15 September 2003

Mr James Gerraty Listings Officer Australian Stock Exchange Limited 530 Collins Street MELBOURNE VIC 3001

Dear Mr Gerraty

FOR ANNOUNCEMENT -ANNUAL REPORT AND NOTICE OF ANNUAL GENERAL MEETING

Following is the 2002-03 Annual Report and Notice of the Annual General Meeting of CSL Limited, which will be held at the Function Centre, National Tennis Centre, Melbourne Park, Batman Avenue, Melbourne on Thursday, 16 October, 2003, at 10.00 a.m.

The above material is being mailed to shareholders on 15 September, 2003.

Yours sincerely

Peter Turvey COMPANY SECRETARY

MANIAN DI

10
12
14

16.
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28
22

Our People	24
Health, Safety and Environment	26
Controlled Entities	28
CSL Group Business Operations	30
Our Executive Management Group	31
Directors ^p rofiles	32
Corporate Governance	34
Share Information	42

Shareholder information	43
Five Year Summary	44
Shareholders	44
CSL Business Addresses	Insule Back Cover
trademarks	Inside Back Cover
About CSL Limited	Back Cover
Wat Our Websites	Back Cover

Cover: Meral Kaypakkaya (Quality Control Technician), Jorge Padilla (Research Scientist) and Hanspeter Gerber (Manufacturing Plant Operator).

Back Cover: Mark Cattapan (Storeman), John Suendermann (Quality Control Technician), Dominic D'Sylva (Melder/Fabricator), and Elizabeth Elms (Packaging Operator).

CSL LIMITED DEVELOPS, MANUFACTURES AND MARKETS PHARMACEUTICAL PRODUCTS OF BIOLOGICAL ORIGIN.

OUR BUSINESS IS HEALTH CARE:

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لعثما

Life-saving products derived from human plasma;

$>$ Pharmaceuticals and diagnostics essential to health;

Cell culture reagents for the pharmaceutical industry;

Veterinary vaccines and diagnostics to protect livestock and companion animals.

ADD 2011

Dear Shareholder,

In a year when CSL's profitability has been significantly affected by difficult US trading conditions and adverse foreign exchange movements, we have expanded key business operations to build competitive strengths in core activities that will position the Company for sustainable growth.

ZLB Bioplasma increased US market share for intravenous Immunoglobulin (MG) and commenced sales of MG in Europe, the Middle East and South America following successful transfer of the Sandoglobulin trademark and product registrations from Novartis AG. JRH Biosciences acquired the largest independent collector of animal serum in the US, started work on a significant upgrade to its plant in the United Kingdom and expanded its presence in Asia. CSL Bioplasma continued to strengthen its Asia Pacific operations and our Animal Health business opened a new vaccine facility in the US. In a year of strong growth, CSL. Pharmaceutical sold more doses of our Fluvax^® influenza vaccine in Australia than ever before.

Dividends and Financial Results

On 15 April 2003, our shareholders received an interim dividend of 12 cents per share (fully franked). CSL's final dividend of 22 cents per share (fully franked) will be paid on 10 October 2003. The Directors have also determined that a Dividend Reinvestment Plan will be implemented which will apply to the final dividend.

The appreciation of the Swiss franc against the US dollar and lower US prices for IVIG significantly affected profitability. The adverse impact of foreign exchange on our Swiss-based ZLB Bioplasma manufacturing operations nullified Swiss tax advantages, resulting in overall higher tax rates for the Group. In the second half of the year, a stronger Australian dollar introduced additional constraints on profitability.

Although ZLB Bioplasma experienced a difficult year, our other businesses performed well to deliver Group sales revenues of \$1,300.3 million. After tax profit fell 43% to \$70.4 million. A complete summary of our key financial results is shown on page two.

Human Health

Human Health includes the operations of ZLB Bioplasma AG, ZLB Bioplasma Inc., CSL Bioplasma, CSL Pharmaceutical and CSL's global New Product Development activities.

ZLB Bioplasma, as already mentioned, experienced a difficult trading year due primarily to an oversupplied US market and adverse currency movements, particularly the Swiss franc's strong appreciation against the US dollar, resulting in weaker

FINANCIAL RESULTS

FINANCIAL HIGHLIGHTS FOR THE YEAR ENDED 30 JUNE 2003 All figures in \$4 million unless stated otherwise

	2002-2003	2001-2002
Jotal revenue	1.313.2	1.350.2
Sales revenue	4,300.3	1.336.4
Research and development expenses	31 S	93.3
Profit from ordinary activities before income tax expense	101.7	156.5.
Profit from ordinary activities after income tax expense	704	128.8
Profit from ordinary activities after income tax expense before amortisation of goodwill	11926	163.6
Capital investment	74.3	82.9
Total assets at 30 June	2219.5	23121
Total equity at 30 June	1,282.7	12731
Net tangible assets per share at 30 June (5)	2.42	-179
Weighted average number of shares (million)	159.2	158.61
Basic earnings per share (cents)	44.2	78.2
Dwiderids per share (cents)	34.0	34.0

There is a tive-year statistical summary on page 44

financial performance. Sales revenue was down 16% to \$398.5 million compared to last year.

In the US, ZLB Bioplasma Inc. expanded the sales of Carimune^TM IVIG year-on-year but these gains were largely offset by lower prices. Successful transfer of the Sandoglobulin trademark from Novartis AG enabled ZLB's sales of MG to commence in Europe. South America and the Middle East. ZLB sales were made through newly established affiliated companies in the United Kingdom, Germany, Belgium and Italy as well as through distributors in a further 24 countries. This expanded commercial structure provides further opportunities for additional sales of other ZLB products.

In April 2003, Carimune^rM, NF, ZLB's MG manufactured using a new nanofiltration process, was successfully launched in the US. This process provides users of this product with additional assurance against transmission of infectious agents including recent threats such as West Nile virus and Severe Acute Respiratory Syndrome (SARS virus).

We completed a number of manufacturing plant upgrades which have increased ZLB's plasma throughput capacity to two million litres per year. Several Regulatory Agency inspections were successful including four by the US FDA. Two inspections involved pre-approval of plant and equipment for expansion of Rhophylac® sales and a liquid IVIG. Both of these product applications are expected to receive US marketing approval in 2004.

ZLB's investment in broadening commercial operations will help reduce the impact of pricing pressures in the competitive US market by continuing to grow our global market share.

CSL Bioplasma increased sales revenue by 10% to \$168.4 million in a year of encouraging progress. Growth was underpinned by continuing strong demand for our products, particularly intragam^® P, and by the increased volumes of plasma we processed on behalf of the Australian Red Cross Blood Service (ARCBS).

CSL Bioplasma continues to build on our close working relationships with Blood Services throughout the Asia Pacific region including New Zealand, Hong Kong, Singapore and Malaysia. Our new regional office in Hong Kong is providing increased levels of technical support to clients as we work to further strengthen our mainstream presence in key regional markets.

In collaboration with the ARCBS, we added another high quality plasma product to our portfolio in April 2003 with the release of Biostate® onto the Australian market. Biostate® is a high purity Factor VIII for the treatment of Haemophilia A and. von Willebrand's Disease. This new product is currently available.

FINANCIAL CALENDAR

$2002$

19 September	Shares traded ex-cividend

26 September	Record date for final dividend


10 October	Final dividend paid

16 October	Annual General Meeting


31 December	Hat year ends

2014

	7 February	Half year profit and interim dividend announcement.
	'a March	Shares traded ex-dividend
	$2$ April	Record date for interim dividend
В.	April	Interim dividend part
	10 June	Year ends:
	B August	Annual profit and final dividend announcement
	7 September	Shares traded ex-dividend
	4 September	Record date for final dividend
	8 October	Firal dividend paid
	4 October	Arnual General Meeting
	M December	Half year ends

ANNUAL GENERAL MEETING

Thursday 16 Getober 2013 at 10,00am Melholine Fine Brinkil Avenue Meleau ne stuft

AGMINNEMERAST

Note: The Chairman's Report and the Chief Executive Officer's Reput vill both be websatchinggh GSL s web site: mmyksiken än

Kay on in he Home Pancro K6SL's web sile and then ellek on the first item under CSL News called Annual General Maangayoness

in 250 IU and 500 IU presentations and a 1000 IU will be available soon for added patient convenience.

During the year, important capital works projects have been successfully completed. In October 2002, our new nucleic acid amplification-testing laboratory was commissioned. Adding another layer of safety to the products we manufacture, this purpose-built facility uses leading edge technology to screen for blood-born viruses prior to plasma pooling.

Completing the work required to expand our manufacturing plant to enable us to fully segregate Australian plasma will be an important step that will lead to our being able to pursue new business opportunities.

Looking to the future, CSL Bioplasma is well placed for business growth. In Australia and regional markets, we will continue to focus on expanding our role as the preferred provider of high quality plasma products and customised toll manufacturing services. We will also take advantage of synergies from working with ZLB to expand into new regional markets with a greater product range.

CSL Pharmaceutical delivered sales revenue of \$245.5 million in 2003, well ahead of our 2002 result, in a year when we had significant growth in vaccine and pharmaceutical sales.

Two notable events for our vaccine portfolio were the introduction of Menjugate*, a conjugated meningococcal C vaccine licensed from Chiron Corporation, and the launch of our thiomersal-free Fluvax^® influenza vaccine.

In October 2002, shortly after we introduced Menjugate* to the market, the Federal Government announced a major vaccination program for protection against meningococcal C disease for all children in Australia up to the age of 19. CSL will supply Menjugate* to several States and the Territories during the three years this program is expected to run.

Our introduction of a thiomersal-free Fluvax^® for Australia's 2003 winter has been an important step in ensuring this key CSL product continues to deliver the latest vaccine requirements. Approved by the Therapeutic Goods Administration in November 2002, this new formulation is free from preservative. More doses of Fluvax^® were sold in Australia this year than ever before. We will continue to optimise manufacturing capacity to ensure our ability to meet the vaccine requirements of customers in both Northern and Southern Hemisphere markets.

During the year, the importance of vaccination was highlighted when the outbreak of SARS (Severe Acute Respiratory Syndrome) led to heightened community awareness of the value of

CSL Total Revenue SA millions?

CSL Profit Before Interest and Tax (SA millions)

YEAR IN REVIEW CONTINUED

immunisation to protect against infectious diseases. This increased awareness assisted us to consolidate our position in Australia as the leading supplier of influenza vaccine to healthy adults and also caused us to expand our corporate workplace program. Two further vaccines with particularly encouraging uptake rates this year were Pneumovax* 23 for prevention of pneumococcal infection and Q-Vax^® for the prevention of Q Fever. Sales growth in pharmaceutical products has also been. strong with Tramal* being a major contributor. This product is consolidating its position as a leading analgesic of choice for moderate to severe pain.

As the result of an in-licensing agreement with Cytokine PharmaSciences, CSL is now marketing Cervidit in Australia. Used to induce labour in childbirth, Cervidil* was launched in June 2003.

Through mutual consent agreements with a number of pharmaceutical companies, we have terminated arrangements for CSL's distribution of hospital products on their behalf. We will continue to phase out low margin, pharmaceutical distribution activities in favour of more profitable in-licensing arrangements, and we will work to further develop domestic and international markets for our Fluvax® influenza vaccine.

New Product Development opportunities continue to come from CSL's proprietary technologies in plasma fractionation, vaccinology, recombinant proteins and our ISCOM® adjuvant technology. We are investing in an R&D portfolio that provides opportunities for short, medium and longer-term growth.

CSL's most immediate returns will arise from product improvements such as our liquid IVIG, and from Rhophylac^®, our high-quality anti-D for preventing haemolytic disease of the newborn (Rh-disease). Late in 2002, the US FDA accepted both plasma products for review. In Australia, as already mentioned, we have launched our preservative-free Fluvax $^\circledR$ influenza. vaccine, a product which will provide a domestic and international platform for revenue growth in our pharmaceutical business.

The main medium term value driver in the portfolio is our HPV. vaccine collaboration with Merck & Co. Inc. (see feature story on page 17). This quadrivalent biotech product, now in Phase III testing at sites around the world, has the potential to make a significant contribution to public health by preventing cervical cancer and genital warts.

Our proprietary ISCOM® adjuvant technology passed a major milestone this year with data from several successfully completed early stage human clinical trials showing ISCOM® product candidates were safe and tolerable, and could generate potent

Dividence to State indicate

An interim dividend on ordinary shares of 12 cents per share (fully franked) was paid on 15 April 2003. A final dividend on ordinary shares of 22 cents per share (fully franked) will be paid on 10 October 2003. The total dividend for the year of 34 cents per share represents a pay out ratio of 48% (based on EPS after tax before goodwill amortisation).

immune responses. This technology should offer CSL a powerful leverage point with partners and give confidence to test ISCOM®. based immunotherapy candidates against chronic infectious diseases and cancer.

Developing additional high-value products derived from human plasma is a strategic imperative for CSL. In this context, we are using a proprietary method to produce a reconstituted high-density lipoprotein (rHDL) from ApoA1 protein fractionated from plasma. Working in collaboration with academic colleagues in Europe and Australia, we have now demonstrated in animal models that rHDL helps reduce the size of brain lesions caused by stroke. Our challenge is to translate these encouraging animal results for treating stroke with rHDL into early-stage human testing.

An expedited production of our Haemostatic Dressing this year saw more than 2000 dressings delivered to the US Army under an Investigational New Drug (IND) application approved by the US FDA. The dressing is designed to prevent blood loss following trauma or during major surgical procedures. It is anticipated that the dressing will be effective in severe life-threatening haemorrhage as it contains potent coagulation proteins necessary for blood clotting. The dressing is capable of being used for both internal and external injuries because it can be absorbed by the body.

Biotechnology has had little impact to date on preventing blindness. Although blotech treatments for such serious eye diseases as age-related macular degeneration are in clinical trials around the world, these experimental treatments have to be delivered by injection into the eye. Working with Professor Doug Coster and his team at Flinders University in Adelaide, we are evaluating a proprietary technology for the less invasive topical delivery of recombinant antibody fragments in eye drops. Work on this method of treatment for blinding disorders is at an early stage but could open for CSL a new area of ocular therapeutics. CSL will continue to develop proprietary platform technologies in which we have broad-based intellectual property and skills, and which will enable us to pursue further research and development collaborations with major industry partners.

JRH Biosciences

JRH Biosciences delivered strong and profitable growth again this year with sales revenue increasing 16% to \$168.0 million. Growth was fuelled by cell culture-based biopharmaceuticals moving through clinical trials and was supported by launches of new products and services, favourable serum trading conditions, and substantial increases in sales of proprietary cell culture media.

SALES REVENUE BY BUSINESS UNIT

Human Health \$812.4 milks

JPM Blossisness \$168.0 million

Andrew Health 384,7 million

71.B Plosens Sorvices \$255.2 million

HUMAN HEALTH - ZLB BIOPLASMA AG (204) - CSL PHARMACEUTICAL (19%) $-$ CSI BIOPLASMA (13%) ZLB PLASMA SERVICES JRH BIOSCIENCES ANIMAL HEALTH

67% 20% 13% 5%

YEAR IN REVIEW CONTINUED

We will sustain our growth by increasing sales of cell culture products for use in clinical phase biopharmaceutical projects moving through the drug development pipeline. To this end, we launched four new proprietary EX-CELLTM serum-free media for virus and monoclonal antibody growth and production. Our expanded product range drove the 35% increase in EX-CELLTM proprietary media revenue.

More customers discovered the benefits of our imMEDIAte Advantage^TM program which offers speedy delivery of smaller volumes of cell culture media for research. Now available worldwide, imMEDIAte Advantage™ helped to accelerate the clinical programs of nearly 300 research customers. The new addition of BioEaze™ to our portfolio delivered custom bioprocessing systems to improve the productivity of cell culture-based operations. Our collaborative work with key biopharmaceutical developers saw milestones reached on 11 cell culture media optimisation projects.

In February 2003, when the reduced availability of raw serum had led to demand for fetal bovine serum outstripping supply, we took action to protect customers by acquiring the business of By-Prod. Corporation, the largest independent serum collector in the US. Serum is an essential component in the production of many biopharmaceutical products and this newly secured US supply

of serum coupled with our existing Australian serum collection operations has strengthened our leadership position in the serum business.

We also increased our global serum operations with the establishment of JRH Asia Pacific. Expanding our presence in the developing Asian market, we have appointed local distributors in Taiwan, Korea, Thailand and Singapore. As part of our continuing investment in European infrastructure, we have started work on a significant upgrade of our liquid cell culture media plant in the United Kingdom. We also appointed additional sales and technical staff to extend services for our European customers.

This year, we expanded the scale and capability of our research and development facilities at Lenexa in Kansas, bringing online an eight-fold increase in bioreactor capacity used to confirm... the scalability of our serum-free media products. At our Denver, Pennsylvania plant we doubled dry media capacity and completed the conceptual design for our next powder expansion. By 2005, JRH will be able to offer both ball-milled and continuously milled powder, providing further capacity and flexibility to address customer demands.

Drawing attention to JRH's leadership position in the cell culture industry, we presented a comprehensive publicity and revised.

corporate identity campaign this year, the main message being our focus on customers and understanding their needs for. consistent, safe and productive cell culture products designed. to improve speed to market.

JRH Biosciences continues to strengthen its position in the global cell culture market by remaining focussed on fulfilling the demands of its customers throughout the world.

Animal Health

Animal Health sales revenue increased 6% to \$64.7 million in a year of significant improvement in overall profitability. Strong growth has been achieved for key products despite the adverse effects of exchange rates and severe drought in the US and Australia. In the US, Biocor Animal Health canine vaccines increased market share and our Bronchicine^® CAe took over as market leader In canine cough vaccines. We also made good progress in the diagnostics sector with Parachek® for Johne's disease in cattle becoming market leader.

During the year, both the US Department of Agriculture and the UK's Veterinary Medicines Directorate approved the construction, commissioning and validation of our new Leptospira vaccine facility at Biocor's site in Omaha, Nebraska. Distributed by our

marketing partner, Pfizer Animal Health, the Spirovac® bovine leptospira vaccine manufactured in this new facility is now on sale in the US, the United Kingdom and the Republic of Ireland. In Australia, substantial progress has been recorded in the livestock sector despite severe drought conditions. Gudair* ovine Johne's disease vaccine and our Glanvac B12 range contributed to sales growth in sheep vaccines.

Good growth was achieved in the pig vaccine market with further uptake of Improvac^®, and demand for Ultravac^® 7 in 1 for cattle also increased. In a good year for companion animal products, we improved our equine market position with the launch of Equity^® equine Immunosterilisation vaccine and Equigen* equine somatotropin.

Animal Health made good progress with new product registrations and licensing activities. We obtained a license to market Pestigard^®, a bovine viral diarrhoea vaccine, and expect to launch this product in Australia soon. We have entered into an agreement with CZ Veterinaria SA for the rights to distribute their bovine Johne's disease vaccine in the US, Australia and New Zealand. A review of manufacturing processes has been instrumental in reducing overall production costs and led to significant

YEAR IN REVIEW CONTINUED

improvement in vields of some of the key antigens used to make our vaccines. Next year, we are expecting to reach several major milestones in the development of new products which will lead to the launch of vaccines in the US, Australia, the United Kingdom and the Republic of Ireland. These launches will help support Animal Health's aggressive growth plans in the years ahead.

ZLB Plasma Services

and a finished and a strong partie of the set of the set of the set of the set of the set of the set of the

ZLB Plasma Services supplies plasma to ZLB Bioplasma AG and several other customers manufacturing and marketing plasma-derived products.

Operational efficiencies implemented this year in plasma. collection centres and our plasma testing laboratory in Miami, Florida contributed to financial performance above expectations. At a time of softening demand for plasma, we consolidated our operations and achieved sales of \$255.2 million.

Aventis Behring LLC

In February 2003, CSL entered into an agreement with Aventis. that provided an opportunity to evaluate Aventis Behring's plasma products business. We have commenced the associated due diligence process and when our investigation is completed, we will present the results to our shareholders.

Aventis Behring is a major manufacturer of plasma derived products with manufacturing plants in the US, Germany, Austria and Spain - as well as a sizeable plasma collection business in the US. Aventis Behring has processing capacity of more than three million litres and produces about 20% of the world's plasma-based therapeutics.

Alban Maria Sa

The ZLB Bioplasma AG manufacturing

facility at Bern in Switzerland.

Performance Rights Plan

At CSL's next Annual General Meeting we will be seeking shareholder approval for a new senior employee incentive Plan. The Board believes this Plan will more closely reflect current shareholder and sharemarket sentiment as a long-term incentive delivery mechanism. Performance Rights will avoid the effects of dilution and dividend leakage until performance hurdles have been achieved by both the Company and the participating employees.

Dividend Reinvestment Plan

As shareholders will be aware, the Board has implemented a Dividend Reinvestment Plan commencing with this year's final dividend. For those shareholders who elect to participate, the Plan offers an efficient method of reinvesting dividends in the Company's shares, as no brokerage or commission is payable.

CSL'S MAJOR CORPORATE OBJECTIVES FOR THE YEAR AHEAD

Restore returns as a growing company;

Strengthen the commercial Bioplasma business by expanding international market presence;

Expand and strengthen the domestic market position of the Company's influenza vaccine business and continue the expansion of sales of this product into Northern and Southern Hemisphere markets;

Continue to invest in high value R&D projects that will deliver future growth in the near, medium and long term by capturing, adding value to and commercialising intellectual property assets for the development of novel biopharmaceuticals;

Continue to develop JRH and Animal Health as profitable, specialised international businesses;

Create an environment for growth, development and achievement consistent with CSL's core values of superior performance, innovation, integrity, collaboration and customer focus.

by the shareholder and the shares are issued at a discount of up to 2.5% to the prevailing market price. More detailed information. has been sent to shareholders separately.

The CSL Board

* See inside back cover

There have been no changes to the membership of the Board during the year, although Mr lan McDonald has indicated that he will not stand for re-election at the Annual General Meeting in October this year.

Mr. McDonald was appointed a Director of CSL in October 1992, and has been of great assistance to the Board in providing the benefit of his many years of experience in the international pharmaceutical industry during a time when the Company has grown from being an Australian based pharmaceutical business to one that now has operations around the globe. The CSL Board wishes to take the opportunity provided by this Report to express. Its appreciation for Mr McDonald's valued contributions during this time of growth for the Company.

Our Thanks to Management and Staff

CSL's people around the world have faced a very challenging year. that has required strong commitment to continue building our businesses under difficult conditions. The CSL Board would like to take this opportunity to acknowledge the dedication and good work of our management and staff.

Peter H Wade Chairman

Brian A McNamee Chief Executive

ZLB Bioplasma AG, based at Bern in Switzerland, is one of the largest manufacturers of plasma products in the world with major markets in the USA and Europe.

MAJOR PLASMA PRODUCTS MARKETED BY ZLB BIOPLASMA MMONORIELING FOR TREATMENT OF :	Carmune ^ry NF and Carimune ^ry are distributed. by ZLB Bloplasma Inc. in the USA.
Carimune™ NF Infections and autoimmune diseases Carimune ^TM Redimune ^TM	Redimune ^rM is distributed by ZLB Bioplasma AG in Swizerland.
Sandoglobulin ^® Panglobulin® MALAOGLOSLENS FOR PREVENTION OF	Sandoglobulin ⁹ is distributed worldwide by ZLB Bioplasma and distributors (excluding USA and Switzerland). Sandoglobulin ⁶ is a trademark from
Rhophylac ^® Haemolytic disease of the newborn- PLASMA VOLDAT TAPANDERS FOR INEALMENT OF	Novartis AG, licensed to ZLB Bioplasma AG, Panglobulin ⁹⁹ is distributed by the American
Albumin Acute blood loss (emergency trauma situations) and severe burns	National Red Cross.
CLOUING PACTOR FOR IREADMENT OF: Factor VIII method M Bleeding disorders such as haemophili

For more information about our business, see our web sites at: www.zlb.com and at www.zlbusa.com

Inside 713 Blookshiets Intraveneus Immunoglobulin (IVIG) manufacturing plant at Bern in Switzerland, operator Hanspeter Gerber changes a nabofilter cartridge. The particular flore process provides a new levekin produci kately

ZLB Bioplasma aims to be a leading provider of intravenous immunoglobulin (IVIG) in North America – an ambitious goal well on the way to being achieved.

When ZLB entered the US market in 2001, there was an MG shortage with hospitals buying all available product. We are now dealing with a period of oversupply in what has become a highly competitive business.

In the US, we stay ahead of supply and demand fluctuations by continuously adjusting sales and marketing strategies with our focus on increasing market share. In 2002, we responded quickly to growing MG inventories identified in industry reports, well. aware competition would increase and prices would drop in the short term.

We doubled our field sales force, introduced a new telemarketing sales team, expanded our IVIG marketing team and focussed more on building end user demand. As a result, we delivered consistent growth in end user demand for Carimune™ throughout 2002 and now have more than 16% market share.

In 2003, faced with even more aggressive competition in the US, ZLB has taken a leadership position in the MG market through the introduction of Carimune^TM NF, our nanofiltered product. A new level in product safety, nanofiltration is an effective way to remove viruses without affecting vital immunoglobulin antibodies. ZLB is the first IVIG manufacturer to use nanofiltration, a process which is designed to remove emerging viruses such as West Nile and coronavirus (SARS) as well as other pathogens. One of three new products we expect to launch in the US, Carimune^TM NF will help us to continue to achieve our goals.

New ZLB-sponsored clinical programs under way in renal transplantation, immunodeficiencies and neuropathies should bring further growth in US demand for MG products and a consequent increase in our market share.

CSL Bioplasma is one of the largest manufacturers of plasma products in the Southern Hemisphere with a state-of-the-art facility in Melbourne that uses chromatographic production technology.

People born deficient in Factor VIII and Factor IX experience severe bleeding into their joints and Gloriable Promotis EORERSMARNEOR muscles which causes extreme pain as well as long. Bleeding disorders such as haemophilia AHF (HP) Biostate® factors minimises bleeding episodes and allows MonoFix ^® - VF people to lead active lives. MMANOGLOSTING Roram Mattizola Intragam ^es P is an intravenous immunoglobulin Intragam ^® P Infections and autoimmune diseases used to treat people with congenital or acquired (product given intravenously) deficiencies which make them susceptible to VI-IMIG	MAJOR PLASMA PRODUCTS MARKETED BY CSL BIOPLASMA

		periods of impaired mobility. Treatment with clotting.
EOREERSWENTON NOW IMMONOGLOBULINS people to live healther lives as active members	Infections (product given intramuscularly)	recurrent infections, intragam ^® P can allow these
of the community. Rh(D) Immunoglobulin Haemolytic disease of the newborn
РІАЗМА ЙОНИМЕ ЕХРАМДЕК FOR TREATMENT OF Albumex ^to is human serum albumin, a plasma Albumex ^® Acute blood loss (emergency trauma situations) and severe burns blood loss and undergoing surgical procedures.		volume expander used in patients suffering severe
LOP DI LINIMATON OF DIACNOSTIQUE COLUCIST ABO Monocional Reagents Compatibility of donor-recipient blood. Reagent Red Blood Cells in transfusion settings

For more information about our business, see the Bioplasma section of CSL's web site at: www.csl.com.au

Building on our strong business position in the Asia Pacific region, CSL Bioplasma is implementing a comprehensive development program to create a more direct mainstream presence in regional markets and significantly increase revenues from international operations.

At the same time, we maintain close relationships with the Australian Red Cross Blood Service and the New Zealand Blood. Service through which we work for continuous improvements. in quality, safety and availability of plasma-derived products.

In 2002, we opened our first regional office in Hong Kong and increased sales and marketing activities to provide better support for our customers. We expect our plasma product range and reach to expand as the result of product development activities and the product marketing relationship we are forging with ZLB Bioplasma AG, CSL's Swiss-based business.

CSL Bioplasma is the preferred supplier of plasma fractionation services to the Hong Kong Red Cross Blood Service, Malaysian National Blood Centre and the Centre for Transfusion Medicine in Singapore. However, the Asia Pacific region also offers significant business growth potential through emerging clinical demand for our high quality plasma products.

Chromatographic methods used by CSL Bioplasma to separate and purify plasma proteins during our manufacturing process include dedicated viral inactivation steps aimed at ensuring the highest product safety standards. All plasma received at our plant is screened against a range of infectious agents. This includes nucleic acid testing (NAT) for HIV and hepatitis C. In 2002, we commissioned a new NAT facility to ensure our continuing ability to meet international testing standards.

During the year, we launched Biostate^® in Australia - a new high purity Factor VIII to treat bleeding disorders such as haemophilia and which provides the additional benefit of preserving the functional von Willebrand's factor deficient in patients with von Willebrand's disease. Biostate® will be launched soon in regional international markets.

CSL Pharmaceutical manufactures and markets biological products for human use. Our activities range from funding early stage research in universities and research institutes to selling products worldwide through major international organisations.

PRESERVANON ONI

Y MECHCME

MAOCINES	ANTENERGYMES
FOR PREVENTION OF:	Reference of A
$Flu$ $\infty$	Flopen®
. Influenza -	Severe staphylococcal infections
Pneumococcal infection	Moxacin®
Pneumovax*23	Bacterial infections
Menjugate*	'Fucidin*
Meningococcal C disease	Bacterial infections
ADT®	BenPen ^®
Diphtheria and tetanus	Bacterial infections
Tet-Tox ^® Tetanus $H-B-VAX*H$	Alixare Indian s FOR THEATMENT OF
Hepatitis B infection	Tramal*
Haemophitus influenzae B	Severe pain
PedvaxHIB*	Flomax*
Vaqta Hepatitis A infection Varivax Refrigerated Varicella	Benign prostatic hyperplasia Antivenoms Envenomation in the
Haemophitus influenzae B and	Cervidil*
Comvax*	Complications during childbirth
Hepatitis B infection	requiring induced tabour
$Q-Vax^{\circledcirc}$	Modavigil*
Q-Fever works	Excessive daytime steepiness
$M-M-R^*$ $\Pi$ Measles, mumps and rubella	in narcolepsy EpiPen Severe allergic reactions Daivonex Psoriasis Inflammatory dermatoses "Advantan*

For more information, see the Pharmaceutical and Human Vaccines sections of CSL's web site at: www.csl.com.au

See Inside back cover

In a year when the outbreak of SARS (Severe Acute Respiratory Syndrome) has brought worldwide attention to the serious threat of infectious diseases, the value of immunisation against influenza has also been reinforced. Even in years without epidemics, thousands of people around the world die from influenza or complications arising from infection with this disease.

Last year, we completed an influenza plant expansion program. that doubled throughput capacity and allowed us to take greater advantage of worldwide demand. Subsequently, we entered into a major five-year contract to supply bulk influenza virus antigen to Europe. By supplying vaccine for Southern and Northern Hemisphere winters, we make use of our plant manufacturing capacity all year round. Further market expansion initiatives are planned in Europe, South Africa and South America.

In Australia, CSL is using increased manufacturing capacity to target healthy adults and reduce the wider community impact of influenza. To raise the awareness of healthy adults to the benefits of immunisation, we carried out a national campaign through pharmacies and medical centres to encourage healthy people to discuss vaccination with their doctors. At the same time, we continued to offer information to large organisations about the benefits of workplace vaccination programs.

For many years, CSL's Fluvax^® influenza vaccine has been. the market leader in Australia and our sales continue to increase. This year, we released our new preservative-free vaccine following approval from the Therapeutic Goods Administration in November 2002.

Looking to the future, growth in Fluvax® influenza vaccine sales. will come from the broadening of vaccine uptake in Australia and the development of new international business.

New Product Development activities are focussed on maintaining CSL's status as Australia's leading investor in biopharmaceutical research. We develop biological products that act on or through the immune system.

HUMAN HEALTH PRODUCTS BEING DEVELOPED BY CSL
CSPS FAD PARTNERS PRODUCTS ACADEMO HERMANIS MERIDAR
Vaccine to prevent Phase III clinical The University "Merck & Co. Inc Cervical Cancer Tof Queensland development - and Genital Warts
Phase II clinical, The University Vaccine to treat of Queensland AIN Disease development
Melanoma/Tumour Phase II clinical Ludwig Institute Immunotherapy development. for Cancer Research
Vaccine to treat Phase II clinical Chiron Hepatitis C infection Corporation research
Haemostatic Early stage American National. clinical Dressing Red Cross development
Treatment of University of Naples Late stage National Stroke stroke with rHDL research Research Institute Howard Florey Institute
Late stage research Flinders University Topical Eye Delivery

For more information about our projects, see the R&D section of CSL's web site at: www.csl.com.au

Excellent progress has been made this year in CSL's collaboration with Merck & Co. Inc. to develop a vaccine against human papillomaviruses (HPV) associated with cervical cancer and genital warts.

Phase II clinical trials of a vaccine against HPV type 16 have been 100% successful in preventing the targeted sexually transmitted disease that is the primary cause of cervical cancer. Following this compelling evidence of efficacy, a multinational Phase II. registrational program is now under way testing a quadrivalent vaccine against HPV types 6, 11, 16 and 18.

Infection with types 16 and 18 can lead to cervical dysplasia and cervical cancer in some women and is also associated with other serious diseases of the genital tract, such as anal intraepithelial neoplasia. Cervical cancer is a major cause of cancer in women. and HPV types 16 and 18 are linked to most cervical cancer. deaths. Infection with types 6 and 11 can lead to genital warts.

The technology on which the vaccine is based was developed in the early 1990s in a collaboration between CSL scientists and Professor Ian Frazer at the University of Queensland. In 1995, Merck obtained an exclusive license for this technology from CSL. CSL holds exclusive distribution rights to Australian and New Zealand markets for any HPV yaccine developed by Merck using the technology and will also benefit from worldwide. commercialisation.

The development of a candidate HPV vaccine is the powerful result of an Australian academic and industry alliance to capture intellectual property and our long-term collaboration with Merck. To identify and develop the technology to create a new vaccine typically takes from ten to fifteen years. From an idea in the early 1990s, we have now progressed to the final phase of human clinical trials and closer to our goal of a socially significant and commercially successful vaccine.

JRT Bloselences develops, manufactures and markets cell culture reagents including dry powder media, liquid media and sera used in the manufacture of vaccines, biopharmaceuticals and gene therapy products.

MAJOR CELL CULTURE PRODUCTS MARKETED BY JRH BIOSCIENCES
BIOTECHNOLOGY PRODUCTS USED IN CELL CULTURE	BIOTECHNOLOGY SERVICES USED IN CELL CULTURE APPLICATIONS
Serum-Free Media For use in the production. Classical Media of therapeutics, vaccines, monoclonal antibodies and Sera i Growth Factors recombinant proteins. Sera, Supplements media and growth factors are- Buffers also extensively used in Detachment Factors research and diagnostic. Reagents laboratories.	imMEDIAte Advantage ^TM Program for quick delivery of small volumes of customised media, either in liquid or dry powder form, preferred by scientists in research and product development. BioEaze ^TM Sterile disposable bags, components and bioprocessing systems designed to address specific pharmaceutical and biotechnology. applications. Bulk Liquid Media System Customised líquid media handling systems designed to facilitate raw material transfer in cell culture laboratories.
Cells taken from living organisms and grown under controlled conditions in a laboratory or manufacturing system are known as cell culture. In cell culture, media combined with sera, growth factors and other supplements are used to grow cells and produce proteins. JRH Biosciences develops, manufactures and markets cell culture reagents and services targeted for commercial firms involved in developing and producing biopharmaceuticals using mammalian and insect cell culture methods.	Media Development and Optimisation Development of media formulations specific to customer cell lines and applications, focussed on improving productivity and efficiencies. Technical Services Regulatory support to meet customer and government requirements for licensing issues; customer support on product applications and cell culture techniques; and product support focussing on technology transfer. Analytical Services Biochemical analyses that aids cell culture product development and optimisation.

For more information about our business, see our web site at: www.jrhbio.com

JRH Biosciences has continued to achieve success through business expansion, product and technology developments, and strong support for our customers. We have invested in the future, as illustrated by our activities in the key European cell culture market.

In the next financial year, JRH will complete a major expansion of manufacturing facilities in the United Kingdom. From this modern plant, liquid cell culture media produced to strict code of Good. Manufacturing Practice (cGMP) requirements will be provided to biopharmaceutical researchers and manufacturers across Europe.

Although JRH is already an established world leader in the liquid media business, this latest expansion positions us for significant involvement in European clinical trials in which large quantities of liquid media are used. We will further improve our business success by aligning cell culture products with the drug development pipeline requirements of the worldwide biopharmaceutical industry.

JRH's February 2003 acquisition of By-Prod, the largest independent collector of animal serum in the US, has now. secured continuity of supply for customers using serum in biopharmaceutical research and development. This US serum business complements our Australian serum collection and processing operations and provides customers with additional options. We will be offering an enhanced portfolio of serum. products next year for this critical component in the development of many biopharmaceuticals.

JRH scientists are continuing to develop products for emerging areas of significant interest to customers including gene therapy and therapeutic monoclonal antibody applications. Our core research focus is on developing proprietary media used in. biopharmaceutical research and development by our customers. Our business success is set to continue as we strengthen global production, sales and distribution capabilities in ways that bring greatest benefit to our customers.

Sturnsk

Animal Health develops, manufactures and markets vaccines for the prevention of disease in livestock (sheep, cattle and pigs) and companion animals (horses, dogs and cats), and a range of diagnostic products.

WACCINES	EQREEL ALDED ROLL	DIAGNOSTIO PRODICTS
Glanvac® Ultravac ^® 7 in Scabigard ^® $\mathsf{C}$ anvac $^\circledast$ Bronchicine ^® CAe	Cheesy gland and clostridial diseases, selenium deficiency and vitamin B12 deficiency in sheep. Leptospirosis and clostridial diseases in cattle Scabby mouth in sheep with the Viral and bacterial diseases in dogs Kennel cough in dogs	Bovigam For the diagnosis of Bovine tuberculosis Parachek ^® For the diagnosis of Johne's disease in cattle
$Fevac^{\circledast}$ Rhinopan^® Equivac ^® $^{\circ}$ Longrange $^{\circledR}$ Ultravac $^{\circ}$ 5 in 1	Viral diseases in cats [110000] Viral and chiamydial diseases in cats Bacterial diseases in horses Botulism in cattle - Clostridial diseases in sheep and cattle	Note: Bronchicine ^® CAe, Surround® and Herdvac ^co are marketed only in the USA.
Gudair* $\,$ Surround $^{\circledR}$ HerdVac ^® Improvac® Leptoshield	Johne's disease in sheep and the Viral and bacterial diseases in cattle Viral and bacterial diseases in cattle Boar taint in male pigs Leptospirosis in cattle	* Gudair, see inside back cover.

For more information about our business, see the Animal Health section of CSL's web site at: www.csl.com.au and also our Biocor Animal Health Inc. web site at: www.biocorah.com

In 2003, our US business, Biocor Animal Health, opened a new Leptospira vaccine production facility at their headquarters in Omaha, Nebraska. Built and commissioned in just two years, this plant has achieved UK Veterinary Medicines Directorate approval after just one inspection, a rare achievement for any US veterinary facility.

The Spirovac^® Leptospira vaccine we produce in this plant using unique vaccine technology is now being sold in our initial target markets - the US, the United Kingdom and the Republic of Ireland. Spirovac^® vaccine has also been approved by the United States Department of Agriculture (USDA) as an aid in protecting unborn calves. This initiative is a result of trials by the USDA's researchers. that indicated total prevention of kidney and genital tract infection. The only bovine leptospirosis vaccine in the world known to have achieved this important label claim, Spirovac^® is a major breakthrough product for dairy and beef producers because the disease is a significant cause of abortion in cattle.

In Australia, sales of Leptospira vaccines are at record levels. Ultravac^® $7$ in 1 and Leptoshield^® are market leaders for bovine leptospirosis vaccines. The unique technology used to produce these vaccines has helped expand the overall market and strengthened our relationships with key customers.

Through marketing partner, Pfizer Animal Health, Spirovac^® has increased our market share in the dairy and particularly the calf. markets in the United Kingdom and Republic of Ireland. The only bovine leptospirosis vaccine approved for calves as young as four weeks old, Spirovac^® protects them from disease before they are naturally exposed to infection.

Future significant sales growth will be achieved in all major cattle. markets through further product development and an expanded. range. We are also developing vaccines to protect other animals from Leptospirosis.

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ZLB Plasma Services is one of the largest collectors of human blood plasma in the world and a major supplier to the US fractionation industry.

ZLB PLASMA SERVICES LOCATIONS

For more information about our business, see our web site at: www.zlbusa.com

Inside the ZLB Plasma Services laboratory in Florida, medical technologist Heddie Baron prepares a reagent used in chemical analysers to test plasma samples. The laboratory processes millions of plasma. Sangles aach verbinn

Based in Boca Raton, Florida, ZLB Plasma Services is one of the largest collectors of human blood plasma in the world, operating forty-five collection centres in twenty-one US States.

Our laboratory in Miami processes millions of plasma samples each year carrying out a wide range of serological plasma screening tests on behalf of our collection centres.

Complying with strict US FDA regulations for donor safety and product quality, ZLB Plasma Services is a major supplier of high quality plasma to the US plasma fractionation industry. Most of the plasma we collect is drawn from the general community but we also produce some speciality plasma with particular antibody profiles for use in manufacturing such products as ZLB Bioplasma's Rhophylac^® for prevention of haemolytic disease in the newborn.

We have steadily invested in the business over the past year to ensure the highest international quality standards. This has helped to position us as a reliable supplier of a critical raw material to the fractionation industry while at the same time creating the greatest operational and marketing flexibility for ZLB Bioplasma.

Now successfully integrated into CSL's operations, we are able to offer a secure source of US plasma to support ZLB Bioplasma requirements as they manufacture increasing quantities of plasma products for both new and existing markets.

Volumes of plasma sent to ZLB Bioplasma for fractionation will increase as necessary to match their business requirements.

Looking to the future, we will continue to optimise our business through careful investment and operational excellence to ensure our facilities and systems exceed the stringent standards of this strictly regulated industry.

By creating opportunities for the benefit and advancement of our people, we help to ensure the achievement of CSL's global objectives.

CSL GROUP VALUES

SUPERIOR PERFORMANCE We strive to be the best at what we do

INNOVATION We seek better ways of doing things.
INTEGRITY We are ethical and honest at all times
COLLABORATION We work together to achieve better results
CUSTOMER FOCUS We seek to understand. and meet their needs.

In Australia, CSL is a leader in innovative human resource practices that have benefited both our people and business operations. CSL's success in creating progressive working environments is the result of competency-based career systems, our learning and development strategies, family friendly workplace initiatives and staff opinion surveys that help identify needs.

During the past year, we have continued to focus on developing global human resources systems to address the emerging demands of our business that now employs more people in the US and Europe than in Australia. The emphasis of these initiatives is on developing leaders, creating among people a better. understanding of all parts of our business, and providing opportunities for our people to look beyond their specific roles to identify more closely with everything we do.

In keeping with these global programs, we have undertaken an extensive internal review that defined the Values of the CSL Group, introduced an Executive Leadership Program, developed a Leadership Capabilities Program and launched a Global Employee Share Plan.

The CSL Group Values define what our Company stands for and what we expect from ourselves. This value system is being implemented across all our operations, with each business working out the most effective way to communicate these. Values within their own environment.

Future key leaders within the CSL Group will come from a diverse range of people spread across the world. With the aim of developing the skills and relationships among the top line leadership, a group of senior executives from across the CSL. Group participated in CSL's initial Executive Leadership Program. The course content of strategic thinking and personal leadership is developing an important internal resource for the business which reflects CSL's immediate and future needs.

CSL Bioplasma's Employee Development

Manager, Brendan Saville Introduces Process Engineer, Natalie Saunders to an E-Learning training module. These modules can also be accessed through personal computers at times stitable for each employee.

Developed through an extensive internal consultation process, CSL's Leadership Capabilities Program provides guidelines and expectations for senior, middle and frontline managers. Based on CSL Group Values, this program has set the framework for what we expect from future leaders as well as for our future learning and development requirements.

The successful launch of our Global Employee Share Plan, approved by shareholders at CSL's 2002 Annual General Meeting, has delivered a new opportunity for all our people to have equity in the business. This plan is part of a strategy to help ensure our people identify more closely with the Company and better understand CSL's businesses.

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Ny INSEE dia mampiasa ny kaodim-paositra 2014–2014. Ilay kaominina dia kaominina mpikambana amin'ny fivondrona

Our continuing aim is to ensure that CSL's business operations are carried out in workplaces that are safe and healthy for our employees, for the community and for the environment.

HEALTH AND SAFETY POLICY

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SYSTEMS (1999)

By encouraging safe work behaviours and implementing processes, policies and procedures, CSL will ensure the health and safety of all employees, contractors, visitors and the community who are associated with our worldwide operations.

CSL will meet its obligations under local laws and statutes and thereby demonstrate our determination to be a responsible employer.

Managers are allocated particular responsibilities for ensuring that the health and safety management system is properly implemented and performing to requirements in all locations and operating areas within the Company.

CSL has developed and will maintain management systems for health and safety that are consistent with internationally recognised standards and enable us to:

Ensure that our facilities operate to the highest health and safety standards to protect our employees, contractors, neighbours and the environment;

Ensure health and safety policies, procedures and instructions are widely communicated and adhered to:
Consult and cooperate with employees and their $\geq$ . representatives on health and safety matters;
Provide appropriate training and resources so those individuals are equipped to work safely in an incident-free workplace.

Fhi Lovelock, the HS&E Manager for Ratolle and associated sites, checks on materials handling procedures in the Parkville Main Store with Rebekah Hansard. Materials Safety Data Sneet Maharrar

Our health, safety and environment (HS&E) responsibilities have continued to expand as CSL has acquired new businesses, commissioned new facilities and extended business operations around the world.

CSL has developed a unified HS&E management system to integrate under one corporate umbrella the range of programs being carried out at all sites. In this way, we have maintained. a consistent global approach to managing the HS&E. requirements of our diverse range of working environments.

The CSL Group delivers a sustainable and comprehensive HS&E management system by requiring all CSL workplaces to meet the same stringent corporate standards and by also complying with the relevant regulations covering those jurisdictions in which our businesses operate.

As a result of our integrated HS&E system, we are well positioned to ensure that all our business operations are carried out in workplaces that are safe and healthy for our employees, the community and the environment.

Our health and safety professionals based in the US, Europe, Australia and New Zealand implement corporate programs at the local level. CSL subsidiaries also have their own internal HS&E auditors, though local operations remain subject to additional corporate audit processes.

Fundamental to our management system are four corporate policies covering health and safety, the environment, incident reporting, and the rehabilitation of injured workers. Developed in consultation with our employees and their representatives, these policies define our beliefs, intentions and approaches to developing HS&E systems. We will continue to maintain safe and healthy workplaces at all sites by implementing consistent policies, providing clear guidelines and demanding adherence to standard operating procedures.

In keeping with Company policy and to minimise environmental impacts of our global operations, all CSL sites are required. to ensure their systems, processes and procedures also comply with local environmental regulations and policies.

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Mga nagang ng mayo ng mayo ng mayo ng mayo ng mayo ng mayo ng mayo ng mayo ng mayo ng mayo ng mayo ng mayo ng

CSL Limited, based at Parkville in Melbourne, is a public company listed on the Australian Stock Exchange and parent company of the CSL Group. CSL business activities are carried out through our Human Health, JRH Biosciences, Animal Health and ZLB Plasma Services operations.

JRH Biosciences Pty Ltd, based in Melbourne, is a subsidiary of CSL Limited that processes Australian animal serum used to produce cell culture media.

CSL (New Zealand) Limited, based in Auckland, is a subsidiary of CSL Limited and is the New Zealand marketing arm for Australian Bioplasma, Pharmaceutical and Animal Health business operations. CSL (New Zealand) Limited also manufactures veterinary viral vaccines at a plant in Upper Hutt, near Wellington.

Iscotec AB, a Swedish company, is a subsidiary of CSL Limited that has technology to enhance the immune response to vaccines.

Cervax Pty Ltd is a subsidiary of CSL Limited and is a company formed to undertake a specific research and development project. Cervax is 74% owned by CSL.

CSL International Pty Ltd is a subsidiary of CSL Limited and the holding company for the international operations of the CSL Group.

CSL Denmark ApS is a subsidiary of CSL International Pty Ltd and the holding company for the European subsidiaries of the Group.

CSL US Inc. is a subsidiary of CSL international Pty Ltd and the holding company for the US operations of the CSL Group.

CSL Finance Pty Ltd is a subsidiary of CSL International Pty Ltd through which the CSL Group raises debt funding.

CSL UK is a subsidiary of CSL International Pty Ltd. This company was dissolved on 28 July 2003.

JRH Biosciences Inc. is a subsidiary of CSL US Inc. Based in Kansas in the US, it is one of the largest manufacturers of specialised cell culture media in the world. JRH Biosciences Inc. has manufacturing sites in Kansas and Pennsylvania.

Biocor Animal Health Inc. is a subsidiary of CSL US Inc. Based in the US at Omaha in Nebraska, Blocor manufactures and markets veterinary vaccines and is operationally part. of CSL's Animal Health Group.

ZLB Biopiasma Inc., a Los Angeles based subsidiary of CSL US Inc., is operationally part of ZLB Bioplasma AG. In the US, ZLB Bioplasma Inc. markets and distributes plasma-derived products and operates ZLB Plasma Services, a Florida based plasma collection business.

ZLB Bioplasma AG., based in Bern, Switzerland, is a subsidiary of CSL Denmark ApS. ZLB Bioplasma AG manufactures plasmaderived products and has major markets in the US and Europe.

ZLB Bioplasma Belgium spri, a subsidiary of CSL Denmark ApS, is a sales and marketing company for plasma products. manufactured by ZLB Bioplasma AG.

ZLB Bioplasma Italy srl, a subsidiary of CSL Denmark ApS, is a sales and marketing company for plasma products manufactured by ZLB Bioplasma AG.

CSL UK Holdings Limited, a subsidiary of CSL Denmark ApS, is the holding company for the United Kingdom operations of the CSL Group.

JRH Biosciences Limited, based in Andover in the United Kingdom, is a subsidiary of CSL UK Holdings Limited and is the European sales and marketing arm of JRH Biosciences Inc.

ZLB Biopiasma UK Limited, a subsidiary of CSL UK Holdings Limited, is a sales and marketing company for plasma products manufactured by ZLB Bioplasma AG.

ZLB GmbH, a German subsidiary of ZLB Bioplasma AG, is a sales and marketing company for plasma products manufactured by ZLB Bioplasma AG.

All subsidiary companies shown in the chart on page 28 are. wholly owned by the parent except Cervax Pty Limited in which. CSL has a majority shareholding.

OP PRODUCED A CONTRACTO

CSL Group business operations are carried out through four business units: Human Health, JRH Biosciences, Animal Health and ZLB Plasma Services.

Minan Nailm ZLB Bioplasma AG ZLB Bioplasma Inc ZLB Bioplasma UK Limited ZLB GmbH Exposure ZLB Bioplasma Belgium sprl ZLB Bioplasma Italy srl CSL Bioplasma	Bern, Switzerland (HQ) Develops, manufactures and markets plasma products California, USA Markets plasma products in the USA. Norfolk, England Markets plasma products in the United Kingdom Munich, Germany Markets plasma products in Germany Markets plasma products in Belgium Brussels, Belgium. Milan, Italy Markets plasma products in Italy Melbourne, Australia Develops, manufactures and markets plasma products
CSL Pharmaceutical ART BIOREFINES	Hong Kong Markets plasma products Markets plasma products Auckland, New Zealand Manufactures and markets biopharmaceutical products Melbourne, Australia Markets biopharmaceutical products Auckland, New Zealand
JRH Biosciences Inc
JRH Biosciences Pty Ltd JRH Biosciences Limited	Develops, manufactures and markets cell culture products Kansas, USA (HQ) Pennsylvania, USA Manufactures cell culture products Melbourne, Australia Manufactures and markets cell culture products Markets cell culture products Hampshire, England
Anina Lieann CSL Animal Health. Biocor Animal Health Inc CSL (New Zealand) Limited ZERVASILE SERVIKES	Melbourne, Australia Develops, manufactures and markets veterinary products. Develops, manufactures and markets veterinary products Nebraska, USA. Upper Hutt, New Zealand Manufactures veterinary products

Peter H Wade

Brian A McNamee

Elizabeth A Alexander

Antoni M Cipa

Peter H Wade, FCPA, FAICD - (age 69) Chairman

Finance, Management (resident in Victoria).

Mr Wade was elected to the CSL Board in 1994 and became Chairman In 1999. He had previously served CSL as a Commissioner and Director from 1985 to 1993 including a period as Acting Chairman during 1988. Mr Wade is a Director of Tabcorp Holdings Limited, and former Managing Director, North Limited.

Brian A McNamee, MB, BS, FAICD - (age 46) Managing Director

Pharmaceutical Industry, Medicine (resident in Victoria).

Dr McNamee is the Chief Executive and Managing Director of CSL, and the President of CSL (US) Inc. He is a Director of the Peter MacCallum Cancer Foundation Ltd. Dr McNamee completed Bachelor of Medicine and Bachelor of Surgery Degrees at the University of Melbourne in... 1979. Before taking up his present position in 1990, Dr McNamee was Managing Director and Chief Executive of Pacific Biotechnology Limited. In Sydney, NSW (1988-89), General Manager, Faulding Product Divisions, F.H Faulding & Co Limited, Adelaide, South Australia (1984-87), and International Product Manager, Dr Madaus & Co, based in Cologne, West Germany (1982-84).

Elizabeth A Alexander, AM. BCom, FCPA, FCA, FAICD $-$ (age 60) Accounting (resident in Victoria).

Miss Alexander was appointed to the CSL Board in July 1991. She is a Director of Amcor Limited and Boral Limited. She is National President of the Australian Institute of Company Directors, a Member of the Corporations and Securities Panel of the Australian Securities and Investment Commission, a Member of the Financial Reporting Council and past National President of the Australian Society of Certified Practising Accountants. She is Chairman of the Board of Advice to the Salvation Army (Southern Command) and is Deputy Chairman. of the Winston Churchill Fellowship Trust. Miss Alexander is Chairman of the Audit and Risk Management Committee.

Antoni M Cipa, B.Bus (Acc), Grad.Dip (Acc), CPA, ACIS - (age 48) Finance Director Finance (resident in Victoria)

Mr Cipa was appointed to the CSL Board as Finance Director in August 2000. Mr Cipa commenced his employment at CSL in 1990 as Finance Manager. He was instrumental in the float of the Company in 1994 at which time he was appointed Chief Financial Officer. Prior to joining CSL, Mr Cipa was employed at large public companies where he had significant exposure to mergers and acquisitions.

C fan R McDonald

lan A Renard

C lan R McDonald, $BSc$ (Hons) $-$ (age 70) International Pharmaceutical Industry (resident in NSW).

Mr McDonald was appointed a Director of CSL in October 1992. Mr McDonald was formerly Group Vice President, Pharmaceuticals, of Syntex Corporation, President of Syntex Pharmaceuticals International Limited, Vice President Asia Pacific of G D Searle & Co, and a former Director of Agen Limited Group. He is a past Managing Director of Searle Australia Pty Limited and Mead Johnson Pty Limited. Mr McDonald is a Member of the Audit and Risk Management Committee.

lan A Renard, BA, LLM, FAICD - (age 57) Law (resident in Victoria).

Mr Renard was appointed to the CSL Board in August 1998. He has for many years practised in company and commercial law. He is a Director of Newcrest Mining Limited and Hillview Quarries Pty Ltd, and is a Member of the Australian Advisory Board of Singapore Power. Mr Renard is also Deputy Chancellor of the University of Melbourne, Chairman of the Melbourne Theatre Company and a Director of Australian Major Performing Arts Group Ltd. Mr Renard is a Member of the Audit. and Risk Management Committee and Human Resources Committee.

Kenneth J Roberts

Arthur C Webster

Kenneth J Roberts, AM, BEc, FCPA, FAM, FAICD, FRACP (Hon) - (age 65) International Pharmaceutical Industry, Management, Marketing (resident in NSW).

Mr Roberts was appointed to the CSL Board in February 1996. Formerly, he was Chairman and Managing Director of Wellcome Australasia and Director of Marketing Development for the Wellcome worldwide group He is Chairman of the Royal Australasian College of Physicians Research and Education Foundation and Start-up Australia Pty Ltd. Mr Roberts is also a Director of ManageSoft Corporation Limited and a Member of the Boards of the Australian Genome Research Facility and the University of Queensland Institute for Molecular Bioscience Com. Mr Roberts is Chairman of the Human Resources Committee.

Arthur C Webster, BVSc, DipBact (Lond) - (age 59) Animal Health Industry, Commerce (resident in NSW).

Dr Webster was appointed to the CSL Board in March 1998. He is Chairman of the Advisory Board for the Faculty of Veterinary Science at Sydney University and also Chairman of three private Australian companies. He is a Council Member of both the Postgraduate Foundation In Veterinary Science and the Veterinary Science Foundation, University of Sydney. Dr Webster was formerly Technical Director then Managing Director of the animal health company, Cyanamid Webster Pty Ltd, and a Member of the Board of Governors, University of Western Sydney. Dr Webster is a Member of the Human Resources Committee.

Peter R Turvey, BA/LLB, MAICD. Company Secretary

This statement outlines the Company's principal corporate governance practices in place during the year or that were introduced during the course of the year.

1. The Board of Directors

1.1 The Board Charter

The Board has a formal charter documenting its membership, operating procedures and the apportionment of responsibilities between the Board and management.

The Board is responsible for oversight of the management of the Company and providing strategic direction. It monitors operational and financial performance, and approves the Company's budgets and business plans. It is also responsible for overseeing the Company's risk management, financial reporting and compliance framework.

The Board has delegated the day-to-day management of the Company, and the implementation of approved business plans and strategies to the Managing Director, who in turn may further delegate to senior management. In addition, a detailed authorisations policy sets out the decision-making powers which may be exercised at various levels of management.

The Board has delegated specific authority to four Board. committees that assist it in discharging its responsibilities by examining various issues and making recommendations to the Board. Those committees are the Audit and Risk Management Committee, the Human Resources Committee, the Nomination Committee and the Securities and Market Disclosure Committee Each committee is governed by a charter setting out its composition and responsibilities. A description of each committee and their responsibilities are set out below. The Board also delegates specific responsibilities to ad hoc committees from time to time.

The Board charter sets guidelines as to the desired term of service of non-executive directors. Board appointees should be available

to serve for at least eight years. Directors are to resign upon having served on the Board for 15 years, unless the remaining members of the Board unanimously request the director to remain on the Board.

Directors are entitled to access independent professional advice at the Company's expense to assist them in fulfilling their responsibilities. To do so, a director must first obtain the approval of the Chairperson. The director should inform the Chairperson of the reason for seeking the advice, the name of the person from whom the advice is to be sought, and the estimated cost of the advice. Professional advice obtained in this way is made available to the whole Board.

1.2 Composition of the Board

Throughout the year there were eight directors on the Board. Two of them - the Managing Director and the Finance Director - are executive directors. The Board charter provides that a majority of directors should be independent. No director acts as a nominee or representative of any particular shareholder. A profile of each director, including details of their skills, expertise, relevant experience, term of office and Board committee memberships can be found on pages 32 and 33.

The Chairman of the Board is an independent, non-executive director. He is responsible for leadership of the Board, for ensuring that the Board functions effectively, and for communicating the views of the Board to the public. The Chairman sets the agenda for Board meetings and manages their conduct and facilitates open and constructive communication between the Board, management, and the public.

1.3 Independence

The Board has determined that all of its non-executive directors are independent, and were independent for the duration of the reporting period.

All CSL directors are aware of, and adhere to, their obligation under the Corporations Act 2001 to disclose to the Board any Interests or relationships that they or any associate of theirs may have in a matter that relates to the affairs of the Company, and any other matter that may affect their independence. As required by law, details of related party dealings are set out in full in note 33 to the Company's accounts. All directors have agreed to give the company notice of changes to their relevant interests in Company shares within five days to enable both them and the Company to comply with the Australian Stock Exchange (ASX) Listing Rules. If a potential conflict of interests exists on a matter before the Board then (unless the remaining directors determine otherwise), the director concerned does not receive the relevant briefing papers, and takes no part in the Board's consideration of the matter nor exercises any influence over other members of the Board.

In addition to considering issues that may arise from disclosure by directors from time to time under these obligations, the Board makes an annual assessment of each non-executive director to determine whether it considers the director to be independent. The Board considers that an independent director is a director who is independent of management and free of any business. or other relationship that could, or could reasonably be perceived to, materially interfere with the exercise of their unfettered and independent judgment.

Information about any such interests or relationships, including any related financial or other details, is assessed by the Board to determine whether the relationship could, or could reasonably be perceived to, materially interfere with the exercise of a director's unfettered and independent judgment. As part of this process the Board takes into account a range of relevant matters including:

$>$ information contained in specific disclosures made by directors pursuant to their obligations under the Board charter and the Corporations Act 2001;

$>$ any past employment relationship between the director and the Company;

any shareholding the director or any of his or her associates may have in the Company;

$>$ any association or former association the director may have with a professional adviser or consultant to the Company;

$>$ any other related party transactions whether as a supplier or customer of the Company or as party to a contract with the Company other than as a director of the Company;

any other directorships held by the director; and

$>$ any family or other relationships a director may have with another person having a relevant relationship or interest.

In determining whether an interest or relationship is considered to interfere with a director's independence, the Board has regard to the materiality of the interest or relationship. For this purpose, the Board adopts a conservative approach to materiality consistent with Australian accounting standards. If a director has a current or former association with a supplier, professional adviser or consultant to the CSL Group, that supplier, adviser or consultant will be considered material:

from the Company's point of view, if the annual amount payable by the CSL Group to the supplier, adviser or consultant exceeds 5% of the consolidated expenses of the CSL Group; and

$>$ from the director's point of view, if that amount exceeds 5% of the supplier's, adviser's or consultant's total revenues.

Similarly, a customer of the CSL Group would be considered material for this purpose from the Company's point of view if the annual amount received by the CSL Group from the customer. exceeds 5% of the consolidated revenue of the CSL Group, and

CORPORATE GOVERNANCE CONTINUED

from the director's point of view if that amount exceeds 5% of the customer's total expenses.

In addition to assessing the relationship in a quantitative sense, the Board also considers qualitative factors, such as the nature. of the goods or services supplied, the period since the director ceased to be associated and their general subjective assessment. of the director.

1.4 Nomination Committee

The functions and responsibilities of the Nomination Committee are documented in a formal charter approved by the Board. Currently all members of the Board sit as the Nomination Committee, and the Committee is chaired by the Board Chairperson.

The Committee is responsible for reviewing the Board's membership and making recommendations on any new appointments. The Committee is also responsible for:

setting and following the procedure for the selection of new directors for nomination:
$>$ conducting regular reviews of the Board's succession plans to enable it to maintain an appropriate mix of skills and experience;
$>$ regularly reviewing the membership of Board committees; and
$\geq$ conducting annual performance reviews of the Board, individual directors, and the Board committees.

Information about meetings held during the year, and individual directors' attendance at these meetings, can be found on page three of the Directors' Report attached to the financial report.

1.5 Director Appointments

No new directors were nominated for appointment to the Board during the financial year. Kenneth J Roberts, Ian A Renard and Antoni M Cipa were each re-elected as directors at the 2002. annual general meeting.

Before their nomination for election or re-election, it is the Company's policy to ask directors to acknowledge to the Board that they have sufficient time to meet the Company's expectations of them. The Board requires that all of its members devote the time necessary to ensure that their contribution to the Company is of the highest possible quality. The Board charter sets out procedures for the removal of a director whose contribution is found to be inadequate.

1.6 Performance Evaluation

As mentioned above, the Board (as the Nomination Committee) meets annually to review its own performance. The Chairperson also holds discussions with individual directors to facilitate peer review. The non-executive directors are responsible for evaluating the performance of the Managing Director, who in turn evaluates the performance of all other senior executives. These evaluations are based on specific criteria including the Company's business performance, whether the long term strategic objectives are being achieved and the achievement of individual performance objectives.

In addition to the briefing papers, agenda and related information regularly supplied to directors, the Board has an ongoing education program designed to give directors further insight into the operation of the Company's business. As part of this program, directors have the opportunity to visit Company facilities and attend meetings and information sessions with employees.

2. Audit and Risk Management

2.1 Integrity in Financial Reporting and Regulatory Compliance

The Board is committed to ensuring the integrity and quality of its financial reporting, risk management and compliance systems.

The Board requires the Managing Director and the Finance Director to sign written management representations to the Board that the annual financial statements present a true and fair view, in all material respects, of the Company's financial condition and operational results, are in accordance with relevant accounting

standards, and that the representation is founded on a sound and functioning system of risk management and internal compliance.

2.2 Audit and Risk Management Committee

The Audit and Risk Management Committee is responsible. for assisting the Board in fulfilling its financial reporting, risk management and compliance responsibilities. The functions and responsibilities of the Committee are set out in a charter. Broadly, the Committee is responsible for:

overseeing the Company's system of financial reporting and safeguarding its integrity;
$>$ overseeing risk management and compliance systems and the internal control framework;
monitoring the activities and effectiveness of the internal audit function:
$\geq$ monitoring the activities and performance of the external auditor and coordinating its operation with the internal audit function; and
$>$ providing full reports to the Board on all matters relevant to the Committee's responsibilities.

The roles and responsibilities of the Committee are reviewed annually.

The Committee currently comprises three independent. non-executive directors. Details of the Committee's current. members, including their qualifications and experience, are set out in the directors' profiles on pages 32 and 33. The Committee charter provides that a majority of the Committee must be independent directors, and that the Committee Chair must be an independent director who is not also Chairperson of the Board. Executive directors may not be members of the Committee. Members are chosen having regard to their qualifications and training to ensure that each is capable of considering and contributing to the matters for which the Committee is responsible. The Committee meets at least four times a year, and senior executives and internal and external auditors frequently attend meetings on invitation by the Committee. However, the Committee holds regular meetings with both the internal and external auditors without management or executive directors present. The Board Chairperson may also attend meetings of the Committee in an ex officio capacity. Details of Committee meetings held during the year and individual directors' attendance at these meetings can be found on page three of the Directors' Report attached to the financial report.

A Risk Management Committee of responsible executives operates under the supervision of the Audit and Risk Management Committee. Its task is to quantify and manage certain business risks, including those relating to operating systems, the environment, health and safety, product liability, physical assets, security, disaster recovery, risk financing and compliance. It reports to the Audit and Risk Management Committee on a quarterly basis. Risk assessment and management policies are reviewed periodically.

2.3 External Auditor

One of the chief functions of the Audit and Risk Management Committee is to review and monitor the performance and independence of the external auditor. The Company's external auditor for the financial year was Ernst & Young, who were appointed by shareholders at the 2002 annual general meeting. A description of the procedure followed in appointing Ernst & Young is set out in the notice of the 2002 annual general meeting.

The Committee has established guidelines to ensure the. independence of the external auditor. The external audit partner is to be rotated at least every seven years, and the auditor is required to make an independence declaration annually. Information about the total remuneration of the external auditor, including details of remuneration for any non-audit services, can be found on page 35 of the financial report.

CORPORATE GOVERNANCE CONTINUED

The Committee is satisfied that the provision of non-audit services by the external auditor was consistent with auditor independence.

It is the Company's policy to request that the auditor attend each annual general meeting to be available to answer questions from shareholders.

3. Remuneration and Human Resources

3.1 Remuneration Policy

The Company has a policy of setting remuneration that is fair and reasonable and consistent with the need to attract and retain high quality personnel. Remuneration is structured to. encourage enhanced Company performance by establishing a clear relationship between executives' performance and their remuneration. Incentive payments and share ownership schemes are in place with a view to motivating employees to pursue the long-term interests of the Company.

3.2 Human Resources Committee

The Board has adopted a formal charter delegating certain of its responsibilities in matters of remuneration and human resources to the Human Resources Committee. The Committee is comprised of three members, all of whom are independent non-executive directors.

The Board's Human Resources Committee is responsible for:

establishing a policy framework for employee and senior executive remuneration;
$>$ monitoring and reviewing Company human resources policies and plans;
$>$ making recommendations to the Board on the remuneration packages of members of senior management, employee share and option plans and employee superannuation arrangements;
$>$ reviewing recruitment, retention and termination policies. for senior management;
approving benchmarks against which salary reviews are to be made; and
$>$ reporting to the Board on any findings or recommendations of the Committee after each meeting.

The entire Board reserves responsibility for:

$>$ approving remuneration for senior management, the Managing Director and non-executive directors:
setting the terms of employment of the Managing Director;
overseeing the Company's Senior Executive Share Ownership Plan and Global Employee Share Plan, and the policies applying to those plans.

The Committee meets at the conclusion of the performance management process, at the conclusion of the succession planning process, and at other times as required to discharge its. responsibilities. Information about Committee meetings held during the year and individual directors' attendance at these meetings can be found on page three of the Directors' Report attached to the financial report.

Senior executives attend Committee meetings from time to time. on invitation from the Committee, and the Board Chairperson may attend any meeting in an ex officio capacity. Final decisions about an individual director or executives' remuneration are made without the director or executive being present.

3.3 Employee and Executive Remuneration

The Company's remuneration policy is designed to be competitive and equitable, and to attract and retain high quality employees. Where appropriate, the Human Resources Committee considers independent advice in setting remuneration levels.

Executives' remuneration packages are made up of fixed and performance-linked components. Base executive remuneration is a salary fixed at a level competitive with market rates. In addition, executives may be awarded an incentive payment based on their.

individual performance, the performance of their division (where applicable) and the performance of the CSL Group during the preceding financial year. Incentive payments and salary increases are determined at the completion of annual performance management reviews, and derive directly from the results of that process.

Incentive payments are calculated by reference to performance objectives and assessment criteria set as part of the Company's Performance Management System. The system gives employees direct input into setting performance hurdles that are meaningful. and relevant to the specific business objectives of the Company. The Company's performance-based remuneration is therefore expected to:

$>$ encourage employees to reflect on appropriate performance benchmarks;
set up real incentives for the achievement of performance objectives; and
$>$ produce measurable improvements that are referable to the specific, identified needs of the Company.

Details of the remuneration of directors and the five most highly remunerated officers of the consolidated entity and the Company in the last financial year can be found on pages five and six of the Directors Report attached to the financial report.

3.4 Employee Share and Option Plans

At the 2002 annual general meeting, shareholders approved the Company's Global Employee Share Plan, which replaced the General Employee Share Ownership Plan. The Global Employee Share Plan (the Share Plan) is designed to enable the participation of employees in all of the countries in which CSL operates. The Share Plan is a contribution plan, under which regular deductions are made from the participant's salary and used to subscribe for new shares for the participant at a discount of 15% to the lower of the market price at the beginning and end of the relevant six. month period.

Senior Executives may also be entitled to participate in the Company's Senior Executive Share Ownership Plan (SESOP II), which was approved by shareholders at the 1997 annual general meeting. SESOP II gives the Board discretion to issue options over shares to key executives. Options issued under SESOP II are subject to vesting periods, and their vesting is dependent upon the relevant individual and the company meeting pre-determined performance hurdles. SESOP II is intended to give executives a long-term performance incentive and ensure their interests are aligned with those of shareholders. The maximum number of options that may be issued is fixed by the terms of the Plan.

The Managing Director and Finance Director participate in SESOP II. An additional incentive is offered to the Managing Director, to be awarded while he remains with the business, if the Company's share price outperforms an appropriate ASX industrial index in that period. Those additional awards are made under a Memorandum of Understanding (MOU) between the Company and the Managing Director entered into in 1998. To date, all such awards have been made in the form of SESOP II options. The issue of shares or options on or before 31 December 2004 as the form of award payable to the Managing Director under the MOU was approved by the Company's shareholders at the 2000 annual general meeting. In accordance with the terms of the MOU, the Managing Director will not receive any awards in this financial year.

Details of the options outstanding and exerciseable under SESOP II are set out in note 28 to the financial statements.

3.5 Remuneration of Directors

The Company's Constitution sets the maximum aggregate amount of remuneration which may be paid to non-executive directors at \$1,000,000. Increases to this sum must be approved by shareholders at a general meeting. Non-executive directors are not entitled to performance based bonuses or share options. Instead, under the Non-Executive Directors' Share Plan (the NED. Share Plan) at least 20% of each director's fees are taken in the form of shares in the Company. The NED Share Plan was approved. by shareholders at the 2002 annual general meeting.

CORPORATE GOVERNANCE CONTINUED

As contemplated by the Constitution, remuneration for any extra services by individual directors, or the reimbursement of reasonable expenses incurred by directors, may also be approved by the Board from time to time.

Non-executive directors are entitled to a retirement allowance as approved by shareholders in 1994 equal to the highest fees received by the director over any consecutive 36 months of service. If the director has served more than five years on the board, they will receive another 5% of the base allowance for every additional year served, up to a limit of 15 years. The Board has decided to terminate this retirement plan as at 31 December 2003.

Further details of directors' remuneration are set out in note 27. of the financial statements.

4. Market Disclosure

4.1 Summary of Continuous Disclosure Policy

The Board has approved a continuous disclosure policy designed to facilitate the Company's compliance with its obligations under the Australian Stock Exchange (ASX) Listing Rules. The policy:

$>$ gives guidance as to the types of information that may require disclosure, including examples of practical application of the rules:
$>$ gives practical quidance for dealing with market analysts and the media;
$>$ identifies the correct channels for passing on potentially market-sensitive information as soon as it comes to hand;
$>$ establishes regular occasions at which senior executives and directors are actively prompted to consider whether there is any potentially market-sensitive information which may require disclosure; and
$\geq$ allocates responsibility for approving the substance and form of any public disclosure and communications with investors.

4.2 Securities and Market Disclosure Committee

The Board has delegated authority to a Securities and Market Disclosure Committee, which has a formal charter. The Committee is designed to be convened at short notice to enable the Company to comply with continuous disclosure obligations and securities related issues. It comprises a minimum of any two directors, one of whom must be an independent director. The Committee has authority to:

$>$ approve the form and substance of any disclosure to be made by the Company to the ASX in fulfilment of its continuous disclosure obligations;
approve the allotment and issue, and registration of transfers of securities:
$>$ make determinations on matters relating to the location of the share register; and
$>$ effect compliance with other formalities which may be urgently required in relation to matters affecting the share capital.

4.3 Shareholder Communication

In addition to its formal disclosure obligations under the ASX Listing Rules, the Board uses a number of additional means of communicating with shareholders. These include:

$>$ -the half-year and annual reports;
$>$ posting media releases, public announcements and other investor related information on the Company's website;
$>$ annual general meetings, including webcasting which permits shareholders worldwide to view proceedings.

5. Securities Trading Policy

By promoting director and employee ownership of shares, the Board hopes to encourage directors and employees to become long-term holders of Company securities, aligning their interests with those of the Company. It does not condone short-term.

or speculative trading in its securities by directors and employees. The Company has a comprehensive securities trading policy which applies to all directors and employees. The policy aims to inform directors and employees of the law relating to insider trading, and provide them with practical guidance for avoiding unlawful transactions in Company securities.

As a basic principle, the policy states that directors and employees should not buy or sell securities in the Company when they are In possession of price sensitive information which is not generally available to the market. The policy identifies trading 'windows' during which, subject to the blanket rule, it is safest to trade. in Company securities. Directors and employees are reminded that procuring others to trade in Company securities when in possession of price sensitive information is also a breach of the law and the securities trading policy. Acquisitions of securities under the employee share and option plans are exempt from the prohibition under the Corporations Act 2001.

A procedure of internal disclosure applies to directors and employees wishing to buy or sell Company securities or exercise options over Company shares. Directors and employees are forbidden from making such transactions without the prior approval of the Chairperson (in the case of directors) or the Company Secretary (in the case of employees). Directors also have specific disclosure obligations under the Corporations Act 2001 and the corresponding ASX Listing Rules.

Ethical Standards

In 2002, the Company set out to identify a set of values common to the diverse business units that form part of the CSL Group. This process resulted in the adoption of the CSL Group Values, intended to set a foundation for working across the organisation and serve as a tool in decision-making. These values are superior performance, innovation, integrity, collaboration and customer focus.

The Board has also adopted a Corporate Code of Conduct (the Code) outlining its commitment to ethical conduct. The Code sets out principles of conduct derived from the Group Values. The Code includes:

$>$ a commitment to conducting its business with the utmost integrity by complying with laws and regulations in all countries in which the Company operates, and by fulfilling all of its responsibilities to shareholders and the financial community;
$>$ rules guiding employees and directors towards ethical. decisions in situations of potential conflict of interest, political involvement, bribery and financial inducements;
$>$ workplace relations principles regarded by the Company as fundamental, including mutual respect, anti-discrimination and freedom of association;
$\ge$ a commitment to adherence to health and safety standards, both of products, through compliance with manufacturing and other best practice standards, and in the provision of safe employee work environments;
practices for responsible environmental management;
$>$ guidance for beneficial interactive relationships with the communities in which CSL operates and collaboration throughout the organisation.

The Company expects that its contractors will comply not only with the national laws of the countries in which they operate, but also with internationally accepted best practice. It therefore requires that contractors also observe the principles set out in the Code of Conduct.

Communication

BS LEATHER RAIN LIBERTIER

Ordnary shares. 152,232,650

Details of Incorporation

CSL's activities were carried on within the Commonwealth Department of Health until the Commonwealth Serum Laboratories Commission was formed as a statutory corporation under the Commonwealth Serum Laboratories Act 1961 (Cth) [the CSL Act] on 2 November 1961. On 1 April 1991, the Corporation was converted to a public company limited by shares under the Corporations Law of the Australian Capital Territory and it was renamed Commonwealth Serum Laboratories Limited. These changes were brought into effect by the Commonwealth Serum Laboratories (Conversion into Public Company) Act 1990 (Cth). On 7 October 1991, the name of the Company was changed to CSL Limited. The Commonwealth divested all of its shares by public float on 3 June 1994.

The CSL Sale Act 1993 (Cth) amends the CSL Act to impose certain restrictions on the voting rights of persons having significant foreign shareholdings, and certain restrictions on the Company itself.

CSL ordinary shares have been traded on the Australian Stock Exchange since 30 May 1994. Melbourne is the Home Exchange.

Substantial Shareholders See page 43 of this Annual Report.

Voting Rights

At a general meeting, subject to restrictions imposed on significant foreign shareholders and some other minor exceptions, on a show of hands each shareholder present has one vote. On a poll each shareholder present has one vote for each fully paid share held.

In accordance with the CSL Act, CSL's Constitution provides that the votes attaching to significant foreign shareholdings are not to be counted when they pertain to the appointment, removal or replacement of more than one-third of the directors of CSL who hold office at any particular time. A significant foreign shareholding is one where a foreign person has a relevant interest in 5% or more of CSL's voting shares.

Significant Foreign Shareholdings

Schroder Investment Management (Group) is designated a significant foreign shareholder under the provisions of CSL's Constitution.

DISTRIBUTION OF SHAREHOLDINGS AS AT 30 JUNE 2003.
BAILGE	WELLETS	SHARLS	WINNERHARG
$1 - 1.000$	37533	18.693.224	11 69
1001 5000	13.234	29.409.162	18.39
5.001 10.000	894	6 527 901	4.08
10.001 100.000	362	6.724.658	545
100.001 and over	66	96.583.515	60.39
Total Shareholders	52,089	159 938 660	100.00
Number of shareholders with less than a marketable parcel of 42 shares (based on the share none of 30. Hare 2003)	1.632	B4 787

Shirtiaram

Computersizers Investor Services Pivel in Lavel 12, 566 Bounce Street Meladune Victoria SOCO felephone: 1300 646 832 Passimile: 03:9611:5740

Shareholders with inquiries should telephone or write to the Share Registry at the above address.

Separate shareholdings may be consolidated by advice to the Share Registry in writing.

Change of address should be notified to the Share Registry in writing without delay. Shareholders who are broker sponsored on the CHESS sub-register must notify their sponsoring broker of a change of address.

Direct payment of dividends into a nominated account may be arranged with the Share Registry. Shareholders are encouraged to use this option by writing to the Share Registry with particulars. 620 362 2975 Melbourte Victora 3001 +61 3 9613 6970 outside Australia

The Annual Report is produced for your information, However, should you receive more than one or wish to be removed from the mailing list for the Annual Report, please advise the Share Registry. You will continue to receive Notices of Meeting and Proxy.

The Annual General Meeting will be held at the Function Centre, National Tennis Centre, Melbourne Park, Batman Avenue, Melbourne at 10:00am on Thursday 16 October 2003. There is a public car park adjacent to the Function Centre which will be available to shareholders at no charge.

SHAKEHOLDER	ACCOUNT	SHAALS	ологд сните
JP Morgan Nominees Australia Limited		27.518.346	1721
2 National Nominees Limited		14 820 788	97
ŝ Westnac Custodian Norrinees Limited		13.071.855	817
Citicorp Nominees Pty Limited J		4.011.580	2.51
5 Commonwealth Custodial Services Limited		3.404.485	213
Queersland Investment Corporation 6		3.380.923	211
ANZ Nominees Limited 7		3.088.886	1.93
RBC Global Services Australia Nominees Pty Limited 8	MENISE	2.969.985	1.86
RBC Global Services Australia Nominees Pty Limited Ø	BKCLIST	2.612.081	1.63
RBC Global Services Australia Nominees Pty Limited 10	MEIMPU	1,339,291	0.84
RBC Global Services Australia Nominees Pty Limited iM.	MENSBL	1,283,129	0.80
12 Cogent Nominees Pty Limited		1.227.190	0.77
Suncorp Custodian Services Pty Limited 13	AET	824.137	0.52
RBC Global Services Australia Nominees Pty Limited 14	MIBPSE	792.665	0.50
Dr Brian Anthony McNamee 15		770.333 728.509	0.48 0.46
UBS Private Clients Australia Nominees Pty Ltd. 16 Perpetual Trustee Company Limited 17		705.875	0.44
RBC Global Services Australia Nominees Pty Limited 18	MLAPST	645.654	0.40
Calex Nominees Pty Limited 19		583.408	0.36
Pan Australian Nominees Pty Limited 20		581.977	0.36
In addition, as at the date of this Report substantial shareholding notices have been received from: Schroder Investment Management (Group). Merrill Lynch Mercury		12.050.091 8,179,889	757 6.17

ayasan ya ya gunana
Yana ya ya yanan wa Yanan Marekani
Wa ya ya Yanana wa Yanan ka Yana ya ya SUNNIAN

FIVE YEAR SUMMARY

All figures are in \$A million unless stated otherwise.

	2002-03	2001-02	2000-01	1999-00	1998-99
Total revenue	1.3132	1.350.2	8548	504.3	424.9
Sales revenue	1.300.3	1,336.4	843.3	450.6	41335
Research and development investment	91.5	9838	新製	43.6	40.6
Profit from ordinary activities before income tax expense	801.7	156.5	1051	80.6	703
Profit from ordinary activities after income tax expense	704	123.3	不安	54.4	47.44
Profit from ordinary activities after income tax expense before amortisation of goodwill	112.6	1636	1024	54.4	47.9
Capital investment	743	-82.9	60.9	372	39.0
Total assets at 30 June	2.219.5	2.312.1	1.7118	946.5	561.5
Total equity at 30 June	1,282.7	1273.1	B/6.0	793.6	4149
Net tampble assets per share at 30 June (\$)	2.42	179	1.36	532	3.15
Weighted average number of shares (million)	159.2	1533	149.5	133,4	131.4
Basic earnings per share (cents)	44.2	78.2	52.3	40.8	36.1
Dividend per share (cents)	34.0	34.0	26.0	23.0	21.0

SHAREHOLDERS AS AT 30 JUNE 2003 arting the start of the started and the started and the started and the started of the started of the started

	SMART DEDEKS	SHARLS
Australian Capital Territory	1,203	1 094 411
New South Wales	12,966	82,681,175
Northern Territory	173	126.157
Queensland	1473	12,494,849
South Australia	3.789	4,167,134
Tasmania	786	729.821
Victoria	21.701	53.894,763
Western Australia	2972	3,295,453
International Shareholders	1.026	1.454.920
Total Shareholders a a a sa antara a ana ana ana ana ana ana ana ana an	52.089	159.938.660

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Australian Addresses

GSL Emited Registered Head Office 45 Poplar Road Parkville Victoria 3052 Australia Telephone: + 61 3 9389 1911 Facsimile: + 61 3 9389 1434

CSL Bioplasma

189 Camp Road Broadmeadows Victora 3047 Telephone: + 61 3 9246 5200 Facsimile: + 61.3 9246 5299

JRH Biosciences Pty Ltd 18-20 Export Drive Brooklyn Victoria 3025

Telephone: +61 3 9362 4500 Facsimile: 461 3 9315 1656

Australian Sales Offices

Designed and produced by Arristrong Willer-Wallaren, Mabbourne and System

Victoria and Tasmania

45 Poplar Road Parkville Victoria 3052 lelephone: CSI Pharmaceutical + 61 3 9389 1408 CSL Anmal Health + 61 3 9389 1251 Facsimile: $+61393891727$

New South Wales

25-27 Paul Street North North Pyde New South Wales 2113 Telephone: (02) 9887 4433 Facsimile: (02) 9887 3174

Queensland 14 Dividend Street

Mansfield Queensland 4122 Telephone: (07) 3849 6140 Facsimile: (07) 3849 6141

South Australia and Northern Territory 11 Coongle Avenue

Edwardstown South Australia 5039 Telephone: (08) 8276 3200 Facsimile: (08) 8277 0556

Western Australia 293-297 Fitzgerald Street Path

Mestern Australia 6000 Telephone: (08) 9328 7322 Facsimile: (08) 9227 6196

International Addresses

CSL (New Zealand) Limited

CSL Pharmaceutical and CSL Bioplasma Level 4, Building 10 666 Great South Road Central Park, Penrose Auckland 6 New Zealand Telephone: +64 9 579 8105 Facsimile: +64 9 579 8106

CSL (New Zealand) Limited

Animal Health 2-6 Shakespeare Avenue Upper Huff New Zealand Telephone: 464 4 527 9088 Facsmile: +64 4 527 9717

ZLB Bioplasma AG Wankdorfstrasse 10

CH-3000 Bern 22 Switzenand Telephone: 441 31 344 4444 Facsimile: +41 31 344 5555

ZLB Bioplasma Inc.

801 North Brand Boulevard Suite 1150 Glendate California 91203 USA felephone: +1 818 244 2952 Facsimile: +1 818 244 9952

ZLB Bioplasma UK Limited

Breckland House St Nicholas Street Thetford, Norfolk IP24 1BT England Telephone: +44 1842 755 025 Facsimile: +44 1842 755 174

71 B GmbH

Schafferstrasse 4 D-80333 Minich Germany Telephone: +49 89 244 488 300 Facsimile: +49 89 244 488 311

ZLB Bioplasma Belgium SPRL

Interleuvenlaan 64 B-3001 Leuven Belgium Telephone: +32 16 38 80 80 Facsimile: +32 16 38 80 89

ZLB Bioplasma Italy SRL

Via Valia 16 1-20141 Milan Italy Telephone: +39 02 84742 230 Facsimile: +39 02 84742 229

JRH Biosciences Inc.

13804 West 107th Street Lenexa Kansas 66215 USA Telephone: +1.913 469 5580 US Toll Free +1 800 255 6032 Facsimile: +1 913 469 5584

JRH Biosciences Limited

Smeaton Road West Portway Andover Hampshire SP10 3LF England Telephone: +44 1264 333 311 Facsimile: +44 1264 332 412

ZLB Plasma Services

5201 Congress Avenue Suite 220 Boca Raton Florida 33487 USA Telephone: +1.561.981.3700 Facsmile: +1 561 912 3005

Biocor Animal Health Inc.

2720 North 84th Street Omana Nebraska 68134 USA Telephone: +1 402 393 7440 Facsimile: +1 402 393 4712

CSL Bioplasma (Hong Kong)

Suite 1805, Wheelock House 20 Pedder Street, Central Hong Kong Telephone: +852 2293 2317 Facsimile: +852 2588 3434

TRADEMARKS

GSL, Bloom, Blopiasma, JRH and ZLB are all tratemarks of the CSL Group.

@ Redsiered traemark of GSL Linited of Its affiliates:

IN TRICE IN THE STATISTICS OF IS RIGHTERESS Trademarks of companies other than 951, and referred to in this Annual Report are listed below: Controled therapsules GENETI READERS INNES

OZNOGIE I Litro del personico Products Limited AS

Marok Stefan Ins

Satemark Yananouch Europe BV Gaberbia Grioti Gillon Spa Conserva Mbrok Keak

ENGEL

BELL'AREA ENAME Honey RETAIL Mariji RENERALES MENTIONS TENER Välker Muzikin Floritz Tranal Mangeria NOBROI Edizan

VISIT OUR WEBSITES

CSL Limited - www.csl.com.au ZLB Bioplasma AG - www.zlb.com ZLB Bioplasma Inc - www.zibusa.com JRH Biosciences - www.jrhbio.com Animal Health - www.biocorah.com

ABOUT CSL LIMITED

The CSL Group of companies develops, manufactures and markets:

$>$ Life-saving products derived from human plasma:
$>$ Pharmaceuticals and diagnostics essential to health.
$>$ Cell culture reacents for the pharmaceutical industry.
$>$ Veterinary vaccines and diagnostics to protect livestock and companion animals.

CSL has substantial manufacturing facilities in the United States, Europe and Australia and operates globally through four businesses: Human Health, JRH Biosciences, Animal Health and ZLB Plasma Services.

Our Human Health business includes the operations of ZLB Bioplasma, CSL Bioplasma, CSL Pharmaceutical, and our global new product development activities.

We continue to build on the significant contribution CSL has made to health care for more than eighty years:

H Through investment in new product development,

櫽

Through collaborative ventures that strengthen our scientific, manufacturing and marketing expertise;
$>$ Through quality products and excellent customer service.

CSL LIMITED FINANCIAL REPORT 2002-2003

CSL LIMITED DEVELOPS, MANUFACTURES AND MARKETS PHARMACEUTICAL PRODUCTS OF BIOLOGICAL ORIGIN.

OUR BUSINESS IS HEALTH CARE:

Life-saving products derived from human plasma; $\geq$
Pharmaceuticals and diagnostics essential to health; $\overline{\phantom{1}}$
Cell culture reagents for the pharmaceutical industry; $\geq$
Veterinary vaccines and diagnostics to protect livestock and companion animals. $\Rightarrow$

Cover: Meral Kaypakkaya (Quality Control Technician), Jorge Padilla (Research Scientist) and Hanspeter Gerber (Manufacturing Plant Operator).

Back Cover: John Suendermann (Quality Control Technician), Dominic D'Sylva (Melder/Fabricator), and Elizabeth Elms (Packaging Operator).

CS Board of Directors
Financial Results	2
Directors Report	B.
Statement of Financial Performance	8.
Statement of Financial Position	S)
Statement of Cash Flows	10.
Notes to the Emanoial Statements	11
Directors' Declaration	64
Independent Audit Report	56.
CSL Business Addresses	Ыł

OSLEO ARD OF DEECTORS

Peter H Wade, FCPA, FAICD - (age 69) Chairman Finance, Management (resident in Victoria).

Mr Wade was elected to the CSL Board in 1994 and became Chairman in 1999. He had previously served CSL as a Commissioner and Director from 1985 to 1993 including a period as Acting Chairman during 1988. Mr Wade is a Director of Tabcorp Holdings Limited, and former Managing Director, North Limited.

Brian A McNamee, MB, BS, FAICD - (age 46) Managing Director Pharmaceutical Industry, Medicine (resident in Victoria).

Dr McNamee is the Chief Executive and Managing Director of CSL, and the President of CSL (US) Inc. He is a Director of the Peter MacCallum Cancer Foundation Ltd. Dr McNamee completed Bachelor of Medicine and Bachelor of Surgery Degrees at the University of Melbourne in 1979. Before taking up his present position in 1990. Dr McNamee was Managing Director and Chief Executive of Pacific Biotechnology Limited in Sydney, NSW (1988-89), General Manager, Faulding Product Divisions, F H Faulding & Co Limited, Adelaide, South Australia (1984-87), and International Product Manager, Dr Madaus & Co, based in Cologne, West Germany (1982-84).

Elizabeth A Alexander, AM. BCom, FCPA, FCA, FAICD.- (age 60) Accounting (resident in Victoria).

Miss Alexander was appointed to the CSL Board in July 1991. She is a Director of Amcor Limited and Boral Limited. She is National President of the Australian Institute of Company Directors, a Member of the Corporations and Securities Panel of the Australian Securities and Investment Commission, a Member of the Financial Reporting Council and past National President of the Australian Society of Certified Practising Accountants. She is Chairman of the Board of Advice to the Salvation Army (Southern Command) and is Deputy Chairman of the Winston Churchill Fellowship Trust. Miss Alexander is Chairman of the Audit and Risk Management Committee.

Antoni M Cipa, B.Bus (Acc), Grad.Dip (Acc), CPA, ACIS - (age 48) Finance Director Finance (resident in Victoria)

C lan R McDonald, BSc (Hons) $-$ (age 70) International Pharmaceutical Industry (resident in NSW).

Mr McDonald was appointed a Director of CSL in October 1992. Mr McDonald was formerly Group Vice President. Pharmaceuticals, of Syntex Corporation, President of Syntex Pharmaceuticals International Limited, Vice President Asia Pacific of G D Searle & Co, and a former Director of Agen Limited Group. He is a past Managing Director of Searle Australia Pty Limited and Mead Johnson Pty Limited. Mr McDonald is a Member of the Audit and Risk. Management Committee.

lan A Renard, BA, LLM, FAICD $\sim$ (age 57) Law (resident in Victoria).

Mr Renard was appointed to the CSL Board in August 1998. He has for many years practised in company and commercial law. He is a Director of Newcrest Mining Limited and Hillview Quarries Pty Ltd. and is a Member of the Australian Advisory Board of Singapore Power. Mr Renard is also Deputy Chancellor of the University of Melbourne, Chairman of the Melbourne Theatre Company and a Director of Australian Major Performing Arts Group Ltd. Mr Renard is a Member of the Audit and Risk Management Committee and Human Resources Committee.

Kenneth J Roberts, AM, BEC, FCPA, FAIM, FAICD, FRACP (Hon) - (age 65) International Pharmacestical Industry, Management, Marketing (resident in NSW).

Mr Roberts was appointed to the CSL Board in February 1996. Formerly, he was Chairman and Managing Director of Wellcome Australasia and Director of Marketing Development for the Wellcome worldwide group. He is Chairman of the Royal Australasian College of Physicians Research and Education Foundation and Start-up Australia Pty Ltd. Mr Roberts is also a Director of ManageSoft Corporation Limited and a Member of the Boards of the Australian Genome Research Facility and the University of Queensland Institute for Molecular Bloscience Com. Mr Roberts is Chairman of the Human Resources Committee.

Arthur C Webster, BVSc, DipBact (Lond) - (age 59) Animal Health Industry, Commerce (resident in NSW).

Dr Webster was appointed to the CSL Board in March 1998. He is Chairman of the Advisory Board for the Faculty of Veterinary Science at Sydney University and also Chairman of three private Australian companies. He is a Council Member of both the Postgraduate Foundation in Veterinary Science and the Veterinary Science Foundation, University of Sydney. Dr Webster was formerly Technical Director then Managing Director of the animal health. company, Cyanamid Webster Pty Ltd, and a Member of the Board of Governors, University of Western Sydney. Dr Webster is a Member of the Human Resources Committee.

Peter R Turvey, BA/LLB, MAICD Company Secretary

FINANCIAL RESULTS FOR THE YEAR ENDED 30 JUNE 2003

All figures in \$A million unless stated otherwise.

	2002-2003	2001-2002
Total revenue	1.313.2	1.350.2
Sales revenue	1.300.3	1.336.4
Research and development expenses	91.5	88.8
Profit from ordinary activities before income tax expense	801.7	156.5
Profit from ordinary activities after income tax expense.	70.4	1238
Profit from ordinary activities after income tax expense before amortisation of goodwill	11246	163.6
Captal investment	74.3	829
Total assets at 30 June	2.219.5	2.312.1
Total equity at 30 June	12827	1,273,1
Net tangble assets per share at 30 June (6)	2.42	179
Weighted average number of shares (million)	159.2	158.31
Basic earnings per share (cents)	44.2	78.2
Dividends per share (cents)	34.0	340

SALES REVENUE BY BUSINESS UNIT

n nealth 62%
BIOPLASMA AG (30%)
PHARMACEUTICAL (19%)
BIOPLASMA (13%)
ASMA SERVICES. 20%
13% IOSCIENCES
I. HEALTH -5%

DIREGIORSER E DREI

The Board of Directors of CSL Limited has pleasure in submitting the statement of financial position of the Company and of the consolidated entity at 30 June 2003, and the related statement of financial performance and statement of cash flows for the year then ended, and reports as follows:

1. DIRECTORS

The Directors of the Company in office during the financial year and until the date of this report are as follows. Directors were in office for the entire period.

Mr.P.H Wade (Chairman) Dr B A McNamee (Managing Director) Miss E A Alexander, AM Mr A M Cipa Mr C I R McDonald Mar I A Renard Mr K J Roberts, AM Dr A C Webster

Particulars of the directors' qualifications, experience, special responsibilities, ages and the period for which each has been a director are set out in the Directors' Profiles section of the Annual Report.

2. DIRECTORS' SHAREHOLDINGS AND INTERESTS

At the date of this report, the interests of the directors in the shares and options of the Company were:

CSL Limited

Ordinary Shares	Share Options
PH Wade $-18.427$
B A McNamee 770,333	100,000
- E A Alexander 3,897
A M Cipa 8,000	100,954
CIRMcDonald 40,564
A Renard 3,962
K.J Roberts 3,564
A C Webster 6,568

3. DIRECTORS' INTERESTS IN CONTRACTS.

Particulars of directors' interests in contracts are to be found. in Note 33 of the financial statements. This Report also sets out particulars of the Deed of Access, Indemnity and Insurance entered into by the Company with each director.

4. DIRECTORS' MEETINGS

During the year, the Board held 13 meetings. The Audit and Risk Management Committee met four times and the Human Resources Committee met four times. The Nomination Committee comprises the full Board and meets in conjunction with Board Meetings. The Securities Committee met 13 times and comprises at least any two Directors, one of whom must be a non-executive director.

The attendances of directors at meetings of the Board and its Committees were:

		Board of. Directors		Audit and Risk Management Committee	Securities Committee	Human Resources Committee
	Attended	: Maximum	Attended	`` Maximum	: Attended	Attended	Maximum
P.H Wade	$\lnot 3$ .	13.	ಿಗ		-13
B A McNamee	13.	13
E A Alexander	12.	13.
A M Cipa.	13.
C R McDonald		13
I A Renard	12.	13
K J. Roberts		13
A C Webster	12	13
* Attended for at least part by invitation.

DIRECTORS' REPORT OZORNE RIBERT MATERIAL

5. PRINCIPAL ACTIVITIES

The principal activities of the consolidated entity during the financial year were the research, development, manufacture, marketing and distribution of biopharmaceutical and allied products. No significant change in the nature of those activities has taken place during the year.

6. OPERATING RESULTS

The consolidated profit of the consolidated entity for the financial year, after providing for income tax, amounted to \$70.4m. This represents a 43% decline on the 2001-2002 result of \$123.8m.

7. DIVIDENDS

The following dividends have been paid or declared since the end of the preceding financial year.

2001-2002 - A final dividend for the year ended 30 June, 2002, of 22 cents per ordinary share fully franked at 30% was paid on 10 October, 2002, out of profits for that year as declared by the Directors in last year's Directors Report.

2002-2003 - An interim dividend on ordinary shares of 12 cents per share, fully franked at 30%, was paid on 15 April 2003. The directors of the Company have declared a final dividend of 22 cents per ordinary share for the year ended 30 June 2003, to be paid out of profits for that year. The dividend is fully franked at 30%. The directors have also determined that a dividend reinvestment plan will be implemented, which will apply to that final dividend.

Total dividends for the 2002-2003 year are:

On Ordinary shares
	\$'000
Interim fully franked dividend
paid 15 April 2003	\$19,167
Final fully franked dividend
payable on 10 October 2003	\$35,187

8. REVIEW OF OPERATIONS

The Company's profitability was significantly affected by difficult US trading conditions and adverse foreign currency movements. However, ZLB Bloplasma AG increased its US market share for IVIG and commenced sales of this product in Europe, the Middle East and South America. JRH Biosciences acquired a bovine serum business in the US, commenced work on the construction of a new plant in the United

Kingdom and expanded its presence in Asia. CSL Biopiasma. increased its revenue due largely to increased volumes of plasma processed on behalf of the Australian Red Cross Blood Service and continuing to build on its Asian business. CSL Bioplasma also launched a new highly purified Factor VIII. product (Biostate) onto the Australian market.

CSL Pharmaceutical achieved significant growth in vaccine sales during the year having launched a conjugated semeningococcal C vaccine and an improved influenza vaccine.

In R&D, Merck continues to make excellent progress in their Phase III clinical trial of the CSL licensed quadrivalent vaccine for preventing cervical cancer and genital warts. In respect to the Company's Animal Health business, significant improvement in overall profitability was achieved despite severe. drought conditions in both the US and Australia and a new leptospira vaccine facility was constructed, commissioned and validated at the Company's site in Omaha, Nebraska.

SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS.

The financial performance of the Company has been. significantly affected by an appreciating Swiss franc against the US dollar. A comparison of the average rate between the two currencies for each of the 2002 and 2003 financial years indicates that the Swiss franc has strengthened to the extent of 16% against the US dollar.

In addition, the average selling price in the US for the Company's largest single product, IVIG, reduced by 16% over the course of the year.

During the year the Company also entered into an exclusive agreement with Aventis to allow the Company to evaluate the opportunity to acquire Aventis Behring LLC. Associated due diligence activities are still underway as at the date of this report and discussions are ongoing.

There are no other significant changes in the state of affairs of the consolidated entity during the financial year not otherwise disclosed in this report or in the financial statements.

10. SIGNIFICANT EVENTS AFTER YEAR END

Directors are not aware of any matter or circumstance which has arisen since the end of the financial year which has 1 significantly affected or may significantly affect the operations of the consolidated entity, the results of those operations or the state of affairs of the consolidated entity in subsequent financial vears.

DIREGIORS REPORT COMINUAL

11. LIKELY DEVELOPMENTS AND FUTURE RESULTS

Other than comments on likely developments or expected results of certain of the operations of the consolidated entity contained in the Year in Review in the Annual Report, it would unreasonably prejudice the interests of the consolidated entity If this report were to refer further to the likely developments in the operations of the consolidated entity and expected results from those operations in future financial years.

12. ENVIRONMENTAL REGULATORY PERFORMANCE

The consolidated entity maintains management systems for health, safety and the environment that are consistent with internationally recognised standards to help ensure that its facilities operate to the highest safety and environmental standards to help protect its employees, contractors and the environment. The consolidated entity also provides appropriate training and resources so that its employees are equipped to work safely and to maintain incident-free workplaces. The consolidated entity's sites throughout the world are required to meet the same stringent requirements established by the Board.

Additionally, the consolidated entity's environmental obligations and waste discharge quotas are regulated under both Australian State and Federal law. All environmental performance obligations are monitored by the Board and subjected from time to time to government agency audits and site inspections. The consolidated entity has a policy of complying with and, where appropriate, exceeding its environmental obligations.

The consolidated entity also endeavours to minimise the environmental impact of its operations by recycling waste paper and other materials and by the responsible management and disposal of all product packaging.

No environmental breaches have been notified by the Environmental Protection Authority in Victoria, Australia, or by any other equivalent interstate or foreign government agency in relation to the Company's Australian or international operations during the year ended 30 June 2003.

13. SHARE OPTIONS

Unissued Shares

As at the date of this report, there were 4,993,030 unissued ordinary shares under options (4,435,130 at balance date). Refer to Note 28 of the financial statements for further details of the options outstanding.

Option holders do not have any right, by virtue of the option, to participate in any share issue of the Company or any related body corporate or in the interest issue of any other registered scheme.

Shares issued as a result of the exercise of options

During the financial year, employees and executive directors have exercised the option to acquire 1,219,977 fully paid ordinary shares in the Company at a weighted average exercise price of \$6.58. Since the end of the financial year, a further 14,000 options have been exercised, at a weighted average exercise price of \$11.45.

14. DIRECTORS AND OFFICERS REMUNERATION

Remuneration of senior executives within the Company is reviewed by the Human Resources Committee. Remuneration is determined as part of an armual performance review having regard to market factors, a performance evaluation process and independent remuneration advice. For executive directors and officers, remuneration packages generally comprise salary, a performance-based bonus and superannuation,

Executives are also provided with longer term incentives through the Senior Executive Share Ownership Plan II ("SESOP II") and the Global Employee Share Plan, and in the case of the Managing Director, an individual, long term performance incentive, which act to align the executives' actions with the interests of the shareholders.

The incentive for the Managing Director is designed to encourage him to conduct the Company's business with a view to the Company's share price outperforming an appropriate ASX industrial index progressively over a period of tenyears and for him to remain with the Company over that period. If the Company's share price underperforms that ASX index over a relevant period, no amount is payable in respect of that period. Details regarding the issue of share options under these Plans are provided in Note 28 to the financial statements.

As described in the Notice of Meeting for the 2003 Annual General Meeting, the Company proposes to replace the SESOP If with a new Long Term Incentive Plan.

Non-executive directors are not entitled to performance based bonuses or share options. The Board has implemented a Non-Executive Directors' Share Plan under which at least 20% of a directors' base fees are taken in the form of shares

DIRECTORS' REPOR CONTINUED WWW.

in the Company. That Plan was approved by the Company's shareholders at the 2002 Annual General Meeting.

The Board meets annually to review its own performance. The Chairperson also holds discussions with individual directors to facilitate this peer review. The non-executive directors are responsible for evaluating the performance of the Managing Director who in turn evaluates the performance of all other senior executives. These evaluations are based

on specific criteria including the Company's business performance, whether the long term strategic objectives are being achieved and the achievement of individual performance objectives.

Details of remuneration provided to directors (\$A) and the five. most highly remunerated officers of the Consolidated Entity and the Company are as follows:

SALARY \$	FËĿ Ŝ	BORUS \$	SUPER	CASH TOTAL \$	ATTRIBUTABLE OPTION VALUE URBER ASIC GUESELINES® S	TOTAL Ś	COMPORENT OF ATTRIBUTABLE OPTION VALUE RELATING TO OFTIONS GRANIED IN PRIOR YEARS®	线MABER OF OPTIONS GRANTED DURING ITHE YEAR
P.H Wade	200,000		18,000	218,000		218,000
B A McNamee ^®® 1,103,830				1,103,830	4,120,209	5,224,039		204,600
A M Cipa 387,231		73,500	31,797.	492,528	249,677	742,205	249.677
E A Alexander	100,000		9,000	109,000		109,000
C I R McDonald	92,500		8,325	100,825		100,825
1 A Renard	92,500		$8,325$ .	100,825		100,825
K.J Roberts	95,000		$-8,550$	103,550		103,550
A C Webster	90.000		8,100	98,100		98.100
P.DeHart®® 1,446,992				,446,992		1,446,992
P. Turner ^@@ 746,698			28.344	775,042	456,017	1,231,059	307,177	75,000
C Armit 359,019		97.500	$-28,080$	484,599	493,046	977,645	393,820	50,000
P. Grujic ^19,49 500,931		111,366	20,500	632,797	177,346	810,143	177,346
G Naylor ^13,8 560.004		68,062	10,534.	638,600	121,541	760,141	42,160	40,000
P.Turvey ^® 273,416		62,400	37,440	373,256	273,630	646,886	174,404	50,000
P. Bordonaro ²⁷ 307.900		$50.400$ :	24,366	382,666	249,705	632,371	249,705
A Cuthbertson ^® 255,501		27,700	21,499.	304,700	260,374	565,074	111,534	75,000
D Gearing ^® 173,406		9,451	15,606	198,463	228,388	426,851	168,853	30,000

P Deffart, P Turner, P Grujic and G Naylor were not employees of the parent entity during the financial year. P Deffart, P Grujic and G Naylor salaries are paid Note 1: In \$US and P Turner in Swiss Francs, but reported in \$A at the average exchange rate.

Note 2: P Turvey, P Bordonaro, A Cuthbertson and D Gearing are included to disclose the top five executives of the parent entity.

The amount shown as salary for i^p DeHart includes redundancy entitiements and other contractual obligations consistent with his termination entitlements. Note 3: Note 4: .
The parent entity has entered into a Memorandum of Understanding with Dr B A McNamee dated 16 July 1998 ithe MOUI. The issue of shares or oritions on or before 31 December 2004 as the form of award payable to Dr B A McNamee under the MOU was approved by the Company's shareholders at the 2000 Annual General Meeting. The incentive is designed to encourage him to conduct the consolidated entity's business with a view to the parent entity's share price outperforming an appropriate ASX industrial index progressively trom 31 August 1998. If the parent entity's share price underperforms the said ASX index over the relevant period, no amount is payable in respect of that period. In September 2002, Dr B A McNamee was issued 204,600 options at 1 cent per share in accordance with this agreement for the entity's progressive share price performance from 31 August 1998 to 31 August 2002. In accordance with the MOU, Dr B A McNamee will not receive any options for the parent entity's progressive share price performance for the financial year ended 30 June 2003.

Note 5: $^\circ$ The amount shown as salary for Dr B A McNamee includes \$164,899 as a US living allowance.

Note 6: The amounts shown as salary for P Turner, P Grujic and G Naylor include ex-patriate living allowances.

Note 7: Options issued under the Senior Executive Share Ownership Plan have been valued using the Black-Scholes option valuation methodology as at the grant date adjusted for the probability of performance hurdles being achieved. The amounts disclosed in remuneration have been determined by allocating the value of the option evenly over the period from grant date to vesting date in accordance with ASIC guidelines. As a result, the current year includes options that were granted in prior years and therefore disclosed as part of the executives' remuneration in prior years using the grant date basis of measurement.

DIRECTORS' REPORT CONTRUSI

15. INDEMNIFICATION OF DIRECTORS AND OFFICERS

During the financial year, the following insurance and indemnity arrangements were in place concerning directors and officers of the consolidated entity:

The Company has executed a Director's Deed with each director, as approved by the Board and pursuant to a waiver granted by the Australian Securities and Investments Commission under section 196(1) of the Corporations Act. regarding access to Board papers, indemnity and insurance. Each Deed provides:

(a) an ongoing and unlimited indemnity to the relevant director against flability incurred by that director in or arising out of the conduct of the business of the Company or of a Subsidiary (as defined in the Corporations Act) or in or arising out of the discharge of the duties of that director. The indemnity is given to the extent permitted by law and to the extent and for the amount that the relevant director is not otherwise entitled to be, and is not actually, indemnified by another person or out of the assets of a corporation, where the liability is incurred in or arising out of the conduct of the business of that corporation or in the. discharge of the duties of the director in relation to that corporation;

(b) that the Company will maintain, for the term of each director's appointment and for seven years following cessation of office, an insurance policy for the benefit of each director which insures the director against liability for acts or omissions of that director in the director's capacity or former capacity as a director of the Company; and

(c) the relevant director with a right of access to Board papers relating to the director's period of appointment as a 1 director for a period of seven years following that director's cessation of office. Access is permitted where the director is, or may be, defending legal proceedings or appearing before an inquiry or hearing of a government agency or an external administrator, where the proceedings, inquiry or hearing relates to an act or omission of the director in performing the director's duties to the Company during the director's period of appointment.

In addition to the Director's Deeds, Rule 146 of the Company's Constitution requires the Company to indemnify each "officer" of the Company and of each wholly owned subsidiary of the Company out of the assets of the Company "to the relevant extent" against any liability incurred by the officer in the conduct of the business of the Company or in the conduct of the business of such wholly owned subsidiary of the Company or in the discharge of the duties of the officer unless incurred in circumstances which the Board resolves do not justify indemnification.

For this purpose, "officer" includes a director, executive officer, secretary, agent, auditor or other officer of the Company. The indemnity only applies to the extent the Company is not precluded by law from doing so, and to the extent that the officer is not otherwise entitled to be or is actually indemnified by another person, including under any insurance policy, or out of the assets of a corporation, where the liability is incurred in or arising out of the conduct of the business of that corporation or in the discharge of the duties of the officer in relation to that corporation.

The Company paid insurance premiums of \$375,514 in respect of a contract insuring each individual director of the Company and each full time executive officer, director and secretary of the Company and its controlled entities, against certain liabilities and expenses arising as a result of work performed in their respective capacities, to the extent permitted by law.

16. ROUNDING

The amounts contained in this report and in the financial report have been rounded to the nearest \$1,000 (where rounding is applicable) unless specifically stated otherwise under the relief available to the Company under ASIC Class Order 98/0100. The Company is an entity to which the Class Order applies.

This report has been made in accordance with a resolution of directors.

Signed

Peter H Wade (Director)

Signed

Brian A McNamee (Director)

Melbourne 21 August 2003

OSLUMITED AND ITS CONTROLLED ENTILES
STATIEM ENTLOIT FINANCIAL (PERFICE IV ANCE) FOR THE YEAR ENDED 30 JUNE 2003

		Consolidated Entity	Parent Entity
Notes	2003 \$000	2002 \$000	2003 \$000	2002 \$000
2 Sales revenue	1,300,344	1,336,412	456,368	418,070
Cost of sales	820,037	814,637	232,426	220,258
Gross profit	480,307	521,775	223,942	197,812
Other revenues	12,863	13,770	5,513	14,146
Research and development expenses	91.529	93,277	50,434	49,630
Selling and marketing expenses.	112,178	96,184	47,790	51,177
General and administration expenses	92,125	102,290	38,626	48,655
Borrowing costs	34,228	$33,457$ .	225	136
Other expenses 3(a)	61,378	53,884		4,492
Profit from ordinary activities before income tax expense	101,732	156,453	92,380	57,868
Income tax expense relating to ordinary activities	31,309	32,645	22,863	13,894
Profit from ordinary activities after income tax expense	70,423	123,808	69,517	43,974
Net exchange difference on translation of financial statements of self-sustaining foreign operations 24.	(53,699)	2,555
Increase/(Decrease) in retained profits on adoption of revised accounting standard AASB 1028 "Employee Benefits" 1(b)	(501)		(295)
Total revenues, expenses and valuation adjustments attributable to members recognised directly in equity	(54, 200)	2,555	(295)
Total changes in equity other than those resulting from transactions with owners as owners 26	16,223	126,363	69,222	43,974

	cents	cents,
Basic earnings per share 39.	44.2	78.2
Diluted earnings per share 39	44.1	77.5

The above statement of financial performance should be read in conjunction with the accompanying notes.

8 CSL FINANCIAL REPORT

OSL LIMITED AND ITS CONTROLLED ENTITIES
STATEMENT OF FINANGIAL POSITION

	Consolidated Entity		Parent Entity
Notes	2003 \$000	2002 \$000	2003 \$000	2002 \$000
CURRENT ASSETS
Cash assets 5	83,466	106,215	40,736	69,468
Receivables 6.	169,866	190,446	61,737	-64,536
Inventories	490,094	436,109.	79,826	71,177
Other 8	5,972	5,930	1,502	1,065
Total Current Assets	749,398	738,700	183,801	206,246
NON-CURRENT ASSETS
Receivables	7,649	2,546.	125,127	72,817.
Other financial assets 10.	2,786	2,036.	694,797	694,047.
Property, plant and equipment -11. .	537,556	562,638	264,012	271,069
Deferred tax assets 12.	22,381	16,268.	10,493	9,151
Intangibles 13 ₁	894,987	989,934	20,000
Other 14	4,781
Total Non-Current Assets	1,470,140	1,573,422	1,114,429	1,047,084
TOTAL ASSETS	2,219,538	2,312,122	1,298,230	1,253,330
CURRENT LIABILITIES
Payables. 15.	193,715	214,560	58,867	50,085
Interest bearing liabilities 16.	611	.78,109.
Tax liabilities 17.	15,873	10,092	11,678	1,075
Provisions 18 Total Current Liabilities	33,167	104,049	15,163	52,059
	243,366	406,810	85,708	103,219
NON-CURRENT LIABILITIES Payables $19-$	51,420	80,377	2,500
Interest bearing liabilities $20_{\odot}$	577,448	501,783
Deferred tax liabilities 21.	38,976	$-22,739$ .	12,938	.13,941
Provisions 22	25,630	27,282	25,630	27,282
Total Non-Current Liabilities	693,474	632,181	41,068	41,223
TOTAL LIABILITIES	936,840	1,038,991	126,776	144,442
NET ASSETS	1,282,698	1,273,131	1,171,454	1,108,888
EQUITY
Contributed equity 23,	936,430	923,856	936,430	923,856
Reserves 24.,	16,367	70,069.	22,824	22,827
Retained profits 25	329,901	279,206	212,200	162,205
TOTAL EQUITY	1,282,698	1,273,131	1,171,454	1,108,888

CSLEMITED AND ITS CONTROLLED ENTITIES
STATEWENDED 30 JUNE 2003

		Consolidated Entity		Parent Entity
Notes	2003 \$000	2002 \$000	2003 \$000	2002 \$000
Cash flows from Operating Activities
Receipts from customers	1,319,241	1,314,967.	463,105	421,487
Payments to suppliers and employees	(1, 128, 858)	(1, 131, 222)	(360, 585)	(336, 499)
Interest received.	753	3,921	359	4,741
Income taxes paid	(29, 382)	(22, 168)	(14, 605)	(13, 635)
Borrowing costs	(46, 239)	(35, 413)	(225)	(136)
Net cash inflow from operating activities 36	115,515	130,085	88,049	75,958
Cash flows from Investing Activities
Proceeds from sale of property, plant and equipment	8,209	.398 ₁	23	.5.
Payment for property, plant and equipment	(74, 279)	$(82, 859)$ .	(24, 450)	(25, 408)
Payment for other investments	(750)	(589)	(750)	(589)
Payment for investment in controlled entities				(310, 522)
Purchase of business, net of cash acquired.	(16, 222)	(313, 203)
Payment for restructuring of business	(37,789)	(9,033)
Payment for intellectual property	(36, 357)
Net cash outflow from investing activities	(157, 188)	(405, 286)	(25, 177)	(336, 514)
Cash flows from Financing Activities
Proceeds from issue of shares	7,468	326,456	7,468	326,456
Dividends paid	(54,091)	(45, 947)	(54,091)	(45, 947)
Advances to controlled entities			(44, 981)	(17, 737)
Proceeds from borrowings	689,570	13,837
Repayment of borrowings	(603, 661)	(42, 513)
Net cash inflow/(outflow) from financing activities	39,286	251,833	(91, 604)	262,772
Net increase/(decrease) in cash held	(2, 387)	(23,368)	(28, 732)	2,216
Cash at the beginning of the financial year.	89,355	109,489	69,468	67,252
Exchange rate variations on foreign cash balances	(4, 113)	3,234
35 Cash at the end of the financial year	82,855	89,355	40,736	69,468

CSL LIMITED AND ITS CONTROLLED ENTITIES NOTES TO AND FOR WING
PARTICE THE HINANGIAL STATEMENTS

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of Accounting

The financial report is a general purpose financial report, which has been prepared in accordance with the requirements of the Corporations Act 2001 including applicable Accounting Standards. Other mandatory professional reporting requirements (Urgent Issues Group Consensus Views) have also been complied with.

The financial report has been prepared in accordance with the historical cost convention.

(b) Changes in Accounting Policies

(i) Foreign Currency Translation

The consolidated entity has adopted the revised Accounting Standard AASB 1012 "Foreign Currency Translation", which has resulted in a change in the accounting policy in relation to the classification of foreign currency contracts that are hedges. Previously, the consolidated entity included foreign currency contracts used to hedge borrowings in interest bearing liabilities. In accordance with the requirements of the revised Standard, these contracts will be shown separately (refer to Note 15 and 19).

(ii) Employee benefits

The consolidated entity has adopted the revised Accounting Standard AASB 1028 "Employee Benefits", which has resulted in a change in the accounting policy for the measurement of employee benefit liabilities. Previously, the consolidated entity measured the provision for annual leave based on remuneration rates at the date of recognition of the liability. In accordance with the requirements of the revised Standard, the provision for annual leave is now measured based on the remuneration rates expected to be paid when the liability is settled. The effect of the revised policy has been to decrease consolidated retained profits and increase employee benefit liabilities at the beginning of the year by \$501,000.

(iii) Provision for dividends

Provision is only made for the amount of any dividend declared, determined or publicly recommended by the directors on or before the end of the financial year but not distributed at balance date.

The above policy was adopted from 1 July 2002 to comply with AASB 1044: Provisions, Contingent Liabilities and Contingent Assets. In previous periods, in addition to providing for the amount of any dividends declared, determined or publicly recommended by the directors on or before the end of the financial year but not distributed at balance date, provision was made for dividends to be paid out of retained profits at the end of the financial year where the dividend was proposed, recommended or declared between the end of the financial year and completion of the financial report.

The adoption of this policy has no impact on the financial position at 30 June 2003 or on the financial results for the financial year then ended.

(c) Principles of Consolidation

The consolidated financial statements are those of the consolidated entity, comprising CSL Limited (the parent entity) and all entities that CSL Limited controlled from time to time during the year and at balance date.

-Information from the financial statements of controlled entities is included from the date the parent entity obtains control until such time as control ceases. Where there is loss of control of a controlled entity, the consolidated financial statements include the results for the part of the reporting period during which the parent entity had control.

The financial statements of controlled entities are prepared for the same reporting period as the parent entity, using consistent accounting policies. Adjustments are made to bring into line any dissimilar accounting policies that may exist.

All intercompany balances and transactions, between entities in the consolidated entity, including any unrealised profits or losses, have been eliminated in full.

OSLUMIED AND IS CONTROLLED ENTITES
NOTES TO AND FORM ING
PARTIOF THE FINANGIAL STATEMENTS OGRAFIKE FALL

(d) Income Tax

Tax-effect accounting is applied using the liability method whereby income tax is regarded as an expense and is calculated on the accounting profit after allowing for permanent differences. To the extent timing differences occur between the time items are recognised in the financial statements and when items are taken into account in determining taxable income, the net related taxation benefit or liability, calculated at current rates, is disclosed as a future income tax benefit or a provision for deferred income tax. The net future income tax benefit relating to tax losses is not carried forward as an asset unless the benefit is virtually certain of being realised.

Foreign Currency Translation $(e)$

Transactions in foreign currencies of entities within the consolidated entity are converted to local currency at the rate of exchange. ruling at the date of the transaction.

Amounts payable to and by the entities within the consolidated entity that are outstanding at the reporting date and are denominated In foreign currencies have been converted to local currency using rates of exchange ruling at the end of the financial year.

The financial statements of integrated foreign operations are translated using the temporal rate method. Any exchange difference arising through the use of the temporal method is taken directly to the statement of financial performance.

The financial statements of self-sustaining foreign operations are translated using the current rate method. Any exchange difference arising through the use of the current rate method is taken directly to the foreign currency translation reserve.

The exchange gains and losses arising on those foreign currency borrowings which are designated as hedges of self-sustaining controlled foreign entities are offset in the foreign currency translation reserve against the gains and losses arising on the translation of the net assets of those entities. These circumstances represent an effective natural hedge.

Inventories $(f)$

All inventories are stated at the lower of cost and net realisable value. Cost includes direct labour and an appropriate proportion of variable and fixed overhead expenditure, the latter being allocated on the basis of normal operating capacity.

(g) Acquisitions of Assets

The cost method of accounting is used for all acquisitions of assets regardless of whether shares or other assets are acquired. Cost is the fair value of consideration given at the date of acquisition plus costs incidental to the acquisition. Where goodwill arises it is brought to account on the basis described in Note 1(m).

(h) Freehold Property, Plant and Equipment

Freehold land and buildings are recorded at deemed cost which is not in excess of the recoverable amount. Provision for depreciation of buildings has been made.

Plant and equipment is stated at cost less depreciation or amortisation which is not in excess of the recoverable amount. Capital work in progress is stated at cost.

The consolidated entity is of the opinion that land and buildings are indivisible and constitute one class of asset. Land and buildings are disclosed separately in Note 11 to provide supplementary information regarding the depreciation of buildings in accordance with AASB 1041 Revaluation of Non-Current Assets.

(i) Recoverable Amount

Non-current assets measured using the cost basis are not carried at an amount above their recoverable amount, and where carrying values exceed this recoverable amount assets are written down. In determining recoverable amount, the expected net cash flows have been discounted to their present value.

ost tarti totali da NOTES TO AND FORMING
PART OFMHE FINANCIAL STATEMENTS exoxtinism

Leasehold improvements (j)

The cost of improvements to or on leasehold properties is amortised over the unexpired period of the lease or the estimated useful life of the improvement whichever is the shorter.

(k) -Leases

Operating leases are not capitalised. Rental payments are charged against profits in equal instalments over the terms of the leases.

Depreciation $\left( 0 \right)$

Property, plant and equipment, except freehold land, are depreciated over their economic lives on a straight line basis as follows:

$-5 - 25$ years Buildings
Plant and equipment $5 - 5 - 15$ years
easehold improvements [ 5 - 10 years ]

(m) Goodwill

On acquisition of some or all of the assets of another entity, the identifiable net assets acquired are measured at their fair value. The excess of the fair value of the purchase consideration plus incidental expenses over the fair value of the identifiable net assets is brought to account as goodwill and is amortised on a straight line basis over the period of expected benefit which currently ranges from 10 to 20 years. The carrying value of goodwill is reviewed at each reporting date by the directors and written down where it is considered that the carrying amount exceeds the recoverable amount. Recoverable amounts are based on expected net cash flows that have been discounted to their present value using the Group's weighted average cost of capital.

The expected net cash flows used to estimate the recoverable amount incorporate best-estimate assumptions. While evidence is available to support the best-estimate assumptions such evidence is generally future oriented and therefore judgemental in nature. In particular, currency exchange rates and the future pricing of Plasma Products are key determinants of the expected net cash flows. Expected net cash flows are based on the USD/CHF exchange rate not materially decreasing from the exchange rate as at balance date.

(n) Research and Development, Patents and Intellectual Property

Current expenditure on research and development and on patents is charged against profit from ordinary activities as incurred. Expenditure on R&D equipment is capitalised in property, plant and equipment and depreciated over its estimated useful life. Purchased intellectual property and other intangibles are carried at cost and amortised over the expected benefit, not exceeding 20 years. The carrying value of intellectual property and other intangibles is reviewed annually by the directors and written down where it is considered appropriate.

(o) Provisions

Provisions are recognised when the consolidated entity has a legal, equitable or constructive obligation to make a future sacrifice of economic benefits to other entities as a result of past transactions or other past events, it is probable that future sacrifice of economic benefits will be required and a reliable estimate can be made of the amount of the obligation.

A provision for dividends is not recognised as a liability unless the dividends are declared, determined or publicly recommended on or before the reporting date.

The Incurred But Not Reported (IBNR) provision is determined on an actuarial basis as the present value of potential future payments, using statistics based on past experience and a judgemental assessment of relevant risk and probability factors. The liability covers claims incurred but not paid, incurred but not reported and the anticipated direct and indirect costs of settling those claims.

OSTIMINE VIHENTIME (VETERIN) Iewotorriikkorin kommen kannaan kannaan kannaan kannaan kannaan kannaan kannaan kannaan kannaan kannaan kanna S 10 AND FORMING
IOF HE FINANCIAL STATEMENTS COME IN REDUCTION

Revenue Recognition (p)

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the entity and the revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is recognised:

Sales revenue

Sales revenue comprises revenue earned (net of returns, discounts and allowances) from the provision of products external to the consolidated entity. Sales revenue is recognised when title of the goods has passed to the buyer.

Interest income

Interest income is recognised as it accrues.

Other revenue

Other revenue, including government grants, is recognised when the entitlement is confirmed.

(q) Cash and Cash Equivalents

For the purpose of the statement of cash flows, cash includes cash on hand and at call deposits with banks or financial institutions and investments in money market instruments, net of bank overdrafts.

Bank overdrafts are carried at the principal amount. Interest is charged as an expense as it accrues.

(r) Goods and Services Tax (GST)

Revenues, expenses and assets are recognised net of GST except where the amount of GST incurred is not recoverable. Receivables and payables are stated at the GST inclusive amount.

Cash flows are included in the cash flow statement on a gross basis. The GST component of cash flows arising from investing and financing activities that are recoverable are classified as operating cash flows.

Other Financial Assets (s)

Interests in non-controlled entities or non-associated corporations are included in investments at the lower of cost or the recoverable amount.

$(1)$ Financial Instruments

Financial Instruments included in Assets

Trade debtors are initially recorded at the amount of the contracted sale proceeds. Provision for doubtful debts is recognised to the extent that recovery of the outstanding receivable balance is considered less than likely.

Bank deposits and bills of exchange are carried at cost.

Financial Instruments included in Liabilities

Liabilities for trade creditors and other amounts are carried at cost which is the fair value of the consideration to be paid in the future for goods and services received, whether or not billed to the consolidated entity. Trade payables are normally settled within 60 days.

Bank and other loans are carried on the statement of financial position at their principal amount. Interest is charged as an expense as It accrues.

Swap payable represents the net position of foreign currency swap positions used to hedge borrowings. This swap was entered into with the objective of reducing the future exchange rate fluctuations on foreign currency borrowings.

GSI IMMILD AND LES CONLINEERINGSI NOTES TO AND FORMING
PART OF THE FINANCIAL STATEMENTS

EXON TIN LIEDWAN

Derivative Financial Instruments

The consolidated entity enters into forward exchange contracts where it agrees to sell specified amounts of foreign currencies in the future at a predetermined exchange rate. The objective is to match the contracts with committed future cash flows from sales and purchases in foreign currencies, to protect the consolidated entity against exchange rate movements.

Gains and losses on forward exchange contracts are accounted for as outlined in Note 1(e).

The consolidated entity has entered into interest rate swap agreements that are used to convert the variable interest rate of its borrowings to fixed interest rates. It is the consolidated entity's policy not to recognise interest rate swaps in the financial statements. Net receipts and payments are recognised as an adjustment to interest expense.

(u) Borrowing Costs

Borrowing costs are expensed in the period in which they are incurred, except where they are included in the costs of qualifying assets, or ancillary costs associated with originating a loan. Any ancillary costs are amortised over the period of the loan.

(v) Employee Benefits

Provision is made for employee benefits accumulated as a result of employees rendering services up to reporting date. These benefits include wages and salaries, annual leave and long service leave.

Employee benefits including on costs, expected to be settled within one year together with benefits arising from wages and salaries and annual leave which will be settled after one year, have been measured at their nominal amounts based on remuneration rates which are expected to be paid when the liability is settled. Long service leave, including on costs, payable later than one year have been measured at the present value of the estimated future cash outflows to be made for those benefits.

Employee benefits expenses and revenues are charged against profits on a net basis in their respective categories.

(w) Defined Benefit Superannuation Plan.

Contributions to defined benefit superannuation plans maintained by the consolidated entity are expensed in the year they are paid or become payable. No amount is recognised in respect of the net surplus or deficit of each plan.

(x) Employee Share and Option Ownership Schemes

Certain employees are entitled to participate in share and option ownership schemes. Loans are provided to assist in the purchase of shares and options. The details of the schemes are described in Note 28. No remuneration expense is recognised in respect of employee shares and options issued. Amounts outstanding on employee share loans are lincluded in non current receivables.

(y) Prior Year Comparatives

Where necessary, comparatives have been reclassified and repositioned for consistency with current year disclosures as a result of the first-time application of revised Accounting Standards AASB 1012 "Foreign Currency Translation", Accounting Standards AASB 1028 "Employee Benefits" and Accounting Standards AASB 1044 "Provisions, Contingent Liabilities and Contingent Assets".

CSL FINANCIAL REPORT 15

OSLUMIED AND ITS CONTROLED ENTITES
NOTES TO AND FORM ING MANE IN FAM

		Consolidated Entity	Parent Entity
	2003 \$000	2002 54.75 \$000	2003 \$000	$-2002$ \$000
2 REVENUE FROM ORDINARY ACTIVITIES
Sales revenue	1,300,344	1.336,412	456,368	418 DZC
Other revenue Interest received/receivable.
Other persons and/or corporations	691	3.829	296	' 231
Controlled entities			2,225	2,418.
Proceeds from sale of property, plant and equipment	8,209	-398	23	-5
.Rent	191	-965	191	164.
Royatties	84	$-215$ .	84	215
Collaborative revenue	996	7,436	998	7,436
Other	2,690	927	1,696	1,677
Total other revenues	12,863	13,770	5,513	14,146
Total revenue from ordinary activities	1,313,207	1,350,182	461,881	432,216

OSLIMMTED AND ITS CONTROLED ENTILS
NOTES TO AND FORM ING CONTINUED

		Consolidated Entity			Parent Entity
		2003 \$000	2002 \$000	2003 \$000	2002 \$000
3	OPERATING PROFIT
	Profit from ordinary activities before income tax includes
	the following specific net gains and expenses:
	Net gains
	Net gain/(loss) on disposal of property, plant and equipment	87	$(505)$ .	(19)	5
	Foreign exchange gains/(losses)	(182)	(111)	1,919	1,333
	Foreign currency translation gains/(losses)	160	(291)
	Expenses
	Borrowing costs Interest paid/payable
	Other persons and/or corporations	33,232	33,457	225	136
	Other borrowing costs	996
	Total borrowing costs	34,228	33,457	225	136
	Depreciation.
	Buildings	8,304	7,636	3,843	3,697
	Plant and equipment	55,763	56,366	27,622	28,409
	Total depreciation	64,067	64,002	31,465	32,106
	Amortisation
	Leasehold improvements	2,435	647
	Intellectual Property (a)	1,807
	Goodwill (a)	51,487	48,487
	Total amortisation	55,729	49,134
	- The functional expense classification of Other Expenses. $(a)$ . includes goodwill and intellectual property amortisation.
	Provisions
	Officer and employee benefits	33,229	28,170	20,043	16,891
	Doubtful debts	199	439
	Other provisions	(7,557)	406.	(6,736)	(386)
	Diminution in value of inventories	12,885	11,941.	3,579	4,131
	Diminution in value of investments		1,000		1,000
	Total provisions	38,756	41,956	16,886	21,636
	Investments written off		3,493		3,493
	Rental expenses relating to operating leases	13,098	13,958	2,664	2,545
	Superannuation contributions - defined benefit fund	12,163	10,095	3,148	2,219

OSI HAI EDIANO O AND FORMING
HIELFINANGIAL STATEMENTS tin 1 业服 CONFINERD

		Consolidated Entity		Parent Entity
	2003 \$000	2002 \$000	2003 \$000	2002 \$000
INCOME TAX The income tax expense for the financial year differs from the amount calculated on the profit. The differences are reconciled as follows:
Profit from ordinary activities before income tax	101,732	156,453	92,380	57,868
Income tax calculated at 30%. Tax effect of permanent differences	30,520	46,935	27,714	17.360
Building depreciation	296	296	296	296
Reduction in tax arising from the tax incentive for R&D.	(2,829)	(2,557)	(2,829)	(2,557)
Equity raising costs.	(452)	(452)	(452)	(452)
Under/(over) provision in previous year	(396)	(1,378)	(404)	(320)
Effects of different rates of tax on overseas income	5,537	(10, 322)
Other non-allowable/assessable items	(1, 365)	123	(1, 462)	(433)
Income tax expense adjusted for permanent differences	31,309	32,645	22,863	13,894

Tax consolidation legislation

No decision has yet been made as to the timing of entry into tax consolidation for the purposes of income taxation. However, Implementation of the tax consolidation legislation is not expected to have material impact on the consolidated assets and liabilities and results.

CURRENT ASSETS - CASH ASSETS
Cash at bank and on hand	83,466	$-45.769$	40,736	9.468
Cash deposits		60.446		60.000
	83,466	106.215	40,736	69.468
CURRENT ASSETS - RECEIVABLES К
Trade debtors	157,499	- 175.686	54,837	.52,572
Less: provision for doubtful debts	1,211	1.174	500	500
	156,288	$-174.512$ .	54,337	.52.072
Other debtors	13,578	15.934	7,400	12.464
	169,866	190.446	61,737	64.536

OSE LIMITED AND ITS CONTROLED ENTITES
NOTES TO AND FORMING
PARTIOF THE FINANCIAL STATEMENTS oonikulo

		Consolidated Entity	Parent Entity
	2003 \$000	2002 \$000	2003 \$000	2002 \$000
CURRENT ASSETS - INVENTORIES 7.
Raw materials and stores - at cost	108,625	84,890	18,899	17,028
Less: provision for diminution in value	2,236	5,030	852	828
Raw materials and stores - net	106,389	79,860	18,047	16,200
Work in progress - at cost	207,116	179,842	26,212	21,281
Less: provision for diminution in value	14,651	16,508	338	762
Work in progress - net	192,465	163,334	25,874	20,519
Finished goods - at cost	197,525	201,044.	36,622	.37,983
Less: provision for diminution in value	6,285	8,129	717	3,525
Finished goods - net	191,240	192,915	35,905	34,458
	490,094	436,109	79,826	71,177
CURRENT ASSETS - OTHER
Prepayments	5,972	5,930	1,502	1,065
NON-CURRENT ASSETS - RECEIVABLES Related bodies corporate
Wholly owned controlled entities			113,539	66,221
Partly owned controlled entities			3,939	4,050
Loans to directors (refer Notes 28 and 33)	1,893	86.	1,893	.86.
Loans to employees (refer Note 28)	5,756	2,460	5,756	2,460
	7,649	2,546	125,127	72,817
10 NON-CURRENT ASSETS - OTHER FINANCIAL ASSETS
Investments in non-controlled entities at cost	3,786	3,036	3,786	3,036
Less: provision for diminution in value of investments	1,000	1,000	1,000	1,000
	2,786	2,036	2,786	2,036
Shares in controlled entities (refer Note 34)			692,011	692,011

OSI LIMITED AND IS CONFOLLED ENLIES
NOTES TO AND FORM ING CONTINUED

	2003	2002	2003	2002
	\$000	\$000	\$000	\$000

NON-CURRENT ASSETS - PROPERTY, T.
PLANT AND EQUIPMENT
Land at deemed cost
Opening balance	30,624	30,607	25,029	25,029
Additions	259
Disposals	(3, 310)
Additions through acquisition of entity		.612
Currency translation differences	(472)	(595)
Closing balance	27,101	30,624	25,029	25,029
Buildings at deemed cost
Opening balance	182,892	171,146	65,005	64,105
Additions	1,688	2,522
Disposals	(5,300)	(12)
Additions through acquisition of entity		1,655
Transferred from capital work in progress	19,431	$-1,720$	5,968	900
Currency translation differences	(9,909)	5,861
Closing balance	188,802	182,892	70,973	65,005
Accumulated depreciation
Opening balance	18,579	10,916	10,868	7,171
Depreciation for the year	8,304	7,636	3,843	3,697
Disposals	(1, 108)
Currency translation differences	(950)	27
Closing balance Net book value	24,825	18,579	14,711	10,868
Net book value of land and buildings	163,977	164,313	56,262	54,137
Leasehold improvements at cost	191,078	194,937	81,291	79,166
Opening balance	4,916	3,434	168	171
Additions	5,826	96
Disposals	(548)	(3)		$\langle 3 \rangle$
Additions through acquisition of entity in	253
Transferred from capital work in progress	2,283	.1,673.
Currency translation differences	(1,613)	(284)
Closing balance	11,117	4,916	168	168
Accumulated amortisation
Opening balance	2,144	$-1,691$ .	168	171
Amortisation for the year	2,435	647.
Disposal	(230)	$\cdot$ (3)
Currency translation differences	(551)	(191)
Closing balance	3,798	2,144	168	168
Net book value of leasehold improvements	7,319	2,772

CSE EMATED AND ITS CONTROLLED ENTITIES S TO AND FORMING
OF THE FINANCIAL STATEMENTS nung
Anggl ooninuad

		Consolidated Entity		Parent Entity
	2003 \$000	2002 : \$000	2003 \$000	2002 \$000
11 NON-CURRENT ASSETS - PROPERTY,
PLANT AND EQUIPMENT (continued)
Plant and equipment at cost
Opening balance	613,051	515,467	422,474	405,873
Additions	5,745	21,491
Disposals	(6,966)	(4,053)	(79)	(302)
Additions through acquisition of entity	1,013	24,472
Transferred from capital work in progress	74,183	53,358	30,608	16,903
Currency translation differences	(20, 418)	2,316
Closing balance	666,608	613,051	453,003	422,474
Accumulated Depreciation
Opening balance	321,606	268,709	267,176	239,069
Depreciation for the year	55,763	56,366	27,622	28,409
Disposals	(6,664)	(3,162)	(37)	(302)
Currency translation differences	(6,650)	(307)
Closing balance	364,055	321,606	294,761	267,176
Net book value of plant and equipment	302,553	291,445	158,242	155,298
Capital work in progress
Opening balance	73,484	68.560	36,605	29,000
Additions	60,761	58,750	24,450	25,408
Additions through acquisition of entity		158
Transferred to buildings at cost.	(19, 431)	$(1,720)$ .	(5,968)	(900)
Transferred to plant and equipment at cost	(74, 183)	(53, 358)	(30,608)	(16,903)
Transferred to leasehold improvements at cost	(2, 283)	(1,673)
Currency translation differences	(1,742)	2,767
Closing balance	36,606	73,484	24,479	36,605
Total net book value of property, plant and equipment	537,556	562,638	264,012	271,069

Valuation of land and buildings

$\langle 0 \rangle$

(a) Land and buildings are valued every three years.

$(b)$ The directors' most recent valuation of land and buildings was at 30 June 2002 being \$285,096,000 for the consolidated entity.

The valuation of land and buildings is based on their fair market value based on existing use. The valuations in Australia and New Zealand were carried out by PR Dickinson, AAPI AREI; AK Brown, AAPI; and PW Senior, ANZIV SNZPI, of CB Bichard Ellis a di Salah Salah Sebagai Sela
Selatan Salah Selatan di Salah Salah Pty Ltd.

The valuations in the USA were carried out by ME Kancel, SCGA, of Bliss Associates Inc., and by PR Seevers, MAI SRA, of Seevers Jordan Ziegenmeyer. The valuations in Switzerland were carried out by MGA Lequen Se Lacroix, MIRCS, of ONCOR International.

OSI LIMITED AND ITS CONTROLLED ENTITES
NOTES TO AND FORM ING osobra Restardininin

		Consolidated Entity		Parent Entity
	2003 \$000	2002 \$000	2003 \$000	2002 \$000
12 NON-CURRENT ASSETS DEFERRED TAX ASSETS
Future income tax benefit	22,381	16,268	10,493	9,151
Attributable to timing differences	19,466	,16,132.	10,493	9.151
Attributable to carried forward losses	2,915	136
	22,381	16,268	10,493	5.L 9,151
13 NON-CURRENT ASSETS - INTANGIBLES
Goodwill at cost (a) .	946,594	1,015,206
Less: accumulated amortisation	126,821	86,053
	819,773	929,153
intellectual property (b)	57,828	$-61,737$
Less: accumulated amortisation	2,614	956
	55,214	60,781
Other intangibles	20,000		20,000
	894,987	989.934	20,000

The foreign currency translation differences arising from the translation of self-sustaining foreign operations has reduced $(a)$ goodwill at cost by \$88 million this financial year. Accommodation of the control of the Control of

.
In the prior period, ZLB Bioplasma AG purchased product registrations and trade marks for Sandoglobulin and Sanglopor from Novartis. The intellectual property in the amount of CHF 52.2 million was discounted to its fair value with the corresponding payable apportioned between current and non current payables (refer Notes 15 and 19).

14 NON-CURRENT ASSETS - OTHER THE
Deferred borrowing costs	4,781
15 CURRENT LIABILITIES - PAYABLES
Trade creditors	110,744	$-104,033$	27,518	24.724
Other creditors	77,432	$-103.042$	31,349
Swap payable (refer Note 42)	5,539	7.485
	193.715	214.560	58,867	50.085

$\langle 0 \rangle$

OSLAMTED AND ITS CONFOLLED ENTITS
NOTES TO AND FORM ING
PARTIOF THE FINANCIAL STATEMENTS COMINUED

		Consolidated Entity		Parent Entity
	2003 \$000	2002 \$000	2003 \$000	2002 \$000
16 CURRENT LIABILITIES -
INTEREST BEARING LIABILITIES
Unsecured
Bank overdrafts	611	16,860
Bank loans (refer Note 20(a))		61,249
	611	78,109

17 CURRENT LIABILITIES - TAX LIABILITIES
Income tax	15,873	10,092	11,678	1,075

18 CURRENT LIABILITIES - PROVISIONS
Dividends (refer Note 25)		$-34,864.$		34,864
Employee benefits	23,522	24,780.	14,707	.14,207
Restructuring of acquired entities (a) (b)	9,305	40,484
Other (b)	340	3,921	456	2,988
	33,167	104,049	15,163	52,059

Restructuring of acquired entities (a)
This provision relates to prior acquisitions and also includes the restructuring provision in relation to the acquisition of By-Prod and Siris assets made during the year as discussed in Note 37.
Movements .(b).
– Restructuring of acquired entities

restructuring or acquired entities.
Carrying amount at the beginning of the financial year.	40,484	23,883
Additional provision	6,170	23.623
Payments made.	(37,789)	(9,033)
Currency translation differences	440	2,011
Carrying amount at the end of the financial year	9.305	40,484
Other.
Carrying amount at the beginning of the financial year.	3,921	3,462.	2,988	2.400
Additional provision	1,008	2,059	979	1.225
Payments made	(1, 339)	(1.600)	(1, 111)	(637
Provision no longer required	(3,250)		(2,400)
Carrying amount at the end of the financial year	340	3.921	456	2.988

OSLUMITED AND ITS CONTROLED ENTITES
NOTES TO AND FORM ING
PART OF THE FINANCIAL STATEMENTS CONTINUED

		Consolidated Entity		Parent Entity
	2003 \$000	2002 \$000	2003 \$000	2002 \$000
19 NON-CURRENT LIABILITIES - PAYABLES
Other creditors	25,388	26,949.	2,500
Swap payable (refer Note 42)	26,032	53,428
	51,420	80,377	2,500

20 NON-CURRENT LIABILITIES -
INTEREST BEARING LIABILITIES
Unsecured .
Bank Joans (a)	177,719	284,989.
Vendor loans (b)	25,142	216,794
Other loans (c)	374,587
	577,448	501,783
During the year, the group completed an issue of USD250 million of Senior Unsecured Notes into the US Private Placement (C) . market. The Notes mature in December 2012 with interest fixed at 5.30% and 5.90%. Repayments are made blannually from December 2006 to December 2012.
Refer to Note 42 for further details on the foreign exchange and maturity profile of the consolidated entity's borrowings and the impact of currency and interest rate swaps on the effective interest rates and Note 38 for details on the total facilities available and drawn down. 21 NON-CURRENT LIABILITIES DEFERRED TAX LIABILITIES

Provision for deferred income tax	38,976	22,739	12,938	13,941

osti rahi zdrađeni KORINZENEZ DIERENTZE TO AND FORMING
F THE FINANCIAL STATEMENTS İ otan kilod

1999年10月12日,1999年10月10日,1999年10月1日,1999年10月1日,1月12日,1月12日,1月12日,1月12日,1月12日,1月12日,1月12日,1月10日,1月10日, Nepresente popular necessary in terms and a community of New Jersey Community and account of the community of the
		Consolidated Entity		Parent Entity
And the first state of the contribution of the contribution of the contribution of Department the office of the processes of the experimental consequence is the consequence of the consequence of as social a taglactita a titala sua alagua a a magnega a a a titala taga sus sua a a taga sus sus sus a a guida	2003 SOOO	- 2002- നേന	2003 \$000	3000
22 NON-CURRENT LIABILITIES - PROVISIONS
Claims provision including IBNR (a) (b)	15,853	$-21,168$	15,853	$-21,168$ .
Employee benefits	9.777	6.114	9.777	6.114
	25.630	27.282	25.630	27.282

Claims provision including IBNR $(a)$

The Australian Government has indemnified CSL Limited for certain existing and potential claims made for personal injury and damage suffered through use of certain products manufactured by CSL Limited under government ownership. The indemnity covers AIDS and hepatitis related claims for blood products derived from Australian blood. The indemnity also covers CJD claims for human pituitary hormones (manufacture of which ceased in 1985) and claims for pertussis vaccines manufactured prior to June 1994.

$(b)$ Movements

$23₁₀$ On

$(a)$

61 Claims provision including IBNR

ファイルストリックスープー the contract of the contract of the contract of the contract of the contract of the contract of the contract of
Carrying amount at the beginning of the financial year	21,168	$-22.779$	21,168	.22,779
Provision no longer required	(5.315)	(1.611)	(5,315)	(1,611)
Carrying amount at the end of the financial year	15.853	21.168	15.853	21,168
ONTRIBUTED EQUITY
dinary shares fully paid	936,430	923.856	936.430	923.856
ومتعاملته والراوي ومعاملته ومعاقبا

2003

	Number of shares	\$000	Number \$000 of shares
Movements in shares on issue:
Opening balance	158,470,491	923,856	149.667.254. $-596.407$ .
Shares issued on equity placement (a)			8.250.000 $-330.000$ .
Shares issued to employees through participation .in SESOP.∥.tb) ∴	1,219,977	8,025	544,934 4,912
Shares issued to employees through participation in GESOP (c)			8.303 328
Shares issued to shareholders through participation in Shareholder Plan (d)	170.350	3.625
Shares issued to employees through participation in GESP (e)	77,842	924
Share issue placement costs (a)			(7,791)
Balance at 30 June	159,938,660	936,430	158,470,491 923.856

On 3 July 2001 the parent entity issued 8,250,000 fully paid shares at \$40.00 per share for the purpose of enabling the consolidated entity to acquire 47 US based plasma collection centres and associated laboratory facilities from Nabi. Cost associated with the equity raising have been applied against contributed equity.

2002

OSI LIMITED AND ITS CONTROLLED ENTITES
NOTES TO AND FORM ING CONTRUSO

	2003 \$000	2002 \$000	2003 \$000	2002 \$000

23 CONTRIBUTED EQUITY (continued) (b) Options exercised under SESOP II as disclosed
at Note 28 during the year were as follows:
530,333 issued at \$0.01	5		5
200,000 issued at \$8.93	1,786		1,786
56,314 issued at \$10,82	609		609
-61,400 issued at \$11,45	703		703
371,930 issued at \$13.23	4,922		4,922
90,000 issued at \$5.01.		451.		451.
79,308 (ssued at \$5.29)		419.		419.
7,000 (ssued at \$5.73)		- 40		-40
60,000 (ssued at \$6.05		363		363
193,566 Issued at \$10.82		2,094		2,094
78,400 issued at \$11.45		-898.		898
18,660 Issued at \$13.23		247.		247.
18,000 issued at \$22.22		400		400
	8,025	4,912	8,025	4,912
Shares issued to employees under GESOP as disclosed (C).
in Note 28 were as follows:
- 8,303 issued at \$39.45		328		328
Shares issued to shareholders under the Shareholder {d}
Plan were as follows:
- 170,350 issued at \$21.28 on 15 November 2002	3,625		3,625

Shares issued to employees under Giobal Employee .(e)
Share Plan (GESP) as disclosed in Note 28 were as follows:
- 77,842 issued at \$11.87 on 12 March 2003	924		924
. The Signal State of the Committee of the Committee of the Committee of the Committee of the Committee of the C Terms and conditions of contributed equity with the
Ordinary shares have the right to receive dividends as declared and, in the event of winding up the company, to participate in the
proceeds from the sale of all surplus assets in proportion to the number of and amounts paid up on shares held.

OSE IANITED AND IT'S CONTROLLED ENT S TO AND FORMING
OF THE FINANCIAL STATEMENTS

CONTINUED

		Consolidated Entity		Parent Entity
	2003 \$000	2002 \$000	2003 \$000	2002 \$000
24 RESERVES
Composition.
Asset revaluation reserve	22,308	22,308.	22,824	22,824
Foreign currency translation reserve	(5,941)	47,758
General reserve
Options reserve		3
	16,367	70,069	22,824	22,827
Movements
Asset revaluation reserve
Opening balance.	22,308	22,308	22,824	22,824
Increment on revaluation of land and buildings
Closing balance	22,308	22,308	22,824	22,824
Foreign currency translation reserve.
Opening balance	47,758	45,203
Net exchange differences on translation of foreign
controlled entities, net of hedge	(53, 699)	2,555
Closing balance	(5,941)	47,758
General reserve
Opening balance		5,618		5,618
Transfer to retained profits		(5,618)		(5,618)
Closing balance
Options reserve
Opening balance	3	$-1,274$	3	.274
Net options issued during the period		72
Options exercised during the period	(3)	(1, 273)	(3)	(1, 273)
Closing balance		3		3

Nature and purpose of reserves

The Asset Revaluation Reserve was used to record increments and decrements in the value of non-current assets. The reserve can only be used to pay dividends in limited circumstances. All land and buildings previously revalued are now carried at deemed cost.

The Foreign Currency Translation Reserve is used to record exchange differences arising from the translation of the financial statements of self-sustaining operations and exchange gains and losses arising on those foreign currency borrowings which are designated as hedges of self-sustaining controlled foreign entities.

OSLIDIMITED AND ITS CONTROLLED ENTITIES
NOTES TO AND FORM ING OGNEIN FO

		Consolidated Entity		Parent Entity
	2003 \$000	2002 \$000	2003 \$000	2002 \$000
Providence and a trade over RETAINED PROFITS AND DIVIDENDS 25.
Retained profits at the beginning of the financial year.	279,206	205,148	162,205	167,981
Adjustment arising from adoption of revised accounting standard:
AASB 1028 "Employee Benefits"	(501)		(295)
AASB 1044 "Provisions, Contingent Liabilities and Contingent Assets"	34,864		34,864
Transfer from general reserve		5,618		5,618
Dividends provided for or paid	(54,091)	(55,368)	(54,091)	(55,368)
Net profit or loss	70,423	123,808	69,517	43,974
Retained profits at the end of the financial year	329,901	279,206	212,200	162,205
Appropriation of 2002 final dividend (22 cents per share fully franked) in respect of shares issued after 30 June 2002. and before the record date for dividends (2001: 17 cents) per share fully franked)	60	$1,503$ .	60	1,503.
Final ordinary dividend of 22 cents per share fully franked paid on 10 October 2002 recognised as a liability at 30 June 2002 but adjusted against retained profits at the beginning of the financial year on the change in accounting policy for providing for dividends (note 1(b))	34,864	34,864	34,864	34,864
Interim ordinary dividend of 12 cents per share fully franked paid on 15 April 2003 (2002: 12 cents per share fully franked)	19,167	19,001	19,167	19,001
	54,091	55,368	54,091	55,368
Dividends not recognised at year end In addition to the above dividends, since year end the directors have recommended the payment of a final dividend of 22 cents per share fully franked. The aggregate amount of the proposed dividend expected to be paid on 10 October 2003 out of retained profits at 30 June 2003, but not recognised as a liability at year end as a result of the change in accounting policy for providing for dividends is	35,187		35,187
Franking credit balance The amount of retained profits and reserves that could be distributed as fully franked dividends from franking credits that exist or will arise after payment of income tax in the next year, excluding debits attaching. to the final dividend not recognised at year end. This balance has been determined in accordance with the revised imputation system that came into force on 1 July 2002.
Class C - franked to 30%	40,932	23,076	33,766	16,857

OSLAMATED AND ITS CONTROLED ENTITES
NOTES TO AND FORM ING
PART OF THE FINANCIAL STATEMENTS

COMINUED

		Consolidated Entity		Parent Entity
	2003 \$000	2002 \$000	2003 \$000	2002 \$000
26 EQUITY
Total equity at the beginning of the financial year.	1,273,131	875,958	1,108,888	794,104.
Total changes in equity recognised in the statement of financial performance	16,223	126,363	69,222	43.974
Transactions with owners as owners
Adjustment arising from adoption of revised accounting standards.	34,864		34,864
Contributed equity, net of transaction costs	12,571	$326,178$ .	12,571	326,178
Dividends	(54,091)	(55, 368)	(54,091)	(55, 368)
Total equity at 30 June	1,282,698	1,273,131	1,171,454	1,108,888
27 DIRECTORS' AND EXECUTIVES' REMUNERATION -Directors' Remuneration $(a)$ . Income paid or payable, or otherwise made available, in respect of the financial year, to all directors of each consolidated entity, directly or .indirectly, by the entities of which they are directors or any related party: 12.	6.721	8.669
Income paid or payable, or otherwise made available, in respect of the financial year, to all directors of CSL Limited,			6,697	8.632

(2002: \$615,600).

OSILIE VIENDAVA (otoinelmentale le le O AND FORMING
THE FINANCIAL STATEMENTS MARK IN HOT

	2003 $-2002$ Number
27 DIRECTORS' AND EXECUTIVES' REMUNERATION (continued)
Number of parent entity directors whose income from the parent entity and any related bodies corporate was within the following bands:
\$.80,000 < \$.89,999.
$$.90,000 - $.99,999.$
\$100,000 \$109,999.
\$180,000 - \$189,999
\$210,000 - \$219,999.
\$480,000 - \$489,999
\$740,000 - \$749,999
\$5,220,000 - \$5,229,999
\$7,530,000 - \$7,539,999

For the purposes of Note 27(a) the definition of director excludes any person who is a full time employee of the parent entity, unless that person is a director of the parent entity.

The executive directors remuneration includes options issued under the Senior Executive Share Ownership Plan. The options have been valued using the Black-Scholes option valuation methodology as at the grant date adjusted for the probability of performance hurdles being achieved.

The amounts disclosed in remuneration have been determined by allocating the value of the options evenly over the period from grant date to vesting date in accordance with ASIC guidelines. As a result, the current year includes options that were granted in prior years and therefore disclosed as part of the executive directors remuneration in prior years using the grant date basis of measurement.

$\langle 0 \rangle$ Directors' Retirement Benefits

There were no prescribed benefits given to a person, or to a prescribed superannuation fund, in connection with the retirement of a person from a prescribed office in relation to an entity in the consolidated entity during the financial year. I

	Consolidated Entity		Parent Entity
No. 200 Providence Territori	2003 \$000	2002 \$000	2003 \$000	2002 \$00C
Executive Officers' Remuneration (C) Income received or due and receivable by Australian-based executive officers (including executive directors) of the consolidated entity, from all entities in the consolidated entity or a related party, whose income is \$100,000 or more	10.440	IN 607
Income received or due and receivable by Australian-based executive officers (including executive directors) of the parent will entity, from the parent entity or any related party, whose income
is \$100,000 or more			10,440	10.607

esi kahildi ada shekara ne h TO AND FORM NE
EMITE HNANOIAL STATEMENTS í exxententien

	Consolidated Entity	Parent Entity
	$\sim 2002$ 2003	2002 2003
	Number	Number
27 DIRECTORS' AND EXECUTIVES'
REMUNERATION (continued)

The number of executive officers whose income was within the following bands:
\$100,000 - \$109,999
\$110,000 - \$119,999	2	2
\$120,000 - \$129,999
\$130,000 - \$139,999	2.,
\$140,000 - \$149,999	2.
\$150,000 - \$159,999	2.
\$180,000 - \$189,999	5	5
\$190,000 - \$199,999	5
\$210,000 - \$219,999	3	3
\$220,000 - \$229,999	3
\$230,000 - \$239,999
\$240,000 - \$249,999	2 ⊲l t
\$250,000 - \$259,999	2 2	2 2
\$260,000 - \$269,999	4 1
\$270,000 - \$279,999
\$280,000 \$289,999	2
\$300,000 - \$309,999
\$310,000 - \$319,999

\$340,000 - \$349,999 \$350,000 - \$359,999	2	2
	2	2
\$360,000 - \$369,999 \$370,000 - \$379,999

\$410,000 - \$419,999
\$420,000 - \$429,999
\$520,000 - \$529,999
\$560,000 - \$569,999
\$630,000 - \$639,999
\$640,000 - \$649,999
\$680,000 - \$689,999
\$740,000 - \$749,999
\$770,000 - \$779,999
\$780,000 - \$789,999 \$970,000 - \$979,999

The executives' remuneration includes options issued under the Senior Executive Share Ownership Plan. The options have been valued using the Black-Scholes option valuation methodology as at the grant date adjusted for the probability of performance hurdles being achieved. The amounts disclosed in remuneration have been determined by allocating the value of the options evenly over the period from grant date to vesting date in accordance with ASIC guidelines. As a result, the current year includes options that were granted in prior years and therefore disclosed as part of the executives' remuneration in prior years using the grant date basis of measurement. Prior year comparatives have also been amended to include the value of options in accordance with ASIC guidelines.

S TO AND FORMING
OF THE FINANCIAL STATEMENTS OCENE INE BEDIUW

27 DIRECTORS' AND EXECUTIVES' REMUNERATION (continued)

Chief Executive Officer Memorandum of Understanding $\langle d \rangle$

The parent entity has entered into a Memorandum of Understanding with Dr B A McNamee dated 16 July 1998 (the MOU). The issue of shares or options on or before 31 December 2004 as the form of award payable to Dr B A McNamee under the MOU was approved by the Company's shareholders at the 2000 Annual General Meeting.

The incentive is designed to encourage him to conduct the consolidated entity's business with a view to the parent entity's share price out performing an appropriate ASX industrial index progressively from 31 August 1998. If the parent entity's share price underperforms the said ASX index over the relevant period, no amount is payable in respect of that period.

In September 2002, Dr B A McNamee was issued 204,600 options at 1 cent per share in SESOP II in accordance with this agreement for the entity's progressive share price performance from 31 August 1998 to 31 August 2002.

In accordance with the MOU, Dr B A McNamee will not receive any options for the parent entity's progressive share price performance for the financial year ended 30 June 2003.

28 EMPLOYEE BENEFITS Aggregate employee benefit liability (refer Notes 18 and 22) The number of full time equivalents employed at 30 June Employee Option Ownership Scheme CSL Limited offers to senior employees options over ordinary shares. CSL Limited operates two types of option plans. Senior Executive Share Ownership Plan (SESOP) The establishment of the SESOP plan was approved by special resolution at the annual general meeting of the Company on 15 August 1994.	2003 \$000 33,299 3,792	2002 \$000 30,894 3,821	2003 \$000 24,484 1,410	$-2002$ \$000 20,321 1,455






Under the rules of SESOP, the parent entity has provided an interest free loan to each participant which was used to acquire the options. A receivable is included in the financial statements in Note 9. In the event of lapse, the parent entity has undertaken to acquire the options at an amount equal to the option price. This amount will be used to discharge the participants' loans. Options issued under SESOP ceased during the year ended 30 June 1997.
Performance hurdles for both the consolidated entity and employees must be met before the options can be exercised. The exercise price was calculated using the weighted average price over the 5 days preceding the issue date of the option.
Revised Senior Executive Share Ownership Plan (SESOP II) on 19 November 1998.
are recorded in receivables until the option is exercised.

				The establishment of the SESOP II plan was approved by special resolution at the annual general meeting of the Company Under the rules of SESOP II no loan is made to the recipients of options until the option is exercised. Consequently, no amounts Performance hurdles for both the consolidated entity and employees must be met before the options can be exercised. The exercise price is calculated using the weighted average price over the 5 days preceding the issue date of the option.

CSL LIMITED AND ITS CONTROLLED ENTITIES S TO AND FORMING
OF THE FINANCIAL STATEMENTS und
1000 COMBUST

28 EMPLOYEE BENEFITS (continued)

$\Phi$ Employee Option Ownership Scheme (continued)

The following table summarises information about options outstanding and exercisable at 30 June 2003:

		SESOP II Options
Month of issue employees	No. of Opening Balance	During the Year: issued	Exercised Lapsed	Balance at 30 June 2003	Exercise Expiry Price Date
SESOP II - November 1997	300,000 $\mathbb{J}.$	200,000		100,000	$$8.93$ . : Nov-04 :
SESOP II - March 1998	12. 92,400	61,400		31,000	\$11.45. Mar-05.
SESOP II - July 1998.	.11 . 117,196	56,314.	2,572	58,310	\$10.82 Jul-05.
SESOP II - July 1999	27 909,450	371,930	$-17,600.$	519,920	\$13.23 60-lui 1
SESOP II - November 1999	1 85,000			85,000	\$20.84 Nov-06
SESOP II - February 2000	60,000			60,000	\$21.01 Feb-07
SESOP II - July 2000					$$22.22$ . Feb-07
SESOP II - July 2000	200,000			200,000	\$23.07 Feb-07 -
SESOP II ~ August 2000	28 939,500		.174,600 -	764,900	\$34.04 . Aug-07 .
SESOP II: October 2000	82,540	82,540			\$0.01 Nov-07
SESOP II - June 2001	34. 844,800		53,000	791,800	\$37.54 Jun-08 .
SESOP II - July 2001	3 170,000		80,000	90,000	\$49.31 Jul-08.
SESOP II - August 2001	17 268,400		14,000	254,400	\$37.54 Aug-08
SESOP II - September 2001	243,193 -1	243.193			\$0.01 Aug-08
SESOP II - October 2001	$-5,000$			5,000	\$43.51. Aug-08
SESOP II - December 2001	3 $-91,000$			91,000	\$49.94 Dec-08 .
SESOP II: January 2002	20,000			20,000	\$47.20 Jan-09.
SESOP II - April 2002	3,000			3,000	\$40.41 Арг-09.
SESOP II - July 2002.	49	1,388,300	57,500	1,330,800	\$27.97. $J_4J_209$ .
SESOP II = September 2002		204,600 204,600			$$0.01$ . Sep-09
SESOP II - October 2002		30,000		30,000	Oct-09 \$20.67
Total	4,431,479	1,622,900 1,219,977	399,272	4,435,130

Options in CSL Limited are not listed and as such have no readily determinable market value.

Since 1999-2000, the parent entity has offered employees the option of taking a bonus entitlement earned under either the Enterprise Bargaining Agreement or the performance management system in the form of shares in the parent entity in lieu of cash payments.

Global Employee Share Plan (GESP) $\phi$

During this financial year, the group introduced the Global Employee Share Plan (GESP). Under the plan, employees make contributions from after tax salary up to a maximum of \$3,000 per contribution period. The employees receive the shares at a 15% discount to the applicable market rate, as quoted on the ASX on the first day or the last day of the six month contribution period, whichever is lower.

OSTI EXTEREDIXAR S TO AND FORMING
OF TIE FINANCIAL STATEMENTS QORTINE

29 SUPERANNUATION COMMITMENTS

The consolidated entity sponsors a range of superannuation plans for its employees worldwide. Entitles of the consolidated entity contribute to the respective plans in accordance with the Trust Deeds following receipt of actuarial advice. Actuarial assessments are made at no more than three yearly intervals.

	"我们不是一个人的人,你们不是不是,你们不是不是,你们的人,你们不是你们的人,你们不是你们的人,你们不是你们的人,你们不是你们	Name of the plan and continuous continuous continuous continuous continuous continuous Date of last financial report of the state of the state of the state of the state of the state of the state of the state of the state
		CSL Superannuation Plan (CSL) Committee Defined Benefit and Accumulation Committee 2002 Committee Committee Committee Committee Committee Committee Committee Committee Committee Committee Committee Committee Committee Comm
		ZLB Bioplasma AG Pension Fund (ZLB) Modified Defined Benefit 1999 1999 1999 31 December 2002
		Details of the superannuation funds extracted from their most recent financial report are as follows:- .

i i Saaraa Sheegga gaga Sheeggaa Milaamaan maraamaan maraamaan maraamaan maraamaan maraamaan maraamaan maraama . *******
The Met market value of plan assets recommendation and contain an account of the market value of plan assets	57.821		$152.539$ $210.360$ .
Accrued benefits (a), (b)	58.401	Service 155.765	The property of 214.166
. Excess/(Deficiency) of plan assets over accrued benefits			The County
ested heaetits	58.401	. 55.765	. 166
the contract of the contract of the con- The property company of the company a construction of the Construction	the first property of the

An actuarial update of the CSL Superannuation Plan was performed by Paul Shallue, BSc, FIAA of NSP Buck Pty Limited on 1 $(a)$ July 2003. This review showed a deficiency of plan assets over accrued benefits of \$1.8m. Atthough no commitment has been made at this time, CSL will provide further funding from time to time, if required, to return this fund to surplus.

The actuarial assessment of the ZLB Bioplasma AG Pension Fund was performed by Marc Andre Rothlisberger, Qualified $\langle 0 \rangle$ Pension Actuary and Dr Oliver Kern, Dipl. phys. Ing. ETH of AON Chuard Consulting AG on 1 January 2003. This actuarial assessment was conducted in accordance with the Trust Deed and Swiss Law and as such has been performed on a 'static basis' which resulted in a deficiency of \$3.2m.

Under the Trust Deed, the employees and ZLB Bioplasma AG are responsible for making good this deficiency on a prospective. basis and have entered into an agreement to share this cost with effect from 1 July 2003. ZLB Bioplasma AG commissioned a further actuarial report dated 31 May 2003 that assessed the position of the fund at 31 December 2002 on a 'dynamic basis' using principles consistent with Australian GAAP. This report shows a deficiency of plan assets over accrued benefits of \$12.3m.

CSL LIMATED AND ITS CONTROLLED ENTI S TO AND FORMING
OF THE FINANCIAL STATEMENTS GOBINIEN

		Consolidated Entity		Parent Entity
	2003	2002	2003	.2002
30 REMUNERATION OF AUDITORS Amounts received, or due and receivable, for the audit and review of the financial reports of the parent entity and its controlled entities by
- Ernst & Young	329,500	125,500	329,500	125,500
- Andersen ¹		387,300		104,300
Total for parent entity auditors [16].	329,500	512.800	329,500	$-229,800$
- Ernst & Young related practices	755,500	574.000
	1,085,000	1,086,800	329,500	229.800
Amounts received, or due and receivable for other services In relation to all entities in the consolidated group
. Ernst & Young
- Andersen 12		427,917		144,917
Total for parent entity auditors		427.917		144.917
- Ernst & Young related practices ²	550,817	121.000
Total remuneration	1,635,817	1,635,717	329,500	374,717

[53]. ASIC approved the resignation of Arthur Andersen as auditor of the parent entity and as auditor of various controlled entities effective 2 July 2002. Following the resignation of Arthur Andersen, the directors resolved to appoint Ernst & Young Australia as the auditors of the parent entity and all controlled entities within the Group. This appoint at the 2002 Annual General Meeting.

² Includes due diligence work and other compliance audits.

	2003 \$000	$-2002$ \$000	2003 \$000	.2002 \$000
COMMITMENTS Capital Commitments (a) Total capital expenditure contracted for at balance date but not provided for in the financial statements, payable:
Not later than one year	11,042	22,926	2,552	6,690
$(b)$ Lease Commitments Total lease expenditure contracted for at balance date but not provided for in the financial statements, payable:
Not later than one year	10,725	11,758	1,673	1,888
Later than one year but not later than five years	21,175	26.967	1,561	$\sim$ 2.195
Later than five years	59,901	63.883
	91.801	102.608	3,234	4,083
Representing
Non-cancellable operating leases	91,801	102,608	3,234	4,083

Operating leases entered into relate predominantly to leased land and rental properties. Rental payments are generally fixed, but with inflation escalation clauses on which contingent rentals are determined. No operating leases contain restrictions on financing or other leasing activities.

DIRORMINGI r.w OF THE FINANCIAL STATEMENTS oani Riko

31 COMMITMENTS (continued)

$\langle 0 \rangle$

On 19 June 1998, CSL Limited entered into an agreement with Aviron (now part of Medimmune Inc.) to develop and register for sale Aviron's intranasal influenza vaccine. Upon successful achievement of a series of milestones related to the registration and PBS listing of the product Aviron will become entitled to options over 1,000,000 ordinary shares in CSL Limited at an exercise price of \$9.82 per share plus a premium of up to \$2.00 depending on when exercised.

the contract of the contract of the mean of the contract of the contract of the contract of the contract of th		Consolidated Entity		Parent Entity
in the second in the control of the second the The County t Service Theodore September 2000 (1990) en the company's company of the company of the company's company's Details and estimates of maximum amounts of contingent liabilities, classified in accordance with the party from whom the liability could arise for which no provisions are included. in the financial statements, are as follows: Parent entity guarantee of controlled entity borrowings	2003 \$000	-2002 SOOO	2003 \$000	20D2 8000
-32 CONTINGENT LIABILITIES AND THE RESIDENCE

			583,958
Bank guarantees	5.524	2.410	5.524	2.410
	5.524	2.410	589.482	409.561

As explained in Note 34, the parent entity has entered into a deed of cross guarantee in accordance with a class order issued by the Australian Securities and Investments Commission. The parent entity, and the controlled entities which are party to the deed, have guaranteed the repayment of all current and future creditors in the event that any of these companies are wound up.

The maximum contingent liabilities for benefits under service (C) agreements, in the event of an involuntary redundancy, is between 3 to 12 months. Agreements are held with the managing director and persons who take part in the management of the companies in the consolidated entity. These contingent liabilities amount to: $5,014.$ 4,099 2,896 3,015
On 31 August 2000, the consolidated entity acquired the plasma fractionation assets and business of Zentrallaboratorium. (d)。 Blutspendedienst. The consideration included an earn out agreement entitling Rotkreuzstiftung Zentrallaboratorium Blutspendedienst SRK to further payments if certain performance targets are met at the end of 30 June 2003 and 30 June 2005 reporting periods. The 30 June 2003 performance target was not met, thereby reducing the maximum contingent liability payable under this earn out agreement to CHF 90 million (AUD \$1.00 million).

The legal matter with Aventis Pasteur SA in relation to the transfer of travel vaccines has been settled. $\langle e \rangle$

The legal matter with Apine Biologics Inc. in relation to the distribution of Albumin in the USA has been settled. 10)

CSLIMITED AND ITS CONTROLLED ENTITS
NOTES TO AND FORM ING
PART OF THE FINANCIAL STATEMENTS CONTRUED

33 RELATED PARTIES

$(a)$

$\langle \mathsf{b} \rangle$

Directors
The directors of CSL Limited during the financial year were:
∵PHWade J Dr B A McNamee E A Alexander A M Cipa.
C.I.R. McDonald A C Webster K J Roberts I A Renard
Information in relation to remuneration of directors is disclosed in Note 27.
- Directors' Shareholdings and Interests

Issued by the Parent Entity

さいようかかんこうかくしょうか	2003	$-2002$ Number
Shares and options held at the end of the year.
Ordinary shares (refer to Directors' Report)	855,315	114,833
Options - SESOP II	200,954	762.641
Movements in directors' shareholdings during the year Aggregate number of shares acquired by directors
or their director related entities through purchases were: Aggregate number of shares acquired by directors or their	7,149	.7,600.
director related entities through exercising their options were:	766,287	24,274.
Aggregate number of options acquired by directors or their director related entities were: Aggregate number of shares disposed of by directors or their director related entities were: - fully paid shares	204.600	243,193 2,912
- options (exercised and shares sold) mar.	32,954	24.274

e e de la caractería de la caractería de la caractería de la caractería de la caractería de la caractería		Consolidated Entity		Parent Entity
.	2003	$.2002 -$	2003
Loans to directors and director-related entities Loans to directors disclosed in Note 9 comprise:
Unsecured Loans Loan repayments received:	1,893,058	-86.052	1,893,058	86 A52
Unsecured loans to A M Cipa.	430,002	209,109	430,002	209,109
Unsecured loans to Dr B A McNamee	10.005	8.534	10.005	8.534

In accordance with the rules of the Senior Executive Share Ownership Plan (SESOP) Dr B A McNamee and Mr A M Cipa received an interest free loan (disclosed in Note 9) from the parent entity which was used to take up an offer of options over ordinary shares in the parent entity.

OSTIMIE: VIEERTURTEEM O AND HORM ING OF THE FINANCIAL STATEMENTS CONFINEED

33 RELATED PARTIES (continued)

(d) Other Transactions of Directors and Director-Related Entities

The directors of the consolidated entity, or their director-related entities, have the following transactions with entities within the consolidated entity that occur within a normal employee, customer or supplier relationship on terms and conditions no more favourable than those which it is reasonable to expect the entity would have adopted if dealing with the director or directorrelated entity at arm's length in similar circumstances:

Provision of taxation, due diligence, information technology services and internal audit by PricewaterhouseCoopers, a firm in which E.A Alexander was a partner until June 2002, to a value of \$2,556,400 (2002:\$3,732,337).

Provision of legal services by Allens Arthur Robinson, a firm to which I A Renard is a consultant to a value of \$817,400 $(2002: $965.532)$ .

The parent entity made contributions during the financial year to the CSL Superannuation Plan. Dr B A McNamee is a shareholder of the Plan's trustee company, but not a member of the Plan.

Transactions with Related Parties in the wholly owned controlled entities. $(e)$

The parent entity entered into the following transactions during the year with related parties in the consolidated entity:
Loans were advanced and repayments received on the long term intercompany accounts;
Interest was charged on outstanding intercompany loan account balances; ٠
Sales and purchases of products; $\bullet$
Licensing of intellectual property;
Provision of marketing services by controlled entities; and ۰
Management fees were received from a controlled entity.

The sales, purchases and other services were undertaken on commercial terms and conditions.

Payment for intercompany transactions is through the intercompany loan accounts which may be subject to extended payment terms.

Amounts payable to and receivable from parties in the wholly owned controlled entities are set out in the notes to the financial. statements.

Ownership interests:

The ownership interests in related parties in the consolidated entity are disclosed in Note 34. All transactions with controlled entities have been eliminated on consolidation.

Transactions with Other Related Parties

The parent entity entered into the following transactions during the year with other related parties:

Loans were advanced and repayments received on the long term intercompany accounts; and
Provision of research and development services

Amounts payable to and receivable from other related parties are set out in the notes to the financial statements.

-{G}-Ultimate Controlling Entity

The ultimate controlling entity is CSL Limited.

CSI IMANIFO AND : S TO AND FORMING
IOF THE FINANCIAL STATEMENTS m ▓ BATH COMBUED

	Country of incorporation		Percentage Owned
		2003	2002
		%	₩
34 CONTROLLED ENTITIES

Parent Entity:
CSL Limited	Australia

Controlled Entities of CSL Limited:
JRH Biosciences Pty Ltd	Australia	100	100
Cervax Pty Ltd	Australia	74	74
CSL (New Zealand) Limited	New Zealand	100	100.	(C)
Iscotec AB	Sweden	100	100,	(C)
CSL International Pty Ltd	Australia	100	100.
CSL Finance Pty Ltd	Australia	100	100
CSL Denmark ApS.	Denmark	100	100.	. (c)
ZLB Bioplasma AG	Switzerland	100	100	(C)
ZLB Bioplasma GmbH	Germany	100	100	$\left( 0\right)$
CSL UK Holdings Limited	England	100	100	(C)
JRH Biosciences Limited	England	100	100	$\langle c \rangle$
ZLB Bioplasma UK Limited	England	100	100.	$\cdot$ (c)
ZLB Bioplasma Belgium spri	Belgium	100	100	(c)
ZLB Bioplasma Italy srl	Italy	100		$(a)$ $(c)$
CSL UK (in Members Voluntary Liquidation)	England	100	100	$\phi$
CSL US Inc	USA	100	100	$\langle c \rangle$
JRH Biosciences Inc	USA	100	100	(c)
Blocor Animal Health Inc	USA	100	100	(C)
ZLB Bioplasma Inc	USA	100	100	(c)

(a) ZLB Bioplasma Italy srl was incorporated in September 2002.

(b) CSL UK (in Members Voluntary Liquidation) was dissolved with effect from 28 July 2003.

OSHUERATERDUANA STO AND FORMING
OF THE FINANCIAL STATEMENTS CONFINER

34 CONTROLLED ENTITIES (continued)

A deed of cross guarantee between CSL International Pty Ltd and CSL Limited was enacted on 20 June 1995 and relief was obtained from preparing financial statements of CSL International Pty Ltd under the ASIC Class Order. On 30 June 2003, an Assumption Deed was lodged with the ASIC, which joins CSL Finance Pty Ltd and JRH Biosciences Pty Ltd as parties to the deed of cross guarantee. Under the deed, all entities guarantee to support the liabilities and obligations of each other. Financial information for the class order group comprising CSL Limited, CSL International Pty Ltd, CSL Finance Pty Ltd and JRH Biosciences Pty Ltd is as follows:

	2003 \$000	2002 \$000
Statement of Financial Performance
Sales revenue	476,123	418,070
Cost of sales	250,330	220,258
Gross profit	225,793	197,812
Other revenues	62,364	189,782
Research and development expenses	50,434	49,630
Selling and marketing expenses.	48,532	51,177
General and administration expenses	36,980	78,347
Borrowing costs	11,175	136
Other expenses		4,492
Profit from ordinary activities before income tax expense	141,036	203,812
Income tax expense relating to ordinary activities	37,397	13,894
Profit from ordinary activities after income tax expense	103,639	189,918
Set out below is a summary of movements in consolidated retained profits of the closed group:
Retained profits at the beginning of the financial year	317,492	167,981
Net profit	103,639	189,918
Adjustment arising from adoption of revised accounting standard	34,569
Transfer from general reserves		5.618
Dividends provided for or paid	(54,091)	(55, 368)
Retained profits at the end of the financial year	401,609	308,149

OSLEMATED AND ITS CONTROLED ENTITIES
NOTES TO AND FORMING
PARTIOF THE FINANCIAL STATEMENTS COMINIED WWW

	2003 \$000	2002 \$000
34 CONTROLLED ENTITIES (continued)

Statement of Financial Position
CURRENT ASSETS
Cash assets	40,736	69,468
Receivables	67,554	64,536
Inventories	93,024	71,177
Other	1,502	1,065
Total Current Assets	202,816	206,246
NON-CURRENT ASSETS
Receivables	630,637	72,817
Other financial assets	844,907	840,226
Property, plant and equipment	264,907	271,069
Deferred tax assets	10,756	9,151
Intangibles	20,000
Total Non-Current Assets	1,771,207	1,193,263
TOTAL ASSETS	1,974,023	1,399,509
CURRENT LIABILITIES
Payables	60,552	50,483
Interest bearing liabilities	611
Tax liabilities Provisions	11,109 15,301	1,075 52,059
Total Current Liabilities	87,573	103,617

NON-CURRENT LIABILITIES Payables.	33,442
Interest bearing liabilities	439,930
Deferred tax liabilities	26,748	13,941
Provisions	25,630	27,282
Total Non-Current Liabilities	525,750	41,223
TOTAL LIABILITIES	613,323	144,840
NET ASSETS	1,360,700	1,254,669
EQUITY
Contributed equity	936,430	923,856
Reserves	22,661	22,664
Retained profits	401,609	308,149
TOTAL EQUITY	1,360,700	1,254,669

CSL LIMITED AND ITS CONTROLLED ENTITIES S TO AND FORMING
OF THE FINANCIAL STATEMENTS OGNE KERU

		Consolidated Entity	Parent Entity
the third and a company of the company of the second Notes	2003 \$000	$-2002$ \$000	2003 \$000	$\sim 2002$ \$000
35 RECONCILIATION OF CASH ASSETS AND NON-CASH FINANCING AND INVESTING ACTIVITIES
Cash at the end of the year is shown in the statement . {}} of financial position as:
Cash on hand	83,466	45.769	40,736	9.468
Cash deposits		- 60.446		60.DDC
Bank overdrafts 16	(611)	(16, 860)
	82,855	89.355	40.736	69.468

Non-Cash Financing and Investing Activities $\langle \mathbf{i} | \mathbf{j} \rangle$

On 28 June 2002, ZLB Bioplasma AG purchased product registrations and trade marks for Sandoglobulin and Sanglopor from Novartis. The intellectual property in the amount of \$60.8 million was discounted to its fair value with the corresponding payable apportioned between current and non current payables.

36 RECONCILIATION OF PROFIT FROM. ORDINARY ACTIVITIES AFTER TAX TO CASH FLOWS FROM OPERATIONS

Profit from ordinary activities after tax	70,423	123,808	69,517	43,974
Non-cash items in profit from ordinary activities
Depreciation and amortisation	119,796	:113.136 .	31,465	-32,106.
Loss/(profit) on sale of property, plant and equipment	(87)	505.	19	(5)
Investments written off or provided for		$-4,493$		4.493
Amortisation of borrowing costs	661
Changes in assets and liabilities, net of the effects of purchase of controlled entities
(Increase)/decrease in receivables	8,047	(30,898)	574	(5,989)
(Increase)/decrease in inventories	(84,534)	$(126, 499)$ .	(8,649)	(1,370)
(Increase)/decrease in prepayments	(142)	-3,371 -	(437)	. (408)
(Increase)/decrease in tax assets	(6, 113)	. 1,921	(1, 342)	494
Increase/(decrease) in payables	5,190	28,572	(8,718)	-2,401
Increase/(decrease) in provisions	(5,766)	3,123.	(3,980)	497
Increase/(decrease) in tax liabilities	8,040	8,553	9,600	(235)
Net cash inflow from operating activities	115,515	130.085	88,049	75,958

OSE EMANIED AND U.S. CONTROLLED ENTITLE NOTES TO AND HORM NG
PARTICHIHE HINANGIAL STATEMENTS COMINIED

37 BUSINESSES ACQUIRED

The following investments in operating assets were acquired by the consolidated entity at the dates stated. Their operating results have been included in the consolidated statement of financial performance from the relevant dates and the operating assets acquired have been included in the statement of financial position since the date of acquisition.

On 14 February 2003, the consolidated entity acquired the serum business of By-Prod Corporation and the Siris Group for consideration of AUD \$23.7 million.

On 6 September 2001, the consolidated entity acquired 47 US based plasma collection centres and associated laboratory facilities from Nabi for consideration of AUD \$316.9 million.

		Consolidated Entity
	2003 \$000	$-2002$ \$000
Consideration
Cash	23,685	316,891
Total consideration	23,685	316,891
Fair value of net assets acquired
Goodwill	13,796	260,089
Cash		$-875$
Property, plant and equipment	1,266	26,897
Inventories	6,548	25,697
Prepayments	386	1,640
Debtors	3,205
Deferred tax assets		$-4,586$
Payables	(1,094)	(2,570)
Provisions	(422)	(323)
	23,685	316,891
Cash outflow on acquisition of operating assets
Cash consideration	23,685	316,891
Less
Cash acquired		875
Cash payable	7,463	2,813
	16,222	313,203

CSL LIMITED AND ITS CONTROLLED ENTITIES S TO AND FORM ING
OF THE FINANCIAL STATEMENTS ozazari izibara

38 FINANCING FACILITIES

The consolidated entity has access to the following financing facilities with a number of financial institutions:

		Consolidated Entity			Parent Entity
	Accessible \$000	Drawn down \$000	· Unused \$000	Accessible \$000	Drawn down \$000	Unused \$000
June 2003
Bank overdraft facility (b), (d), (e)	4,624		4,624	4,624		4,624
Bank loan facilities (a), (e)	404,374	177,719	226,655
Total financing facilities (c)	408.998	177.719	231.279	4.624		4.624
June 2002
Bank overdraft facility (b), (d), (e)			4,827
Bank loan facilities (a), (e)	434,355	346.239	88,116	43.761		43.761
Total financing facilities (c)	439,182	346.239	92,943	48.588		48,588
的复数爱尔兰人化乙酰乙酰胺		经过分股份经经济保险经公司管理经资产的化乙基苯胺医神经医前庭化氟化		ia na Aug. 17, No. 18, 1991

Drawn facilities expire in December 2005. $(a)$

No specific expiry date. (b)

The current/non-current allocation of loan facilities reflect the existing refinancing arrangements in place during the period. (C)

The overdraft facility includes a group set off arrangement. The amount of overdraft at 30 June 2003 included in this setoff (d) was \$0.611 million (2002: \$16.860 million). الهابات

The bank loan and overdraft facilities have certain loan convenants attached to them. As at balance date, the consolidated entity :(e). was in compliance with these convenants.

		Consolidated Entity
المحاولة والمحالي والمستحدث والمتواطئ to a consolation of three companies of the executive	2003 SOOO	$-2002$ SOOO
39 EARNINGS PER SHARE The following reflects the income and share information used in the calculation of basic and diluted earnings per share.
Earnings used in calculating basic earnings per share	70,423	123,808
		Number of shares
Weighted average number of ordinary shares used in the calculation of basic earnings per share: 159,168,685		158,330,681
Effect of dilutive securities:
Share options	443,473	1,351,496
Adjusted weighted average number of ordinary shares used in calculating diluted earnings per share 159,612,158		159,682,177

Conversions, calls, subscription or issues after 30 June 2003.

Since the end of the financial year, 14,000 ordinary shares have been issued pursuant to the senior executive share option plan.

There have been no other conversions to, calls of, or subscriptions for ordinary shares or issues of potential ordinary shares since the reporting date and before the completion of this financial report.

OSE INNIED AND ITS CONTROLLED EN S TO AND FORMING
OF THE FINANCIAL STATEMENTS nomi
1000 COMINIED

40 SEGMENT INFORMATION

Defined business segments	Products/services
Human Health.	Develops, manufactures and markets biopharmaceutical products to the human health industry.
Biosciences	Develops, manufactures and markets cell culture reagents used in the manufacture of vaccines, biopharmaceuticals and gene therapy products.
Animal Health	Develops, manufactures and markets vaccines and diagnostics to protect livestock and -companion animals.
Plasma Services	Collects human plasma used in manufacture of biopharmaceutical products for the human health
	industry.

Geographical Segments

The consolidated entity operates predominantly in three segments, being Australasia, USA and Europe. The geographic segment of Australasia comprises Australia and New Zealand.

Segment Accounting Policies

The consolidated entity accounts for intersegment sales and transfers as if the sales or transfers were to third parties at current market prices. i de la companya de la companya de la companya de la companya de la companya de la companya de la companya de
La companya de la companya de la companya de la companya de la companya de la companya de la companya de la co

Segment accounting policies are the same as the consolidated entity's policies described in Note 1. During the financial year, there were no changes in segment accounting policies that had a material effect on the segment information.

OSE LIMITED AND JIS CONTROLLED ENTITES
NOTES TO AND FORM ING
PART OF THE FINANCIAL STATEMENTS OGNETNERO

40 SEGMENT INFORMATION (continued)

Business segments	Human Health \$'000	Biosciences \$'000	Animal Health \$'000	Plasma \$'000	Services Eliminations Consolidated \$'000	\$'000
2003
External sales	812,389	168,055	64,704	255,196		1,300,344
Other external revenue	3,059	4,742	47			7,848
Intersegment revenue	905	639	ц		(1,544)
Segment revenue	816,353	173,436	64,751	255,196	(1,544)	1,308,192
Unallocated revenue						5,015
Total revenue						1,313,207
Segment earnings	79,007	44,452	8,042	6,275		137,776
Borrowing costs						(34,228)
Unalfocated expense net of unalfocated revenue						(1,816)
Profit from ordinary activities before tax						101,732
income tax expense						31,309
Profit from ordinary activities after tax						70,423
Segment assets	1,632,156	122,212	76,429	260,025		2,090,822
Cash assets						83,466
Unallocated assets						45,250
Total assets						2,219,538
Segment liabilities	185.118	22,303	7,990	20,261		235,672
Interest bearing liabilities						578,059
Provision for dividend
Unallocated fiabilities						123,109
Total liabilities						936,840
Other Information
Acquisition of property, plant and equipment and intangible assets	70,311	21,720	10,716	5,683		108,430
Unallocated acquisitions of property, plant and equipment						911
Total acquisitions						109,341
Depreciation and amortisation	93,779	4,228	2,843	17,315	÷,	118,165
Unallocated depreciation and amortisation						1,631
Total depreciation and amortisation						119,796
Other non-cash expenses	(1.862)	449	1	582	743	(87)
Geographic segments		Australasia	USA		Europe Eliminations Consolidated
		\$'000	\$'000	\$'000	\$'000	\$'000
External revenues		476,846	637,520	198,841		1,313,207
Intersegment revenue		17,209	38,958	219,302	(275, 469)
Total revenue		494,055	676,478	418,143	(275, 469)	1,313,207
Segment assets		517,029	458,414	1,244,095		2,219,538
Acquisition of property, plant and equipment
and intangible assets		45,284	37,456	26,601		109,341

OSI EMAND AND AS CONTROLED ENTITES
NOTES TO AND FORM ING
PART OF THE FINANCIAL STATEMENTS

OOM IN UED

40 SEGMENT INFORMATION (continued)

Human Health Business segments	S'000	Biosciences \$'000	Animal Health \$'000	Plasma \$'000	\$'000	Services Eliminations Consolidated \$'000
2002
External sales 848,127		145.421	60,874	281,990		1,336,412
Other external revenue 6,626		1,231	-1,911			9,768
Intersegment revenue		432			(432)
Segment revenue 854,753		147,084	62,785	$-281,990$	(432)	1,346,180
Unallocated revenue						4,002
Total revenue						1,350,182
Segment earnings 167,303		22,487	$-4,008$	3.981		197,779
Borrowing costs						(33, 457)
Unallocated expense net of unallocated revenue						(7,869)
Profit from ordinary activities before tax						156,453
Income tax expense						32,645
Profit from ordinary activities after tax						123,808
Segment assets 1,707,396		103,434	65,536	303,756		2,180,122
Cash assets						106,215
Unallocated assets						25,785
Total assets						2,312,122
Segment liabilities 247,663.				116,691,1114,1161127,241		305,711
Interest bearing liabilities						579,892
Provision for dividend						34,864
Unallocated liabilities						118,524
Total líabilities						1,038,991
Other Information
Acquisition of property, plant and
equipment and intangible assets 125.776 Unallocated acquisitions of property,		7.160	14,009	293,392		440,337
plant and equipment						50
Total acquisitions						440,387
Depreciation and amortisation $\sim 90.893$			$1.114,008$ . $1.112,883$ .	ා 15.223		113,007
Unallocated depreciation and amortisation						129
Total depreciation and amortisation						113,136
Other non-cash expenses	2.636	2.275	(9)	124	(28)	4.998

Geographic segments		Australasia	USA			Europe Eliminations Consolidated
		\$'000	\$'000	\$'000	\$'000	\$'000
External revenues		437,871	680,396	231,915		1,350,182
Intersegment revenue		12,594	30,048	257,283	(299, 925)
Total revenue		450,465	710,444	489,198	(299, 925)	1,350,182
Segment assets		506,800	481,930	1,323,392		2,312,122
Acquisition of property, plant and equipment			313,233	101,429		440,387
and intangible assets		25,725

OSHIBMI ED AND IIS CONTROLLED ENITY E S TO AND FORMING
OF HE FINANCIAL STATEMENTS ozbeni i sheke dili

41 SIGNIFICANT PURCHASER

Significant volumes of the parent entity's sales of human pharmaceutical and plasma products are to the Australian Government.

42 FINANCIAL INSTRUMENTS

Objectives for holding derivative financial instruments

The consolidated entity uses derivative financial instruments to manage specifically identified interest rate and foreign currency risks as approved by the board of directors.

The consolidated entity is primarily exposed to the risk of adverse movements in the Australian dollar and Swiss franc relative to certain foreign currencies, in particular the United States dollar and movement in interest rates. The purpose of which specific derivative instruments are used is as follows:

Foreign currency forward exchange contracts are purchased predominantly to hedge the Swiss franc and Australian dollar value of US dollar receipts and payments. Forward exchange contracts in other currencies are purchased throughout the consolidated entity when considered necessary to create a desired hedge position;
The consolidated entity raises short and long term debt at both fixed and variable rates. Interest rates swap agreements are used to convert variable interest rate exposures on certain debt to fixed rates. These swaps entitle the consolidated entity to receive, or oblige it to pay, the amounts, if any, by which actual interest payments on nominated loan amounts exceed or fall below specified interest amounts; and
Long term currency swaps are purchased to convert Australian dollar exposure on certain borrowings into Swiss franc exposures. The swaps entitle the consolidated entity to receive an agreed amount of Australian dollars, and oblige it to pay an agreed amount of Swiss francs, at the date of maturity of the swaps.

Interest Rate Risk

The consolidated entity has entered into interest rate swap contracts. These contracts are used to convert the variable interest rate of its borrowings to fixed interest rates.

Interest Rate Risk Exposures

The consolidated entity is exposed to interest rate risk through primary financial assets and liabilities modified through derivative financial instruments such as interest rate and cross currency swaps. The following table summarises interest rate risk for the consolidated entity together with effective interest rates as at balance date.

OSI EMANED AND IS CONTROLED ENTILES
NOTES TO AND FORM ING CONTINUED

42 FINANCIAL INSTRUMENTS (continued)

$\left( 3\right)$

	Floating Rate (a) \$000	or less \$000	1 year Over 1 year to 5 years \$000	5 years \$000	Over Non-interest Bearing \$000	\$000	Average Total Interest Rate %
June 2003
Financial Assets
Cash at bank and on hand	83,466					83,466	2.29
Trade debtors					157,499	157,499
Other debtors					13,578	13,578
Cash deposits
Loans to directors and employees					7,649	7,649
Investment in non controlled entities					2,786	2,786
	83,466			L	181,512	264,978
Financial Liabilities
Trade creditors					110,744	110,744
Other creditors					77,432	77,432
Swap payable					31,571	31,571
Bank loans	177,719					177,719	1.19
Vendor Ioan			25,142			25,142	4.75
Bank overdraft	611					611	8.35
Other loans			42,808	331,779		374,587	5.66
Interest rate swap*	(158, 326)	27,776	130,550
	20,004	27,776	198,500	331,779	219,747	797,806
June 2002
Financial Assets
Cash at bank and on hand	45.769					45,769	1.60
Trade debtors					175,686	175,686
Other debtors.					15,934	15,934
Cash deposits.	60.446					60,446	4.65
Loans to directors and employees					2,546	$-2,546$
Investment in non controlled entities					2,036	2,036
Financial Liabilities	106,215				196,202	302,417

Trade creditors Other creditors					104,033 103,042	104,033 103,042
Swap payable					60,913	60,913
Bank loans	346,238					346,238	4.80
Vendor Ioan			216,794			216,794	4.75
		16,860				16,860	8.10
		37,998	270,733
Bank overdraft Interest rate swap'	(308, 731)

oshillin illimus kemi ishooni ilishkata tah S TO AND FORM NG
OF THE FINANCIAL GIATEMENTS otan hinyakar mutu

42 FINANCIAL INSTRUMENTS (continued)

Foreign Exchange Risk

The consolidated entity enters into forward exchange contracts to buy and sell specified amounts of foreign currencies in the future at predetermined exchange rates. The objective is to match the contracts with committed future cash flows from sales and purchases in foreign currencies, to protect the consolidated entity against exchange rate movements.

The accounting policy with regard to forward exchange contracts is outlined in Note 1(t).

The following table summarises by currency the Australian dollar value of forward exchange agreements at balance date. Foreign currency amounts are translated at rates prevailing at reporting date. Contracts to buy and sell foreign currencies are entered into from time to time offset purchase and sale obligations in order to maintain a desired hedge position. [1111]

The parent entity and other controlled entities enter into forward contracts to hedge foreign currency receivables from other entities within the group.

These receivables are eliminated on consolidation, however, the hedges are in place to protect the parent entity and other group controlled entities from movements in exchange rates that would give rise to a statement of financial performance impact.

		Average		2003 Sell	Buy	2002 Sell
	2003	Exchange Rate 2002	Buy \$000	\$000	\$000	\$000
US dollars
3 months or less	0.6647	0.5655	16,541	(10, 540)	1,795	(58, 326)
			16,541	(10, 540)	1,795	(58, 326)
Pounds sterling
3 months or less	0.4029			(2, 482)
New Zealand dollars
3 months or less	1.1434		3,061
Euro
3 months or less	0.5831		3,776
Swiss francs
3 months or less	0.9087	0.8626	47,111	(198, 854)	66,705	(118,906)
3 to 12 months	1.0003	1.0003		(25,000)		.(15,000)
1 to 2 years	1.0003	1,0003		(235,000)		(50,000)
2 to 5 years		1.0003				(235,000)
			47,111	(458, 854)	66,705	(418,906)
Australian dollars
3 months or less	0.8914	0.8075.	198,854	(57, 467)	156,099	(47,367)
3 to 12 months	1.0003	1.0003	25,000		$-15,000$
1 to 2 years	1.0003	1,0003	235,000		50,000
2 to 5 years		1.0003			235,000
			458,854	(57, 467)	456,099	(47, 367)
			529,343	(529, 343)	524,599	(524, 599)

CSE LIMITED AND ITS CONTROLLED ENTITIES S TO AND FORMING
OF THE FINANCIAL STATEMENTS ■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■ SOSHAUED

42 FINANCIAL INSTRUMENTS (continued)

The consolidated entity is exposed to foreign currency exchange risk through primary financial assets and liabilities.

The following table, expressed in Australian dollars, summaries the foreign exchange risk carried by the consolidated entity as a result of the existence of foreign currency denominated financial assets and liabilities.

	Aust \$ \$000	US \$ \$000	Swiss francs \$000	Euro \$000	Other \$000	Total \$000
June 2003 Financial Assets
Cash assets	39,705	26,993	7,396	5,610	3,762	83,466
Trade debtors	54,644	81,916	2,370	10,661	7,908	157,499
Other debtors	5,990	1,416	5,183	685	304	13,578
Employee loans	7,649					7,649
Investment in non controlled entities	2,786					2,786
	110,774	110,325	14,949	16,956	11,974	264,978
Financial Liabilities
Trade creditors	17,774	45,022	16,129	29,125	2,694	110,744
Other creditors	31,725	15,643	25,897	3,031	1,136	77,432
Swap payable			31,571			31,571
Bank loans			177,719			177,719
Vendor loan			25,142			25,142
Other loans		374,587				374,587
Bank overdrafts	611					611
	50,110	435,252	276,458	32,156	3,830	797,806
June 2002
Financial Assets
Cash assets	68,850	33,236	1,382	1,520.	$-1,227$ .	106,215
Trade debtors	51,037	101,171.	16,645	3,883.	2,950	175,686
Other debtors	9,140.	3,562	3,194		38	15,934
Employee loans	2,546					2,546
Investment in non controlled entities	2,036					2,036
	133,609	137,969	21,221	5,403	4,215	302,417
Financial Liabilities
Trade creditors	23,324	62,949	12,301	3,014	2,445	104,033
Other creditors	17,388	$-7,897$	61,179	.572	16,006	103,042
Swap payable			-60,913			60,913
Bank loans		21,239	324,999			346,238
Vendor loan	151		216,643			216,794
Bank overdrafts	16,860					16,860
	57,723	92,085	676,035	3,586	18,451	847,880

OSE LIMITED AND ITS CONTROLIND ENTITIES S TO AND FORMING
OF THE FINANCIAL STATEMENTS QOREIRE REGIONAL

42 FINANCIAL INSTRUMENTS (continued)

Credit Risk

Credit risk represents the extent of credit related losses that the consolidated entity may be subject to on amounts to be exchanged under derivatives or to be received from financial instruments. The consolidated entity, while exposed to credit related losses in the event of non-performance by counterparties to financial instruments, does not expect any counterparties to fail to meet their obligations.

The maximum exposure to credit risk at balance date to recognised financial assets is the carrying amount, net of any provision for doubtful debts, as disclosed in the statement of financial position and notes to the financial statements.

The consolidated entity minimises concertrations of credit risks by undertaking transactions with a large number of debtors in various countries. The countries

The major geographic concentrations of credit risk arise from the location of counterparties to the consolidated entity's financial assets as shown in the following table:........

Location of Credit Risk	2003 \$000	2002
Australia	98,759	129.196
. USA	98,849
Europe	51,752	.55.49
Other	15,618	6.731
	264,978	302.417
Concentration of credit risk on financial assets is indicated in the following table by percentage of the total balance receivable from customers in the specified categories:
Customer/Industry Classification	%
State and Federal Government	16
Financial Institutions.	27
Other	57	52

Derivatives

The consolidated entity incurs credit risk on forward exchange contracts entered into with major banks. At balance date the consolidated entity's credit exposure in respect of such contracts is \$Nil (2002: \$Nil).

Konnegnegoran ma ost matiled alder S TO AND FORMING
OF THE FINANCIAL STATEMENTS

egenrued

42 FINANCIAL INSTRUMENTS (continued)

Net Fair Values of Financial Assets and Liabilities

The approach to determining the fair value of financial instruments is disclosed in Note 1(t).

The carrying amounts and estimated net fair values of financial assets and financial liabilities (including derivatives) held at balance date are given below. Short term instruments where carrying amounts approximate net fair values are omitted. The net fair value of a financial asset or a financial liability is the amount at which the assets could be exchanged, or a liability settled in a current. transaction between willing parties after allowing for transaction costs.

		2003	Consolidated Entity	2002
	Carrying amount \$'000	Fair value \$'000	Carrying amount \$'000	Fair value \$'000
Financial Assets
Investments in non-controlled entities	2,786	2,786	2,036	2,036
Loans to directors.	1,893	1,893	86	86
Loans to employees	5,756	5,756	2,460	2,460
Financial Liabilities
Short term debt	611	611	21,238	21,238
Long term debt	552,306	552,306	325,000	325,000
Swap payable	31,571	22,428	60,913	66,143
Vendor loan	25,142	25,142	216,794	216,794
Derivatives
Interest rate swaps		(14, 215)		(8,897)

OSE EMPTED AND ITS CONFROLLED ENTITIES

(1) In the opinion of the Directors:

(a) the financial statements and notes of the company and of the consolidated entity are in accordance with the Corporations Act 2001, including:
(i) giving a true and fair view of the company's and consolidated entity's financial position as at 30 June 2003 and of their performance for the year ended on that date; and
(ii) complying with Accounting Standards and Corporations Regulations 2001; and
(b) there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable.
The the opinion of the Directors, as at the date of this declaration, there are reasonable grounds to believe that the members of the $\langle 2 \rangle$ Closed Group identified in Note 34 will be able to meet any obligations or liabilities to which they are or may become subject, by virtue of the Deed of Cross Guarantee dated 20 June 1995.

Made in accordance with a resolution of the directors.

Peter H Wade Chairman

Melbourne Dated 21 August 2003

Brian A McNamee Managing Director

INDEPENDENT AUDIT REPORT

EII FRNST & YOUNG

To the members of CSL Limited

Scope

The financial report and directors' responsibility

The financial report comprises the statement of financial position, statement of financial performance, statement of cash flows, accompanying notes to the financial statements, and the directors' declaration for CSL Limited (the company) and the consolidated entity, for the year ended 30 June 2003. The consolidated entity comprises both the company and the entities it controlled during that year.

The directors of the company are responsible for preparing a financial report that gives a true and fair view of the financial position and performance of the company and the consolidated entity, and that complies with Accounting Standards in Australia, in accordance with the Corporations Act 2001. This includes responsibility for the maintenance of adequate accounting records and internal controls that are designed to prevent and detect fraud and error, and for the accounting policies and accounting estimates inherent in the financial report.

Audit approach

We conducted an independent audit of the financial report in order to express an opinion on it to the members of the company. Our audit was conducted in accordance with Australian Auditing Standards in order to provide reasonable assurance as to whether the financial report is free of material misstatement. The nature of an audit is influenced by factors such as the use of professional judgement, selective testing, the inherent limitations of internal control, and the availability of persuasive rather than conclusive evidence. Therefore, an audit cannot guarantee that all material misstatements have been detected.

We performed procedures to assess whether in all material respects the financial report presents fairly, in accordance with the Corporations. Act 2001, including compliance with Accounting Standards in Australia, and other mandatory financial reporting requirements in Australia, a view which is consistent with our understanding of the company's and the consolidated entity's financial position, and of their performance as represented by the results of their operations and cash flows.

We formed our audit opinion on the basis of these procedures, which included:

examining, on a test basis, information to provide evidence supporting the amounts and disclosures in the financial report, and
assessing the appropriateness of the accounting policies and disclosures used and the reasonableness of significant accounting estimates made by the directors.

While we considered the effectiveness of management's internal controls over financial reporting when determining the nature and extent of our procedures, our audit was not designed to provide assurance on internal controls.

We performed procedures to assess whether the substance of business transactions was accurately reflected in the financial report. These and our other procedures did not include consideration or judgement of the appropriateness or reasonableness of the business plans or strategies adopted by the directors and management of the company.

CONTINUED NEXT PAGE

INDEPENDENT AUDIT REPORT li ji wî di î OONE IN FAU

El ERNST & YOUNG

Independence

We are independent of the company, and have met the independence requirements of Australian professional ethical pronouncements and the Corporations Act 2001. In addition to our audit of the financial report, we were engaged to undertake the services disclosed in the notes to the financial statements. The provision of these services has not impaired our independence.

Audit Opinion

In our opinion, the financial report of CSL Limited is in accordance with:

(a) the Corporations Act 2001, including:

(i) solving a true and fair view of the financial position of CSL Limited and the consolidated entity at 30 June 2003 and of their performance for the year ended on that date; and
(ii) complying with Accounting Standards in Australia and the Corporations Regulations 2001; and
(b) other mandatory financial reporting requirements in Australia.

Ernst & Young

Ivan Wingreen Partner Melbourne.

21 August 2003

OSTEUSINESS ADDRESSES

AUSTRALIAN ADDRESSES CSI Limitad

UJL LIHHKU
Registered Head Office
45 Popiar Road
Parkville
Victoria 3052
Australia
Telephone: + 61 3 9389 191
$+6139389143$ Facsimile:

CSL Bioplasma 189 Camp Road Broadmeadows Victoria 3047

Jelephone: + 61 3 9246 5200 Facsimile: : - + 61 3 9246 5299

JRH Biosciences Pty Ltd 18-20 Export Drive Brooklyn Victoria 3025 Telephone: ~+61 3 9362 4500 Facsimile: 461 3 9315 1656

Australian Sales Offices

Victoria and Tasmania 45 Popiar Road Parkville Victoria 3052 Telephone: CSL Pharmaceutical: $+61393891408$ CSL Animal Health: $+61393891251$ Facsimile: + 61 3 9389 1727

New South Wales 25-27 Paul Street North North Ryde New South Wales 2113 Telephone: - (02) 9887 4433 Facsimile: (02) 9887 3171

Queensland 14 Dividend Street Mansfield · Queensland 4122 Telephone: (07) 3849 6140 Facsimile: (07) 3849 6141

South Australia and Northern Territory

11 Coongie Avenue Fdwardstown in South Australia 5039 Telephone: (08) 8276 3200 Facsimile: (08) 8277 0556

Western Australia

293-297 Fitzgerald Street Perthological company

Western Australia 6000 Telephone: (08) 9328 7322 Facsimile: (08) 9227 6196

INTERNATIONAL ADDRESSES

CSL (New Zealand) Limited CSL Pharmaceutical and CSL Bioplasma Level 4, Building 10 666 Great South Road Central Park, Penrose Auckland 6 New Zealand Telephone: 4-64 9 579 8105 Facsimile: 464 9 579 8106

CSL (New Zealand) Limited Animal Health 2-6 Shakespeare Avenue Upper Hult New Zealand Telephone: 4-64 4 527 9088 Facsimile: 464 4 527 9717

ZLB Bioplasma AG

Wankdorfstrasse 10 CH-3000 Bern 22 Switzerland Telephone: 441 31 344 4444 Facsimile: 344 31 344 5555

ZLB Bioplasma Inc 801 North Brand Boulevard. Suite 1150. Glendale California 91203 USA Telephone: +1 818 244 2952 Facsimile: 41 818 244 9952

ZLB Bioplasma UK Limited Breckland House St Nicholas Street Thetford, Norfolk IP24 1BT England -Telephone: +44 1842 755 025 Facsimile: 444 1842 755 174

ZLB GmbH

Schafflerstrasse 4 D-80333 Munich Germany ~ Telephone: 449 89 244 488 300 Facsimile: 449 89 244 488 311

ZLB Bioplasma Belgium SPRL

Interleuvenlaan 64 B-3001 Leuven Belaium Telephone: 4-32 16 38 80 80 Facsimile: 432 16 38 80 89

ZLB Bioplasma Italy SRL Via Valla 16 1-20141 Milan Raly money Telephone: 439 02 84742 230 Facsimile: 439 02 84742 229

JRH Biosciences Inc.

13804 West 107th Street Lenexa in the company Kansas 66215 USA Telephone: 441-913-469-5580 US Toll Free:+1 800 255 6032 Facsimile: 7541-913-469-5584

JRH Biosciences Limited

Smeaton Road West Portway Andover Hampshire SP10 3LF England ~ Telephone: +44 1264 333 311 Facsimile: +44 1264 332 412

ZLB Plasma Services

5201 Congress Avenue Suite 220 Boca Raton Florida 33487 USA Telephone: +1.561.981.3700 Facsimile: ~~ 1 561 912 3005

Biocor Animal Health Inc. 2720 North 84th Street Omaha

Nebraska 68134 USA Telephone: 41 402 393 7440 Facsimile: +1 402 393 4712

CSL Bioplasma (Hong Kong) Suite 1805, Wheelock House. 20 Pedder Street, Central Hong Kong Telephone: +852 2293 2317 Facsimile: +852 2588 3434

VISIT OUR WEBSITES

CSL Limited - www.csl.com.au ZLB Bioplasma AG - www.zlb.com JRH Biosciences - www.jrhbio.com

ZLB Bioplasma Inc - www.zlbusa.com Animal Health - www.biocorah.com

Telephone: +6113 9389 1911 Facsimile: +6113 9387 8454

Dear Shareholder

I have pleasure in inviting you to our 13th Annual General Meeting, a Notice of which is attached.

The Meeting will be held at the Function Centre at the National Tennis Centre, Melbourne Park, Batman Avenue, Melbourne, on Thursday, 16 October, 2003, commencing at 10.00 a.m. Morning tea will be available before and after the Meeting.

Trams from Flinders Street stop at the Rod Laver Arena tram stop. Proceed through the car park to the ramp leading to the Function Centre. If driving, take Entrance D off Swan Street and proceed to the Northern Car Park. Entrance A off Batman Avenue will also be open for those travelling from the City via the Batman Avenue tollway.

Please bring this Notice with you as the barcode printed on it will assist registration and admission. Please show the Notice to the car park attendant for free parking.

If you cannot attend but wish to appoint a Proxy, a form is attached which may be returned in the envelope provided.

To comply with legal requirements, representatives of Companies holding shares who wish to vote should complete and bring or mail in a "Certificate of Appointment of a Corporate Representative" which may be continuing or for this Meeting only. A new form is not required if a continuing Appointment form has been lodged previously. A form of the Certificate may be obtained from the Company's share registry.

I and the Managing Director will be reviewing the operations of the Group over the past 12 months, concentrating on the performance of ZLB Bioplasma AG and the impact of difficult US trading conditions for its principal product, MG, and on a more positive note, the progress the Group has made as a whole in preparing its businesses for future growth.

Shareholders will also be asked to approve the Company's Dividend Reinvestment Plan, information on which was previously forwarded to you to allow you to participate in the Plan in connection with the final dividend that is due to be paid to you on 10 October, 2003. Further information on this Resolution will be found in the Explanatory Notes.

Shareholders will also be asked to approve a Performance Rights Plan. Your Board believes this Plan will more closely reflect current shareholder and sharemarket sentiment as a long term incentive delivery mechanism for senior executives.

Your participation at the meeting will be both welcome and appreciated by your Directors who look forward to presenting an informative program. Yours sincerely

efter bode.

PH Wade CHAIRMAN

15 September 2003

HOW TO COMPLETE THE PROXY FORM

1 Your Name and Address

This is your address as it appears on the company's share register. If this information is incorrect, please mark the box and make the correction on the form. Securityholders sponsored by a broker (in which case your reference number overleaf will commence with an 'x') should advise your broker of any changes. Please note, you cannot change ownership of your securities using this form.

$\mathbf{2}$ Appointment of a Proxy

If you wish to appoint the Chairman of the Meeting as your proxy, mark the box. If the person you wish to appoint as your proxy is someone other than the Chairman of the Meeting please write the name of that person. If you leave this section blank, or your named proxy does not attend the meeting, the Chairman of the Meeting will be your proxy. A proxy need not be a securityholder of the company.

3 Votes on Items of Business

You may direct your proxy how to vote by placing a mark in one of the three boxes opposite each item of business. All your securities will be voted in accordance with such a direction unless you indicate only a portion of voting rights are to be voted on any item by inserting the percentage or number of securities you wish to vote in the appropriate box or boxes. If you do not mark any of the boxes on a given item, your proxy may vote as he or she chooses. If you mark more than one box on an item your vote on that item will be invalid.

4 Appointment of a Second Proxy

You are entitled to appoint up to two persons as proxies to attend the meeting and vote on a poll. If you wish to appoint a second proxy, an additional Proxy Form may be obtained by telephoning the company's share registry or you may copy this form.

To appoint a second proxy you must:

(a) indicate that you wish to appoint a second proxy by marking the box.
(b) on each of the first Proxy Form and the second Proxy Form state the percentage of your voting rights or number of securities applicable to that form. If the appointments do not specify the percentage or number of votes that each proxy may exercise, each proxy may exercise half your votes. Fractions of votes will be disregarded.
(c) return both forms together in the same envelope.

5 Signing Instructions

You must sign this form as follows in the spaces provided:

Individual:	where the holding is in one name, the holder must sign.
Joint Holding:	where the holding is in more than one name, all of the securityholders should sign.
Power of Attorney:	to sign under Power of Attorney, you must have already lodged this document with the registry. If you have not previously lodged this document for notation, please attach a certified photocopy of the Power of Attorney to this form when you return it.
Companies:	where the company has a Sole Director who is also the Sole Company Secretary, this form must be signed by that person. If the company (pursuant to section 204A of the Corporations Act 2001) does not have a Company Secretary, a Sole Director can also sign alone. Otherwise this form must be signed by a Director jointly with either another Director or a Company Secretary. Please indicate the office held by signing in the appropriate place.

If a representative of the corporation is to attend the meeting the appropriate "Certificate of Appointment of Corporate Representative" should be produced prior to admission. A form of the certificate may be obtained from the company's share registry.

Lodgement of a Proxy

This Proxy Form (and any Power of Attorney under which it is signed) must be received at an address given below no later than 48 hours before the commencement of the meeting - ie, by 10.00am on Tuesday 14 October 2003. Any Proxy Form received after that time will not be valid for the scheduled meeting.

Documents may be lodged using the reply paid envelope or:

-- by posting, delivery or facsimile to CSL Limited share registry at the address opposite, or
by delivering to the Registered office of CSL Limited 45 Poplar Road, Parkville Victoria 3052

CSL Limited share registry Computershare Investor Services Pty Limited GPO Box 242 Melbourne Victoria 3001 Australia Facsimile 61 3 9473 2555

IMPORTANT: FOR ITEMS 5 AND 6 BELOW

If the Chairman of the Meeting is your nominated proxy, or may be appointed by default, and you have not directed your proxy how to vote on Items 5 or 6 below, please place a mark in this box. By marking this box you acknowledge that the Chairman of the Meeting may exercise your proxy even if he has an interest in the outcome of those Items and that votes cast by him, other than as proxy holder, would be disregarded because of that interest. If you do not mark this box, and you have not directed your proxy how to vote on items 5 or 6, the Chairman of the Meeting will not cast your votes on that item and your votes will not be counted in computing the required majority if a poll is called on that item. The Chairman of the Meeting intends to vote undirected proxies in favour of each Item.

Voting directions to your proxy – please mark $|\mathcal{X}|$ to indicate your directions

Item 2a To re-elect Mr Peter H Wade as a Director Item 2b To re-elect Mr Arthur C Webster as a Director
ltem 3 To approve the renewal of the Partial Takeover Rule
To approve the Dividend Reinvestment Plan Item 4
Item 5 To approve the Performance Rights Plan
To approve the issue of Performance Rights to Executive Directors tem 6

Against Abstain* For

* If you mark the Abstain box for a particular item, you are directing your proxy not to vote on your behalf on a show of hands or on a poil, or if your votes entitlement cannot be voted by the Chairman of the Meeting, your votes will not be counted in computing the required majority on a poll.

Appointing a second Proxy I/We wish to aggoint a second proxy. Mark with an 'X' if State the percentage of your voting rights or AND ₩ OR you wish to appoint the number of securities for this Proxy Form. a second proxy.

PLEASE SIGN HERE This section must be signed in accordance with the instructions overleaf to enable your directions to be implemented. Individual or Securityholder 1 Securityholder 2 Securityholder 3

Полновых политиках восстановленное состоянное соответствующего состоянное состояние состояния политиках политиках политиках политиках политиках политиках политиках политиках политиках по	50000004 ВАВ ВОДУЮОН ВОДОДОДОДАТА АЛЬТОООООООООООООООООООООООООООООООООООО	00000000000000000000000000000000000000
Individual/Sole Director and Sole Company Director	Director	Director/Company Secretary

Contact Name

Contact Daytime Telephone

Date

NOTICE OF ANNUAL GENERAL MEETING

NOTICE IS GIVEN that the Thirteenth Annual General Meeting of CSL Limited (ABN 99 051 588 348) will be held at the Function Centre, National Tennis Centre, Melbourne Park, Batman Avenue, Melbourne on Thursday, 16 October 2003 at 10.00am (EST).

CSL Limited ABN 99 051 588 348 45 Poplar Road Parkville Victoria 3052 Australia Telephone: +61.3 9389 1911 Facsimile: +61.3 9387.8454

NOTICE OF ANNUAL GENERAL MEETING (CONTINUED)

ORDINARY BUSINESS

1. Accounts and Reports

To receive and consider the Financial Statements and the reports of the Directors and Auditors for the year ended. 30 June 2003, and to note the final dividend in respect of the year ended 30 June 2003 declared by the Board and paid by the Company.

2. Election of Directors

(a) To consider and, if thought fit, to pass the following resolution as an ordinary resolution:
"That Peter H Wade, a Director retiring from office by rotation in accordance with Rule 99(a) of the Constitution, being eligible, is re-elected as a Director of the Company.".
(b) To consider and, if thought fit, to pass the following resolution as an ordinary resolution:
"That Arthur C Webster, a Director retiring from office by rotation in accordance with Rule 99(a) of the Constitution, being eligible, is re-elected as a Director of the Company.".
Information about the candidates for re-election, together with Information about voting by any significant foreign shareholder In the Company, is included in the Explanatory Notes.

SPECIAL BUSINESS

1. Renewal of Partial Takeover Provision
To consider and, if thought fit, to pass the following resolution as a special resolution:
"That the Company approves the renewal for a 3 year. period of Rule 147 of the Constitution of the Company.".
A description of Rule 147, and further information relating to this resolution, is included in the Explanatory Notes.

4. Approval of Dividend Reinvestment Plan

To consider and, if thought fit, to pass the following resolution as an ordinary resolution:
"That for the purpose of Exception 7 in ASX Listing Rule 7.2, Exception 3 in ASX Listing Rule 10.12 and for all other purposes, approval be given to the terms of the Company's Dividend Reinvestment Plan, a copy of which was tabled at the meeting and for the purposes of identification signed by the Chairman of the meeting.".

For a summary of the terms of the Dividend Reinvestment Plan, see the Explanatory Notes.

5. Approval of Performance Rights Plan

To consider and, if thought fit, to pass the following resolution as an ordinary resolution:

"That the Company hereby approves:

(a) the implementation and administration of the Performance Rights Plan in accordance with the Rules of the Performance Rights Plan, a copy of which was tabled at the meeting and signed by the Chairman for the purposes of identification; and
(b) the issue of performance rights and shares under. the Performance Rights Plan as an exception to ASX Listing Rule 7.1.".

In accordance with the ASX Listing Rules, the Company will disregard any votes cast on this resolution by:

$\bullet$ : a director of the Company; and

form; or

an associate of a director of the Company.

However, the Company need not disregard a vote if:

. It is cast by a person as proxy for a person who is entitled
to vote, in accordance with the directions on the proxy

NOTICE OF ANNUAL GENERAL MEETING (CONTINUED)

the is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides (and the acknowledgment box on the proxy form in relation to this resolution is marked).
For information on the proposed Performance Rights Plan, see the Explanatory Notes.
1. Issue of Performance Rights to Executive Directors To consider and, if thought fit, to pass the following resolution

as an ordinary resolution:

"That the Company hereby approves, for the purposes of ASX Listing Rule 10.14 and for all other purposes:
(a) the issue of performance rights from time to time. under, and in accordance with, the Performance Rights Plan to any of the executive directors of the Company as at the date this resolution is passed, for a period of three years from the date this resolution is passed; and
(b) any issue of shares to those executive directors upon the exercise of any such performance rights.".
In accordance with the ASX Listing Rules, the Company will disregard any votes cast on this resolution by:
a director of the Company; and

Oľ,

an associate of a director of the Company.

However, the Company need not disregard a vote if:

it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form,
It is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides (and the acknowledgment box on the proxy form in relation to this resolution is marked).

For information on the proposed Issue of Performance Rights to the Executive Directors, see the Explanatory Notes.

INFORMATION ON PROXIES

Please note that:

a shareholder of the Company entitled to attend and vote at the Annual General Meeting is entitled to appoint а ргоху;
a proxy need not be a shareholder of the Company;
a shareholder who is entitled to cast two or more votes may appoint not more than two proxies and may specify the proportion or number of votes each proxy is appointed. to exercise; and
to be valid the form appointing the proxy and the power of attorney or other authority (if any) under which it is signed (or a certified copy thereof) must be lodged, or received by fax, at least 48 hours prior to the meeting at the following address:

Computershare Investor Services Pty Limited GPO Box 242 Melbourne Vic 3001 Fax: (03) 9473 2555

A proxy appointment form accompanies this Notice of Annual General Meeting.

The Company has determined that for the purpose of voting at the meeting, shares will be taken to be held by those who hold them at 10.00pm on 14 October 2003.

BY ORDER OF THE BOARD

Peter R Turvey - Company Secretary 15 September 2003

EXPLANATORY NOTES

RESOLUTION 2 - ELECTION OF DIRECTORS Candidates for Re-election to the Office of Director Peter H Wade, FCPA, FAICD (age 69) - Finance, Management (resident in Victoria) - Chairman

Mr Wade was elected to the CSL Board in 1994 and became. Chairman in 1999. He had previously served CSL as a Commissioner and Director from 1985 to 1993, including a period. as Acting Chairman during 1988. Mr Wade is a Director of Tabcorp Holdings Limited, and former Managing Director of North Limited.

Arthur C Webster, BVSc, DipBact (Lond) (age 59) - Animal Health Industry, Commerce (resident in NSW).

Dr Webster was appointed to the CSL Board in March 1998. He is Chairman of the Advisory Board for the Faculty of Veterinary Science at Sydney University and also Chairman of three private Australian companies. He is a Council Member of both the Postgraduate Foundation in Veterinary Science and the Veterinary Science Foundation, University of Sydney. Dr Webster was formerly Technical Director then Managing Director of the animal health company, Cyanamid Webster Pty Ltd, and a Member of the Board of Governors, University of Western Sydney. Dr Webster is a Member of the Human Resources Committee.

Retiring Director and number of vacancies

Mr C lan R McDonald, a director on the CSL Board since October 1992 will be retiring from the Board at the conclusion of this year's meeting.

Pursuant to Rule 78 of the Company's Constitution the Board has determined that, as a result of Mr McDonald's resignation, the number of Board members will be reduced to 7.

Voting restrictions on any significant foreign shareholders

As required by the Commonwealth Serum Laboratories Act, the -Company's Constitution provides that if the Board becomes aware of a 'significant foreign shareholding' in the Company, the Board. must be divided into two classes of directors, comprising O class and A class directors. The Constitution defines a "significant foreign shareholder" as a foreign person who has a relevant interest. in at least 5% of the voting shares of the Company.

The number of 0 class directors must be the number nearest to but not exceeding one third of the directors. Thus in a Board of 8 members, there would need to be two O class directors and six A. class directors. Under the Constitution, the Managing Director must be regarded as an A class director.

All shareholders are entitled to vote on the election of an O class director. A significant foreign shareholder (including any controlled entities and nominees of the significant foreign shareholder to the extent they hold the shares which comprise the significant foreign shareholding) may not vote on the election of an A class director.

As required by the Constitution, the Board conducts periodic reviews of the Company's share register with a view to determining whether or not there are any significant foreign shareholders. For example, the Company reviews the underlying ownership of substantial shareholders of the Company who, in accordance with Chapter 6C of the Corporations Act, must give notice to the Company and the ASX if they and their associates have relevant interests in 5% or more of the voting shares in the Company. In most cases to date, where the substantial shareholder is a foreign company or a member of a foreign company's group, it has been in its capacity as a fund manager. The constitution provides that a fund manager is only a foreign person for this purpose if the total interests of foreign persons in the fund represent more than 40% of the total.

As a result of those periodic reviews, the Board has determined that all the shares presently owned by or registered in the names of subsidiaries of Schroders plc are part of a significant foreign shareholding, because Schroders pic (a foreign company registered in England) has a relevant interest (as defined in the Corporations Act) in those shares, and because the Company understands that the total interests of foreign persons in the relevant funds managed by the Schroders subsidiaries exceed 40% of the total. Based on the last substantial shareholding notice lodged by Schroders on 20 February 2003, subsidiaries of Schroders pic had relevant interests in 7.57% of the ordinary shares in the Company.

Accordingly, Schroders plc, its controlled entities and their nominees (to the extent they own or hold shares in which Schroders plc has a relevant interest) and any other significant foreign shareholder. at the time of the Annual General Meeting, will be prohibited from voting at the election of each A class director at the 2003 Annual General Meeting.

In accordance with the Constitution, the Board of Directors has determined that Mr Peter Wade (Chairman of directors) and Mr lan Renard be classified as O class directors, with the rest of the directors being classified as A class directors.

At the 2003 Annual General Meeting, one O class director (Mr Peter Wade), and one A class director (Mr Arthur Webster) will retire by rotation and have made themselves available for re-election.

RESOLUTION 3 - RENEWAL OF PROPORTIONAL TAKEOVER PROVISION

The Company's Constitution includes a rule (Rule 147) dealing with proportional takeover bids, which provides that the Company can prohibit the registration of a transfer of shares resulting from a proportional takeover bid unless shareholders in a general meeting approve the bid.

It is a requirement of the Corporations Act that proportional takeover bid approval rules apply for a maximum period of 3 years unless. renewed. As the Company's proportional takeover bid approval rule (Rule 147) was fast renewed at the 2000 Annual General Meeting on 18 October 2000, it is due to expire on 18 October 2003. To continue the operation of Rule 147, it is necessary for Rule 147 to be renewed at the 2003 Annual General Meeting.

The Board considers that it is in the interests of shareholders for the Company to have a proportional takeover bid approval rule, and therefore recommends that shareholders vote to adopt the renewed rule.

Effect of Proportional Takeover Approval Rule

The Corporations Act requires that, if a proportional takeover bid is made and the Company's Constitution includes a provision like Rule 147, the Directors must convene and hold a meeting of Fig. shareholders to vote on a resolution to approve the bid. The meeting must be held, and the resolution voted on, before the approving resolution deadline, which is defined in the Corporations Act as the 14th day before the last day of the bid period.

Rule 147 provides that for a resolution to be approved it must be passed by a majority of votes at the meeting, excluding votes by the bidder and its associates.

If no resolution to approve the bid has been voted on in accordance with Rule 147 as at the end of the 14th day before the end of the bid period, a resolution approving the bid will be deemed by the Corporations Act to have been passed, thereby allowing the bid to proceed.

If a resolution to approve the bid is rejected, binding acceptances are required to be rescinded, and all unaccepted offers and offers failing to result in binding contracts are taken to be withdrawn.

If the resolution is approved, the relevant transfers of shares will be registered, provided they comply with the other provisions of the Company's Constitution and the Corporations Act.

Rule 147 does not apply to full takeover offers. Rule 147 will expire 3 years after its adoption or last renewal unless renewed by a further special resolution of shareholders.

Reasons for Proposing the Resolution

Directors consider that shareholders should have the opportunity to vote on a proportional takeover bid. A proportional takeover. bid for the Company may enable control of the Company to be acquired by a party holding less than a majority interest and without shareholders having the opportunity to dispose of all their shares. This could mean that shareholders could be at risk of being left. as part of a minority interest in the Company. Rule 147 enables shareholders to decide whether a proportional takeover bid should be permitted to proceed.

Present Acquisition Proposals

At the date of this notice, no Director is aware of any proposal by any person to acquire, or to increase the extent of, a substantial interest in the Company.

Review of Proportional Takeover Approval Provisions

The Corporations Act requires these explanatory notes to discuss retrospectively the advantages and disadvantages, for directors and members, of the proportional takeover provision proposed to be renewed.

While the proportional takeover approval provisions have been. in effect, there have been no takeover bids for the Company, either proportional or otherwise. Consequently there are no actual examples against which to review the advantages or disadvantages of the existing proportional takeover provisions (contained in Rule 1.47) for the directors and members of the Company. The directors are not aware of any potential takeover bid which was discouraged by Rule 147.

Potential Advantages and Disadvantages

In addition to a retrospective discussion of the provisions proposed to be renewed, the Corporations Act also requires these explanatory notes to discuss the potential future advantages and disadvantages of the proposed rule for both directors and members.

The directors consider that there are no such advantages or disadvantages for them as they remain free to make a

The proposed rule will ensure that all members will have an opportunity to study a proportional takeover bid and then attend or be represented by proxy at a meeting called specifically to vote on the proposal. A majority of shares voted at the meeting, excluding the shares of the bidder and its associates, is required for the resolution to be passed, following which shareholders will be able to decide whether to accept bids which may result in a change of control in the Company.

This will enable shareholders to prevent a proportional takeover bid proceeding if they believe that control of the Company should not be permitted to pass under the bid, and accordingly the terms of any future proportional takeover bid are likely to be structured to be attractive to the holders of a majority of the remaining shares.

It may be argued that the rule reduces the possibility of a successful proportional takeover bid and that as a result, proportional takeover bids for the Company will be discouraged. This in turn may reduce opportunities that shareholders may have to sell some of their shares. at an attractive price to persons seeking control of the Company, and may reduce any 'takeover speculation' element in the Company's share price on the Australian Stock Exchange. It may also be said that the provisions constitute an additional restriction on the abilities of individual shareholders to deal freely with their shares.

Recommendation

be accepted.

Directors consider that the proposed renewal of Rule 147 is in the interests of shareholders as it allows the holders of a majority of the shares (excluding those held by the bidder and its associates) to determine whether a proportional takeover bid should proceed. The Directors recommend that shareholders vote in favour of the renewal of Rule 147.

RESOLUTION 4 – APPROVAL OF DIVIDEND REINVESTMENT PLAN

In August 2003, the Company's Board established a Dividend Relovestment Plan (DRP) which will operate for the first time In connection with the final dividend that is due to be paid to shareholders on 10 October 2003. Information regarding the DRP (including a copy of the DRP Rules) and the forms required to be submitted to participate in the DRP were sent to shareholders in early September. A copy of the DRP Rules can be obtained

by shareholders by calling the Company's share registry on 1800 646 882 (from within Australia) or +61 3 9615 5970 (from outside Australia).

Under ASX Listing Rule 7.1, subject to certain exceptions, a company may not issue new shares equivalent in number to more than 15% of its issued shares in any rolling 12 month period without the prior approval of its shareholders. One of the exceptions, being Exception 7 in ASX Listing Rule 7.2, provides that ASX Listing Rule 7.1 does not apply to an issue of shares under a dividend reinvestment plan (excluding an issue to the plan's underwriters) provided that the plan's terms are approved by shareholders.

Under ASX Listing Rule 10.11, subject to certain exceptions, a company may not issue new shares to a related party of the... company (which includes a director of the company, the parents, spouse or children of a director and any company controlled by one or more of them) without the prior approval of its shareholders. One of the exceptions, being Exception 3 in ASX Listing Rule 10.12, provides that the prohibition in ASX Listing Rule 10.11 does not apply to an issue of shares under a dividend reinvestment plan (excluding an issue to the plan's underwriters) provided that the plan's terms are approved by shareholders.

Accordingly, the approval of shareholders to the terms of the DRP (contained in the DRP Rules) is being sought so that future issues of shares under the DRP will be exempt from ASX Listing Rules 7.1 and 10.11 (excluding any issues to any underwriter of the DRP). Set out below is a summary of the DRP Rules:

A shareholder who is eligible to participate in the DRP may elect to participate in respect of all or part of their shareholding. If a shareholder elects partial participation, then the shareholder must specify the number of shares in respect of which the shareholder wishes to participate. Any further shares acquired by the shareholder (including shares allotted under the DRP) will not be subject to the DRP. Accordingly, if at any point in time a shareholder wishes to increase their level of participation, they will need to notify the Company (by providing a 'Notice' of Variation').
The Board retains absolute discretion as to whether. shareholders with registered addresses or resident outside Australia may participate in the DRP. The Board may also refuse participation in certain circumstances, such as where participation by a person might require the Company to issue

a prospectus, or might result in a breach of an applicable law or the Company's constitution. In accordance with these Rules, the Board has resolved to limit participation in the DRP to only those shareholders with a registered address in Australia or New Zealand.

$\bullet$ $\lnot$ if a shareholder elects to participate in the DRP to the extent of less than 200 shares (or such other number determined by the Board), the Board may preclude participation by the shareholder. In accordance with this Rule, the Board has resolved that the minimum level of participation in the DRP is 200 shares.
The DRP operates on the basis that unless the Board otherwise determines, each registered holding of a person will be treated separately for the purposes of the DRP, so that two or more holdings by the same person will not be aggregated.
The DRP operates so that the number of shares that will be issued to a participant will be determined by dividing the amount in the participant's DRP account (which will initially be the first dividend payable after implementation of the DRP), after deducting any withholding tax or other amount the Company is entitled or obliged to retain or withhold, by the relevant issue price.
The issue price under the DRP will be equal to the arithmetic. average of the daily volume weighted average market price. of the Company's shares sold on the ASX during the 10 trading days beginning on the second trading day after the Record Date in respect of the relevant dividend (rounded to the nearest cent), less a discount (if any) determined by the Board (which. may not exceed 2.5%). The discount to be applied to the issue. of shares under the DRP in relation to the upcoming final dividend will be 2.5%.

It is important to note that the Board retains a discretion to vary the discount rate for each dividend payment (provided the discount does not exceed 2.5%), and the Board has a broad discretion to vary the Rules of the DRP at any time.

If, following the determination of the number of shares to be allotted to a participant, there is a residual amount of the participant's dividend remaining, then this amount will be carried forward in the participant's DRP account and applied for acquiring shares at the next dividend payment date. There is no rounding up to the next whole share.

If a participant in the DRP ceases to hold shares, elects to cease participation in the DRP or the DRP is terminated, any residual balance in the participant's DRP account will be paid. to the participant.
The Board has a broad discretion to yary, suspend or terminate the DRP at any time, and without the need to seek shareholder approval. If the Board suspends the DRP, it may subsequently determine to recommence the DRP at any time.

Recommendation

The Directors recommend that shareholders vote in favour of the resolution to approve the terms of the DRP.

RESOLUTION 5 - APPROVAL OF PERFORMANCE RIGHTS plan

Resolution 5 seeks approval of the implementation and administration. of a long-term employee incentive plan known as the 'CSL Limited' Performance Rights Plan' (the Performance Rights Plan).

Background

The Board proposes that the Performance Rights Plan be introduced as a long term employee incentive plan, which will include vesting conditions and performance hurdles. The proposed Performance Rights Plan is consistent with current market practice and will. largely replace the Company's existing Senior Executive Share. Ownership Plan II (SESOP II).

The Board considers that the opportunities afforded to employees under the Performance Rights Plan to participate in the ownership of the Company will enhance the relationship between the Company and its employees for their long-term mutual benefit. The Performance Rights Plan is designed to provide the Company with a mechanism to attract prospective employees, to encourage the retention of strategically important employees and to strengthen t he link between employee performance and the delivery of reward with improvements and increases in shareholder value.

Participation in the Performance Rights Plan will be limited to employees who are identified by the Board as being of strategic and operational importance to the Company and whose. performance warrants an allocation of Performance Rights.

The Performance Rights Plan would operate with the Board making periodic offers of performance rights to those strategic employees.

who meet the Board's criteria. Over time, and subject to the Company satisfying the performance criteria set out in the terms of the Plan, performance rights held by an employee (Performance Rights may be exercised and converted into ordinary shares in the Company (Shares: A disposal restriction will apply which, except in certain circumstances, will generally prevent employees from disposing of more than 50% of the shareholding resulting from the acquisition of Shares under the Performance Rights Plan in any 12 month period commencing from a particular day of the year. In the event that the Company consistently fails to achieve the performance criteria, all the employee's Performance Rights lapse. with no Shares being issued. A summary of the terms of the Performance Rights Plan is set out below.

No Performance Rights or Shares have, to date, been issued under the Performance Rights Plan. If shareholders approve Resolution 5. the Board proposes to implement the Performance Rights Plan with effect from the date of approval.

ASX Listing Rule 7.1

Resolution 5 also seeks approval for the issue of Performance Rights and Shares under the Performance Rights Plan to be an exception to ASX Listing Rule 7.1.

As outlined in relation to Resolution 4 above, ASX Listing Rule 7:1 requires a company to obtain the approval of shareholders if it. proposes to issue equity securities equivalent in number to more than 15% of its issued shares in a rolling 12 month period. ASX Listing Rule 7.2 contains a number of exceptions to ASX Listing Rule 7.1, allowing certain issues of securities to be excluded from the calculation of the number of securities issued in the previous 12 months. Shareholder approval is sought in accordance. with Exception 9 in ASX Listing Rule 7.2, which would enable Performance Rights and Shares issued under the Performance Rights Plan over the next three years to be excluded from any such calculations.

Summary of terms of Performance Rights Plan

1. Eligible Employees

The class of persons who may participate in the Performance Rights Plan will comprise full-time and part-time employees of the Company or its related bodies corporate (including the current Executive Directors of the Company) or (if the Board

decides in a particular case) employees of an associated company in which the CSL Group has voting power of at least 20%. The Board will have the discretion to invite such employees to participate in the Performance Rights Plan from time to time, and may develop policies for determining.

· which employees will be eligible to receive an invitation to participate in the Performance Rights Plan (Eligible Employees. As mentioned above, it is intended that Eligible Employees will be those employees who are identified by the Board as being of strategic and operational importance to the Company and whose performance warrants an allocation of Performance Rights, and
. the number of Performance Rights to be the subject of individual invitations.

2. Grant of Performance Rights

Performance Rights will be granted to employees who accept an invitation to participate in the Performance Rights Plan Participants

Unless otherwise determined by the Board, Performance Rights will be granted for no consideration payable by the employee. A Performance Right represents the right to subscribe for or acquire one Share for either nil or monetary consideration. not exceeding \$1.00 per Share for such other amount as determined by the Board from time to time).

Performance Rights:

do not confer on a Participant the right to participate in new issues of Shares by the Company, including by way of bonus issue, rights issue or otherwise;
. may not be transferred, assigned or novated without the approval of the Board; and
. will not be listed for quotation on any stock exchange.

3. Exercise of Performance Rights

A Performance Right may only be exercised when it has become a Vested Performance Right. Unvested Performance Rights cannot be exercised. Vested Performance Rights can be exercised from the date they become Vested Performance. Rights until they lapse.

Performance Hurdles, Performance Periods and Test Dates

Performance Rights may become Vested Performance Rights if the Company satisfies specified Performance Hurdles during specified Performance Periods.

The Board may from time to time determine:

the Performance Hurdles and Performance Periods that will apply to Performance Rights.
. the date or dates (Test Dates on which the Company's satisfaction or otherwise of the Performance Hurdles during the Performance Periods is to be measured; and
the extent to which Performance Rights will become Vested Performance Rights on any Test Date if the Company satisfies the Performance Hurdles during a Performance Period

It is currently proposed that:

the Performance Hurdle will be the Company's Total Shareholder Return (TSR) relative to the ASX top 100 index (excluding commercial banks, oil and gas and selected metals and mining companies);
the Performance Period will be 3 years for, if not fully met after 3 years, 4 years or 5 years);
the Test Dates will occur at the end of Years 3, 4 and 5; and
the Performance Hurdles will tcascade' so that a proportion of Performance Rights become Vested Performance Rights when a minimum target is reached, and the proportion will increase as performance exceeds the minimum target. If, on any fest Date, the Company's performance does not place it above the 50th percentile in terms of TSR ranking none of the Performance Rights will vest. Where the Company is placed at or above the 75th percentile, all of the Performance Rights will vest. Between the 50th and 75th percentiles, the proportion of Performance Rights that will vest will increase on a straight line basis

5. Lapse of Performance Rights

Performance Rights lapse in certain circumstances, including where:

the Performance Hurdles have not been satisfied within the required time period,
the Performance Rights have not been exercised before their expry date
a forfeiture event has occurred (as determined by the Board),
the holder of the Performance Rights ceases to be an employee, and
the holder of the Performance Rights has (in the reasonable opinion of the Board) acted fraudulently or dishonestly or is in material breach of his or her obligations. to the Company.

Upon the lapse of a Performance Right, all rights of the employee in respect of that Performance Right cease.

6. Issue of Shares upon exercise of Performance Rights

Within 28 days after the exercise of a Performance Right, the Company must issue tor arrange the transfer) to the employee the number of Shares nominated by the Participant.

Shares issued upon the exercise of Performance Rights will rank equally with all other issued Shares, and will be entitled in full to those dividends which have a record date for determining entitlements after the date of issue. The Company will apply for official quotation of those Shares on each stock. exchange on which the Shares are quoted.

7. Limitations on the number of Shares which may be issued

Performance Rights may not be granted under the Performance Rights Plan if, immediately following the grant, the aggregate of the total number of Shares:

(a) issued under the Performance Rights Plan and the Company's other employee share or option plans which remain subject to the applicable plan rules (such as restrictions on transfer), and

(b) underlying all outstanding options to subscribe for Shares issued under the Company's employee option plans or outstanding performance rights issued under the Company's performance rights plans.

would exceed 7.5% of the total number of issued Shares at that time. That cap cannot be increased without first obtaining further shareholder approval.

In addition to the above cap, the Rules of the Performance Rights Plan contain additional Imitations in order to satisfy Australian legal and regulatory requirements. In particular, the exemption granted by the Australian Securities and Investments Commission from Australia's prospectus, product disclosure statement and licensing laws effectively requires that the number of Shares issued (or the subject of options or performance rights granted) to Australian participants under all the Company's employee equity plans (and which were not otherwise exempted from the prospectus or product disclosure statement laws) cannot exceed 5% of the total number of issued Shares in the Company, calculated on a rolling five-year basis.

8. Restrictions on dealing with Shares

The Board has the power to impose 'Holding Locks' over Shares issued upon the exercise of Performance Rights, which restrict a Participant's right to sell, encumber or otherwise deal with such Shares during specified Holding Lock Periods'. It is the present intention of the Board to impose Holdings Locks.

Any such Holding Lock Period will automatically end if there is a successful takeover or scheme of arrangement in respect of the Company, Furthermore, the Board has discretion to end the Holding Lock Period at any time.

9. Adjustments upon significant events

If, at any time before Performance Rights are exercised, an event occurs affecting the number or type of securities on issue in the capital of the Company (including a subdivision, consolidation, reduction, redemption or further issue of securities) (a Capital Event, the Performance Rights must be restructured in a manner which is fair and equitable to the Participants and which is consistent with the relevant provisions of the Listing Rules.

Where certain Change of Control Events' have or will occur, the Board may determine the manner in which the Performance Rights will be dealt with so that each Participant remains,

as at the date of the determination, in a financial position in respect of the Performance Rights which is as near as possible. to that which existed prior to the date of the Change of Control Event occurring.

10. Administration and amendment

The Board will have the ability to delegate the administration of the Performance Rights Plan to special purpose committees. or designated executives, and to engage specialist external. service providers to assist in the management of the Plan.

The Performance Rights Plan may be amended or supplemented by the Board. The Board may also formulate (and subsequently amend) special rules to apply to Participants. located in or connected with particular countries. Amendments may have retrospective effect.

11. Termination

The Board may terminate or suspend the operation of the Performance Rights Plan at any time.

A copy of the Rules of the Performance Rights Plan will be sent. to a shareholder free of charge on request.

Recommendation

The Directors recommend that shareholders vote in favour of the resolution to approve the Performance Rights Plan and the issue of Rights and Shares under the Performance Rights Plan.

RESOLUTION 6 - ISSUE OF PERFORMANCE RIGHTS TO EXECUTIVE DIRECTORS

Resolution 6 seeks approval, for the purposes of ASX Listing Rule. 10.14, for the issue of Performance Rights under the Performance Rights Plan (as outlined in the Explanatory Notes to Resolution 5 above) from time to time to any of the Executive Directors of the Company, as at the date the resolution is passed, for a period of three years from the date the resolution is passed (ie, until 16 October 2006). Shares may subsequently be issued to the Executive Directors upon the exercise of such Performance Rights without the need for further shareholder approval.

The current Executive Directors of the Company are:

Dr Brian A McNamee (Managing Director); and
Mr Tony Cipa (Finance Director)

Initially, Dr McNamee and Mr Cipa will be the only Executive. Directors who will be entitled to participate in the Performance Rights Plan. No other Executive Directors in future will be able. to participate without further shareholder approval being obtained under ASX Listing Rule 10.14.

The participation of the Executive Directors in the Performance. Rights Plan is a result of the Company's proposal that, in future, all senior and strategic employees (including the Executive Directors) largely receive their future long term incentives in the form of Performance Rights. As a result, it is proposed that, subject to and with effect from Resolution 6 being passed, Dr McNamee's long term incentive arrangements will transition to the Performance Rights Plan, and he will cease to be entitled to awards which may otherwise have been payable to him in the remaining years. under his existing long term incentive arrangements (being the Memorandum of Understanding between the Company and Dr McNamee dated 16 July 1998).

It is currently proposed that Dr McNamee and Mr Cipa will participate in the Performance Rights Plan on an annual basis. Each year, each Executive Director would be issued a number of Performance Rights in respect of which the then current value of the underlying Shares would equal a certain percentage of their prevailing base remuneration, initially those percentages will be 35% for Mr Cipa, and 50% for Dr McNamee.

Further, it is noted that in 2002 Mr Cipa did not receive a biennial grant of options under SESOP II in respect of the 2001 and 2002. years. Accordingly, in relation to the first allocation to Mr Cipa under the Performance Rights Plan, it is proposed that he also be issued additional Performance Rights on the above basis in recognition of his performance in respect of the 2001 and 2002 years.

The maximum number of Performance Rights that may be acquired. by those Executive Directors (and accordingly that may become exercisable) over the 3 year approval period is 350,000 in aggregate, which includes the 'catch up' allocations referred to above. The actual number of Performance Bights issued will, as mentioned above, depend on changes in the Company's share price, and the remuneration of the Executive Directors, over the period.

Like all the Performance Rights issued under the Performance Rights Plan, the Performance Rights that are issued to an Executive Director will

. be issued for no consideration payable by the Executive Director, and
· represent the right to subscribe for or acquire one Share for either nil or monetary consideration not exceeding \$1.00 per Share (or such other amount as determined by the Board from time to time).

As the Performance Rights Plan has not previously existed, no Executive Director has previously received any Performance Rights under the Plan. No loans will be provided by the Company in relation. to the grant of Performance Rights to, or exercise of Performance Rights by, Executive Directors under the Performance Rights Plan.

Details of any Performance Rights issued to an Executive Director under the Performance Rights Plan will be published in each annual report issued by the Company relating to a period in which the Performance Rights were issued. The annual report will also contain. a statement that shareholder approval for the issue of the Performance Rights was obtained under ASX Listing Rule 10.14.

Recommendation

The Non-Executive Directors recommend that shareholders vote in favour of the resolution to approve the issue of Performance Rights to the Executive Directors on the basis outlined above.

CSL Limited ABN 99 051 588 348 45 Poplar Road Parkville Victoria 3052 Australia
-Telephone: +61 3 9389 1911 Facsimile: +61 3 9387 8454

AI assistant

CSL Ltd. — Annual Report 2003

17854_rns_2003-09-14_f8f855c7-893c-4b06-bebf-afc844bbdc40.pdf

FOR ANNOUNCEMENT -ANNUAL REPORT AND NOTICE OF ANNUAL GENERAL MEETING

MANIAN DI

ADD 2011

Dear Shareholder,

Dividends and Financial Results

Human Health

FINANCIAL RESULTS

FINANCIAL CALENDAR

$2002$

2014

ANNUAL GENERAL MEETING

AGMINNEMERAST

YEAR IN REVIEW CONTINUED

Dividence to State indicate

JRH Biosciences

SALES REVENUE BY BUSINESS UNIT

YEAR IN REVIEW CONTINUED

Animal Health

YEAR IN REVIEW CONTINUED

ZLB Plasma Services

Aventis Behring LLC

Performance Rights Plan

Dividend Reinvestment Plan

CSL'S MAJOR CORPORATE OBJECTIVES FOR THE YEAR AHEAD

The CSL Board

The company of the company of the company of the company of the company of the company of the company of the cThe company of the company of the company of the company of the company of the company of the company of the c

ZLB PLASMA SERVICES LOCATIONS

CSL GROUP VALUES

CSL Bioplasma's Employee Development

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HEALTH AND SAFETY POLICY

SYSTEMS (1999)

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OP PRODUCED A CONTRACTO

Elizabeth A Alexander

Peter H Wade, FCPA, FAICD - (age 69) Chairman

Brian A McNamee, MB, BS, FAICD - (age 46) Managing Director

Elizabeth A Alexander, AM. BCom, FCPA, FCA, FAICD $-$ (age 60) Accounting (resident in Victoria).

lan A Renard

Kenneth J Roberts

Arthur C Webster

1. The Board of Directors

1.1 The Board Charter

1.2 Composition of the Board

1.3 Independence

CORPORATE GOVERNANCE CONTINUED

1.4 Nomination Committee

1.5 Director Appointments

1.6 Performance Evaluation

2. Audit and Risk Management

2.1 Integrity in Financial Reporting and Regulatory Compliance

2.2 Audit and Risk Management Committee

2.3 External Auditor

CORPORATE GOVERNANCE CONTINUED

3. Remuneration and Human Resources

3.1 Remuneration Policy

3.2 Human Resources Committee

3.3 Employee and Executive Remuneration

3.4 Employee Share and Option Plans

3.5 Remuneration of Directors

CORPORATE GOVERNANCE CONTINUED

4. Market Disclosure

4.1 Summary of Continuous Disclosure Policy

4.2 Securities and Market Disclosure Committee

4.3 Shareholder Communication

5. Securities Trading Policy

Communication

BS LEATHER RAIN LIBERTIER

Details of Incorporation

Substantial Shareholders See page 43 of this Annual Report.

Voting Rights

Significant Foreign Shareholdings

Shirtiaram

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FIVE YEAR SUMMARY

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