disposal of property holdings
94.8
75.6
Net Aluminium Reliability and Emergency Reserve Trader (RERT) compensation
–
12.7
Other
3.9
1.3
Recognition and measurement
Sale of goods: the group sells a range of building products and aluminium. Sales are recognised when control of the products has
transferred, being when the products are delivered and accepted by the customer. A receivable is recognised when the goods are
delivered as this is the point in time that the consideration is unconditional because only the passage of time is required before the
payment is due. The group’s obligation to repair or replace faulty products under the standard warranty terms is recognised as a
provision.
Sale and installation of goods: certain CSR businesses supply and install building products. Sales are recognised over time given that
there is generally no alternative use of the product (it is generally specified based on the requirements of the building) and there is an
enforceable right to payment. Revenue from providing services is recognised in the accounting period in which the services are rendered.
For fixed-priced contracts, revenue is recognised based on the actual service provided to the end of the reporting period as a proportion
of the total services to be provided because the customer receives and uses the benefits simultaneously. For each of these contracts an
appropriate driver is determined which is then used to recognise revenue as the work is completed. In the case of fixed-price contracts,
the customer generally pays the fixed amount based on a payment schedule. If the services rendered by CSR exceed the payment, a
contract asset is recognised. If the payments exceed the services rendered, a contract liability is recognised.
Some contracts include multiple deliverables, such as the sale of product and related installation services. However, if the installation
could be performed by another party it is accounted as a separate performance obligation. Where the contracts include multiple
performance obligations, the transaction price will be allocated to each performance obligation based on the stand-alone selling price.
Revenue in relation to the sale of the product is recognised at a point in time when the product is delivered, and legal title has passed,
and the customer has accepted the goods. Estimates of revenues, cost or extent of progress toward completion are revised if
circumstances change. Any resulting increases or decreases in estimated revenues or costs are reflected in profit or loss in the period in
which the circumstances that give rise to the revision become known by management.
Sale and installation of goods revenue is disclosed within ‘trading revenue’ above and in note 2 given it is not material for separate
disclosure.
Sale of property holdings: income is recognised when control over the property has been transferred to the customer. The properties
have generally no alternative use for the group due to contractual relationships. An enforceable right to payment does not arise until
after the customer has taken control of the property which is the earlier of when title of the property passes or when the customer has
physical possession of the property. As a result, income is recognised when control of the property passes to the customer. Income is
measured as the amount receivable under the contract. It is discounted to present value if deferred payments have been agreed and the
impact of discounting is material. In most cases, the consideration is due when legal title is transferred. Profit realised on the sale of
property holdings are disclosed within ‘net gain on disposal of property holdings’ and classified as 'other income’ on the statement of
financial performance and is recognised in the Property segment.
Disposal of assets: the net gain (loss) is recognised in ‘other income (expense)’ when control of the asset passes to the purchaser.
NOTES TO THE CONSOLIDATED FINANCIAL REPORT | FINANCIAL PERFORMANCE OVERVIEW
58
6
Expenses
$million
Note
2024
2023
Expenses
Significant items1
3
15.3
15.1
Employee benefits expense
525.2
478.8
Depreciation
12,14
84.4
82.6
Amortisation
12
2.7
2.3
Other
6.5
–
1
Significant items are included within other expenses in the statement of financial performance.
Nature of expense
Employee benefits expense: includes salaries and wages, share-based payments and other entitlements.
7
Net finance costs
$million
Note
2024
2023
Interest expense and funding costs
2.9
2.7
Finance cost – leases
14
6.6
6.8
Discount unwind and hedging relating to product liability provision
3
8.8
5.3
Discount unwind of other non-current liabilities
15
1.0
0.8
Foreign exchange (gain) loss
(0.1)
6.9
Finance costs
19.2
22.5
Interest income
(3.2)
(2.5)
Net finance costs
16.0
20.0
Recognition and measurement
Interest income and expense are accrued on a time basis, by reference to the principal outstanding and at the applicable effective interest
rates. Funding costs are capitalised and subsequently amortised over the term of the facility. Unwinding of the interest component of
discounted assets and liabilities is treated as a finance cost.
NOTES TO THE CONSOLIDATED FINANCIAL REPORT | FINANCIAL PERFORMANCE OVERVIEW
59
8
Income tax expense
Reconciliation of income tax expense charged to the statement of financial performance:
$million
Note
2024
2023
Profit before income tax
300.9
294.6
Income tax expense calculated at 30%
(90.3)
(88.4)
Decrease (increase) in income tax expense due to:
Recognition of carried forward capital tax losses
3
–
5.0
Recognition of carried forward tax losses
3
7.5
2.8
Share of net profit of joint venture entities
6.5
5.5
Taxable profit on property disposals
(0.7)
(0.4)
Income tax over (under) provided in prior years
0.5
(0.7)
Other items
–
(0.2)
Total income tax expense
(76.5)
(76.4)
Comprising of:
Current tax expense
(69.4)
(43.3)
Deferred tax expense relating to movements in deferred tax balances
13
(7.1)
(33.1)
Total income tax expense
(76.5)
(76.4)
Recognition and measurement
Current and deferred tax is recognised as an expense in the statement of financial performance except when it relates to items credited or
debited directly to equity, in which case the deferred tax is also recognised directly in equity, or where it arises from the initial accounting of
a business acquisition, in which case it is taken into account in the determination of goodwill.
Disclosure of company tax information
Under tax legislation the Australian Taxation Office will publish in 2024 the following data for the CSR Limited tax consolidated group and
Gove Aluminium Finance Limited in relation to the 2023 tax year:
Entity
Total revenue1
($million)
Taxable income
($million)
Tax payable
($million)
CSR Limited (ABN: 90 000 001 276)
2,171.4
196.2
48.4
Gove Aluminium Finance Limited (ABN: 45 001 860 073)
797.4
9.4
0.5
1 For financial reporting and taxation purposes, items may have been classified between revenue and expenses differently. Therefore, total revenue may not reconcile to
note 2 or note 24.
Income tax is payable on taxable income (not total revenue) after allowing for expenses and specific adjustments under the tax law. For CSR
Limited, tax payable for 2023 was $48.4 million because CSR was entitled to utilise franking credits on dividends received and R&D tax
offsets to reduce its tax payable.
Significant judgement and critical accounting estimate – treatment of tax losses
Carry forward tax losses or unused tax credits are recognised as a deferred tax asset to the extent that it is probable that future taxable
profit will be available against which the unused tax losses and unused tax credits can be utilised.
During the year ending 31 March 2024, the CSR group has recognised a deferred tax asset of $7.5 million in relation to carry forward tax
losses.
The net amount of tax losses, capital losses and rebates carried forward at the end of the year for which no deferred tax asset has been
recognised is set out below:
The gross value of unused tax losses for which no deferred tax asset has been recognised are $nil (2023: $27.1 million).
The gross value of unused capital losses for which no deferred tax asset has been recognised are $304.8 million (2023: $304.8 million).
These unrecognised capital losses were predominately generated from the sale of the Viridian Glass business, and it is not considered
probable that the unrecognised capital losses will be utilised in the foreseeable future. Unused capital and tax losses can be carried forward
indefinitely subject to meeting ownership or business continuity requirements.
Value of tax losses, capital losses and rebates
carried forward (net)
2024
($million)
2023
($million)
CSR group
91.5
99.0
NOTES TO THE CONSOLIDATED FINANCIAL REPORT | FINANCIAL PERFORMANCE OVERVIEW
60
9
Business combinations
i)
Current year
Woven Image
Background
The CSR group acquired 100% of the shares in Woven Image on 1
September 2023.
Woven Image is a leader in sustainable, design-led acoustic finishes
and textiles. The primary reason for the acquisition was to enhance
CSR’s commercial interior finishes offering in the Australian market
and exports to Europe and Asia.
Revenue and profit contribution
If Woven Image’s share of revenue and profit before income tax were
excluded from the CSR group results for the year ended 31 March
2024, CSR group revenue would have been $31.3 million lower and
profit before income tax would have been $3.9 million lower.
Acquisition related costs
Acquisition related costs expensed were $1.2 million.
Acquisition accounting for the transaction
Details of the effective purchase consideration and the fair value of
the Woven Image assets and liabilities acquired are set out below. The
accounting for this acquisition has been finalised in the year ended 31
March 2024.
$million
Note
Consideration
Cash paid
(a)
43.5
Total consideration
43.5
Assets acquired and liabilities assumed
Cash
1.0
Trade and other receivables
5.1
Inventories
2.9
Property, plant and equipment
2.5
Other intangible assets
0.5
Deferred income tax liabilities
(0.1)
Trade and other payables
(3.4)
Provisions
(1.0)
Fair value of net assets acquired
7.5
Goodwill arising on acquisition
36.0
The goodwill is attributable to the workforce, profitability and growth
potential of the acquired business. It will not be deductible for tax
purposes.
a)
Purchase consideration – cash outflow
$million
Consideration
Cash consideration
43.5
Less cash acquired
(1.0)
Outflow of cash – investing activities
42.5
Building Products segment
During the year ended 31 March 2024, the Building Products
segment acquired the business assets of one entity for total
consideration of $5.0 million with goodwill of $3.7 million arising as a
result of this acquisition.
ii) Prior year
Building Products segment
During the year ended 31 March 2023, the Building Products
segment invested in an entity for cash consideration of $1.3 million.
NOTES TO THE CONSOLIDATED FINANCIAL REPORT | BALANCE SHEET ITEMS
61
Balance sheet items
10 Working capital
i)
Current receivables
$million
2024
2023
Trade receivables
242.4
269.4
Expected credit losses
(13.8)
(15.3)
Net trade receivables
228.6
254.1
Property receivable
–
6.3
Other receivables
24.8
25.5
Total current receivables
253.4
285.9
Movement in expected credit losses
Opening balance
(15.3)
(10.2)
Trade debts written off
7.5
1.1
Trade debts provided
(6.0)
(6.2)
Closing balance
(13.8)
(15.3)
The expected credit losses for trade receivables has been determined as follows:
$million
Within terms
Past due
0-60 days
Past due
>60 days
Total
2024
Gross carrying amount – trade receivables
230.3
4.9
7.2
242.4
Expected credit losses
1.7
4.9
7.2
13.8
2023
Gross carrying amount – trade receivables
255.2
7.1
7.1
269.4
Expected credit losses
1.3
7.1
6.9
15.3
ii)
Inventories
$million
2024
2023
Current
Raw materials and stores
138.1
168.6
Work in progress
27.7
26.1
Finished goods
238.2
230.5
Total current inventories
404.0
425.2
Write-down of inventories recognised as an expense within cost of sales for the year ended 31 March 2024 totalled $17.9 million (2023: $15.0 million).
iii) Current payables
$million
2024
2023
Trade payables
231.9
255.3
Other payables
26.3
38.2
Total current payables
258.2
293.5
Recognition and measurement
Trade receivables: are recognised initially at fair value and are subsequently measured at amortised cost. The CSR group has adopted an
expected credit loss (‘ECL’) model under AASB 9 Financial Instruments. The group always measures the loss allowance for trade
receivables at an amount equal to lifetime ECL. The expected credit losses on trade receivables are estimated using a provision matrix by
reference to past default experience of the debtor and an analysis of the debtor’s current financial position, adjusted for factors that are
specific to the debtors, general economic conditions of the industry in which the debtors operate and an assessment of both the current
as well as the forecast direction of conditions at the reporting date.
Inventories: are valued at the lower of cost and net realisable value. Net realisable value is the estimated selling price in the ordinary
course of business less the estimated cost of completion and costs necessary to make the sale. Costs included in inventories consist of
materials, labour and manufacturing overheads which are related to the purchase and production of inventories. The value of inventories
is derived by the method most appropriate to each particular class of inventories. The major portion is valued on either a first-in-first-out
or average cost basis.
Trade and other payables: are recognised when the CSR group becomes obliged to make future payments resulting from the purchase of
goods and services. Payables are stated at their amortised cost.
NOTES TO THE CONSOLIDATED FINANCIAL REPORT | BALANCE SHEET ITEMS
62
11 Property holdings
$million
2024
2023
Current
Held for sale
2.7
36.0
Total current property holdings
2.7
36.0
Non-current
Held for sale
–
36.8
Property projects
106.4
72.6
Total non-current property holdings
106.4
109.4
Total property holdings
109.1
145.4
$million
2024
2023
Opening balance at 1 April
145.4
166.9
Capital expenditure
35.0
47.4
Disposed
(74.7)
(68.9)
Transfer from property, plant and equipment
3.4
–
Closing balance at 31 March
109.1
145.4
Recognition and measurement
Property holdings: accounted for as investment properties in accordance with AASB 140 Investment Property. The carrying amount of
property holdings includes the cost of acquisition and costs incurred in preparing the site for sale. Costs incurred after completion of the
site are expensed as incurred. Property holdings are classified as either:
‒
Held for sale: if the carrying amount will be recovered principally through a sale transaction and a sale is considered highly
probable. The assets are measured at the lower of their carrying amount and fair value less costs to sell. Held for sale property
assets that are not expected to settle within 12 months but are subject to a sales agreement are classified as non-current assets.
‒
Property projects: property holdings are the investment properties which are not yet classified as ‘held for sale’. Property holdings
not expected to be fully developed within 12 months are classified as non-current assets.
NOTES TO THE CONSOLIDATED FINANCIAL REPORT | BALANCE SHEET ITEMS
63
12 Property, plant and equipment and intangible assets
i)
Property, plant and equipment
Land and buildings
Plant and equipment
Total
$million
Note
2024
2023
2024
2023
2024
2023
Cost or written down value
419.6
401.0
1,525.6
1,426.2
1,945.2
1,827.2
Accumulated depreciation and impairment
(127.2)
(120.4)
(1,048.7)
(1,014.6)
(1,175.9)
(1,135.0)
Net carrying amount
292.4
280.6
476.9
411.6
769.3
692.2
Net carrying amount at 1 April
280.6
285.7
411.6
380.4
692.2
666.1
Capital expenditure
22.3
1.2
110.2
81.8
132.5
83.0
Disposed
(0.3)
(1.1)
(0.3)
(2.1)
(0.6)
(3.2)
Depreciation
6
(7.9)
(7.8)
(46.5)
(46.5)
(54.4)
(54.3)
Exchange differences
0.1
–
(0.1)
0.1
–
0.1
Acquisitions – business combinations
9
1.0
–
2.0
–
3.0
–
Transferred (to)/from property, plant and equipment and
property holdings
(3.4)
2.6
–
(2.1)
(3.4)
0.5
Balance at 31 March
292.4
280.6
476.9
411.6
769.3
692.2
ii)
Goodwill and other intangible assets
Goodwill
Software
Other
Total other intangible
assets
$million
Note
2024
2023
2024
2023
2024
2023
2024
2023
Cost
99.6
59.9
96.7
90.1
30.4
29.8
127.1
119.9
Accumulated amortisation and
impairment
–
–
(89.9)
(87.4)
(24.0)
(23.2)
(113.9)
(110.6)
Net carrying amount
99.6
59.9
6.8
2.7
6.4
6.6
13.2
9.3
Net carrying amount at 1 April
59.9
59.9
2.7
3.0
6.6
7.1
9.3
10.1
Capital expenditure
–
–
6.1
1.5
–
–
6.1
1.5
Amortisation
6
–
–
(2.2)
(1.8)
(0.5)
(0.5)
(2.7)
(2.3)
Acquisitions – business combinations
9
39.7
–
0.2
–
0.3
–
0.5
–
Balance at 31 March
99.6
59.9
6.8
2.7
6.4
6.6
13.2
9.3
NOTES TO THE CONSOLIDATED FINANCIAL REPORT | BALANCE SHEET ITEMS
64
12 Property, plant and equipment and intangible assets (continued)
Recognition and measurement
Property, plant and equipment: assets acquired are recorded at historical cost of acquisition less accumulated depreciation and
impairment. Historical cost includes expenditure that is directly attributable to the acquisition of items. Subsequent costs are included in
the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits
associated with the item will flow to the group and the cost of the item can be measured reliably. All other repairs and maintenance are
charged to profit or loss during the reporting period in which they are incurred. The assets’ residual values and useful lives are reviewed,
and adjusted if appropriate, at the end of each reporting period. An asset’s carrying amount is written down immediately to its recoverable
amount if the asset’s carrying amount is greater than its estimated recoverable amount.
Depreciation/amortisation: assets are depreciated or amortised at rates based upon their expected economic life using the straight-line
method. Land, goodwill and trade names with indefinite lives are not depreciated or amortised. Useful lives are as follows: buildings 10 to
40 years; plant and equipment 2 to 40 years; and systems software and other intangible assets 2 to 8 years.
Software: developed internally or acquired externally, is initially measured at cost and includes development expenditure. Subsequently,
these assets are carried at cost less accumulated amortisation and impairment losses.
Software-as-a-Service (SaaS) arrangements: SaaS arrangements are service contracts providing the group with the right to access the
cloud provider’s application software over the contract period. Costs incurred to configure or customise, and the ongoing fees to obtain
access to the cloud provider's application software, are recognised as operating expenses when the services are received. Some of these
costs incurred are for the development of software code that enhances or modifies, or creates additional capability to, existing on-premise
systems and meets the definition of and recognition criteria for an intangible asset. These costs are recognised as intangible software
assets and amortised over the useful life of the software on a straight-line basis.
Other intangible assets: including trade names and customer lists obtained through acquired businesses, are measured at fair value at
the date of acquisition. Trade names of $1.6 million (2023: $1.6 million) that have an indefinite life are assessed for recoverability
annually. Customer lists and all other trade names that have a defined useful life are amortised and subsequently carried net of
accumulated amortisation. Intangible assets not obtained through acquired businesses are measured at cost. These assets are
subsequently carried at cost less accumulated amortisation and impairment losses.
Goodwill: represents the excess of the cost of acquisition over the fair value of the identifiable assets and liabilities acquired. Goodwill is
not amortised, but tested annually and whenever there is an indicator of impairment. Goodwill is allocated to the lowest level within the
group at which the goodwill is monitored for internal management purposes and cannot be larger than an operating segment.
Critical accounting estimate – carrying value assessment
The CSR group tests property, plant and equipment and intangible assets for impairment to ensure they are not carried at amounts above
their recoverable amounts:
at least annually for goodwill and trade names with indefinite lives; and
where there is an indication that the assets may be impaired (which is assessed at least each reporting date).
These tests for impairment are performed by assessing the recoverable amount of each individual asset or, if this is not possible, then the
recoverable amount of the cash generating unit (CGU) to which the asset belongs. CGUs are the lowest levels at which assets are grouped
and generate separately identifiable cash flows. The recoverable amount is determined each reporting period using the CGU’s fair value
which is calculated using the discounted cash flows expected to arise from the asset. Management judgment is required in these
valuations to forecast future cash flows and to determine a suitable discount rate in order to calculate the present value of these future
cash flows. Future cash flows take into consideration forecast changes in the building cycle, aluminium prices and exchange rates where
appropriate.
If the recoverable amount of a cash generating unit is estimated to be less than its carrying amount, the carrying amount of the cash
generating unit is reduced to its recoverable amount with any impairment recognised immediately in the statement of financial performance.
The carrying amount of goodwill and trade names with indefinite lives forms part of the Building Products segment: $99.6 million and $1.6
million respectively (2023: $59.9 million and $1.6 million respectively). The recoverable amounts of the cash generating units that include
goodwill are determined using discounted cash flow projections.
Key assumptions used in the impairment assessments:
Cash flow forecasts: The cash flows are modelled over a five-year period with a terminal value used from year six onwards. The first five
years represent financial plans forecast by management, based on the CSR group's view of the most recent outlook on building activity
levels and the current climate-related regulations and committed sustainability initiatives in place, with the terminal year representing
long-term average activity levels. These estimates are informed by a review of a sample of external forecasts available as at the reporting
date. In addition, cash flows for the Aluminium cash generating unit reflect the most recent forecasts for key assumptions such as:
−
the percentage of hedged aluminium and alumina prices (based on hedge contracts as disclosed in note 21) which decrease over
the period modelled;
−
unhedged aluminium prices based on the latest forecast consensus US$ London Metal Exchange (LME) prices;
−
forecast consensus USD:AUD exchange rates;
−
the moderation of certain production related costs; and
−
estimated costs in relation to the settlement of obligations under the Safeguard Mechanism.
Post-tax discount rate: The valuation is calculated using a post-tax annual discount rate of 9.6% for all CGUs other than Aluminium which
uses 11.6% (2023: 9.6% for all CGUs other than Aluminium which was 11.6%).
Terminal value: The terminal value annual growth rate assumed is 2.5% (2023: 2.5%).
NOTES TO THE CONSOLIDATED FINANCIAL REPORT | BALANCE SHEET ITEMS
65
13 Net deferred income tax assets
$million
2024
2023
Net deferred income tax assets arising on temporary differences
143.9
168.5
Tax losses recorded as assets
22.3
2.4
Capital tax losses recorded as assets
4.7
35.8
Total net deferred income tax assets
170.9
206.7
Movement in net deferred income tax assets
$million
Opening
balance
Credited
(charged) to
profit or loss
Recognised in
other
comprehensive
income
Other
(including
transfers)
Closing
balance
2024
Property, plant and equipment
(16.5)
5.0
–
(0.4)
(11.9)
Right-of-use lease assets
(38.6)
9.0
–
(8.4)
(38.0)
Lease liabilities
49.1
(11.0)
–
8.3
46.4
Product liability provision
58.0
(3.0)
–
–
55.0
Employee benefits provisions
28.4
2.4
–
0.4
31.2
Other provisions
26.0
0.6
–
0.8
27.4
Fair value of hedges
57.6
–
(30.0)
–
27.6
Accrued expenses
7.8
(1.3)
–
–
6.5
Other individually insignificant balances
(3.3)
2.4
1.1
(0.5)
(0.3)
Tax losses
2.4
19.9
–
–
22.3
Capital tax losses
35.8
(31.1)
–
–
4.7
Total net deferred income tax assets
206.7
(7.1)
(28.9)
0.2
170.9
2023
Property, plant and equipment
(11.9)
(4.6)
–
–
(16.5)
Right-of-use lease assets
(37.8)
8.5
–
(9.3)
(38.6)
Lease liabilities
49.6
(9.6)
–
9.1
49.1
Product liability provision
64.0
(6.0)
–
–
58.0
Employee benefits provisions
29.8
(1.4)
–
–
28.4
Other provisions
22.7
3.1
–
0.2
26.0
Fair value of hedges
149.6
–
(92.0)
–
57.6
Accrued expenses
11.1
(3.3)
–
–
7.8
Property sales on capital account
8.7
(8.7)
–
–
–
Other individually insignificant balances
2.5
(4.8)
0.7
(1.7)
(3.3)
Tax losses
0.6
1.8
–
–
2.4
Capital tax losses
43.9
(8.1)
–
–
35.8
Total net deferred income tax assets
332.8
(33.1)
(91.3)
(1.7)
206.7
Recognition and measurement
Current tax: represents the amount expected to be paid in relation to taxable income for the financial year measured using tax rates and tax
laws that have been enacted or substantively enacted by the reporting date. Current tax for current and prior periods is recognised as a liability
(or asset) to the extent that it is unpaid (or refundable).
Deferred income tax: is provided in full, using the balance sheet liability method, on temporary differences arising between the carrying
amounts of assets and liabilities for financial reporting and tax purposes. Deferred tax assets and liabilities are measured at the tax rates that
are expected to apply to the period(s) when the asset and liability giving rise to them are realised or settled, based on tax rates (and tax laws)
that have been enacted or substantively enacted by the reporting date.
Deferred tax assets are recognised to the extent that it is probable that sufficient taxable amounts will be available against which deductible
temporary differences or unused tax losses and tax offsets can be utilised.
Deferred tax assets and liabilities are not recognised for temporary differences between the carrying amount and tax bases of investments in
controlled entities where the parent entity is able to control the timing of the reversal of the temporary differences and it is probable that the
differences will not reverse in the foreseeable future. A deferred tax liability is not recognised in relation to taxable temporary differences arising
from goodwill.
Tax assets and liabilities are offset when there is a legally enforceable right to offset tax assets and liabilities, when the tax balances relate to
the same taxation authority and when the CSR group intends to settle the tax assets and liabilities on a net basis. No provision for withholding
tax has been made on undistributed earnings of overseas controlled entities where there is no intention to distribute those earnings.
NOTES TO THE CONSOLIDATED FINANCIAL REPORT | BALANCE SHEET ITEMS
66
14 Leases
i)
The CSR group’s leasing activities
The CSR group leases various properties, equipment and vehicles. Property leases typically are for a period of 4 to 10 years and often have extension
options and equipment and vehicle leases are typically for a period of 3 to 6 years. Lease terms are negotiated on an individual basis and contain a
wide range of different terms and conditions. The lease agreements do not impose any covenants, but leased assets may not be used as security for
borrowing purposes.
Leases are recognised as a right-of-use asset and a corresponding liability at the date at which the leased asset is available for use by the group.
Each lease payment is allocated between the liability and finance cost. The finance cost is charged to the statement of financial performance over
the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The right-of-use asset
is depreciated over the shorter of the asset’s useful life and the lease term on a straight-line basis.
Payments associated with short-term leases and leases of low-value assets are recognised on a straight-line basis as an expense in the statement of
financial performance. Short-term leases are leases with a term of 12 months or less. Low-value assets comprise IT equipment and office equipment
such as photocopiers.
ii)
Amounts recognised in the financial statements
The statement of financial position reflects the following amounts relating to leases:
$million
2024
2023
Right-of-use assets
Properties
111.8
115.3
Equipment
8.6
7.8
Vehicles
6.2
5.7
Total right-of-use assets
126.6
128.8
Lease liabilities
Current
33.6
32.5
Non-current
121.1
131.1
Total lease liabilities
154.7
163.6
Additions to the right-of-use assets for the year ended 31 March 2024 were $15.2 million (2023: $17.5 million).
The statement of financial performance contains the following amounts relating to leases:
$million
2024
2023
Depreciation charge for right-of-use assets
Properties
24.3
22.8
Equipment
2.8
2.6
Vehicles
2.9
2.9
Total depreciation charge for right-of-use assets
6
30.0
28.3
Interest expense (included in finance cost)
7
6.6
6.8
Expense relating to short-term and low-value leases
19.0
15.6
The statement of cashflows contains the following amounts within ‘financing activities’ relating to leases:
$million
2024
2023
Lease payments
35.5
32.7
Interest
7
6.6
6.8
Total lease cash outflows included in ‘cash flows from financing activities’
42.1
39.5
The table below analyses the undiscounted cash flows for the CSR group’s lease liabilities, into relevant maturity groupings based on the
remaining lease term at the reporting date:
$million
2024
2023
1 year or less
39.6
38.8
1 to 3 years
63.6
63.4
3 to 5 years
35.4
39.6
Over 5 years
41.5
49.7
Total undiscounted cash flows
180.1
191.5
NOTES TO THE CONSOLIDATED FINANCIAL REPORT | BALANCE SHEET ITEMS
67
15 Provisions
$million
2023
Recognised/
remeasured
Settled/
transferred
Discount
unwind
2024
Current
Employee benefits
88.7
66.8
(58.8)
–
96.7
Restructure and rationalisation
1.4
5.1
(0.8)
–
5.7
Product liability
24.0
15.5
(18.9)
–
20.6
Restoration and environmental rehabilitation
1.4
–
–
–
1.4
Uninsured losses and future claims
6.3
7.6
(5.9)
–
8.0
Other1
12.5
9.1
(6.6)
–
15.0
Total current provisions
134.3
104.1
(91.0)
–
147.4
Non-current
Employee benefits
5.3
–
–
–
5.3
Product liability
169.4
(15.5)
–
8.8
162.7
Restoration and environmental rehabilitation
2.4
1.4
(0.6)
–
3.2
Make-good for property leases
10.4
–
(0.6)
–
9.8
Uninsured losses and future claims
16.0
(3.1)
–
0.7
13.6
Other1
9.7
–
(0.8)
0.3
9.2
Total non-current provisions
213.2
(17.2)
(2.0)
9.8
203.8
1 Includes provision for anticipated disposal costs of Tomago aluminium smelters spent pot lining and onerous lease liabilities.
Recognition, measurement and critical accounting estimates
Provisions are recognised when the CSR group has a present obligation (legal or constructive) as a result of a past event, it is probable that
settlement will be required and the obligation can be reliably estimated. Provisions which are not expected to be settled within 12 months
are measured at the present value of the estimated future cash outflows to be made by the CSR group.
Provisions representing critical accounting estimates and key sources of estimation uncertainty
Product liability: provision is made for all known asbestos claims and reasonably foreseeable future claims has been determined using
an independent expert’s report and includes an appropriate prudential margin. Refer to note 16 for further details of the key
assumptions and uncertainties in estimating this liability.
Uninsured losses and future claims: relates to the CSR group’s self-insurance program for workers’ compensation. CSR Limited is a
licensed self-insurer in New South Wales, Queensland, Victoria and Western Australia for workers compensation insurance. The provision
recognises the best estimate of the consideration required to settle the present obligation for anticipated compensation payments and is
determined at each year end using reports provided annually by independent experts.
Other provisions
Employee benefits: provision is made for benefits accruing to employees in respect of wages and salaries, annual leave, long service
leave and other employee obligations when it is probable that settlement will be required and they are capable of being reliably
measured. Provisions made in respect of employee benefits expected to be settled within 12 months are measured at their nominal
values using the remuneration rate expected to apply at the time of settlement.
Restructure and rationalisation: provision is made for restructuring and rationalisation where the CSR group has a present legal or
constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation and
the amount can be reliably estimated. The provision is measured at the present value of management’s best estimate of the expenditure
required to settle the present obligation at the end of the reporting period.
Restoration and environmental rehabilitation: the liability is immediately recognised when the environmental exposure is identified and
the rehabilitation costs can be reliably estimated. Judgment is required in arriving at an estimate of future costs required to extinguish
these obligations. Given the nature of these issues, circumstances may change and estimates and provisions will be updated
accordingly. Expert advice is relied upon (where available) and known facts at the date of this report are considered to arrive at the best
estimate for future liabilities.
Make-good for property leases: provision has been recognised for the present value of the estimated expenditure to restore leased
properties to their original condition at the end of the respective lease terms. These costs have been capitalised as part of the cost of the
right-of-use leased asset and are amortised over the shorter of the term of the lease and the useful life of the assets.
NOTES TO THE CONSOLIDATED FINANCIAL REPORT | BALANCE SHEET ITEMS
68
16 Product liability
Background
CSR Limited and/or certain subsidiaries (CSR) were involved in mining
asbestos and manufacturing and marketing products containing
asbestos in Australia and exporting asbestos to the United States.
CSR’s involvement in asbestos mining, and the manufacture of
products containing asbestos, began in the early 1940s and ceased
with the disposition of the Wunderlich asbestos cement business in
1977. As a result of these activities, CSR has been named as a
defendant in litigation in Australia and the United States.
CSR has been settling claims since 1989. It has been, and remains,
CSR’s policy to ensure that all legitimate asbestos related claims,
whether in Australia or the US, are resolved on a fair and equitable
basis. Where there is a demonstrated liability, CSR will seek to offer a
fair settlement and, in the case of US claimants, one that is consistent
with claim settlement values in Australia.
Default judgments have been sought and obtained against CSR in the
US, without CSR being present or represented (and for damages that
are excessive and of a nature that would not be recognised in
Australia). Australian law does not recognise the jurisdiction of US
courts in such matters. There have not been any US judgments
enforced against CSR. As at 31 March 2024, CSR had resolved
approximately 5,700 claims in Australia and approximately 137,900
claims in the United States.
Basis of provision
CSR includes in its financial statements a product liability provision
covering all known claims and reasonably foreseeable future asbestos
related claims. This provision is reviewed every six months. The
provision recognises the best estimate of the consideration required
to settle the present obligation for anticipated compensation
payments and legal costs as at the reporting date. The provision is net
of anticipated workers compensation payments from available
workers compensation insurers.
CSR does not believe there is any other significant source of
insurance available to meet its asbestos liabilities. CSR no longer has
general insurance coverage in relation to its ongoing asbestos
liabilities.
In determining the product liability provision, CSR has obtained
independent expert advice in relation to the future incidence and
value of asbestos related claims in Australia and has previously
obtained similar advice in respect of potential claims in the US. CSR
has appointed Finity Consulting Pty Limited as the independent expert
to estimate the Australian liabilities. The independent expert makes
their own determination of the methodology most appropriate for
estimating CSR’s future liabilities. The assessment of the independent
expert projects CSR’s claims experience into the future using
modelling techniques that take into account a range of possible
outcomes. The present value of the liabilities is estimated by
discounting the estimated cash flows using the pre-tax rate that
reflects the current market assessment of the time value of money
and risks specific to those liabilities.
Many factors are relevant to the independent expert’s estimates of
future asbestos liabilities, including:
numbers of claims received by disease and claimant type and
expected future claims numbers, including expectations as to
when claims experience will peak;
expected value of claims;
the presence of other defendants in litigation or claims involving
CSR;
the impact of and developments in the litigation and settlement
environment;
estimations of legal costs;
expected claims inflation of 3.25%; and
the discount rate applied to future payments of 4.65%.
There are a number of assumptions and limitations that impact on the
assessments made by CSR’s expert, including the following:
assumptions used in the modelling are based on the various
considerations referred to above;
the future costs of asbestos related liabilities are inherently
uncertain for the reasons discussed in this note;
uncertainties as to future interest rates and inflation;
the analysis is supplemented by various academic material on the
epidemiology of asbestos related diseases that is considered by
the experts to be authoritative;
the analysis is limited to liability in the respective jurisdiction of
Australia that is the subject of the analysis of that expert and to the
asbestos related diseases that are currently compensated in that
jurisdiction; and
the effect of possible events that have not yet occurred which are
currently impossible to quantify, such as medical and
epidemiological developments in the future in treating asbestos
diseases, future court and jury decisions on asbestos liabilities,
and legislative changes affecting liability for asbestos diseases.
The product liability provision is determined every six months by
obtaining the independent expert’s estimate for Australia as noted
above and adding a prudential margin. The prudential margin is
determined by the CSR directors at the balance date, having regard to
the prevailing litigation environment and any material uncertainties
that may affect future liabilities. As evidenced by the analysis below,
the prudential margin has varied over the past five years. The
directors anticipate that the prudential margin will continue to
fluctuate within a range approximating 10% to 30% depending on the
prevailing circumstances at each balance date.
Having regard to the extremely long tailed nature of the liabilities and
the long latency period of disease manifestation from exposure, the
estimation of future asbestos liabilities is subject to significant
complexity. As such, there can be no certainty that the product liability
provision as at 31 March 2024 will definitively estimate CSR’s future
asbestos liabilities. If the assumptions adopted by CSR’s expert prove
to be incorrect, the current provision may be shown to materially
understate or overstate CSR’s asbestos liability.
However, taking into account the provision already included in CSR’s
financial statements and current claims management experience,
CSR is of the opinion that asbestos litigation in Australia and the
United States will not have a material adverse impact on the CSR
group’s financial condition.
CSR’s asbestos provision is summarised in the graph and table below:
Table and Graph 1: Five-year history – asbestos provision
$million
Year ended 31 March
2024
2023
Base case estimate
149.2
156.8
Prudential margin
34.1
36.6
Prudential margin %
22.9%
23.3%
Total product liability provision
183.3
193.4
183.3
246.9
231.0
213.3
193.4
0
100
200
300
400
500
2020
2021
2022
2023
2024
Base case provision A$m
Prudential margin A$m
NOTES TO THE CONSOLIDATED FINANCIAL REPORT | CAPITAL STRUCTURE AND RISK MANAGEMENT
69
Capital structure and risk management
17 Credit facilities
The CSR group has a total of $330.0 million (31 March 2023: $330.0 million) committed standby facilities with external financial institutions.
These facilities have fixed maturity dates as follows: $55.0 million in 2025, $130.0 million in 2026 and $145.0 million in 2027. As at 31 March
2024, $330.0 million of the standby facilities were undrawn (2023: $330.0 million undrawn).
18 Issued capital
Ordinary shares
fully paid1
Issued capital
$million
On issue 31 March 2023
477,383,587
930.3
On-market share buy-back – net of transaction costs
–
–
On issue 31 March 2024
477,383,587
930.3
1 Fully paid ordinary shares are listed on the Australian Securities Exchange and carry one vote per share and the right to dividends.
No shares were issued during the years ended 31 March 2024 and 31 March 2023 under employee share plans as shares in respect of the
plans were acquired on market. During the years ended 31 March 2024 and 31 March 2023, eligible shareholders were able to reinvest all or
part of their dividends in fully paid ordinary shares. Shares were acquired on-market and did not have any impact on issued capital.
Net tangible assets per ordinary share for the year ended 31 March 2024 are $2.43 (2023: $2.30). Net tangible assets per share is calculated
as net assets attributable to CSR Limited shareholders of $1,271.5 million (2023: $1,167.1 million) less intangible assets of $112.8 million
(2023: $69.2 million) divided by the number of issued ordinary shares of 477.4 million (2023: 477.4 million).
During the year ended 31 March 2024, no shares were bought back on market. During the year ended 31 March 2023, 7,999,189 shares were
bought back on-market and the total cost amounted to $36.4 million net of transaction costs. The share buy-back commenced in July 2022 and
concluded in July 2023.
19 Dividends and franking credits
i)
Dividends
Dividend type
Cents per
share
Franking
Total
amount
$million
Date
paid/payable
2022 Interim ordinary
13.5
100%
65.5 10 December 2021
2022 Final ordinary
18.0
100%
87.4
1 July 2022
2023 Interim ordinary
16.5
100%
79.2
9 December 2022
2023 Final ordinary
20.0
100%
95.5
3 July 2023
2024 Interim ordinary
15.0
100%
71.6
7 December 2023
Graph 1: Dividends declared relating to each financial year
– cents per share
In the context of the proposed Scheme of Arrangement with Saint-Gobain, the CSR Board has not declared a final dividend. Refer note 30 for
further details on the proposed Scheme of Arrangement.
The amounts disclosed as recognised in 2024 are the final dividend in respect of the financial year ended 31 March 2023 and the interim
dividend in respect of the financial year ended 31 March 2024.
ii)
Franking credits
$million
2024
2023
Franking account balance on an accruals basis1
33.8
22.8
1 The above amounts are calculated from the balance of the franking account as at the end of the reporting period, adjusted for franking credits and debits that will arise
from the settlement of income tax liabilities or receivables after the end of the year.
14.0
36.5
31.5
36.5
15.0
-
10.0
20.0
30.0
40.0
2020
2021
2022
2023
2024
NOTES TO THE CONSOLIDATED FINANCIAL REPORT | CAPITAL STRUCTURE AND RISK MANAGEMENT
70
20 Reserves
$million
Hedge
reserve
Foreign
currency
translation
reserve
Employee
share
reserve
Share-
based
payment
trust
reserve
Non-
controlling
interests
reserve
Total
Balance at 1 April 2023
(89.5)
(4.6)
51.4
(36.4)
(68.8)
(147.9)
Hedge gain recognised in equity
43.4
–
–
–
–
43.4
Hedge loss transferred to the statement of financial
performance
20.6
–
–
–
–
20.6
Translation of foreign operations
–
(0.5)
–
–
–
(0.5)
Income tax related to other comprehensive income
(19.2)
–
–
–
–
(19.2)
Share-based payments
–
–
4.3
–
–
4.3
Income tax related to share-based payments
–
–
0.4
–
–
0.4
Acquisition of treasury shares
–
–
–
(6.0)
–
(6.0)
Balance at 31 March 2024
(44.7)
(5.1)
56.1
(42.4)
(68.8)
(104.9)
Balance at 1 April 2022
(236.8)
(5.4)
48.7
(31.4)
(68.8)
(293.7)
Hedge gain recognised in equity
164.8
–
–
–
–
164.8
Hedge loss transferred to the statement of financial
performance
45.7
–
–
–
–
45.7
Translation of foreign operations
–
0.8
–
–
–
0.8
Income tax related to other comprehensive income
(63.2)
–
–
–
–
(63.2)
Share-based payments
–
–
4.3
–
–
4.3
Income tax related to share-based payments
–
–
(1.6)
–
–
(1.6)
Acquisition of treasury shares
–
–
–
(5.0)
–
(5.0)
Balance at 31 March 2023
(89.5)
(4.6)
51.4
(36.4)
(68.8)
(147.9)
Nature and purpose of reserves
Hedge reserve: the hedge reserve is used to record gains or losses on a hedging instrument in a cash flow hedge that are recognised in
other comprehensive income. Amounts are reclassified to profit or loss when the associated hedged transaction affects profit or loss.
Foreign currency translation reserve: exchange differences arising on translation of foreign controlled entities are recognised in other
comprehensive income and accumulated in a separate reserve within equity.
Employee share reserve: the employee share reserve is used to recognise the share-based payments expense and associated income tax
recognised through equity.
Share-based payment trust reserve: treasury shares are shares in CSR Limited that are held by the CSR Limited Share Plan Trust (‘Trust’) for
the purpose of issuing shares under the CSR employee share plans and the CSR executive incentive plans (see the Remuneration Report for
further detail). When the Trust purchases the company’s equity instruments, the consideration paid is recorded in the share-based
payments trust reserve.
Number of shares
2024
2023
Opening balance
843,107
807,479
Acquisition of treasury shares (average price of $5.55 (2023: $4.48) per share)
1,081,696
1,116,734
Issue of shares under executive incentive plans
(1,542,626)
(1,081,106)
Closing balance
382,177
843,107
Non-controlling interests reserve: this reserve is used to record the differences which may arise as a result of transactions with non-
controlling interests that do not result in a loss of control.
NOTES TO THE CONSOLIDATED FINANCIAL REPORT | CAPITAL STRUCTURE AND RISK MANAGEMENT
71
21 Financial risk management
The CSR group’s activities expose it to a variety of financial risks,
including credit, liquidity and market risks.
This note presents information about the risk management policy
framework (‘framework’) and each of these risks.
The framework sets out the specific principles in relation to the use of
financial instruments in hedging exposures to market risk, specifically
interest rate risk, foreign exchange risk and commodity risk
(aluminium, alumina, oil, electricity and gas) and the investment of
excess liquidity. The risk management policy has been approved by
the board of directors.
Risk management policies and systems are reviewed regularly to
reflect changes in market conditions and the CSR group’s activities.
Compliance with the framework and procedures is reviewed by the
Finance Committee on a routine basis. The Finance Committee
membership consists of the managing director and other relevant
senior executives.
The CSR group uses a variety of derivative instruments to manage
market risks. Except from a transfer from Level 2 to Level 3 in the fair
value hierarchy during the year ended 31 March 2024, there have
been no changes in the type and scale of risk that the CSR group is
exposed to or the risk management policies used to manage these
risks during the years ended 31 March 2024 and 31 March 2023.
The CSR group does not use derivative or financial instruments for
speculative or trading purposes.
Recognition and measurement
Derivatives are initially recognised at fair value on the date a
derivative contract is entered into and are subsequently remeasured
to their fair value at each reporting date. The resulting gain or loss is
recognised in profit or loss immediately unless the derivative is
designated and effective as a hedging instrument, in which event the
timing of the recognition in profit or loss depends on the nature of the
hedge relationship.
i)
Credit risk
Nature of the risk
Credit risk is the risk of financial loss to the CSR group if a customer
or counterparty to a financial instrument fails to meet its contractual
obligations and arises principally from the CSR group’s receivables
from customers. The carrying amount of financial assets represents
the maximum credit exposure.
Credit risk management: receivables
The CSR group’s exposure to credit risk is influenced mainly by the
individual characteristics of each customer. However, management
also considers the factors that may influence the credit risk of its
customer base, including the default risk of the industry sector and
country in which customers operate. To manage this risk, the CSR
group has a policy for establishing credit approvals and limits under
which each new customer is analysed individually for creditworthiness
before the CSR group’s standard payment and delivery terms and
conditions are offered. Credit limits are established for each customer
and reviewed regularly.
Any sales exceeding those limits require approval from the general
manager. The CSR group continuously monitors the financial viability
of its trade customers and accounts, ageing analysis and, where
necessary, carries out a reassessment of credit limits provided.
Concentrations of credit risk with respect to receivables are limited
due to the large number of customers and markets in which the CSR
group does business, as well as the dispersion across many
geographic areas.
The CSR group measures the loss allowance at an amount that
reflects expected losses for trade and other receivables (refer to note
10).
Credit risk management: derivatives
The CSR group has an established counterparty credit risk policy.
Derivatives may be entered into with banks that are rated at least A or
A2 for durations of more than 3 months or A– or A3 from rating
agencies Standard & Poor’s and Moody’s respectively for shorter
terms, unless otherwise approved by the board.
ii)
Liquidity risk
Nature of the risk
Liquidity risk is the risk that the CSR group has insufficient funds to
meet its financial obligations when they fall due.
Liquidity risk management
Liquidity risk management requires the maintenance of sufficient
cash, bank facilities and reserve borrowing facilities in combination
with the continuous monitoring of forecast and actual cash flows, to
enable matching the maturity profiles of financial assets and
liabilities. The CSR group’s approach to managing liquidity is to
ensure, as far as possible, that it will always have sufficient liquidity to
meet its obligations when due, without incurring unacceptable losses
or risking damage to the CSR group’s reputation. Details of credit
facilities and the maturity profile are given in note 17.
The table below analyses the undiscounted cash flows for the CSR
group’s financial liabilities and derivative financial instruments,
currently in a liability position, into relevant maturity groupings based
on the remaining period at the reporting date to maturity:
Liquidity risk
$million
1 year
or less
1 to 3
years
3 to 5
years
Total
2024
Current payables
258.2
–
–
258.2
Commodity financial
instruments
21.6
63.5
26.7
111.8
Foreign currency financial
instruments
39.2
36.9
1.0
77.1
Total
319.0
100.4
27.7
447.1
2023
Current payables
293.5
–
–
293.5
Commodity financial
instruments
41.3
92.2
39.0
172.5
Foreign currency financial
instruments
28.7
46.2
4.2
79.1
Total
363.5
138.4
43.2
545.1
NOTES TO THE FINANCIAL REPORT | CAPITAL STRUCTURE AND RISK MANAGEMENTCIAL REPORT | CAPITAL STRUCTURE AND RISK MANAGEMENT
26
21 Financial risk management (continued)
iii)
Market risk
The table below provides information about commodity derivatives (to manage commodity price exposures) and significant exchange rate exposures in forward exchange rate contracts, entered
into by the CSR group:
Average price/
exchange rate 1,2
Notional value
Fair value3,4
Change in equity before tax
$million
1 year or
less
1 to 3 years
3 to 5 years
Total
Asset
Liability
Price/exchange
rate strengthens
by 10%5
Price/exchange
rate weakens by
10%5
2024
Commodity swaps – aluminium
2,489.6
452.7
760.5
233.0
1,446.2
23.3
(37.4)
(134.8)
134.8
Commodity swaps – alumina/aluminium6
–5
183.0
387.5
191.1
761.6
16.3
(22.5)
64.5
(64.5)
Commodity swaps – oil
117.7
6.9
3.7
–
10.6
0.6
–
1.1
(1.1)
Commodity swaps & futures – electricity
99.1
15.5
15.3
–
30.8
0.9
(4.3)
2.6
(2.6)
Forward exchange rate contracts (US dollars – sell)7
0.7
438.0
677.5
208.9
1,324.4
4.0
(73.4)
119.5
(146.0)
2023
Commodity swaps – aluminium
2,409.8
378.7
765.2
299.7
1,443.6
14.6
(122.6)
(143.7)
143.7
Commodity swaps – alumina/aluminium6
–5
173.3
367.2
196.3
736.8
3.8
(36.3)
65.2
(65.2)
Commodity swaps – oil
99.7
12.6
5.8
–
18.4
3.5
(0.7)
2.1
(2.1)
Commodity swaps & futures – electricity
63.4
9.1
6.7
–
15.8
15.3
(0.3)
3.0
(3.0)
Forward exchange rate contracts (US dollars – sell)7
0.7
354.9
669.1
237.0
1,261.0
4.2
(74.5)
113.6
(138.9)
1
Exchange rate applicable to forward exchange rate contracts.
2
Average deal price is in USD/metric tonne (aluminium), AUD/barrel (oil), AUD/MWh (electricity) and AUD/GJ (gas).
3
$23.3 million net of commodity contract losses (2023: $123.2 million net losses) were deferred in 2024 as the losses relate to cash flow hedges of highly probable forecast transactions. The expected timing of recognition based on the
fair values at 31 March 2024 is one year or less: $5.7 million gain (2023: $15.2 million loss); one to three years: $17.8 million loss (2023: $77.2 million loss); three to five years: $11.2 million loss (2023: $30.8 million loss). The fair
value of $23.1 million (2023: $122.7 million) includes $0.2 million of gains (2023: $0.5 million of gains) recognised in profit or loss.
4
$69.4 million of net foreign exchange contract losses (2023: $70.3 million net losses) have been deferred as the losses relate to cash flow hedges of highly probable forecast transactions. The expected timing of recognition based on
the fair values at 31 March 2024 is one year or less: $36.5 million loss (2023: $27.4 million loss); one to three years: $33.7 million loss (2023: $41.9 million loss) and three to five years $0.8 million gain (2023: $1.0 million loss).
5
Under the alumina/aluminium swaps entered into, the CSR group receives a floating alumina price and pays a floating aluminium price. The change in equity before tax due to price movements relates to the alumina price.
6
Under the alumina/aluminium swaps entered into the CSR group receives a floating alumina price and pays a floating aluminium price. Notional amount is tonnes of alumina.
7
Sale of US dollars is the dominant foreign exchange hedge. In addition, the CSR group uses FX swaps to manage foreign currency cash positions and FX forwards to purchase foreign currency expended in manufacturing inputs. The fair
value of these at 31 March 2024 is an asset value of $1.0 million (2023: $2.3 million) and liability value of $0.2 million (2023: $0.1 million).
NOTES TO THE CONSOLIDATED FINANCIAL REPORT | CAPITAL STRUCTURE AND RISK MANAGEMENT
72
NOTES TO THE CONSOLIDATED FINANCIAL REPORT | CAPITAL STRUCTURE AND RISK MANAGEMENT
73
21 Financial risk management (continued)
iii) Market risk (continued)
The table below provides details on the nature, risk management and sensitivity in relation to interest rate and foreign exchange risk.
Risk
Nature of risk
Risk management and sensitivity
Interest
rate
At the reporting date, CSR group’s interest rate
exposure is limited to the net cash balance of
$138.1 million (2023: net cash balance of $131.6
million).
The maturity profile for the net cash balance of
$138.1 million is less than 1 year. The average
interest rate on cash balances for the year was
4.60% (2023: 1.83%).
The CSR group has a policy of hedging interest rate risk to reduce the
volatility of interest expense.
At 31 March 2024 the group had no interest rate risk management
measures in place because it had no material borrowings.
If interest rates had increased/decreased by one percentage point per
annum from the year end rate with all other variables held constant,
the post-tax profit for the year would have been $0.2 million
higher/lower (2023: $0.7 million higher/lower).
This is mainly due to higher/lower interest income on net cash
balances.
Foreign
exchange
The CSR group’s major foreign currency exposure
relates to its US dollar aluminium sales revenue.
A portion of revenue is unhedged to offset its US
dollar expense requirements for raw materials and
equipment.
The group also has foreign currency exposure arising
from payments for raw materials and capital
equipment in its other businesses. This exposure is
not material compared to aluminium sales revenue
exposure.
The CSR group uses a variety of foreign exchange risk management
instruments, including spot, forward and swap currency contracts and
currency options, to hedge foreign currency denominated receipts
resulting from revenue and payments for raw materials and capital
equipment denominated in foreign currencies.
The CSR group’s policy is to hedge its net US dollar aluminium
exposure to reduce the volatility of aluminium earnings, when
acceptable Australian dollar outcomes can be achieved.
Forecast US dollar receipts are based on highly probable forecast
monthly sales receipts of aluminium which ensures that the underlying
foreign currency exchange risk is identical to the hedged risk
component (i.e. the US dollar price). Hedging is undertaken at
declining levels for up to four years.
Sensitivity of fair values to changes in exchange rate is disclosed in
the market risk table on page 72.
The table below provides details on the nature and risk management in relation to commodity price risk. Sensitivity of fair values to changes in
commodity prices is disclosed in the market risk table on page 72.
Commodity
Nature of commodity price risk
Commodity price risk management
Aluminium
The CSR group has exposure to aluminium
commodity prices which arises from sales contracts
that commit the CSR group to supply aluminium in
future years. Prices for product supplied under these
contracts are a function of the US dollar market
price at the time of delivery.
The CSR group has a policy of hedging its aluminium sales (net of any
linked exposure on inputs such as alumina), where acceptable pricing
is available, to reduce the volatility of its aluminium earnings when
exchanged into Australian dollars. Eligible hedging instruments used
for hedging commodity price risk include commodity forward contracts
and commodity options. Hedging is undertaken at declining levels for
up to four years.
Alumina
The CSR group has exposure to alumina commodity
prices through the consumption of alumina at the
US$ denominated market price.
The CSR group has a policy of hedging its alumina purchases to
reduce the volatility of its aluminium manufacturing costs. Eligible
hedging instruments are commodity forward contracts and commodity
futures contracts. The commodity forward contracts utilised are
typically of the form where the CSR group receives a floating alumina
price and pays a floating aluminium price.
Oil
The CSR group has exposure to oil commodity prices
through oil price linked gas purchasing contracts.
The A$ gas purchase price is partially a function of
the prevailing US$ oil price and A$/US$ exchange
rate.
The CSR group has a policy of hedging the oil price component of the
price of gas purchased to reduce the volatility of its energy costs.
Eligible hedging instruments are commodity forward contracts and
commodity futures contracts. These contracts are either denominated
in A$ or US$. If denominated in US$ the risk arising from movements
in the A$/US$ exchange rate is managed through foreign exchange
forward and option contracts.
Electricity
The CSR group purchases electricity from the
National Electricity Market which gives rise in
exposure to the spot electricity price.
The CSR group has a policy of hedging the electricity spot price to
reduce the volatility of its energy costs. Eligible hedging instruments
are commodity forward contracts and options and commodity futures
contracts and options.
NOTES TO THE CONSOLIDATED FINANCIAL REPORT | CAPITAL STRUCTURE AND RISK MANAGEMENT
74
21 Financial risk management (continued)
iv) Fair value measurement of financial instruments
The table below provides an analysis of hedge accounted financial instruments that are measured subsequent to initial recognition at fair value.
2024
2023
$million
Level
Current1
Non-current
Total
Current1
Non-current
Total
Financial assets at fair value
Commodity swaps – aluminium
2
7.4
15.9
23.3
8.3
6.3
14.6
Commodity swaps – alumina/aluminium
3
14.6
1.7
16.3
3.2
0.6
3.8
Commodity swaps – oil
2
0.5
0.1
0.6
3.5
–
3.5
Commodity swaps – electricity
2
–
–
–
4.1
–
4.1
Commodity futures – electricity
1
0.7
0.2
0.9
7.3
3.9
11.2
Forward exchange rate contracts
2
1.4
3.7
5.1
2.2
4.3
6.5
Futures margin2
1
7.9
2.0
9.9
0.6
0.3
0.9
Other
2
–
5.5
5.5
–
5.5
5.5
Total
32.5
29.1
61.6
29.2
20.9
50.1
Financial liabilities at fair value
Commodity swaps – aluminium
2
13.7
23.7
37.4
38.4
84.2
122.6
Commodity swaps – alumina/aluminium
3
0.1
22.4
22.5
2.5
33.8
36.3
Commodity swaps – oil
2
–
–
–
0.3
0.4
0.7
Commodity futures – electricity
1
3.3
1.0
4.3
0.2
0.1
0.3
Forward exchange rate contracts
2
38.3
35.3
73.6
28.1
46.5
74.6
Other
2
0.1
–
0.1
0.2
–
0.2
Total
55.5
82.4
137.9
69.7
165.0
234.7
1 Derivatives are presented as current assets or liabilities to the extent they are expected to be settled within 12 months after the end of the reporting period.
2 Futures margin as required for hedging under futures account agreements.
The definitions of the fair value hierarchy levels are below.
Level 1: fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable for the
asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3: fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not based on
observable market data (unobservable inputs). The significant unobservable inputs used in the fair value measurement of commodity swaps are
the forward prices of alumina in Australia. Significant increases (decreases) in the alumina forward price inputs in isolation would result in a
significantly higher (lower) fair value asset measurement.
There were no transfers from Level 2 to Level 1 in either direction in 2024 and 2023. The transfers from Level 2 to Level 3 during 2024 relate to
commodity swaps on alumina/aluminium due to a lack of observable data from the assessment of liquidity in the Commodity Exchange futures
contract.
The following table provides a reconciliation of Level 3 fair value movements in 2024:
$million
2024
Opening balance
–
Transfer from Level 2 to Level 3
(32.5)
Settlements during the year recognised in profit and loss
14.5
Changes in fair value
11.8
Closing balance
(6.2)
The fair value amounts shown above are not necessarily indicative of the amounts that the CSR group would realise upon disposition, nor do
they indicate the CSR group’s intent or ability to dispose of the financial instrument.
NOTES TO THE CONSOLIDATED FINANCIAL REPORT | CAPITAL STRUCTURE AND RISK MANAGEMENT
75
21 Financial risk management (continued)
iv) Fair value measurement of financial instruments (continued)
Recognition and measurement
The fair value of financial instruments, including financial assets and liabilities approximates their carrying amount.
The Level 1 fair values of derivative instruments are calculated using quoted market prices.
Level 2 fair values, where quoted market prices are not available, are determined by a discounted cash flow analysis using the applicable
yield curve for the duration of the instruments for non-optional derivatives, and option pricing models for optional derivatives.
Level 3 fair values arise when the observable commodity price curve has a shorter maturity than the derivative instruments held. In these
cases the last observable price is used to determine the fair value.
The CSR group designates its derivatives as cash flow hedges. The effective portion of changes in the fair value of derivatives that are
designated and qualify as cash flow hedges is deferred in equity. The gain or loss relating to the ineffective portion is recognised
immediately in profit or loss. Amounts deferred in equity are recycled in profit or loss in the year when the hedged item is recognised in profit
or loss.
v)
Capital management
The CSR group manages its capital to ensure that entities in the CSR group will be able to meet their obligations as and when due, take
advantage of business opportunities as they present, and continue as a going concern while maximising the return to shareholders in the context
of business and financial market conditions.
The capital structure of the CSR group consists of cash and cash equivalents, issued capital and reserves disclosed in notes 18 and 20, retained
profits and debt. The CSR group reviews the capital structure regularly and balances its overall capital structure through the payment of
dividends, new share issues, share consolidations and share buy-backs, as well as the issue of new debt or the repayment of existing debt.
NOTES TO THE FINANCIAL REPORT | CAPITAL STRUCTURE AND RISK MANAGEMENT
30 CSR LIMITED ANNUAL REPORT 2021
21 Financial risk management (continued)
vi) Cash flow hedging
The impact of hedging instruments designated in material hedging relationships as of 31 March 2024 on the statement of financial position of the CSR group is as follows:
1
The net hedge gain recognised in other comprehensive income totalling $67.3 million (2023: $226.4 million net gain) less non-controlling interests of $23.9 million (2023: $61.6 million) reconciles to the hedge gain transferred
to equity in note 20.
2
The net loss reclassified from other comprehensive income to profit or loss before tax totalling $33.0 million (2023: $80.3 million net loss) less non-controlling interests of $12.4 million (2023: $34.6 million) reconciles to the
hedge loss transferred to the statement of financial performance in note 20.
3
Under the alumina/aluminium swaps entered into the CSR group receives a floating alumina price and pays a floating aluminium price. Notional amount is tonnes of alumina.
$million
Notional amount
Asset
carrying
amount
Liability
carrying
amount
Changes in value
of instrument used
for calculating
hedge
ineffectiveness –
gain (loss)
Changes in value
of hedged item
used for
calculating hedge
ineffectiveness –
gain (loss)
Cash flow hedge
reserve
(continuing
hedges) –
gain (loss)
Hedge gain (loss)
recognised in
other
comprehensive
income1
(Gain) loss
reclassified from
other
comprehensive
income to profit or
loss before tax2
Line item in
statement of
comprehensive
income
Hedge
ineffectiveness
recognised in
profit or loss
2024
Aluminium commodity swaps
379,350 tonnes
23.3
(37.3)
93.9
(94.4)
(14.0)
103.8
(9.9)
Trading revenue
–
Alumina/aluminium commodity
swaps3
1,290,000 tonnes
16.3
(22.3)
26.3
(26.4)
(6.0)
11.8
14.5
Cost of sales
(0.2)
Oil commodity swaps
90,000 barrels
0.6
–
(2.2)
2.2
0.6
2.8
(5.0)
Cost of sales
–
Electricity commodity futures/swaps
311,256 MWh
0.6
(4.4)
(18.3)
18.5
(3.8)
(17.6)
(0.7)
Cost of sales
0.4
Forward currency contracts (sales)
1,324.4
4.0
(73.4)
0.8
(0.8)
(69.4)
(35.9)
36.8
Trading revenue
–
Forward currency contracts
(purchases)
53.1
1.4
(0.2)
(0.6)
0.6
1.2
2.2
(2.7)
Cost of sales
–
Environmental certificates
17,000 certificates
–
(0.1)
0.2
(0.2)
(0.1)
0.2
–
Cost of sales
–
2023
Aluminium commodity swaps
402,350 tonnes
14.6
(122.6)
495.8
(497.6)
(107.9)
410.7
85.1
Trading revenue
–
Alumina/aluminium commodity
swaps3
1,330,000 tonnes
3.8
(36.1)
(59.9)
63.4
(32.3)
(98.1)
38.3
Cost of sales
(0.1)
Oil commodity swaps
184,000 barrels
3.5
(0.7)
(8.6)
8.6
2.8
1.3
(9.9)
Cost of sales
–
Electricity commodity futures/swaps
250,296 MWh
14.8
(0.3)
(7.9)
7.0
14.5
16.5
(24.4)
Cost of sales
0.5
Forward currency contracts (sales)
1,260.5
4.2
(74.5)
(115.1)
115.1
(70.3)
(107.2)
(7.9)
Trading revenue
–
Forward currency contracts
(purchases)
47.1
2.3
(0.6)
2.9
(2.9)
1.7
3.7
(0.9)
Cost of sales
–
Environmental certificates
84,000 certificates
–
(0.3)
(0.5)
0.5
(0.3)
(0.5)
–
Cost of sales
–
NOTES TO THE CONSOLIDATED FINANCIAL REPORT | CAPITAL STRUCTURE AND RISK MANAGEMENT
76
NOTES TO THE CONSOLIDATED FINANCIAL REPORT | GROUP STRUCTURE
77
Group structure
22 Subsidiaries
Entity
% CSR
ownership
Entity
% CSR
ownership
2024
2023
2024
2023
Incorporated in Australia
Incorporated in Australia (continued)
A-Jacks Hardwall Plaster Pty Ltd
100
100 High Road Capital Pty Limited
100
100
A-Jacks Unit Trust
100
100 Midalco Pty Limited
100
100
AFS Systems Pty Limited2
100
100 Monier PGH Superannuation Pty Limited
100
100
AFS Unit Trust
100
100 PASS Pty Limited
100
100
BI (Contracting) Pty Limited
100
100 PGH Bricks & Pavers Pty Limited2
100
100
Bradford Insulation Industries Pty Limited
100
100 Rediwall Unit Trust
100
100
Bradford Insulation (S.A.) Pty Limited1
100
100 Rivarol Pty Limited2
100
100
Bricks Australia Services Pty Limited2
100
100 Seltsam Pty Limited
100
100
Buchanan Borehole Collieries Pty Ltd
100
100 Softwood Holdings Limited1
100
100
CSR Building Products Limited2
100
100 Softwood Plantations Pty Limited1
100
100
CSR Developments Pty Ltd
100
100 Softwoods Queensland Pty Limited1
100
100
CSR Erskine Park Trust
100
100 Thiess Bros Pty Limited
100
100
CSR Finance Ltd2
100
100 Thiess Holdings Pty Limited
100
100
CSR Industrial Property Trust
100
100 Woven Image Pty Limited
100
–
CSR Industrial Property Nominees No. 1 Pty Limited
100
100
CSR Industrial Property Nominees No. 2 Pty Limited
100
100 Incorporated in New Zealand
CSR International Pty Ltd
100
100 CSR Building Products (NZ) Ltd
100
100
CSR Investments Pty Limited2
100
100
CSR Investments (Asia) Pty Limited
100
100 Incorporated in other countries
CSR Investments (Indonesia) Pty Limited
100
100 CSR Guangdong Glasswool Co., Ltd (China)
79
79
CSR Martini Pty Limited2
100
100 CSR Insurance Pte Limited (Singapore)
100
100
CSR Share Plan Pty Limited
100
100 Mandarin Design International Limited (Hong
Kong)
100
–
CSR Structural Systems Pty Limited2
100
100 PT Prima Karya Plasterboard (Indonesia)
100
100
CSR Subsidiary Finance Pty Limited2
100
100 Woven Image (Europe) Limited (United Kingdom)
100
–
CSR Subsidiary Holdings Limited2
100
100 Woven Image Hong Kong Limited (Hong Kong)
100
–
CSR-ER Nominees Pty Limited
100
100 Woven Image Interior Material (Shanghai) Ltd.
Co. (China)
100
–
Gove Aluminium Finance Limited
70
70 Woven Image Singapore Pte. Ltd. (Singapore)
100
–
1 In members voluntary liquidation.
2 These subsidiaries have been granted relief from the necessity to prepare financial reports in accordance with ASIC Corporations (Wholly-owned Companies) Instrument
2016/785.
23 Deed of cross guarantee
CSR Limited, AFS Systems Pty Limited, Bricks Australia Services Pty Limited, CSR Building Products Limited, CSR Martini Pty Limited, CSR
Finance Ltd, CSR Investments Pty Limited, CSR Structural Systems Pty Limited, CSR Subsidiary Finance Pty Limited, CSR Subsidiary Holdings
Limited, PGH Bricks & Pavers Pty Limited and Rivarol Pty Limited are parties to a deed of cross guarantee (‘the Deed’) under which each
company guarantees the debts of the others. By entering into the Deed, the wholly owned entities have been relieved from the requirement to
prepare a financial report and Directors’ Report under ASIC Corporations (Wholly-owned Companies) Instrument 2016/785.
The above companies represent a ‘closed group’ for the purposes of the Class Order, and as there are no other parties to the Deed that are
controlled by CSR Limited, they also represent the ‘extended closed group’.
Set out on the following page is a consolidated statement of financial performance, a consolidated statement of comprehensive income, a
consolidated statement of financial position and a summary of movements in consolidated retained profits for the years ended 31 March 2024
and 31 March 2023 of the closed group.
NOTES TO THE CONSOLIDATED FINANCIAL REPORT | GROUP STRUCTURE
78
23 Deed of cross guarantee (continued)
i)
Consolidated statement of financial performance
$million
2024
2023
Trading revenue – sale of goods
1,800.1
1,762.0
Cost of sales
(1,065.8)
(1,072.7)
Gross margin
734.3
689.3
Other income
96.3
75.6
Warehouse and distribution costs
(213.1)
(209.5)
Selling, administration and other operating costs
(276.4)
(253.1)
Share of net profit of joint venture entities
21.7
18.2
Other expenses
(21.1)
(16.0)
Profit before net finance costs and income tax
341.7
304.5
Interest income
2.0
1.8
Finance costs
(15.9)
(13.0)
Profit before income tax
327.8
293.3
Income tax expense
(93.1)
(79.0)
Profit after tax
234.7
214.3
ii)
Consolidated statement of comprehensive income
$million
2024
2023
Profit after tax
234.7
214.3
Other comprehensive income, net of tax
Items that may be reclassified to profit or loss
Hedge (loss) gain recognised in equity
(12.5)
21.0
Hedge gain transferred to the statement of financial performance
(8.3)
(35.1)
Exchange differences arising on translation of foreign operations
(0.5)
0.8
Income tax benefit relating to these items
6.3
4.2
Items that will not be reclassified to profit or loss
Actuarial loss on superannuation defined benefit plans
(3.6)
(1.9)
Income tax benefit relating to these items
1.1
0.7
Other comprehensive expense – net of tax
(17.5)
(10.3)
Total comprehensive income
217.2
204.0
iii) Summary of movements in consolidated retained profits
$million
2024
2023
Opening retained profits
387.9
341.4
Profit for the year
234.7
214.3
Actuarial loss on superannuation defined benefit plans (net of tax)
(2.5)
(1.2)
Dividends provided for or paid
(167.1)
(166.6)
Closing retained profits
453.0
387.9
NOTES TO THE CONSOLIDATED FINANCIAL REPORT | GROUP STRUCTURE
79
23 Deed of cross guarantee (continued)
iv) Consolidated statement of financial position
$million
2024
2023
Current assets
Cash and cash equivalents
128.9
125.2
Receivables
213.2
277.0
Inventories
274.7
259.6
Property holdings
2.7
36.0
Other financial assets
10.1
17.4
Income tax receivable
3.3
16.8
Prepayments and other current assets
21.4
12.4
Total current assets
654.3
744.4
Non-current assets
Receivables
11.5
9.9
Property holdings
106.4
109.4
Investments accounted for using the equity method
24.4
36.0
Other financial assets
105.7
107.5
Property, plant and equipment
666.1
594.1
Right-of-use lease assets
101.5
109.4
Goodwill
99.6
59.9
Other intangible assets
12.3
8.5
Deferred income tax assets
126.3
131.7
Other non-current assets
4.6
8.5
Total non-current assets
1,258.4
1,174.9
Total assets
1,912.7
1,919.3
Current liabilities
Payables
122.3
178.0
Lease liabilities
33.6
32.5
Other financial liabilities
3.5
1.1
Tax payable
35.2
23.0
Provisions
126.5
116.4
Total current liabilities
321.1
351.0
Non-current liabilities
Lease liabilities
105.1
118.6
Other financial liabilities
1.2
0.2
Provisions
193.8
203.2
Other non-current liabilities
1.1
0.7
Total non-current liabilities
301.2
322.7
Total liabilities
622.3
673.7
Net assets
1,290.4
1,245.6
Equity
Issued capital
930.3
930.3
Reserves
(92.9)
(72.6)
Retained profits
453.0
387.9
Equity attributable to shareholders of the closed group
1,290.4
1,245.6
NOTES TO THE CONSOLIDATED FINANCIAL REPORT | GROUP STRUCTURE
80
24 Non-controlling interests
Summarised financial information for each subsidiary that has non-controlling interests that are material to the CSR group is set out below. The
amounts disclosed are before intercompany eliminations.
Gove Aluminium Finance
Limited
$million
2024
2023
Statement of financial position
Current assets
178.1
186.2
Non-current assets
174.4
198.1
Current liabilities
167.2
178.4
Non-current liabilities
92.2
175.7
Statement of financial performance
Revenue
731.4
780.3
Loss after tax for the year
(21.8)
(1.1)
Other comprehensive income for the year
84.7
224.6
Total comprehensive income for the year
62.9
223.5
Statement of cash flows
Cash flows from operating activities
14.9
(15.5)
Cash flows from investing activities
(16.0)
65.0
Cash flows from financing activities
(1.6)
(40.5)
Net (decrease) increase in cash held
(2.7)
9.0
Transactions with non-controlling interests
Loss attributable to non-controlling interests
(6.6)
(0.3)
Dividends paid to non-controlling interests
–
–
Recognition and measurement
Non-controlling interests in the results and equity of subsidiaries are shown separately in the statement of financial performance, statement of
comprehensive income, statement of financial position and statement of changes in equity respectively. The effects of all transactions with non-
controlling interests are recorded in equity if there is no change in control. Where there is a loss of control, any remaining interest in the entity is
remeasured to fair value and a gain or loss is recognised in the income statement. Any losses are allocated to the non-controlling interest in
subsidiaries even if the accumulated losses should exceed the non-controlling interest in the individual subsidiary’s equity.
25 Interest in joint operations
The CSR group’s interest in the Tomago aluminium smelter joint operation of 36.05% (2023: 36.05%) is held through a controlled entity in which
the CSR group has a 70% interest, resulting in an effective interest in the joint operation of 25.24% (2023: 25.24%).
Recognition and measurement
The shareholders of the joint operation are jointly and severally liable for the liabilities incurred by the operation and have rights to the assets.
This entity is therefore classified as a joint operation and the group recognises its direct right to the jointly held assets, liabilities, revenues
and expenses. Where the CSR group and the parties to the agreements only have rights to the net assets of each of the operations under the
arrangements, these entities will be classified as joint ventures of the CSR group and accounted for using the equity method. Refer to note
26.
Critical accounting estimate
Investments in joint arrangements are classified as either joint operations or joint ventures. The classification depends on the contractual
rights and obligations of each investor, rather than the legal structure of the joint arrangement, and therefore requires judgment in
determining the classification. The CSR group has both joint operations and joint ventures.
NOTES TO THE CONSOLIDATED FINANCIAL REPORT | GROUP STRUCTURE
81
26 Equity accounting information
Carrying amount ($million)
2024
2023
Entity1
Long-term
loan
Equity
accounted
investment
Net
investment
Long-term
loan
Equity
accounted
investment
Net
investment
Building products
Rondo Building Services Pty Ltd2
–
12.2
12.2
–
23.9
23.9
Gypsum Resources Trust Australia2
12.0
–
12.0
12.0
–
12.0
New Zealand Brick Distributors3
–
8.8
8.8
–
9.0
9.0
Other2
–
0.2
0.2
–
0.1
0.1
Total investment
12.0
21.2
33.2
12.0
33.0
45.0
1 The CSR group’s interest in these entities is 50% (2023: 50%).
2 Entities incorporated in Australia.
3 Entity is a limited partnership in New Zealand.
Recognition and measurement
Investments in joint venture and associate entities have been accounted for under the equity method in the CSR group financial statements.
CSR’s share of net profit/loss of joint venture entities is recorded in the statement of financial performance.
Purchases and sales of goods and services to joint venture entities are on normal terms and conditions.
i)
Net investment in joint ventures
$million
2024
2023
Opening net investment
45.0
40.1
Share of net profit before income tax
31.8
27.5
Share of income tax
(9.5)
(8.2)
Dividends and distributions received
(33.9)
(15.0)
Foreign currency translation and other
(0.2)
0.6
Closing net investment
33.2
45.0
ii)
Summarised financial information of joint venture entities
$million
2024
2023
Statement of financial position
Current assets
104.6
135.2
Non-current assets
58.7
52.6
Current liabilities
73.2
79.8
Non-current liabilities
47.7
42.6
Statement of financial performance
Revenue
314.5
350.2
Share of net profit after tax
Rondo Building Services Pty Ltd
21.5
18.4
Other
0.8
0.9
iii) Balances and transactions with joint venture entities
$million
Note
2024
2023
Current payables to CSR
2.0
1.7
Non-current loans payable to CSR
33
6.5
3.2
Current payables to joint venture entities
4.4
7.3
Purchases of goods and services
43.5
57.1
Sales of goods and services
4.5
4.8
NOTES TO THE CONSOLIDATED FINANCIAL REPORT | GROUP STRUCTURE
82
27 Parent entity disclosures
i)
Summary financial information of CSR Limited
$million
2024
2023
restated1
2023
Statement of financial position
Current assets1
755.5
733.9
733.6
Non-current assets
1,828.1
1,830.8
1,828.5
Current liabilities1, 2
(1,297.7)
(1,291.8)
(1,289.0)
Non-current liabilities2
(197.4)
(215.7)
(210.9)
Net assets
1,088.5
1,057.2
1,062.2
Equity
Issued capital
930.3
930.3
930.3
Reserves
7.5
9.0
9.0
Retained profits
150.7
117.9
122.9
Total equity
1,088.5
1,057.2
1,062.2
Statement of financial performance
Profit after tax for the year
199.8
118.1
123.1
Total comprehensive income
199.9
116.9
121.9
1 As at 31 March 2024, CSR Limited is in a net current liability position of $542.2 million (2023: $557.9 million). The net current liability position is due to intercompany
payable balances held with controlled entities. CSR Limited, as the parent entity, determines when these balances will be settled and the subsidiaries cannot call upon
these liabilities for settlement.
2 Included within current liabilities is the current portion of the product liability provision of $20.6 million (2023: $24.0 million). Included within non-current liabilities is the
non-current portion of the product liability provision of $162.7 million (2023: $169.4 million). See notes 15 and 16 for further details.
AASB 17 Insurance Contracts (AASB 17) became first applicable to the CSR group for the year commencing 1 April 2023 and must be applied
retrospectively. AASB 17 establishes the principles for the recognition, measurement, presentation and disclosure of insurance contracts. The
parent entity, CSR Limited, is impacted by the application of AASB 17 as the parent entity is a licensed self-insurer in New South Wales,
Queensland, Victoria and Western Australia for workers compensation insurance.
In accordance with Australian Accounting Standards the change in accounting policy has been adopted retrospectively and impacted the prior
year parent entity financial information disclosure as follows:
an increase in current assets at 1 April 2022 of $0.5 million.
an increase in non-current assets at 1 April 2022 of $2.4 million.
an increase in current liabilities at 1 April 2022 of $3.4 million.
an increase in non-current liabilities at 1 April 2022 of $4.6 million.
a decrease in retained earnings at 1 April 2022 of $5.1 million.
a decrease in profit after tax for the year ended 31 March 2023 of $5.0 million.
ii)
CSR Limited transactions with controlled entities
During the financial years ended 31 March 2024 and 2023, CSR Limited advanced and repaid loans, sold and purchased goods and services,
and provided accounting and administrative assistance to its controlled entities. All loans advanced to and payable to these related parties are
unsecured and subordinate to other liabilities. Loans between members of the Australian tax consolidation group are not on normal terms and
conditions.
iii) Contingent liabilities
$million
Note
2024
2023
Contingent liabilities, capable of estimation, arise in respect of the following categories:
Performance guarantees provided to third parties1
97.8
93.8
Bank guarantees to Harwood Superannuation Fund2
28
4.3
3.3
Total contingent liabilities
102.1
97.1
1 Financial guarantees disclosed above relate to bank guarantees provided to third parties to guarantee CSR Limited’s performance of its liabilities of $55.0 million (2023:
$51.0 million) and guarantees provided to third parties outside of the CSR group of $42.8 million (2023: $42.8 million). In addition, CSR Limited has undertaken to provide
financial support, as and when required, to certain wholly owned controlled entities so as to enable those entities to pay their debts as and when such debts become due
and payable.
2 CSR Limited has an obligation to contribute amounts so as to ensure that the assets attributable to certain superannuation defined benefit plans are not less than 107% of
the amount required to meet the actuarial liabilities.
iv) Capital commitments
CSR Limited has committed $nil to the acquisition of any property, plant and equipment as at 31 March 2024 (2023: $nil).
NOTES TO THE CONSOLIDATED FINANCIAL REPORT | OTHER
83
Other
28 Employee benefits
i)
Superannuation commitments
During the year, the CSR group participated in a number of superannuation funds (‘funds’) in Australia and New Zealand. The funds provide
benefits either on a cash accumulation or defined benefit basis, for employees (and spouses) on retirement, resignation or disablement, or to
their dependants on death. Employer contributions are legally enforceable, with the right to terminate, reduce or suspend those contributions
upon giving written notice to the trustees. CSR Limited and its Australian controlled entities are required to provide a minimum level of
superannuation support for employees under the Australian superannuation guarantee legislation.
Australian superannuation funds
In Australia, the CSR group participates in the Harwood Superannuation Fund and the Pilkington (Australia) Superannuation Scheme for those
employees and pensioners who are currently members of these funds and any new employees who become members.
Retirement funds
The contributions to the funds for the year ended 31 March 2024 for the CSR group were $40.0 million (2023: $37.0 million).
Accumulation funds
The benefits provided by accumulation funds are based on the contributions and income thereon held by the funds on behalf of the members.
Contributions are made as agreed between the member and the company, and for the financial year ended 31 March 2024 contributions
totalled $37.1 million (2023: $33.9 million). These contributions are expensed in the year they are incurred. CSR group’s legal or constructive
obligation is limited to these contributions.
Defined benefit funds
The benefits provided by defined benefit divisions of funds (DBDs) are based on length of service or membership and salary of the member at or
near retirement. Member contributions, based on a percentage of salary, are specified by the rules of the fund. Employer contributions generally
vary based on actuarial advice and may be reduced or cease when a fund is in actuarial surplus. DBDs are closed to new members.
Changes to defined benefit obligations
The Harwood Superannuation Fund Trust Deed was amended with effect from midnight on 31 December 2011 to restructure the various plans
within the fund, including splitting the CSR Plan Division One (defined benefit) into three separate plans. The amendment reflected the
agreement between CSR Limited and Wilmar International Limited that Sucrogen Limited would assume full responsibility to fund its obligations
for defined benefit members employed by the Sucrogen business as well as its share of the funding obligation in respect of the Harwood
Pensioner DBD Plan. As such, amounts recorded for the CSR group exclude funding obligations and share of assets and liabilities which have
been assumed by Wilmar Sugar Australia Limited.
The Pilkington (Australia) Superannuation Scheme Trust Deed was amended with effect from midnight on 31 January 2019 to restructure the
plan within the fund, including splitting the Pilkington (Australia) Superannuation Scheme defined benefit plan into two separate plans. The
amendment reflected the agreement between CSR Limited and Viridian Glass Limited that Viridian Glass Limited would assume full
responsibility to fund its obligations for defined benefit members employed by the Viridian Glass Limited business. The CSR group retained the
funding obligations in respect of the Viridian pensioner defined benefit plan. As such, amounts recorded for the CSR group exclude funding
obligations and share of assets and liabilities which have been assumed by Viridian Glass Limited.
Asset backing
The last actuarial assessment for the Harwood Superannuation Fund was completed as at 30 June 2023. The funding requirements were
reviewed as at 30 June 2023. A combination of the attained age normal and projected unit credit funding methods were used to determine the
contribution rates for the Harwood Superannuation Fund. The projected unit credit funding method was used for the Pilkington (Australia)
Superannuation Scheme.
The Trust Deed sets out a minimum funding level of 103% and a funding guarantee of 107% of actuarial liabilities for the DBD CSR and DBD
Harwood Pensioner plans. At the time of the last actuarial review, DBD CSR had a funding position in excess of 107% and DBD Harwood
Pensioner had a funding position of 100%. Therefore, as at 31 March 2024, CSR Limited was required to provide bank guarantees of $4.3
million to the trustee of the fund to satisfy the balance of its commitments (2023: $3.3 million). The bank guarantees have been disclosed in
note 27.
Table 1: Defined benefit plans (DBDs) sponsored by the CSR group
$million
CSR contributions
to the funds
Present value
of fund assets
Present value
of fund liability
Net defined benefit
asset (liability)
Contributions
paid
Harwood Superannuation Fund
DBD CSR and DBD
Harwood Pensioner1
$nil from 1 April 2023
55.5
(54.4)
1.1
0.1
DBD Monier PGH
$nil from 1 April 2023
27.9
(24.9)
3.0
0.2
Pilkington (Australia)
Superannuation Scheme DBD $nil from 1 April 2023 15.3 (16.3) (1.0) –
1 Actuarial liabilities are determined to be past service liabilities based on membership accrued up to 31 March 2024.
NOTES TO THE CONSOLIDATED FINANCIAL REPORT | OTHER
84
28 Employee benefits (continued)
i)
Superannuation commitments (continued)
Key assumptions used by actuaries
Key assumptions and parameters used by the actuaries (expressed as weighted averages) are outlined below:
%
2024
2023
Discount rate (after tax)
5.3
5.3
Expected salary increase
2.9
2.8
Asset class allocation – Equity instruments
27.7
27.8
– Debt instruments
53.3
53.3
– Property
7.4
7.2
– Other
11.6
11.7
Impact of plans on the statement of financial performance and comprehensive income
$million
2024
2023
Amounts recognised in the statement of financial performance1
Current service cost
0.5
0.6
Finance cost
4.8
3.5
Interest income
(5.1)
(3.8)
Total expense included in the statement of financial performance
0.2
0.3
Actuarial loss incurred during the financial year and recognised in the statement of comprehensive income
(3.6)
(1.9)
Cumulative actuarial losses recognised in the statement of comprehensive income
(56.0)
(52.4)
1 Disclosed in selling, administration and other operating costs.
Impact of plans on the statement of financial position
$million
2024
2023
Net asset of superannuation defined benefit plans
Fair value of assets
98.7
102.2
Present value of liabilities
(95.6)
(95.7)
Net asset
3.1
6.5
Included in the statement of financial position
Other non-current assets (note 33)
4.1
7.2
Other non-current liabilities
(1.0)
(0.7)
Net asset
3.1
6.5
Movements in the fair value of the defined benefit plan assets
Assets at the beginning of the financial year
102.2
111.7
Interest income
5.1
3.8
Return on assets (in excess of interest income)
0.3
(6.0)
Contributions from the employer
0.3
0.4
Benefits paid
(9.2)
(7.7)
Assets at the end of the financial year
98.7
102.2
Movements in the present value of the defined benefit plan liabilities
Liabilities at the beginning of the financial year
95.7
103.4
Current service cost
0.5
0.6
Finance cost
4.8
3.5
Actuarial loss (gain)
3.9
(4.1)
Benefits paid
(9.3)
(7.7)
Liabilities at the end of the financial year
95.6
95.7
NOTES TO THE CONSOLIDATED FINANCIAL REPORT | OTHER
85
28 Employee benefits (continued)
i)
Superannuation commitments (continued)
Net asset (liability) of superannuation defined benefit plans
Recognition and measurement
For superannuation defined benefit plans, the cost of providing benefits is determined using the projected unit credit method, with actuarial
valuations being carried out at each reporting date. Actuarial gains and losses are recognised in full, directly in retained profits, in the year in
which they occur, and are presented in the statement of comprehensive income. Past service cost is recognised immediately to the extent
that the benefits are already vested, and otherwise is amortised on a straight-line basis over the average period until the benefits become
vested.
The defined benefit obligation recognised in the statement of financial position represents the present value of the defined benefit
obligation, adjusted for unrecognised past service cost, net of the fair value of the plan assets. Any asset resulting from this calculation is
limited to past service costs, plus the present value of available refunds and reductions in future contributions to the plan.
ii)
Share-based payments
Long-term incentive (LTI) plan – Performance rights plan (PRP)
Under the LTI plan effective during the year ended 31 March 2024, eligible executives were invited to receive performance rights in the
company. Shares acquired on vesting of performance rights are fully paid ordinary shares and the amount payable to acquire these shares is
$nil.
A summary of the performance rights granted under the plan is set out below:
Number of performance rights
2024
2023
Opening balance
3,120,587
3,406,248
Granted during the year
1,404,543
949,888
Exercised during the year
(1,201,584)
(724,335)
Lapsed during the year
(400,524)
(511,214)
Closing balance
2,923,022
3,120,587
There were no exercisable shares (or performance rights) at 31 March 2024 (2023: nil).
Performance rights outstanding at the end of the year have the
following expiry dates:
Grant date
Expiry date
Performance rights
2024
2023
21 July 2020
1 April 2023
–
1,335,093
21 July 2021
1 April 2024
721,303
835,606
29 July 2022
1 April 2025
797,176
949,888
27 July 2023
1 April 2026
1,404,543
–
Total
2,923,022
3,120,587
A summary of key valuation assumptions for rights granted in the year
ended 31 March 2024 is set out below:
Grant date
27 July 2023
27 July 2023
Vesting condition
Relative TSR with a
positive absolute TSR
requirement
EPS growth
Valuation method
Monte-Carlo simulation
Binominal tree
Start of performance
period
1 April 2023
1 April 2023
Testing date
31 March 2026 31 March 2026
Expected life
2.7 years
2.7 years
Grant date share price
$5.66
$5.66
Volatility
30%
30%
Dividend yield
5.6%
5.6%
Risk-free rate
3.81%
3.81%
Fair value
$3.31
$4.87
Further details on the LTI plan and the terms of the grants during the year are detailed in the Remuneration Report.
129.9
115.1
103.4
95.7
95.6
121.4
123.5
111.7
102.2
98.7
(8.5)
8.4
8.3
6.5
3.1
0
20
40
60
80
100
120
140
2020
2021
2022
2023
2024
Present value of fund liabilities ($m)
Fair value of fund assets ($m)
Net asset (liability) ($m)
NOTES TO THE CONSOLIDATED FINANCIAL REPORT | OTHER
86
28 Employee benefits (continued)
ii)
Share-based payments (continued)
Deferred shares
Under the STI deferral plan, 40% of any STI earned by senior executives is delivered in CSR shares. These shares must be held in trust subject to
trading restrictions and 50% are deferred for one year and 50% are deferred for two years.
Deferred shares are administered by the CSR Share Plan Trust. The shares are acquired on market at the grant date and are held as treasury
shares until such time as they vest. Forfeited shares are reallocated in subsequent grants. The number of shares to be granted is determined
based on the weighted average price at which the company’s shares are traded on the Australian Stock Exchange.
2024
2023
Number of rights to deferred shares granted
341,042
350,446
Fair value of rights at grant date
$5.37
$6.17
Other plans
Employee Share Grant: to encourage employee share ownership, from time to time, the CSR board may elect to grant eligible employees CSR
shares. The maximum value of the Employee Share Grant is $1,000 per eligible participant. The shares can only be sold three years after the
date of grant, unless the participant’s employment ceases before then.
Employee Share Acquisition Plan (ESAP): directors and employees can forgo up to $5,000 of their cash remuneration annually to acquire shares in
the company. The shares are purchased on market by the CSR Share Plan trustee, who acts on instructions given in accordance with the plan rules
and the company’s Share Trading Policy.
Number of shares issued under the plans
2024
2023
Employee share grant1
568,052
670,038
ESAP
124,521
135,053
1
Number of shares issued includes the number of purchased shares issued to employees under the plan. Each participant was issued with shares to a maximum value of
$1,000 based on the weighted average market price of $5.50 (2023: $4.44).
For further details on the ESAP, refer to the Remuneration Report.
Expenses arising from share-based payment transactions
$
2024
2023
Long-term incentive plan (PRP)
3,232,456
2,549,474
Deferred shares
1,035,270
1,764,474
Other plans
2,524,569
2,341,390
Total expense
6,792,295
6,655,338
Recognition and measurement
Share-based payments can either be equity settled or cash settled.
Equity settled: the fair value determined at the grant date of the equity settled share-based payments is expensed on a straight-line basis
over the vesting period (with a corresponding increase to the employee share reserve), based on the CSR group’s estimate of shares that
will eventually vest.
Cash settled: the ultimate expense recognised in relation to cash settled transactions will be equal to the actual cash paid to the
employees, which will be the fair value at settlement date. The expected cash payment is estimated at each reporting date and a liability
recognised to the extent that the vesting period has expired and in proportion to the amount of the awards that are expected to ultimately
vest.
NOTES TO THE CONSOLIDATED FINANCIAL REPORT | OTHER
87
29 Related party disclosures
i)
Transactions with directors or other key management personnel
Transactions entered into during the financial year with directors of CSR Limited and other key management personnel of the CSR group and
with their closely related entities which are within normal customer or employee relationships on terms and conditions no more favourable than
those available to other customers, employees or shareholders included:
contracts of employment (see section ii) and reimbursement of expenses;
acquisition of shares in CSR Limited under the employee share plans and the dividend reinvestment plan;
dividends from shares in CSR Limited; and
sale and purchase of goods and services.
No new loans, loan repayments or loan balances occurred between the CSR group and directors and other key management personnel of the
CSR group during the financial year ended 31 March 2024 (2023: nil).
ii)
Key management personnel remuneration
Total remuneration paid or payable to directors and key management personnel is set out below:
$
2024
2023
Short-term employee benefits
5,087,228
4,649,337
Share-based payments expense
799,647
964,748
Total
5,886,875
5,614,085
Details of remuneration and the CSR Limited equity holdings of directors and other key management personnel are shown in the Remuneration
Report.
iii) Other related parties
Other than transactions with joint venture entities disclosed in note 26, no material amounts were receivable from, or payable to, other related
parties as at 31 March 2024 (2023: nil), and no material transactions with other related parties occurred during those years.
Details of payments to superannuation defined benefit plans are shown in note 28.
30 Proposed acquisition by Saint-Gobain
On 26 February 2024, CSR announced that it had entered into a Scheme Implementation Deed (SID) with Compagnie de Saint-Gobain (Saint-
Gobain) for the acquisition of all of the issued shares in CSR by way of Scheme of Arrangement at an offer price of $9.00 cash per share
(‘Scheme’).
On 26 April 2024, CSR announced that the Supreme Court of New South Wales had made orders that CSR convene a meeting of its
shareholders to vote on the Scheme (‘Scheme Meeting’) and that the Scheme Booklet had been registered with the Australian Securities and
Investment Commission (‘ASIC’). A copy of the Scheme Booklet was also made available through an ASX announcement and on CSR’s website.
31 Subsequent events
Except for the item disclosed in note 30, there has not arisen in the interval between 31 March 2024 and the date of this report, any other
matter or circumstance that has significantly affected or may significantly affect the operations of the CSR group, the results of those operations
or the state of affairs of the CSR group in subsequent financial years.
32 Commitments and contingencies
i)
Commitments
$million
2024
2023
Contracted capital expenditure comprises:
Payable within one year
50.9
44.7
Payable within one to five years
8.5
4.2
Total contracted capital expenditure
59.4
48.9
ii)
Contingencies
Contingencies for CSR Limited are outlined in the parent entity note 27. There are no other contingencies in relation to controlled entities within
the CSR group.
NOTES TO THE CONSOLIDATED FINANCIAL REPORT | OTHER
88
33 Other non-current assets
$million
Note
2024
2023
Loans to joint venture entities1
26
6.5
3.2
Other receivables
6.8
9.1
Total non-current receivables
13.3
12.3
Other assets
0.5
1.3
Superannuation defined benefit plans – fair value of surplus
28
4.1
7.2
Total other non-current assets
4.6
8.5
1 The CSR group has provided facilities to joint venture entities on arm’s length terms.
34 Auditor’s remuneration
$
2024
2023
Deloitte Touche Tohmatsu and related network firms
Audit or review of financial reports
716,000
686,000
Other assurance and agreed-upon procedures under other legislation or contractual arrangements
49,000
48,591
Total auditor’s remuneration
765,000
734,591
35 Other accounting policies
Cash and cash equivalents: net cash is defined as cash at bank and on hand and cash equivalents, net of bank overdrafts. Cash equivalents
include highly liquid investments which are readily convertible to cash, and loans which are not subject to a term facility. Cash and cash
equivalents held at 31 March 2024 included $138.1 million of cash at bank and on hand (2023: $131.6 million) and $nil short-term deposits
(2023: $nil).
Tax consolidation: Australian tax legislation allows groups, comprising a parent entity and its Australian resident wholly owned entities, to elect to
consolidate and be treated as a single entity for income tax purposes.
The CSR group has elected for those entities within the CSR group that are wholly owned Australian resident entities to be taxed as a single entity
from 1 April 2004.
Prior to the adoption of the tax consolidation system, CSR Limited, as the head entity in the tax consolidated group, agreed to compensate or be
compensated by its wholly owned controlled entities for the balance of their current tax liability/(asset) and any tax loss related deferred tax asset
assumed by CSR Limited. Due to the existence of a tax funding arrangement between the entities in the tax consolidated group, amounts are
recognised as payable to or receivable by CSR Limited and each member of the group in relation to the tax contribution amounts paid or payable
between CSR Limited and the other members of the tax consolidated group in accordance with the arrangement.
Foreign currency: all foreign currency transactions during the financial year have been brought to account using the exchange rate in effect at
the date of the transaction. Foreign currency monetary items at reporting date are translated at the exchange rate existing at that date.
Exchange differences are brought to account in profit or loss in the year in which they arise except if designated as cash flow hedges.
On consolidation, the results and financial position of foreign operations are translated as follows:
assets and liabilities are translated using exchange rates prevailing at the end of the reporting period;
income and expense items are translated at the average exchange rates for the period; and
exchange differences arising, if any, are recognised in the foreign currency translation reserve and recognised in profit or loss on disposal of
the operation.
Goods and services tax: revenues, expenses and assets are recognised net of the amount of goods and services tax (GST), except where the
amount of GST incurred is not recoverable from the taxation authority. In these circumstances, the GST is recognised as part of the cost of
acquisition of the asset or as part of the expense.
Receivables and payables are stated with the amount of GST included. The net amount of GST recoverable from or payable to the taxation
authority is included as a current asset or liability.
Cash flows are included in the statement of cash flows on a gross basis. The GST components of cash flows arising from investing and financing
activities which are recoverable from or payable to the taxation authority are classified as operating cash flows.
DIRECTORS’ DECLARATION
89
CSR LIMITED
ABN 90 000 001 276
Directors’ declaration
The directors declare that:
1
in the directors’ opinion, there are reasonable grounds to believe that CSR Limited will be able to pay its debts as and when they become
due and payable;
2
in the directors’ opinion, the attached financial statements are in compliance with International Financial Reporting Standards, as disclosed
in note 1;
3
in the directors’ opinion, the attached financial statements and notes thereto are in accordance with the Corporations Act 2001, including
compliance with accounting standards and giving a true and fair view of the financial position and performance of the CSR group;
4
the directors have been given the declarations required by section 295A of the Corporations Act 2001 from the managing director and chief
financial officer for the financial year ended 31 March 2024; and
5
there are reasonable grounds to believe that CSR Limited and the group entities identified in note 23 will be able to meet any obligations or
liabilities to which they are or may become subject to by virtue of the deed of cross guarantee between CSR Limited and those group
entities pursuant to ASIC Corporations (Wholly-owned Companies) Instrument 2016/785.
Signed in accordance with a resolution of the directors made pursuant to section 295(5) of the Corporations Act 2001.
John Gillam
Chair of the board
Julie Coates
Managing Director and CEO
15 May 2024
15 May 2024
INDEPENDENT AUDITOR’S REPORT
90
Independent Auditor’s Report to the Members of CSR Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of CSR Limited (“CSR” or the Company) and its subsidiaries (the “Group”), which comprises the consolidated
statement of financial position as at 31 March 2024, the consolidated statement of financial performance, the consolidated statement of
comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended,
and notes to the financial statements, including material accounting policy information and other explanatory information, and the directors’
declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including:
giving a true and fair view of the Group’s financial position as at 31 March 2024 and of its financial performance for the year then
ended; and
complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the
Auditor’s Responsibilities for the Audit of the Financial Report section of our report. We are independent of the Group in accordance with the
auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical
Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the “Code”) that are relevant to
our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been given to the directors of the CSR, would be
in the same terms if given to the directors as at the time of this auditor’s report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial report for the
current period. These matters were addressed in the context of our audit of the financial report as a whole, and in forming our opinion thereon,
and we do not provide a separate opinion on these matters.
Key audit matter
How the scope of our audit responded to the key audit matter
Product Liability Provision
(Refer to Note 16 Product Liability)
CSR has recognised a product liability provision of
$183.3 million as at 31 March 2024. The provision is
in respect of all known and reasonably foreseeable
future asbestos claims. The provision is determined
after considering the advice provided by
management’s appointed external expert.
The determination of the provision is subject to
significant judgement as to expected settlement
amounts and likelihood of future claims.
In conjunction with actuarial specialists, our procedures included, but were not
limited to:
evaluating management’s process, including testing design and
implementation of controls in respect of the determination of the product
liability provision;
assessing the objectivity, independence and competence of management
appointed external expert;
assessing the appropriateness of the assumptions and methodology used in
the report prepared by the management appointed external expert; including:
- evaluating the reasonableness of the methodology used to calculate the
provision;
- benchmarking of the discount rates; and
- comparison of historical claims experience to assumptions used to
estimate future claims;
testing on a sample basis, the accurate inclusion and exclusion of asbestos
claims in management’s liability database, which is provided to management
appointed external expert and forms the basis for the report;
enquiring of management appointed external expert and the company’s
internal and external legal counsels in respect of their conclusions;
Liability limited by a scheme approved under Professional Standards Legislation.
Member of Deloitte Asia Pacific Limited and the Deloitte organisation.
Deloitte Touche Tohmatsu
A.B.N. 74 490 121 060
Quay Quarter Tower
50 Bridge Street
Sydney, NSW, 2000
Australia
Tel: +61 (0) 2 9322 7000
Fax: +61 (0) 2 9322 7001
www.deloitte.com.au
INDEPENDENT AUDITOR’S REPORT
91
Key audit matter
How the scope of our audit responded to the key audit matter
Product Liability Provision (continued)
assessing the appropriateness of management’s conclusions in relation to
the US liability;
assessing the basis for the determination of the prudential margin through
enquiries of management and their consideration of the external expert’s
report; and
assessing the appropriateness of the relevant disclosures in the Notes to the
financial statements.
Other Information
The directors are responsible for the other information. The other information comprises the information included in the Group’s annual report
for the year ended 31 March 2024, but does not include the financial report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider whether the other
information is materially inconsistent with the financial report or our knowledge obtained in the audit, or otherwise appears to be materially
misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required
to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors for the Financial Report
The directors of CSR are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian
Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the
preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue as a going concern, disclosing, as
applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the
Group or to cease operations, or has no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due
to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a
guarantee that an audit conducted in accordance with the Australian Auditing Standards will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis of this financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgement and maintain professional scepticism
throughout the audit. We also:
Identify and assess the risks of material misstatement of the financial report, whether due to fraud or error, design and perform audit
procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The
risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made
by the directors.
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit evidence
obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to
continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report
to the related disclosures in the financial report or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based
on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease
to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial report, including the disclosures, and whether the financial
report represents the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to
express an opinion on the financial report. We are responsible for the direction, supervision and performance of the Group’s audit. We
remain solely responsible for our audit opinion.
INDEPENDENT AUDITOR’S REPORT
92
Auditor’s Responsibilities for the Audit of the Financial Report (continued)
We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings,
including any significant deficiencies in internal control that we identify during our audit.
We also provide the directors with a statement that we have complied with relevant ethical requirements regarding independence, and to
communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable,
actions taken to eliminate threats or safeguards applied.
From the matters communicated with the directors, we determine those matters that were of most significance in the audit of the financial report
of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes
public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our
report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such
communication.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report which forms part of the Directors’ Report and is included in pages 27 to 46 of the Directors’ Report for
the year ended 31 March 2024.
In our opinion, the Remuneration Report of CSR Limited for the year ended 31 March 2024, complies with section 300A of the Corporations Act
2001.
Responsibilities
The directors of CSR are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the
Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with
Australian Auditing Standards.
DELOITTE TOUCHE TOHMATSU
Sandeep Chadha
Partner
Chartered Accountants
Sydney, 15 May 2024
SHAREHOLDER INFORMATION
93
Shareholder information
20 LARGEST HOLDERS OF ORDINARY SHARES
As at 19 April 2024
Rank
Name
Units
% of units
1.
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
104,084,672
21.80
2.
J P MORGAN NOMINEESAUSTRALIA PTY LIMITED
100,898,201
21.14
3.
CITICORP NOMINEES PTY LIMITED
83,240,499
17.44
4.
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED - A/C 2
12,918,567
2.71
5.
BNP PARIBAS NOMS PTY LTD
11,901,656
2.49
6.
NATIONAL NOMINEES LIMITED
10,095,350
2.11
7.
BNP PARIBAS NOMINEES PTY LTD
3,849,306
0.81
8.
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
2,777,286
0.58
9.
NEWECONOMY COM AU NOMINEES PTY LIMITED <900 ACCOUNT>
2,101,829
0.44
10.
PRUDENTIAL NOMINEES PTY LTD
2,100,000
0.44
11.
CITICORP NOMINEES PTY LIMITED
2,058,369
0.43
12.
ECAPITAL NOMINEES PTY LIMITED
1,693,155
0.35
13.
WARBONT NOMINEES PTY LTD
1,586,220
0.33
14.
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
1,428,127
0.30
15.
MR ALLAN ERNEST ORMES
1,066,667
0.22
16.
IOOF INVESTMENT SERVICES LIMITED
605,028
0.13
17.
BNP PARIBAS NOMINEES PTY LTD
597,948
0.13
18.
V M NOMINEES PTY LTD
550,000
0.12
19.
SUD PACONDA PTY LTD
540,000
0.11
20.
NETWEALTH INVESTMENTS LIMITED
521,856
0.11
Top 20 holders of issued capital
344,614,736
72.19
Remaining holders balance
132,768,851
27.81
SUBSTANTIAL SHAREHOLDERS OF CSR LIMITED
Name
Units
% of units
Mitsubishi UFJ Financial Group, Inc (as indirect 100% owner of First Sentier Investors Holdings Pty
Limited and through its relevant interest of more than 20% of voting power in Morgan Stanley), in
the Form 604 as released to the ASX on 17 April 2024
42,469,400
8.90
State Street Corporation and subsidiaries named in Annexures to the Form 604, as released to the
ASX on 18 April 2024
39,625,155
8.30
First Sentier Investors Holdings Pty Limited and its related bodies corporate or associates listed in
Annexure A to the Form 604, as released to the ASX on 4 April 2024
37,488,166
7.85
BlackRock Group and its subsidiaries named in Annexures to the Form 603, as released to the ASX
on 19 April 2024
31,943,593
6.69
Vanguard Group, Inc. and its controlled entities including those listed in Annexure A to the Form
603, as released to the ASX on 10 January 2022
24,280,701
5.09
SHAREHOLDER INFORMATION
94
SHAREHOLDINGS BY GEOGRAPHIC LOCATION
Location
Units
Units %
Holders
Holders %
Australia
474,509,966
99.40
43,955
96.80
New Zealand
1,710,348
0.36
952
2.10
Hong Kong
401,982
0.08
27
0.06
United Kingdom
287,944
0.06
208
0.46
United States of America
112,168
0.02
83
0.18
Other
361,179
0.08
183
0.40
Total
477,383,587
100%
45,408
100.00
DISTRIBUTION OF SHAREHOLDINGS
Range
Holders
Units
% of issued capital
1 – 1,000
22,406
10,623,383
2.23
1,001 – 5,000
17,395
40,631,742
8.51
5,001 – 10,000
3,369
24,385,566
5.11
10,001 – 100,000
2,170
46,008,554
9.64
100,001 and over
68
355,734,342
74.51
Total
45,408
477,383,587
100.00
UNMARKETABLE PARCELS
Minimum parcel size
Holders
Units
Minimum $500.00 parcel at $8.8600 per unit
57
1,156
19,220
RECENT CSR DIVIDENDS
Date paid
Type of dividend
Dividend per share
Franking
Franked amount
per share at 30%
December 2017
Interim
13.5 cents
50%
6.75 cents
July 2018
Final
13.5 cents
75%
10.125 cents
December 2018
Interim
13.0 cents
100%
13.0 cents
July 2019
Final
13.0 cents
50%
6.5 cents
December 2019
Interim ordinary
10.0 cents
50%
5.0 cents
December 2019
Interim special
4.0 cents
50%
2.0 cents
December 2020
Interim ordinary
8.5 cents
100%
8.5 cents
December 2020
Interim special
4.0 cents
100%
4.0 cents
July 2021
Final ordinary
14.5 cents
100%
14.5 cents
July 2021
Final special
9.5 cents
100%
9.5 cents
December 2021
Interim ordinary
13.5 cents
100%
13.5 cents
July 2022
Final ordinary
18.0 cents
100%
18.0 cents
December 2022
Interim ordinary
16.5 cents
100%
16.5 cents
July 2023
Final ordinary
20.0 cents
100%
20.0 cents
December 2023
Interim ordinary
15.0 cents
100%
15.0 cents
SHAREHOLDER INFORMATION
95
Registered Office
CSR Limited
ABN 90 000 001 276
Triniti 3, Level 5, 39 Delhi Road
North Ryde NSW 2113 Australia
Mailing Address
Locked Bag 1345
North Ryde BC NSW 1670 Australia
Telephone
(02) 9235 8000
International
+61 2 9235 8000
www.csr.com.au
Share Registry
All inquiries and correspondence regarding shareholdings
should be directed to CSR’s share registry:
Computershare Investor Services Pty Limited
GPO Box 2975
Melbourne VIC 3001 Australia
Telephone
1800 676 061
International
+61 3 9415 4033
Facsimile
+61 3 9473 2500
www.investorcentre.com/contact
Investor Relations
For general investor queries please contact us at: Email investorrelations@csr.com.au
Further information
The CSR Annual Report, Corporate Governance Statement and Sustainability Report are available to view online or downloaded on our
website at www.csr.com.au
For further information about CSR and its operations, or to sign up for ASX announcements please visit our website at www.csr.com.au