The following information is provided inresponse to ASX’s requirement for listed companies to provide answers tospecific questions about progress in addressing the Year2000 problem by 31March 1999.

Introduction

CSR is one ofthe world’s largest building and construction materials companies, withoperations in Australia, the United States of America, Asia and New Zealand. InAustralia we are a major sugar producer and we have substantial aluminiuminterests.

Each of CSR’sbusinesses continues to make good progress with changes needed for computersand microprocessors to cope with the Year 2000 date problem. We are workingtowards a July 1999 completion date for operational compliance in all relevantareas. Since the report to ASX in June 1998, CSR’s cost estimates to achieveYear 2000 compliance have firmed from around $20m to $23m as a result offurther detailed analysis and cost refinement in January 1999.

Question 1

Has yourcompany’s assessment of its overall potential exposure to the Year 2000 problemchanged materially from what the market has previously been told? If it has,your response should describe the change.

No.

Question 2

Has yourcompany initiated any material action to address the Year 2000 problem beyondactions previously disclosed to the market, or does it propose to initiate anysuch action? If it has, your response should describe the action.

CSR continuesto progress in all businesses with a well defined process for addressing Year2000 issues. Two areas have received increased focus since the previous reportto ASX.

Firstly, aspart of an ongoing series of compliance audits, an external legal review wascommenced in February 1999 with the aims of identifying key areas of legal riskto CSR and to suggest any changes to practices/approaches to assist in reducinglegal risk.

Secondly, eachCSR business is implementing contingency planning to address businesscontinuity in the event of an unforseen Year 2000 failure occurring. Finalplans for key risks will be in place by September 1999 and will include, forexample, contingency arrangements in the event of non supply of a key rawmaterial for one of our manufacturing processes or failure of a key utilitysuch as electricity or gas supply.

Question 3

Pleaseprovide details of your company’s progress in relation to its activities toaddress the Year 2000 problem, including the date by which your company expectsto have completed those activities.

Overview ofYear 2000 Program

Each CSRbusiness has a Year 2000 program that focuses on five key areas.

1. Transaction systems -commercial systems that support the business.

2. Process control -computer controlled equipment within our manufacturing facilities.

3. Microprocessors -equipment and systems with embedded microprocessors including personalcomputers, building entry systems, fire alarms, heating control systems, liftsetc.

4. Supply chain -suppliers of raw materials, transport and microprocessor based equipment.

5. Customers - Year 2000problems experienced by customers may impact CSR, eg an inability to place anorder or to make a payment on time.

CSR has made sound progress in addressing eachof these areas. To evaluate progress we are using the Gartner Group CompareScale, an internationally recognised Year 2000 measurement standard. TheCompare Scale provides CSR with a consistent framework for assessing levels ofactivity and readiness for the Year 2000 and has been applied to key complianceprojects and activities within each business.

Year 2000 Risk Assessment Guidelines

CSR has assessed Year 2000 risk for the above5 key areas using the following guidelines which are based on Australia/NewZealand Standard AS/NZS 4360:1995 "Risk Management".

Risk is determined by assessing theconsequence of failure and likelihood of occurrence (refer Appendix 1).

Compliance Assurance

Each of CSR’s businesses provided thefollowing assurances during March 1999:

1. Confirmation that realistic plans were in place to complete theremediation of key Year 2000 risks by July 1999.

· Completion of remediation of key risks will entail remediation ofall known compliance issues for all high and medium risk systems. Where this cannotbe achieved (for example, due to our inability to test a component of asystem), business continuity plans will be put in place to allow continuedoperations if failure occurs. Full compliance remediation of low risk systemsis not being undertaken where it is not cost justified or would divertresources from high and medium risk systems.

· Very few exceptions were identified - these are being closelymanaged and the last of them is expected to be completed by September 1999.

2. Confirmation that change management processes were being put inplace to ensure that non compliant systems or suppliers are not re introducedinto the business after testing, remediation and compliance certification workhas been completed.

3. Confirmation of costs of rectifying Year 2000 problems.

Written assurances have either been obtainedor are being obtained from boards of CSR joint venture companies stating thatthey will achieve similar levels of compliance by July 1999.

Compliance Progress for Key CSR Businesses

CSR Building Materials

CSR Building Materials is a leading supplierin Australia of plasterboard products, glasswool and rockwool insulation, claybricks and pavers, concrete and clay roof tiles, and lightweight concreteproducts and is growing rapidly in fibre cement. In Asia, CSR producesglasswool and rockwool insulation, lightweight concrete products andplasterboard.

Some key Year 2000 compliance activities arelisted below (list is not exhaustive):

CSR Construction Materials

CSR Construction Materials is a leadingsupplier of pre-mixed concrete and quarry and concrete products and hasinterests in road surfacing, cement production and waste management. In China,CSR has a large pre-mixed concrete and quarry business and in Taiwanmanufactures concrete pipes and tunnel segments.

Some key Year 2000 compliance activities arelisted below (list is not exhaustive):

CSR Timber Products

CSR Timber Products is the largest totallyintegrated producer of timber products in Australia and is a leading supplier ofsolid pine timber and of medium density fibreboard panels, particleboard, doorpanels and decorative laminates.

Some key Year 2000 compliance activities arelisted below (list is not exhaustive):

CSR America, Inc.

CSR America is a major supplier ofconstruction materials, pre-mixed concrete, concrete pipes, concrete blocks andpolyethylene pipes. CSR America makes and installs underground pipeline rehabilitationproducts and has a major building materials distribution business in Florida.

Some key Year 2000 compliance activities arelisted below (list is not exhaustive):

CSR Sugar

CSR's seven sugar mills in Queensland produceabout 40% of Australia's total raw sugar, making CSR one of the largest millersin the world. With our joint venture partners in Sugar Australia, CSR is aleading sugar refiner.

Some key Year 2000 compliance activities arelisted below (list is not exhaustive):

CSR’s Aluminium Interests

Gove Aluminium (70% CSR) has a 36.05% interestin the Tomago aluminium smelter in New South Wales and a 30% share in theNabalco bauxite and alumina joint venture at Gove Peninsula in the NorthernTerritory.

Year 2000 compliance is the directresponsibility of the respective boards of Tomago and Nabalco joint venturecompanies. CSR receives monthly reports from each company on their progress toYear 2000 compliance. CSR is unaware of any issue that will prevent eithercompany from achieving Year 2000 compliance.

Question 4

Are there areas of your company’s activitieswhere, in your company’s assessment, material Year 2000 risks will remain afterthe company’s activities to address the Year 2000 problem are completed?Examples might include dependencies on third parties such as utilities. Ifthere will be remaining risks, your response should describe them.

Yes.

CSR cannot guarantee the Year 2000 readinessof any external organisation.

CSR’s main areas of risk in this regard are theprovision of utility services such as power and gas and telecommunications,including voice and data traffic over network services provided by externalparties. Problems in these areas may impact CSR’s ability to service itscustomers and to respond contractually with supplier agreements. In addition,CSR cannot guarantee the supply of critical raw materials for its manufacturingprocesses. However, reasonable steps are being taken to address businesscontinuity in the event of non supply, with a strong focus on high and mediumrisk areas.

There is also the risk to CSR of being heldliable at law for damage caused to a third party by some failure on CSR’s partarising out of the Year 2000 issue. As with other corporations, CSR facespotential legal liability arising out of Trade Practices Act contraventions(misleading / deceptive conduct), contractual breaches and possibly negligence.CSR has undertaken an external legal risk assessment and its recommendationsare being implemented.

Question 5

Please describe your company’s contingencyplan in relation to Year 2000 issues.

CSR commenced work on Year 2000 businesscontinuity planning in August 1998. A methodology was developed, whichaddresses CSR business processes and identifies possible Year 2000 loss scenariosrelated to those processes. The methodology specifically addresses:

· requirements to sustain each key process within the business

· Year 2000 date related failure scenarios

· indicators of a Year 2000 date related failure

· the potential impact of a Year 2000 date related failure

· the likelihood of occurrence of a Year 2000 date related failure

· mitigating actions currently in place or that need to be put inplace

· dates when the risk could impact

From analysis of the above, one or morealternatives to sustain that process in the event of some impact from a Year2000 date related failure are identified and documented within the plan.Triggering events or dates and specific mechanisms to activate the businesscontinuity plan are also identified.

In addition, the methodology creates anawareness within the businesses of how to deal with unanticipated Year 2000date related failure scenarios that might occur and how to quickly develop abusiness continuity plan to meet the unanticipated failure.

The methodology has been found to be suitablefor all businesses with only minor modification required in some areas.

The methodology has been piloted in theBuilding Materials insulation business and will be progressively rolled out tothe other CSR businesses. Implementation of business continuity plans for keyrisks will be completed by September 1999.

Dated: 31 March 1999

Appendix 1