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Afrikai Report 2005 2006

The Year in Review	1	Directors' Profiles	22
The CSL Story 1916-2006	8	Executive Management Group	24
CSL Behring	9	Controlled Entities	25
CSL Bioplasma	12.	Business Operations	28
CSL Biotherapies	14	Share Information	30
New Product Development	16	Shareholder Information	31
Our People, Our Communities	18	Corporate Governance	33
		Financial Report.	39

Financial Calendar

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Annual General Meeting

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AGM Lite Webcast

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Manufacture Production Company The Limit Contribution of the

CSLS Year in Review Highlights 2005-2006

Peter Wade Charman

Brian McNamee Chief Executive Officer and Managing Director

Dear Shareholder.

We are pleased to report that the continuing strong performance of our plasma therapeutics business has delivered an excellent year for CSL. In addition, our long-term commitment to research and development has resulted in a significant collaborative outcome with Merck & Co. Inc. with the approval of the world's first vaccine against cervical cancer.

Highlights:

Net profit after tax from continuing operations (before the recognition of the contingent consideration) reached \$351 million, up 49% on the previous year, and net operating cash flow was \$522 million. Given our strong performance, CSL has made provision for the contingent payment of US\$250 million arising from the acquisition of Aventis Behring in 2004.
In June 2006, the US FDA and Australia's TGA both granted approval to market Gardasil, the world's first vaccine against cervical cancer. Merck & Co. Inc. is our licensee and has exclusive global marketing rights. CSL will receive royalties from Merck's sales and has the distribution rights for Australia and New Zealand.
CSL announced an \$80 million capital investment in our Australian influenza vaccine plant to double capacity to 40 million doses per season and accommodate plans to introduce this vaccine into the US market in the 2007-08 winter season.
After achieving encouraging preliminary results from initial clinical trials of our pandemic influenza vaccine based on the H5N1 avian virus, CSL is working closely with public health authorities and the Australian Government to develop and license a safe and effective prototype vaccine.
Key plasma therapeutics continued to record strong growth in sales and Vivaglobin® subcutaneous immunoglobulin became the first product of its kind to be launched in the US market.
CSL announced a proposal to acquire 100% of the issued shares in Zenyth Therapeutics Limited to be implemented by way of a Scheme of Arrangement.
The Company's various visual identities and operating names have been aligned to strengthen connections throughout CSL's global network.

OSLS YEAR IN REVIEW Financial Results

Dividends to Shareholders

On 13 April 2006, our shareholders received an interim unfranked dividend of 28 cents per share. CSL's final unfranked dividend of 40 cents per share will be paid on 13 October 2006.

Five Year Summary

All figures are in \$A million unless stated otherwise¹¹

	2005-06.	2004-05	2003-04	2002-03	2001-02
Total revenue	2,904	2,650	1.836	1.313	1,350
Sales revenue	2.849	2.609	1.650	1.300	1,336
Research and development investment	161	141	101	92	93
Profit before income tax expense ^®	499	410	255	102	157
Net profit ²¹	351	235	220	70	124
Capital investment	122	105	80	74	83
Total assets at 30 June	4.186	3,893	3.875	2,220	2,312
Total equity at 30 June	1.990	2,109	2.074	1,283	1,273
Net tangible assets per share at 30 June (\$)	6.43	7.02	6.18	2.42	1.79
Weighted average number of shares (million)	182	196	178	159	158
Basic earnings per share (cents) ²³	192.8	119.8	123.3	44.2	78.2
Dividend per share (cents) ³³	68.0	47.0	38.0	34.0	34.0

(1) The Group's results for the year ended 30 June 2006 and 30 June 2005 are reported in accordance with the Australian Equivalents to International Enternational Reporting Standards (A-IFRS). The Group's results for the years ended 30 June 2002 through to 30 June 2004 are reported in accordance with the Group's old basis of accounting (AGAAP).

(2) Excludes the recognition of the contingent consideration payable for the acquisition of Aventis Behring and the profit after tax from discontinued operations.

(3) Excludes special dividend of 10 cents for the year ended 30 June 2005.

01-02 02-03 03-04 04-05 05-06

CSL R&D Investment (SA millions)

Year in Review PIA (REPART)

$Viv$ aglobin $^\circ$ subcutaneous immunoglobulin this year became the first product of its kind to be launched in the US market.

Dividends and Financial Results

On 13 April 2006, shareholders received an interim unfranked dividend of 28 cents per share. A final unfranked dividend of 40 cents per share will be paid on 13 October 2006. As foreshadowed in last year's Annual Report, dividends have not been franked due to the increasing proportion of revenue now being generated offshore and increased expenditure. on research and development in Australia.

The CSL Group achieved a net profit after tax from continuing operations of \$351 million (excluding the recognition of the contingent consideration on acquisition. of Aventis Behring) with sales revenue up 9% to \$2.8 billion. Strong net operating cash flows amounted to \$522 million.

As a result of the strong performance this year, provision has been made for a contingent payment as agreed when we acquired Aventis Behring in 2004. CSL agreed to pay US\$250 million to Aventis Behring if CSL's share price moved above \$35 dollars and remained above that price. for any 60 consecutive trading days in the period between. 27 September 2007 and 26 March 2008. The provision is shown as a separate item in CSE's profit and loss account. for the financial year ended 30 June 2006.

Business Reports

CSL's business activities include CSL Behring (previously ZLB Behring), CSL Bioplasma, CSL Biotherapies (previously CSL Pharmaceutical), and our global research and development operations.

CSL Behring

CSL Behring this year consolidated the momentum from the integration of Aventis Behring in 2004 with sales reaching \$2.4 billion and further improvements achieved in business efficiency. Sales revenue was 11% ahead. of the previous year (10% in constant currency) with strong performance across our product portfolio.

The strong demand for Factor VIII contributed to sales growth of 10% in our Helixate® recombinant product. The sales growth of plasma-derived Factor VIII and von Willebrand Factor products has been helped by the increasing awareness of von Willebrand Disease and Immune Tolerance-Therapy (ITT) treatment protocols.

Immunoglobulin sales grew over the previous year with continued strong demand in the US market driving global growth. We successfully launched Liquid Sandoglobulin in Europe with strong sales in England, France and Denmark. Vivaglobin® (immunoglobulin for subcutaneous injection). received US Food and Drug Administration (FDA) approval midway through the year and has been launched in the United States for the treatment of Primary Immune Deficiency, Vivaglobin® offers patients the flexibility of treating themselves in the convenience of their own homes, with approval from their doctors.

CSL Behring achieved strong growth in the number of patients being treated with Zemaira® for genetically-linked emphysema and the recent FDA approval of our expanded manufacturing capacity has significantly increased the potential for greater patient numbers.

In Japan, self-sufficiency initiatives and flat demand for plasma therapeutics are slowly eroding sales opportunities. However, CSL Behring's specialty products in surgical sealants and for critical care provide a base for usto compete in this market.

CSL Behring's financial performance has continued to exceed expectations as a result of strong demand across CSL Behring's product portfolio. This is reflected in a 28% increase in earnings before interest and tax over the previous year. Product margins have improved fromadditional manufacturing volumes, higher prices, integration benefits, and from operating efficiencies compensating for the discount allocated to inventory arising.

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	Share	Rank
Coaquiation	20%	2
Critical Care	21%
Emmunealoculus	21%	2
Amadel	9%.

from the purchase of Aventis Behring. Market demand and improved supply chain management have produced strong cash flows from operations.

Strong US demand for intravenous immunoglobulin is also driving the demand for plasma to manufacture our products. CSL Behring is well placed to meet growth opportunities through its own plasma collection centres and plasma purchased from US and European Blood Banks.

Our research and development projects have made good. progress this year. The clinical trial for a chromatographic, high-yielding liquid immunoglobulin for intravenous administration has been completed and filings are planned. for late 2006 with the FDA, European and Canadian regulatory agencies. A surgical study for Humate®/Haemate® (plasma-derived Factor VIII) has been completed and the file supplement for this indication has been submitted to the FDA. A multi-centre clinical trial in Hereditary Angiodema. is in progress with the aim of broad registration of Berinert." (C-1 Esterase Inhibitor) for treatment of this painful and sometimes life-threatening condition. A clinical trial will also be completed in 2006 evaluating the use of Beriplex* (prothrombin complex) for treatment of coagulation factor deficiencies associated with Warfarin therapy.

To meet projected demand for immunoglobulin, work has commenced on a large-scale chromatographic purification. plant at our Bern facility. The Bern project includes a state-of-the-art filling suite for immunoglobulin. At our Marburg plant, we have started work on a new filling suite. for coaqulation factor products. Additional works are being undertaken to expand our capacity for coagulation. and acute care products.

CSL Bioplasma

CSL Bioplasma includes our contract fractionation operations. in Melbourne, the commercial operations of CSL Behring Asia (excluding Japan) and our Immunohaematology Group.

Several industry policy changes have contributed to an 8% reduction in sales revenue to \$191 million this year. Sales of our plasma-derived therapeutics were affected by the first full year of Australian Government funding for imported recombinant coagulation factors. This was also the first fullyear of the Plasma Products Agreement (PPA) with the Australian National Blood Authority (NBA) under a new pricing policy for fractionation services. The new Australian procurement arrangements introduced by the NBA for the diagnostics sector also had an impact on our market share for immunohaematology products.

Under the PPA, CSL Bioplasma has fractionated approximately 300 tonnes of Australian plasma this year producing sufficient life-saving, plasma-derived therapeutics to treat approximately 200,000 Australians.

We are achieving higher yields of intravenous immunoglobulin as a result of innovative improvements. to the fractionation process used for Intragam® P. Our industry-leading intravenous immunoglobulin yield allows. us to optimise the extraction of IVIg from the voluntary blood donations collected in Australia, and thereforeprovide greater quantities of this life-saving product. to our health care professionals.

During the year, we launched the Mix2Vial, an improved reconstitution device designed to enhance ease of use and patient safety when reconstituting our lyophilised coagulation. factors including Biostate® (Factor VIII), MonoFix® (Factor IX), and Prothrombinex^™ - HT (factors il, IX and X concentrate).

CSL Biotherapies President, Colin Armit (left) and Merck, Sharpe and Dohme CEO, Will Delast, sign a new agreement under which CSL will distribute a broader range of Merck vaccines in Australia.

Significant sales revenues continue to be generated through the customised contract fractionation operations we provide to the blood services of New Zealand, Malaysia, Hong Kongand Singapore. This year, we extended our contract fractionation agreement with Hong Kong, and renegotiated our manufacturing agreement with the New Zealand Blood Service. Renewing these agreements reinforces the position of CSL Bioplasma as the plasma fractionator of choice. in the Asia Pacific.

Strong demand for albumin in Asia, particularly China, underpinned CSL Behring Asia's 20% growth in sales revenue. We continue to build our infrastructure in Chinaand now have offices in Beijing, Shanghai, Guangzhour and Chengdu.

CSL Biotherapies

CSL Biotherapies is the new name for CSL Pharmaceutical and is responsible for vaccines and pharmaceuticals in Australia, and global sales of our influenza vaccines.

Sales revenue this year reached \$212 million (up 3%). with a strong contribution coming from our expanding influenza vaccine business.

The launch of our influenza vaccine in the United Kingdom. and in Sweden coincided with a shortfall in supply from other manufacturers. As a result, almost one in four patients in the United Kingdom received CSL vaccine.

In February 2006, we announced plans to introduce CSL's influenza vaccine to the US market and the associated investment of \$80 million in plant and equipment. When this work is completed at our Melbourne facility, we will double vaccine manufacturing capacity to 40 million doses per season, In June 2006, an investigational new drug application was approved by the US FDA and we initiated the required clinical study under an accelerated approval process. Subject. to FDA approval, we plan to launch our vaccine in the US market for the 2007-08 winter season.

CSL Biotherapies has made further progress in Asian. markets with approval of formulated bulk influenza vaccine. for supply to Korea. Our Fluvax® is marketed in Singapore, Malaysia and Hong Kong, and regulatory authorities in Chinahave recently accepted the registration dossier for our fluvaccine as a first step to market entry. A long-term supply agreement has been reached with the New Zealand government for the first time.

One of the few manufacturers of influenza vaccine in the world, CSL Biotherapies is well placed to take advantage. of increased demand that has resulted from supply shortages, greater awareness of the benefits of immunisation and concerns about a pandemic.

Approved by the Australian Therapeutic Goods Administration (TGA) in June this year, Gardasil is the first vaccine shown to prevent cervical cancer. Gardasil is the result of a crucial breakthrough in 1991 by Professor. lan Frazer and his team at the University of Queensland, collaborative research with CSL scientists and the strong support since 1995 of Merck & Co. Inc. (Merck), our licenseefor this product. Merck granted CSL exclusive marketing rights for Gardasil in Australia and New Zealand.

The launch of Gardasil and other new vaccines in the comingyear underpin a strong platform for business growth.

CSUs proprietary iscomatrix" adjuvant is now being manufactured at our Kankakee site for use by US-based licensees in the development of a new generation of human vaccines.

New Product Development

The biggest research and development event this year has been the licensing of the Merck human papillomavirus. vaccine, Gardasil, in the US and Australia (see feature on page 16 of this Report).

Another area of significant achievement has been the work in supporting the internationalisation of CSL's influenzal vaccine. As already mentioned, we have now licensed our high quality Australian influenza vaccine in key European countries and started the clinical trials required for registration in the United States.

At the same time, we have responded to the international public health threat of bird flu by producing and testing an experimental vaccine against the H5N1 strain that has caused concern across a number of countries in and beyond our region. As the only flu vaccine manufacturer in the Southern-Hemisphere, we are working closely with public health authorities and the Australian Department of Health to develop and license a safe and effective prototype vaccine. in Australia as soon as possible. In developing the H5N1 vaccine, we have used technologies that we are confident. can reliably be reproduced in large quantities, should a crisis occur. Early in 2006, we completed our first human clinical trial and in the second half of this year we will be exploring responses to higher doses of antigen in a broader age group.

Adjuvants are used to enhance or modify the human immune response to antigens in vaccines. Following some years of R&D investment in CSEs proprietary ISCOMATRIX* adjuvant, we are now pleased to be moving the technology into a larger scale manufacturing environment at our Kankakee site in the US. This adjuvant will be used by US-based licensees including Merck in their development.

of a new generation of human vaccines. We plan to produce commercial quantities of GMP-quality adjuvant at both our US and Australian manufacturing sites.

Consistent with our long-term manufacturing of polyclonal immunoglobulin purified from human plasma, CSL has a significant interest in developing biotechnology products. based on recombinant monoclonal antibody (MAb) technology. The academic scientific base to support the discovery of these MAb candidates is strong in Australia. We are investing in relationships, skills, facilities and intellectual property that will enable us to develop our lead antibody. candidate, a drug potentially to treat leukaemia, as well as a growing portfolio of exciting preclinical candidate molecules.

Consistent with this strategy, the Company has announced a proposal to acquire 100% of the issued shares in Zenyth Therapeutics Ltd to be implemented by way of a Scheme of Arrangement. Our proposal was unanimously recommended by Zenyth Directors in the absence of a superior proposal. from a third party. If the proposal is approved by Zenythshareholders and the Supreme Court of Victoria, we look forward to combining Zenyth's portfolio of pre-clinical R&D. projects with CSE's R&D portfolio and using our complementary skills to enhance our scientific capabilities.

The CSL Board

Mr Peter Wade will retire from the Board prior to our Annual General Meeting in October this year after seven years as Chairman. He will be succeeded by Elizabeth Alexander who brings 15 years experience to her new role as Chairman, having been appointed to the Board in 1991. Mr Wade served as a Commissioner and Director from 1985 to 1993, and was reappointed as a Director in 1994 shortly after CSL was listed as a public company on the Australian

The official opening of CSL Behring's expanded Kankakee production facility for Zemaira®, a treatment for genetically-linked emphysema. CSL Chairman, Peter Wade, cuts the ribbon watched by CEO, Brian McNamee and Director, Elizabeth Alexander,

Stock Exchange. Mr Wade has been closely involved in our successful transition from an Australian government. instrumentality to a global business. The Board appreciates his significant 20-year commitment to the growth of CSL and recognises his key role in creating an international company.

In addition, Dr Arthur Webster, who was appointed to the Board as a Director in March 1998 has decided not to seek re-election at the October Annual General Meeting. The Board has greatly appreciated Dr Webster's significant. contribution to Board decisions particularly during the time. that the Company operated its Animal Health business but also in assisting the Company to become a global operation. Dr Webster has been a valued member of the Human Resources Committee.

In June this year, we welcomed Professor John Shine to the Board. Professor Shine is Executive Director of the Garvan-Institute of Medical Research, Professor of Medicine and Professor of Molecular Biology at the University of NSW, past Chairman of the National Health and Medical Research Council, and Vice President of the Australian Academy of Science. Professor Shine will be seeking to be elected to the Board at the Annual General Meeting in October.

We also welcome Mr David Simpson to the Board. Mr Simpson is the non-executive Chairman of Aristocrat Leisure Limited and a Director of the Eighthouse Foundation, having previously been the Finance Director for Tabcorp Holdings. Limited from 1995 to 2003 and prior to that Executive General Manager Finance for Southcorp Holdings Limited from 1987 to 1995. Mr Simpson will succeed Elizabeth Alexander as Chair of the Audit and Risk Management. Committee. He will be seeking to be elected to the Board at the Annual General Meeting in October.

Our Thanks to Management and Staff

CSL now has more than 7,500 employees in 26 countries. and successfully integrated operations have been the key to another year of strong business performance. It is important. that we recognise that our employees at all levels have been instrumental in delivering this result. Your Board of Directors congratulates management and staff for the vital roles theyhave played in another excellent business outcome for CSL this financial year by continuing to deliver innovative medicines to thousands of people.

year bade.

Peter Wade Chairman

Brian McNamee Chief Executive Officer and Managing Director

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The CSL Story 1916-2006

In CSL's 90th year, there is no more fitting commemoration than to know that through our strong commitment to research and development we have played a key role in the collaborative work that has delivered the world's first vaccine against cervical cance:

Our core plasma therapeutics business had its origins in the early 1950s when CSL began to carry out plasma fractionation on behalf of the Australian Government in collaboration with the Australian Red Cross and using [111] blood from woluntary donors. Since listing as a publiccompany in 1994. CSL has become a world leader in the in plasma therapeutics through astute acquisitions and sound commercial management. The management

First produced in Australia for the 1968 influenza parxlemic. CSLs split wrion influenza vaccine is now part of Australia's national vaccination program, and international markets are expanding. The only influenza vaccine manufacturer in the Southern Hemisphere, CSL is also working closely with public health authorities and the Australian Department of Health to develop and license a safe and effective prototype pandemic influenza vaccine based on the H5N1 avian virus.

Now a global specialty biopharmaceutical company, CSL is continuing to build the skills and capacity to develop, manufacture and market products for the treatment. and prevention of serious human medical conditions.

CSL was established by the Australian Government in 1916 to produce sera,
vaccines and other biologicals at a
humoud and other biologicals at a time when World War I led to supply
shortages of these products to Australia. By 1923, within a year of its discovery,
CSL produced insulin to treat diabetes. Under Wartime conditions in 1944 CS manufactured penicillin and Australia
became the first country to make regular supplies available to a civilian population.
Production of BCG vaccine for the
prevention of tuberculosis began in 1947. In a ter-year period starting in 1956, CSL produced 25 million doses of Salk polio
Vaccine and saw the disease virtually
eliminated in Australia. These are just a few of many notable achievements
in human health over the past 90 years

CSL Behring is a global leader in biotherapies with the broadest range of quality products in our industry and substantial markets in the USA, Europe and Japan.

Our lifesaving and life-prolonging therapies are indicated for the treatment of rare diseases such as haemophiliaand other bleeding disorders, primary immune deficiency disorders, and inherited respiratory disease. Our plasmaderived therapeutics are used to prevent Rh factor problems. in the newborn, to assist recovery from heart surgery. and to treat shock and severe burns.

CSL Behring

Based at King of Prussia in Pennsylvania (USA), CSL Behring operates manufacturing plants in Kankakee, Illinois (USA), Bern (Switzerland) and Marburg (Germany), and sales and distribution centres throughout the world.

CSL Behring remains well positioned to develop its global biotherapeutics business through our broad portfolio of high quality products, global marketing that meets customer needs, a pipeline of new and improved plasma products, lower cost and higher yield manufacturing processes and effective balancing of supply and demand.

Our extensive research and development activities, patient. support services and patient-focused resources are key elements in an ongoing commitment to people whose lives depend on our products.

We listen carefully to the concerns of people with rare, life-threatening disorders and work to address their needs. By providing safe and effective products and services, we help patients to improve quality of life. And we continue to develop programs that help patients and families to manage the daily challenges of living with chronic conditions.

CSL Behring produces high quality products in our state-ofthe-art facilities using the most sophisticated methods available. Because patient safety is our first priority, we closely monitor every aspect of the manufacturing process.

CSL Behring's plasma collection business, ZLB Plasma. Services, has 65 collection centres in the USA and eight. in Germany, along with plasma testing laboratories. and logistics centres in both countries.

Laboratory technician, Thomas Rein, carries out a Real Time PCR quantitative virus detection assay used to determine that biological materials are virus free.

Head of Patents and Licences in Marburg, Dr Hans-Friedrich Lauppe, with Senior Patent Manager, Felicitas Sigmund.

Globally, more than 400,000 donors provide the plasma used to produce life-saving products for critically ill patients. ZLB Plasma Services offers a reliable and secure source of plasma for those essential medications.

ZLB Plasma Services is based in Boca Raton, Florida (USA) and has the largest plasma-testing laboratory in the industry in Knoxville, Tennessee (USA) and a logistics centre in Indianapolis, Indiana (USA).

Based in Marburg, our German operations include a plasma-testing laboratory in Goettingen and a logistics centre in Schwalmstadt.

The largest collector of human blood plasma in the world, ZLB Plasma Services sources the plasma required by CSL Behring through its plasma collection operations and commercial purchases.

In this stringently regulated industry, CSL Behring and ZLB Plasma Services comply with the highest international standards, use the most sophisticated systems and continueto explore avenues of innovation.

HAEMOPHILIA AND OTHER COAGULATION DISORDERS	CRITICAL CARE CONDITIONS	ALPHA 1-PROTEINASE INHIBITOR DEFICIENCY
Coagulation therapies are used to treat bleeding disorders such as haemophilia and Von Willebrand disease.	Critical care products are used to treat shock, sepsis and severe burns, and are used in cardiac stirgery.	For people at risk from life-shortening emphysema through a genetic deficiency in their synthesis of this protein,
Recombinant Factor VIII * Helixate® FS Helixate® NexGen Plasma-derived Factor VIII	Trauma Therapies » AlbuRx ³³⁶ 5 and 25 « AlbuRx ³⁶⁶ 5 and 20 » Albuminar ^® ~5 and ~25	™ Zemaira® IMMUNE DISORDERS AND IMMUNE THERAPY
« Beriate® P » Haemate® P « Humate-P® * Monoclate-P®	· Albumin ZLB 5% and 20% Beriplex® P/N » Haemocompiettan® P • Human-Albumin 20% Behring, low salt	Immunoglobulins are used to treat infections and autoimmune diseases. and to prevent haemolytic disease in the newborn.
Plasma-derived Factor IX ». Berinin® P * Mononine® « Factor IX P Behring	Inhibitors '» Berinert® P « Kybernín® P.	Polyvalent Immunoglobulins » Beriglobin® P. « Carimune® NF * Redimune ^@
Von Willebrand Disease. « Haemate® P Humate-P® Stimate ^®	Cardiology « Streptase® WOUND HEALING	* Redimune® NF Liquid « Sandoglobulin ^® ® Sandoglobulin® NF Liquid ⊛Gamma-Venin® P » Gammar ^® -P.I.V.
Other Coagulation Disorders « Benplex® P/N	Wound healing therapies are used to facilitate healing.	∝ Venimmun® N « Vivaglobin®
« Fibrogammin® P « Haemocompiettan® P Kybernin® P	» Beripfast® P « Fibrogammin®. P * Tachocomb. ⁸	« Immune Globulin Subcutaneous (Human) Specific Immunoglobulins « Berirab® P
		Hepatitis B Immunoglobulin P Behring » Rhesogamma ^® F « Rhophylac ^® Tetagam ^® P » Varicellon® P

■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■■

Immunchaematology Laboratory Supervisor, Teresa Anderson, examines red cells ready for freezing at the ZLB Plasma Services plasma-testing laboratory in Knoxville, Termessee.

-CSL Behring sales representative, Ayako Kiyonaga makes a presentation to a Tokyo pharmacist.

Leigh Ann Miller is a Senior Biomedical Technician. In the ZLB Plasma Services collection centre In-Knoxville, Tennessee, one of more than 60 centres across the USA.

Apprentice Laboratory Technician, David Rufenacht, tests a water sample at CSL Behring's manufacturing facility in Bern.

Based in Melbourne, CSL Bioplasma delivers contract plasma fractionation services and commercial plasma-derived therapeutics throughout the Asia Pacific (except Japan).

Contract plasma fractionation services are provided from our fractionation facility in Australia under long-standing agreements with the Governments and blood services of Australia, New Zealand, Hong Kong, Malaysia and Singapore. Our regional office in Hong Kong, now supported by offices in Beijing, Shanghai, Guangzhou and Chengdu, drives business in China, Taiwan, South Korea and South Asia.

CSL Bioplasma has been Australia's national fractionator since 1952 and this relationship continues today under our five-year (2005-2010) Plasma Products Agreement (PPA) with the Australian Government, an agreement which is now managed by the National Blood Authority. The contractual arrangements under the PPA ensure Australia retains control over the quality, safety and supply of its plasma-derived therapeutics.

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	$\Box$ Major plasma products manufactured by CSL Bioplasma $\Box$

COAGULATION THERAPIES	CRITICAL CARE PRODUCTS	TOLL FRACTIONATION SERVICES
Coagulation therapies are used to	Critical care products are used for	CSL Bioplasma performs plasma
treat bleeding disorders such as	plasma volume expansion and for	fractionation for Australia's National
haemophilia and von Willebrand	replacement of albumin.	Blood Authority, a role pivotal to
disease.	* Albumex®	Australia's policy of self-sufficiency.
* Biostate ^®	* Thrombotrol ^®	CSL Bioplasma is also the national
ं∢ MonoFix® ≂.VF		fractionator of New Zealand, Hong
® Prothrombinex™ - HT		Kong, Malaysia and Singapore.
	DIAGNOSTIC PRODUCTS
	Diagnostic products are used
IMMUNOGLOBULINS	to determine compatibility of	CSL BEHRING PLASMA
Immunoglobulins are used to modify	donor-recipient blood in	THERAPEUTICS
function of the immune system.	transfusion settings.	CSL Biopíasma markets CSL Behring's
«Intragam ^@ P	ABO Monoclonal Reagents	commercial products in Asia through
« Normal immunoglobulin	Reagent Red Blood Cells	CSL Behring Asia.
, Rh(D) immunoglobulin
« CMV immunoglobulin
· Hepatitis B Immunoglobulin
Zoster Immunoglobulin
Tetanus Immunociobulin

Under regulatory control of Australia's Therapeutic Goods Administration, CSL Bioplasma works very closely with the Australian Red Cross Blood Service and the regional blood services supplying plasma for fractionation into a range of products. The voluntary, non-remunerated plasmadonations that we receive from each of these blood services remain strictly separated at every stage from receipt, through fractionation, to storage and distribution.

The chromatographic fractionation processes developed by CSL Bioplasma's scientists and engineers extract high purity plasma-derived therapeutics including intravenous immunoglobulin and Factor VIII - von Willebrand factor concentrate. We use innovative processes to recover the highest yields from each donation.

CSL Bioplasma offers a broad range of products, customised toll manufacturing to blood services throughout our region, and strong client support through our presence. in key markets.

CSL Bioplasma Process Specialist, Kylie-Cranver, is shown here working with chromatography columns dedicated to processing plasma collected from Australian donors. Plasma donations received from blood services in Australia and throughout the Asia Pacific region are strictly separated at every stage from receipt, through plasma fractionation to storage and distribution.

During a Careers Day, CSL Bioplasma Scientist, Vicky Gatzigiannis, talks about her work to Matthew Ellis.

CSL Biotherapies has continued to expand global sales of our influenza vaccines this year and is now further increasing manufacturing capacity to take advantage of growing international demand.

The new \$80 million capital investment in our Melbourne influenza vaccine plant announced in February this year will double production capacity to 40 million doses per season and accommodate plans to introduce CSL vaccine into the US market.

and Drug Administration (FDA). Subject to FDA approval, we will supply vaccine for the 2007-2008 winter and have capacity to supply up to 20 million doses to the US market. in the following season as our expanded manufacturing facilities come on line.

After CSL completes the required US human clinical study, we will submit a Biologics License Application to the Food In 2004, we completed a \$33 million expansion to meet the increasing vaccine demands of our customers in both

VACCINES	FOR PREVENTION OF:	ANTI-INFECTIVES	FOR TREATMENT OF:
:Fluvax®	Influenza.	Flopen®	Severe staphylococcal infections
Pneumovax*.23	Pneumococcal infection	Moxacin ^®	Bacterial infections
Menjugate*	Meningococcal C disease	Fucidin*	Bacterial infections
ADT ^®	Diphtheria and Tetanus.	BenPen®	Bacterial infections
H-B-Vax. II PedvaxHIB	Hepatitis B infection Haemophilus influenzae B	OTHER PRODUCTS	FOR TREATMENT OF:
Vaqta*	Hepatitis A infection	Tramal*	Moderate to severe pain
Variyax*	Varicella .	Flomaxtra*	Benign prostatic hyperplasia
Comvax*	Haemophilus influenzae B and.	Antivenoms	Enveriomation
$Q$ -Vax $\circledast$	Hepatitis B infection Q-Fever.	Cervidil ^*	Complications during childbirth requiring induced tabour
MMR*I	Measles, mumps and rubella	Modavigil. ^*	Excessive daytime sleepiness in narcolepsy -
RotaTeq*	Rotavirus-induced gastroentiritis	Epi-Pen*	Severe allergic reactions
Gardasif 3	Cervical cancer	Daivonex*	Psoriasis
		Daivobet*	Psoriasis.

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Northern and Southern Hemisphere markets. In 2005, we made up for an unexpected shortfall of influenzavaccine imports to Australia. CSL Biotherapies is well. positioned to manufacture enough influenza vaccine. to protect the Australian population in the event of a pandemic. Pandemics result from a new influenza variant. that populations have not been exposed to previously, and can occur at any time.

During the year, we achieved encouraging results from initial clinical trials of our pandemic influenza vaccine based on the H5N1 avian virus. Further trials now targeting a broader age range will determine the optimum dosage and demonstrate safety.

CSL has manufactured influenza vaccine in Melbourne since 1968 and our branded influenza vaccines are marketed in 16 countries worldwide. We also provide bulk influenza vaccine to 24 countries.

Under a contract with the Australian Government, CSL also supplies 65% of the vaccine requirements for Australia's national program against influenza targeting people over 65 and Torres Straight Islanders over 50.

Our influenza vaccine manufacturing plant in Melbourne is the only one of its kind in the Southern Hemisphere and is Australia's first line of defence against this serious infectious disease. The new expansion of facilities will help meet the increasing global demand for seasonal influenza vaccines.

In June 2006, the US Food and Drug Administration (FDA) and Australia's Therapeutic Goods Administration granted approval to sell Gardasil – the world's first vaccine against cervical cancer.

Merck & Co. Inc., CSL's ficensee for this novel quadrivalent. recombinant vaccine, has also applied for licensing approval to regulatory authorities in a number of other countries.

The powerful result of more than 15 years collaborative work, Gardasil has potential to benefit millions of women. Cervical cancer is the second most prevalent cancer in

women, typically affecting those aged 35 to 55, and causing close to 240,000 deaths globally each year. Gardasil is designed to prevent 70% of cervical cancers.

Cervical cancers are caused by human papillomavirus (HPV). infections. Professor lan Frazer and his team at the University of Queensland made the crucial first breakthrough in 1991

Our Future Research and Development Focus

New Product Development

CSL is investing in the development of new protein-based mediunes that can be punikat hom human plasma, matte kom traditional sources (as with our influenza vaccines), or be produced using recombinant biotechnology. The common feature is that all these approaches lead to powerful biological medicines for treating serious himan diseases

ASHIBIKDHIPHINABEXQIONITPIOSTEIBES sontinued to strengthen the focus of nesearch and development activities on developing products that materiour នភាពពេលនៅវិនាសារព្រំសែន

OSLS research and development programs show agr strong commitment to products made from human plasma, as with our range of liquid miravenous and submitaneous immunoclobulins. We are also engaged in broadening both regulatory jurisdictions and clinical indications in speakly phono products such as Zemaira (alpha 1 antitrypsin inhibitor) and Berinert³ P (C) esterase inhibitor).

We continue to support market expansion tor our Australian manufactured influenza vacemes by seeking new international registrations. Another goal for us is to improve influenza vacane efficacy, particularly in older accepte.

An increasing proportion of our research and development investment is being allat nich tie bielegandlegy mojedes particularly for recombinant antibody medianes. A key longer-term objective is to build the skills and facilities that ensure we are capable of carrying out the dinical development of recombinant antibody candidates and following this through all the way to commercial sourch.

by discovering that the HPV capsid recombinant protein could self-assemble into virus-like particles (VLPs) which made production of a vaccine possible. Research continued in collaboration with CSL scientists from the early 1990s and with the support of Merck from 1995.

Extensive clinical trials carried out by Merck demonstrated Gardasil prevented 100% of all high-grade cervical pre-cancers and non-invasive cervical cancers associated with HPV types 16 and 18.

HPV types 6, 11, 16 and 18 in the vaccine are the most. common types affecting the health of women, accounting for a significant proportion of abnormal pap tests. HPV types 16 and 18 account for close to 70 percent of cervical cancer cases and are linked to most deaths from this disease. HPV types 6 and 11 cause about 90 percent. of genital warts infections.

Merck has exclusive global marketing rights for Gardasil vaccine. CSL has the distribution rights for Australia and New Zealand and will receive royalties from global sales.

18 CSL Limited Annual Report 2005-2006

To succeed in the complex and challenging environment in which we operate, we rely on our people understanding and demonstrating CSL's Values of customer focus, innovation, integrity, collaboration and superior performance.

Our people continue to find innovative ways to integrate our Values with CSL's business. Management tools help demonstrate how to keep our Values alive, including the Values Road Map developed at CSL Bioplasma, the Values Journal in CSL Behring's US Commercial Operations group and an intranet based resource in Marburg, In several locations including Hong Kong and Lisbon, team-building activities have focused on the importance of living our Values alongside a clear understanding of business objectives.

Healthy Workplaces

All CSL businesses focus on creating and maintaining a safe and healthy work environment. Our Health, Safety and Environment Management System (HS&EMS) provides a structured approach to managing global risk and dealing effectively with occupational health, safety and environmental issues. Our system meets international occupational safety and health management standards (OHSAS 18001). Our safety specialists collaborate to ensure understanding of, and compliance with, our HS&EMS. The focus is on both prevention and remediation of issues via ongoing training and internal and external audits.

We recognise the importance of healthy life styles and a positive work-life balance. Alongside ongoing education sessions, we promote a range of well-being initiatives such as bike riding groups, triathlon teams, yoga classes and seated massage. We help strengthen our sense of community by bringing our people together to celebrate project milestones and other significant events.

7,500 People with Great Ideas

An exceptionally high 77% of our 7,500 employees, across 26 countries, responded to the Global Employee. Opinion Survey in December 2005. Over 83% of those who responded are proud to work for CSL and 81% agree that their manager listens to their ideas and opinions. Opportunities for improvement include the need to further recognise the achievements of our people and to concentrate on organisational cohesion. Local improvement initiatives are being developed within work areas based. on their specific results.

Our People, Our Communities

Working rogetter on project linelines in Marbing are Senior Project Management team (from left) on Martin Vey,
Thike Friebenshauser Mark Prinsensberg and Brill-Inks Volper

Jylo generations at CSN Behring Intellectual Property
Director Di Hugo Piel, with daughter Milly a legal
student who spent lime as a trainee in the Marburg
Legal Department of the Marburg

Jessica and her son at an event in King of Prussia
that marked the 20th anniversary of the US launch
of Humate P Both mother and son receive treatment
for Von Willebrand disease

Our People, Our Communities continued

Sharing Knowledge Effectively

How we select, interpret and apply knowledge to our work is crucial to our success. We have many ways of promoting more effective communication and knowledge sharing via work planning discussions, team meetings, town half meetings, the intranet and regular newsletters.

We invest in technological improvements to expedite the transfer of knowledge within the organisation. For example, cross-functional teams have streamlined data management to improve our supply and value chains. Likewise, a new Digital Media Management system provides a single point of access for company images, documents and product materials.

Contributing to Our Communities

To inform our business planning, we seek to understand the cares, concerns, motivations and needs of our stakeholders through surveys, patient group forums, sales conventions, industry conferences and research symposia.

Patients and plasma donors are a source of inspiration and help us understand the positive difference our work makes to people's lives.

Many employees including those in our large manufacturing sites have had the chance to listen directly to stories from patients with serious medical conditions.

Product donations in emergency situations is a hallmark of the way we meet our corporate social responsibilities. Other long-standing programs dedicated to improving patient care include disease awareness education and collaboration with patient advocacy organisations. CSL works pro-actively with government and communityorganisations to ensure the company plays a positive role. in the communities in which we live. We provide charitable contributions in support of local organisations and support. employee volunteer activities.

CSL contributes to scientific education by providing scholarships and grants to universities. Many of our professionals are also involved in post-graduate teaching and mentoring and we welcome school site visits.

Learning and Leadership

To maintain a competitive advantage by increasing our adaptability and resilience, we are implementing effective approaches to learning online, in work teams and on the job. Our learning is focused on knowing what we do well and enabling our people to continue to be successful.

We know that our relationships with each other, our customers and partners are as important as our systems and processes. With work often being done by virtual teams, we are developing our skills to build effective working relationships across cultural and geographical boundaries.

Our leaders energise people to make continuous learning a reality. Challenging our leaders to communicate a compelling vision and clear statement of how we are going to be successful is a feature of our leadership programs. Tools for 360-degree feedback, internal mentoring and external coaching are improving the leadership capability of our managers.

CSL Group Employees by Region

CSL Bioplasma Emergency Response Group members (from left) Morris Esposito, Mark Amos and Simon Trease
on a training exercise with their new vahicle,

Supported by the on-site Rike Users Group and encounaged. by CSL, an increasing number of employees at Parkville in
Melbourne cycle to work including (from left) Mary Walker,
Geoff Lewis, Carlos Krepelka, Sam Straniero, Phuong Tang, Candion Cook and James Thyse

Albumin Manager, Anthony Manovella, taking part in a
Careers Day at CSL Bioplasma's manufacturing fasility with
(from left) Thomas Anderson, Michael Pell, Ashloy Haslam
and Callum Lippiatt

Voin Dundun-ya revancs his prze fran Corey and Perry Parker at the golf and baseball Junior National
Championship presented by the National Hemophilia
Foundation and CSL Behring. This annual event encourages
Rids with bleeding disorders to get active and stay fit

Corey (160) was a professional baseball player and is
Manager of Coaquiation Products in Southern California
Perry is a coll professional Both Corey and Perry have
Hemophilia A

The Head of Solution Development in Bern, Andre Strahmwith Joyce Errollino, Associate Director of eStrategy
in King of Prussia, training to the a web site content
management system to be introduced worldwide.

Directors' Profiles

PETER WADE Chairman

ELIZARFTH DR BRIAN MCNAMEE ALEXANDER Chief Executive Officer and Managing Director

TONY CIPA JOHN AKEHURST IAN RENARD Einance Director

MAURICE RENSHAW

KENNETH ROBERTS ICHAN SHINE

DAVID SIMPSON ARTHUR WEBSTER

PETER H WADE, FCPA, FAICD - (age 72) 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 was formerly a Director of Tabcorp Holdings Limited and Managing Director, North Limited. Mr Wade will be retiring from the Board on 30.September 2006.

ELIZABETH A ALEXANDER, AM. BCom, FCPA, FCA, FAICD - (age 63)

Finance and Risk Management (resident in Victoria).

Miss Alexander was appointed to the CSL Board in July 1991 and will become Chairman on 1 October 2006. She is a Director of Boral Limited and D.B. RREEF. She is a Member of the Takeovers Panet, Deputy Chairman of the Financial Reporting Couricil and past National President of the Australian Society of Certified Practising Accountants and of the Australian ... Institute of Company Directors. She is Chairman of the Board of Advice to the Salvation Army (Southern Command), is Deputy Chairman of the Winston Churchill Fellowship Trust and Chairman of the Finance Committee of Melbourne -University. Miss Alexander was Chairman of the Audit and Risk Management Committee and will remain a Member of the Committee when she becomes Chairman of the Board.

BRIAN A MCNAMEE, MB, BS, FAICD - (age 49) Pharmaceutical Industry, Medicine (resident in Victoria). Chief Executive Officer and Managing Director

Dr McNamee was appointed to the CSL Board in 1990 and: is the Chief Executive Officer and Managing Director. He is a Director of the Peter MacCallum Cancer Foundation Ltd and Gen-Probe Inc, a US company. Dr-McNamee completed Bachelor of Medicine and Bachelor of Surgery Degrees at the University of Melbourne in 1979.

ANTONI M CIPA, B.Bus (Acc), Grad Dip (Acc), CPA, ACIS - (age 51) Finance (resident in Victoria). Finance Director

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.

JOHN AKEHURST, MA (Oxon), FIMechE - (age 57) Engineering, Management (resident in Western Australia).

Mr Akehurst was appointed to the CSL Board in April 2004. After graduating in Engineering from Oxford University, he has had 30 years' experience in the international hydrocarbos. industry, most recently as Managing Director and CEO of Woodside Petroleam Ltd. Prior to this, he held a number of engineering and management positions with the Royal Dutch/Shell Group of Companies.

Mr. Akehurst is a Director of Alinta Limited and of Coogee Resources Limited. He is Chairman of Indigo Energy Ltd, a Director of Biostarch Technologies Ltd and a former Director of Oil Search Limited. He is also a Director of the University of Western Australia Business School and of Youth Focus, a charitable organisation dedicated to the prevention of youth suicide. Mr Aketsurst is a Member of the Human Resources Committee.

IAN A RENARD, BA, LLM, FAICD - (age 60) Law (resident in Victoria).

Mr Renard was appointed to the CSL Board in August 1998. For many years he practised in company and commercial law. He was a Director of Newcrest Mining Limited up until September 2006, and is a Director of Hillyiew Quarries Pty Ltd, SP Australia Networks (Distribution) Ltd and SP Australia Networks (Transmission) Ltd. Mr Renard is Chancellor of the University of Melbourne. Mr Renard is a Member of the Audit and Risk Management Committee.

MAURICE A RENSHAW, B.Pharm. - (age 59) International Pharmaceutical Industry (resident in NSW).

Mr Renshaw was appointed to the CSL Board in July 2004. Formerly, he was Vice-President of Pfizer Inc, Executive -Vice-President, Pfizer Global Consumer Group and President of Pfizer's Global Consumer Healthcare Division. Prior to his positions in Pfizer, Mr Renshaw was Vice-President of Warner Lambert Co. and President of Parke-Davis USA. Mr Renshaw has had more than thirty years experience in the international pharmaceutical industry. Mr Renshaw was a Member of N. the Audit and Risk Management Committee and is a Member of the Human Resources Committee.

KENNETH J ROBERTS, AM, FRACP (Hon), BEC, FCPA, FAIM, FAICD. - (acre 68)

International Pharmaceutical Industry, Management, Marketing, Human Resources (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.

Mr Roberts is Chairman of the Royal Australasian College of Physicians Research and Education Foundation and Start-up Australia Pty Ltd. He is also Chairman of the Boards of the.. Australian Genome Research Facility Ltd and the Australian Phenomics Facility and Deputy Chairman of IMB Com Pty Ltd, the University of Queensland's biotechnology transfer company. Mr Roberts is Chairman of the Human Resources Committee.

JOHN SHINE, AO, FAA - (Age 60) Pharmaceutical Industry, Medicine (resident in NSW).

.
Professor Shine was appointed to the CSL Board in June 2006. He is Executive Director of the Garvan Institute of Medical Research and a Board Member of the Garvan Research Foundation. He is Professor of Molecular Biology and Professor of Medicine at the University of NSW, and a Director of many scientific research and medical bodies throughout Australia. Professor Shine was also Chairman of the National Healthand Medical Research Council (NHMRC) and a Member of the Prime Minister's Science, Engineering and Innovation Council. (PMSE(C) up to 30 June 2006.

DAVID J SIMPSON, FCPA - (Age 66) Finance and Management (resident in Victoria).

Mr Simpson is the non-executive Chairman of Aristocrat Leisure Limited and a Director of the Lighthouse Foundation. For many, years, Mr Simpson was Finance Director of Tabcorp Holdings Limited and before that Executive General Manager Finance. of Southcorp Holdings Ltd. He will become Chairman of the $\frac{1}{2}$ Audit and Risk Management Committee when Miss Alexander takes up the role of Chairman of the Board.

ARTHUR C WEBSTER, BVSc, DipBact (Lond) - (age 62) Animal Health Industry, Commerce (resident in NSW).

Dr Webster was appointed to the CSL Board in March 1998. He is Chairman of four 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 $\cdot$ 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

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Human Resources

Gancolleg Entities

CSL LIMITED

CSL Limited, based in Melbourne, Australia, is a public company listed on the Australian Stock Exchange and parent. company of the CSL Group. The Company manufactures plasma products, human vaccines and antivenoms.

CSL Biotherapies Pty Ltd is responsible for vaccines and pharmaceuticals in Australia, and global sales of influenza vaccines.

CSL (New Zealand) Limited in Auckland is the New Zealand marketing arm for CSL Bioplasma (plasma products). and CSL Biotherapies (vaccines and pharmaceutical products).

Cervax Pty Ltd was formed for a specific research and development project.

Iscotec AB has technology to enhance the immune response to vaccines.

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

MA888 SEP is a partnership formed to allow CSL access to benefits arising from commercialisation of the MA888 patent for recombinant Factor VIII.

CSL Finance Pty Ltd raises debt funding for the CSL Group.

ZLB Behring Asia Pacific Ltd, ZLB Behring SA and ZLB Behring UK Limited are sales and marketing companies for plasma products manufactured by the CSL Group.

CSL Biotherapies Asia/Pacific Limited is the Hong Kong sales and marketing arm for influenza vaccines. manufactured by CSL Biotherapies Pty Ltd.

ZLB Behring Holdings Ltd holds product licences for the CSL Group.

CSL Denmark ApS is a holding company for European subsidiaries of the CSL Group (also known as ZLB Behring ApS).

CSL UK Holdings Limited is a holding company for the UK operations of the CSL Group.

ZLB Behring AG manufactures plasma products in Bern, Switzerland.

ZLB Bioplasma UK Limited and ZLB GmbH were previously sales and marketing companies for products. manufactured by ZLB Behring AG, and now hold product registrations for the CSL Group.

ZLB Holdings Inc. is a holding company for ZLB Behring LLC (see details this page).

ZLB Behring Holdings GmbH is a holding company for ZLB Behring Holdings KG (see details this page).

ZLB HOLDINGS INC.

ZLB Holdings Inc. and ZLB Bioplasma HK Limited are holding companies for ZLB Behring LLC.

ZLB Behring LLC manufactures products in Kankakee, Illinois and owns the following sales and marketing operations: ZLB Behring Brazil Ltda (Sao Paulo - Brazil), ZLB Behring KK (Tokyo - Japan), ZLB Behring SA de CV (Mexico City - Mexico), ZLB Behring SA (Paris - france) and ZLB Behring Canada Inc. (Ottowa - Canada).

Business operations also include CSL Biotherapies GmbH, holding German product licences, ZLB Sales Force Inc. which employs the US sales force, and ZLB Foundation, a charitable foundation.

ZLB Bioplasma Inc. owns and operates ZLB Plasma Services in the US.

CSL Biotherapies Inc is the US marketing arm. for influenza vaccines manufactured by CSL Limited.

ZLB BEHRING HOLDINGS GMBH

ZLB Behring Holdings GmbH is a holding company for ZLB Behring Holdings KG.

ZLB Behring Holdings KG is a holding company for the European businesses of the CSL Group including the following sales and marketing operations: ZLB Behring (Schweiz) AG (Zurich - Switzerland), ZLB Behring SpA (Milan - Italy). ZLB Behring SA (Barcelona - Spain), ZLB Behring Lda (Lisbon - Portugal), ZLB Behring GmbH (Vienna - Austria), ZLB Behring NV (Brussels - Belgium), ZLB Behring AB (Stockholm - Sweden), and ZLB Behring MEPE (Kryoneri - Greece).

Company operations also include ZLB Behring GmbH, a plasma products manufacturer in Marburg, Germany and ZLB Plasma Services GmbH, a plasma collection business in Germany.

Controlled Entities contracted

CSL Limited Annual Report 2005-2006 $\bar{z}7$

The CSL Group: CSL Behring incorporating ZLB Plasma Services. CSL Bioplasma, and CSL Biotherapies

CSL has more than 7,500 employees working in 26 countries.

CSL LIMITED

CSL Group Head Office: Melbourne, Australia (1991)
Meibourne	Australia	Corporate, R&D

CSL BIOTHERAPIES

Business: Vaccines and pharmaceuticals in Australia, and global sales and marketing of influenza vaccines Australia Melbourne Sales, Manufacturing Warehousing

and Distribution

Australia	Warehousing
Australia	and Distribution
Australia
New Zealand	Sales, Marketing
USA	Sales, Marketing
China	Sales, Marketing

CSL BIOPLASMA

Business: Immunoglobulins, Albumin, Coagulation and Wound Healing Therapies, Blood Diagnostics

Melbourne	Australia	R&D, Manufacturing
		Sales, Distribution
Sydney	Australia
Brisbane	Australia	Warehousing
Adelaide	Australia	and Distribution
Perth	Australia
Auckland	New Zealand
: Hong Kong	China
. Beijing	China	Sales and
. Chengdu	China	Distribution
- Shanghail	China
Guangzhou	China
	the State and

CSL BEHRING

Business: Immunoglobulins, Albumin, Coagulation and Wound Healing Therapies, Pulmonary Disease Treatments.

∿King of Prussia	USA	Administration, R&D. Sales, Distribution
Bern	Switzerland	R&D, Manufacturing, Sales, Distribution
Marburg	Germany	R&D, Manufacturing
Kankakee	USA	R&D, Manufacturing
Ottawa	Canada
Mexico City	Mexico
Sao Paulo	8razif
Buenos Aires	Argentina
Haywards Heath	UК
Leuven	Belgium
Paris	France
Lisbon	Portugal
Barcelona	Spain	Regional Sales and Distribution
Copenhagen	Denmark
Stockholm	Sweden
Hattersheim	Germany
Vienna	Austria
Milan	ltaly
Zurich	Switzerland
Kryoneri	Greece
Токұо	Japan

ZLB PLASMA SERVICES

Business: Plasma Collection and Testing
-----------------------------------------	--	--

	.
Boca Raton	USA	Administration
Knoxville	tisa	Testing Laboratory
Indianapolis	USA	Logístics Centre
Goettingen	Germany	Testing Laboratory
Schwalmstadt	Germany	EU Logistics Centre

Plus 65 Plasma Collection Centres in the USA and 8 Plasma Collection Centres.in Germany

CSL Limited Annual Report 2005-2006

Information

CSL Limited Issued Capital: Ordinary shares: 181,889,019 as at 30 June 2006

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 31 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 person or by proxy.

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

As at 30 June 2006, Barclays Global Investors Australia Limited is considered a significant foreign shareholder representing the interests of the Barclays Group.

DISTRIBUTION OF SHAREHOLDINGS AS AT 30 JUNE 2006

Range	Holders	Shares	% total Shares
31-1.000	34.038	14,775,776	812
$1001 - 5.000$	15.753	31.121.813	1711
5.001 10.000	-857	5.817.423	-3.20.
10.001 100.000	279	8.740.305	4.81
100.001 and over	$-14$	121.433.642	66.76
Mai Shareholders	51.079	181.889.013	400.00
Number of shareholders with less
than a marketable parcel of 10 shares
thased on the share price of 30 June 2006).	-290 -	d. 2361

Siarender
Information

CSL'S TWENTY LARGEST SHAREHOLDERS AS AT 30 JUNE 2006

	Shareholder	Account	Shares	%Total Shares
11	Chase Manhattan Nominees		31,465,672	17.30
$\mathbf{2}$	Westpac Custodian Nominees		21,403,455	1111
3	National Nominees Limited		21.021,781	11.56
$\boldsymbol{A}$	ANZ Nominees Limited	Cash income Art	9,092,044	500
5.	Citicarp Nominees Pty Limited		7635,381	4.20
6	Cogent Nominees Pty Limited		3,594,779	1.98
7,	Queensland Investment Corporation		3.475,052	ាទា
8	Citicorp Nominees Pty Limited	CFS WSLE Imputation Fund A/c	2.549.923	1.40
9.	AMP Life Limited		2.156,174	110
10	Citicorp Nominees Pty Linited	CFS imputation Fund A/c	1,714,429	0.94
11	HSBC Custody Nortunees (Australia) Limited		1.403,616	0.77
12	Citicorp Nominees Pty Limited	CFS WSLE Geared Share Fund A/C	1,386,881	076
13	Citicorp Nominees Pty Limited	CFS WSLE Aust Share Fund A/c	1,341,621	0.74
14	Cogent Nominees Pty Limited	SMP Accounts	1.219.323	0/0
15	Citicorp Nominees Pty Limited	CFS WSLE Industrial Share A/c	1073070	0.59
16.	Suncerp Custodian Services Pty Limited	AET.	926,600	0.51
17	IAG Nominees Pty Limited		878.767	0.48
18	Perpetual Irustee Company Ltd.		643.029	0.35.
19	UBS Nominees Pty Limited		574417	0.32
20.	Westpac Financial Services Limited		514,184	0.28
	In addition, substantial shareholding notices have been received from:
	Commonwealth Bank of Australia		10.507.860	581
	Barclays Global Investors Australia United		9,389,319	5.19

State to deal dichoated as a manual

Share Registry

Computershare Investor Services Pty Limited Yarra Falls, 452 Johnston Street Abbotsford VIC 3067

Postal Address: GPO Box 2975 Melbourne VIC 3001

Enquiries within Australia: 1800 646 882 Enquiries outside Australia: 61 3 9415 4000 Investor enquiries facsimile: 61-3 9473-2500 Website: www.computershare.com.au Email: [email protected]

Shareholders with enquiries 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.

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 Wednesday 18 October 2006. There is a public car park adjacent to the Function. Centre which will be available to shareholders at no charge.

Help us to help the environment with efree

As a participating member of effree, CSL Limited is proud to support this environmental initiative encouraging shareholders to receive all their shareholder communications electronically. You can help reduce paper waste and company costs by electing to receive all your CSL shareholder information (including the Annual Report) online. For every email address registered at www.efree.com.au/csl, two dollars will be donated to Landcare Australia on your behalf to support native reafforestation and restoration projects in the State or Territory in which you reside. With your support, CSL is already helping to facilitate the planting of more than 22,000 native trees across Australia and New Zealand. Your effort goes a long way towards building a more sustainable future. We also encourage you to visit eTree if your email address has changed and you need to update it. For every updated registration, a one dollar donation will be made to Landcare Australia.

You will need your shareholder reference number (SRN) or Holder Identification Number (HIN) to register.

		Shareholders	Shares
Australian Capital Territory		120	1.040.317
an Maria Bar New South Wales	andro de la Carolla de Ca	12,838	82,748,062
Northern lentory		157	104.693
Cureenstand	a la partir de la familia de la companya de la companya de la companya de la companya de la companya de la com	7322	12,499,432
South Australia		3068	3.650.869.
lasmania	a martin and the more and the company of the company of the company of the company of the company of the company of the company of the company of the company of the company of the company of the company of the company of t	-148	699,808
Victoria		21.037	76.621.433
Mestern Australia	Maria Maria Maria Maria Maria Maria Maria Maria Maria Maria Maria Maria Maria Maria Maria Maria Maria Maria Ma	3.242	23,133,887
International Shareholders		ි 546	1.390.518
katai Shareholders		m m	181.889.019

SHAREHOLDERS AS AT 30 JUNE 2006

Conodiate Govenaard

This statement outlines the Company's principal corporate governance practices in place during 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, human resources policies and practices 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 8 years. Prior to re-election the Board must review the performance of such director. In the event that such performance is considered less than adequate, the Board may decide that it will not support the re-election of such director.

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 Chairman. The director should inform the Chairman 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 either nine or ten directors on the Board. (Professor John Shine was appointed to the Board in June 2006). Mr David Simpson has since also been appointed. Two of the Directors - 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 current, director, including details of their skills, expertise, relevant. experience, term of office and Board committee memberships can be found on pages 22 and 23 of this Report.

As announced by Peter Wade at the 2005 Annual General Meeting, he intends to retire from the Board prior to the 2006 Annual General Meeting and Elizabeth Alexander will take over as Chairman of the Board effective from . the 2006 Annual General Meeting.

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.

Corporate Governance condition

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 27 to the Company's financial statements. 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;
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 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 Chairman.

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
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 40.

1.5 Director Appointments

Professor John Shine and Mr David Simpson were new directors appointed to the Board since the last Annual General Meeting and, in accordance with the Company's Constitution, they will be seeking to be elected at the 2006. annual general meeting. Messrs lan Renard, Ken Roberts and Peter Wade were each re-elected as directors at the 2005 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 Chairman 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.

Prior to giving their director's declaration in respect of the annual and half-year financial statements, the Board requires the Managing Director and the Finance Director to sign. written declarations to the Board that:

The financial statements and associated Notes comply with AIFRS Accounting Standards as required by the Corporations Act 2001, the Corporations Regulation 2001 and the CSL Group Accounting Policies.
The financial statements and associated Notes give a true and fair view of the financial position as at 30 June. 2006 and performance of the Company for the year then ended as required by the Corporations Act 2001.
In their opinion there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.
They have established and maintained an adequate risk management and internal compliance and control system to facilitate the preparation of a reliable financial report which in all material respects implement the policies adopted by the Board of Directors and the Statements made above are based on that system.

Corporate Governance continued

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;
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 22 and 23 of this Report. 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 Chairman 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. The Committee holds regular meetings with both the internal and external auditors without management or executive directors present. Details of Committee meetings held during the year and individual directors' attendance at these meetings can be found on page 40.

A Risk Management Committee of responsible executives reports to the Audit and Risk Management Committee on a quarterly basis. 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. 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 five 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 in note 29 of the financial report.

The Committee is satisfied that the provision of those 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.

REMUNERATION POLICIES

Detail on the Company's remuneration policies and practices (including details of the Human Resources Committee of the Board, remuneration of directors and senior executives of the consolidated entity and the Company, and details of the Company's employee share, option and performance rights plans) are set out in the Remuneration Report on pages 42 to 57.

MARKET DISCLOSURE 4.

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 guidance 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
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 $\mathbb{R}^+$ 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 report;
posting media releases, public announcements, notices of general meetings and voting results, and other investor related information on the Company's. website; and
annual general meetings, including webcasting which permits shareholders worldwide to view proceedings.

The Company has a dedicated corporate governance page on the Company's website which supplements the communication to shareholders in the annual report regarding the Company's corporate governance policies and practices. That web page also contains copies of many of the Company's governance-related documents, policles and information.

The Board is committed to monitoring ongoing developments that may enhance communication with shareholders, including technological developments, regulatory changes and the continuing development of "best practice" in the market, and to implementing changes to the Company's communications strategies whenever reasonably practicable to reflect any such developments.

Corporate Governance contract

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 nor does it permit directors or employees to enter into any price protection arrangements with third parties to hedge such securities. 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 quidance 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 Chairman (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.

6. ETHICAL STANDARDS

In 2002 the Company set out to identify a set of values common to the diverse business units that form 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 decisionmaking. 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, antidiscrimination and freedom of association;
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; and
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 laws of the countries in which they operate, but also with internationally accepted best practice. It therefore expects that contractors also observe the principles set out in the Code of Conduct.

In furtherance of the Code, the Company has adopted a Whistleblower Policy which outlines the Company's commitment to ensuring that employees are able to raise concerns regarding any illegal conduct or malpractice without being subject to victimisation, harassment or discriminatory treatment, and to have such concerns. properly investigated. This Policy sets out the mechanism by which staff, contractors and consultants can confidently, and anonymously if they wish, voice concerns in a responsible manner without fear. of discriminatory treatment.

Emandel Report

Goldians

sentako erregea (h. 1928).	Tas
A BOOK TELEVISION	5133
BERTHERN THE WA	$\mathbb{Z}^2$
Statement of Recombact Internet and Cardinal	COL
CASTERIO DE CARDIANA	$\sim 2$
Material Italiana National	63.
Directors Declaration	18143
dree hadden andre komme	m

The Board of Directors of CSL Limited has pleasure in submitting their report on the consolidated entity at 30 June. 2006, consisting of CSL Limited and its controlled entities.

1. Directors

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

Mr P H Wade (Chairman)

Dr B A McNamee (Managing Director)

Mill H Akehurst

Miss E.A. Alexander, AM

Mr A M Cipa

Mr I A Renard

Mr M A Renshaw

Mr K J Roberts, AM

Professor J Shine: AO (appointed 1 June 2006).

Dr A C Webster

Particulars of the directors' qualifications, experience, all directorships of public companies held for the past three years, 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 Company Secretary

The company secretary is Mi P R Turvey, BA/LLB, MAICO. Mr. Turvey was appointed to the position of company secretary in 1998 having joined the Company in 1992 Before joining CSL Limited he held the role of Company Secretary for five years with Blotech Australia Pty Ltd. Mr E H Bailey, B Com/LLB, is Assistant Company Secretary and was appointed in 2001 having joined the Company. in 2000, Before joining the Company he was a Senior. Associate with Arthur Robinson & Hedderwicks.

3. Directors' Meetings.

During the year, the Board held nine meetings. The Audit and Risk Management Committee met four times and the Human Resources Committee met five times. The Nomination Committee comprises the full Board and meets in conjunction with Board Meetings. The Securities and Market Disclosure Committee met 17 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 Directory	Aucht and Alsk Management	Commune	Securities and Market Disclosure Cormute		itunan kecamca Commute
	Attended	Blazinans	Atterised	Maxonum	Attended:	Altended	Maxmum
P H Wade	A.	9.	$\mathcal{A}^{1}$	WWW.WWW.WWW.WWW.WWWWWWWWWWWWWWWWWWWWWW	31 7	$4^3$
B.A.M.Namee	$\Lambda$	.a.	泽生 mmmmmm	mmmmmmm	$\mathbb{R}^3$	$\mathcal{E}_{\mathcal{E}}$
j Akehurst	Ĥ.	G.				3.	$\mathbb{F}_3$ .
L A Alexander	4.	9.	Â.	000000000000 $\Delta$
A M Cipa	Q.	9	B		$\Lambda$
LA Renard	g,	Y.	4	4		1
M A Renshaw	Ø.	g,	4.	4
K Roberts	塖	9.				5.	Æ.
J Shine	ា	1.
A C Webster	9.	O.				B.	$\mathbb{F}_2$

Attended for at least part in ex officio capacity

Attended for at least part by invitation

Directors' Report e provincija i prije

Principal Activities

The principal activities of the consolidated entity during the financial year were the research, development, manufacture, marketing and distribution of biopharmaceutical and alled products

5. Operating Results

Profit from continuing operations after tax and net profitfor the year attributable to members (excluding the recognition of the contingent consideration on acquisition. of Aventis Behring and the profit after tax from discontinued operations) was up 49.5% to \$350.9 million. Net profit from continuing operations and profitattributable to members of the parent entity was \$117.4 million. Sales revenue was \$2,849 million up 9%. on the previous year with research and development. expenditure of \$161 million up 14% on the previous year. Net operating cash flow was \$522.2 million which was 8% lower than the previous year.

6. Dividends

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

2004-2005 A final dividend for the year ended 30 lune. 2005 of 30 cents per ordinary share, fully franked at 30%, and a special dividend of 10 cents per share franked to 1.78 cents per share was paid on 10 October, 2005, cut of profits for that year as declared by the Directors in last year's Directors' Report.

2005-2006 An interim dividend on ordinary shares of 28 cents per share, unfranked, was paid on 13 April 2006. The Directors of the Company have declared a final clividend of 40 cents per ordinary share, unfranked, for the year ended 30 June 2006, to be paid out of retained. profits

In accordance with determinations by the Directors, the Company's dividend reinvestment plan remains suspended.

Total dividends for the 2005-2006 year are:

			SOOO



Interim dividendi

paid 13 April 2006			50.910.


Final dividend

			12.156
payable on 13 October 2006.

On Ordinary shares

7. Review of Operations

The Company's operating results for the year ended 30 lune, 2006, reflects a strong contribution by CSL Behring (in the financial report, CSL Behring is referred to as ZLB Behring) with sales growing 11% to \$2.4 billion. CSL Behring's growth was a function of solid performance. across the product portfolio

Strong demand in the USA for intravenous immunoglobulin has given rise to additional demand for the raw material, plasma. CSL Behring is well placed to meet this growth. opportunity through its own plasma collection centres. The US FDA approved Vivaglobin in January 2006 being the first subcutaneous immunoglobulin approved in the US. Clinical work on a chromatographic high yielding liquid.....

immunoglobulin for intravenous administration has also been completed.

CSL Broplasma's sales declined 8% to \$191m attributable to an Australian Government change of policy relating to the importation of recombinant coagulation factors.

CSL Biotherapies (previously known as CSL Pharmaceuticals) grew sales by 3% to \$212m largely driven by growth in northern hemisphere influenza vaccine sales. A new

Agreement was signed with Merck & Co, Inc. for the Australian distribution of a number of new vaccines. Merck, CSI's licensee, also received approval in the US. and Australia for the marketing of the world's first cervical cancer vaccine, Gardasil^io.

The Company also announced plans to develop influenzaproduction capacity to 40 million doses per season. to facilitate its US entry strategy as well as announcing encouraging results from its initial clinical trial of a pandemic influenza vaccine based on the H5N1 awain virus.

For further information on the operations of the Company refer to the Year in Review in the Annual Report.

8. Significant changes in the State of Affairs

There were no 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

9. Significant events after year end

On 17 July 2006 the consolidated entity announced a proposal to acquire 100% of the issued shares in Zenyth. Therapeutics Limited, a publicly listed Australian based.
biotechnology company. The consideration offered is 82 cents per share. The proposal has been unanimously. recommended by Zenyth's directors in the absence of a superior proposal by a third party and is proposed to be implemented by way of a scheme of arrangement between Zenyth and its shareholders.

Directors are not aware of any other matter or circumstance which has arisen since the end of the financial year which has 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 years.

10. Likely Developments Business Strategies and Future Prospects

In the medium term, the Company will continue to grow. through developing differentiated plasma products, expanding flu vaccine sales internationally, receiving royalty flows from the exploitation of the human papillomavirus. vaccine by Merck & Co. Inc and the commercialisation of the Company's Iscomatrix® adjuvant technology Over the longer term the Company intends to develop new products which are protected by its own intellectual property which are high margin human health medicines marketed and sold by the Company's global operations. Further comments on likely developments and expected results of certain aspects of the operations of the consolidated entity. and on the business strategies and prospects for future financial years of the consolidated entity, are contained inthe Year in Review in the Annual Report and in section 7

of this Directors' Report. Additional information of this nature can be found on the Company's website (www.cst.com.au). Any further information of this nature. has been omitted as it would unreasonably prejudice the interests of the consolidated entity if this report were to refer further to such matters.

11. Environmental Requiatory 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 those 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.

Additionally, the consolidated entity's environmental obligations and waste discharge quotas are regulated under applicable Australian and foreign laws. 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 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 2006.

12. Directors' Shareholdings and Interests

At the date of this report, the interests of the directors who held office at 30 June 2006 in the shares, options and performance rights of the Company are set out in a table on pages 54, 55 and 56 of this Report.

13. Directors' Interests in Contracts

Section 17 of this Report sets out particulars of the Directors Deed entered into by the Company with each director in relation to Board paper access (indemnity) and insurance matters).

14. Share Options

As at the date of this report, the number of unissued ordinary shares in the Company under options and under performance rights are set out in Note 26 of the Financial Statements.
Holders of options or performance rights do not have any right, by virtue of the options or performance rights, to participate in any share issue by the Company or any other body corporate or in any interest issued by any reqistered. managed investment scheme.
The number of options exercised during the financial year. and the exercise price paid to acquire fully paid ordinary shares in the Company is set out in Notes 21 and 26 of the Financial Statements. Since the end of the financial year, no further options have been exercised.

During, and since the end of the financial year, noperformance rights were exercised. There were no shares issued as a result of the exercise of performance rights. during the financial year or since the end thereof.

15. Remuneration Report

This report summarises the director and executive remuneration policies and practices, including detailed remuneration outcomes for the 2006 financial year. The report has been prepared in accordance with the remuneration reporting requirements under section 300A of the Corporations Act 2007 and Corporations Regulation. 2M 6.04, details the remuneration arrangements for Key Management Personnel according to Accounting Standard AASB 124 Related Party Disclosures

Key Management Personnel comprise:

· all directors of CSL and
those individuals who have authority and responsibility for planning, directing and controlling the activities. of the Company and the consolidated entity.

Board and Human Resources Committee

The Board has adopted a formal charter delegating certain of its responsibilities concerning human resources and remuneration to the Human Resources Committee. This charter can be found on the www.csl.com.au website under Corporate Governance: Board and Committee Charters

The responsibilities of the Human Resources Committee псаюе

U, reviewing and monitoring the human resources strategic plan,
reviewing and approving the corporate human resources policies:
establishing a policy framework for employee and senior executive remuneration.
reviewing and recommending the terms relating to the Company's employee share, option and performance. night schemes:
recommending to the Board individual senior executive. remuneration packages and where appropriate, seeking independent advice regarding senior executive. remuneration.
· recommending to the Board serior executive. recruitment retention and termination policies as well. as succession planning strategies and policies.
reviewing benchmarks against which salary reviews are made and monitoring and reviewing the Company's performance management system, and
reporting to the Board any findings or recommendations of the Committee after each meeting.

In accordance with the charter, the Board reserves. responsibility for:

· the remuneration of non-executive directors;
setting the terms of employment and remuneration with the terms of employment and remuneration for the Managing Director
approving remuneration for senior executive management and

the operation and policies relating to the Company's employee share, option and performance right schemes. and succession planning.

The Human Resources Committee comprises four members, all of whom are independent non-executive directors (NED). These are:

Mr Ken Roberts (Chairman)
· Mr John Akefurst
· Mr Maurice Renshaw (joined june 2006); and
· Dr Arthur Webster

Ms Alison von Bibra, General Manager - Human Resources, acts as Secretary of the Committee. The Board Chairperson may attend any meeting of the Committee in an ex officiocapacity. The Managing Director, senior executives and professional advisors retained by the Human Resources. Committee attend meetings by invitation.

The Committee meets at the conclusion of the performance management process, at the conclusion of the succession planning process, prior to the allocation of long term incentives, and at other times as are required to discharge its responsibilities. Information about Committee. meetings held during the year and individual directors'. attendance at these meetings can be found in section 3 of this Directors' Report.

Any recommendation made by the Human Resources Committee concerning an individual director or executive's remuneration is made without that director or executive being present.

Non-Executive Directors' Remuneration

The Board's principal responsibility is the oversight of the management of the Company and providing strategic direction for and approving the Company's business. strategies and objectives. Non-executive director remuneration is not linked to the Company's short-term financial performance and these directors are not entitled. to performance based remuneration or participation in the Company's equity incentive plans.

Non-executive directors are entitled to fixed fees having. regard to their Board responsibilities, obligations on any of the tour Board committees and the aggregate nonexecutive director remuneration limit approved by shareholders. Within this limit, the Board determines the fees payable to non-executive directors based on advice. from professional advisors which takes into consideration fees payable to non-executive directors by comparable organisations as well as fee levels which the Boardconsiders appropriate to attract and retain high quality non-executive directors having regard to the Company's requirements and the responsibilities attached to the successful discharge of director's duties.

Currently, the Company's Constitution sets the maximum aggregate amount of remuneration which may be paid. to non-executive directors at \$1,500,000. Any increases to this sum must be approved by shareholders at a general meeting. As outlined in 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.

The table on page 49 of this Report sets out the fees paid to non-executive directors and is based on the following NED. Committee Fees schedule

NED Committee Fees (Effective 1 Jan 2006)

	Auda & Risk	Навтал		SECURITY & Warket
	Management Road Committee Committee Committee Committee		Resources Nomination	flischosure
	Andreas Andreas Andreas Andreas Andreas Andreas Andreas Andreas Andreas Andreas Andreas Andreas Andreas Andreas Andreas Andreas Andreas Andreas Andreas Andreas Andreas Andreas Andreas Andreas Andreas Andreas Andreas Andr
Charman 300.000	30.000	20.000
Members 125.000	12.500.	10,000

The Chairman and members of the Nortunation Committee and the Securities and Market Disclosure Committee do not receive any additional fees for committee responsibilities.

Non-executive directors participate in the Non-Executive Directors' Share Plan (the NED Share Plan) approved by shareholders at the 2002 annual general meeting. Under the NED Share Plan, non-executive directors are required to take at least 20% of their director's fees in the form of shares in the Company Shares are purchased on market at prevailing share prices. These purchases are made by the NED Share Plan administrator at pre-determined intervals.

In addition to fees paid in cash or taken in the form of shares. non-executive directors also receive superammation contributions equal to 9% of their fees.

Non executive directors were entitled to a retirement allowance. as approved by shareholders in 1994 equal to the highest fees. over any consecutive 36 months of service. If the director had served more than five years on the Board, they would receive another 5% of the base fee at the time of retirement for every additional year served, up to a limit of 15 years. The Board terminated this retrement plan as at 31 December 2003 and froze the retirement allowance as at that date. No nonexecutive clientor has accrued any entitlement to any retirement allowance since 31 December 2003.

Executive Remuneration Policy

The Company's remuneration policy is designed to be competitive and equitable and to attract and retain high quality employees. The aim of the policy is to provide executives. (including executive directors and the Company Secretary). with an appropriate balance of fixed and performance related remuneration.

Remuneration is set at a level competitive with market rates. The performance related remuneration ensures that a significant proportion of executive remuneration is at risk by linking reward to the achievement of personal and corporate. objectives, business performance and shareholder returns.

Where appropriate, the Human Resources Committee considers. independent external advice in setting both the balance of fixed. and performance related remuneration and the remuneration. levels.

Executive Remuneration Structure

The Company's remuneration structure comprises three core elements

· fixed remuneration.
short-term incentives; and
fong-term intentives.

logether, these elements comprise an executive's total potential remuneration

Broadly, an executive will have fixed remuneration and a short-term incentive percentage representing the executive's potential short-term incentive as a percentage of fixed remuneration. Under the Company's performance management system, this percentage ranges from 10% to 60% of fixed remuneration depending on an executive's seniority level. In addition, an executive may participate in specific one-off Board approved incentive arrangements. relating to key corporate objectives, milestories or events.

During the 2006 financial year, executives were also able to participate in the Company's equity incentive arrangements. Under this arrangement, a long-term incentive percentage is applied to an eligible executive's fixed remineration. to derive a long-term intentive amount. This amount determines the allocation level of options or performance. rights to the executive. The long-term incentive percentage generally reflects an executive's short term incentive percentage and hence also ranges from 10% to 60% of fixed remuneration.

In June 2006, the CSL Board approved new long-term. incentive arrangements for future equity grants that will become effective in the 2007 financial year. The changes are consistent with the rules of the CSL Performance Rights Plan approved by shareholders at the Annual General Meeting in 2003.

The short-term and long-term incentive arrangements are discussed further on pages 44 to 47 of this Report. Additionally details about the new long-term incentive arrangements are outlined at page 46.

Subject to specific industry or geographical labour market conditions, the short-term and long-term incentive percentages for the 2006 financial year were generally of equal amounts. The proportion of performance related remuneration to an executive's total potential remuneration is kept consistent for a given level of seniority. As an executive's semionty level increases, so do the incentive. percentages and the proportion of performance related remuneration to that executive's total potential. remuneration.

CSLs performance management system is central to how the Company manages performance related remuneration and its integration into the total remuneration structure. The extent to which executives meet or exceed the performance objectives as set out in the performance management system influences the calculation of shortterm incentives as well as executives' ability to participate in the Company's long-term incentive programs. Performance as measured under the performance management system is also taken into consideration. in reviewing fixed remuneration.

The total remuneration levels for executive Key Management Personnel are illustrated in the tables on pages 49 to 51 of this Report. The balance of fixed and performance related remuneration for executive Kevi Management Personnel is illustrated in the table on page 52 of this Report.

Following a market competitiveness review in December 2005, an adjustment to fixed remuneration and a supplementary long-term incentive grant was offered to a limited number of executives in order to align their total. remureration with that of the market.

Fixed Remaneration

Depending on the country in which the executive is employed, an executive's fixed pay is expressed as a "Total" Employment Cost" ("TEC") or as "salary plus benefits"

Where a TEC approach is adopted, an executive's fixed. remuneration comprises benefits the executive has elected to receive in lieu of salary inclusive of any associated costs. such as fringe benefits tax and mandatory superannuation. with the balance taken as cash salary. Where a "salary plus benefits" approach is adopted, the salary is specified and the Company provides benefits to an executive consistent. with the labour market practices in that jurisdiction.

Executives who are working in a country other than their usual country of residence are eligible to receive benefits. in accordance with the Company's expatriate policies. CSL's expatriate policies are intended to compensate an executive for the additional commitment and costs associated with working in a different country. The Human Resources Committee periodically reviews these policies to ensure appropriateness and consistency with market practices.

The level of twed remuneration paid to each executive is based on the executive's performance, skills and experience. the requirements for their role and their relevant labour market in terms of the particular industry and geographical locationi

In setting fixed remuneration, the executive's total potential remuneration is taken into consideration to ensure appropriateness of the balance between fixed and performance related remuneration and also appropriateness of the resulting total potential remuneration level

Executive fixed remuneration is reviewed annually to ensure that it remains market competitive for each executive and reflects any changes in an executive's role or relevant. employment market conditions. The executive's performance as evaluated against objectives under the Company's performance management system significantly influences recommendations relating to fixed remuneration.

Any recommendations concerning the serior executive fixed remuneration levels are made by the Human Resources Committee to the Board for the Board's consideration.

Short-term Incentives

Short-term incentives may be awarded to employees based on their annual performance as evaluated under the CSL performance management system, in addition, the Human Resources Committee may recommend the establishment. of specific incentive programs linked to the achievement. of key corporate objectives, inilestones or events. Shortterm incentives are paid in cash...

Directors' Report

All executive Key Management Personnel are eligible to receive an annual incentive under the Company's performance management system. This system facilitates consideration of appropriate performance metrics by the Company and by executives and provides the mechanism for the payment of incentives linked to measurable gains. in the achievement of the Company's corporate objectives.

Under the performance management system, usually no more than six key performance objectives for a financial. year are specified. The actions to achieve the stated objectives and indicators or measures to be applied in assessing an executive's performance against the objectives are also determined.

Typically, the performance objectives comprise elements. relating to individual performance (specific business tasks), the performance of the relevant business division or function depending on the executive's role (eg revenue) costs targets) and in some cases, that of the CSL group.

Importantly, consistent with the philosophy of the shortterm incentive percentage representing the potential shortterm incentive, performance is assessed against the extent. to which these objectives are exceeded and not simply met. As discussed below, the objectives directly relate to the corporate objectives, strategic plans and financial budgets. approved by the Board.

Accordingly, the specific short-term incentive objectives vary from executive to executive both in terms of their nature and the weighting of these objectives in accordance with the Company's pronties.

In relation to process, the Board approves the corporate objectives, strategic plans and financial budgets. The Boardalso approves the Managing Director's specific performance. objectives established with reference to the Board approved corporate objectives, plans and budgets. The Managing-Director specifically approves the performance objectives for other executives which are also based on the Board approved corporate objectives, plans and budgets and which are also linked to the Managing Director's performance objectives.

Annual performance objectives and assessment criteria are established consistent with the corporate objectives and business plans approved by the Board and the responsibilities of the executive's position. Upon completion of the annual performance period, performance reviews are then conducted. Proposed incentive payments are then derived from this process having regard to the established performance objectives and assessment criteria. The Human Resources Committee then considers the proposed. incentive payments and makes a recommendation to the Board, for approval.

In relation to one-off incentive programs, on 16 March. 2004, the Board approved an incentive linked to the successful integration of ZLB Behring based on integration metrics approved by the Board which were previously used. to evaluate the Avents Behring acquisition. A cash payment was payable to selected executives whose roles were deemed critical in ensuring a successful integration, in two tranches. The second tranche was payable during the current financial year after an assessment that the second year integration targets were met

As with proposed incentive payments under the Company's performance management system, any proposed payments under the one-off incentive programs are considered by the Human Resources Committee with a recommendation for approval then made to the Board.

Further details relating to payments under the short-term incentive programs are set out on pages 49 to 51 of this Report.

Long-term Incentives

Long-term incentives are reserved for employees who have performed to a required performance level and who are regarded as being of strategic and/or operational. importance to the Company, and for prospective keyemployees. The Company used the CSL Performance Rights Plan approved by shareholders at the 2003 annual general

meeting for this purpose during the financial year.

Performance Rights Plan

The number of Performance Rights issued to an executive is dependent upon an executive's long-term incentive. percentage and the Company's share price. In the case of executive directors, any allocations of Performance Rights are also subject to shareholder approval. Shareholder approval was obtained at the 2003 annual general meeting for up to 350,000 performance rights to be issued in total to Dr Brian McNamee and Mr Tony Cipa over three years.

During the financial year. Performance Rights were granted as equity compensation benefits to executive directors and Tall Tall executive Key Management Personnel on the basis that they were strategically and/or operationally important. employees who had performed to a required performance. level as evaluated under the Company's performance. management system.

The Performance Rights were issued for no consideration. Each Right entities the holder to subscribe for one fully paid ordinary share in the entity for either nil or nominal consideration. A Performance Right may only be exercised when it has become a Vested Performance Right. Unvested Performance Rights cannot be exercised and lapse on termination of employment. Vested Performance Rights can be exercised from the date they become Vested Performance Rights until they lapse which is seven years. from their issue clate.

Performance Rights may become Vested Performance Rights if the Company satisfies specific performance hurdles during specified Performance Periods.

The minimum Performance Period is three years. If all eligible Performance Rights do not vest at the end of this period, performance may be reassessed at one-yearly. intervals for up to a further two years. Any Performance Rights which remain unvested after the last reassessment. vill lapse.

The measure used in the Performance Hurdle is the Company's Total Shareholder Return (TSR) relative to that of the companies comprising the ASX top 100 by market. capitalisation (excluding companies with the GICS industry codes of commercial banks, oil and gas and metals and mining). The Peer Groups for various allocations were established on 1 October 2003, 31 March 2004, 1 October

oomide med

2004, 7 June 2005 and 20 December 2005 and are stipulated in the documents evidencing the respective grants

The Board views TSR as an appropriate measure to assess long-term performance as this measure closely reflects shareholder requirements in terms of share price growth and distributions. Also, the extent to which longer-term. corporate objectives are achieved should be reflected in the Company's share price and dividend paying capacity. over this time.

Given the Company's relevant capital markets, the Board's view is that the Reer Group best represents the jurisdiction and also the companies with which CSL competes for capital. As the Company is employing a relative TSR measure, the Board's opinion was to exclude from the Peer Group companies operating in distinctive industries not relevant to CSL (such as mining companies).

The performance hurdle is defined so that a proportion. of Performance Rights vest when a minimum target is reached and this proportion increases as performance. exceeds the minimum target.

In relation to Performance Rights granted to date. If the Company's performance in terms of TSR ranking places it below the 50th percentile at every lest Date, none of the Performance Rights will vest. Where the Company is placed at or above the 75th percentile on any lest Date, all of the Performance Rights, which have reached or exceeded the minimum Performance Period of three years will vest. 50% of the eligible Performance Rights vest upon CSL being. ranked at the 50th percentile with the balance vesting on a straight line basis between the 50th and 75th percentiles. The data used to assess performance is provided by external advisers.

Future Long-term Incentive Arrangements

The Board has determined that future long-term incentive grants to executives will incorporate both Performance. Rights and Performance Options (each with a different performance hurdle) to provide a more appropriate balance of risk, a more leveraged incentive and broader performance measurement criteria. The use of these two types of equity is expected to closer align reward. with corporate performance, increase the market competitiveness of the total remuneration package, and facilitate the attraction and retention of highcalbre executives

Each tong-term incentive grant will generally consist of 50% Performance Rights and 50% Performance Options. For a specified group of Senior Leadership Executives, a mixof 40% Performance Rights and 60% Performance Options will be granted. This latter group includes the CEO and the state of Managing Director and Executive Key Management Personnel

The Performance Rights will continue to be granted on a similar basis as described above. The performance hurdle attached to Performance Rights will be a relative TSR hundle. with a peer group as described above. Vesting will occur where the Company's TSR ranking is at or above the 50th percentile.

The Performance Options will be issued for hil consideration. with an exercise price equal to the volume weighted.

average CSL share price over the week up to and including the gay of grant.

The performance hurdle for the Performance Options will be an earnings per share (EPS) measure. It is expected that the initial target will be 10% compound EPS growth per annum measured from 30 June in the financial year preceding the grant of options until 30 lune in the financial. year prior to the relevant test date. Either none or all of the Performance Options are exercisable depending on whether this target is achieved.

The Board considers that an EPS performance hurdle. is appropriate since a key approved corporate objective is the pursuit of sustainable earnings growth.

Performance Rights and Performance Options will be issued for a term of seven years and begin to be exercisable, subject to satisfying the relevant performance hurdle, after the second anniversary of the date of grant asdetailed in the table below.

Grant date amiwersary																																							411

Percentage of Performance
Rights and Options vested																										25% 35% 40%

If the portion tested at each anniversary meets the relevant performance hurdle, that portion of rights and options will vest and become exercisable until the expiry date. If the portion tested rais to meet the performance hurdle the portion will be carried over to the next anniversary and retested. After the fifth anniversary, any Performance... Rights and Performance Options not vested will lapse.

Importantly, there is an individual employee hurdle requiring an executive to obtain for the financial year prior to exercise of the Performance Rights and Performance Options. a satisfactory (or equivalent) rating under the Company's performance management system.

There will be no company provided toans as part of the future long-term incentive arrangements.

SESOP II

The Senior Executive Share Ownership Plan II (USESOP III) had previously been used for the purpose of delivering long-term incentives. SESOP II was approved by special resolution at the annual general meeting of the Company on 20 November 1997.

Under this program, options were issued for a term. of seven years and began to be exercisable, subject to satisfying the performance hurdle, after the third. anniversary of the clate of grant. An allocation could be fully exercisable after five years. The exercise price was calculated using the weighted average price over the five days preceding the issue date of the option.

For the options to be exercisable, a performance hurdle. relating to earnings per share for CSL ordinary shares had to be met. Specifically, for the period from the financial year preceding the grant of options until the financial year prior. to the date of exercise, pre-abnormal earnings per share. had to increase by seven percent compound per amum. Either none or all of the options are exercisable depending. upon whether this target is achieved.

Directors' Report Osmanlıkla

In addition, there was also an individual employee hurdle. requiring an executive to obtain for the financial year prior. to exercise of the options, a satisfactory rating under the Company's performance management system.

In relation to grants of options made in previous financial. years, the Board's view was that an earnings per share. performance hurdle was most appropriate given a key approved corporate objective of pursuing sustainable. qrowth.

Under the rules of SESOP II, participants could be provided with a loan to fund the exercise of the options. Consequently, no loan was made to the recipients of options until the option was exercised and no amounts were recorded in receivables until the option was exercised. Interest equivalent to the after-tax cash amount of dividends on the underlying shares fexcluding the impact of imputation and assuming a marginal income tax rate. of 48.5%) was charged on the loan.

No options were issued under SESOP II during the 2006. financial vear.

During the past financial year, the SESOP II foan terms were adjusted to enable the Company to seek loan repayment. where the market value of the shares issued to an individual participant falls to 110% or less of the total exercise price. This mechanism will ensure that the full loan amount remains recoverable by the Company.

Relationship between Company Performance & Executive Remuneration

Over the last five years, reward delivered under the longterm intentive component of executive remuneration has been dependent on CSL's EPS growth or TSR performance. As discussed earlier, from the 2007 financial year the longterm interitive arrangements will be dependent on both the EPS growth and TSR performance of CSL.

The table below illustrates the Company's annual compound growth in basic earnings per share (EPS) for the three possible test dates for each SESOP allocation. Options granted inder SESOP and SESOP II have vested where the 7% hurdle of annual compound growth is achieved after taking into account exceptional items.

SESOP			Financial Year
Allocation	2000	2001	2002	2003	2004	2005	2006
1997	16%	19%	23%
1998		18%	24%.	9%
1999			$23\%$	5%	15%
2000.				5%	$18\%$	-22%
2001					19%	24%	30%
2002.						23%	30%
2003.							25%

To date each allocation of options has satisfied the performance hurdle before their explity date. Accordingly, except for options lapsing in accordance with the Rules (eq termination of employment), all options that have met the time-related vesting requirements have vested.

As mentioned earlier in this Report, short-term incentives are principally managed by the Company's performance management system, and until July 2003, long-term. incentives were delivered through SESOP and SESOP II using options having an EPS hurdle. Accordingly, until July 2003. there was no direct link between TSR and performance. related pay except to the extent that EPS could influence ISR

Since October 2003, the Company has provided long-term. incentives using Performance Rights which have a TSR. hurdle. Write no Performance Period has yet been completed for any allocation, the table below summarises. the prospect of Performance Rights vesting given the Company's relative TSR performance over the Performance Period to date. The data is indicative of results as if tested. on 30 June 2006.

	Company		Indicative
	TSR!	avdicative	Murniker
Peer Group	as at	Percentie	of Raints
Establishment Date	30 have 2006	Ram	Vesting
1 October 2003	247%	100 0	100%
31 March 2004	164%	987	100%
1 October 2004	93%	949	100%
7 lune 2006	85%	100.0	100%
20 December 2005	32%	96.2	100%

All Performance Rights yest at the 75th percentile

Director and Executive Contracts

Non Executive Directors

Non-executive directors are subject to ordinary election and rotation requirements as stipulated in the ASX Listing Rules. and the Company's Constitution. Accordingly, there are no. specific employment contracts with non-executive directors.

Executive Key Management Personnel

All executive Key Management Personnel are employed. under a service contract. Each contract outlines the key terms of employment including the executive's fixed remuneration. The potential short-term incentive may also be stipulated in the contract or be governed by the Company's remuneration policy which governs the level of short term incentives applicable to senionty levels.

It is the Company's general practice that employment contracts for executives do not have a fixed term.

It is the Company's policy that employment contracts for executives contain provisions for termination with notice or payment in fleu thereof and for termination by the Company without notice for serious misconduct and breach of contract.

Certain executives may be entitled to receive a termination. payment in addition to notice where the Company terminates employment with the executive. In all circumstances, termination payments are not required to be made where termination of employment by the Company occurs for senous misconduct and breach of contract.

The notice period required to be given by the employee. or the Company along with any termination payments to which they may be eligible are set out in the table below. With the exception of Tom Glarla whose termination payment may include potential homises, termination payments for all executives are expressed in months and calculated by reference to TEC or salary (excluding benefits). which the executive would have earned over that time.

	Nation Period by Company	Nouce Period by Employee	lemination Payments
Executive Directors
B A McNamee	6 months	6 months	12 months
A M Cipa	6 months	6 months	12 months
Specified Executives
Pillumer	6 months	6 months	12 months
C Amit	6 months	6 months	None
P Bordonaro ²	3 months	3 months	12 months
A Curtinertson	6 months	6 months	12 months
P. Turvey	6 months	6 months	12 months
К Мису	3 months	3 months	12 months
A vor Bibra	6 months	6 months	12 nonths
l Giarla	6 months	6 months	12 months

The Company and Mr C Armit entered into a fixed term contract begraving 14 November 2005 and ending 31 December 2007. The Company cannot terminate this agreement before 31. December 2007 except in the case of material under performance whereupon six months notice is required, or termination for serious misconduct or breach of contract.

The Company and Mr P Bordonaro entered into a fixed term contract beginning 1 February 2006 and ending 31 March 2008. Under the new employment arrangements Mr P Bordonaro ceased to be a Key Management Personnel from 1 February 2006. The notice periods and termination payments disclosed reflect those that were in place while Mr P Bordonaro was Key Management Personnel
11 Mr K Milroy ceased to be a Key Management Personnel on 6 January 2006. The notice periods and termination payments. disclosed reflect those that were in place while Mr K Milroy was Key Management Personnel
Mr 1 Giarla is currently on an international assignment contract. The term of the assignment is from 16 Tanuary 2006 to $\qquad \qquad$ 1 February 2009 with an option to extend by 12 months by mutual agreement with the company. Should Mr T Grada bemade redundant during or at the conclusion of the assignment. a termination payment consisting of 1 year base salary (or USD300.000, whichever is greater), 100% of armual short term [100%] incentive potential (or USD150.000), whichever is greater), health in the benefits for two years after terraination date, and USD32.000 as compensation for other origoing benefits. Resignation within the initial two years of the assignment or at the end of the assignment results in a termination payment as described above unless a suitable role is found in the United States.

Directors' Report Continued and the Continued Books of the Books of the Books of the Books of the Books of the Books of the Books of the Books of the Books of the Books of the Books of the Books of the Books of the Books of the Books of th

15. Remuneration Report (continued)

Director and Executive Remuneration

Director Remuneration

			Primary		Post employment			Other Long Jerm	Share Based Paymonts
		Cash salary and fees!	Caso Bonus: Ă.	Non- топезагу Senefits	Super- annualion Semetits	Other -5	1 ong Service teave Å	Termination Benefits. - 5	Performance Rights' ю.	Options	fotal
Executive Directors
Dr. & A McNamee	2006	1,542,374 1,500,000		17.695	42,060	÷.	160,629	$\mathcal{A}$	610.904		3,873,662
Managing Director	2005	1473.007	1300000	66/3	40,202		143.735		246.680		3-212-302
A M Cipa	2006	610.568	543,000	1.828	47,400	ä,	65,166	$\sim$	275.017		1,542,979
Finance Director	2005	026.416	495.000	2,565	42,531		46,990		138,349	31,269	1,282,120
Non-executive Directors
P H Wade	2006	275,000			24,750	í,		÷.			299.750
Chairman	2005	235.000			21450	÷.					256,150
J Akehurst	2006	126,250			11,363	$\mathbf{r}$		Ŵ,			137,613
Non-executive director	2005	108.750			9,788.						118,38
L.A. Alexander	2006	145,000	×.		13.050	W,		$\overline{\phantom{a}}$	r.		158,050
Non-executive director	2005	127,600			11.475						138.975
I A Renard	2006	128,750	X.	×.	11,587	ŵ		×			140,337
Non-executive director	2005	118 / 50			10688						129,438
M A Renshaw	2006	128,750	s.	$\mathcal{L}_{\mathcal{A}}$	11.587	Ø		u,			140,337
Non-executive director	2005	110.000			9.900						119.900
K Roberts	2006	135,000			12,150	÷.		$\alpha$			147,150
Non-executive director	2005	120 000			10.800						130.800
A U Webster	2006	126,250			11,363			ж			137,613
Non-executive director	2005	417 GOO			10.575						128,075
Total of all Directors	2006		3,217,942 2,043,000 19,523		185,310	$\omega$	225,795	ä,	885.921		6,577,491
	2005		2.33.523 195.000 1 243		167.109		490.725		385.029	31.269	5,576,298

Mr M A Renshaw commenced 20 July 2004

As disclosed on page 43 of this Report under the section titled
"Non-Executive Director Remuneration", non-executive
directors participate in the NED Share Plan under which non-executive directors are required to take at least 20% of their fees in the form of shares in the Company which are purchased on market at prevailing share prices.

As disclosed on page 44 of this Report under the section titled

"Short term Incentives", executive directors were entitled to

receive one off bonuses linked to meeting performance objectives relating to the successful integration of ZLB Behring. included in the cash bonuses are the following ZLB integration. bonuses which were paid in two tranches in the 2005 financial year and 2006 financial year:

	VO ST.	Performance BOTHSS	71.13 integration Bonus	lound Cash Sonns:
Dr B A McNamee	2006	\$750,000	\$750,000	\$1,500,000
	2005	\$650.000	\$650.000	\$1.300.000
Mr A M Ciba	2006	\$297.000	\$246,000	\$543.000
	2005	\$275.000	\$220,000	\$495.000

In relation to the ZLB integration bonus, the bonus was dependant upon achieving 95% of the earnings and cash flow. integration targets based on integration metrics used by the Board to evaluate the Aventis Behring acquisition.

The options and rights have been valued using a combination. of the Binomial and Black Scholes option valuation methodologies as at the grant date adjusted for the probability
of performance hurdles being achieved. This valuation was undertaken by PricewaterhouseCoopers.

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

Contract of the Community Contract of the Community CONTRACTOR CONTRACTOR CONTRACTOR

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a kama wa mshindi wa 1979, alikuwa wa 1979, alikuwa wa 1979, alikuwa wa 1980, alikuwa wa 1980, alikuwa wa 198

Directors' Report

15. Remuneration Report (continued)

Non Director Key Management Personnel Renumeration

			Primary		Post employment	Other Long Term		Share Based Payments
		Castrodary and fees!	1.357 Monus A,	Non- monetary Benefits	Retire- Super- ment annuaton Benefits	Loug Service Leave	Техтопикон Benefits	Pertormarce Rights	Oplears'	fotal
P Turner	2006	886,025	886,683	34.384	78,696	85,192		209,144	158,340	2,338,464
President ZLB Behring (based in United States)	2005	1 008 492	762.440.	41/2	76,260	395.940		83.514	200.002	2 32 820
C Armit	2006	396,340	107,500	61,993	35,401	19,016		96,027	105,560	821,837
President CSL Phormaceutical (based in Australia)	2005	390,761	124,300	62,895	33.160	16.033		47,121	160.066	834 536
P Bordonaro	2006	188,489		2,189	73,411 IIX.			106,268		370,357
General Manager CSL Bioplasma
(based in Australia) A Cumperson	2005 2006	3/135/ 424,586	120.000 157,500	29.660 91,085	30 783	4841 41,039		68.083 89,167	31.269	655.985 994,315
Chief Scientific Officer (based in Australia)	2005	356.772	105.000	53614	32,598 24.141	16.829		37 166	158,340 1/3/11	767,905
P Turvey	2006	464,228	309,625	50,051	51,886	53,647 ú,		102,919	105,560	1,137,916
Company Secretary and General Counsel (based in Australia) К Мілоу	2005 2006	397.233 224,512	294.000 132,000	31.859 20,383	48,740 30,013	22.838		58,319 45,491	126,414 160,675	979.403 613,074
General Manager Human Resource
(based in Australia)	2005	376.665	258.566	23.495	32.913	5.115		20,896	82.156	800 806
T Claria President Bioplasma Asia Pacific	2006	256,269	460,754	58,070	23,237		÷.	67.780	206,582	1,072,692
(based in Australia)	2005	461,899	1,574,604	9.663	29,362			20,747	98,628	2,214,923
A von Bibra General Manager Human Resource (based in Australia)	2006 2006	134,513	174,185	27,977	9.796	22,346		23.103	103,662	495,582
Total of non-director Key Management Personnel	2006 2005		2,974,962 2,228,247 3365179 3239110 215348	346,132	335,038 278,985	221,240 461,596		739,899 335.848	998,719 8/2312	1,844,237 8.786.378

Cash salary and fees, cash bonuses and superannuation paid. in foreign currency have been converted to Australian dollars at the year end exchange rate. Both the amount of remuneration and any movement in comparison to prior years may be influenced by changes in the respective currency exchange rates
Included in the cash bonuses are the following ZLB integration. bonuses which were paid in two tranches in the 2005 financial year and 2006 financial year.

			71.9	Iotal
		Performance	wwegration	Cash
	Vear	BOITES	BORUS	Norus
P lumer	2006	\$449.757	\$436,926	\$886,683
	2005	\$391,220.	\$381.220	\$162.440
P lutvey	2006	\$169,750	\$139,875	\$309,625
	2005	\$168000	\$126.000	\$294.000
K Minov	2006	ù.	\$132,000	\$132,000
	2005	\$120.664	13/902	\$258,566
A von Bibra	2006	\$90,000	\$84,185	\$174,185
	20.000

The options and rights have been valued using a combination of the Binomial and Black Scholes option valuation. methodologies as at the grant date adjusted for the probability of performance hurdles being achieved. This valuation was undertaken by PricewaterhouseCoopers.

.......................................

The amounts disclosed have been determined by allocating the minimum value of the options and performance rights evenly over the period from grant date to vesting date in accordance with
applicable accounting standards. As a result, the current year includes options that were granted in prior years and disclosed with as part of the executive's remuneration in prior years using the grant date basis of measurement.

In the 2005 financial year. I Giarla was entitled to receive a USD 300,000 non-compete payment (effective for up to two years) relating to the sale of JRH Biosclences and was
also entitled to receive a USD 300,000 sign-on fee on entering
into an employment agreement with CSL in lieu of further entitiements in connection with the sale of JRH Biosciences.

Ms A von Bibra became Key Management Personnel during the 2006 financial year, therefore no amounts are disclosed for the 2005 financial year manufacturers and the

15. Remuneration Report (continued)

Executive Key Management Personnel

Fixed and Performance Remuneration Components

Remuneration Components as a Proportion of Total Remuneration

				Pertermance Related Remuneration
	Fixed Remineration (not linked)		Equary Based
	to company performancel	Cash Based SIE	Performance Mares.	Performance Options	lotal	fotal.
Executive Directors
B.A.M.Namee	45%	39%	16%		65%	100%
A M Cipa	41%	35%	18%		53%	100%
Key Management Personnel
P Turner	46%	38%	$9\%$	7%	54%	100%
C Armiti	62%	13%	$12\%$	13%	38%	100%
P Bordonaro.	71%	9%	29%		23%	100%
A Cuttibertson	59%	16%	9%	16%	41%	100%
P Turvey	55%	21%	9%	9%	45%	100%
K Milroy	45%	22%	7%	26%	55%	100%
1 Grarla	32%	43%	6%	19%	66%	100%
A von Bibra	39%	35%	$5\%$	21%.	61%	100%

Remuneration not linked to company performance means fixed remuneration as outlined in the section. Executive Remuneration Structure" on page 44 of this Report and comprises cash salary, superannuation and non-monetary benefits (including interest on loans if any).

As stated under the section "Fixed Remuneration" on page 44 of this Report, any recommendations concerning senior executive fixed remuneration levels are significantly influenced by the executive's performance as assessed under the Company's performance management system.

Cash based STI includes any payments based on the executive's performance under the Company's performance management system as well as any payments pursuant to the specific one-off programs approved by the Board relating to the integration of ZLB Behring.

The balance between fixed and performance related pay and the relationship between short-term and long-term incentive percentages has been significantly influenced during the financial year as a result of cash based short-term incentive payments in connection with the integration of ZLB Behring.

Directors' Report an martin

15. Remuneration Report (continued)

Executive Key Management Personnel

a a shekarar 1979

Performance Remuneration

		Short term intertive 2016		Accounting Values being amortised in respect of the 2006 equity grants in future years."			春村 Remunerat n consisting of options. & rights	(B) Value of Richts. gesneer! durant 05/06 at monted date	K) Maiue of Options exemised during 05/06 at exercise date"	10) Total of совники @ 10 (0)
	Percentage Awarded	Percentage Not Auranded!	2007 $\sim$	2008	2009 Š.	2010 ł.	$\mathbb{P}_\alpha$		S.	A
Executive Directors
B A McNamee	$83.3\%$	16.7%	682.471	684.341	666.25	204 281		16% 2614.690		2614.650
А М Сцю	-90.0%	10.0%	266,702	267.432	260.759	81.713		18% 199 360		997.500 2018.850
Key Management Personnel
P lumer	100.0%		252.665	253.353	245.430	65 334	16%	942.003	2918850	3920853
C Armit	62.5%	315%	48.466	48.599	45.412		25%	181.780	613.200	794 980
P Bordonaro			48.466	48,599	45,412		29%	181.780	1.399.500	1.561.280
A Cumbertson	87.5%	12.5%	138.405	138.784	136.253	49.412	25%	514830	469.980	984 810
P Jurvey	81.5%	12.5%	86.993	81.232	84431	21.961	18%	324 380	1.674.900	1.999.280
KIMEOV			28.949	29.029	21125		33%	108,580	24.080	132.660
1 Giarla	31.5%	62.6%	44.563	44.685	41/94		25%	167 140	1.015.200	1162340
A von Bibra	75.0%	25.0%	21.468	21.527	20.115		26%	60.520	320.10	400.699

Short term incentive awarded and not awarded relates to the period ended 30 June 2006 only.

As mentioned on pages 44 and 45 of this Report under the section "Short-term incentives", consistent with the philosophy of the short-term incentive percentage representing the potential short-term incentive, to be awarded 100% of short-term incentive, an executive is required to have exceeded all performance objectives. An executive who has obtained less than 100% of their incentive payment may have met all their objectives and exceeded some of their objectives but may not have exceeded all of the performance objectives.

Ø. The value has been determined at grant date and amortised in accordance with the applicable accounting standard requirements. The minimum value of the grant is \$nil if the performance conditions are not satisfied.

Represents the value of options and rights that are granted to the person as part of their remuneration in the 2006 financial year. The value at grant date represents the accounting value of the grant.

Represents the value of options and rights that were granted to the person as part of their remuneration and that were exercised. during the year. The value at exercise date has been determined by the share price at the close of business on exercise date less the option/right exercise price (if any) times by the number of options/rights exercised during 2006.

mmmmmm8

Continued

15. Remuneration Report (continued)

Executive Key Management Personnel
Options and Rights Holdings Committee Committee Committee Committee
Performance Rights

						lerns and Conditions for Performance Rights grants during 2006
	Balance 201 1m 2008	Number Granted	balance at 30 June 2006	Number vested During the Year	Grant Date	Value per Richt af Grant Date Y.	First Exercise Date	1 ast Lxercise Date
Executive Directors
B.A.McNamee	70.000	40.000 37.000	147,500		15-14-05 7 Mar 06	24.51 43.58	30 Sep 08 20-Dec-08	7-180-12 20 Dec 12
A M Cipa	40.000	15.000			15-10-05.	24.51	30 Sep 06	$J$ -lun 1 $Z$
Key Management Personnel		15.000	70.000	$\sim$	7 Mar 06	43.68	20 Dec-08	20 Dec-12
Pluner	24.800	17650			$I-$ Sep $-05$	24.40	30-Sep-08)	7-Jun-12
		11.900	54.350		6 Арг-06	42.97	20 Dec-08	20 Dec 12
A Cuthbertson	11.100	5250			$7-$ Se $p$ -O $5$	24.40	30-Sep-08.	$7 \text{ km} \cdot 12$
		9000	25.350	¥	6 Apr 06	42.97	20-Dec-08	20-Dec-12
Pillavey	17 100	6250			$T$ -Sep-Ob	24.40	$30$ -Sep-OS	$7 - 1$ Lin $-12$
		4.000	27350		6-Apr-06	42.97	$20 - \log 08$	20 Dec 12
C Armiti	14 400	1.450	21.850		7-Sep Ob	24.40	30-Sep-08)	$7 - \ln n + 2$
P Bordonaro	20.800	7.450	28.250		7 Sep-05	24.40	30 Sep 08	7 Jun 12
K Miroy	5800	4.450	10,250	23	7-Sep-05	24.40	$30$ -Sep $-06$	$7 - 110 - 12$
I Glarla	6.000	6.850	12850	S.	$7-$ Serp $ (15)$	24.40	30-Sep-06	7-lun-12
A von Bibra	1.500	3,300	4.800		$I$ -Sen $-05$	24.40	30-Sep 08	$7 - 11 + 12$
¶ota∥	211.500	191,050	402.550

Alan Alaman Manazarta (Alan Alaman Manazarta (Alan Alaman Manazarta (Alan Alaman Manazarta (Alan Alaman Manaz

,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,

......................................

The Board has resolved to make grants of Performance Rights relating to the 2006 financial year subsequent to completing assessments under the Company's performance management system and annual reviews of executive remuneration levels. These are expected to be granted in October 2006.

ganaan mil

a kanang manang manang manang manang manang manang manang manang manang manang manang manang manang manang man

,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,

a a mata a mata a cinemata a cinemata a cinemata a cinemata a cinemata a cinemata a cinemata a cinemata a cine

15. Remuneration Report (continued)

Executive Key Management Personnel

SESOP and SESOP II Options

	Balance at 1 July 2005	Mumber Granted	Number Exercised	Balance at 30 June 2006	Winnber Vested Dunna the Year	Vested and Exercisable at 30 June 2006
Executive Directors
B A McNamee
А М Стра	75.000		50.000.	25.000	15.000	25.000
Specified Executives
Pllumer	175.000		145.000	30.000	65.000
C Armit	90.000		40.000	50.000	70.000	30.000
P Bordonaro	75,000		75.000		15,000
A Cutribertson	87.000		57000	30.000	57.000
Pilurvey	100.000		80.000	20,000	40.000
K Milroy	70.000		28.000	42.000	7.000
I Giarla	103.500	- 1	45,000	58.500	54.000	36.000
A von Bibra	39.600		21.120	18.480	5,280
lotall	815 100		541 120	273.980	328.280	91.000

In relation to the 2006 financial year, the Company used the CSL Performance Rights Plan approved by shareholders at the 2003
annual general meeting for long term incentive purposes. Accordingly, no options were issued und

Shares Issued on Exercise of Options and Rights

	Date Options granted ¹	& rahts Manber of Shares	Paid 3 Per Strate	Unpaid \$ Per Share
Executive Directors
B. A. McNamee
A M Cipa	Aug-2000	50.000	34.04
Key Management Personnel
Pillumer	Aug-2000	100 000	34.04
	11 2002	45.000	21.91
C Armit	Feb-2000	40.000	23.01
A Cuthbertson	feb 2000	12.000	21.01
	11 2002	45.000	2191
Р илиех	Aug. 2000	50.000	34.04	mm
	101-2002	30.000	2/97
P Bordonaro	Aug-2000	75.000	34.04
K Milroy	Jun-2001	28,000	37.54
1 Gerta	Aul-2003.	45.000	12.19
A von Bibra	lun 2001	21.120	37.54
lotal IIII		541.120

For all of the Options granted, the time-related vesting criteria was 60% of the allocation after three years from grant date,
20% after four years from grant and the balance of 20% after five years from grant date.

Refer to the tables on page 54 and above for the balance of options and performance rights held by Key Management
Personnel subsequent to exercise of the options and performance rights as set out above $\mathbf{z}$

the contract of the contract of the contract of

San San San San San San San San San San

iiiiii

Directors' Report

15. Remuneration Report (continued)

Directors and other Key Management Personnel

Shareholding

	Balance at	Outtons exercised	Other charates	Balance at $30 \mu m$	Balance as of date of this
	1 Any 2005 damng year		during year	2006	report
Directors
B A McNamee	343.511		(50,000)	293.511	293.611
А М Стра	8.547	50.000	(50.000)	8547	8547
P. H. Wade	30 910		1241	32.161	32.151
Akehurst	6313		531	6.844	6.844
t. A Alexander	6.516		531	7.047	1047
J.A. Renand	6373		531	6,904	6.904
M A Renshaw	659		531	0.190	1,190
K J Roberts	5.838		(469)	5.369	5,369
A C Webster	8 842		531	9.373	9373
Key Management Personnel
Pilmner	12.242	146.000	(145,000)	12.242	12,242
C. Armit	110.910	40.000	(80,0.00)	70.910	70.910
P Bordonaro	26,760	75,000	(101/000)	760	760
A Cuthbertson	49.379	57.000	(48.000)	57.379	57.379
Pilavey	46.971	80.000	(75.113)	51.268	51.258
K Miltov	36.603	28.000	(62, 832)	1771	1711
ll Giarla		45.000	(45.000)
A von Bibra	1,283	21.120	(21) 765	636	638
lotal	700.657	541,120	(675, 683)	565.894	565,894

Loans to Executive Key Management Personnel.

Details of the aggregate of toans to Key Management Personnel are as shown:

		Opening Balance \$000	interest Charged \$000	merest Not Charged \$000	Closina Kalance 5000	Mumber in group 30 June 2005
Executive Directors	2006	941	37	20	493	2
	2005	1.882.	71	-71	941	-2
Key Management	2006	5,041	112	212	4.938	8
Personnel	2005	1.930.	72.	218.	5.041	10.
Total Executive Directors
and Key Management	2006	5.982	149	232	5.431	10
Personnel	2005	-3.812	143	-289	5.982	12.

15. Remuneration Report (continued)

Loans to Executive Key Management Personnel (continued).

Details of the aggregate of Icans to Key Management Personnel are as shown:

	Balance at 1 May 2005 \$000	Interest Charged \$ 000	mterest Not Charged \$ 000	Balance at 30 June 2006 3.000	Highest Owing in Penad \$ 000
Executive Directors
B A McNamee	893	35.	18	447	893
A M Cina	48.	D.	2	46.	48.
Key Management Personnel
D'iurner	110	4	4	110.	110
C Amit	2.537	401	62.	1615	3.460
P Bordonaro	330		2.		330
A Cuthbertson	1.008	37	91	1.611	1/84
Pluney	593	20.	50	1702.	11702
K Miroy	463		3.		463
1 Grana		ារា

All of the loans relate to SESOP and SESOP II under which Key Management Personnel were provided with Idans to fund the exercise of options. SESOP was terminated by the Company and there are no longer any outstanding options. under SESOP. No grants of options have been made under SESOP II since July 2003.

Loans to Key Management Personnel relating to SESOP are interest free. Loans relating to SESOP II are charged interest at a concessional average rate of 2%. This is based on interest being charged equivalent to the after tax cash. amount of dividends on the underlying shares (excluding the impact of imputation and assuming a marginal income tax rate of 48.5%)

Interest not charged represents the difference between the average commercial rate of interest during the year (7%). and interest charged to the individual.

16. Other Transactions and Balances with Directors and other Key Management Personnel

The directors and other key management personnel and their 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 at arm's length in similar circumstances

The Company has a number of contractual relationships induding property leasing and research collaborations. with the University of Methourne of which Mi lan. Renard is the Chancellor and Miss Elizabeth Alexander is the Chair of the Finance Committee and a member of the Council, and
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.

17. Indemnification of Directors and Officers

During the financial year, the insurance and indemnity arrangements discussed below were in place concerning. directors and officers of the consolidated entity.

The Company has entered into a Director's Deed with each director regarding access to Board papers, indemnity and Insurance, Each Deed provides,

an ongoing and unlimited indemnity to the relevant director against liability incurred by that director in or ansing out of the conduct of the business. of the Company or of a subsidiary (as defined in the Corporations Act 2001) 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 ansing 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.
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 ornissions of that director in the director's capacity or former capacity as a director of the Company, and
the relevant director with a right of access to Board. papers relating to the director's period of appointment as a 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 periodof appointment.

In addition to the Director's Deeds, Rule 146 of the Company's Constitution requires the Company to indemnity 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 inthe discharge of the duties of the officer in relation to that corporation.

The Company paid instrance premiums of \$678,937.89 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 (including liability for certain legal costs) arising as a result of work performed in their respective capacities, to the extent permitted by law.

18. Auditor independence and non-audit services

The company may decide to employ the auditor on assignments additional to their statutory audit duties where the auditor's expertise and experience with the company and/or the consolidated entity are important.

Details of the amounts paid or payable to the entry's auditor, Ernst & Young for non-audit services provided. during the year are set out below. The directors, in accordance with the advice received from the Audit and Risk Management Committee, are satisfied that the provision of non-audit services is compatible with the general standard of independence for auditors imposed. by the Corporations Act 2001. The directors are satisfied that the provision of non-audit services by the auditor didnot compromise the auditor independence requirements. of the Corporations Act 2001 for the following reasons.

all non-audit services have been reviewed by the Audit and Risk Management Committee to ensure that they do not impact the impartiality and objectivity of the auditor, and

· none of the services undermine the general principles relating to auditor independence as set out in Professional Statement F1, including reviewing or auditing the auditor's own work, acting in a management or a decision making capacity for the company, acting as an advocate for the company or jointly sharing economic risks and rewards.

A copy of the auditors' independence declaration as required under section 307C of the Corporations Act 2001... accompanies this Report.

Ernst & Young and its related practices received or are due to receive the following amounts for the provision. of non-audit services."

	Due diligence and completion audits Compliance and other audits.																															\$194,243		0.16000
																																		\$210.243

19. Rounding

The amounts contained in this report and in the financial containing the amount of 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 orrectors.

Signed

Peter H Wade (Director)

Signed

Brian A McNamee (Director)

Melbourne 23 August 2006

EII ERNST & YOUNG

F Ernst & Young Building Enter
8 Exhibition Street
Melbourne VIC 3000 Australia

GPO Box 67
Melbourne VIC 3001

■ Tel 61 3 9288 8000 Fax 61 3 8650 7777

Auditor's Independence Declaration

In relation to our audit of the financial report of CSL Limited for the financial year ended 30 June 2006, to the best of my knowledge and belief, there have been no contraventions of the auditor independence requirements of the Corporations Act 2001 or any applicable code of professional conduct.

Emit 9 yours

Ernst & Young

Ivan Wingreen Partner Melbourne

23 August 2006

Liability limited by a scheme approved under-Professional Standards Legislation.

CSL Limited and its controlled entities Income Statement for the year ended 30 June 2006

				Consolidated Entity [[[[[[[[[
			Contingent
			Consideration
		Operating 2006	(Note 5) 2006	Total 2006	2005
	Notes	\$000	\$000	\$000	\$000
Continuing operations
Sales revenue	3	2,848,908		2,848,908	2 608 965
Cost of sales ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,	m	(1,703,033)	÷	(1,703,033)	(1.618.833)
Gross profit		1,145,875	$\ddot{\phantom{0}}$	1,145,875	990,132
Other revenues	3.	54,624		54,624	41,294
Other income	3	2,081		2,081
MANAMANAN Research and development expenses		(161, 023)		(161, 023)	(140.958)
Selling and marketing experises.		(339, 863)		(339, 863)	(324, 866)
General and administration expenses		(161, 197)	(328, 515)	(489, 712)	(116.604)
Finance costs	3	(41, 517)	$\Delta$	(41, 517)	(38.816)
Profit before income tax expense		498,980	(328, 515)	170,465	410.283
Income tax experise	4.	(148, 087)	94,979	(53, 108)	(175, 554)
Net profit from continuing operations	23	350,893	(233, 536)	117,357	234.729

Discontinued operations
Proticatter tax from discontinued operations	Ġ.				253.045
Profit attributable to members of the parent entity	23.	350,893	(233, 536)	117,357	487.774


Earning, per share		Cents		Cents	▥ Cents
Basic earnings per share for profit from continuing operations	34	192.77		64.47	110 ii
Basic earnings per share for profit from discontinuing operations	34				129.11
Basic earnings per share for profit attributable to members.	34	192.77		64.47	ШЩ 248.68
Diluted earnings per share for profit from continuing operations	34	184.25		61.62	116.39
Diluted earnings per share for profit attributable to members	34	184.25		61.62	241.86

......................................

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a a shekarar 1999

CSL Limited and its controlled entities Income Statement
for the year ended 30 June 2006

,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,

.......................................

gan an aikin

			этайхаар шахагу
		2006	2005
	Notes	\$000	5000
Continuing operations
Sales revenue	А,	346,822	363.320
Cost of sales		(171, 356)	(11) 8531
Gross profit		175,466	192,467
Other revenues	3	35.016	30.998
Other Income	3.	1,660
Research and development expenses		(79, 509)	159,1921
Seling and marketing expenses		(47, 785)	142.5171
General and administration expenses.		(58, 419)	(56, 558)
Finance costs	$\mathcal{A}$	(4, 826)	(387)
Profit before income tax expense		21,603	64.811
Income tax expense.	$\overline{4}$	(5, 569)	(0, 16)
Profit attributable to members of the parent entity	23	16,034	65,295

the contract of the contract of the contract of the contract of the contract of

W. . . . . . . . . . . . . . . . . . .

a a shekarar 1979

CSL Limited and its controlled entities Balance Sheet
as at 30 June 2006

			Consolidated Entry		Parem Entity
	Notes	2006 \$000	2005 \$900	2006 \$000	2005 4000
CURRENT ASSETS
Cast and cash equivalents	J.	753,694	723,842	177,290	461.769
Trade and other receivables.	8	593,679	559.227	99,734	71,283
Current tax assets	18	6,889		6,889
Inventories	9	973,427	946,583	66,426	59,451
Other financial assets	10	7,872
Total Current Assets		2,335,561	2.229.652	350,339	592.603
NON-CURRENT ASSETS
Irade and other receivables.	8	17,673	14.026	11,117	20.041
Other financial assets	4H	4,728	16.566	1,232,935	232.905
Property plant and equipment	12	816,336	769,143	268,881	261.402
Deferred tax assets	13	187,432	76.659.
Intangible assets	14	820,841	786,435,	20,000	20,000
Retrement benefit assets	16,	3,514	-60.	1,840
Iotal Non-Current Assets		1,850,524	1.662.879	1,534,773	1.534.348
TOTAL ASSETS		4,186,085	$3.892 + 31$	1,885,112	2.126.851
CURRENT LIABILITIES
Trade and other payables	16.	388,979	396,555	688,999	595 199
Interest-bearing kabilities and borrowings	17	463,632	14.141
Current tax labilities Provisions	18 19.	88,038 85,885	31,130 81,891	26,115	1/348
Deferred government grants	20	371	296	371	296.
Retirement benefit liabilities	15	4,635
Total Current Liabilities		1,031,540	533 (013)	715,485	613.343
NON CURRENT LIABILITIES
Interest-bearing Vabilities	17.	595,197	995,839
Non-current tax liabilities	18	5,043
Deterred tax habilities	13	61,767	18,211	1,715	9.958
Provisions.	19	408,053	78,546	5,223	16.391
Deferred government grants	20	4,093	2.664	4,093	2,004
Retirement benefit liabilities	$15\,$ wm	90,588	95.667		- 159
Total Non-Current Liabilities m		1,164,741	1.250.993	11,031	29.172
TOTAL LIABILITIES		2,196,281	1.784.006	726,516	642.510
NET ASSETS		1,989,804	2.08525	1,158,596	1,484,336
EQUITY
Contributed equity	21	994,101	1,223,456	994,101	1,223,466
Reserves	22	(55, 767)	(18200)	13,351	2.803
Retained earnings	23	1,051,470	1.068.065	151,144	258 067
TOTAL EQUITY	24.	1,989,804	2.106.25.	1,158,596	1484,336

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200000000000000000000000000000000000000

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MANAMANA

CSL Limited and its controlled entities Statement of Recognised Income and Expense
for the year ended 30 June 2006

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33333333333333333333333333333333333333

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			Conselvated Entry		Parent Eminy
	Notes	2006 \$000	2005 6000	2006 \$000	2005 SOOO
Profit for the year		117.357	487.774	16.034	56.295
Exchange differences on translation of foreign operations. net of hedges.	22.	116.691	1106-973.
Gains liossest on available for sale financial assets, net of tax	22.	(101)		(101)
Actuaria gains losses) on derined benefit plans, net of tax	23.	(9,558)	(16/136)	1,437	38.
Net income (expense) recognised directly in equity.		107.032	(213,100)	1.336	38.
Total recognised income and expense for the year attributable to equity holders	24	224.389	274.665	17.370	1999

a a shekarar 1979

CSL Limited and its controlled entities Cash Flow Statement

		Consolidated Entry		Parent Entity
Motes	2006 \$000	2005 \$000	2006 \$000	2006 9.000
Cash flows from Operating Activities
Receipts from customers (inclusive of GST)	2,982,382	2.698.158	373,303	369.640
Payments to suppliers and employees (inclusive of GST)	(2,324,695)	(207333)	(329, 539)	(291, 294)
Cash generated from operations	657,687	624821	43,764	16.346
Income taxes (paid/received	(127, 727)	(43, 299)	4,173	(14.620)
Interest received	24,767	16,954	8,438	12.384
finance costs paid	(32, 563)	130.660)	(324)	(384)
32 Net cash inflow from operating activities	522,164	66/622	56,051	15123
6. Net cash outflow from operating activities - discontinued operations		9.566
Net cash inflow from operating activities - continuing operations	522,164	511.386	56,051	$\frac{1}{2}$
Cash flows from Investing Activities
Proceeds from sale of property, plant and equipment	2.739	712	281	13
Proceeds (payments) from the sale of business unit.	(14, 920)	460.135
Dividends received	396		2,661
Payments for property, plant and equipment	(122,065)	(105,015)	(38, 881)	132.0291
Payments for other investments	(132)	(211)	(132)	12TT)
Payments for intellectual property	(8,548)	(9.001)
Payments for restructuring of acquired entities and businesses.	(10,086) (5,025)	(83, 967)
Payments for onerous contracts		(14682) (30.433)		(20.624)
Income tax on profit on sale of business unit	(157, 641)	217,472	(36,071)	[52.917]
Net cash inflow/foutflow) from investing activities Net cash outflow from investing activities - discontinued operations. Ø.		14.868
Net cash inflow/(outflow) from investing activities
- continuing operations	(157, 641)	232.340	(36,071)	[52,817]
Cash flows from Financing Activities
21 Proceeds from issue of shares	51.711	16,970	51.711	16970
Payments for shares bought back 21	(281, 538)	(317, 195)	(281, 538)	(317.795)
Dividends paid	(124, 394)	(63, 508)	(124, 394)	(63, 508)
Acvances from subsidiaries			49,762	700,596
Proceeds from borrowings	(2,082)	266.617 (10, 20, 2)
Repayment of portowings Net cash inflow/(outflow) from financing activities	(356, 303)	(166,688)	(304, 459)	426,263
Net cash flow from financing activities - discontinued operations 6.
Net cash inflow/(outflow) from financing activities
- continuing operations	(356, 303)	(166,688)	(304, 459)	426.263
Net increase/(decrease) in cash and cash equivalents - continuing operations	8,220	643.040	(284, 479)	449,069
Net decrease in cash and cash equivalents
- discontinued operations f)		(24, 434)
Net increase in cash and cash equivalents	8,220	018606	(284, 479)	449,069
Cash and cash equivalents at the beginning of the financial year WWWW	719,751	110343	461,769	12,700
Exchange rate variations on foreign cash and cash equivalent Dalances	20,017	(0, 108)
32 Cash at the end of the financial year	747,988	710,761	177,290	461,769

CSL Limited and its controlled entities Notes to the Financial Statements for the year ended 30 June 2006

1 Summary of Significant Accounting Policies

The financial report of CSL Limited (the Company) for the year ended 30 line 2006 was authorised for Issue in accordance with a resolution of the directors on 23 August 2006.

(a) Statement of compliance

This general purpose financial report has been prepared in accordance with Australian Accounting Standards (AASBs) adopted by the Australian Accounting Standards Board (AASB) and the Corporations Act 2001. Compliance with AASBs ensures that the financial report, comprising the financial statements and notes thereto, complies with the international Financial Reporting Standards (IFRS).

This is the first financial report prepared in accordance with the Australian equivalents to the International Financial Reporting Standards (AIFRS) and AASB 1 First-Time adoption of Australian Equivalents to International Financial Reporting Standards has been applied. The consolidated entity has taken the exemption available under AASB 1 to only apply AASB 7 Financial Instruments: Disclosure, AASB 132 Financial Instruments. Presentation and AASB 139 Financial Instruments: Recognition and Measurement from 1 July 2005. An explanation of how the transition to AIFRS has affected the reported financial position, financial performance and cash flows of the consolidated entity and the Company is provided in note 37.

Except for the revised AASB 119 Employee Benefits (issued December 2004) and AASB 7 Financial Instruments. Disclosure fissued August 2005), Australian Accounting Standards that have been issued or amended subsequent to 1 July 2005, but are not yet effective or adopted by the consolidated entity for the annual reporting period ended 30 June 2006 are as follows:

AASB amendment/ standard	Affected Standard(s)	Nature of change to accounting policy	Application date of standard	Application date for the consolidated entity
2004-3	AASB 1: First-time adoption of AlFRS, AASB 101: Presentation of Financial Statements, and AASB 324; Related Party Disclosures.	No change to accounting policy required. Therefore no impact.	1 January 2006#	1 July 2006
2005-1	AASB 139: Financial Instruments: Recognition and Measurement.	No change to accounting policy required. Therefore no impact.	1 January 2006#	1 July 2006
2005-4	AASB 139: Financial Instruments: Recognition and Measurement, AASB 132: Financial Instruments: Disclosure and Presentation. AASB 1: First-time adoption of AIFRS, AASB 1023: General Insusance Contracts, and AASB 1038: Life Insurance Contracts.	No change to accounting policy required. Therefore no impact.	1 January 2006#	1 July 2006
2005-5	AASB 3: First time adoption of AIFRS, AASB 139: Financial instruments: Recognition and Measurement.	No change to accounting policy required. Therefore no impact.	1 January 2006#	1 July 2006
2005-6	AASB 3: Business Combinations.	No change to accounting policy required. Therefore no impact.	1 January 2006#	1 July 2006
2005-9	AASB 4: Insurance contracts, AASB 1023: General Insustance Costracts. AASB 132: Financial instruments: Presentation and Disclosure. AASB 139: Financial instruments: Recognition and Measurement.	Change to accounting policy required. However, no material impact on the current financial years financial statements.	1 January 2006#	1 July 2006

CSL Limited and its controlled entities Notes to the Financial Statements continued for the year ended 30 June 2006.

Summary of Significant Accounting Policies (continued) I

(a) Statement of compliance (continued) statement or compliance (community) and the community of the community of the community of the community of the community of the community of the community of the community of the community of the community of the communit

AASB amendment/ standard	Affected Standard(s)	Nature of change to accounting policy	Application date of standard	Application date for the consolidated entity
2005-10	AASB 3: First time adoption of AIFRS, AASB 4: Insurance contracts, AASB 101: Presentation of Financial Statements, AASB 114: Segment Reporting, AASB 117: Leases, AASB 133: Earnings per Share, AASB 132: Financial Instruments: Presentation and Disclosure. AASB 139: Financial Instruments: Recognition and Measurement, AAS8 1023: General Insurance Contracts, AASB 1038: Life Insurance Contracts.	No change to accounting policy required. Therefore no impact.	1 January 2006#	1 ltdy 2006
2006-3	AASB 121: The Effects of Changes in Foreign Exchange Rates.	No change to accounting policy required. Therefore no impact.	31 December 2006* 1 ltdly 2006
UiG 4	UIG 4: Determining whether an Asset Contains a Lease.	No change to accounting policy required. Therefore no impact.	1 January 2006#	1 ltdy 2006
UIG 5	UIG 5: Rights to Interests arising from Decommissioning, Restoration and Environmental Rehabilitation Funds.	Not applicable to the consolidated entity. Therefore no impact.	Not applicable	Not applicable
UiG 6	UIG 6: Liabilities arising from Participating in a Specific Market - Waste Electrical and Electronic Equipment.	Not applicable to the consolidated entity. Therefore no impact.	Not applicable	Not applicable
UiG 7	UIG 7: Applying the Restatement Approach under AASB 129 Financial Reporting in Hyperinflationary Economies.	No change to accounting policy required. Therefore no impact.	1 March 2006#	1 ltdy 2006
UIG 8	UIG 8: Scope of AASB 2. required. Therefore no impact.	No change to accounting policy	1 May 2006#	1 luly 2006
UiG 9	UIG 9: Reassessment of Embedded Derivatives.	No change to accounting policy required. Therefore no impact.	3 June 2006#	1 laly 2006
	$t$ Application date is for the annual reporting periods beginning on or after this date.

Application date is for the annual reporting periods ending on or after this date.

CSL Limited and its controlled entities Notes to the Financial Statements continued for the year ended 30 lune 2006.

Summary of Significant Accounting Policies (continued)

(b) Basis of Accounting

These financial statements have been prepared under the historical cost convention, as modified by the revaluation of available for-sale financial assets, financial assets and ilabilities (including derivative instruments) at fair value through profit or loss, and land and buildings.

The preparation of a financial report in conformity with Australian Accounting Standards requires directors to make judgments. estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision only affects that period, or in the period of the revision and future periods if the revision affects both current and future periods.

The consolidated entity has elected to apply AASB 119 Employee Benefits fissued December 2004) to the annual reporting period beginning 1 July 2005. This includes applying AASB 119 to the comparatives in accordance with AASB 108 Accounting Policies, Changes in Accounting Estimates and Errors.

The consolidated entity has also elected to apply AASB-7 Financial Instruments. Disclosure to the annual reporting period beginning 1 July 2005. As permitted by AASB 1 First-Time adoption of Australian Equivalents to International Financial Reporting Standards, comparative information has not been restated.

The accounting policies set out below have been applied consistently, except as noted below, to all periods presented in the consolidated financial report and in preparing the opening AIFRS balance sheet at 1 July 2004 for the purpose of the transition to Australian Accounting Standards - AIFRS.

(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 during the period and at balance date (together being the consolidated entity).

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

Where control of an entity is obtained during a financial period, its results are included in the consolidated income statement from the date on which control commences. Where there is loss of control of an entity, the consolidated income statement. includes the results for the part of the reporting period during which control existed.

(d) Foreign Currency Translation

Items included in the financial statements of each of the Group's entities are measured using the currency of the primary economic environment in which the entity operates (the functional currency). The consolidated financial statements are presented in Australian dollars, which is CSL Limited's functional and presentational currency

Foreign currency transactions are translated into the functional currency using the rate of exchange ruling at the date of the transaction

Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at period-end. exchange rates of monetary assets and labilities denominated in functional currencies are recognised in the locome statement. except when deferred in equity as qualifying cash flow hedges and qualifying net investment hedges.

Translation differences on non-monetary items, such as securities held at fair value through profit or loss, are reported as part of the securities fair value gain or loss. Translation differences on non-monetary items, such as securities classified as available for sale financial assets, are included in the fair value reserve in equity.

Assets and liabilities of foreign operations are translated to Australian dollars at the rates of exchange ruling at the end of the reporting period. Revenue and expenses of foreign operations are translated to Australian dollars at the average rates of exchange ruling for the period. Foreign exchange differences arising on retranslation are recognised directly in a separate component of equity.

On consolidation, exchange differences ansing from the translation of any net investment in foreign operations, and of borrowings designated as hedges of such investments, are taken to the translation reserve. When a foreign operation is sold. a proportionate share of the post 1 luly 2004 net exchange differences are recognised in the income statement as part of the gain or loss on sale.

Summary of Significant Accounting Policies (continued)

(e) Revenue Recognition

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the consolidated 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 the significant risks and rewards of ownership of the goods have passed to the buyer and the costs incurred or to be incurred in respect of the transaction can be reliably measured.

Interest income

Interest income is recognised as it accrues (using the effective interest rate method).

Citier revenue

Other revenue is recognised as it accrues.

Dividend income

Dividend income is recognised when the shareholders right to receive the payment is established.

(f) Government Grants

Government grants are recognised at their fair value where there is a reasonable assurance that the grant will be received. and the consolidated entity will comply with all attached conditions.

Government grants relating to an expense item are deferred and recognised in the income statement over the penod necessary. to match them with the expenses that they are intended to compensate. Government grants received for which there is no future related costs are recognised in the income statement immediately.

Government grants relating to the purchase of property, plant and equipment are included in current and non-current liabilities. as deferred income and are released to the income statement on a straight line basis over the expected useful lives of the related assets.

(g) Borrowing Costs

Borrowing costs are expensed as incurred fusing the effective interest rate method), except where they are directly attributable to the acquisition or construction of a qualifying asset, in which case they are capitalised as part of the cost of that asset.

(b) Goods and Services Tax and other foreign equivalents (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.

(i) Income Tax

Income tax on the profit or loss for the reporting penod comprises current and deferred tax. Income tax is recognised In the income statement except to the extent that it relates to items recognised directly in equity, in which case it is recognised. итесниту.

Current tax is the expected tax payable on the taxable income for the reporting period, using the income tax rate for each jurisdiction that has been enacted or substantially enacted at reporting date and any adjustments to tax payable in respect of previous vears.

Deferred tax is provided using the balance sheet liability method, providing for temporary differences, at the tax rates expected to apply when the assets are recovered or liabilities are settled, between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes.

Temporary differences arising from the initial recognition of an asset or a liability that affect neither accounting profit nor taxable income and differences relating to investments in subsidiaries, to the extent they will probably not reverse in the foreseeable. future, are not provided for

Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilise those temporary differences and tax losses.

Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to set-off current tax assets against current tax liabilities and the deferred tax assets and deferred tax liabilities related to the same taxable entity or group and the same taxation authority

Summary of Significant Accounting Policies (continued)

(j) Cash and Cash Equivalents

Cash on hand and in banks and short-term deposits are stated at nominal value. Cash and cash equivalents comprises cash on hand, at call deposits with banks or financial institutions, investments in money market instruments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value and bank overdrafts.

Bank overdrafts are carried at the principal amount interest is charged as an expense as it accrues (using the effective interest rate method).

(k) Trade and other receivables

Trade and other receivables are initially recorded at the amount of the contracted sale proceeds. A provision for doubtful debts is recognised to the extent that recovery of the outstanding receivable balance is considered no longer probable.

Other receivables are recognised and carried at the nominal amount due. Non-current receivables are recognised and carried at amortised cost. They are non-interest bearing and have various repayment terms.

(1) Inventories

Raw materials and stores, work in progress and finished goods are stated at the lower of cost and net realisable value.

Cost includes direct material and labour and an appropriate proportion of variable and fixed overhead expenditure, the latter being allocated on the basis of normal operating capacity.

Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and the estimated costs necessary to make the sale.

(r) Investments and other financial assets

The consolidated entity has taken the exemption available under AASB 1 to apply AASB 7, AASB 132 and AASB 139 only from 1 July 2005. The consolidated entity has applied Australian accounting standards in force prior to financial years beginning 1 January 2005 ("AGAAP") to the comparative information on investments and other financial assets within the scope of AASB 7 AASB 132 and AASB 139

In accordance with AGAAP, prior to 1 luly 2005, interests in non-controlled entities or non-associated corporations are included in investments at the lower of cost or the recoverable amount.

In accordance with AIFRS, subsequent to 1 July 2005, the consolidated entity classifies its investments as financial assets at fair value through the profit or loss, or available for sale financial assets. The classification depends on the purpose for which the investments were acquired. The consolidated entity determines the classification of its investments at initial recognition and re-evaluates this designation at each reporting date when allowed and appropriate.

Emancial assets at fair value through profit or loss

This category includes financial assets held for trading and financial assets designated at fair value through profit or loss on initial recognition. A financial asset is classified in this category if acquired principally for the purpose of selling in the short term or if so designated. A financial asset is designated in this category if there exists the possibility it will be sold in the short term, and the asset is subject to frequent changes in fair value. Derivatives are also categorised as held for trading unless they are designated as hedges. Assets in this category are classified as current assets if they are either held for trading or are expected. to be realised within 12 months of the balance sheet date.

Realised and unrealised gains and losses arising from changes in the fair value of the financial assets at fair value through profit or loss are included in the income statement in the period in which they arise.

Financial assets at fair value through the profit or loss are carried at fair value.

Available-for-sale financial assets

Available for sale financial assets are non-derivatives that are designated as available for sale. They are included in non-current assets unless it is intercled to dispose of the investment within 12 months of the balance sheet date.

Available for sale financial assets are carried at fair value.

Unrealised gains and losses ansing from changes in the fair value of financial assets classified as available for sale are recognised in equity in the unrealised gains reserve until they are sold or impaired, at which time the accumulated fair value adjustments are included in the income statement.

The fair value of financial assets is based on active market prices. If the market for a financial asset is not active, the consolidated entity establishes fair value by using valuation techniques. These include reference to the fair values of recent arm's length transactions, involving the same instruments or other instruments that are substantially the same, discounted cash flow analysis, and option pricing models refined to reflect the specific dicumstances.

Investments in subsidiaries are carried at their cost of acquisition, less any impairment allowance, in the Company's financial statements

CSL Limited and its controlled entities Notes to the Financial Statements continued for the war ended 30 June 2006.

Summary of Significant Accounting Policies (continued)

In) Acquisition of Assets

The purchase method of accounting is used for all acquisitions of assets regardless of whether equity instruments or other assets are acquired. Cost is measured as the fair value of consideration given at the date of acquisition plus costs directly attributable to the acquistion. Where settlement of any part of cash consideration is deferred, the amounts payable in the future are discounted to their present value as at the date of the acquisition. The discount rate used is the entity's incremental borrowing rate, being the rate at which a similar borrowing could be obtained from an independent financier under comparable terms and conditions.

Where the consideration for an acquisition is specifically hedged, exchange gains or losses on the hedging transaction arising up to the date of acquisition and costs relative to the hedging transaction are deferred and included in the cost of acquisition.

The consolidated entity has taken the exemption available under AASB 1 not to apply AASB 3 to past business combinations that occurred before transition to AFRS.

In accordance with AIFRS, where an entity is acquired and the fair value of the identifiable net assets acquired, including any existing restructuring liabilities and contingent liabilities assumed of the acquired entity, exceeds the cost of acquisition, the difference represents a discount on acquisition. The discount on acquisition is recognised immediately in the income statement, but only after a reassessment of the identification and measurement of the net assets acquired. Where goodwill arises it is brought to account on the basis described in note 1(s).

(o) Property, Plant and Equipment

Freehold land and buildings are recorded at 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, amortisation and accumulated impairment losses, which is not in excess. of the recoverable arnount. Capital work in progress is stated at cost. Property, plant and equipment, except freehold land, are depreciated over their useful lives on a straight line basis as follows:

			Buildings																		5 - 30 years









			Plant and equipment																		$3 - 15$ years




















			Leasehold improvements																		6 10 years

(p) Impairment of Assets

Assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment, or more frequently wherever events or changes in circumstances indicate that it may be impaired.

Assets that are subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

An impairment loss is recognised in the income statement for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs to sell and value in use. In assessing value in use, the estimated fulure cash flows are discounted to their present value using a pre-tax discount rate that reflects. the current market assessments of the time value of money and the risks specific to the asset.

For the purpose of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash generating units). Imparment losses recognised in respect of cash generating units are allocated first to reduce the carrying amount of any goodwill allocated to cash generating units, and then, to reduce the carrying amount of the other assets in the unit on a pro-rata basis.

(g) Leasehold Improvements

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

(r) Leases

Leases are classified at their inception as either operating or finance leases based on the economic substance of the agreement so as to reflect the risks and benefits incidental to ownership.

Finance leases

Leases which effectively transfer substantially all the risks and benefits incidental to ownership of the leased item to the consolidated entity are capitalised at the lower of the fair value of the leased item and the present value of the minimum lease. payments. The corresponding rental obligations, net of finance charges, are included in interest bearing liabilities.

Lease payments are allocated between finance charges and reduction of the lease liability so as to achieve a constant rate on the finance balance outstanding. Finance charges are charged directly against income. Capitalised lease assets are depreciated over the shorter of the estimated useful life of the assets and the lease term.

1 Summary of Significant Accounting Policies (continued)

(r) Leases (continued)

Operation leases

The minimum lease payments of operating leases, where the lessor effectively retains substantially all of the risks and benefits of ownership of the leased item, are recognised as an expense in the income statement on a straight-line basis.

.......................................

(s) Goodwill

On acquisition of some or all of the assets of another entity, the identifiable net assets acquired fincluding contingent liabilities assumed) 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. As from 1 July 2004 goodwill is not amortised

Goodwill is tested for impairment arrivally, or more hequently if events or changes in circumstances indicate that it might be impaired. Goodwill acquired is allocated to each of the cash generating units expected to benefit from the combination's synergies, impairment is determined by assessing the recoverable amount of the cash generating unit to which the goodwill relates.

For business combinations prior to 1 luly 2004, the date of transition to AIFRS, goodwill is included on the basis of its amortised cost, being the amount recorded under the previous AGAAP. The consolidated entity has taken the exemption available under AASB 1 not to restate the opening AIFRS balance sheet for business combinations that occurred prior to transition to AIFRS.

(t) Research and Development, Patents and Intellectual Property

Current expenditure on research activities, undertaken with the prospect of gaining new scientific or technical knowledge and understanding, is recognised in the income statement as an expense when it is incurred.

Expenditure on development activities, being the application of research findings or other knowledge to a plan or design for the production of new or substantially improved products before the start of commercial production or use, is recognised in the income statement as incurred except where the products being developed are technically and commercially feasible and adequate resources are available to complete their development.

Expenditure on equipment used in research and development activities is capitalised in property, plant and equipment and depredated over its estimated useful life.

Purchased intellectual property and other intangibles have been assessed as having finite lives and are carried at cost less accurrulated amortisation and accurridated impairment losses. Purchased intellectual property and other intangibles are amortised on a systematic basis over their useful lifes (from 10 to 20 years).

The carrying value of intellectual property and other intangibles is tested for impairment annually, or more frequently where events or changes in circumstances indicate that they might be impaired.

(u) frade and other payables

Liabilities for trade payables 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 and other creditors are non-interest bearing and have various repayment terms.

(v) Interest-Bearing Liabilities and Borrowings

Interest-bearing liabilities and borrowings are recognised initially at fair value net of transactions costs incurred. Subsequent to initial recognition, interest-bearing liabilities and borrowings are stated at amortised cost with any difference between the proceeds (net of transaction costs) and the redemption value recognised in the income statement over the period of borrowings using the effective interest method.

(w) Denvative Financial Instruments

The consolidated entity may use derivative financial instruments to hedge its exposure to foreign exchange risks arising from operational, financing and investment activities.

In accordance with it's treasury policy, the consolidated entity does not hold or issue derivative trading instruments for trading purposes. However, derivatives that do not qualify for hedge accounting are accounted for as trading instruments.

The consolidated entity has taken the exemption available under AASB 1 to apply AASB 7, AASB 132 and AASB 139 from 1 July 2005. The consolidated entity has applied previous AGAAP in the comparative information on financial instruments within the scope of AASB 7, AASB 132 and AASB 139.

In accordance with AGAAP prior to 1 July 2005, the consolidated entity entered into forward exchange contracts where it agrees to purchase or 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.

CSL Limited and its controlled entities Notes to the Financial Statements continued for the year ended 30 June 2006

Ñ. Summary of Significant Accounting Policies (continued)

(w) Denvative Financial Instruments (continued)

Gains or costs arising from entering into forward exchange contracts, together with the subsequent exchange gains or losses resulting from re-measurement of those contracts by reference to movements in spot exchange rates are deferred in the balance sheet from the inception of the hedging transaction up to the date of the purchase or sale and included in the measurement. of the purchase or sale

In accordance with AIFRS, effective 1 July 2005, derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently remeasured to their fair value. The gain or loss on remeasurement to fair value is recognised immediately in the income statement, except where a derivative financial instrument is designated as a hedge of the variability in cash flows of a recognised asset or liability or a highly probable forecasted transaction, in which case the effective part of any gain or loss on the derivative financial instrument is recognised directly in equity. The ineffective part of any gain or loss is recognised immediately in the income statement.

The fair value of forward exchange contracts is calculated by reference to current forward exchange rates for contracts with smilar maturity profiles.

When the forecasted transaction, which is subject to a derivative financial instrument designated as a hedge, results in the recognition of a non-financial asset or non-financial liability or the forecast transaction for a non-financial asset or non-financial liability becomes a firm commitment for which fair value hedge accounting is applied, the associated cumulative gain or loss is removed from equity and included in the initial cost or other carrying amount of the non-financial asset or liability.

If a hedge of a forecasted transaction subsequently results in the recognition of a financial asset or a financial liability, the associated gains or losses that were recognised directly in equity are reclassified into the income statement in the same period. or periods during which the asset acquired or liability assumed affects profit or loss.

For cash flow hedges, other than those covered by the preceding two policy statements, the associated cumulative gain or loss is removed from equity and recognised in the income statement in the same period or periods during which the hedged forecast transaction affects profit or loss.

(x) Provisions

Provisions are recognised when the consolidated entity has a present legal or constructive obligation arising from past transactions or events, it is probable that a future sacrifice of economic benefits will be made, and a reliable estimate of the amount of the obligation can be made.

If the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows at a pre-tax discount rate that reflects the current market assessments of the time value of money and the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a borrowing cost. In addition, the following specific recognition criteria must also be met before a provision is recognised.

Dividends

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.

Claims provision including IBNR

The claims provision including Incurred But Not Reported (IBNR) is determined on an actuanal 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.

Restructuring

A restructuring provision is recognised when the main features of the restructuring are planned, identifying the business/locations affected, location, function and approximate number of employees, the expenditures that will be undertaken and the implementation timetable, and there is a demonstrable commitment and valid expectation that the restructuring planwill be implemented.

Onerous contracts

A provision for enerous contracts is recognised when the expected economic benefits to be derived from a contract are less than the unavoidable costs of meeting the obligations under the contract.

Surphis lease space

A provision for surplus lease space is recognised when a net obligation exists in respect of operating leases that have been identified as surplus to the consolidated entity's current requirements.

CSL Limited and its controlled entities Notes to the Financial Statements continued for the year ended 30 June 2006

Summary of Significant Accounting Policies (continued) Ã.

W 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, long service leave and other post retirement benefits.

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, are measured at their nominal amounts based on remuneration rates which are expected to be paid when the lability is settled. Long service leave and other post retirement benefits, 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 using the projected unit credit method.

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

Superannuation Plans

The consolidated entity contributes to defined benefit and defined contribution superannuation plans for the benefit of all employees. Defined benefit superannuation plans provide defined tump sum benefits based on years of service and final average salary. Defined contribution plans receive fixed contributions from the consolidated entity and the consolidated entity's. legal and constructive obligation is limited to these contributions.

A tiability or asset in respect of defined benefit superannuation plans is recognised in the balance sheet, and is measured as the present value of the defined benefit obligation at the reporting date less the fair value of the superannuation funds assets at that date and any unrecognised past service cost. The present value of the defined benefit obligation is based on expected future payments which arise from membership of the fund to the reporting date, calculated by independent actuaries using the projected unit credit method. Consideration is given to expected future wage and salary levels, experience of employee. departures and periods of service.

Expected future payments are discounted using market yields at the reporting date on national government bonds with maturity and currency that match, as closely as possible, the estimated future cash outflows. Actuanal gains and losses arising from experience adjustments and changes in actuarial assumptions are recognised in retained earnings as incurred.

Past service costs are recognised immediately in income, unless the changes to the superannuation fund are conditional on the employees remaining in service for a specified period of time (vesting period). In this case, the past service costs are amortised on a straight-line basis over the vesting period.

Future taxes that are funded by the entity and are part of the provision of the existing benefit obligation are taken into account in measuring the net liability or asset.

Contributions to defined contribution superannuation plans are recognised as an expense as they become payable.

Termination Benefits arising as a consequence of acquisitions

Liabilities for termination benefits relating to an acquired entity are recognised if a termination benefit hability of the acquired entity exists as at the date of the acquisition. Liabilities for termination benefits arising as a result of the acquisition are recognised in accordance with note 1(y).

(z) Share-based payment transactions

Under the Revised Senior Executive Share Ownership Plan and Employee Performance Rights Plan, Group Executives and Employees are granted options or performance rights over CSL Limited shares which only vest if the Company and the individual achieve certain performance hurdles.

Under the Grobal Employee Share Plan, all employees are granted the option to acquire discounted CSL Limited shares.

No employee experise is recognised in respect of options and rights granted before 7 November 2002 and/or vested before 1 lanuary 2005. The shares are recognised when the options or rights are exercised and the proceeds received allocated to share capital.

The fair value of options or rights granted after 7 November 2002 and vesting after 1 January 2005 is recognised as an employee benefit expense with a corresponding increase in equity. The fair value is recognised over the penod during which the employees become unconclitionally entitled to the options. The fair value at grant date is independently determined using a combination of the Binomial and Black Scholes option valuation methodologies, taking into account the terms and conditions upon which the options and rights were granted.

The fair value of the options granted excludes the impact of any non-market vesting conditions. Non-market vesting conditions are included in assumptions about the number of options that are expected to vest. At each reporting date, the Company revises its estimate of the number of options and rights that are expected to vest. The employee benefit expense recognised each period. takes into account the most recent estimate of the number of options and rights that are expected to vest. No expense is recognised for options and rights that do not ultimately vest, except where vesting is conditional upon a market condition.

Upon exercise of options or rights, the balance of the share-based payments reserve relating to those options or rights is transferred to share capital.

CSL Limited and its controlled entities

Notes to the Financial Statements continued

for the year ended 30 lune 2006

× Summary of Significant Accounting Policies (continued)

(aa) Contributed equity

Ordinary shares are classified as equity, incremental costs directly attributable to the issue or buy-back of shares are shown in equity as a deduction, net of tax, from equity,

(bb) Earnings per share

Basic earnings per share

Basic earnings per share is calculated by dividing the profit attributable to members, excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the year.

Diluted earnings per share

Diluted earnings per share adjusts the figures used in determination of basic earnings per share to take into account the after tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares.

Discontinued operations

Basic and diluted earnings per share attributable to discontinued operations is calculated by dividing the profit attributable. to members from discontinued operations and dividing it by the weighted average number of cridinary shares calculated for the basic earnings per share and diluted earnings per share calculations as outline above respectively.

$\bar{Z}$ Segment Information

Business Secments

The consolidated entity's primary segment reporting format is business segments. The consolidated entity operates one segment - Human Health, the principal activity being to develop, manufacture and market biopharmaceutical products to the human health industry.

The Human Health business segment has been further broken down into ZLB Behring and Other Human Health to assist with external analysis of the financial statements. Other Human Health includes CSL Pharmaceutical and CSL Bioplasma

Geographical Segments

The consolidated entity operates predominantly in three segments, being Australasia/Asia Pacific, Americas and EMEA The geographic segment of Australasia/Asia Pacific comprises Australia, New Zealand and Asia. The geographic segment of Americas includes North and South America. The geographic segment of EMEA includes Europe, Middle East and Africa.

Segment Accounting Policies

The consolidated entity accounts for intersegment sales and translers as if the sales or transfers were to third parties at current market prices.

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.

ganan mana

CSL Limited and its controlled entities Notes to the Financial Statements continued for the year ended 30 lune 2006

2 Segment Information (continued)

Business Segments	ZLB Behring 2006 \$000	Other Human Health 2006 \$000	Total Human Health 2006 \$000	AR Behring 2005 \$000	Other Human Health 2005 5000	lotal Human Health 2005 SOOC
External sales	2,445,621	403,287	2,848.908	2,195.196	413.760	2.608.965
Other external revenue	4,721	24,193	28,914	22098	578	22.676
Segment revenue	2,450,342	427,480	2,877,822	2.217.294	414,347	2.631.641
Unallocated revenue			25,710			18.618
lotal revenue			2,903,532			2.650.269
Segment results	497,947	47,902	545,849	390.182	57,721	447,903
Finance costs			(41, 517)			(36.615)
Net unallocated reveraie / expense			(5, 352)			1,195.
Profit before income tax expense and contingent consideration			498,980			410,283
Contingent consideration			(328, 515)
Profit before income tax expense			170,465			410,283
income tax expense			(53, 108)			(176, 54)
Profit from continuing operations			117,357			234.129
Profit from discontinued operations, net of tax				111111111111111111111111111111111111111		253 045
Profit attributable to members of the parent entity			117,357			487,774
Assets and liabilities				111111111111111111111111111111111111111
Secment assets	3,231,836	372,048	3,603,884	2 656 216	376.662	3.031.878
Unallocated assets			582,201			860,653
Total assets			4,186,085			3,692,531
Secment labilities	807,710	69,887	877,597	494.979	38.420	533.389
Unallocated liabilities Total habilities			1,318,684 2,196,281			1,250,607 1/84,006
Other Segment information
Segment capital expenditure	82.721	38,278	120,999	89.489	31.095	120,584
Unallocated capital expenditure			1,066			1,186
Discontinued operation capital expenditure						13.936
Total capital expenditure			122,065			135,706
Depreciation and amortisation	84,772	29,271	114,043	02,562	28.126	120,688
Unallocated depreciation and amortisation			2,021			1803
Discontinued operation depiedation and
amortsator						2.646
Total depreciation and amortisation			116,064			125.137
Other non-cash expenses		75	75	1.927	-67	1,994

MANARIANO

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CSL Limited and its controlled entities

Notes to the Financial Statements continued

for the year ended 30 June 2006.

2 Segment Information (continued)

	Australasia/		Europe, Middle
	Asia Pacific	Americas		East & Africa Consolidated
Geographic Segments	\$000	\$000	\$000	\$000
June 2006
External revenues	575.073	1.200.896	1.127.563	2.903.532
Segment assets	1,131,432	736.636	2,318,017	4,186,085
Total capital expenditure	39.703	40.000	42.362	122,065
June 2005
External revenues	-503.562	1.022.998	1123.699	2660259
Segment assets	1074905	699.822	210144	3.892.531
lotal capital expenditure	$-68.413$	-33.892	33.401	135.706

		Consolidated Entity		Patent Emity
	2006 \$000	2005 \$000	2006 \$000	2005 \$000
Revenue and expenses 3
Revenue and expenses from continuing operations
(a) Revenue Sales revenue	2,848,908	2.608.955	346.822	363.320
Other revenue
Dividend revenue
Subsidiaries			2,265	16331
Finance revenue	25,466	16,940	8,337	12,650
Rent	950	940	950	940
Royalties and licence revenue.	28,208	23.414	23,464	1077
lotal other revenues	54,624	41,294	35,016	30.998
Iotal revenue from continuing operations	2,903,532	2.650.259	381,838	394 318
Finance revenue compuses.
Interest received/receivable:
Other persons and/or corporations	25,317	16/97	8,033	11,564
Subsidiaries			165	923
Key management personnell	149	143	139	143
	25,466	16,940	8,337	12.650
(b) Other income
Government quants	1,660		1,660
Net gains on disposal of plant, property and equipment.	421	W
l'otal other income	2,081		1,660

The consolidated entity has also entered into various grant agreements relating to the development, commercialisation and
production of pharmaceutical products. The grants received are deferred until all conditions or othe the expenses that they are intended to compensate.

CSL Limited and its controlled entities Notes to the Financial Statements continued for the year ended 30 lune 2006.

a series and the series of the series of the series of the series of the series of the

			Consolidated Entity		Parent Enrity
	Mores	2006 \$000	2005. \$000	2006 \$000	2005 5000
Revenue and expenses (continued)
finance costs 桥.
Interest pard/payable
Other persons and/or corporations		34,157	29.544	4,826	387
Non-cash interest - Unwinding of discount		7.360	9211
fotal finance costs		41,517	38.815	4,826	387
(d) Depreciation and amortisation included in the income statement
Depreciation and amortisation of fixed assets.
Buildings depreciation	12	8,936	11.702	4,007	3,836
Plant and equipment depreciation	12	92,243	101.029	27,115	25,910
Leased property, plant and equipment amortisation	$12\,$	2,877	3,907
Leasehold improvements amortisation	$12^{\circ}$	950	51 110,689		20/46
fotal depreciation and amortisation of fixed assets		105,006		31,122
Amertisation of interigibles Intelectual Property	14	11,058	5.802
fotal amortisation of intangibles.		11,058	5.802		mmmme
lotal depreciation and amortisation.		116,064	122.491	31,122	20.746
(e) Other expenses
Write down of inventory to net realisable value.		14,852	26.148	3,490	981
Doubtfull debts		8,787	2.628	(74)	$^{(3)}$
Net loss on disposal of PPE			1.994	75	61
Net foreign exchange (gain)/loss		951	(543)	611	(930)
Lease payments and related expenses included 移头 in the income statement
Rental expenses relating to operating leases		34,098	41 039	1,930	1433
(g) Employee benefits expense
Salaries and wages		674,602	666.816	116,505	106, 182
Defined benefit plan (benefit)/expense	25,	14,218	(18, 199)	1,952	2,017
Defined contribution plan expense	25	19,638	14,460	9,610	8.631
Share based payments expense	22.	4,684	2.294	4,684	2.294
		713,142	663,790	132,751	110.124

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CSL Limited and its controlled entities

Notes to the Financial Statements continued
for the year ended 30 line 2006

		Consolidated Entity		Parent Ernity
Notes.	2006 \$000	2005 - 1000	2006 \$000	2005 \$400
hw ome tax Income tax expense reported in the consolidated income statement Income tax expense attributable to discontinued operations.	53,108	175,554 37.429	5,569	9516
	53,108	212.983	5,569	9.516
(a) Reconciliation of income tax expense Recognised in the income statement Current tax expense Current year	160,191	95677	6,714	12.253
Deterred tax expense
Orgination and reversal of temporary differences (lax losses recognised)/ Expense on derecognition.	(96, 638)	81192	(2, 432)	64.
of tax losses	(13, 184)	22.185
13.	(109, 822)	100.377	(2, 432)	64
Under (over) provided in prior years Income tax expense reported in the income statement	2,739 53,108	7.929 212,983	1,287 5,569	(2.801) 9.516

Recognised directly in equity Deterred tax benefit/experise Share based payments Net actuarial (gain)/loss on defined benefit plans.	6,427 6,319	(8184)	6,427 (616)	17
13. Income tax expense recognised in equity	12,746	(6184)	5,811	HJ.
(b) Reconciliation between tax expense and pre-tax oct profit The reconciliation between tax experise and the product of accounting profit before income tax multiplied by the consolidated entity's applicable income tax rate is as follows:
Accounting profit before tax from continuing operations. Accounting profit before tax from discontinued operations	170,465	410,283 290 474	21,603	64 811
Accounting profit before income tax	170,465	100(15)	21,603	64.817
Income tax calculated at 30% (2005-30%)	51,139	210.228	6,481	19.443
Research and development	(2,984)	(2,4)(4)	(2,984)	(2.404)
Non-assessable capital loss / (gain) Exempt directors received	2,073	(51, 193)	(680)	(4, 899)
Other mon-rieductible expenses / (non-assessable revenue)	7,570	9 945	1,466	177
(Utilisation of tax losses)/Unrecognised deferred tax assets	(13, 183)	22185
Effects of offferent rates of tax on overseas income-	5,754	16,293
Under/(Over) provision in prior year	2,739	1.925	1,286	(2.803)
	53,108	212.983	5,569	9.516

a a shekara Notes to the Financial Statements continued

furthe year ended 30 June 2006.

Income tax (continued)

Tax consolidation in Australia

The Company and its wholly owned Australian resident entities formed a tax consolidation group with effect from 1 July 2004 and therefore are taxed as a single entity from that date. CSL Limited is the head entity of the tax-consolidated group.

Tax effect accounting by members of the tax consolidated group in Australia

Current tax expense/income, deferred tax liabilities and deferred tax assets ansing from temporary differences of the members of the tax-consolidation group are recognised in the separate financial statements of the members of the tax-consolidation group using the 'separate taxpayer within group' approach, by reference to the carrying amounts in the separate financial statements of each entity and the tax values applying under tax consolidation.

Current tax liabilities (or assets) and deferred tax assets arising from unused tax losses of the subsidiaries are assumed by the head entity in the tax consolidation group and are recognised as amounts payable/(receivable) to/(from) other entities in the tax-consolidated group in conjunction with any tax funding arrangement amounts (refer below). Any difference between these amounts is recognised as an equity contribution or distribution.

The Company recognises deferred tax assets arising from unused tax losses of the tax-consolidated group to the extent that it is probable that future taxable profits of the tax-consciidated group will be available against which the asset can be utilised.

Tax funding arrangements and tax sharing agreements in Australia

Members of the tax-consolidated group have entered into a tax funding agreement. The tax funding agreement sets out the funding obligations of members of the tax-consolidated group. Payments are required to/from the head entity equal to the current tax hability/(asset) assumed and any deferred tax assets arising from unused tax losses assumed by the head entity. resulting in the head entity recognising an inter-entity payable/(receivable) equal to the tax liability/(asset) assumed. The Interentity payable/(receivable) is at call

Contributions to fund the current tax liabilities are payable as per the tax funding arrangement and reflect the timing of the head entity's obligation to make payments for tax liabilities to the relevant authorities.

The head entity, in conjunction with other members of the tax consolidated group, has also entered into a tax sharing agreement. The tax sharing agreement provides for the determination of the allocation of income tax llabilities between the entities should the head entity default on its tax payment obligations. No amounts have been recognised in the financial statements in respect of this agreement as payment of any amount under the tax sharing agreement is considered remote.

5 Contingent consideration on acquisition of Aventis Behring

On 31 March 2004, the consolidated entity acquired the global plasma therapeutics business of Aventis Behring, The consideration included contingent payments. A cash payment or issue of shares (at CSL Limited's discretion) in the amount of USD 125 million will be required to be made by the consolidated entity if the ordinary share price of CSL Limited is above A\$28 per share ('trigger price') for a specified future period. To satisfy this requirement, the volume weighted average share price of an ordinary share of CSL Limited must be above the trigger price for any 60 consecutive trading days during the period from 27 September 2007 to 26 March 2008.

A further cash payment or issue of strares (at CSL Limited's discretion) in the amount of USD 125 million will be required to be made by the consolidated entity if the ordinary share price of CSL United is above A\$35 per share for a specified future. period. The same requirement for the trigger price must be satisfied as mentioned above.

On 20 June 2006 the Board of Directors performed their six monthly review of the likelihood of the potential contingent payments meeting the criteria for recognition as a provision. During this review it was determined that as a result of the continued positive business performance the contingency now met the recognition criteria and accordingly a provision was raised by the Group and booked in the accounts of the acquirer, ZLB Bioplasma (Hong Kong) Limited.

Consistent with AIFRS and the company's announcement at the time of the acquisition, the provision is charged to the Income Statement at the time of recognition. To provide the reader with greater clarity of the effect of this charge on the financial statements, it has been separately shown on the face of the Income Statement. The liability is included on the balance sheet within non-current provisions (see note 19).

......................................

Discontinued operations ł.

On 28 February 2005, the consolidated entity disposed of the JRH business unit, a separate business segment, to Sigma-Aldrich
Corporation, The disposal included 100% of the voting shares in CSL US Inc, JRH Biosciences Limi

Details on the sale of the JRH businesses are as follows:

	Consolidated Entry
	2005 3400
(a) Profit after tax from discontinued operation
Pre-tax gain on sale of discontinued operation (see (b) below).	278,902
Post 1 July 2004 foreign currency translation reserve movement	(11.164)
Income tax expense	(30,051)
Gain on sale after tax	237 687
Contribution for the period 1 July 2004 to 28 February 2005 after tax (see (c) below)	15358
Profit after tax from discontinued operation	253.045
(b) Gain on sale and effect of the disposal on individual assets and liabilities of the consolidated entity
Cash and cash equivalents	(18,863)
Trade and other receivables.	(18.284)
Inventones	(113.276)
Property, plant and equipment	140.4751
Deferred tax assets	(111)
Intangible assets	(9/85)
trade and other payables	20.969
Provisions Net identifiable assets and liabilities	1,720 (1/9.344)
Consideration received, satisfied in cash.	456,246
Pre-tax gain on sale of discontinued operation.	278.902
Net cash inflow from transaction (consideration net of cash disposed)	439.363
(c) Analysis of profit and loss contribution for the period 1 July 2004
to 28 February 2005 of the discontinued operation
Sales revenue Cost of sales	140.969 (94.091)
Gioss profit	46.878
Other revenues	264.
Research and development expenses.	(4/63)
Selling and marketing expenses.	(1.470)
General and administration expenses	(9.348)
finance costs	(2.825)
Profit before income tax.	22,136
Income tax expense. ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, mmmmm Net profit after tax	(1,3/8) 15.58

(d) Cash flows for the period 1 July 2004 to 28 February 2005 of the discontinued operation Net cash flows from operating activities	(9,66)
Net cash flows from investing activities	(14.868)
Net cash flows from financing activities.
Net cash flows	[24, 4, 34]

CSL Limited and its controlled entities Notes to the Financial Statements continued

			Consolidated Entity		Parent Entity
		2006	2005	2006	2005
		\$000	4000	\$000	5000
7.	Cash and cash equivalents
	Cash at bank and on hand	384,064	258.528	28,066
	Cash deposits	369,630	46.314	149,224	461,769
		753,694	123.842	177,290	461,769
签	fracte and other receivables
	Current
	Irade receivables	538,726	502.325	35,843	29.673
	Less. Allowance for doubtful debts (i)	13,744	4.970	423	497.
		524,982	498,156	35,420	29,176
	Sundhy receivables	40,063	38.828	7,805	15.089
	Prepayments	28,634	22 244	3,036	2.419
	Receivables - wholly owned subsidiaries			49,534	24,599
	Receivables - partly owned subsidiaries			3,939
		593.679	169,227	99,734	VI.eta
	Non Current
	Related parties
	Wholly owned subsidiaries				5,148
	Partly owned subsidiaries				2 939
	Loans to key management personnel - executive directors	511	941	511	941
	Loans to key management personnel - other executives	4,937	5,041	4,937	5.443
	Leans to other employees.	5,669	0.032	5,669	4,564
	Long Term Deposits	6,556	- 3012
		17,673	14 026	11,117	20,041
	(i) Reconciliation of Allowance for doubtful debts
	Opening balance	4,170	1.642	497	500
	Additional allowance / (utilised)	8,787 787	3.901 (1,3/3)	(74)	13)
	Currency translation differences	13,744	4,170	423	497

9.	inventories
	Raw materials and stores – at cost	188,269	196,939	13,088	11.922
	Less. Allowance for diminution in value	10,139	3.516	967	159
	Raw materials and stores - net	178,130	103.424	12,121	11.763
	Work in progress - et cost	413,415	539.36	19,073	18.673
	Less. Alcwance for diminution in value	25,699	32.780 505.581	1,549	902 11111
	Work in progress - net	387,716		17,524
	Finished goods - at cost Less. Allowance for diminution in value.	423,129 15,548	265,896 18318	37,985 1,204	31.335 1,436
	Finished goods - net	407,581	247 578	36,781	20.901
		973,427	946-683	66,426	59.451

	10 Other financial assets
	Cuirent
	At fair value through the profit or loss.		sommininininin
	Managed financial assets	7,872

88888

uu miinimii

Notes to the Financial Statements continued
for the year ended 30 lune 2006

		Consolidated Frany		Parem Entity
	2006 \$000	2005 \$000	2006 \$000	2009 \$100
Cither financial assets (continued) Aon-current Available for sele financial assets. Unisted equity securities At far value through the profit or loss: Managed financial assets Investment in non-controlled entity at cost.	4,728	11,868 4.696	4,728	4.698
Shares in subsidiaries - at cost (refer note 31)			1,228,207	1.228.201
	4,728	16.566	1,232,935	1.232.906
12 Property, Plant and Equipment Land at cost Opening balance Other additions Disposals Currency translation differences	26.097 (411) 48	27.090 609 (1.602) (196)	25,030	25.030
Closing balance	25,734	26.097	25,030
Buildings at cost Opening balance Transferred from capital work in progress Other additions	196,653 24,803 264	206.448 12695	81,162 2,093	71,214 9,948
Disposals	(101)	(5,159)
Currency translation differences.	9,741	(17.33)
Closing balance Accumulated depreciation and impairment losses Opening balance Depreciation for the year Disposals	231,360 39,039 8,936 (103)	196,653 35,241 11875 (1221)	83,255 22,500 4,007	61.162 18.664 3.836
Currency translation differences	2,769	(4, 856)
Closing balance	50,641	39,039 167,614	26,507	22.500
Net book value of buildings Net book value of land and buildings	180,719 206.453	183,111	56,748 81,778	58.662 82.692
Leasehold improvements at cost Opening balance Transferred from capital work in progress Other additions	4,208 1,286 31	1168I 952 5.221	168	168
Disposals Currency translation differences	(26) (459)	(12.234) (416)	(9)
Closing balance	5,040	4,208	159
Accumulated amortisation and impairment. Opening balance Amortisation for the year Disposals	2,282 950 (17)	5,75 798 (3.473)	168 $\left( 9\right)$	168
Currency translation differences	163	1618)
Closing balance	3,378	2.282	159	168
Net book value of leasehold improvements.	1,662	1,926.

a a mara a mata a ta 1979.

a ang

annannan

CSL Limited and its controlled entities Notes to the Financial Statements continued
for the year ended 30 line 2006

MANA

		Consolidated Entry		Parent Entity
	2006 \$000	2006. sono	2006 \$000	2005 5000
12 Property, Plant and Equipment (continued)
Plant and equipment at cost
Opening balance	884,337	909.382	486,233	431,208
Transferred from capital work in progress	69,160	82.424	17,020	06,206
Other additions	18,297	29.431
Disposals	(24, 187)	(5/175)	(10, 408)	(1,270)
Currency translation differences amma	47,013	(19726)
Closing balance	994,620	604.337	492,845	486,234
Accumulated depredation and impairment
Opening balance	412,570	381.776	321,728	297.008
Depreciation for the year	92,243	102.755	27,115	25,910
Disposals	(22,151)	(27670)	(10, 128)	(1, 189)
Currency translation differences	26,641	(44.253)
Closing balance	509,303	412,570	338,715	321,729
Net book value of plant and equipment	485,317	411,161	154,130	164,505
Leased property, plant and equipment at cost
Opening balance	33,617	33.046
Other additions	256	4/41
Disposals	(116)	(731)
Currency translation differences	3,536	(2.439)
Closing balance	37,293	33.617	$\star$
mmammammamm Accumulated amortisation and impairment
Opening balance	3,741	214
Amortisation for the year	2,877	3.907
Disposals	(108)
Currency translation differences	1,371	(360)
Closing balance	7,881	W 3.741	÷	000000000000000000000000000000000000000
Net book value of leased property, plant and equipment	29,412	29.876
Capital work in progress
Opening balance	81,863	1201/0	13,205	47,420
Other additions	103,084	64,813	38,880	32,029
transferred to buildings at cost	(24, 803)	(12.695)	(2,092)	(9,948)
Transferred to plant and equipment at cost	(69, 160)	(82, 424)	(17, 020)	(56, 296)
fransferred to leasehold improvements at cost.	(1, 286)	(952)
Currency translation differences Closing balance	3,794 93,492	(1.049) 81,863	32,973	13,205
Total net book value of property, plant and equipment	816,336	$169 - 43$	268,881	261.402

CSL Limited and its controlled entities

Notes to the Financial Statements continued

,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,

1999 - Jan Jan Salam Barat dan Bandara dan Bandara dan Bandara dan Ba

for the year ended 30 line 2006.

		Consolidated Entity		Patern Ernity
	2006 \$000	2005 5000	2006 \$000	2005 \$000
13 Deferred tax assets and liabilities Deferred tax asset Deferred tox llability	187,432 (61, 767)	76,659 (16.21)	(1, 715)	(9.958)
Net deferred tax asset / (liability) (a) Deferred tax balances comprise temporary differences attributable to: Amounts recognised in the income statement	125,665	iiiiiii (1 7616)	(1, 715)	(9.958)
trade and other receivables. inventories	(7,518) 41,698	(4, 935) 21,330	449 (2,095)	(143) (1.466)
Property, plant and equipment Intangible assets	(62,066) (49, 171)	(55.637) (34,35)	(18, 797)	[20, 701]
Other accets frace and other payables	8.169 8,813	(170) 12.321	153 2,084	230 1,362
Interest bearing liabilities Other liabilities and provisions. Recognised carry forward tax losses Other	751 163,428 7,474 1,341	910 66.062 26 426	10,680	10/43
Amounts recognised in equity Other assets	112,919 6.427	6.566	(7, 526) 6,427	(0.975)
interest bearing liabilities. Other liabilities and provisions	6,319	(8184)	(616)	17
Net deferred tax asset (liability)	12,746 125,665	(8, 184) (16.8)	5,811 (1, 715)	17 (9.958)
(b) Movement reconciled Opening balance Credited/Icharged) to the income statement	(1,618) 109,882	126.653 (109, 337)	(9,958) 2,432	(9.877) (64)
Credited/(charged) to equity Acquisition of subsidiary Disposal of subsidiary	12,746	(8, 184) (712)	5,811	(17) 000000000000000000000000000000000000000
Currency translation difference Closing balance NA MARKA A A ARABA A ARABAN DA A ANG PARA ANG PANGAPALA A ANG. NG SA SA SA SA SA SA SA ARABAN ANG PANGAPANG ANG PANGAPAN. Pangang pangapang pangapang pangapang ang mangapang pangapang ang man	4,655 125,665	(12033) ്വക്ക	(1, 715)	(9.958)
(c) Unrecognised deferred tax assets Deferred tax assets have not been recognised in respect of the following. lax losses:
Expry date in less than 1 year. Expry date greater than 1 year but less than 5 years.	226	3,567
Expry date greater than 5 years. mmmmm No expry date	6,519 19,547	20,460 35,899
	26,292	59.926		mmanis

Deferred tax assets have not been recognised in respect of these items because it is not probable that future taxable profit will
be available for utilisation in the entities that have recorded these losses.

CSI, Limited and its controlled entities Notes to the Financial Statements continued for the year ended 30 June 2006

		Consolidated Entity		Parent Entity
	2006 \$000	2005 \$000	2006 \$000	2005 3000
14 Intangible Assets
(a) Carrying amounts Goodwill
Opening balance	692,591	785,380
Disposals		(9.785)
Currency translation differences	42,840	(83.004)
Closing balance	735,431	692.091	÷
Intellectual property
Opening balance	104,411	80,211	20,000	20,000
Additions		32.098
Disposals
Currency translation differences	1,438	(1,964)
Closing balance	105,849	104,411	20,000	20,000
Accurriulated amortisation and impairment
Opening balance	10,567	5/6/
Amortisation for the year	11,058	5.802
Disposals				B.
Currency translation differences	(1, 186)	(1.022)
Olosing balance	20,439	10.56T
Net intellectual property	85,410	93.844	20,000	2000
Total net intangible assets	820,841	786.435	20,000	20,000

The amortisation charge is recognised in general and administration expenses in the income statement.

(b) Impairment tests for cash generating units containing goodwill

All goodwill is related to the ZLB Behring cash generating unit.

The impairment test for the ZLB Behring cash generating unit is based on value in use calculations. These calculations use cash flow projections based on actual operating results and the three-year strategic business plan. Cash flows for a further period of 3 years have been extrapolated using a zero per cent growth rate at which point a Terminal Value is calculated based on a business valuation multiple. The valuation multiple has been calculated based on independent external analyst views, long term government bond rates and the Company's pre-tax cost of debt. Projected cash flows have been discounted by using the implied pre-tax discount rate of 9.44% associated with the business valuation multiple discussed above.

The recoverable amount of the unit significantly exceeds its carrying amount, including goodwill. It is not considered a reasonable possibility for a change in assumptions to occur that would lead to the recoverable amount failing below the units carrying amount.

a a shekarar wasan ƙwallon ƙafa ta ƙasar Ingila.

CSL Limited and its controlled entities

Notes to the Financial Statements continued

for the year ended 30 June 2006.

		Consolidated Entity		Farent Entity
	2006 \$000	2005 3000	2006 \$000	2005 \$400
15 Retnement benefit assets and habilities. Retirement benefit assets

Non-carent Defined benefit plans (refer note 25)	3,514	50.	1.840
Retirement benefit liabilities
Current defined benefit plans (refer note 25)	4,635
Non-current defined benefit plans (refer note 25).	90.588	95.667		159
Total retirement benefit liabilities	95.223	95.667		159
16 Trade and other payables
Correra
Trade payables	136,089	146,646	32,859	31.356
Accruais and other payables	252,890	251709	37,179	23.441
Payable - wholly owned subsidiaries			618,961	540.402
	388,979	398.555	688,999	595.199
17 Interest-bearing liabilities and borrowings
Current
Bank overchafts - Unsecured	5.706	4,091
Bank loans - Unsecured (a) Senior Unsecured Notes Unsecured (b)	347,333 18,993	1011
Deferred cash settlement for subsidiary acquired - unsecured (c)	80,228
Deferred cash settlement for intangibles acquired - Unsecured (d)	9,261	8.283
Lease liability - Secured (e)	2,111	1,766
	463,632	15.141	÷
Moneuren
Bank loans Unsecured (a)	139,589	451,258
Senior Unsecured Notes Unsecured (b)	317,477	324,891
Deferred cash settlement for subsidiary acquired Unsecured (c) Deterred cash settlement for intangibles acquired - Unsecured (d)	82,262 16,459	150,960 24,255
Lease lability Secured (e)	39,410	38.485
	595,197	995.839		0000000000000000000000000000000000000

(a) The consolidated entity has a global multi-currency facility of \$650 million (2005: \$650 million). During the year there were no additional draw downs under the facility. The current portion of the facility expires in March 2007, with the non-current portion expiring in March 2009. Interest is payable semi-annually in arrears at a variable rate.

(b) Represents USD250 million of Senior Unsecured Notes placed into the US Private Placement market. The Notes mature in December 2012 with interest fixed at 5.30% and 5.90%. Repayments are made biannually from December 2006 to December 2012. On 19 June 2006 USD88 million of the notes was converted into Euro 70 million via an agreement with the noteholders. The Euro notes have the same maturity profile as the USD notes, however the interest rate on the Euro notes is fixed at 3.98% and 4.70%.

CSL Limited and its controlled entities Notes to the Financial Statements continued for the year ended 30 June 2006.

17 Interest bearing liabilities and borrowings (continued).

(c) At reporting date, the company had a deferred cash settlement representing the present value of the remaining consideration payable for the acquisition of Aventis Behring, discounted at the prevailing commercial borrowing rate and payable in tranches as follows.

'ayment (USD).	Payment Date	Discount Rate
30 million i	15 Auly 2006	- 379%
30 millioni	31 December 2006		4.29%

aa mulkanii	31 December 2007	4.66%

(d) The company has deferred cash settlements for consideration payable on the acquisition of intangible assets, discounted at the incremental borrowing rate at the time of acquisition (ranging from 2% to 3.5%). Payment dates are determined in accordance with the acquisition agreements and are payable at various dates concluding in 2007.

(e) Finance leases have an average tease term of 18 years (2005: 18 years). The weighted average discount rate implicit in the leases is 6:14% (2005: 6:37%). The consolidated entity's lease liabilities are secured by leased assets of \$29.4m (2005: \$29.9m). In the event of default, leased assets revert to the lesson.

Refer to note 32 for details on the total facilities available and drawn down. Note 36 has further information about the consolidated entity's exposure to interest rate risk, foreign exchange risk and the fair value of financial assets and liabilities.

		Consolidated Entity	Parent Emity
	2006 \$000	2005 \$000	2006 \$000	2005. $-000$
18 Tax assets and habilities
Current Assets
lincome tax	6,889		6,889
Tax Liabilities
Current liability income tax	88,038	8888 37.130
Non-current income tax	5,043
Total tax liabilities	93.081	37130

gan masa sa

CSL Limited and its controlled entities

Notes to the Financial Statements continued

for the year ended 30 June 2006.

	Consolidated Enlity			Parent Emily
	2006 \$000	2005 SOOO	2006 \$000	2006 \$000
9 Provisions
Curent
contovee benefits (efer note 25).	66,237	47,198	24,805	16.717
Restruction and	10,828	23.319
Onerous contracts (ii)	4,676	2407
Surplus lease space (iii)	2,343	6.720
Other [vi]	1,801	2181	1,310	1 137
	85,885	81.891	26,115	1/848
Non-corrent
Employee benefits (refer note 25)	52,586	56.174	4,221	10 646
Onerous contracts (ii)	15,863	12.783
Stirplus lease space (iii)	948	3.844
Provision for contingent consideration on Aventis Behring. acquisition (refer Note 5 and (iv))	337,654
Claims provision including IBNR (v)	1.002	5,745	1,002	5,145
	408.053	78.546	5.223	16,391

(i) Restructuring

This provision is for restructuring.

(ii) Orierous contracts

The provision recognised is based on the excess of the estimated cash flows to meet the unavoidable costs, over the estimated cash flows to be received in relation to certain contracts, having regard to the risks of the activities relating to the contracts.

(iii) Surphus lease space

A surplus lease space provision has been recognised in respect to the net obligation payable for various non-cancellable operating leases where the leases have been identified as surplus to the consolidated entity's current requirements.

(v) Claims provision

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

Discounting

Where the effect of discounting is determined to be material to the provision, the net estimated cash flows are discounted using a pre-tax discount rate reflecting current market assessments of the time value of money and the risks specific to the lability

CSL Limited and its controlled entities Notes to the Financial Statements continued
for the year ended 30 line 2006

		Consolidated Entity		Parent Entity
	2006 \$000	2005 som	2006 \$000	2005 \$900
Provisions (continued)
Movements
(i) Restructuring
Opening balance	23,319	115,879
Additional provision		6.014
Payments made	(10,086)	(89.364)
Provision released	(3, 357)
Currency translation differences.	952	(8, 210)
Closing balance	10,828	23319
(ii) Orierous contrads
Opening balance	15,250	33/167
Additional provision	9,111
Payments made	(5,025)	(14.682)
Currency translation differences	1,203	(3,835)
Closing balance	20,539	15.250
(iii) Surplus lease space
Opening balance	10,564	14.502
Additional provision		396
Payments made	(4,908)	(2.960)
Provision released	(2,511)
Currency translation differences	146	(1.884)
Closing balance	3,291	10.664
(iv) Contingent consideration on Aventis Behring acquisition
Opening balance
Provision recognised	328,515
Currency translation differences	9,139
Clesing balance	337,654
(v) Claims provision including IBNR
Opening balance	5,745	11161	5,745	11,161
Provisions utilised	(4, 743)	(5.416)	(4, 743)	(5, 416)
Closing balance	1,002	5/45	1,002	5.745 ЩЩ
(vi) Other
Opening balance 000000000000000000000000000000000000000	2,187	4,681	1,131	1,250
Accitional provision	1,101	2.053	74,575	3127 I
Payments made	(1,539)	(4.089)	(74, 396)	(1,396)
Currency translation differences	52	(364)
Closing balance	1,801	2.18T	1,310	- 1781
20 Deferred government grants
Current deferred income	371	296	371	296
Non-current deferred income	4,093	2664	4,093	2,664
	4,464	2.960	4,464	2.960

mik WW

,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,

Maria Maria Bara

Notes to the Financial Statements continued

for the year ended 30 June 2006

			Parent Entity
	2006	2006	2005
	\$000	\$000
21 Contributed cauty
Ordinary shares issued and fully naid.	994.101	994.101

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. Ordinary shares entitle their holder to one vote, either in person or proxy, at a meeting of the company.

		2006		2005
	Number of shares	\$000	Number of shares.	5000
Movement in ordinary shares on issue
Opening balance	188,272,370	1.223.466	196 448 377	1.502.417
Share buy back, inclusive of cost (i)	(8,000,000)		$(281,538)$ (10,000,000)	1317 TOUT
Shares issued to employees through participation in SESOPJIII	1,553,870	49.917	GR5-2101	15.628
Shares issued to shareholders though participation. in Dividend Recruestment Plan (III)			770457	21.442
Shares issued to employees through participation in GESP (iv)	62.779	1.794	-68.326	1.342
Share Based payments reserve transfer (see note 22).		462		432
Closing balance	181,889,019	994.101	188.272.370	1,223,466

MANAGEMENT SERVICE SERVICE SERVICE

(i) As part of its continuing capital management program, the Company purchased 8,000,000 ordinary shares on market
at an average price of \$35.16 per share, with prices ranging from \$34.25 to \$36.44. The share buy back was

During March, April and May 2005, the Company purchased 10,000,000 crdinary shares on market as part of its ongoing capital management program. Of these 8.871.306 were cancelled prior to 30 June 2005 and 1,128.694 cancelled
subsequent to 30 June 2005. The share buy back was approved by the Board on 22 February 2005. The shares were acquired at an average price of \$31.76 per share, with prices ranging from \$28.57 to \$35.05.

		Consciidated Entity		Parem Erany
	2006 \$000	2005 \$000	2006 \$000	2005 3400
(ii) Options exercised under SESOP II as disclosed in note 25 were as follows:
0 issued at \$8.93		893		893
0 Issued at \$10.82		631		631
52,200 issued at \$12.19	636	1.398	636	1.398
$0$ issued at $\$13.23$		$-1.102$		5.192
17,000 issued at \$20.84	354	1417	354	1411
12,000 issued at \$21.01	252	1008	252	1.008
40,000 issued at \$23.07	923	3.691	923	3.691
459,610 issued at \$27.97	12,855	420	12,855	420
467.589 issued at 134.04	15,917	976	15,917	978
18,000 issued at \$20.67	372		372
24.800 Issued at \$49.94	1,239		1,239
462 680 issued at \$37.54	17,369		17,369
	49,917	15.628	49.917	15.628
(iii) Shares issued to shareholders under the Dividend Reinvestment Plan		21.442		21.442
		21.442	٠	21,442

CSI, Limited and its controlled entities Notes to the Financial Statements continued for the year ended 30 June 2006.

		Consolidated Emiry	Parent Entity
	2006 \$000	2005. SOUG	2006 \$000	2005 %000
21 Contributed equity (continued) (iv) Shares issued to employees under Global Employee Share Plan (GESP) as disclosed in note 26 were as follows:
$-29.789$ issued at $$27.59$ on 9 September 2005	822	649	822	549
- 32,990 issued at \$29.46 on 8 March 2006	972	793.	972	793
	1,794	1.342	1,794	1.342
22 Reserves
Share based payments reserve (I)	13,452	2803	13,452	2.603
Net unrealised gains reserve (ii)	(101)		(101)
Foreign currency translation reserve (iii)	(69, 118)	(185.809)
	(55, 767)	(183,006)	13,351	2,803
Movement reconciliation
(i) Share based payments reserve
Opening balance	2,803	941	2,803	941
Share based payments expense Deferred tax on share based payments	4,684 6,427	2.294	4,684 6.427	2,294
transfer to contributed equity	(462)	(432)	(462)	(432) !!!!!!!!!!
Closing balance	13,452	2.803	13,452	2.803
(ii) Net unrealised gains reserve
Opening balance
Unrealised rosses on revaluation of available for sale investments	(101)		(101)
Crosing balance	(101)		(101)
(iii) Foreign currency translation reserve Opening balance	(185, 809)
Net exchange gains/losses) on translation of foreign subsidiaries, net of hedge	116,691	(196,973)
Realised exchange loss on disposal of foreign subsidiaries reclassified to the income statement, net of hedge		11 164
Closino balance	(69.118)	(185, 809)		8888888

Nature and purpose of reserves

(i) Share based payments reserve

The share based payments reserve is used to recognise the fair value of options, performance rights and global employee share plan rights issued but not exercised. Amounts are transferred to contributed equity when options and other equity instruments are exercised.

(ii) Not unrealised gains reserve

The net unrealised gains reserve is used to recognise the cumulative changes in the fair value, net of tax, of investments that are classified as available for sale. Amounts are recognised in profit or loss when the associated assets are sold or impaired.

(iii) Foreign currency translation reserve

The foreign currency translation reserve is used to record exchange differences arising from the translation of the financial statements of foreign operations and exchange gains and losses arising on those foreign currency borrowings which are designated as hedging the Company's net investment in foreign operations.

CSL Limited and its controlled emities

Notes to the Financial Statements continued
for the year ended 30 line 2006

		Consulidated Fritty		Patent Entity
	2006 \$000	2005 \$990.	2006 \$000	2005 SOM.

23 Retained earnings
Opening balance	1,068,065	681377	258,067	287.684
Net profit for the year	117,357	481.174	16,034	55,295
Dradends	(124, 394)	(84, 950)	(124, 394)	[64,950]
Actuarial gain/(loss) on defined benefit plans	(15, 877)	(24, 320)	2,053	55
Deferred tax on actuanal gain/(loss) on defined benefit plans	6,319	$6 - 184$	(616)	(17)
Closing balance	1,051,470	1.068.065	151,144	258.067
(a) Dividends paid
Dividends recognised in the current year by the Company are:
Final ordinary dividend of 30 cents per share, fully franked,
paid on 10 October 2005 (2005: 26 cents per share, fully franked)	55,113	51,249	55,113	51,249
Special dividend of 10 cents per share, tranked to 1.78 cents, paid on 10 October 2005 (2005: Nil cents per share)	18,371		18,371
Interim ordinary dividend of 28 cents per share, unfranked,
paid on 13 April 2006 (2005: 17 cents per share, fully franked).	50,910	33/101	50,910	33.701
	124,394	84.960	124,394	84.950
(b) 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 40 cents per share, unfranked (2005; ordinary dividend of 30 cents per
share fully franked, special dividend of 10 cents per share franked
to 1.78 cents per share). The acgregate amount of the proposed dividend, based on the number of shares on issue at the date of
this report, is expected to be paid on 13 October 2006 out of
retained earnings at 30 June 2006, but not recognised as a liability	72,756	13,538	72.756	13.538
(c) Tranking credit balance
There are no amounts 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
debts attaching to the final dividend not recognised at year end.

24 Loury
lotal equity at the beginning of the financial year.	2,108,525	2 184 135	1,484,336	291,042
lotal recognised income and expense for the year attributable to equity holders.	224,389	274 665	17,370	56.333
Movement in contributed equity	(229, 365)	(278.201)	(229, 365)	(278.951)
Dividends	(124, 394)	(84,950)	(124, 394)	(84.950)
Realised exchange differences on disposal of foreign subsidiaries
reclassified to the income statement, net of hedge		11,164
Movement in share based payments reserve lotal equity at the end of the financial year.	10,649 1,989,804	1.662 2,108,525	10,649 1,158,596	1.862 484 336

8888888888

CSL Limited and its controlled entities Notes to the Financial Statements continued for the year ended 30 June 2006.

		Consolidated Entity		Parent Entity
Mores	2006 \$000	2005 4000	2006 \$000	2005 9000
25 Employee benefits
A reconciliation of the employee benefits recognised is as follows:
Retrement benefit assets - non-current (note 15)	3.514	-50	1.840
Retrement benefit labilities - current frote 151	4,635
Provision for employee penefits - current innie 19)	66.237	47.198	24,805	16.717
Retrement benefit lianities - non-current mote 15)	90.588	95.667		159.
Provision for employee benefits - non-current (note 19)	52.586	56.174	4.221	10.646
lotal employee benefits liabilities.	214.046	199.039	29,026	27.522
The number of full time equivalents employed at 30 June.	7.575	6.474	1.427	1253.

(a) Defined benefit plans

The consolidated entity sponsors a range of defined benefit superannuation plans that provide pension benefits for its worldwide. employees upon retirement. Entities of the consolidated entity who operate the defined benefit plans contribute to the
respective plans in accordance with the Trust Deeds, following the receipt of actuarial advice.

		Consolidated Entity	Parent Fraity
	2006 \$000	2005 \$000	2006 \$000	2005 \$000
Movements in the net liability/(asset) for defined benefit obligations recognised in the balance sheet
Net liability/(asset) for defined benefit obligation:
Opening balance	95.617	115,565	159	533
Contributions received	(38, 732)	(11.879)	(1,898)	(2,336)
Benefits paid	(1, 849)	(1888)
Expense/(benefit) recognised in the income statement (refer below).	14.218	(18,799)	1,952	2.017
Actuarial (gams)/losses recognised in equity	15,877	24 320	(2,053)	(55)
Liabilities transferred	60	(171)
Currency translation differences	6,518	(11.531)
Closino balance	91.709	96.617	(1, 840)	158
Net hability/(asset) for defined benefit obligation is reconciled to the balance sheet as follows:
ketirement benefit assets - non-current (note 15)	(3, 514)	1501	(1, 840)
Retrement benefit labilities - current frate 15)	4,635
ketirement benefit liabilities - non-current mote 15)	90.588	95.661		169
Net lability	91.709	98.617	(1, 840)	159
Amounts for the current and previous periods are as follows:
Defined benefit collgation	477,637	421,658	26,903	26.199
Plan assets	385.928	325.941	28,743	26,040
Surplus/Ideficit)	(91, 709)	(96.61J)	1,840	---------------------------------------
Experience adjustments on plan liabilities	(10, 562)	(30,269)	959	11.1 I S)
Experience adjustments on plan assets	(5, 316)	5,969	1.094	11 ZO
Actual return on plan assets	11,924	25.129	2,910	2812

The consolidated entity and the Company have used the AASB 1 exemption and disclosed amounts under AASB 1 20A(p)
above for each annual reporting period prospectively from the AIFRS transition date (1 July 2004).

CSL Limited and its controlled entities

Notes to the Financial Statements continued
for the year ended 30 June 2006

		Consolidated Entry		Parem Entity
	2006	2005	2006	2005
	\$000	:000	\$000	\$000
25 Employee benefits (continued)

(a) Defined benefit plans (continued)
Changes in the present value of the defined benefit obligation are as follows:

Opening balance	421,558	453,397	26,199	24.207
Service cost	14,514	18,752	2,627	2.412
interest cost	16,006	19.643	1,141	1,241
Contributions by members	3,086	3,769
Actuarial (gains)/losses	10,562	30,289	(959)	1,116
(Gains)/losses on curtalments		(41623)
Benefits paid	(12, 837)	(16, 542)	(1,593)	(2.225)
Otter inovernents	486	(723)	(512)	(557)
Currency translation differences	24,262	(45, 399)
Closing belance	477,637	421.556	26,903	26.199
The present value of the defined benefit obligation comprises:
Present value of wholly unit inded obligations	81,034	63.281
Present value of funded obligations	396,603	358.271	26,903	26.199
	477,637	421.556	26,903	26,199
Changes in the fair value of plan assets are as follows:				▒
Opening balance	325,941	337 832	26,040	23674
Expected return on plan assets	17,240	19,160	1,816	1642
Actuanal gains/(losses) on plan assets	(5, 316)	5.969	1,094	1120
Contributions by employer	38,732	11.879	1,898	2,336
Contributions by members	3,087	3/169
Benefits paid	(10, 988)	(14,654)	(1, 593)	(2, 225)
Gans/Josses) on curtailments		(3, 589)
Other movements	(512)	(557)	(512)	(557)
Currency translation differences	17,744	(32.868)
Closing belance	385,928	325,941	28,743	26.040
The major categories of plan assets as a percentage of total
plan assets is as follows:
Cash	15.7%	0.4%	8.1%
Equity instruments	28.9%	48.4%	59.9%	60.1%
Debt insulaments	44.8%	38.6%	22.3%	10.2%
Property	8.8%	10.3%	9.7%	29.1%
Other assets	1.8%	23%
	100.0%	100.0%	100%	100.0%
Expenses/(gains) recognised in the income statement are as follows:
Current service costs	14,514	18.762	2,627	2,412
	16,006	19.643	1,141	1.241
Interest on obligation
Expected return on assets Losses/(gains) on curtailments and settlements	(17, 240)	(10,160) (38.034)	(1, 816)	(1.642)
Past service costs	938
	14,218	(16 799)	1,952	2,017
The defined benefit plan expenses/(gains) are recognised in general and administration expenses in the income statement.

,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,

,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,

$\mathbb{S}4$ CSL Limited Annual Report 2005-2006

CSL Limited and its controlled entities Notes to the Financial Statements continued for the year ended 30 line 2006

2006 2005 2006 2005	Consolidated Entity		Parent Entity
	\$000	\$000	\$000	5000
25 Employee bondits (continued)
(a) Defined benefit plans (continued) The principal actuarial assumptions at the balance sheet date (expressed as weighted averages) are as follows:
45% 4% 4.9% 4.2% Discount rate
6.2% 7.0% 7.0% 5.8% Expected return on assets and expected long-term rate of return on assets.
5.0% 2.4% 2.6% 5.0% Future salary increases
0.2% 0.6% 5.0% Future pension increases

The expected long-term rate of return is based on the portfolio as a whole and not on the sum of the returns on individual asset categories.

Surplus/(deficit) for each defined benefit plan on a funding basis

			Plan	Contribution
	Plan assets'	Accrued benefit ¹		surplus/ recommended
			(deficity)	${per\, year}$ ^2.3
Consolidated Entity - June 2006
CSL Superannuation Plan (Australia)*	28.743	(26, 903)	1.840	2,093
ZEB Bioplasma AG Pension Fund (Switzerland)	222,181	(220, 506)	1.675	8,433
ZEB Behring Pension Plan (US PP)	82.102	(86, 657)	(4, 555)	4,555
ZEB Behring Uaion Pension Plan (US UPP)	52,902	(62, 537)	(9,635)
ZLB Behring GmbH Pension Plan (Germany).	٠	(69, 779)	(69, 779)
ZEB Pharma GmbH Peasion Plan (Germany)		(1,819)	(1, 819)
ZLB Behring KG Pension Plan (Germany)		(2,932)	(2, 932)
ZLB Plasma Services GmbH Pension Plan (Germany)		(146)	(146)
ZEB Behring KK Retirement Allowance Plan (Japan)	٠	(6, 358)	(6, 358)
	385,928	(477, 637)	(91,709)	15,081
Consolidated Entity - June 2005
CSL Superannuation Plan (Australia)	26,040	(26.199)	(159)	2,113
ZLB Bioplasma AG Pension Fund (Switzerland)	193.689.	(193,638)	50.	8 386
ZLB Behring Pension Plan (US PP)	62158	173.1901	111.0321
ZLB Behring Union Pension Plan (US UPP)	44.055	(65.244)	(21, 180)
2LB Behring GmbH Pension Plan (Germany)		${1,4,144}$	454 144
ZLE Pharma GmbH Pension Plan (Germany)		(1.472)	(1.472)
ZLB Behring KG Pension Plan (Germany)		(1.879)	(1.870)
2LB Plasma Services GmbH Pension Plan (Germany)		(120)	(120)
ZLB Behring KK Retirement Allowance Plan (Japan)		(SC/2)	(5,6/2)
	325.941	(421.558)	195 B I A	10499

Plan assets at net market value, and accrued benefits have been calculated at 31 May 2006 (prior year: 30 June 2005),
being the date of the most recent financial statements of the plans.

Genetally contribution recommendations for actively funded plans is based on a methodology that will achieve
and maintain a target level of 100% - 105% coverage of vested defined benefit liabilities. The level of contribut

The principal economic assumptions used in making these recommendations include.

	Consolidated Entity	Parent Emma
	2006 2005.	2006 2005
	\$000	\$000
Expected return on plan assets.	5.8%	7.0%
Full the salary moreases.	2.6%	5.0%

The CSL Superannuation Plan (Australia) is also the defined benefit plan of the parent entity On 1 June 2006 the
CSL Superannuation Plan ceased operation as a stand alone fund. The Assets and Liabilities of the Plan were t

CSL Limited and its controlled entities Notes to the Financial Statements continued

for the year ended 30 June 2006.

25 Employee benefits (continued)

(b) Defined contribution plans.

The consolidated entity and parent entity makes contributions to various defined contribution superarmuation plans. The amounts recognised as an expense for the year ended 30 June 2006 was \$19,638,000 and \$9,610,000 respectively (2005) \$14,480,000 and \$8,631,000il

26 Share based payments

(a) Share based payment schemes

The Company operates the following schemes that entities key management personnel and senior employees to purchase shares in the company.

Serior Executive Share Ownership Plan (SESOP)

The Company has an option arrangement (Senior Executive Ownership Plan (SESOP)) where options were granted before 7 November 2002. AASB 2 has not been applied to these options in accordance with the transitional provisions of AASB 1. There are no outstanding SESOP opticns, however some interest free loans associated with exercised options remain (refer note 8 for details)

Revised Senior Executive Share Ownership Plan (SESOP II)

The establishment of the SESOP II plan was approved by special resolution at the annual general meeting of the Company on 20 November 1997.

Under the rules of SESOP II no loan is made to the recipients of options until the option is exercised. Consequently, no amounts are recorded in receivables until the option is exercised.

The options are issued for a term of seven years and begin to be exercisable after the third anniversary of the date of grant The options cannot be transferred and are not quoted on the ASX

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.

AASB 2 has only been applied to those options that were issued after 7 November 2002 in accordance with the transitional provisions of AASB 1.

Employee Performance Rights Plan (Performance Rights)

The establishment of the Employee Performance Rights Plan (Performance Rights) was approved by special resolution at the annual general meeting of the Company on 16 October 2003.

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.

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 Rights may become Vested Performance Rights if the Company satisfies specified Performance Hurdles during specified Performance Periods. The Performance hurdle is 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 is 3 years (or, if not fully met after 3 years, then 4 years or 5 years) with the Test Dates occurring at the end of Years 3, 4 and 5. The Performance Flurdies will cascade' 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 Test 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.

No loans are provided by the Company in relation to the grant of Performance Rights to, or exercise of Performance Rights by employees under the Performance Rights Plan.

Global Employee Share Plan (GESP).

Global Employee Share Plan (GESP) also operates whereby 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.

26 Share based payments (continued)

(b) Outstanding share based payment equity instruments

The number and exercise price for each share based payment scheme outstanding is presented as follows. All options are settled by physical delivery of shares.

	Opening					Closing	Exercise	Expiry	Vested at
June 2006	Batance	Granted	Exercised	Forfeited	Lapsed	balance	Price	ďate	30 June 2006
SESOP II (by grant date)
16 November 1999*	17,000		(37,000)				\$20.84	16-Nov-06
28 February 2000*	12,000		(32,000)				\$23.01	28-Feb-07
9 February 2000*	40,000	$\overline{a}$	(40,000)			$\overline{a}$	\$23.07	09-Feb-07
2 August 2000*	558,980	Ĭ.	(467, 580)	(41, 100)		50,300	\$34.04	02-Aug-07	50,300
20 June 2003*	634,400		(462, 680)	(28, 300)		143,420	\$37.54	20- kun-08	143,420
21 August 2001*	90,000					90,000	\$49.31	20-Aug-08	90,000
23 August 2001*	126,000			(41,000)	×,	85,000	\$37.54	22-Aug-08	85,000
18 October 2001*	5,000			(5,000)	ł,		\$43.51	20-Aug-08
10 December 2001*	63,000		(24, 800)			38,200	\$49.94	09-Dec-08	38,200
28 January 2002*	20,000			(20,000)		$\overline{\phantom{a}}$	\$47.20	28- i an-09
23 July 2002*	1,013,700	L	(459, 610)		í,	554.090	\$27.97	23-lui-09.	554.090
16 October 2002*	30,000	$\overline{a}$	(18,000)		÷,	32,000	\$20.67	16-Oct-09	12,000
1 July 2003	392,900		(52,200)			340,700	\$12.39	03-kil-10
	3,002,980		$-$ {1,553,870}	(135, 400)		$-1,313,710$
Performance Rights (by grant date)
16 October 2003	50,000					50,000	翘	27-Oct-10
15 December 2003	128,600				L,	128,600	娴	27-Oct-10
28 April 2004	60,000					60,000	翅形	31-Mar-11
21 June 2004	132,300			(15,700)		116,600	翘	31-Mar-11
29 October 2004	83,400			(800)	J.	82.600	掴	25-Aug-13
15 July 2005	÷,	55,000			Ĭ.	55,000	娴	07-lan-12
7 September 2005		346,750		(8,000)		338,750	刘雨	07-Jun-12
7 March 2006		52,500				52,500	翘	20-Dec-12
6 April 2006		40,850				40,850	翘	20-Dec-12
	454,300	495,300		(24, 500)	$\overline{a}$	924,900
GESP (by grant date)
1 March 2005	29.789	$\overline{\phantom{a}}$	(29, 789)				\$27.59	31-Aug-05
1 September 2005	$\overline{a}$	32,990	(32,990)			$\frac{1}{2}$	\$29.46	28-Feb-06
1 March 2006#	$\overline{\phantom{a}}$	22,072				22,072	\$44.17	31-Aug-06
	29,789	55,062	(62, 779)	×,		22,072
Total	3,487,069		550,162 (1,616,649)	(159.900)		$-2.260.682$

* AASB 2 has not been applied to these options as they were issued before 7 November 2002.

As noted above, the exercise price at which GESP plan shares are issued is calculated at a 15% discount to the lower of the ASX inarket price on the first and last dates of the contribution period. Accordingly the exerci

The weighted average share price at the dates of exercise, by equity instrument type, is as follows:
SESOP B	847.99
Performance Rights
GESP	\$44.18 .

CSL Limited and its controlled emities Notes to the Financial Statements continued for the year ended 30 line 2006.

26 Share based payments (continued)

(b) Outstanding share based payment equity instruments (continued).

ltne 2005	Opening Gatanee	Granted Exemised Fortened	Lapsed	Closing balance	Exercise Price	Expiry ann.	Vested at 30 have 2005
SESOP II (by grant date)
20 November 1997 ⁴	100,000	(100,000)			-68.93	20 Nov-04
14 kuly 1998 ⁴	68.310	52.310			\$10.82	14-11-05
13 kily 1990*	392,480	(392, 480)		88	\$13.23	13-дл-06
16 November 1999	85,000	(68.000)	41	17,000	\$20.84	16 Nov 06	17000
28 February 2000*	60,000	(48.000)		12,000	\$21.01	$28 - 60$	12.000
9 February 2000	200,000	(160,000)		40,000	\$23.07	09-feb-07	40,000
2 August 2000*	612.700	(28/20) ŗ,	(25,000)	568.980	\$34.04	$02 - A_{11} 07$	558,080
20 June 2001 *	649,500		115,7001	634 400	\$37.64	20 Am 08	634.400
21 August 2001*	90.000			90,000	\$49.31	20-Aug-08	9000
23 August 2001*	198,000		(12,000)	126,000	\$37.54	22-Aug-08	126,000
18 October 2001 f	5.000			5,000	\$43.61	20 Aug-08	6000
10 December 2001 f	91000	SIINININININSSE	(28,000)	63.000	\$49.94	09 Dec-08	63,000
28 Ianuary 2002	20.000			20.000	34/20	28-fan-09	20,000
23 July 2002*	1,091,200	(15,000)		162.500) 11013 700	\$2191	23-10109	1.013,700
16 October 2002 ^*	30.000			30,000	\$20.67	16-0at-09	30.000
1 July 2003	507,600	(114,700)		392 900	\$12.19	01-a1-10
	4,190,790	(985,210) (202,600) 3,002,980					2.610.080
Performance Rights (by grant date)	mmmm
16 October 2003	50,000			60,000	ΝIΙ	$270$ ch $10$
15 December 2003	153,000		124.4001	125,600	ΝIΙ	$27 - 0 + 10$
28 April 2004	60.000			60.000	NI.	31 Mar 11
21 lune 2004	132,300			132,300	NJ	31-Mar 11
23 October 2004	W.	83.400		83.400	NI.	25 Aug 11
	395,300	83.400	(24.400)	454.300
GESP (by grant date)
1 September 2004		35.895 (35.895)			\$22.09	28-Feb-06
1 Marth 2006#	800028	29.789 wana		29.789	27.52	31-Aug-06
		65.664 (35,800)		29.789
llotal	4.586.090	149.084.(1,021,105)	(227.000) 3.487.069

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$^*$ AASB 2 has not been applied to these options as they were issued before 7 November 2002.

As noted above, the exercise price at which GESP plan shares are issued is calculated at a 15% discount to the lower of the ASX
market price on the first and last dates of the contribution period. Accordingly the exercis issued is not yet known (and may differ from the assumptions and fair values disclosed below). The above disclosures are estimated based on information available as at 30 June 2005.

The weighted average share price at the dates of exercise, by equity instrument type, is as follows:











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Performance Rights and Committee Rights












			All Andrew Communications



YAKKO .	---------------------------------------

,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,

CSL Limited and its controlled entities Notes to the Financial Statements continued for the year ended 30 June 2006.

26 Share based payments (continued)

(c) Valuation assumptions and fair values of equity instruments granted

The fair value of services received in return for equity instruments granted are measured by reference to the fair value of equity instruments granted. The estimate of fair value of the services received is measured based on a combination of the Binomial and Black Scholes option valuation methodologies. The expected vesting period of equity instruments is also used as an input into the valuation model applied.

The following tables summarise the assumptions and fair values of unexercised equity instruments issued after 7 November 2002.

						Expected	Risk free
	Fair Value ^®	Share Price	Exercise Price	Expected volatility ²	Life assumption	dividend vield	interest rate
SESOP II (by grant date)
1 July 2003	\$4.58	\$12.08	\$12.19	37.0%	3-5 years	2.5%	5.60%

Performance Rights (by grant date)
16 October 2003	\$10.52	\$16.25	Ni	37.0%	4 years	2.5%	5.61%
15 December 2003	\$11.33	\$17.51	Ni	37.0%	4 years	2.5%	5.79%
28 April 2004	\$15.14	\$22.91	Ni	35.0%	4 years	2.0%	5.71%
23 June 2004	\$14.34	\$21.72	Ni	34.0%	4 years	2.0%	5.63%
29 October 2004	\$20.69	\$28.80	Ni	34.0%	4 years	2.0%	5.32%
15 July 2005	\$24.53	\$34.90	Ni	27.0%	4 years	3.5%	5.19%
7 September 2006	\$24.40	\$34.75	Ni	27.0%	4 years	1.5%	5.10%
7 March 2006	\$43.58	\$53.25	Ni	27.0%	4 years	1.5%	5.37%
6 April 2006	\$42.97	\$53.41	Νß	27.0%	4 years	1.5%	5.51%

GESP (by grant date) ³
1 September 2004	\$5.97	\$26.03	\$22.09	34.0%	6 months	2.0%	5.70%
1 March 2005	\$7.60	\$33.11	\$28.14	34.0%	6 months	2.0%	5.70%
1 September 2006	\$6.19	\$34.52	\$29.46	27.0%	6 months	1.5%	5.10%
1 March 2006	\$10.89	\$51.97	\$44.17	27.0%	6 months	3.5%	5.37%

Equity instruments are granted under a service condition and, for equity instruments issued under the SESOP II plan, a non-market performance condition. Such conditions are not taken into account in the grant date fair value measurement of the services received. The market conditions associated with equity instruments issued under the SESOP II and Performance Rights plans are incorporated into the determination of the fair value at grant date.

The expected volatility is based on the historic volatility (calculated based on the remaining life assumption of each equity instrument), adjusted for any expected changes to future volability due to publicly available information.

The fair value of GESP equity instruments is estimated based on the assumptions prevailing on the grant date. In accordance with the terms and conditions of the GESP plan, shares are issued at the lower of the ASX market price on the first and last dates of the contribution period.

for the year ended 30 lune 2006.

27 Key management personnel disclosures.

The following were key management personnel of the consolidated entity at any time during the reporting period and unless otherwise indicated were key management personnel for the entire period.

Executive directors

B A McNamee (Chief Executive Officer and Managing Director)

A M Cipa (Finance Director)

Non-executive directors

P H Wade (Chairman)

J Akelurst

MIRSS

E.A. Alexander and the contract of the contract of the contract of the contract of the contract of the contract of the contract of the contract of the contract of the contract of the contract of the contract of the contrac

LA Renard

M A Renshaw

K I Roberts

1 Shine (appointed 1 June 2006) [1999] [1999] [1999] [1999] [1999] [1999] [1999] [1999] [1999] [1999] [1999] [1999] [1999] [1999] [1999] [1999] [1999] [1999] [1999] [1999] [1999] [1999] [1999] [1999] [1999] [1999] [1999] [

A C Webster

Executives

P Turner (President, ZLB Behring)

C Armit (President, CSL Pharmaceutical)

P Bordonaro (President, CSL Bioplasma)⁴

A Curinbertson (Chief Scientific Officer)

P Turvey (Company Secretary and General Counsel)

K Milroy (General Manager, Human Resources)⁶

1 Glaria (President, CSL Bioplasma)*

A von Bibra (General Manager, Human Resources ).⁶

⁺ During the year the role of President of CSL Bioplasma transitioned from Mr Bordonaro to Mr Giarla.

maanaalassa massa

⁴ During the year the role of General Manager of Human Resources transitioned from Mr Milroy to Ms von Bibra. The disclosures below for Ms von Bibra are for the period from 23 January 2006 to 30 June 2006.

animilli

CSL Limited and its controlled entities Notes to the Financial Statements continued for the year ended 30 June 2006.

27 Key management personnel disclosures (continued)

2002/02/02/02/20

Total compensation for key management personnel

		Consolidated Entry		Parent Entity
	2006 \$	2005 Ķ.	2006 \$	2005 Ϋ́.
Short term
Salary and Fees.	6,192,904	6 319 102	5,306,879	6,310,610
Short term incentive cash corius.	4,271,247	5.034.110	3,384,564	4271670
Non-monetary benefits	365,655	286.591	331,271	282.419
lotal.	10,829,806	11 639 803	9,022,714	9864699
Post-employment
Superannuation benefits	520,348	446,034	441,652	367,834
fotall	520.348	446.094	441.652	367,834
Other long-term - Long service leave and equivalents	447.035	652,321	361,843	256.381
Share-based payments
Equity settled shares / units	1,625,820	720,877	1,416,676	637,363
Equity settled options / nants	998,719	903.581	840.379	703.579
	2,624,539	1.624.458	2,257,055	1,340,942
Total	14,421,728	14.362676	12,083,264	1.820.856

The consolidated entity has applied the relief granted in Regulation 2M of the Corporations Act to disclose certain compensation
Information required by AASB 124 Related Parties Disclosure in respect of key management pers

Loans to key management personnel and their related parties (consolidated entity)

Details regarding the aggregate of loans made, guaranteed or secured by any entity in the consolidated entity to key management personnel and their related parties, and the number of individuals in each group, are as follows:

		Opening balance S.	Interest charged	Closing balance ¢,	Mumber ли скоша:
Total for key management personnel	2006	5.982.000	149.000	5.385.000	10.
	2005	3.812.000	143.000	5,982,000	12.
Total for other related parties	2006				$\sim$
	2005.
Total for key management personnel	2006.	5.982.000	149.000	5,385,000	10.
and their related parties	2005.	3.812.000	143000	5,982,000	12.

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CSL Limited and its controlled entities. Notes to the Financial Statements continued

for the year ended 30 June 2006.

27 Key management personnel disclosures (continued)

Loans to key management personnel and their related parties (continued)

Details regarding loans outstanding at the reporting date to key management personnel and their related parties at any time during the reporting period, are as follows.

	Balance at 1 huw 2005	Interest charged.	Balance at 30 June 2006	Haghest owner in pernod	interest rat charged.
		X.	s
Executive Directors
B A McNamee	893.000	36.000	447,000	893.000	18.000
A M Cipa	48.000	2000	46.000	48.000	2.000
Key Management Personnel
Patranec	110.000	4.000	310,000	110.000	4.000
C. Armit	2537000	40.000	1,615,000	3,460,000	62.000
P Bordonaro	330.000			330.000	2000
A Cuthberson	1.008.000	37.000	1.513,000	1,784,000	91.000
P Luvey	593.000	20.000	1.702,000	1702,000	50.000
K MILOV	463,000			463,000	3.000
A von Bibra
1 Giana		11.000

mmmmmm

All of the loans relate to SESOP and SESOP II under which key management personnel were provided with loans to fund the exercise of options. SESOP was terminated by the Company and there are no longer any outstanding options under this plan. No grants of options have been made under SESOP II since July 2003.

Loans to key management personnel relating to SESOP are interest free. Loans relating to SESOP II are charged interest at a concessional average rate of 2.5%. This is based on interest being charged equivalent to the after tax cash amount of dividends on the underlying shares (excluding the impact of imputation and assuming a marginal income tax rate of 48.5%). The average commercial rate of interest during the year was 7.82%.

Other key management personnel transactions with the company or its controlled entities

The key management personnel and their 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 at arm's length in similar circumstances.

The Company has a number of contractual relationships, including property leases and collaborative research arrangements. with the University of Melbourne of which Mr lan Renard is the Chancellor and Miss Elizabeth Alexander is the Chair of the Finance Committee and a member of the Council.
* 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.

CSL Limited and its controlled entities Notes to the Financial Statements continued for the year ended 30 June 2006.

27 Key management personnel disclosures (continued)

Options and rights over equity instruments granted as compensation The movement during the reporting period in the number of options and rights over ordinary shares in the Company held directly, indirectly or beneficially, by each key management person, including their related parties, is as follows:

SESOP and SESOPIE Quaems	Balarice at 1 luly 2005	Mumber Exercised	Balance at 30 June 2006	Munber vested during the year	Vested and exercisable at 30 June 2006
Executive Directors
B A McNamee
А М Ста	75.000.	50.000	25.000	15.000	25.000.
Executives
Patrick	175.000	145000	30.000	65.000
C Arrut	90.000	40.000	50,000	70.000	30.000
P Bordonaro	76.000	75.000		15.000
A Cuthbertson	87.000	57.000	30,000	57,000
Pillurvey	100.000	80.000	20,000	40.000
K Miroy	70.000.	28.000	42,000	7.000
Tuskaria.	103.500.	45.000	58.500	54.000	36.000
A von Bibra	-39.600	21.120	18,480	6.280
lotal	816.100	541.120	273,980	328.280	91.000

No SESOP or SESOP II options were granted in the current year. No SESOP or SESOP II options have been granted since the end of the financial year. The options have been provided at no cost to the recipients.

No options held by key management personnel are vested but not exercisable.

For further details, including the key terms and conditions, grant and exercise dates for options granted to executives, referincte 26.

Manifestania

______________________________________

an an an Aonaichte

TANA ARA

CSL Limited and its controlled entities

Notes to the Financial Statements continued

for the year ended 30 lune 2006.

Key management personnel disclosures (continued)

,,,,,,,,,,,,	balance at	Mumber	Balance at
Performance Rights	1 July 2005	Granted.	30 June 2006
Executive Directors
B A McNamee	70.000	77500	147,500
A M Cipa	40.000	30.000	70,000
Executives
$P$ if $a$ a.e.	24.800	29.660.	54,350
C Arrut	14.400	7450	21,850
P. Bordonaro	20.800	7.450	28,250
A Cuthbertson	33. 100.	14,250	25,350
Pillavey	17 100	10.250.	27,350
К Миру	$-800$	4.450	10,250
J Giarla	6.000	6,850	12,850
A von Bibra	1.500	3.300	4,800
Total	211,500	191,050	402,550

Performance Rights were granted during the current year as follows

Date granted	Ехрігу date	Exercise price	Fair value
15 July, 2005	7 June 2012	Ni	\$24.53
7 September, 2005	7 June 2012	Na	\$24.40
7 March, 2006	20 December 2012	Νi	\$43.58
6 April, 2006	20 December 2012	Na	\$42.97

No Performance Rights have been granted since the end of the financial year. The Performance Rights have been provided at no cost to the recipients.

No Performance Rights held by key management personnel have vested.

For further details, including the key terms and conditions, grant and exercise dates for all Performance Rights granted to executives, refer note 26.

Modification of terms of equity-settled share-based payment transactions

No terms of equity-settled share-based payment transactions (including options and performance rights granted as compensation to a key management person) have been altered or modified by the issuing entity during the reporting period.

CSL Limited and its controlled entities Notes to the Financial Statements continued

for the year ended 30 lune 2006.

27 Key management personnel disclosures (continued)

Exercise of equity instruments granted as compensation

During the reporting period, the following shares were issued on the exercise of options or performance rights granted
as compensation:

		30 June 2006	Paid		30 June 2005
	Date Option Granted	Number of shares	per share \$	Date Ootton Gramed	Number of sharps.	Paid new share. Æ.
Directors
B A McNamee		н		November 1997	100.000	\$8.93
A M Cipa	August 2000	50,000	\$34.04	July 1998	6.054	\$10.82
				July 1999	20.000	\$13.23
Executives
F Turnet	July 2002	45,000	\$27.97	$h$ ny 1998.	10.192	\$10.82
	August 2000	100,000	\$34.04
C Armit	February 2000	40,000	\$23.07	February 2001	160.000	\$23.07
P Bordonaro	August 2000	75,000	\$34.04	July 1998	6.000	\$10.82
A Cuthbertson	February 2000	12,000	\$21.01	huy 1999	20.000	\$1323
	July 2002	45,000	\$27.97	February 2000	48.000	\$21.01
E liney	August 2000	50,000	\$34.04	lulv 1998	5.024	\$10.82
	July 2002	30,000	\$27.97	huv 1999	20,000	\$13.23
K Milroy	June 2001	28,000	\$37.54	luv 1999	14.000	\$13.23
1 Giarla	July 2003	45,000	\$12.19	July 1999	36.000	\$13.23
A von Bibra	June 2001	21,120	\$37.54
	Total:	541,120			446.070

There are no amounts unpaid on the shares as a result of the exercise of options or performance rights.

		Balance at Options/Performance Rights	Other changes	Balance at
Movemerts in shares	1 Luy 2005	Exercised during year	during year	30 June 2006
Executive Directors
B A McNamee	343.511		(50,000)	293,511
AMCpa	8.547	50.000	(50,000)	8,547
Non-Executive Directors
P H Wade	30 910		1,241	32,151
Akenurst	6,313		531	6,844
L. A. Alexander	6,516		531	7,047
1 A Renand	6373		531	6,904
MA Renshaw	659		531	1,190
Ki Roberts	5838		(469)	5,369
A C Webster	8.842		531	9,373
Executives
Pillumer	12,242	145,000	1145.0001	12,242
C Armit	110910	40,000	(80,000)	70,910
P Bordonaro	26.760	75,000	(101,000)	760
A Cuthbertson	48.379	57.000	(46,000)	57,379
Pilavey	46,971	8000	(15, 713)	51,258
К Мігоу	36,603	28.000	(62, 832)	1,771
1 Giarla		45,000	(45,000)
A von Bibra	1.283	21.120	(21.765)	638
Total	100657	541.120	675,883	565,894

There have been no movements in shareholdings of key management personnel between 30 lune 2006 and the date of this report.

28 Non key management personnel related party disclosure

Ultimate Controlling Entity

The ultimate controlling entity is CSL united.

Identity of related parties

The parent entity has a related party relationship with its subsidiaries (see note 31) and with its key management personnel (see note 27)

Other related party transactions

The parent entity entered into the following transactions during the year with related parties in the consolidated entity.

Wholly owned subsidiatios

* Loans were advanced and repayments received on the long term intercompany accounts,
· Interest was charged on outstanding intercompany loan account balances;
· Sales and purchases of products,
· Licensing of intellectual property
· Provision of marketing services by controlled entities; and
· 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 intercompany loan accounts and may be subject to extended payment terms.

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

Partly owned subsidiaries

· No transactions occurred during the year.

Amounts payable to and receivable from parties in the partly owned subsidiaries are set out in the notes to the financial statements.

Transactions with key management personnel and their related parties

Disclosures relating to key management personnel are disclosed in note 27.

Transactions with other related parties

During the year, the parent and subsidiaries made contributions to defined benefit and contribution superannuation plans as disclosed in note 25.

Ownership interests in related parties

The ownership interests in related parties in the consolidated entity are disclosed in note 31. All transactions with subsidiaries have been eliminated on consolidation.

,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,

CSL Limited and its controlled entities Notes to the Financial Statements continued for the year ended 30 lune 2006.

		Consolidated Entity		Parent Indry
	2006 S	2005	2006 s	2005 Æ.
29 Remuneration of Auditors Amounts received, or due and receivable, for the audit and review of the financial reports of the parent entity and its subsidiaries by: tra a King Ernst & Young related practices	751,500 2,541,364	590.217 2,391,655	751,500	590.217
	3.292.864	2.981.872	751.500	590.217
Amounts received, or due and receivable, for the other services. in relation to the parent entity and its subsidiaries by Ernst & Young
due diligence / completion audits accounting advice	16,000	488.408 67.600	16,000	488.408 67.500
compliance and other audits.	13,050	46.764	13,050	46,764
Emst & Young related practices due oligence / completion audits accounting advice		19.695
complance and other auclits.	181,193
	210,243	622.367	29,050	602.672
	3,503,107	3604.239	780,550	1.192.889

30 Commitments and contingencies

		Consolidated Entity	Parent Entity
	2006 \$000	2005 SOCIO-	2006 \$000	2005 ROOD
(a) Operating leases
Non-cancellable operating lease rentals are payable as follows:
Not later than one year.	35.667	31.889	1.259	1433.
Later than one year but not later than five years	86.466	86.222	2.084	2613.
Later than twe years	117.482	132.2681	370	378.
	239.615	250 370	3.713	2.430

Operating leases entered into relate predominantly to leased land and rental properties. Rental payments are predominantly
Tixed, but generally contain inflation escalation clauses on which contingent rentals are determine

(b) Finance leases

Future minimum lease payments are payable as follows:
Not later than one year	4.771	4,242
Later than one year but not later than five years.	17,416	16.614
Later than twe years	49,160	49.095
lotal minimum lease payments	71.347	69.951
Future aname charges	(29, 826)	(29.710)
Finance lease liability	41,521	40.241
The present value of finance lease liabilities is as follows:
Not later than one year.	2.198	1.850
Later than one year but not later than five years.	8.372	7.969
Later than tive years	30,951	30,422
	41,521	40.243
Finance lease - current liability (refer note 17)	2.111	1756
Finance lease - non-current liability liefer note 17	39.410	38.485
	41.521	AC 241

Finance leases entered into relate predominantly to leased plant and equipment. Lease payments are generally fixed for the life
of the agreement. At the end of the lease term, the consolidated entity has the option to purc leasing activities.

CSL Limited and its controlled entities

Notes to the Financial Statements continued

for the year ended 30 June 2006.

		Consolidated Entity	Parent Entity
	2006 \$000	2005 3000	2006 \$000	2006 SOOO
30 Commitments and contingencies (continued)
(c) Total lease hability
Current
Finance leases (refer note 17)	2,111	1756
Surplus lease space (refer note 19) mmummummes	2,343	6.720
	4.454	84/6
Non-aurent
Finance leases trefer note 171	39,410	38.485
Surplus lease space (refer note 10)	948	3.844
	40,358	42,329
	44.812	50.805
(d) Capital commitments Capital expenditure contracted for at balance date but not provided for in the financial statements, payable, Not later than one year	40.109	11.808	13,832	4.500
Later than one year but not later than five years Later than twe years	8,160
	48,269	11.608	13,832	4.500

(e) Contingent assets and habilities

Guarantees

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:

SRAKALBRETAL S RS:	Patent entry quarantee of subsidiary borrowings.	26.632	858.451 4.995
		26.632	863.446

Service agreements

The maximum contingent liability for benefits under service 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. The maximum liability that could arise, for which no provisions are included in the financial statements is as follows:

				-------	~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~							-682-			-5.463.
		.									,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,

The consolidated entity is currently involved in litigation with both Bayer and Baxter over alleged infringement of the consolidated entity's interest in the Freudenberg patent covering technology involved in the production of rFVIII. Bayer has filed a counter suit against the consolidated entity claiming breach of the Helixate supply agreement. There is no guarantee that the consolidated entity will be successful in the defence of this patent. Bayer's counter suit against the consolidated entity represents a threat to the continued supply of Helixate from Bayer.

The consolidated entity is involved in other litigation in the ordinary course of business. The directors believe that future payment of a material amount in respect of litigation is remote. An estimate of the financial effect of this litigation cannot be calculated as it is not practicable at this stage. The consolidated entity has disclaimed liability for, and is vigorously defending, all current claims and actions that have been made.

Deed of cross guarantee

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 subsidiaries 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. Refer note 33 for details.

CSL Limited and its controlled entities Notes to the Financial Statements continued
for the year ended 30 line 2006

	Country of incorporation	Percentage Owned
		2006 ℅	2005 !!!!!?‱ ▒
Controlled Entitles M.
Parent Eminy
CSL Limited	Australia
Subsidiaries of CSL Limited:
Cervax Pty Ltd	Australia	74	74.
CSL (New Zealand) Limited	New Zealand	100	100 (a)
Iscoter AB	Sweden	100	100(a)
CSL International Pty Ltd	Australia	100	100
CSL Finance Pty Ltd CSL Denmark ApS	Australia Denmark	100 100	100 $100$ $(a)$
2LB Behring AG	Switzerland	100	$100$ $(a)$
ZLB GmbH	Germany	100	100(a)
CSL JK Hodings Limited	England	100	100(6)
ZLB Bioplasma UK Limited	England	100	$100$ $(a)$
ZLB Holdings Inc.	USA	160	100.
CSL Brotherapies Inc.	USA	100	.lb)
ZLB Bioplasma (Hong Kong) Limited	Hang Kong	100	100 (a)
ZLB Benning LLC	USA	100	$100$ $(a)$
ZLB Behring Sales Force Inc.	USA	100	$100$ (a)
ZLB Bioplasma fire	USA	100	$100$ (a)
ZLB Behring Canada Inc.	Canada	100 100	100 (a)
ZLB Behiing Brazil Comercio de Produtos Farmaceuticais Ltda ZLB Behring KK	Brazil Japan	100	100(a) $100$ (a)
ZLB Behring S.A. de C.V.	Мехісо	100	100 (a)
ZLB Benting S.A.	France	100	100 (a)
ZLB Prama GmbH	Germany	160	$100$ $(a)$
ZLB Behring Foundation for Research and Advancement of Patient Health
	USA	100	100 (a)
ZLB Behring Verwaltungs GmbH ZLB Behring Beteiligungs GmbH & Co KG	Germany Germany	100 100	$100$ $(a)$ 100(p)
ZLB Plasma Services GmbH	Germany	100	$100$ (a)
2.B Behring GrinbH	taesmann	100	100(a)
ZLB Behring (Switzerland) AG	Switzerland	100	$100$ (a)
1999 - Andrea Andrewski, filozof a strong a strong and a strong and a strong and a strong and a strong and a ZLB Behring GmbH	Austria	100	$100$ $(a)$
ZLB Benang S.A.	Spain	100	100(a)
ZLB Behring A.B.	Sweden	100	$100$ $(a)$
ZLB Behring S.p.A.	Italy	100	100(a)
ZLB Behring N.V.	Belgium	100	$100\,$ (a)
4.3 Behing Lda ZLB Betting MEPE	Portugal Стенсе	100 100	$100$ $(a)$ 100 (a)
ZLB Behring Asia Pacific Limited!	Hong Kong	100	100(6)
ZLB Behring S A	Argentina	100	100 (a)
ZLB Behring Holdings Ltd.	England	100	$100$ $(a)$
ZLB Behing UK Ltd.	England	100	$100$ $(a)$
CSL Biotherapies Asia Pacific Limited	Hong Kong	100	O)

(a) Audited by affiliates of the parent entity auditors.
(b) CSL Biotherapies Inc and CSL Biotherapies Asia Pacific Limited were incorporated during the year.

anana

ammannannan

Notes to the Financial Statements continued
for the year ended 30 line 2006

			Consolidated Entity		Parent Entity
	Noves	2006 \$000	2005 \$000	2006 \$000	2005 \$000
32 Statement of Cash Hows
(a) Reconditation of cash and cash equivalents and non-cash financing and investing activities Cash at the end of the year is shown in the cash flow stotement as:
Castrat bank and on hand	7	384.064 369,630	258.528 465.314	28.066
Cash deposits Bank overchafts	17.	(5,706)	(4.091)	149.224	461,769
		747,988	/19/51	177.290	461.769

(b) Reconciliation of Profit after Tax to Cash Hows from Operations
Profit after tax		117.357	481 74	16.034	56.296
Non-cash items in profit after tax
Contingent consideration		233,536
Depreciation and amortisation.		116,064	125.137	31,122	29.746
Loss / (Gain) on sale of property, plant and equipment		(421)	1994	75	67
Finance costs		1.351	1,268
Unwinding of discount		7.360	9.271
Realised exchange loss on disposal of foreign subsidiaries. reclassified to the income statement			11 164
Share based payments expense		4.684	2.294	4,684	2.294
Changes in assets and labilities, net of the effects of purchase / disposal of subsidiaries.
Increase/decrease in trade and other receivables.		24,704	(86, 707)	(16, 803)	113.988)
Increasevecrease in inventories		30,500	157972	(6.975)	6.696
(Increase/decrease in retrement benefit assets		(19, 342)	921	213
lincreasei/decrease in deferred tax assets		6,809	113,235	(14, 216)
Increase/Idecrease) in trade and other payables		(6,066)	31.036	10,751	892
Increase/Idecrease) in deferred government grants		1.504	2.460	1,504	2.460
Increase/Idecrease) in provisions		(3,713)	122.2221	5.862	(2.316)
Increase/Inemease) in retirement benefit liabilities		(5, 714)	(37,060)	(158)	(336)
Increase/(decrease) in deferred tax liabilities		13.551	(53.024)	23.958	(5.081)
	6.	522,164	805.509 231687	56,051	15/23
Less: Gain on sale of discontinued operations, net of tax		522,164	567.622	56.051	75,723
Net cash inflow from operating activities

MARKA ANDRO DE LA CALCACIÓN DE LA CALCACIÓN DE LA CALCACIÓN DE

WWW

(c) Financing Facilities

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

		Consolidated Entity			Parent Entity
	\$000	Accessible Drawn down SAAA	Unused \$000	Accessible saan	Drawn down \$000	lmused \$000
June 2006
Bank overdraft facility (b), (d)	10.219	5.706	4.513	4.513		4.513
Bank loan facilities (a), (d)	655.132	486,778	168.354
Total financing facilities (c)	665.351	492.484	172.867	4.513

CSL Limited and its controlled entities Notes to the Financial Statements continued

for the year ended 30 June 2006.

32 Statement of Cash Flows (continued) [1997]

(c) Financing Facilities (continued)

		Consolidated Entity		Parery Friday
	Accessible Drawn down -9990	ಾಂಬ	AIGHT-COLL 3000	Accessible Drawn down 30000	5000	Unused -9000
June 2005
Bank overdraft facility (b) (d)	9.383	4.091	-92	4.482		4482
Bank Ican facilities (a) (d)	658.514	458.260	200.245
lotal financing facilities (c).	667.897	462.360	205.537	4 482		4.482

(a) Drawn facilities expire in March 2007 and March 2009.

(b) No specific explividate.

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

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

33 Deed of Gross Guarantee

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 Onder. On 30 June 2003, and
Assumption Deed was lodged with ASIC, which joins CSL Finance Pty Ltd and RRH Biosciences Pty Ltd a order group comprising CSL Limited, CSL International Pty Ltd. CSL Finance Pty Ltd and JRH Biosciences Pty Ltd (until its disposal on 28 February 2005) is as follows:

		Consolidated Entry
Summarked Impare Statement and Retained Earnings	2006 \$000	2005 5000
Profit before tax.	243,272	206,493
Income tax expense.	(10, 268)	្រាច, 356)
Net profit.	233.004	191.137
Set out below is a summary of movements in consolidated retained earnings of the closed group:
Retained earnings at beginning of the financial year.	581.196	474.071
Net profit	233.004	191137
Actuarial gain / floss) on defined benefit plans, net of tax	1.437	-38.
Dividends provided for or paid.	(124, 394)	(84,950)
Retained earnings at the end of the financial year.	691.243	581 196

As disclosed in note 5 the contingent consideration on the acquisition of Aventis Behring was recognised on 20 June 2006 and accordingly a provision was raised by the Group and booked in the accounts of the acquirer, ZLB Bioplasma (Hong Kong) Limited. As the provision was booked in ZLB Bioplasma (Hong Kong) Limited, the provision and associated charge is not reflected within the class order group.

CSL Limited and its controlled entities

Notes to the Financial Statements continued

for the year ended 30 June 2006.

33 Deed of Cross Guarantee (continued)

		Consolidated Entry
	2006	2005
Balance Sheet	\$000	40m
CURRENT ASSETS
Cash and cash equivalent	434,383	461 769
Irade and other recevables.	58,975	53,370
Current tax assets	57,374
Inventories Other financial assets	66,426	59.451

fotal current assets	617,158	574 590
NON-CURRENT ASSETS trade and other receivables	429,080	456.876
Other financial assets	1,259,318	1,298.641
Property plant and equipment.	268,881	261,402
Deferred tax assets	24,457
Intangible assets	20,000	20,000
Retrement benefit assets	1,840
Total non-current assets	2,003,576	2,036,919
TOTAL ASSETS	2,620,734	2611,509
CURRENT LIABILITIES
frade and other payables.	109,361	138.221
Interest-bearing liabilities and borrowings	359,855	11111111111112
Other financial liabilities		111111111111111111111111111111111111111
Current tax liabilities	24,801	111111111111111111111111111111111111111
Provisions	26,116	17848
Deferred government grants	371	296
Retirement benefit liabilities
Total Current Liabilities	520,504	156,365
NON-CURRENT LIABILITIES
Irade and other payables	69.813	1.328
interest-bearing liabilities and borrowings.	274,399	595 520
Non-current tax liabilities
Deferred tax liabilities	37,225	31,61%
Provisions	5,223	16,397
Deterred government grants	4,093	2664
Retirement benefit liabilities		159
Total Non-Current Labilities	390,753	64/6/9
TOTAL LIABILITIES KAMANAN MANA (KAMAN	911,257	804,044
NET ASSETS	1,709,477	1.807.465
EQUITY
Contributed equity	994,101	1,223,466
Reserves	24,133	2.803
Retained earnings Maria Maria (Maria Maria Maria Maria Maria Maria Maria Maria Maria Maria Maria Maria Maria Maria Maria Maria	691,243	581 196
TOTAL EQUITY	1,709,477	160/465

www.

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CSL Limited and its controlled entities Notes to the Financial Statements continued for the year ended 30 June 2006.

		Consciunted Entity
	2006 \$000	2005 5000
34 Earnmos Per Share
Earnings used in calculating basic and cliutive earnings per share comprises.
Profit from continuing operations	117.357	234.729
Profit from discontinuing aperations.		253.045
Profit attributable to ordinary shareholders	117,357	481.114

		Mimber of shares
	2006	2005
Weighted average number of ordinary shares used in the calculation of basic earnings per share:	182.025.674	195 988 194
Effect of clique securities.
Senior Executive Share Ownership Plan options	697,530	500 953
Employee Performance Rights	587.904	321.154
Global Employee Share Plan	29.299	7551
Contingent Consideration	7.098.615	4.852.093
Adjusted weighted average number of ordinary shares used in the calculation of diluted. earnings per share.	190.439.022	201609345

Contingent consideration

In accordance with AASB 133 Earnings Per Share, contingent consideration that may be settled in either cash or ordinary shares. is required to be included in the calculation of diluted earnings per share where the effect is dilutive.

Conversions, calls, subscription or issues after 30 June 2006.

Since the end of the financial year, no ordinary shares have been issued.

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.

35 Events occurring after reporting date

On 17 July 2006, the consolidated entity announced a proposal to acquire 100% of the issued shares (125.2 million at 30 June 2006) in Zenyth Therapeutics Limited (Zenyth), a listed Australian based biotechnology company. The consideration offered is 82 cents cash per share. The proposal has been unanimously recommended by Zenyth's directors and is proposed to be implemented by way of a scheme of arrangement between Zenyth and its shareholders.

......................................

CSL Limited and its controlled entities Notes to the Financial Statements continued for the year ended 30 June 2006

36 Financial Instruments

Objectives for holding derivative financial instruments

The consolidated entity is primarily exposed to the risk of adverse movements in exchange rates and interest rates and accordingly uses derivative financial instruments to manage specifically identified risks as approved by the board of directors. The accounting policy applied by the consolidated entity in respect to derivative financial instruments is outlined in note 1(w).

The purpose of specific derivative instruments that may be used by the consolidated entity is as follows:

Foreign currency forward exchange contracts are purchased predominantly to hedge the foreign currency value of receivables. and payables, forward exchange contracts are purchased when considered necessary to create a desired hedge position, and
Interest rate 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.

Interest Rate Risk Exposures

The consolidated entity is, from time to time, exposed to interest rate risk through primary financial assets and liabilities. In
accordance with the consolidated entities approved risk management policies, derivative fina rate swaps are used to hedge interest rate risk exposures. As at 30 June 2006, no derivative financial instruments hedging interest rate risk were outstanding (2005-Nil).

The following tables summarise interest rate risk for income earning financial assets and interest-bearing financial liabilities. the effective interest rates as at balance date and the periods in which they reprice

			Fixed interest rate maturing in
	Floating	1 year	Over 1 year	Over	Non-interest		Average
Consolidated Entity - June 2006	Rate (a) \$000	or less \$000	to 5 years \$000	5 years \$000	Bearing \$000	Total \$000	Interest Rate %
Financial Assets
Cash and cash equivalents.	753,694			۰	$\mathbf{r}$	753.694	4.75%
Trade and other receivables				٠	611,352	611,352
Other financial assets					12.600	12,600
	753,694			٠		623,952 1,377,646

Financial Liabilities
Trade and other payables				۰	388,979	388,979
Bank loans - ansecured	486,922			÷	٠	486,922	2.59%
Deferred consideration -intangibles acquired	٠	9.261	16.459		٠	25.720	2.78%
Deferred consideration -subsidiary acquired	۰	80.228	82,262	٠	٠	162.490	4.35%
Bank overdraft - unsecured	5,706	÷	۰	÷		5.706	5.10%
Senior unsecured notes	۰	18.993	75,713	241.764		336,470	5.22%
Lease liabilities		2.111	8,394	31,016		41,521	6.14%
	492,628	110,593	182,828	272,780		388,979 1,447,808

CSL Limited and its controlled entities Notes to the Financial Statements continued for the year ended 30 June 2006

36 Financial Instruments (continued)

			Fixed interest rate maturing in
	Floating Rate (a)	1 year or less	Over 1 year to 5 years.	Over Sheats	Man-interest Bearing	lotal	Average Interest Rate
Consolidated Enuty - June 2005	\$000	5000	3000	5000	\$000	2006	96.
Financial Assets
Cash and cash equivalents	123.842					723,842	4.29%
Irade and other receivables					573.253	573,253
Other financial assets					16,566	16.566
	723.842			890000000000000000000000000000000000000		589 819 713 661
Financial Liabilities
frace and other payables.		×.			396.656.	398.555
Bank overdraft	4.031					4.091	2.45%
Bank loans - unsecured	458,269					456.269	1.82%
Deterred consideration -intangibles acquired		8.283	24.255			32.538	2.50%
Deferred consideration –subsidiary acquired.		×	150950			150.950	4.36%
Senior unsecured notes			14.258	250633		324.891	570%
Lease labilities		1756	11/33	26.752		40.241	5.95%
	462,360	10.039	261.196	211.385	398.555	1409.35

* Notional principal amounts

(a) Floating interest rates represent the most recently determined rate applicable to the instrument at balance sheet date. The following tables summarise interest rate risk for income-earning financial assets and interest-bearing financial liabilities, the effective interest rates as at balance date and the periods in which they reprice.

			Fixed interest rate maturing in
	Floating	1 year	Over 1 year	Over	Non-interest		Average
Parent Entity - June 2006	Rate (a) \$000	or less \$000	to 5 years \$000	5 years \$000	Bearing \$000	Total \$000	Interest Rate

Financial Assets
Cash and cash equivalents	177.290					177.290	-5.62%
Trade and other receivables					110.851	-110.851
Other financial assets					1,232,935 1,232,935
	177.290				1.343.786 1.521.076
Financial Liabilities
Trade and other payables					688.999	688.999
					688.999	688.999

.......................................

CSL Limited and its controlled entities Notes to the Financial Statements continued

for the year ended 30 June 2006.

36 Financial Instruments (continued)

Fixed interest rate maturing in
Parent Entry - Arme 2005	Hoating Hate (a) SOOT	A year OF RESS -5166	Over 1 year AO 5 Vears - 1000	Ower Sycars -5000	Nor-merest Bearing \$000	lotal. 5000	Average interest itate - 200
Financial Assets
Cash and cash equivalents	461.769					461.769	5.54%
lizde and other receivables.					-91-324)	-91.324
Other financial assets					1,232.905	1,232,905
	461769				1.324.229 1 785.998
Financial Liabilities
Trade and other payables.					595.199.	-595.199
					595.199	-596.199

Notional principal amounts

(a) Floating interest rates represent the most recently determined rate applicable to the instrument at balance sheet date.

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. Contracts to buy and sell foreign currencies are entered into from time to time to offset purchase and sale obligations in order to maintain a desired hedge position.

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

These receivables are eliminated on consolidation, thowever, the hedges are in place to protect the parent entity and other group subsidiaries from movements in exchange rates that would give rise to an income statement impact.

Hedges of net investment in foreign subsidiaries

Included in Interest Bearing Liabilities (refer note 17) as at 30 June 2006, are Unsecured Notes amounting to US\$86.66m (2005; US\$175m) and EUR 70.334m (2005. Nil) that are designated as a hedge of the consolidated entity's investment in ZLB Holdings. Inc and ZLB Behring Gmbh. A net foreign exchange loss of \$8.5m (2005, gain of \$24.6m) was recognised in equity on translation of these borrowings to Australian Dollars.

Included in Interest Beanno Liabilities (refer note 17) as at 30 June 2006, are Bank Loans amounting to EUR 130m (2005, EUR 130m) that are designated as a hedge of the consolidated entity's investment in ZLB Behring GmbH. A net foreign exchange loss of \$17.3m (2005; gain of \$22.4m) was recognised in equity on translation of these borrowings to Australian Dollars.

Sensitivity analysis

In managing interest rate and currency risks the consolidated entity aims to reduce the impact of short-term fluctuations on the consolidated entity's earnings. However, over the longer-term, permanent changes in foreign exchange and interest rates would give rise to a consolidated entity income statement impact.

At 30 June 2006 it is estimated that a general increase of one percentage point in interest rates would increase/(decrease) the consolidated entity's profit after tax by approximately \$1.8m (2005: \$1.8m).

It is estimated that a general increase of one percentage point in the value of the Australian Dollar against other currencies. would increase/Idecrease) the consolidated entity's profit after tax by approximately \$3 3m for the year ended 30 June 2006 (2005: \$2.6m). The forward exchange contracts have been included in this calculation. The manner of the state of

CSL Limited and its controlled entities Notes to the Financial Statements continued

for the year ended 30 June 2006

36 Financial Instruments (continued)

Fair values

The fair values, together with the carrying amounts of Financial Asset and Financial Liabilities shown in the balance sheet, are as follows:

	Carrying amount	Fair Value	Carrying amount	f air Value
	2006	2006	2005	2005
Consolidated Entity	\$000	\$000	5000	SOO0
Financial Assets
Cash and cash equivalents ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,	753,694	753,694	723,842	123,842
trade and other receivables.	611,352	611,352	513.253	5/3,283
Other thancial assets
Derivatives
Unlisted equity securities	4,728	4,728	4.698	4.698
Managed financial assets	7,872	7,872	11.668	11,868
Financial Liabilities	1,377,646	1,377,646	$-1, 3, 13, 66, 1$	1.313.661
Bank overdraft
	5,706 388,979	5,706 388,979	-4.091 398,555	4.091 398,555
frace and other payables Interest bearing liabilities and borrowings 00000000000000000000000000000000000000
Unsecured bank loans	486,922	486,922	458,269	459,287
Unsecured notes	336,470	338,462	324,891	321,225
Deferred cash settlement	188,210	188,210	183.488	183,486
Finance leases	41.521	41,521	40 241	40,241
Other financial liabilities
Derivatives
mmmmmmmm	1,447,808	1,449,800	1,409,535	1.412,687
There are no unrecognised gains or losses.
Parent Entity
Financial Assets
Cash and cash equivalents	177,290	177,290	461.769.	461,769
trade and other receivables.	110,851	110,851	91,324	91,324
Other financial assets
Derivatives
Unlisted equity securities	4,728	4,728	4.698	4,698
Longiterin deposits
Managed financial assets
	292,869	292,869	55/191	557,791
Financial Liabilities
Bank overdraft trade and other payables	688,999	688,999	595.199	595,199
Interest bearing liabilities and borrowings
Unsecured bank loans
Unsecured notes
Deferred cash settlement
Finance leases
Other financial liabilities
Derivatives
	688,999	688,999	595,199	595.199
There are no unrecognised gams or losses

aanaanaana

CSL Limited and its controlled entities Notes to the Financial Statements continued for the year ended 30 june 2006

36 Financial Instruments (continued)

The following methods and assumptions were used to determine the net fail values of financial assets and liabilities.

trade and other receivables I payables

The carrying value of trade and other receivables/payables with a remaining life of less than one year is deemed to reflect its fair value. All other trade and other receivables/payables are discounted to determine fair values.

Other financial assets - Derivatives

Forward exchange contracts are either marked to market using listed market prices or by discounting the contractual forward price and deducting the current spot rate. Where discounted cash flows are used, estimated future cash flows are based on the director's best estimate and the discount rate is a market related rate for a similar instrument at the balance sheet date.

Other financial assets - other

Fair value is estimated using valuation techniques including recent arms length transactions of like assets, discounted cash flow analysis and comparison to fair values of similar financial instruments.

Interest bearing liabilities and borrowings

Fair value is calculated based on the discounted expected future principal and interest cash flows.

Interest hearing liabilities and borrowings - Finance leases

The fair value is estimated as the present value of future cash flows, discounted at market interest rates for homogeneous lease agreements. The estimated fair values reflect change in interest rates.

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 financial instruments contracts or the amount receivable from trade and other debtors. Management has established policies to monitor and limit the exposure to credit risk on an on-going basis.

Transactions involving derivative financial instruments are with counterparties with whom the consolidated entity has a signed netting agreement as well as sound credit ratings. Given their high credit ratings, management does not expect any counterparty to fail to meet its obligations.

The consolidated entity infrienties the credit risks associated with trade and other debtors by undertaking transactions with a large number of customers in various countries.

The maximum exposure to credit risk at balance date is the carrying amount, net of any allowance for doubtful debts or impairment, of each financial asset, including derivative financial instruments, in the balance sheet.

The credit quality of financial assets that are neither past due, nor impaired is as follows:

For the year ended 30 June 2006	Financial Institutions	Governments	Hospitals	Buying Groups	Other	Total
Cash and cash equivalents	753.694					753,694
Trade and other receivables.	1.242	36.104	209.817	170.555	193.634	611.352
Other financial assets	12.600					12.600
	767.536 .	36.104	209.817	170.555	193.634	1.377.646

1989 - Johann Stein, fransk politiker (d. 1989)

The consolidated entity has not renegotiated any material collection/repayment terms of any financial assets in the current financial year.

CSI, Limited and its controlled entities Notes to the Financial Statements continued for the year ended 30 June 2006.

36 Financial Instruments (continued)

Credit Risk (continued)

An analysis of trade receivables that are past due and the allowance for doubthal debts is as follows. All other financial assets are less than 30 days overdue.

			Allowance
			for doubtful
For the period ended 30 June 2006:	Not impaired	Impaired	debts
Trade and other receivables:
less than 30 days overdue	357,451
more than 30 but less than 90 days overdue	84.605
more than 90 days overdue.	82.926	13.744	13,744
	524.982	13.744	13.744

Financial assets are considered impaired where there is objective evidence that the consolidated entity will not be able to collect all amounts due according to the original trade and other receivable terms. An allowance for doubtful debts is created for the difference between the assets carrying amount and the present value of estimated future cashflows. The consolidated entity's trading terms do not generally include the requirement for customers to provide collateral as security for financial assets.

37 Explanation of transition to AIFRS

As stated in significant accounting policies note 1, these consolidated financial statements are the first prepared in accordance with AIFRS.

The policies set out in the significant accounting policies section of this report have been applied in preparing the financial statements for the year ended 30 June 2006, the comparative information presented in these financial statements for the year ended 30 June 2005 and in the preparation of an opening AIFRS balance sheet as at 1 July 2004 (the consolidated entity's transition date)

In preparing its opening AIFRS balance sheet, the consolidated entity has adjusted amounts reported previously in financial statements prepared in accordance with its old basis of accounting (AGAAP). An explanation of how the transition from the previous AGAAP to AIFRS has affected the consolidated entity's financial position, financial performance and cash flows is set out in the following tables and the notes that accompany the tables.

22000000000000000000000000000000000000

_______________________________________

CSL Limited and its controlled entitles Notes to the Financial Statements continued for the year ended 30 June 2006.

37 Explanation of transition to AIFRS (continued)

(a) Reconciliation of equity reported under previous Australian Generally Accepted Accounting Principles (AGAAP) to equity under Australian equivalents to IFRS (AIFRS)

iiiiiiiiiiiiiiiiiiiiii

,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,

......................................

,,,,,,,,,,,,,,,,,,,,,,,,,

i). At the date of transition to AIFRS: 1 July 2004

		Consolidated Entity			Parent Entity
Notes	Previous Agaap \$'000	Effect of transition to AIFRS \$'000	AIFRS \$'000	Previous AGAAR \$ 000	Effect of transition to Alfre \$1000	airs \$3000
CURRENT ASSETS
Cash and cash equivalents	114,896		114.896	12,700		12.700
frade and other receivables. TX.	532,396	31,860	564,056	43,265	3.894	47 159
Inventones	1,352,578	$\overline{\phantom{a}}$	1,352,578	66.147		66.147
Other Ű.	31,860	(31,860)		3,894	(3,894)
Total Current Assets	2,031,530		2,031,530	126,006		126,006
NON-CURRENT ASSETS
trace and other receivables	6,489		6,489	305.109		305.109
Citier financial assets	8,223		8,223	204.058		1,204,058
Property, plant and equipment	887,017		887,017	259,190		259,199
Deferred tax assets M.	77,644	192,825	270,469	0,825	(9 825)
thangible assets	859,870	$\overline{\phantom{a}}$	859,870	20000		20.000
Other зā,	4,610	(4,610)
Retirement benefit assets M.		1,026	1,026
Total Non-Current Assets	1,843,853	189,241	2,033,094	1.798,191		(0,825) 1 768.366
TOTAL ASSETS	3,875,383	189,241	4,064,624	1.924.197		(9.825) 1.914.372
CURRENT LIABILITIES
trade and other payables.	458,502		458,502	53,905		53,905
Interest bearing liabilities and www. borrowings X.	13,297	(5,353)	7,944
Otter financial liabilities
Current tax liabilities	26,903		26,903	21.960		21,960
Provisions X.	199,406	5,353	204,759	15.843		15,843
Deferred government grants ÎV.		296	296		296.	296
Total Current Liabilities	698,308	296	698.404	91/08	296.	02.004
NON-CURRENT LIABILITIES
Interest bearing liabilities and borrowings X, M	854,347	${13,759}$	840,588
Deferred tax liabilities $\mathcal{U}$	80,577	61,239	141,816	12.699	(2, 822)	0.817
Provisions W(X)	168,309	${86,023}$	82,286	20.112		20.712
Deferred government grants JV.		204	204		204	204
Retirement benefit liabilities W.		116,591	116,591	M.	\$33	633
Total Non-Current Liabilities	1,103,233	78,252	1,181,485	33.411	(2085)	31.326
TOTAL LIABILITIES mw	1,801,341	78,548	1,879,889	125.110	(1/89)	123,330
NET ASSETS	2,074,042	110,693	2,184,735	1/99.076 ▥		$(0.036)$ 1 $101.042$
EQUITY
Contributed equity	1,502,417		1,502,417	1.502A11		1,502,417
Reserves XV.	77,373	(76, 432)	943	22824	(21.883)	941
ketained earnings XVI.	494,252	187,125	681,377	213831	13.847	287.684
TOTAL EQUITY	2,074,042	110,693	2,184,735	199078		(6.036) 1.01.042

22.

CSL Limited and its controlled entities Notes to the Financial Statements continued for the year ended 30 lune 2006

37 Explanation of transition to AIFRS (continued) ii). At the end of the last reporting period under previous AGAAP: 30 June 2005

	Consolidated Entity				Parent Entity
Notes.	Previous agaap \$'000	Effect of transition to AIFRS \$'000	AIFRS \$'000	Previous ACAAR 8 DUQ	Effect of transmon 10 AIPS \$'000	AIFRS \$ 000
CURRENT ASSETS
Cash and cash equivalents	723,842		723,842	461,769		461,769
trade and other receivables	536,983 ÌХ.	22,244	559,227	68,864	2419.	71,283
Inventones	946,583	$\overline{\phantom{a}}$	946,583	59,401		59,451
Other	22,244 ĨХ	(22.244)		2,419	(2.419)
Other financial assets
Total Current Assets	2,229,652		2,229,652	592.503	mill	-592.503
NON-CURRENT ASSETS
Irade and other receivables	11,014 ÌХ.	3,012	14,026	20,041	X.	20.041
Other financial assets	19,578 ijĶ.	(3.012)	16,566	1232905		1,232,905
Property plant and equipment	769,143	$\overline{\phantom{a}}$	769,143	261.402		261.402
Deferred tax assets	97,414 V.	(20, 755)	76,659	10.400	(10 400)
Intangible assets TM. Other	744,143	42,292	786,435	20,000		2000
Retrement benefit assets	3,352 XI. W	(3,352) 50	50
lotal Non-Current Assets	1,644,644	18,235	1,662,879	1,544,748		(10,400) 1,534,348
TOTAL ASSETS	3,874,296	18,235	3,892,531	2137251		(10.400) 2.126.651
CURRENT LIABILITIES
trade and other payables	398,555 $\mathcal{Q}$		398,555	573,540	21.659	595,199
Interest bearing liabilities and
borrowings	21,861 Х	(6, 720)	15,141
Other financial liabilities
Current tax liabilities	37,130		37,130
Provisions Deferred government grants	75,171 Χ IV.	6,720 296	81,891 296	17 848	296.	17846 296.
Total Current Liabilities	532,717	296	533,013	591.366	21.955	613,343
NON-CURRENT LIABILITIES
Interest bearing liabilities and
$X \times V$ DONOWIDOS	1,003,035	(7, 196)	995,839
Deferred tax liabilities	106,814 ÿ	(28, 537)	78,277	33.968	(24,010)	9968
Provisions ЦX,	157,218	(78, 672)	78,546	16,301	99	16,391
Deterred government grants.	W	2,664	2,664		2.664	2,664
Retirement benefit liabilities Total Non-Current Liabilities	W. 1,267,067	95,667 (16, 074)	95,667 1,250,993		159 $(2 - 187)$	159 29.172
TOTAL LIABILITIES	1,799,784	(15, 778)	1,784,006	90.359 641,747	768	642.515
NET ASSETS	2,074,512		34,013 2,108,525	1.495.504		(11.168) 1.484.336
EQUITY
Contributed equity	1,223,034 TI.	432	1,223,466	1,223,034		432 1223,466
Reserves X).	(62,093)	(120, 915)	(183,006)	22824	(20.021)	2,803
Retained earnings ma l	913,569	154,496	1,068,065	249,646	8.421	258.067
TOTAL EQUITY	2,074,512	34,013	2,108,525	1.495.004		$[11.168]$ 1.464.336

minimini

www.

CSL Limited and its controlled entities

Notes to the Financial Statements continued

for the year ended 30 June 2006.

37 Explanation of transition to AIFRS (continued)

(b) Reconciliation of profit under previous AGAAP to profit under Australian equivalents to IFRS (AIFRS).

i). Reconciliation of profit for the year ended 30 June 2005

			Consolidated Entity			Parent Fritty
	Notes	Previous AGAAP \$'000	Effect of transition to AIFRS \$'000	AIFRS \$'000	Previous AGAAP \$ 0.00	Friest of transform to All'RS \$000	AIFRS \$000
Sales revenue	M	2.749,934	(140.969)	2,608.965	363.320		363.320
Cost of sales	VLXIV.	(1,686,776)		67,943 (1,618,833)	(169.872)	(981)	(170 ssa)
Gross profit		1,063,158	(73,026)	990,132	193,448	(981)	102.467
Other revenue	17.VI.XII	502,976	(461,682)	41,294	33.471	(2.473)	30.998
Research and development expenses	M.	(145, 721)	4.763	(140,958)	(59.192)		(59.192)
Selling and marketing experises	vil.	(332, 336)	7.470	(324, 866)	(42.512)		(42.517)
General and administration. expenses	1 ш.м.ха хи хи	(174, 583)	58,079	(116, 504)	155.577	4981)	(56, 566)
Other expenses Met assets of discontinued operations	VI.	(178, 548)	178,548
Other expenses	4.VOMBI	(51,366)	51,366
Finance costs	VIII	(41, 640)	2,825	(38, 815)	13871		(387)
Profit before income tax expense - continuing operations		641,940	(231,657)	430.283	69.246	(4.435)	64,811
Ілсотне тах ехрепье – солтигшло operations	M.	(95, 422)	(80, 132)	(175, 554)	(8,481)	(1 029)	(9, 516)
Net Profit after tax from continuing operations		546,518	(311,789)	234.729	60.750	(5.464)	55.205
Net Profit after tax from discontinued operations	VIII		253,045	253,045
Net profit attributable to members of CSL Limited		546,518	(58.744)	487.774	60 759	(5, 464)	55.295

(c) Reconciliation of cash flow statement for the year ended 30 June 2005 The adoption of AIFRS has not resulted in any material adjustments to the cash flow statement.

(d) Adoption of AASB 132 Financial Instruments: Presentation and Disclosure and AASB 139 Financial Instruments: Recognition and Measurement

The adoption, effective 1 July 2005, of AASB 132 and AASB 139 has not resulted in any material adjustments to the consolidated balance sheet.

CSL Limited and its controlled entitles Notes to the Financial Statements continued for the year ended 30 June 2006.

37 Explanation of transition to AIFRS (continued)

(e) Notes to the reconciliations

(i) Goodwill

In accordance with AIFRS, from 1 July 2004 goodwill acquired in a business combination is no longer amortised.
Instead goodwill is subject to an annual impairment test focusing on the cash flows of the related cash generat The incremental effect on the balance sheet is as follows.

		Consolidated Entity		Parent Frinty
	1 luly 2004 \$000	30 June 2005 \$000	3000	1 luly 2004 30 lune 2005 5000
increase intangible assets.		43.052
(increase) deterred tax liabilities.		(10, 676)
MET ASSETS		32,376
Decrease foreign currency translation reserve		1,951
(Increase) retained earnings		(34, 327)
total eolity WARRANGANGANGAN		(32, 376)
The incernental effect on the income statement is as follows:		Year ended 30 June 2005 \$000		Year ended 30 Any 2005 - 000
(Decrease) other expenses.		(45.564)
Incease income tax expense		11,237
MELPROFIE		(34, 327)

(ii) Employee Benefits

In accordance with AIFRS, actuarial valuations have been used to measure and recognise the net benefit or obligation
attributable to current and prior periods of the defined benefit superarmuation plans and other retiremen

The incremental effect on the balance sheet is as follows:

		Consolidated Entity		Parent Emiry.
	1 July 2004 \$000	30 June 2005 \$000	SOOT	1 длу 2004 - 30 для 2005. -5600
increase retirement benefit assets.	1,026	50.
Increase deferred tax assets	8,229	5,066	160.	48.
(Increase) retirement benefit liabilities.	(533)	(159)	(533)	1159).
(Increase) non-current provisions	(20, 886)	(12,992)
(increase) deterred tax labilities	(225)	(11)
NET ASSETS	${12,389}$	(8,046)	1373)	00 O
(Increase) foreign currency translation reserve		(1,002)
Decrease retained earnings	12,389	9,048	373	174
TOTAL EQUITY	12,389	8.046	313	111
The incremental effect on the income statement is as follows:		Year ended 30 June 2005 \$000		Year ended 30 June 2005 30OO
(Decrease) general and administration experies.		(29,967)		(319)
Increase income tax expense.		10,490		96
NET PROFIL		(19.477)		(224)

In addition, in accordance with AASB 119 Employee Benefits, Retrement benefit liabilities are presented separately from provisions. and therefore liabilities recognised in the AGAAP balance sheet have been reclassified as follows:

CSL Limited and its controlled entities

Notes to the Financial Statements continued

for the year ended 30 line 2006

37 Explanation of transition to AIFRS (continued)

--------------		Consolidated Entity	Parent Entity
,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,	\$000	1 luly 2004 30 lune 2005 \$000	1 для 2004 - 30 для 2005 A TARA DA MARTIN
Decrease non-current provisions.	116.058	95.508
Increase) non-current retirement perefit. Isbiities	(116.058).	(95.508)
NET ASSETS

(iii) Share-based payments

In accordance with AIFRS, a share based payments expense has been recognised for options, performance rights and share plan
arrangements granted after 7 November 2002 that remain unexercised as at 1 January 2005

......................

The incremental effect on the balance sheet is as follows:

	Consolidated Entity		Farem Entity
	1 luly 2004 \$000	30 June 2005 \$000	SOUTH	1 Any 2004 30 Aug 2005 5000
(increase) contributed equity		(432)		(432)
(Increase) share based payments reserve	(941)	(2,803)	19411	(2.803)
Decrease retained earnings	941	3.235	-941	3.235
10 AL EQUITY
The incremental effect on the income statement is as follows.		Year ended 30 June 2005 \$000		Year ended 30 June 2005 \$000
Increase general and administration expenses		2.294		2.294
nei profil		2.294		2.294

(iv) Government Grants

In accordance with AIFRS, where a government grant relates to the acquisition or construction of an asset, the far value is deferred and released, on a straight line basis, to the income statement over the expected useful life of the relevant asset.

The incremental effect on the balance sheet is as follows:

		Consolidated Entity		Parent Entity
	1 luly 2004 \$000	30 June 2005 \$000	1 kuw 2004 \$000	30 June 2005 \$000
Increase deferred tax assets	350	888	150	888
Increase) current deferred government grants	(296)	(296)	(296)	(296)
fincrease) non-current deterred government grants.	(204)	(2,664)	(204)	(2.664)
NET ASSETS	(350)	(2,072)	(350)	(2.072)

Decrease retained earnings	350	2.072	350	2072
total equity	350	2.072	350	2012
The incremental effect on the income statement is as follows.		Year ended 30 June 2005 \$000		Year ended. 30 hmc 2005 \$000
Decrease other revenue		2.460		2,460
(Decrease) income tax expenses		(738)		(788)
NET PROFIT		1,722		1.122

CSL Limited and its controlled entities Notes to the Financial Statements continued for the year ended 30 June 2006.

37 Explanation of transition to AIFRS (continued)

(v) Income laxes

In accordance with AIFRS, the 'balance sheet' approach has been adopted in accounting for income taxes. This requires the identification of temporary differences for each asset and liability. These differences take into consideration the numerous tax jurisdictions in which the consolidated entity operates and the differences in the book and tax bases of assets and liabilities as a result of the acquisition of Aventis Behring which under AGAAP were treated as permanent differences. The increase in the net deferred tax asset at the transition date is primarily due to AASB 112 requiring the consolidated entity to recognise a deferred tax asset in respect of the unrealised portion of the discount on acquisition and other adjustments from the Aventis Behring acquisition that remain in the balance sheet at the date of transition. The subsequent movement under AIFRS at 30 June 2005 is primarily due to this deferred tax asset decreasing and flowing through the tax expense line as the assets and liabilities with differences in bases are realised. Such a deferred tax asset is not recognised under AGAAP.

In addition, in accordance with AASB 112 Income Tax, deferred tax assets and deferred tax liabilities of the same taxable entity/group are required to be set off if they relate to income taxes levied by the same taxation authority and the entity/group has a legally enforceable nont to set off current tax assets against current tax liabilities.

the incremental effect on the balance sheet is as follows.

	Consolidated Entity		Parent Fittity
	1 luly 2004 \$000	30 June 2005 \$000	5000	1 July 2004 30 June 2005 1000
Increase/Idecrease) deferred tax assets	184.446	(26.709)	110.1351	111 336)
dncrease)/decrease deferred tax habilities	(61.014)	39.224	2822	24.030
(increase) decrease current trade and other payables				(21,659)
NET ASSETS	123,432	12.515	(7.313)	18.9851
Decrease foreign currency translation reserve		14.345
drorease/decrease retained earnings	(123, 432)	(26.860)	7.313.	6,985
total equity.	(123.432)	(12.515)	7313	8.985

The incremental effect on the income statement is as follows: Year ended Year ended 30 June 2005 30 avu 2005 \$000 3000 1612 Increase income tax expenses (non-cash) 96,572 NET PROFIT 96,572 $1/6/2$

	Consolidated Entity		Parent Enrity
	1 luly 2004 \$000	30 June 2005 \$000	$-5000$	1 длу 2004 - 30 для 2005 3000
Deferred tax assets
balance sheet approach / set-off (above)	184,446	${26.709}$	440 4351	01 3361
employee benefits inote al-	8,229	5.066	160.	48
querment grants (note iv)	150	888	150	888
	192,825	${20.755}$	(9.825)	(10, 400)
Deterred tax habilities
balance sheet approach / set off (above)	(61,014)	39.224	2822	24.010.
goodwill trote it		(10.676)
employee benefits incite in	(225)	(13)
	(61.239)	28.537	2.822	24.010.

KARA MANAMAN MANAMAN MANAMAN MANAMAN MANAMAN MANAMAN MANAMAN MANAMAN MANAMAN MANAMAN MANAMAN MANAMAN MANAMAN

CSL Limited and its controlled emities

Notes to the Financial Statements continued

for the year ended 30 line 2006.

37 Explanation of transition to AIFRS (continued)

(v) Income Taxes (continued)

The total incremental effect on the income statement arising from transition to AIFRS is as follows:

	Consolidated Entity	Parent Entity
	Year ended 30 lune 2005 \$000	Year ended 30 June 2005 -3000
Income tax experise - continuing operations
balance sheet approach (above).	96.572	16/2
goodwill (note ill	11.237
employee benefits (note ii)	10.490	-96
government grants (note w)	(738)	(738)
discontinued operations inote vil	(37, 429)
	80.132	- 129

(vi) Profit on sale of business unit

In accordance with AIFRS, on disposal of a business unit, the portion of the balance of the foreign currency translation reserve that
relates to the business unit being disposed must be recognised in the income statement a

The incremental effect on the balance sheet is as follows:

	Consolidated Entity		Parent Emily
	1 luly 2004 \$000	30 June 2005 \$000	\$000	1 km 2004 - 30 km 2005 \$000
(Decrease) intangible assets		(760)	UUNGU MANAHUWA
NET ASSETS		(760)
(increase) foreign currency translation reserve		(11,200)
Decrease retained earnings		11.960	8888
TO AL EQUIDY		760
the incremental effect on the income statement is as follows.		Year ended 30 June 2005 \$000		Vear ended 30 June 2005 \$000
(Increase) other expenses		(796)
(Decrease) net profit from discontinued operations		(11, 164)
NET PROFIT		(11,960)

In addition, in accordance with AASB 5 Non-current assets Held for Sale and Discontinued Operations, the results of a disposed business unit and the profit on the sale of that business unit are removed from results from continuing operations and separately
disclosed. The effect of this is as follows:

	Year ended 30 Ame 2005 \$000	Year ended 30 ame 2005 \$000
Decrease sales revenue	140,969
(Decrease) cost of sales	(94,091)
Decrease other revenue	458.530
(Decrease) research and development expenses	(4,763)
(Decrease) selling and marketing expenses	(7.470)	ж
(Decrease) general and administration expenses	(9,348)
(Decrease) other expenses - net assets of discontinued operations	(178,548)
(Decrease) other expenses	(796)
(Decrease) finance costs	(2,825)
(Decrease) income tax expense - continuing operations	(37, 429)
fincrease) net profit after tax from discontinued operations.	(264, 209)
NET PROFIT

CSL Limited and its controlled entities Notes to the Financial Statements continued for the year ended 30 June 2006.

37 Explanation of transition to AIFRS (continued)

(vii) Foreign currency translation reserve: curridative translation differences

In accordance with an exemption provided by AASB 1, the consolidated entity has deemed that the cumulative translation differences for all foreign subsidiaries at the date of transition to AIFRS be reset to \$Nil. Accordingly the opening balance and subsequent foreign currency reserve transfers have been adjusted.

The effect on the balance sheet is as follows: www.www.www.www.

		Consolidated Emiryl	Parent Enuty
	\$000	July 2004 30 June 2005 \$000	ПАЛИ 2004 30 две 2005 SOUT
Decrease foreinn currency translation reserve	54.536	96.787
tincrease) retained earnings.	(54.536)	496.787)
kojal eoliin.

There is no effect on the income statement.

(viii) Land and Buildings

In accordance with an exemption provided by AASB 1, the consolidated entity has elected to use a previous AGAAP revaluation of land and buildings as deemed cost. Accordingly, the balance of the asset revaluation reserve has been transferred to retained earnings

The effect on the balance sheet is as follows:

		Consolidated Entity	Parent Emm
	July 2004 - \$000	30 June 2005 \$000	1 July 2004 30 Aug 2005 SOOO.
Decrease asset revaluation reserve	22.837	22.837	22.824 -22 824.
Increase/vetained earnings/	(22,837)	${22,837}$	122724 22.824
ofa foliim

There is no effect on the income statement.

(ix) AIFRS presentational adjustment - Prepayments and other receivables

In accordance with AASB 101 Presentation of Financial Statements Prepayments and Long term deposits have been reclassified from Other assets and Other financial assets to Trade and other receivables as follows:

	Consulated Entry		Parent Entity
	1 July 2004. \$000	30 June 2005 \$000	5000	1 lub 2004 30 kmc 2005 1000
increase current trade and other receivables.	31.860	22.244	3.894	2419
(Decrease) other assets)	(31,860)	${22.244}$	(3.894)	12,4191
ulcrease non-current trans and other receivables.		3.012
(Decrease) other financial assets		(3,012)
NET ASSETS.

(x) AIFRS presentational adjustment - Surplus lease space provisions

In accordance with AASB 101 Presentation of Financial Statements Surplus lease space provisions have been reclassified from Interest bearing liabilities to Provisions as follows....

		Conscitutional Entity	Parent Entity
	- July 2004 \$000	30 June 2005 \$000	1 July 2004 30 Julie 2005 - 3100	3000
Decrease current interest bearing liabilities	5.353	6.720
(increase) current provisions	(5,353)	(6.720)
Decrease non-current interest bearing liabilities	9.149	3.844
(Increase) hon-current provisions	(9,149)	(3.844)
NET ASSETS

CSL Limited and its controlled entities

Notes to the Financial Statements continued

for the year ended 30 June 2006.

37 Explanation of transition to AIFRS (continued)

(xi) AIFRS presentational adjustment - Borrowing costs

In accordance with AASB 101 Presentation of Financial Statements Deferred borrowing costs are included within the carrying value of interest bearing liabilities and therefore the following adjustment has been made.

		Aonsolidated Entity	Parent Ernity
	\$000	1 iulv 2004 - 30 iune 2005 - \$000	1 дам 2004 30 липе 2005 -3000 -3000
flecrease non-current other assets	(4.610).	${3,352}$
Decrease non-current interest bearing liabilities and borrowings	4.610	3.352
ne assets

(xii) AIFRS presentational adjustment - Other Revenue

In accordance with AASB 101 Presentation of Financial Statements Items previously shown gross in Other Revenue are off-set with their associated costs and shown in either other income or expenses. The effect of this is as follows:

	Year ended 30 Ame 2005 \$000	year ended 20 June 2005
Decrease other revenue
(Decrease) general and administration expenses

(xiii) AIFRS presentational adjustment - Other Expenses

In accordance with AASB 101 Presentation of Financial Statements, the category of other expenses has been eliminated and items have been reclassified to general and administration expenses as follows:

,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,	Year ended 30 June 2005 \$000	Year ended 30 ляте 2006
Increase general and administration expenses	5.802
(Decrease) other expenses

(xiv) AIFRS presentational adjustment - Inventory write-downs

In accordance with AASB 101 Presentation of Financial Statements, inventory write-downs (to net realisable value) have been reclassified from general and administration expenses to cost of sales. The effect of this is as follows:

	Year ended 30 June 2005 \$000	Vear ended 30 June 2005
Increase cost of sales	26.148
Decrease) general and administration expenses	(26,148)

CSL Limited and its controlled entities Notes to the Financial Statements continued for the year ended 30 June 2006.

37 Explanation of transition to AIFRS (continued)

(xv) Reserves

The Committee of the Committee

The total incremental effect on Reserves of the above noted adjustments is as follows.

		Consolidated Entity		Parent Emily
	1 luly 2004 \$000	30 June 2005 \$000	SHOU	- 1 100 1004 - 10 10 10 10 10 10 10 10 10 -5000
Reserves
goodval (note iji		1.953
employee benefits (note in		(1.002)
share-based payments (note iii)	(941)	(2,803)	(94.1)	42.8031
income taxes (note w)		14.345
profit on sale of business unit (note vi)		${11,200}$
foreign currency translation reserve cumulative translation differences inote vill	54,536	96.787
land and buildings (note viii)	22,837	22.837	22824	-22 824
	76.432	120.915	21.683	20.021

(xvi) Retained earnings

The total incremental effect on Retained earnings of the above noted adjustments is as follows:

		Consolidated Emiry		Parent Eurity
	1 luly 2004 \$000	30 June 2005 \$000	1 1uly 2004 - - 600	30 kmc 2005 3000
Retained earnings
- doogvall (rote 1)		${34,327}$
employee benefits (note ii).	32.389	9.048	313	411
share-based payments (note 11)	941	3.235	041	3.235.
government grants (note W)	350	2.072	350.	2.012
theome taxes (note v)	(123, 432)	(26.860)	7313	8985
profit on sale of business unit (note vi)		11.960
foreign currency translation reserve curriculative translation. differences inote will	(54,536)	${96.787}$
land and buildings (note viii)	(22, 837)	${22,837}$	4228241	(22.824)
	(187.125)	(154.496)	(13.847)	18.4211

,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,

ana amin'ny fisika

33333333333333333333333333333333333333

,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,

summummum

CSL Limited and its controlled entities Directors' Declaration

(1) In the opinion of the Directors:

(a) the financial report, and the additional disclosures included in the directors' report designated as audited, 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 2006 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
(2) This declaration has been made after receiving the declarations required to be made to the directors in accordance with section: 295A of the Corporations Act 2001 for the financial period ending 30 June 2006.
(3) In the opinion of the Directors, as at the date of this declaration, there are reasonable grounds to believe that the members. of the Closed Group identified in note 33 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 + Made Chairman minimum minimum

Melbourne 23 August 2006

Brian A McNamee Managing Director

EII FRNST & YOUNG

F Ernst & Young Building 8 Exhibition Street Melbourne VIC 3000 Australia

GPO Box 67 Melbourne VIC 3001

# Tel 61 3 9288 8000 Fax 61 3 8650 7777

Independent Audit Report

to Members of CSL Limited

Scope

The financial report, remuneration disclosures and directors' responsibility

The financial report comprises the income statement, balance sheet, statement of recognised income and expense, cash flow statement, 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 2006. The consolidated entity comprises both the company and the entities it controlled during that year.

The company has disclosed information as required by paragraphs Aus 25.4 to Aus 25.7.2 of Accounting Standard 124 Related Party Disclosures ("remuneration disclosures"), under the heading "Remuneration Report" on pages 42 to 57 of the directors' report, as permitted by Corporations Requiation 2M.6.04.

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 2007. 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. The directors are also responsible for the remuneration disclosures contained in the directors' report-

Audit approach

We conducted an independent audit of the financial report in order to express an opinion 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 and the remuneration disclosures comply with Accounting Standard AASB 124 Related Party Disclosures: 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 quarantee 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 2007, 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 and whether the remuneration disclosures comply with Accounting Standard AASB 124 Related Party Disclosures

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 the remuneration disclosures, 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 and the remuneration disclosures. 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.

Liability limited by a scheme approved under Professional Standards Legislation.

Independence

We are independent of the company and the consolidated entity and have met the independence requirements of Australian professional ethical pronouncements and the Corporations Act 2001. We have given to the directors of the company a written
Auditor's Independence Declaration, a copy of which is included in the Directors' Report.

Audit opinion

Іп сил оринов.

1 the financial report of CSL Limited is in accordance with the top of

(a) the Corporations Act 2001 including:

(i) giving a true and fair view of the financial position of CSL Limited and the consolidated entity at 30 June 2006 and of their performance for the year ended on that date: and
(ii) complying with Accounting Standards in Australia and the Corporations Regulations 2007, and

(b) other mandatory financial reporting requirements in Australia.

2 the remuneration disclosures that are contained on pages 42 to 57 of the directors' report comply with Accounting Standard AASB 124 Related Party Disclosures AASB 124 Related Party

Ennt 9 yours

Ernst & Young

Wignen

wan Wingreen management Partner Methourne

23 August 2006

Designed and constructions of their Design Association Melbourne.

Registered Head Office

Maria Gregoria

Emandel Report

Goldians

sentako erregea (h. 1928).	Tas
A BOOK TELEVISION	5133
BERTHERN THE WA	$\mathbb{Z}^2$
Statement of Recombact Internet and Cardinal	COL
CASTERIO DE CARDIANA	$\sim 2$
Material Italiana National	63.
Directors Declaration	18143
dree hadden andre komme	m

The Board of Directors of CSL Limited has pleasure in submitting their report on the consolidated entity at 30 June. 2006, consisting of CSL Limited and its controlled entities.

1. Directors

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

Mr P H Wade (Chairman)

Dr B A McNamee (Managing Director)

Mill H Akehurst

Miss E.A. Alexander, AM

Mr A M Cipa

Mr I A Renard

Mr M A Renshaw

Mr K J Roberts, AM

Professor J Shine: AO (appointed 1 June 2006).

Dr A C Webster

2 Company Secretary

The company secretary is Mi P R Turvey, BA/LLB, MAICO. Mr Turvey was appointed to the position of company secretary in 1998 having joined the Company in 1992 Before joining CSL Limited he held the role of Company Secretary for five years with Blotech Australia Pty Ltd. Mr E H Bailey, B Com/LLB, is Assistant Company Secretary and was appointed in 2001 having joined the Company. in 2000, Before joining the Company he was a Senior. Associate with Arthur Robinson & Hedderwicks.

3. Directors' Meetings.

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

		Board of Directory	Aucht and Alsk Management	Commune	Securities and Market Disclosure Cormute		itunan kecamca Commute
	Attended	Blazinans	Atterised	Maxonum	Attended:	Attended	Maxmum
P H Wade	A.	9.	$\mathcal{A}^{1}$	WWW.WWW.WWW.WWW.WWWWWWWWWWWWWWWWWWWWWW	31 7	$4^3$
B.A.M.Namee	$\Lambda$	.a.	泽生 mmmmmm	mmmmmmm	$\mathbb{R}^3$	$\mathcal{E}_{\mathcal{E}}$
j Akehurst	Ĥ.	G.				3.	$\mathbb{F}_3$ .
L A Alexander	4.	9.	Â.	000000000000 $\Delta$
A M Cipa	Q.	9	B		$\Lambda$
LA Renard	g,	Y.	4	4		1
M A Renshaw	Ø.	g,	4.	4
K Roberts	塖	9.				5.	Æ.
J Shine	ា	1.
A C Webster	9.	O.				B.	$\mathbb{F}_2$

Attended for at least part in ex officio capacity

Attended for at least part by invitation

Directors' Report e provincija i prije

Principal Activities

The principal activities of the consolidated entity during the financial year were the research, development, manufacture, marketing and distribution of biopharmaceutical and alled products

5. Operating Results

6. Dividends

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

In accordance with determinations by the Directors, the Company's dividend reinvestment plan remains suspended.

Total dividends for the 2005-2006 year are:

			SOOO



Interim dividendi

paid 13 April 2006			50.910.


Final dividend

			12.156
payable on 13 October 2006.

On Ordinary shares

7. Review of Operations

immunoglobulin for intravenous administration has also been completed.

CSL Broplasma's sales declined 8% to \$191m attributable to an Australian Government change of policy relating to the importation of recombinant coagulation factors.

CSL Biotherapies (previously known as CSL Pharmaceuticals) grew sales by 3% to \$212m largely driven by growth in northern hemisphere influenza vaccine sales. A new

For further information on the operations of the Company refer to the Year in Review in the Annual Report.

8. Significant changes in the State of Affairs

There were no 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

9. Significant events after year end

10. Likely Developments Business Strategies and Future Prospects

11. Environmental Requiatory Performance

12. Directors' Shareholdings and Interests

13. Directors' Interests in Contracts

Section 17 of this Report sets out particulars of the Directors Deed entered into by the Company with each director in relation to Board paper access (indemnity) and insurance matters).

14. Share Options

As at the date of this report, the number of unissued ordinary shares in the Company under options and under performance rights are set out in Note 26 of the Financial Statements.
Holders of options or performance rights do not have any right, by virtue of the options or performance rights, to participate in any share issue by the Company or any other body corporate or in any interest issued by any reqistered. managed investment scheme.
The number of options exercised during the financial year. and the exercise price paid to acquire fully paid ordinary shares in the Company is set out in Notes 21 and 26 of the Financial Statements. Since the end of the financial year, no further options have been exercised.

15. Remuneration Report

Key Management Personnel comprise:

· all directors of CSL and
those individuals who have authority and responsibility for planning, directing and controlling the activities. of the Company and the consolidated entity.

Board and Human Resources Committee

The responsibilities of the Human Resources Committee псаюе

U, reviewing and monitoring the human resources strategic plan,
reviewing and approving the corporate human resources policies:
establishing a policy framework for employee and senior executive remuneration.
reviewing and recommending the terms relating to the Company's employee share, option and performance. night schemes:
recommending to the Board individual senior executive. remuneration packages and where appropriate, seeking independent advice regarding senior executive. remuneration.
· recommending to the Board serior executive. recruitment retention and termination policies as well. as succession planning strategies and policies.
reviewing benchmarks against which salary reviews are made and monitoring and reviewing the Company's performance management system, and
reporting to the Board any findings or recommendations of the Committee after each meeting.

In accordance with the charter, the Board reserves. responsibility for:

· the remuneration of non-executive directors;
setting the terms of employment and remuneration with the terms of employment and remuneration for the Managing Director
approving remuneration for senior executive management and

the operation and policies relating to the Company's employee share, option and performance right schemes. and succession planning.

The Human Resources Committee comprises four members, all of whom are independent non-executive directors (NED). These are:

Mr Ken Roberts (Chairman)
· Mr John Akefurst
· Mr Maurice Renshaw (joined june 2006); and
· Dr Arthur Webster

Any recommendation made by the Human Resources Committee concerning an individual director or executive's remuneration is made without that director or executive being present.

Non-Executive Directors' Remuneration

The table on page 49 of this Report sets out the fees paid to non-executive directors and is based on the following NED. Committee Fees schedule

NED Committee Fees (Effective 1 Jan 2006)

	Auda & Risk	Навтал		SECURITY & Warket
	Management Road Committee Committee Committee Committee		Resources Nomination	flischosure
	Andreas Andreas Andreas Andreas Andreas Andreas Andreas Andreas Andreas Andreas Andreas Andreas Andreas Andreas Andreas Andreas Andreas Andreas Andreas Andreas Andreas Andreas Andreas Andreas Andreas Andreas Andreas Andr
Charman 300.000	30.000	20.000
Members 125.000	12.500.	10,000

The Chairman and members of the Nortunation Committee and the Securities and Market Disclosure Committee do not receive any additional fees for committee responsibilities.

In addition to fees paid in cash or taken in the form of shares. non-executive directors also receive superammation contributions equal to 9% of their fees.

Executive Remuneration Policy

Where appropriate, the Human Resources Committee considers. independent external advice in setting both the balance of fixed. and performance related remuneration and the remuneration. levels.

Executive Remuneration Structure

The Company's remuneration structure comprises three core elements

· fixed remuneration.
short-term incentives; and
fong-term intentives.

logether, these elements comprise an executive's total potential remuneration

Fixed Remaneration

Depending on the country in which the executive is employed, an executive's fixed pay is expressed as a "Total" Employment Cost" ("TEC") or as "salary plus benefits"

Any recommendations concerning the serior executive fixed remuneration levels are made by the Human Resources Committee to the Board for the Board's consideration.

Short-term Incentives

Directors' Report

Further details relating to payments under the short-term incentive programs are set out on pages 49 to 51 of this Report.

Long-term Incentives

meeting for this purpose during the financial year.

Performance Rights Plan

Performance Rights may become Vested Performance Rights if the Company satisfies specific performance hurdles during specified Performance Periods.

oomide med

2004, 7 June 2005 and 20 December 2005 and are stipulated in the documents evidencing the respective grants

The performance hurdle is defined so that a proportion. of Performance Rights vest when a minimum target is reached and this proportion increases as performance. exceeds the minimum target.

In relation to Performance Rights granted to date. If the Company's performance in terms of TSR ranking places it below the 50th percentile at every lest Date, none of the Performance Rights will vest. Where the Company is placed at or above the 75th percentile on any lest Date, all of the Performance Rights, which have reached or exceeded the minimum Performance Period of three years will vest. 50% of the eligible Performance Rights vest upon CSL being ranked at the 50th percentile with the balance vesting on a straight line basis between the 50th and 75th percentiles. The data used to assess performance is provided by external advisers.

Future Long-term Incentive Arrangements

The Performance Options will be issued for hil consideration. with an exercise price equal to the volume weighted.

average CSL share price over the week up to and including the gay of grant.

The Board considers that an EPS performance hurdle. is appropriate since a key approved corporate objective is the pursuit of sustainable earnings growth.

Grant date amiwersary																																							411

Percentage of Performance
Rights and Options vested																										25% 35% 40%

There will be no company provided toans as part of the future long-term incentive arrangements.

SESOP II

Directors' Report Osmanlıkla

No options were issued under SESOP II during the 2006. financial vear.

Relationship between Company Performance & Executive Remuneration

SESOP			Financial Year
Allocation	2000	2001	2002	2003	2004	2005	2006
1997	16%	19%	23%
1998		18%	24%.	9%
1999			$23\%$	5%	15%
2000.				5%	18%	-22%
2001					19%	24%	30%
2002.						23%	30%
2003.							25%

	Company		Indicative
	TSR!	avdicative	Murniker
Peer Group	as at	Percentie	of Raints
Establishment Date	30 have 2006	Ram	Vesting
1 October 2003	247%	100 0	100%
31 March 2004	164%	987	100%
1 October 2004	93%	949	100%
7 lune 2006	85%	100.0	100%
20 December 2005	32%	96.2	100%

All Performance Rights yest at the 75th percentile

Director and Executive Contracts

Non Executive Directors

Executive Key Management Personnel

It is the Company's general practice that employment contracts for executives do not have a fixed term.

It is the Company's policy that employment contracts for executives contain provisions for termination with notice or payment in field thereof and for termination by the Company without notice for serious misconduct and breach of contract.

	Nation Period by Company	Nouce Period by Employee	lemination Payments
Executive Directors
B A McNamee	6 months	6 months	12 months
A M Cipa	6 months	6 months	12 months
Specified Executives
Pillumer	6 months	6 months	12 months
C Amit	6 months	6 months	None
P Bordonaro ²	3 months	3 months	12 months
A Curtinertson	6 months	6 months	12 months
P. Turvey	6 months	6 months	12 months
К Мису	3 months	3 months	12 months
A vor Bibra	6 months	6 months	12 nonths
l Giarla	6 months	6 months	12 months

The Company and Mr P Bordonaro entered into a fixed term contract beginning 1 February 2006 and ending 31 March 2008. Under the new employment arrangements Mr P Bordonaro ceased to be a Key Management Personnel from 1 February 2006. The notice periods and termination payments disclosed reflect those that were in place while Mr P Bordonaro was Key Management Personnel
11 Mr K Milroy ceased to be a Key Management Personnel on 6 January 2006. The notice periods and termination payments. disclosed reflect those that were in place while Mr K Milroy was Key Management Personnel
Mr 1 Giarla is currently on an international assignment contract. The term of the assignment is from 16 Tanuary 2006 to $\qquad \qquad$ 1 February 2009 with an option to extend by 12 months by mutual agreement with the company. Should Mr T Grada bemade redundant during or at the conclusion of the assignment. a termination payment consisting of 1 year base salary (or USD300.000, whichever is greater), 100% of armual short term [100%] incentive potential (or USD150.000), whichever is greater), health in the benefits for two years after terraination date, and USD32.000 as compensation for other origoing benefits. Resignation within the initial two years of the assignment or at the end of the assignment results in a termination payment as described above unless a suitable role is found in the United States.

Directors' Report Continued and the Continued Books of the Books of the Books of the Books of the Books of the Books of the Books of the Books of the Books of the Books of the Books of the Books of the Books of the Books of the Books of th

15. Remuneration Report (continued)

Director and Executive Remuneration

Director Remuneration

			Primary		Post employment			Other Long Jerm	Share Based Paymonts
		Cash salary and fees!	Caso Bonus: Ă.	Non- топезагу Senefits	Super- annualion Semetits	Other -5	1 ong Service teave Å	Termination Benefits. - 5	Performance Rights' ю.	Options	fotal
Executive Directors
Dr. & A McNamee	2006	1,542,374 1,500,000		17.695	42,060	÷.	160,629	$\mathcal{A}$	610.904		3,873,662
Managing Director	2005	1473.007	1300000	66/3	40,202		143.735		246.680		3-212-302
A M Cipa	2006	610.568	543,000	1.828	47,400	ä,	65,166	$\sim$	275.017		1,542,979
Finance Director	2005	026.416	495.000	2,565	42,531		46,990		138,349	31,269	1,282,120
Non-executive Directors
P H Wade	2006	275,000			24,750	í,		÷.			299.750
Chairman	2005	235.000			21450	÷.					256,150
J Akehurst	2006	126,250			11,363	$\mathbf{r}$		Ŵ,			137,613
Non-executive director	2005	108.750			9,788.						118,38
L.A. Alexander	2006	145,000	×.		13.050	W,		$\overline{\phantom{a}}$	r.		158,050
Non-executive director	2005	127,600			11.475						138.975
I A Renard	2006	128,750	X.	×.	11,587	ŵ		×			140,337
Non-executive director	2005	118 / 50			10688						129,438
M A Renshaw	2006	128,750	s.	$\mathcal{L}_{\mathcal{A}}$	11.587	Ø		u,			140,337
Non-executive director	2005	110.000			9.900						110,900
K Roberts	2006	135,000			12,150	÷.		$\alpha$			147,150
Non-executive director	2005	120 000			10.800						130.800
A U Webster	2006	126,250			11,363			ж			137,613
Non-executive director	2005	417 GOO			10.575						128,075
Total of all Directors	2006		3,217,942 2,043,000 19,523		185,310	$\omega$	225,795	ä,	885.921		6,577,491
	2005		2.33.523 195.000 1 243		167.109		190.725		385.029	31.269	5,576,298

Mr M A Renshaw commenced 20 July 2004

	VO ST.	Performance BOTHSS	71.13 integration Bonus	lound Cash Sonns:
Dr B A McNamee	2006	\$750,000	\$750,000	\$1,500,000
	2005	\$650.000	\$650.000	\$1.300.000
Mr A M Ciba	2006	\$297.000	\$246,000	\$543.000
	2005	\$275.000	\$220,000	\$495.000

Contract of the Community Contract of the Community CONTRACTOR CONTRACTOR CONTRACTOR

88888888888

a kama wa mshindi wa 1979, alikuwa wa 1979, alikuwa wa 1979, alikuwa wa 1980, alikuwa wa 1980, alikuwa wa 198

Directors' Report

15. Remuneration Report (continued)

Non Director Key Management Personnel Renumeration

			Primary		Post employment	Other Long Term		Share Based Payments
		Castrodary and fees!	1.357 Monus A,	Non- monetary Benefits	Retire- Super- ment annuaton Benefits	Loug Service Leave	Телляникон Benefits	Pertormarce Rights	Oplears'	fotal
P Turner	2006	886,025	886,683	34.384	78,696	85,192		209,144	158,340	2,338,464
President ZLB Behring (based in United States)	2005	1 008 492	762.440.	41/2	76,260	395.940		83.514	200.002	2 32 820
C Armit	2006	396,340	107,500	61,993	35,401	19,016		96,027	105,560	821,837
President CSL Phormaceutical (based in Australia)	2005	390,761	124,300	62,895	33.160	16.033		47,121	160.066	834 536
P Bordonaro	2006	188,489		2,189	73,411 IIX.			106,268		370,357
General Manager CSL Bioplasma
(based in Australia) A Cumperson	2005 2006	3/135/ 424,586	120.000 157,500	29.660 91,085	30 783	4.841 41,039		68.083 89,167	31.269	655.985 994,315
Chief Scientific Officer (based in Australia)	2005	356.772	105.000	53614	32,598 24.141	16.829		37 166	158,340 1/3/11	767,905
P Turvey	2006	464,228	309,625	50,051	51,886	53,647 ú,		102,919	105,560	1,137,916
Company Secretary and General Counsel (based in Australia) К Мілоу	2005 2006	397.233 224,512	294.000 132,000	31.859 20,383	48,740 30,013	22.838		58,319 45,491	126,414 160,675	979.403 613,074
General Manager Human Resource
(based in Australia)	2005	376.665	258.566	23.495	32.913	5.115		20,896	82.156	800 806
T Claria President Bioplasma Asia Pacific	2006	256,269	460,754	58,070	23,237		÷.	67.780	206,582	1,072,692
(based in Australia)	2005	461,899	1,574,604	9.663	29,362			20,747	98,628	2,214,923
A von Bibra General Manager Human Resource (based in Australia)	2006 2006	134,513	174,185	27,977	9.796	22,346		23.103	103,662	495,582
Total of non-director Key Management Personnel	2006 2005		2,974,962 2,228,247 3365179 3239110 215348	346,132	335,038 278,985	221,240 461,596		739,899 335.848	998,719 8/2312	1,844,237 8.786.378

Cash salary and fees, cash bonuses and superannuation paid. in foreign currency have been converted to Australian dollars. at the year end exchange rate. Both the amount of remuneration and any movement in comparison to prior years may be influenced by changes in the respective currency exchange rates
Included in the cash bonuses are the following ZLB integration. bonuses which were paid in two tranches in the 2005 financial year and 2006 financial year.

			71.9	Iotal
		Performance	wwegration	Cash
	Vear	BOITES	BORUS	Norus
P lumer	2006	\$449.757	\$436,926	\$886,683
	2005	\$391,220.	\$381.220	\$162.440
P lutvey	2006	\$169,750	\$139,875	\$309,625
	2005	\$168.000	\$126.000	\$294.000
K Minov	2006	ù.	\$132,000	\$132,000
	2005	\$120.664	13/902	\$258,566
A von Bibra	2006	\$90,000	\$84,185	\$174,185
	20.000

.......................................

Ms A von Bibra became Key Management Personnel during the 2006 financial year, therefore no amounts are disclosed for the 2005 financial year manufacturers and the

15. Remuneration Report (continued)

Executive Key Management Personnel

Fixed and Performance Remuneration Components

Remuneration Components as a Proportion of Total Remuneration

				Pertermance Related Remuneration
	Fixed Remineration (not linked)		Equary Based
	to company performancel	Cash Based SIE	Performance Mares.	Performance Options	lotal	fotal.
Executive Directors
B.A.M.Namee	45%	39%	16%		65%	100%
A M Cipa	41%	35%	18%		53%	100%
Key Management Personnel
P Turner	46%	38%	$9\%$	7%	54%	100%
C Armiti	62%	13%	$12\%$	13%	38%	100%
P Bordonaro.	71%	9%	29%		23%	100%
A Cuttibertson	59%	16%	9%	16%	41%	100%
P Turvey	55%	21%	9%	9%	45%	100%
K Milroy	45%	22%	7%	26%	55%	100%
1 Grarla	32%	43%	6%	19%	66%	100%
A von Bibra	39%	35%	$5\%$	21%.	61%	100%

Directors' Report an martin

15. Remuneration Report (continued)

Executive Key Management Personnel

a a shekarar 1999

Performance Remuneration

		Short term intertive 2016		Accounting Values being amortised in respect of the 2006 equity grants in future years."			春村 Remunerat n consisting of options. & rights	(B) Value of Richts. gesneer! durant 05/06 at monted date	K) Maiue of Options exemised during 05/06 at exercise date"	10) Total of совники @ 10 (0)
	Percentage Awarded	Percentage Not Auranded!	2007 $\sim$	2008	2009 İ.	2010 ł.	$\mathbb{P}_\alpha$		S.	A
Executive Directors
B A McNamee	$83.3\%$	16.7%	682.471	684.341	666.25	204 281		16% 2614.690		2614.650
А М Сцю	-90.0%	10.0%	266,702	267.432	260.759	81.713		18% 199 360		997.500 2018.850
Key Management Personnel
P lumer	100.0%		252.665	253.353	245.430	65 334	16%	942.003	2918850	3920853
C Armit	62.5%	315%	48.466	48.599	45.412		25%	181.780	613.200	794 980
P Bordonaro			48.466	48,599	45,412		29%	181.780	1.399.500	1.561.280
A Cumbertson	87.5%	12.5%	138.405	138.784	136.253	49.412	25%	514830	469.980	984 810
P Jurvey	81.5%	12.5%	86.993	81.232	84431	21.961	18%	324 380	1.674.900	1.999.280
KIMEOV			28.949	29.029	21125		33%	108,580	24.080	132.660
1 Glarla	31.5%	62.6%	44.563	44.685	41/94		25%	167 140	1.015.200	1162340
A von Bibra	75.0%	25.0%	21.468	21.527	20.115		26%	60.520	320.10	400.699

Short term incentive awarded and not awarded relates to the period ended 30 June 2006 only.

mmmmmm8

Continued

15. Remuneration Report (continued)

Executive Key Management Personnel
Options and Rights Holdings Committee Committee Committee Committee
Performance Rights

						lerns and Conditions for Performance Rights grants during 2006
	Balance 201 1m 2008	Number Granted	balance at 30 June 2006	Number vested During the Year	Grant Date	Value per Richt af Grant Date Y.	First Exercise Date	1 ast Lxercise Date
Executive Directors
B.A.McNamee	70.000	40.000 37.000	147,500		15-14-05 7 Mar 06	24.51 43.58	30 Sep 08 20-Dec-08	7-180-12 20 Dec 12
A M Cipa	40.000	15.000			15-10-05.	24.51	30 Sep 06	$J$ -lun 1 $Z$
Key Management Personnel		15.000	70.000	$\sim$	7 Mar 06	43.68	20 Dec-08	20 Dec-12
Pluner	24.800	17650			$I-$ Sep $-05$	24.40	30-Sep-08)	7 Iun 12
		11.900	54.350		6 Арг-06	42.97	20 Dec-08	20 Dec 12
A Cuthbertson	11.100	5250			$7-$ Se $p$ -O $5$	24.40	30-Sep-08.	$7 \text{ km} \cdot 12$
		9000	25350	¥	6 Apr 06	42.97	20-Dec-08	20-Dec-12
Pillavey	17 100	6250			$T$ -Sep-Ob	24.40	$30$ -Sep $\omega$ 8	$7 - 1$ Lin $-12$
		4.000	27350		6-Apr-06	42.97	$20 - \log 08$	20 Dec 12
C Armiti	14 400	1.450	21.850		7-Sep Ob	24.40	30-Sep-08)	$7 - \ln n + 2$
P Bordonaro	20.800	7.450	28.250		7 Sep-05	24.40	30 Sep 08	7 Jun 12
K Miroy	5800	4.450	10,250	23	7-Sep-05	24.40	$30$ -Sep $-06$	$7 - 115 - 12$
I Glarla	6.000	6.850	12850	S.	$7-$ Se $p1$ (Jo	24.40	30-Sep-06	7-lun-12
A von Bibra	1500	3,300	4.800		$I$ -Sen $-05$	24.40	30-Sep 08	$7 - 11 + 12$
¶ota∥	211.500	191,050	402.550

Alan Alaman Manazarta (Alan Alaman Manazarta (Alan Alaman Manazarta (Alan Alaman Manazarta (Alan Alaman Manaz

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......................................

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15. Remuneration Report (continued)

Executive Key Management Personnel

SESOP and SESOP II Options

	Balance at 1 July 2005	Mumber Granted	Number Exercised	Balance at 30 June 2006	Winnber Vested Dunna the Year	Vested and Exercisable at 30 June 2006
Executive Directors
B A McNamee
А М Стра	75.000		50.000.	25.000	15.000	25.000
Specified Executives
Pllumer	175.000		145.000	30.000	65.000
C Armit	90.000		40.000	50.000	70.000	30.000
P Bordonaro	75,000		75.000		15,000
A Cutribertson	87.000		57000	30.000	57.000
Pilurvey	100.000		80.000	20,000	40.000
K Milroy	70.000		28.000	42.000	7.000
I Giarla	103.500	- 1	45,000	58.500	54.000	36.000
A von Bibra	39.600		21.120	18.480	5,280
lotall	815 100		541 120	273.980	328.280	91.000

Shares Issued on Exercise of Options and Rights

	Date Options granted ¹	& rahts Manber of Shares	Paid 3 Per Strate	Unpaid \$ Per Share
Executive Directors
B. A. McNamee
A M Cipa	Aug-2000	50.000	34.04
Key Management Personnel
Pillumer	Aug-2000	100 000	34.04
	11 2002	45.000	21.91
C Armit	Feb-2000	40.000	23.01
A Cuthbertson	feb 2000	12.000	21.01
	11 2002	45.000	2191
Р илиех	Aug. 2000	50.000	34.04	mm
	101-2002	30.000	2/97
P Bordonaro	Aug-2000	75.000	34.04
K Milroy	Jun-2001	28,000	37.54
1 Gerta	Aul-2003.	45.000	12.19
A von Bibra	lun 2001	21.120	37.54
lotal IIII		541.120

the contract of the contract of the contract of

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iiiiii

Directors' Report

15. Remuneration Report (continued)

Directors and other Key Management Personnel

Shareholding

	Balance at	Outtons exercised	Other charates	Balance at 30 June	Balance as of date of this
	1 Any 2005 damng year		during year	2006	report
Directors
B A McNamee	343.511		(50,000)	293.511	293.611
А М Стра	8.547	50.000	(50.000)	8547	8547
P. H. Wade	30 910		1241	32.161	32.151
J Akehurst	6313		531	6.844	6.844
t. A Alexander	6.516		531	7.047	1047
J.A. Renand	6373		531	6,904	6.904
M A Renshaw	659		531	0.190	1,190
K J Roberts	5.838		(469)	5.369	5,369
A C Webster	8 842		531	9.373	9373
Key Management Personnel
Pilmner	12.242	146.000	(145,000)	12.242	12,242
C. Armit	110.910	40.000	(80,0.00)	70.910	70.910
P Bordonaro	26,760	75,000	(101/000)	760	760
A Cuthbertson	49.379	57.000	(48.000)	57.379	57.379
Pilavey	46.971	80.000	(75.113)	51.268	51.258
K Miltov	36.603	28.000	(62, 832)	1771	1711
ll Giarla		45.000	(45.000)
A von Bibra	1,283	21.120	(21) 765	636	638
lotal	700.657	541,120	(675, 683)	565.894	565,894

Loans to Executive Key Management Personnel.

Details of the aggregate of toans to Key Management Personnel are as shown:

		Opening Balance \$000	interest Charged \$000	merest Not Charged \$000	Closina Kalance 5000	Mumber in group 30 June 2005
Executive Directors	2006	941	37	20	493	2
	2005	1.882.	71	-71	941	-2
Key Management	2006	5,041	112	212	4.938	8
Personnel	2005	1.930.	72.	218.	5.041	10.
Total Executive Directors
and Key Management	2006	5.982	149	232	5.431	10
Personnel	2005	-3.812	143	-289	5.982	12.

15. Remuneration Report (continued)

Loans to Executive Key Management Personnel (continued).

Details of the aggregate of Icans to Key Management Personnel are as shown:

	Balance at 1 May 2005 \$000	Interest Charged \$ 000	mterest Not Charged \$ 000	Balance at 30 June 2006 3.000	Highest Owing in Penad \$ 000
Executive Directors
B A McNamee	893	35.	18	447	893
A M Cina	48.	D.	2	46.	48.
Key Management Personnel
D'iurner	110	4	4	110.	110
C Amit	2.537	401	62.	1615	3.460
P Bordonaro	330		2.		330
A Cuthbertson	1.008	37	91	1.611	1/84
Pluney	593	20.	50	1702	1 702
K Miroy	463		3.		463
1 Grana		ារា

Interest not charged represents the difference between the average commercial rate of interest during the year (7%). and interest charged to the individual.

16. Other Transactions and Balances with Directors and other Key Management Personnel

The Company has a number of contractual relationships induding property leasing and research collaborations. with the University of Methourne of which Mi lan. Renard is the Chancellor and Miss Elizabeth Alexander is the Chair of the Finance Committee and a member of the Council, and
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.

17. Indemnification of Directors and Officers

During the financial year, the insurance and indemnity arrangements discussed below were in place concerning. directors and officers of the consolidated entity.

The Company has entered into a Director's Deed with each director regarding access to Board papers, indemnity and Insurance, Each Deed provides,

an ongoing and unlimited indemnity to the relevant director against liability incurred by that director in or ansing out of the conduct of the business. of the Company or of a subsidiary (as defined in the Corporations Act 2001) 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 ansing 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.
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 ornissions of that director in the director's capacity or former capacity as a director of the Company, and
the relevant director with a right of access to Board. papers relating to the director's period of appointment as a director for a period of seven years following that

18. Auditor independence and non-audit services

Details of the amounts paid or payable to the entry's auditor, Ernst & Young for non-audit services provided. during the year are set out below. The directors, in accordance with the advice received from the Audit and Risk Management Committee, are satisfied that the provision of non-audit services is compatible with the general standard of independence for auditors imposed. by the Corporations Act 2001. The directors are satisfied that the provision of non-audit services by the auditor did not compromise the auditor independence requirements. of the Corporations Act 2001 for the following reasons.

all non-audit services have been reviewed by the Audit and Risk Management Committee to ensure that they do not impact the impartiality and objectivity of the auditor, and

A copy of the auditors' independence declaration as required under section 307C of the Corporations Act 2001... accompanies this Report.

Ernst & Young and its related practices received or are due to receive the following amounts for the provision. of non-audit services."

	Due diligence and completion audits Compliance and other audits.																															\$194,243		0.16000
																																		\$210.243

19. Rounding

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

Signed

Peter H Wade (Director)

Signed

Brian A McNamee (Director)

Melbourne 23 August 2006

EII ERNST & YOUNG

F Ernst & Young Building Enter
8 Exhibition Street
Melbourne VIC 3000 Australia

GPO Box 67
Melbourne VIC 3001

■ Tel 61 3 9288 8000 Fax 61 3 8650 7777

Auditor's Independence Declaration

Emit 9 yours

Ernst & Young

Ivan Wingreen Partner Melbourne

23 August 2006

Liability limited by a scheme approved under-Professional Standards Legislation.

CSL Limited and its controlled entities Income Statement for the year ended 30 June 2006

				Consolidated Entity [[[[[[[[[
			Contingent
			Consideration
		Operating 2006	(Note 5) 2006	Total 2006	2005
	Notes	\$000	\$000	\$000	\$000
Continuing operations
Sales revenue	3	2,848,908		2,848,908	2 608 965
Cost of sales ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,	m	(1,703,033)	÷	(1,703,033)	(1.618.833)
Gross profit		1,145,875	$\ddot{\phantom{0}}$	1,145,875	990,132
Other revenues	3.	54,624		54,624	41,294
Other income	3	2.081		2,081
MANAMANAN Research and development expenses		(161, 023)		(161, 023)	(140.958)
Selling and marketing experises.		(339, 863)		(339, 863)	(324, 866)
General and administration expenses		(161, 197)	(328, 515)	(489, 712)	(116.604)
Finance costs	3	(41, 517)	$\Delta$	(41, 517)	(38.816)
Profit before income tax expense		498,980	(328, 515)	170,465	410.283
Income tax experise	4.	(148, 087)	94,979	(53, 108)	(175, 554)
Net profit from continuing operations	23	350,893	(233, 536)	117,357	234.729

Discontinued operations
Proticatter tax from discontinued operations	Ġ.				253.045
Profit attributable to members of the parent entity	23.	350,893	(233, 536)	117,357	487.774


Earning, per share		Cents		Cents	▥ Cents
Basic earnings per share for profit from continuing operations	34	192.77		64.47	110 ii
Basic earnings per share for profit from discontinuing operations	34				129.11
Basic earnings per share for profit attributable to members.	34	192.77		64.47	ШЩ 248.68
Diluted earnings per share for profit from continuing operations	34	184.25		61.62	116.39
Diluted earnings per share for profit attributable to members	34	184.25		61.62	241.86

......................................

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a a shekarar 1979

CSL Limited and its controlled entities Income Statement
for the year ended 30 June 2006

,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,

.......................................

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			этайхаар шахагу
		2006	2005
	Notes	\$000	5000
Continuing operations
Sales revenue	А,	346,822	363.320
Cost of sales		(171, 356)	(11) 8531
Gross profit		175,466	192,467
Other revenues	3	35.016	30,998
Other Income	3.	1,660
Research and development expenses		(79, 509)	159,1921
Seling and marketing expenses		(47, 785)	142.5021
General and administration expenses.		(58, 419)	(56, 558)
Finance costs	$\mathcal{A}$	(4, 826)	(387)
Profit before income tax expense		21,603	64.811
Income tax expense.	$\overline{4}$	(5, 569)	(0, 16)
Profit attributable to members of the parent entity	23	16,034	65,295

the contract of the contract of the contract of the contract of the contract of

W. . . . . . . . . . . . . . . . . . .

a a shekarar 1979

CSL Limited and its controlled entities Balance Sheet
as at 30 June 2006

			Consolidated Entry		Parem Entity
	Notes	2006 \$000	2005 \$900	2006 \$000	2005 4000
CURRENT ASSETS
Cast and cash equivalents	J.	753,694	723,842	177,290	461.769
Trade and other receivables.	8	593,679	559.227	99,734	71,283
Current tax assets	18	6,889		6,889
Inventories	9	973,427	946,583	66,426	59,451
Other financial assets	10	7,872
Total Current Assets		2,335,561	2.229.652	350,339	592.603
NON-CURRENT ASSETS
Irade and other receivables.	8	17,673	14.026	11,117	20.041
Other financial assets	4H	4,728	16.566	1,232,935	232.905
Property plant and equipment	12	816,336	769,143	268,881	261.402
Deferred tax assets	13	187,432	76.659.
Intangible assets	14	820,841	786,435,	20,000	20,000
Retrement benefit assets	16,	3,514	-60.	1,840
Iotal Non-Current Assets		1,850,524	1.662.879	1,534,773	1.534.348
TOTAL ASSETS		4,186,085	$3.892 + 31$	1,885,112	2.126.851
CURRENT LIABILITIES
Trade and other payables	16.	388,979	396,555	688,999	595 199
Interest-bearing kabilities and borrowings	17	463,632	14.141
Current tax labilities Provisions	18 19.	88,038 85,885	31,130 81,891	26,115	1/348
Deferred government grants	20	371	296	371	296.
Retirement benefit liabilities	15	4,635
Total Current Liabilities		1,031,540	533 013	715,485	613.343
NON CURRENT LIABILITIES
Interest-bearing Vabilities	17.	595,197	995,839
Non-current tax liabilities	18	5,043
Deterred tax habilities	13	61,767	18,211	1,715	9.958
Provisions.	19	408,053	78,546	5,223	16.391
Deferred government grants	20	4,093	2.664	4,093	2,004
Retirement benefit liabilities	$15\,$ wm	90,588	95.667		- 159
Total Non-Current Liabilities m		1,164,741	1.250.993	11,031	29.172
TOTAL LIABILITIES		2,196,281	1.784.006	726,516	642.510
NET ASSETS		1,989,804	2.08525	1,158,596	1,484,336
EQUITY
Contributed equity	21	994,101	1,223,456	994,101	1,223,466
Reserves	22	(55, 767)	(18200)	13,351	2.803
Retained earnings	23.	1,051,470	1.068.065	151,144	258 067
TOTAL EQUITY	24.	1,989,804	2.106.25.	1,158,596	1484,336

a kacamatan ing Kabupatèn Tanah

200000000000000000000000000000000000000

,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,

MANAMANA

CSL Limited and its controlled entities Statement of Recognised Income and Expense
for the year ended 30 June 2006

,,,,,,,,,,,,,

33333333333333333333333333333333333333

.......................................

......................................

.......................................

......................................

			Conselvated Entry		Parent Eminy
	Notes	2006 \$000	2005 6000	2006 \$000	2005 SOOO
Profit for the year		117.357	487.774	16.034	56.295
Exchange differences on translation of foreign operations. net of hedges.	22.	116.691	1106-973.
Gains liossest on available for sale financial assets, net of tax	22.	(101)		(101)
Actuaria gains losses) on derined benefit plans, net of tax	23.	(9,558)	(16/136)	1,437	38.
Net income (expense) recognised directly in equity.		107.032	(213,100)	1.336	38.
Total recognised income and expense for the year attributable to equity holders	24	224.389	274.665	17.370	1999

a a shekarar 1979

CSL Limited and its controlled entities Cash Flow Statement

		Consolidated Entry		Parent Entity
Motes	2006 \$000	2005 \$000	2006 \$000	2006 9.000
Cash flows from Operating Activities
Receipts from customers (inclusive of GST)	2,982,382	2.698.158	373,303	369.640
Payments to suppliers and employees (inclusive of GST)	(2,324,695)	(207333)	(329, 539)	(291, 294)
Cash generated from operations	657,687	624821	43,764	16.346
Income taxes (paid/received	(127, 727)	(43, 299)	4,173	(14.620)
Interest received	24,767	16,954	8,438	12.384
finance costs paid	(32, 563)	130.660)	(324)	(384)
32 Net cash inflow from operating activities	522,164	66/622	56,051	15123
6. Net cash outflow from operating activities - discontinued operations		9.566
Net cash inflow from operating activities - continuing operations	522,164	511.386	56,051	$\frac{1}{2}$
Cash flows from Investing Activities
Proceeds from sale of property, plant and equipment	2.739	712	281	13
Proceeds (payments) from the sale of business unit.	(14, 920)	460.135
Dividends received	396		2,661
Payments for property, plant and equipment	(122,065)	(105,015)	(38, 881)	132.0291
Payments for other investments	(132)	(211)	(132)	12TT)
Payments for intellectual property	(8,548)	(9.001)
Payments for restructuring of acquired entities and businesses.	(10,086) (5,025)	(83, 967)
Payments for onerous contracts		(14682) (30.433)		(20.624)
Income tax on profit on sale of business unit	(157, 641)	217,472	(36,071)	[52.917]
Net cash inflow/foutflow) from investing activities Net cash outflow from investing activities - discontinued operations. Ø.		14.868
Net cash inflow/(outflow) from investing activities
- continuing operations	(157, 641)	232.340	(36,071)	[52,817]
Cash flows from Financing Activities
21 Proceeds from issue of shares	51.711	16,970	51.711	16970
Payments for shares bought back 21	(281, 538)	(317, 195)	(281, 538)	(317.795)
Dividends paid	(124, 394)	(63, 508)	(124, 394)	(63, 508)
Acvances from subsidiaries			49,762	700,596
Proceeds from borrowings	(2,082)	266.617 (10, 20, 2)
Repayment of portowings Net cash inflow/(outflow) from financing activities	(356, 303)	(166,688)	(304, 459)	426,263
Net cash flow from financing activities - discontinued operations 6.
Net cash inflow/(outflow) from financing activities
- continuing operations	(356, 303)	(166,688)	(304, 459)	426.263
Net increase/(decrease) in cash and cash equivalents - continuing operations	8,220	643.040	(284, 479)	449,069
Net decrease in cash and cash equivalents
- discontinued operations f)		(24, 434)
Net increase in cash and cash equivalents	8,220	018606	(284, 479)	449,069
Cash and cash equivalents at the beginning of the financial year WWWW	719,751	110343	461,769	12,700
Exchange rate variations on foreign cash and cash equivalent Dalances	20,017	(0, 108)
32 Cash at the end of the financial year	747,988	710,761	177,290	461,769

CSL Limited and its controlled entities Notes to the Financial Statements for the year ended 30 June 2006

1 Summary of Significant Accounting Policies

The financial report of CSL Limited (the Company) for the year ended 30 line 2006 was authorised for Issue in accordance with a resolution of the directors on 23 August 2006.

(a) Statement of compliance

AASB amendment/ standard	Affected Standard(s)	Nature of change to accounting policy	Application date of standard	Application date for the consolidated entity
2004-3	AASB 1: First-time adoption of AlFRS, AASB 101: Presentation of Financial Statements, and AASB 324; Related Party Disclosures.	No change to accounting policy required. Therefore no impact.	1 January 2006#	1 July 2006
2005-1	AASB 139: Financial Instruments: Recognition and Measurement.	No change to accounting policy required. Therefore no impact.	1 January 2006#	1 July 2006
2005-4	AASB 139: Financial Instruments: Recognition and Measurement, AASB 132: Financial Instruments: Disclosure and Presentation. AASB 1: First-time adoption of AIFRS, AASB 1023: General Insusance Contracts, and AASB 1038: Life Insurance Contracts.	No change to accounting policy required. Therefore no impact.	1 January 2006#	1 July 2006
2005-5	AASB 3: First time adoption of AIFRS, AASB 139: Financial instruments: Recognition and Measurement.	No change to accounting policy required. Therefore no impact.	1 January 2006#	1 July 2006
2005-6	AASB 3: Business Combinations.	No change to accounting policy required. Therefore no impact.	1 January 2006#	1 July 2006
2005-9	AASB 4: Insurance contracts, AASB 1023: General Insustance Costracts. AASB 132: Financial instruments: Presentation and Disclosure. AASB 139: Financial instruments: Recognition and Measurement.	Change to accounting policy required. However, no material impact on the current financial years financial statements.	1 January 2006#	1 July 2006

CSL Limited and its controlled entities Notes to the Financial Statements continued for the year ended 30 June 2006

Summary of Significant Accounting Policies (continued) I

(a) Statement of compliance (continued) statement or compliance (community) and the community of the community of the community of the community of the community of the community of the community of the community of the community of the community of the communit

AASB amendment/ standard	Affected Standard(s)	Nature of change to accounting policy	Application date of standard	Application date for the consolidated entity
2005-10	AASB 3: First time adoption of AIFRS, AASB 4: Insurance contracts, AASB 101: Presentation of Financial Statements, AASB 114: Segment Reporting, AASB 117: Leases, AASB 133: Earnings per Share, AASB 132: Financial Instruments: Presentation and Disclosure. AASB 139: Financial Instruments: Recognition and Measurement, AAS8 1023: General Insurance Contracts, AASB 1038: Life Insurance Contracts.	No change to accounting policy required. Therefore no impact.	1 January 2006#	1 ltdy 2006
2006-3	AASB 121: The Effects of Changes in Foreign Exchange Rates.	No change to accounting policy required. Therefore no impact.	31 December 2006* 1 ltdly 2006
UIG 4	UIG 4: Determining whether an Asset Contains a Lease.	No change to accounting policy required. Therefore no impact.	1 January 2006#	1 ltdy 2006
UIG 5	UIG 5: Rights to Interests arising from Decommissioning, Restoration and Environmental Rehabilitation Funds.	Not applicable to the consolidated entity. Therefore no impact.	Not applicable	Not applicable
UiG 6	UIG 6: Liabilities arising from Participating in a Specific Market - Waste Electrical and Electronic Equipment.	Not applicable to the consolidated entity. Therefore no impact.	Not applicable	Not applicable
UiG 7	UIG 7: Applying the Restatement Approach under AASB 129 Financial Reporting in Hyperinflationary Economies.	No change to accounting policy required. Therefore no impact.	1 March 2006#	1 ltdy 2006
UIG 8	UIG 8: Scope of AASB 2. required. Therefore no impact.	No change to accounting policy	1 May 2006#	1 luly 2006
UiG 9	UIG 9: Reassessment of Embedded Derivatives.	No change to accounting policy required. Therefore no impact.	3 June 2006#	1 laly 2006
	$t$ Application date is for the annual reporting periods beginning on or after this date.

Application date is for the annual reporting periods ending on or after this date.

CSL Limited and its controlled entities Notes to the Financial Statements continued for the year ended 30 lune 2006.

Summary of Significant Accounting Policies (continued)

(b) Basis of Accounting

(c) Principles of Consolidation

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

(d) Foreign Currency Translation

Foreign currency transactions are translated into the functional currency using the rate of exchange ruling at the date of the transaction

Summary of Significant Accounting Policies (continued)

(e) Revenue Recognition

Sales revenue

Interest income

Interest income is recognised as it accrues (using the effective interest rate method).

Citier revenue

Other revenue is recognised as it accrues.

Dividend income

Dividend income is recognised when the shareholders right to receive the payment is established.

(f) Government Grants

Government grants are recognised at their fair value where there is a reasonable assurance that the grant will be received. and the consolidated entity will comply with all attached conditions.

(g) Borrowing Costs

(b) Goods and Services Tax and other foreign equivalents (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 GSI component of cash flows arising from investing and financing activities that are recoverable are classified as operating cash flows.

(i) Income Tax

Summary of Significant Accounting Policies (continued)

(j) Cash and Cash Equivalents

Bank overdrafts are carried at the principal amount interest is charged as an expense as it accrues (using the effective interest rate method).

(k) Trade and other receivables

(1) Inventories

Raw materials and stores, work in progress and finished goods are stated at the lower of cost and net realisable value.

Cost includes direct material and labour and an appropriate proportion of variable and fixed overhead expenditure, the latter being allocated on the basis of normal operating capacity.

Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and the estimated costs necessary to make the sale.

(r) Investments and other financial assets

In accordance with AGAAP, prior to 1 luly 2005, interests in non-controlled entities or non-associated corporations are included in investments at the lower of cost or the recoverable amount.

Emancial assets at fair value through profit or loss

Financial assets at fair value through the profit or loss are carried at fair value.

Available-for-sale financial assets

Available for sale financial assets are carried at fair value.

Investments in subsidiaries are carried at their cost of acquisition, less any impairment allowance, in the Company's financial statements

CSL Limited and its controlled entities Notes to the Financial Statements continued for the war ended 30 June 2006.

Summary of Significant Accounting Policies (continued)

In) Acquisition of Assets

The consolidated entity has taken the exemption available under AASB 1 not to apply AASB 3 to past business combinations that occurred before transition to AFRS.

(o) Property, Plant and Equipment

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

			Buildings																		5 - 30 years









			Plant and equipment																		$3 - 15$ years




















			Leasehold improvements																		6 10 years

(p) Impairment of Assets

Assets that are subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

(g) Leasehold Improvements

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

(r) Leases

Leases are classified at their inception as either operating or finance leases based on the economic substance of the agreement so as to reflect the risks and benefits incidental to ownership.

Finance leases

1 Summary of Significant Accounting Policies (continued)

(r) Leases (continued)

Operation leases

.......................................

(s) Goodwill

(t) Research and Development, Patents and Intellectual Property

Expenditure on equipment used in research and development activities is capitalised in property, plant and equipment and depredated over its estimated useful life.

The carrying value of intellectual property and other intangibles is tested for impairment annually, or more frequently where events or changes in circumstances indicate that they might be impaired.

(u) frade and other payables

Trade and other creditors are non-interest bearing and have various repayment terms.

(v) Interest-Bearing Liabilities and Borrowings

(w) Denvative Financial Instruments

The consolidated entity may use derivative financial instruments to hedge its exposure to foreign exchange risks arising from operational, financing and investment activities.

CSL Limited and its controlled entities Notes to the Financial Statements continued for the year ended 30 June 2006

Ñ. Summary of Significant Accounting Policies (continued)

(w) Denvative Financial Instruments (continued)

The fair value of forward exchange contracts is calculated by reference to current forward exchange rates for contracts with smilar maturity profiles.

(x) Provisions

Dividends

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.

Claims provision including IBNR

Restructuring

Onerous contracts

A provision for enerous contracts is recognised when the expected economic benefits to be derived from a contract are less than the unavoidable costs of meeting the obligations under the contract.

Surphis lease space

A provision for surplus lease space is recognised when a net obligation exists in respect of operating leases that have been identified as surplus to the consolidated entity's current requirements.

CSL Limited and its controlled entities Notes to the Financial Statements continued for the year ended 30 June 2006

Summary of Significant Accounting Policies (continued) Ã.

W Employee Benefits

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

Superannuation Plans

Future taxes that are funded by the entity and are part of the provision of the existing benefit obligation are taken into account in measuring the net liability or asset.

Contributions to defined contribution superannuation plans are recognised as an expense as they become payable.

Termination Benefits arising as a consequence of acquisitions

(z) Share-based payment transactions

Under the Grobal Employee Share Plan, all employees are granted the option to acquire discounted CSL Limited shares.

No employee experise is recognised in respect of options and rights granted before 7 November 2002 and/or vested before 1 January 2005. The shares are recognised when the options or rights are exercised and the proceeds received allocated to share capital.

Upon exercise of options or rights, the balance of the share-based payments reserve relating to those options or rights is transferred to share capital.

CSL Limited and its controlled entities

Notes to the Financial Statements continued

for the year ended 30 lune 2006

× Summary of Significant Accounting Policies (continued)

(aa) Contributed equity

Ordinary shares are classified as equity, incremental costs directly attributable to the issue or buy-back of shares are shown in equity as a deduction, net of tax, from equity,

(bb) Earnings per share

Basic earnings per share

Diluted earnings per share

Discontinued operations

$\bar{Z}$ Segment Information

Business Secments

Geographical Segments

Segment Accounting Policies

The consolidated entity accounts for intersegment sales and translers as if the sales or transfers were to third parties at current market prices.

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.

gang manala

CSL Limited and its controlled entities Notes to the Financial Statements continued for the year ended 30 lune 2006

2 Segment Information (continued)

Business Segments	ZLB Behring 2006 \$000	Other Human Health 2006 \$000	Total Human Health 2006 \$000	AR Behring 2005 \$000	Other Human Health 2005 5000	lotal Human Health 2005 SOOC
External sales	2,445,621	403,287	2,848.908	2,195.196	413.760	2.608.965
Other external revenue	4,721	24,193	28,914	22098	578	22.676
Segment revenue	2,450,342	427,480	2,877,822	2.217.294	414,347	2.631.641
Unallocated revenue			25,710			18.618
lotal revenue			2,903,532			2.650.269
Segment results	497,947	47,902	545,849	390.182	57,721	447,903
Finance costs			(41, 517)			(36.615)
Net unallocated reveraie / expense			(5, 352)			1,195.
Profit before income tax expense and contingent consideration			498,980			410,283
Contingent consideration			(328, 515)
Profit before income tax expense			170,465			410,283
income tax expense			(53, 108)			(176, 54)
Profit from continuing operations			117,357			234.129
Profit from discontinued operations, net of tax				111111111111111111111111111111111111111		253 045
Profit attributable to members of the parent entity			117,357			487,774
Assets and liabilities				111111111111111111111111111111111111111
Secment assets	3,231,836	372,048	3,603,884	2 656 216	376.662	3.031.878
Unallocated assets			582,201			860,653
Total assets			4,186,085			3,692,531
Secment labilities	807,710	69,887	877,597	494.979	38.420	533.389
Unallocated liabilities Total habilities			1,318,684 2,196,281			1,250,607 1/84,006
Other Segment information
Segment capital expenditure	82.721	38,278	120,999	89.489	31.095	120,584
Unallocated capital expenditure			1,066			1,186
Discontinued operation capital expenditure						13.936
Total capital expenditure			122,065			135,706
Depreciation and amortisation	84,772	29,271	114,043	02,562	28.126	120,688
Unallocated depreciation and amortisation			2,021			1803
Discontinued operation depiedation and
amortsator						2.646
Total depreciation and amortisation			116,064			125.137
Other non-cash expenses		75	75	1.927	-67	1,994

MANARIANO

WWWWWW

Wen

CSL Limited and its controlled entities

Notes to the Financial Statements continued

for the year ended 30 June 2006.

2 Segment Information (continued)

	Australasia/		Europe, Middle
	Asia Pacific	Americas		East & Africa Consolidated
Geographic Segments	\$000	\$000	\$000	\$000
June 2006
External revenues	575.073	1.200.896	1.127.563	2.903.532
Segment assets	1,131,432	736.636	2,318,017	4,186,085
Total capital expenditure	39.703	40.000	42.362	122,065
June 2005
External revenues	-503.562	1.022.998	1123.699	2660259
Segment assets	1074905	699.822	210144	3.892.531
lotal capital expenditure	$-68.413$	-33.892	33.401	135.706

		Consolidated Entity		Patent Emity
	2006 \$000	2005 \$000	2006 \$000	2005 \$000
Revenue and expenses 3
Revenue and expenses from continuing operations
(a) Revenue Sales revenue	2,848,908	2.608.955	346.822	363.320
Other revenue
Dividend revenue
Subsidiaries			2,265	16331
Finance revenue	25,466	16,940	8,337	12,650
Rent	950	940	950	940
Royalties and licence revenue.	28,208	23.414	23,464	1077
lotal other revenues	54,624	41,294	35,016	30.998
Iotal revenue from continuing operations	2,903,532	2.650.259	381,838	394 318
Finance revenue compuses.
Interest received/receivable:
Other persons and/or corporations	25,317	16/97	8,033	11,564
Subsidiaries			165	923
Key management personnell	149	143	139	143
	25,466	16,940	8,337	12.650
(b) Other income
Government quants	1,660		1,660
Net gains on disposal of plant, property and equipment.	421	W
l'otal other income	2,081		1,660

CSL Limited and its controlled entities Notes to the Financial Statements continued for the year ended 30 lune 2006.

a series and the series of the series of the series of the series of the series of the

			Consolidated Entity		Parent Enrity
	Mores	2006 \$000	2005. \$000	2006 \$000	2005 5000
Revenue and expenses (continued)
finance costs 62
Interest pard/payable
Other persons and/or corporations		34,157	29.544	4,826	387
Non-cash interest - Unwinding of discount		7.360	9211
fotal finance costs		41,517	38.815	4,826	387
(d) Depreciation and amortisation included in the income statement
Depreciation and amortisation of fixed assets.
Buildings depreciation	12	8,936	11.702	4,007	3,836
Plant and equipment depreciation	12	92,243	101.029	27,115	25,910
Leased property, plant and equipment amortisation	$12\,$	2,877	3,907
Leasehold improvements amortisation	$12^{\circ}$	950	51 110,689		20/46
fotal depreciation and amortisation of fixed assets		105,006		31,122
Amertisation of interigibles Intelectual Property	14	11,058	5.802
fotal amortisation of intangibles.		11,058	5.802		mmmme
lotal depreciation and amortisation.		116,064	122.491	31,122	20.746
(e) Other expenses
Write down of inventory to net realisable value.		14,852	26.148	3,490	981
Doubtfull debts		8,787	2.628	(74)	$^{(3)}$
Net loss on disposal of PPE			1.994	75	61
Net foreign exchange (gain)/loss		951	(543)	611	(930)
Lease payments and related expenses included 移头 in the income statement
Rental expenses relating to operating leases		34,098	41 039	1,930	1433
(g) Employee benefits expense
Salaries and wages		674,602	666.816	116,505	106, 182
Defined benefit plan (benefit)/expense	25,	14,218	(18, 199)	1,952	2,017
Defined contribution plan expense	25	19,638	14,460	9,610	8.631
Share based payments expense	22.	4,684	2.294	4,684	2.294
		713,142	663,790	132,751	110.124

gan milli

11111111111111111111111111111111111111

Million Million (Million Million School)

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CSL Limited and its controlled entities

Notes to the Financial Statements continued
for the year ended 30 line 2006

		Consolidated Entity		Parent Ernity
Notes	2006 \$000	2005 - 1000	2006 \$000	2005 \$400
hw ome tax Income tax expense reported in the consolidated income statement Income tax expense attributable to discontinued operations.	53,108	175,554 37.429	5,569	9516
	53,108	212.983	5,569	9.516
(a) Reconciliation of income tax expense Recognised in the income statement Current tax expense Current year	160,191	95677	6,714	12.253
Deterred tax expense
Orgination and reversal of temporary differences (lax losses recognised)/ Expense on derecognition.	(96, 638)	81192	(2, 432)	64.
of tax losses	(13, 184)	22.185
13.	(109, 822)	100.377	(2, 432)	64
Under (over) provided in prior years Income tax expense reported in the income statement	2,739 53,108	7.929 212,983	1,287 5,569	(2.801) 9.516

Recognised directly in equity Deterred tax benefit/experise Share based payments Net actuarial (gain)/loss on defined benefit plans.	6,427 6,319	(8184)	6,427 (616)	17
13. Income tax expense recognised in equity	12,746	(6184)	5,811	HJ.
(b) Reconciliation between tax expense and pre-tax oct profit The reconciliation between tax experise and the product of accounting profit before income tax multiplied by the consolidated entity's applicable income tax rate is as follows:
Accounting profit before tax from continuing operations. Accounting profit before tax from discontinued operations	170,465	410,283 290 474	21,603	64 811
Accounting profit before income tax	170,465	100(15)	21,603	64.817
Income tax calculated at 30% (2005-30%)	51,139	210.228	6,481	19.443
Research and development	(2,984)	(2,4)(4)	(2,984)	(2.404)
Non-assessable capital loss / (gain) Exempt directors received	2,073	(51, 193)	(680)	(4, 899)
Other mon-rieductible expenses / (non-assessable revenue)	7,570	9 945	1,466	177
(Utilisation of tax losses)/Unrecognised deferred tax assets	(13, 183)	22185
Effects of offferent rates of tax on overseas income-	5,754	16,293
Under/(Over) provision in prior year	2,739	1.925	1,286	(2.803)
	53,108	212.983	5,569	9.516

a a shekarar 1999 Notes to the Financial Statements continued

furthe year ended 30 June 2006.

Income tax (continued)

Tax consolidation in Australia

Tax effect accounting by members of the tax consolidated group in Australia

Tax funding arrangements and tax sharing agreements in Australia

5 Contingent consideration on acquisition of Aventis Behring

......................................

Discontinued operations ł.

Details on the sale of the JRH businesses are as follows:

	Consolidated Entry
	2005 3400
(a) Profit after tax from discontinued operation
Pre-tax gain on sale of discontinued operation (see (b) below).	278,902
Post 1 July 2004 foreign currency translation reserve movement	(11.164)
Income tax expense	(30,051)
Gain on sale after tax	237 687
Contribution for the period 1 July 2004 to 28 February 2005 after tax (see (c) below)	15358
Profit after tax from discontinued operation	253.045
(b) Gain on sale and effect of the disposal on individual assets and liabilities of the consolidated entity
Cash and cash equivalents	(18,863)
Trade and other receivables.	(18.284)
Inventones	(113.276)
Property, plant and equipment	140.4751
Deferred tax assets	(111)
Intangible assets	(9/85)
trade and other payables	20.969
Provisions Net identifiable assets and liabilities	1,720 (1/9.344)
Consideration received, satisfied in cash.	456,246
Pre-tax gain on sale of discontinued operation.	278.902
Net cash inflow from transaction (consideration net of cash disposed)	439.363
(c) Analysis of profit and loss contribution for the period 1 July 2004
to 28 February 2005 of the discontinued operation
Sales revenue Cost of sales	140.969 (94.091)
Gioss profit	46.878
Other revenues	264.
Research and development expenses.	(4/63)
Selling and marketing expenses.	(1.470)
General and administration expenses	(9.348)
finance costs	(2.825)
Profit before income tax.	22,136
Income tax expense. ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, mmmmm Net profit after tax	(1,3/8) 15.58

(d) Cash flows for the period 1 July 2004 to 28 February 2005 of the discontinued operation Net cash flows from operating activities	(9,66)
Net cash flows from investing activities	(14.868)
Net cash flows from financing activities.
Net cash flows	[24, 4, 34]

CSL Limited and its controlled entities Notes to the Financial Statements continued

			Consolidated Entity		Parent Entity
		2006	2005	2006	2005
		\$000	4000	\$000	5000
7.	Cash and cash equivalents
	Cash at bank and on hand	384,064	258.528	28,066
	Cash deposits	369,630	46.314	149,224	461,769
		753,694	123.842	177,290	461,769
签	fracte and other receivables
	Current
	Irade receivables	538,726	502.325	35,843	29.673
	Less. Allowance for doubtful debts (i)	13,744	4.970	423	497.
		524,982	498,156	35,420	29,176
	Sundhy receivables	40,063	38.828	7,805	15.089
	Prepayments	28,634	22 244	3,036	2.419
	Receivables - wholly owned subsidiaries			49,534	24,599
	Receivables - partly owned subsidiaries			3,939
		593.679	169,227	99,734	VI.eta
	Non Current
	Related parties
	Wholly owned subsidiaries				5,148
	Partly owned subsidiaries				2 939
	Loans to key management personnel - executive directors	511	941	511	941
	Loans to key management personnel - other executives	4,937	5,041	4,937	5.443
	Leans to other employees.	5,669	0.032	5,669	4,564
	Long Term Deposits	6,556	- 3012
		17,673	14 026	11,117	20,041
	(i) Reconciliation of Allowance for doubtful debts
	Opening balance	4,170	1.642	497	500
	Additional allowance / (utilised)	8,787 787	3.901 (1,3/3)	(74)	13)
	Currency translation differences	13,744	4,170	423	497

9.	inventories
	Raw materials and stores – at cost	188,269	196,939	13,088	11.922
	Less. Allowance for diminution in value	10,139	3.516	967	159
	Raw materials and stores - net	178,130	103.424	12,121	11.763
	Work in progress - et cost	413,415	539.36	19,073	18.673
	Less. Alcwance for diminution in value	25,699	32.780 505.581	1,549	902 11111
	Work in progress - net	387,716		17,524
	Finished goods - at cost Less. Allowance for diminution in value.	423,129 15,548	265,896 18318	37,985 1,204	31.335 1,436
	Finished goods - net	407,581	247 578	36,781	20.901
		973,427	946-583	66,426	59.451

	10 Other financial assets
	Cuirent
	At fair value through the profit or loss.		sommininininin
	Managed financial assets	7,872

88888

uu miinimii

Notes to the Financial Statements continued
for the year ended 30 lune 2006

		Consolidated Frany		Parem Entity
	2006 \$000	2005 \$000	2006 \$000	2009 \$100
Cither financial assets (continued) Aon-current Available for sele financial assets. Unisted equity securities At far value through the profit or loss: Managed financial assets Investment in non-controlled entity at cost.	4,728	11,868 4.696	4,728	4.698
Shares in subsidiaries - at cost (refer note 31)			1,228,207	1.228.201
	4,728	16.566	1,232,935	1.232.906
12 Property, Plant and Equipment Land at cost Opening balance Other additions Disposals Currency translation differences	26.097 (411) 48	27.090 809 (1.602) (196)	25,030	25.030
Closing balance	25,734	26.097	25,030
Buildings at cost Opening balance Transferred from capital work in progress Other additions	196,653 24,803 264	206.448 12695	81,162 2,093	71,214 9,948
Disposals	(101)	(5,159)
Currency translation differences.	9,741	(17.33)
Closing balance Accumulated depreciation and impairment losses Opening balance Depreciation for the year Disposals	231,360 39,039 8,936 (103)	196,653 35,241 11875 (1221)	83,255 22,500 4,007	61.362 18.664 3.836
Currency translation differences	2,769	(4, 856)
Closing balance	50,641	39,039 167,614	26,507	22.500
Net book value of buildings Net book value of land and buildings	180,719 206.453	183,111	56,748 81,778	58.662 82.692
Leasehold improvements at cost Opening balance Transferred from capital work in progress Other additions	4,208 1,286 31	1168I 952, 5.221	168	168
Disposals Currency translation differences	(26) (459)	(12.234) (416)	(9)
Closing balance	5,040	4,208	159
Accumulated amortisation and impairment. Opening balance Amortisation for the year Disposals	2,282 950 (17)	5,75 798 (3.473)	168 $\left( 9\right)$	168
Currency translation differences	163	1618)
Closing balance	3,378	2.282	159	168
Net book value of leasehold improvements.	1,662	1,926.

a a mara a mata a ta 1979.

a ang

annannan

CSL Limited and its controlled entities Notes to the Financial Statements continued
for the year ended 30 line 2006

MANA

		Consolidated Entry		Parent Entity
	2006 \$000	2006. sono	2006 \$000	2005 5000
12 Property, Plant and Equipment (continued)
Plant and equipment at cost
Opening balance	884,337	909.382	486,233	431,208
Transferred from capital work in progress	69,160	82.424	17,020	06,206
Other additions	18,297	29.431
Disposals	(24, 187)	(5/175)	(10, 408)	(1,270)
Currency translation differences amma	47,013	(19726)
Closing balance	994,620	604.337	492,845	486,234
Accumulated depredation and impairment
Opening balance	412,570	381.776	321,728	297.008
Depreciation for the year	92,243	102.755	27,115	25,910
Disposals	(22, 151)	(27670)	(10, 128)	(1, 189)
Currency translation differences	26,641	(44.253)
Closing balance	509,303	412,570	338,715	321,729
Net book value of plant and equipment	485,317	411,161	154,130	164,505
Leased property, plant and equipment at cost
Opening balance	33,617	33.046
Other additions	256	4/41
Disposals	(116)	(731)
Currency translation differences	3,536	(2.439)
Closing balance	37,293	33.617	$\star$
mmammammamm Accumulated amortisation and impairment
Opening balance	3,741	214
Amortisation for the year	2,877	3.907
Disposals	(108)
Currency translation differences	1,371	(360)
Closing balance	7,881	W 3.741	÷	000000000000000000000000000000000000000
Net book value of leased property, plant and equipment	29,412	29.876
Capital work in progress
Opening balance	81,863	1201/0	13,205	47,420
Other additions	103,084	64,813	38,880	32,029
transferred to buildings at cost	(24, 803)	(12.695)	(2,092)	(9,948)
Transferred to plant and equipment at cost	(69, 160)	(82, 424)	(17, 020)	(56, 296)
fransferred to leasehold improvements at cost.	(1, 286)	(952)
Currency translation differences Closing balance	3,794 93,492	(1.049) al est	32,973	13,205
Total net book value of property, plant and equipment	816,336	$169 - 43$	268,881	261.402

CSL Limited and its controlled entities

Notes to the Financial Statements continued

,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,

1999 - Jan Jan Salam Barat dan Bandara dan Bandara dan Bandara dan Ba

for the year ended 30 line 2006.

		Consolidated Entity		Patern Ernity
	2006 \$000	2005 5000	2006 \$000	2005 \$000
13 Deferred tax assets and liabilities Deferred tax asset Deferred tox llability	187,432 (61, 767)	76,659 (16.21)	(1, 715)	(9.958)
Net deferred tax asset / (liability) (a) Deferred tax balances comprise temporary differences attributable to: Amounts recognised in the income statement	125,665	iiiiiii (1 7616)	(1, 715)	(9.958)
trade and other receivables. inventories	(7,518) 41,698	(4, 935) 21,330	449 (2,095)	(143) (1.466)
Property, plant and equipment Intangible assets	(62,066) (49, 171)	(55.637) (34, 35)	(18, 797)	[20, 701]
Other accets frace and other payables	8.169 8,813	(170) 12.321	153 2,084	230 1,362
Interest bearing liabilities Other liabilities and provisions. Recognised carry forward tax losses Other	751 163,428 7,474 1,341	910 66.062 26 426	10,680	10/43
Amounts recognised in equity Other assets	112,919 6.427	6.566	(7, 526) 6,427	(0.975)
interest bearing liabilities. Other liabilities and provisions	6,319	(8184)	(616)	17
Net deferred tax asset (liability)	12,746 125,665	(8, 184) (16.8)	5,811 (1, 715)	17 (9.958)
(b) Movement reconciled Opening balance Credited/Icharged) to the income statement	(1,618) 109,882	126.653 (109, 337)	(9,958) 2,432	(9.877) (64)
Credited/(charged) to equity Acquisition of subsidiary Disposal of subsidiary	12,746	(8, 184) (712)	5,811	(17) 000000000000000000000000000000000000000
Currency translation difference Closing balance NA MARKA A A ARABA A ARABAN DA A ANG PARA ANG PANGAPALA A ANG. NG SA SA SA SA SA SA SA ARABAN ANG PANGAPANG ANG PANGAPAN. Pangang pangapang pangapang pangapang ang mangapang pangapang ang man	4,655 125,665	(12033) ്വക്ക	(1, 715)	(9.958)
(c) Unrecognised deferred tax assets Deferred tax assets have not been recognised in respect of the following. lax losses:
Expry date in less than 1 year. Expry date greater than 1 year but less than 5 years.	226	3,567
Expry date greater than 5 years. mmmmm No expry date	6,519 19,547	20,460 35,899
	26,292	59.926		mmanis

CSI, Limited and its controlled entities Notes to the Financial Statements continued for the year ended 30 June 2006

		Consolidated Entity		Parent Entity
	2006 \$000	2005 \$000	2006 \$000	2005 3000
14 Intangible Assets
(a) Carrying amounts Goodwill
Opening balance	692,591	785,380
Disposals		(9.785)
Currency translation differences	42,840	(83.004)
Closing balance	735,431	692.091	÷
Intellectual property
Opening balance	104,411	80,211	20,000	20,000
Additions		32.098
Disposals
Currency translation differences	1,438	(1,964)
Closing balance	105,849	104,411	20,000	20,000
Accurriulated amortisation and impairment
Opening balance	10,567	5/6/
Amortisation for the year	11,058	5.802
Disposals				B.
Currency translation differences	(1, 186)	(1.022)
Olosing balance	20,439	10.56T
Net intellectual property	85,410	93.844	20,000	2000
Total net intangible assets	820,841	786.435	20,000	20,000

The amortisation charge is recognised in general and administration expenses in the income statement.

(b) Impairment tests for cash generating units containing goodwill

All goodwill is related to the ZLB Behring cash generating unit.

a a shekarar wasan ƙwallon ƙafa ta ƙasar Ingila.

CSL Limited and its controlled entities

Notes to the Financial Statements continued

for the year ended 30 June 2006.

		Consolidated Entity		Farent Entity
	2006 \$000	2005 3000	2006 \$000	2005 \$400
15 Retnement benefit assets and habilities. Retirement benefit assets

Non-carent Defined benefit plans (refer note 25)	3,514	50.	1.840
Retirement benefit liabilities
Current defined benefit plans (refer note 25)	4,635
Non-current defined benefit plans (refer note 25).	90.588	95.667		159
Total retirement benefit liabilities	95.223	95.667		159
16 Trade and other payables
Correra
Trade payables	136,089	146,646	32,859	31.356
Accruais and other payables	252,890	251709	37,179	23.441
Payable - wholly owned subsidiaries			618,961	540.402
	388,979	398.555	688,999	595.199
17 Interest-bearing liabilities and borrowings
Current
Bank overchafts - Unsecured	5.706	4,091
Bank loans - Unsecured (a) Senior Unsecured Notes Unsecured (b)	347,333 18,993	1011
Deferred cash settlement for subsidiary acquired - unsecured (c)	80,228
Deferred cash settlement for intangibles acquired - Unsecured (d)	9,261	8.283
Lease liability - Secured (e)	2,111	1,766
	463,632	15.141	÷
Moneuren
Bank loans Unsecured (a)	139,589	451,258
Senior Unsecured Notes Unsecured (b)	317,477	324,891
Deferred cash settlement for subsidiary acquired Unsecured (c) Deterred cash settlement for intangibles acquired - Unsecured (d)	82,262 16,459	150,960 24,255
Lease lability Secured (e)	39,410	38.485
	595,197	995.839		0000000000000000000000000000000000000

CSL Limited and its controlled entities Notes to the Financial Statements continued for the year ended 30 June 2006.

17 Interest bearing liabilities and borrowings (continued).

'ayment (USD).	Payment Date	Discount Rate
30 million i	15 Auly 2006	- 379%
30 millioni	31 December 2006		4.29%

aa mulkanii	31 December 2007	4.66%

		Consolidated Entity	Parent Emity
	2006 \$000	2005 \$000	2006 \$000	2005. $-000$
18 Tax assets and habilities
Current Assets
lincome tax	6,889		6,889
Tax Liabilities
Current liability income tax	88,038	8888 37.130
Non-current income tax	5,043
Total tax liabilities	93.081	37130

gan mana

CSL Limited and its controlled entities

Notes to the Financial Statements continued

for the year ended 30 June 2006.

		Consolidated Enlity	Parent Emily
	2006 \$000	2005 SOOO	2006 \$000	2006 \$000
9 Provisions
Curent
contovee benefits (efer note 25).	66,237	47,198	24,805	16.717
Restruction and	10,828	23.319
Onerous contracts (ii)	4,676	2407
Surplus lease space (iii)	2,343	6.720
Other [vi]	1,801	2181	1,310	1 137
	85,885	81.891	26,115	1/848
Non-corrent
Employee benefits (refer note 25)	52,586	56.174	4,221	10 646
Onerous contracts (ii)	15,863	12.783
Stirplus lease space (iii)	948	3.844
Provision for contingent consideration on Aventis Behring. acquisition (refer Note 5 and (iv))	337,654
Claims provision including IBNR (v)	1.002	5,745	1,002	5,145
	408.053	78.546	5.223	16,391

(i) Restructuring

This provision is for restructuring.

(ii) Orierous contracts

(iii) Surphus lease space

(v) Claims provision

Discounting

CSL Limited and its controlled entities Notes to the Financial Statements continued
for the year ended 30 line 2006

		Consolidated Entity		Parent Entity
	2006 \$000	2005 som	2006 \$000	2005 \$900
Provisions (continued)
Movements
(i) Restructuring
Opening balance	23,319	115,879
Additional provision		6.014
Payments made	(10,086)	(89.364)
Provision released	(3, 357)
Currency translation differences.	952	(8, 210)
Closing balance	10,828	23319
(ii) Orierous contrads
Opening balance	15,250	33/167
Additional provision	9,111
Payments made	(5,025)	(14.682)
Currency translation differences	1,203	(3.835)
Closing balance	20,539	15.250
(iii) Surplus lease space
Opening balance	10,564	14,502
Additional provision		396
Payments made	(4,908)	(2.960)
Provision released	(2,511)
Currency translation differences	146	(1.884)
Closing balance	3,291	10.664
(iv) Contingent consideration on Aventis Behring acquisition
Opening balance
Provision recognised	328,515
Currency translation differences	9,139
Clesing balance	337,654
(v) Claims provision including IBNR
Opening balance	5,745	11161	5,745	11,161
Provisions utilised	(4, 743)	(5.416)	(4, 743)	(5, 416)
Closing balance	1,002	5/45	1,002	5.745 ЩЩ
(vi) Other
Opening balance 000000000000000000000000000000000000000	2,187	4,681	1,131	1,250
Accitional provision	1,101	2.053	74,575	3127 I
Payments made	(1,539)	(4.089)	(74, 396)	(1,396)
Currency translation differences	52	(364)
Closing balance	1,801	2.18T	1,310	- 1781
20 Deferred government grants
Current deferred income	371	296	371	296
Non-current deferred income	4,093	2664	4,093	2,664
	4,464	2.960	4,464	2.960

mik WW

,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,

Maria Maria Bara

Notes to the Financial Statements continued

for the year ended 30 June 2006

			Parent Entity
	2006	2006	2005
	\$000	\$000
21 Contributed cauty
Ordinary shares issued and fully naid.	994.101	994.101

		2006		2005
	Number of shares	\$000	Number of shares.	5000
Movement in ordinary shares on issue
Opening balance	188,272,370	1.223.466	196 448 377	1.502.417
Share buy back, inclusive of cost (i)	(8,000,000)		$(281,538)$ (10,000,000)	1317 TOUT
Shares issued to employees through participation in SESOPJIII	1,553,870	49.917	GR5-2101	15.628
Shares issued to shareholders though participation. in Dividend Recruestment Plan (III)			770457	21.442
Shares issued to employees through participation in GESP (iv)	62.779	1.794	-68.326	1.342
Share Based payments reserve transfer (see note 22).		462		432
Closing balance	181,889,019	994.101	188.272.370	1,223,466

MANAGEMENT SERVICE SERVICE SERVICE

		Consciidated Entity		Parem Erany
	2006 \$000	2005 \$000	2006 \$000	2005 3400
(ii) Options exercised under SESOP II as disclosed in note 25 were as follows:
0 issued at \$8.93		893		893
0 Issued at \$10.82		631		631
52,200 issued at \$12.19	636	1.398	636	1.398
$0$ issued at $\$13.23$		$-1.102$		5.192
17,000 issued at \$20.84	354	1417	354	1411
12,000 issued at \$21.01	252	1008	252	1.008
40,000 issued at \$23.07	923	3.691	923	3.691
459,610 issued at \$27.97	12,855	420	12,855	420
467.589 issued at 134.04	15,917	976	15,917	978
18,000 issued at \$20.67	372		372
24.800 Issued at \$49.94	1,239		1,239
462 680 issued at \$37.54	17,369		17,369
	49,917	15.628	49.917	15.628
(iii) Shares issued to shareholders under the Dividend Reinvestment Plan		21.442		21.442
		21.442	٠	21,442

CSI, Limited and its controlled entities Notes to the Financial Statements continued for the year ended 30 June 2006.

		Consolidated Emiry	Parent Entity
	2006 \$000	2005. SOUG	2006 \$000	2005 %000
21 Contributed equity (continued) (iv) Shares issued to employees under Global Employee Share Plan (GESP) as disclosed in note 26 were as follows:
$-29.789$ issued at $$27.59$ on 9 September 2005	822	649	822	549
- 32,990 issued at \$29.46 on 8 March 2006	972	793.	972	793
	1,794	1.342	1,794	1.342
22 Reserves
Share based payments reserve (I)	13,452	2803	13,452	2.603
Net unrealised gains reserve (ii)	(101)		(101)
Foreign currency translation reserve (iii)	(69, 118)	(185.809)
	(55, 767)	(183,006)	13,351	2,803
Movement reconciliation
(i) Share based payments reserve
Opening balance	2,803	941	2,803	941
Share based payments expense Deferred tax on share based payments	4,684 6,427	2.294	4,684 6.427	2,294
transfer to contributed equity	(462)	(432)	(462)	(432) !!!!!!!!!!
Closing balance	13,452	2.803	13,452	2.803
(ii) Net unrealised gains reserve
Opening balance
Unrealised rosses on revaluation of available for sale investments	(101)		(101)
Crosing balance	(101)		(101)
(iii) Foreign currency translation reserve Opening balance	(185, 809)
Net exchange gains/losses) on translation of foreign subsidiaries, net of hedge	116,691	(196,973)
Realised exchange loss on disposal of foreign subsidiaries reclassified to the income statement, net of hedge		11 164
Closino balance	(69.118)	(185, 809)		8888888

Nature and purpose of reserves

(i) Share based payments reserve

(ii) Not unrealised gains reserve

(iii) Foreign currency translation reserve

CSL Limited and its controlled emities

Notes to the Financial Statements continued
for the year ended 30 line 2006

		Consulidated Fritty		Patent Entity
	2006 \$000	2005 \$990.	2006 \$000	2005 SOM.

23 Retained earnings
Opening balance	1,068,065	681377	258,067	287.684
Net profit for the year	117,357	481.174	16,034	55,295
Dradends	(124, 394)	(84, 950)	(124, 394)	[64,950]
Actuarial gain/(loss) on defined benefit plans	(15, 877)	(24, 320)	2,053	55
Deferred tax on actuanal gain/(loss) on defined benefit plans	6,319	$6 - 184$	(616)	(17)
Closing balance	1,051,470	1.068.065	151,144	258.067
(a) Dividends paid
Dividends recognised in the current year by the Company are:
Final ordinary dividend of 30 cents per share, fully franked,
paid on 10 October 2005 (2005: 26 cents per share, fully franked)	55,113	51,249	55,113	51,249
Special dividend of 10 cents per share, tranked to 1.78 cents, paid on 10 October 2005 (2005: Nil cents per share)	18,371		18,371
Interim ordinary dividend of 28 cents per share, unfranked,
paid on 13 April 2006 (2005: 17 cents per share, fully franked).	50,910	33/101	50,910	33.701
	124,394	84.960	124,394	84.950
(b) 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 40 cents per share, unfranked (2005; ordinary dividend of 30 cents per
share fully franked, special dividend of 10 cents per share franked
to 1.78 cents per share). The acgregate amount of the proposed dividend, based on the number of shares on issue at the date of
this report, is expected to be paid on 13 October 2006 out of
retained earnings at 30 June 2006, but not recognised as a liability	72,756	13,538	72.756	13.538
(c) Tranking credit balance
There are no amounts 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
debts attaching to the final dividend not recognised at year end.

24 Loury
lotal equity at the beginning of the financial year.	2,108,525	2 184 135	1,484,336	291,042
lotal recognised income and expense for the year attributable to equity holders.	224,389	274 665	17,370	56.333
Movement in contributed equity	(229, 365)	(278.201)	(229, 365)	(278.951)
Dividends	(124, 394)	(84,950)	(124, 394)	(84.950)
Realised exchange differences on disposal of foreign subsidiaries
reclassified to the income statement, net of hedge		11,164
Movement in share based payments reserve lotal equity at the end of the financial year.	10,649 1,989,804	1.662 2,108,525	10,649 1,158,596	1.862 484 336

8888888888

CSL Limited and its controlled entities Notes to the Financial Statements continued for the year ended 30 June 2006.

		Consolidated Entity		Parent Entity
Mores	2006 \$000	2005 4000	2006 \$000	2005 9000
25 Employee benefits
A reconciliation of the employee benefits recognised is as follows:
Retrement benefit assets - non-current (note 15)	3.514	-50	1.840
Retrement benefit labilities - current frote 151	4,635
Provision for employee penefits - current innie 19)	66.237	47.198	24,805	16.717
Retrement benefit lianities - non-current mote 15)	90.588	95.667		159.
Provision for employee benefits - non-current (note 19)	52.586	56.174	4.221	10.646
lotal employee benefits liabilities.	214.046	199.039	29,026	27.522
The number of full time equivalents employed at 30 June.	7.575	6.474	1.427	1253.

(a) Defined benefit plans

		Consolidated Entity	Parent Fraity
	2006 \$000	2005 \$000	2006 \$000	2005 \$000
Movements in the net liability/(asset) for defined benefit obligations recognised in the balance sheet
Net liability/(asset) for defined benefit obligation:
Opening balance	95.617	115,565	159	533
Contributions received	(38, 732)	(11.879)	(1,898)	(2,336)
Benefits paid	(1, 849)	(1888)
Expense/(benefit) recognised in the income statement (refer below).	14.218	(18,799)	1,952	2.017
Actuarial (gams)/losses recognised in equity	15,877	24 320	(2,053)	(55)
Liabilities transferred	60	(171)
Currency translation differences	6,518	(11.531)
Closino balance	91.709	96.617	(1, 840)	158
Net hability/(asset) for defined benefit obligation is reconciled to the balance sheet as follows:
ketirement benefit assets - non-current (note 15)	(3, 514)	1501	(1, 840)
Retrement benefit labilities - current frate 15)	4,635
ketirement benefit liabilities - non-current mote 15)	90.588	95.661		169
Net lability	91.709	98.617	(1, 840)	159
Amounts for the current and previous periods are as follows:
Defined benefit collgation	477,637	421,658	26,903	26.199
Plan assets	385.928	325.941	28,743	26,040
Surplus/Ideficit)	(91, 709)	(96.61J)	1,840	---------------------------------------
Experience adjustments on plan liabilities	(10, 562)	(30,269)	959	11.1 I S)
Experience adjustments on plan assets	(5, 316)	5,969	1.094	11 ZO
Actual return on plan assets	11,924	25.129	2,910	2812

CSL Limited and its controlled entities

Notes to the Financial Statements continued
for the year ended 30 June 2006

		Consolidated Entry		Parem Entity
	2006	2005	2006	2005
	\$000	:000	\$000	\$000
25 Employee benefits (continued)

(a) Defined benefit plans (continued)
Changes in the present value of the defined benefit obligation are as follows:

Opening balance	421,558	453,397	26,199	24.207
Service cost	14,514	18,752	2,627	2.412
interest cost	16,006	19.643	1,141	1,241
Contributions by members	3,086	3,769
Actuarial (gains)/losses	10,562	30,289	(959)	1,116
(Gains)/losses on curtalments		(41623)
Benefits paid	(12, 837)	(16, 542)	(1,593)	(2.225)
Otter inovernents	486	(723)	(512)	(557)
Currency translation differences	24,262	(45, 399)
Closing belance	477,637	421.556	26,903	26.199
The present value of the defined benefit obligation comprises:
Present value of wholly unit inded obligations	81,034	63.281
Present value of funded obligations	396,603	358.271	26,903	26.199
	477,637	421.556	26,903	26,199
Changes in the fair value of plan assets are as follows:				▒
Opening balance	325,941	337 832	26,040	23674
Expected return on plan assets	17,240	19,160	1,816	1642
Actuanal gains/(losses) on plan assets	(5, 316)	5.969	1,094	1120
Contributions by employer	38,732	11.879	1,898	2,336
Contributions by members	3,087	3/169
Benefits paid	(10, 988)	(14,654)	(1, 593)	(2, 225)
Gans/Josses) on curtailments		(3, 589)
Other movements	(512)	(557)	(512)	(557)
Currency translation differences	17,744	(32.868)
Closing belance	385,928	325,941	28,743	26.040
The major categories of plan assets as a percentage of total
plan assets is as follows:
Cash	15.7%	0.4%	8.1%
Equity instruments	28.9%	48.4%	59.9%	60.1%
Debt insulaments	44.8%	38.6%	22.3%	10.2%
Property	8.8%	10.3%	9.7%	29.1%
Other assets	1.8%	23%
	100.0%	100.0%	100%	100.0%
Expenses/(gains) recognised in the income statement are as follows:
Current service costs	14,514	18.762	2,627	2,412
	16,006	19.643	1,141	1.241
Interest on obligation
Expected return on assets Losses/(gains) on curtailments and settlements	(17, 240)	(10,160) (38.034)	(1, 816)	(1.642)
Past service costs	938
	14,218	(16 799)	1,952	2,017
The defined benefit plan expenses/(gains) are recognised in general and administration expenses in the income statement.

,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,

,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,

$\mathbb{S}4$ CSL Limited Annual Report 2005-2006

CSL Limited and its controlled entities Notes to the Financial Statements continued for the year ended 30 line 2006

2006 2005 2006 2005	Consolidated Entity		Parent Entity
	\$000	\$000	\$000	5000
25 Employee bondits (continued)
(a) Defined benefit plans (continued) The principal actuarial assumptions at the balance sheet date (expressed as weighted averages) are as follows:
45% 4% 4.9% 4.2% Discount rate
6.2% 7.0% 7.0% 5.8% Expected return on assets and expected long-term rate of return on assets.
5.0% 2.4% 2.6% 5.0% Future salary increases.
0.2% 0.6% 5.0% Future pension increases

The expected long-term rate of return is based on the portfolio as a whole and not on the sum of the returns on individual asset categories.

Surplus/(deficit) for each defined benefit plan on a funding basis

			Plan	Contribution
	Plan assets'	Accrued benefit ¹		surplus/ recommended
			(deficity)	${per\, year}$ ^2.3
Consolidated Entity - June 2006
CSL Superannuation Plan (Australia)*	28.743	(26, 903)	1.840	2,093
ZEB Bioplasma AG Pension Fund (Switzerland)	222,181	(220, 506)	1.675	8,433
ZEB Behring Pension Plan (US PP)	82.102	(86, 657)	(4, 555)	4,555
ZEB Behring Uaion Pension Plan (US UPP)	52,902	(62, 537)	(9,635)
ZLB Behring GmbH Pension Plan (Germany).	٠	(69, 779)	(69, 779)
ZEB Pharma GmbH Peasion Plan (Germany)		(1,819)	(1, 819)
ZLB Behring KG Pension Plan (Germany)		(2,932)	(2, 932)
ZLB Plasma Services GmbH Pension Plan (Germany)		(146)	(146)
ZEB Behring KK Retirement Allowance Plan (Japan)	٠	(6, 358)	(6, 358)
	385,928	(477, 637)	(91,709)	15,081
Consolidated Entity - June 2005
CSL Superannuation Plan (Australia)	26,040	(26.199)	(159)	2,113
ZLB Bioplasma AG Pension Fund (Switzerland)	193.689.	(193,638)	50.	8 386
ZLB Behring Pension Plan (US PP)	62158	173.1901	111.0321
ZLB Behring Union Pension Plan (US UPP)	44.055	(65.244)	(21, 180)
2LB Behring GmbH Pension Plan (Germany)		${1,4,144}$	454 144
ZLE Pharma GmbH Pension Plan (Germany)		(1.472)	(1.472)
ZLB Behring KG Pension Plan (Germany)		(1.879)	(1.870)
2LB Plasma Services GmbH Pension Plan (Germany)		(120)	(120)
ZLB Behring KK Retirement Allowance Plan (Japan)		(SC/2)	(5,6/2)
	325.941	(421.558)	195 B I A	10499

Plan assets at net market value, and accrued benefits have been calculated at 31 May 2006 (prior year: 30 June 2005),
being the date of the most recent financial statements of the plans.

The principal economic assumptions used in making these recommendations include.

	Consolidated Entity	Parent Emma
	2006 2005.	2006 2005
	\$000	\$000
Expected return on plan assets.	5.8%	7.0%
Full the salary moreases.	2.6%	5.0%

CSL Limited and its controlled entities Notes to the Financial Statements continued

for the year ended 30 June 2006.

25 Employee benefits (continued)

(b) Defined contribution plans.

26 Share based payments

(a) Share based payment schemes

The Company operates the following schemes that entities key management personnel and senior employees to purchase shares in the company.

Serior Executive Share Ownership Plan (SESOP)

Revised Senior Executive Share Ownership Plan (SESOP II)

The establishment of the SESOP II plan was approved by special resolution at the annual general meeting of the Company on 20 November 1997.

Under the rules of SESOP II no loan is made to the recipients of options until the option is exercised. Consequently, no amounts are recorded in receivables until the option is exercised.

The options are issued for a term of seven years and begin to be exercisable after the third anniversary of the date of grant The options cannot be transferred and are not quoted on the ASX

AASB 2 has only been applied to those options that were issued after 7 November 2002 in accordance with the transitional provisions of AASB 1.

Employee Performance Rights Plan (Performance Rights)

The establishment of the Employee Performance Rights Plan (Performance Rights) was approved by special resolution at the annual general meeting of the Company on 16 October 2003.

No loans are provided by the Company in relation to the grant of Performance Rights to, or exercise of Performance Rights by employees under the Performance Rights Plan.

Global Employee Share Plan (GESP).

26 Share based payments (continued)

(b) Outstanding share based payment equity instruments

The number and exercise price for each share based payment scheme outstanding is presented as follows. All options are settled by physical delivery of shares.

	Opening					Closing	Exercise	Expiry	Vested at
June 2006	Batance	Granted	Exercised	Forfeited	Lapsed	balance	Price	ďate	30 June 2006
SESOP II (by grant date)
16 November 1999*	17,000		(37,000)				\$20.84	16-Nov-06
28 February 2000*	12,000		(32,000)				\$23.01	28-Feb-07
9 February 2000*	40,000	$\overline{a}$	(40,000)			$\overline{a}$	\$23.07	09-Feb-07
2 August 2000*	558,980	Ĭ.	(467, 580)	(41, 100)		50,300	\$34.04	02-Aug-07	50,300
20 June 2003*	634,400		(462, 680)	(28, 300)		143,420	\$37.54	20- kun-08	143,420
21 August 2001*	90,000					90,000	\$49.31	20-Aug-08	90,000
23 August 2001*	126,000			(41,000)	×,	85,000	\$37.54	22-Aug-08	85,000
18 October 2001*	5,000			(5,000)	ł,		\$43.51	20-Aug-08
10 December 2001*	63,000		(24, 800)			38,200	\$49.94	09-Dec-08	38,200
28 January 2002*	20,000			(20,000)		$\overline{\phantom{a}}$	\$47.20	28- i an-09
23 July 2002*	1,013,700	L	(459, 610)		í,	554.090	\$27.97	23-lui-09.	554.090
16 October 2002*	30,000	$\overline{a}$	(18,000)		÷,	32,000	\$20.67	16-Oct-09	12,000
1 July 2003	392,900		(52,200)			340,700	\$12.39	03-kil-10
	3,002,980		$-$ {1,553,870}	(135, 400)		$-1,313,710$
Performance Rights (by grant date)
16 October 2003	50,000					50,000	翘	27-Oct-10
15 December 2003	128,600				L,	128,600	娴	27-Oct-10
28 April 2004	60,000					60,000	翅形	31-Mar-11
21 June 2004	132,300			(15,700)		116,600	翘	31-Mar-11
29 October 2004	83,400			(800)	J.	82.600	掴	25-Aug-13
15 July 2005	÷,	55,000			Ĭ.	55,000	娴	07-km-12
7 September 2005		346,750		(8,000)		338,750	刘雨	07-Jun-12
7 March 2006		52,500				52,500	翘	20-Dec-12
6 April 2006		40,850				40,850	翘	20-Dec-12
	454,300	495,300		(24, 500)	$\overline{a}$	924,900
GESP (by grant date)
1 March 2006	29.789	$\overline{\phantom{a}}$	(29, 789)				\$27.59	31-Aug-05
1 September 2005	$\overline{a}$	32,990	(32,990)			$\frac{1}{2}$	\$29.46	28-Feb-06
1 March 2006#	$\overline{\phantom{a}}$	22,072				22,072	\$44.17	31-Aug-06
	29,789	55,062	(62, 779)	×,		22,072
Total	3,487,069		550,162 (1,616,649)	(159.900)		$-2.260.682$

* AASB 2 has not been applied to these options as they were issued before 7 November 2002.

As noted above, the exercise price at which GESP plan shares are issued is calculated at a 15% discount to the lower of the ASX inarket price on the first and last dates of the contribution period. Accordingly the exerci

The weighted average share price at the dates of exercise, by equity instrument type, is as follows:
SESOP B	\$47.99
Performance Rights
GESP	\$44.18 .

CSL Limited and its controlled emities Notes to the Financial Statements continued for the year ended 30 line 2006.

26 Share based payments (continued)

(b) Outstanding share based payment equity instruments (continued).

ltne 2005	Opening Gatanee	Granted Exemised Fortened	Lapsed	Closing balance	Exercise Price	Expiry ane	Vested at 30 have 2005
SESOP II (by grant date)
20 November 1997 ⁴	100,000	(100,000)			-68.93	20 Nov-04
14 kuly 1998 ⁴	68.310	52.310			\$10.82	14-11-05
13 kily 1990*	392,480	(392, 480)		88	\$13.23	13-дл-06
16 November 1999	85,000	(68.000)	41	17,000	\$20.84	16 Nov 06	17000
28 February 2000*	60,000	(48.000)		12,000	\$21.01	$28 - 60$	12.000
9 February 2000	200,000	(160,000)		40,000	\$23.07	09-feb-07	40,000
2 August 2000*	612.700	(28/20) ŗ,	(25,000)	568.980	\$34.04	$02 - A_{11} 07$	558,080
20 June 2001 *	649,500		115,7001	634 400	\$37.64	20 Am 08	634.400
21 August 2001*	90.000			90,000	\$49.31	20-Aug-08	9000
23 August 2001*	198,000		(12,000)	126,000	\$37.54	22-Aug-08	126,000
18 October 2001 f	5.000			5,000	\$43.61	20 Aug-08	6000
10 December 2001 f	91.000	SIINININININSSE	(28,000)	63.000	\$49.94	09 Dec-08	63,000
28 Ianuary 2002	20.000			20.000	34/20	28-fan-09	20,000
23 July 2002*	1,091,200	(15,000)		162.500) 11013.700	\$2191	23-10109	1.013,700
16 October 2002 ^*	30.000			30,000	\$20.67	16-0at-09	30.000
1 July 2003	507,600	(114,700)		392 900	\$12.19	01-a1-10
	4,190,790	(985,210) (202,600) 3,002,980					2.610.080
Performance Rights (by grant date)	mmmm
16 October 2003	50,000			60,000	ΝIΙ	$270$ ch $10$
15 December 2003	153,000		124.4001	125,600	ΝIΙ	$27 - 0 + 10$
28 April 2004	60.000			60.000	NI.	31 Mar 11
21 lune 2004	132,300			132,300	NJ	31-Mar 11
23 October 2004	W.	83.400		83.400	NI.	25 Aug 11
	395,300	83.400	(24.400)	454.300
GESP (by grant date)
1 September 2004		35.895 (35.895)			\$22'09	28-Feb-06
1 Marth 2006#	800028	29.789 wana		29.789	27.52	31-Aug-06
		65.664 (35,800)		29.789
llotal	4.586.090	149.084.(1,021,105)	(227.000) 3.487.069

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$^*$ AASB 2 has not been applied to these options as they were issued before 7 November 2002.

As noted above, the exercise price at which GESP plan shares are issued is calculated at a 15% discount to the lower of the ASX
market price on the first and last dates of the contribution period. Accordingly the exercis issued is not yet known (and may differ from the assumptions and fair values disclosed below). The above disclosures are estimated based on information available as at 30 June 2005.

The weighted average share price at the dates of exercise, by equity instrument type, is as follows:











s sopal www		The Search Control






Performance Rights and Committee Rights












			All Andrew Communications



YAKKO .	---------------------------------------

,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,

CSL Limited and its controlled entities Notes to the Financial Statements continued for the year ended 30 June 2006.

26 Share based payments (continued)

(c) Valuation assumptions and fair values of equity instruments granted

The following tables summarise the assumptions and fair values of unexercised equity instruments issued after 7 November 2002.

						Expected	Risk free
	Fair Value ^®	Share Price	Exercise Price	Expected volatility ²	Life assumption	dividend vield	interest rate
SESOP II (by grant date)
1 July 2003	\$4.58	\$12.08	\$12.19	37.0%	3-5 years	2.5%	5.60%

Performance Rights (by grant date)
16 October 2003	\$10.52	\$16.25	Ni	37.0%	4 years	2.5%	5.61%
15 December 2003	\$11.33	\$17.51	Ni	37.0%	4 years	2.5%	5.79%
28 April 2004	\$15.14	\$22.91	Ni	35.0%	4 years	2.0%	5.71%
23 June 2004	\$14.34	\$21.72	Ni	34.0%	4 years	2.0%	5.63%
29 October 2004	\$20.69	\$28.80	Ni	34.0%	4 years	2.0%	5.32%
15 July 2005	\$24.53	\$34.90	Ni	27.0%	4 years	3.5%	5.19%
7 September 2006	\$24.40	\$34.75	Ni	27.0%	4 years	1.5%	5.10%
7 March 2006	\$43.58	\$53.25	Ni	27.0%	4 years	1.5%	5.37%
6 April 2006	\$42.97	\$53.41	Νß	27.0%	4 years	1.5%	5.51%

GESP (by grant date) ³
1 September 2004	\$5.97	\$26.03	\$22.09	34.0%	6 months	2.0%	5.70%
1 March 2005	\$7.60	\$33.11	\$28.14	34.0%	6 months	2.0%	5.70%
1 September 2006	\$6.19	\$34.52	\$29.46	27.0%	6 months	1.5%	5.10%
1 March 2006	\$10.89	\$51.97	\$44.17	27.0%	6 months	3.5%	5.37%

for the year ended 30 lune 2006.

27 Key management personnel disclosures.

The following were key management personnel of the consolidated entity at any time during the reporting period and unless otherwise indicated were key management personnel for the entire period.

Executive directors

B A McNamee (Chief Executive Officer and Managing Director)

A M Cipa (Finance Director)

Non-executive directors

P H Wade (Chairman)

J Akelurst

MIRSS

LA Renard

M A Renshaw

K I Roberts

A C Webster

Executives

P Turner (President, ZLB Behring)

C Armit (President, CSL Pharmaceutical)

P Bordonaro (President, CSL Bioplasma)⁴

A Curinbertson (Chief Scientific Officer)

P Turvey (Company Secretary and General Counsel)

K Milroy (General Manager, Human Resources)⁶

1 Glaria (President, CSL Bioplasma)*

A von Bibra (General Manager, Human Resources ).⁶

⁺ During the year the role of President of CSL Bioplasma transitioned from Mr Bordonaro to Mr Giarla.

maanaalassa missä

animilli

CSL Limited and its controlled entities Notes to the Financial Statements continued for the year ended 30 June 2006.

27 Key management personnel disclosures (continued)

2002/02/02/02/20

Total compensation for key management personnel

		Consolidated Entry		Parent Entity
	2006 \$	2005 Ķ.	2006 \$	2005 Ϋ́.
Short term
Salary and Fees.	6,192,904	6 319 102	5,306,879	6,310,610
Short term incentive cash corius.	4,271,247	5.034.110	3,384,564	4271670
Non-monetary benefits	365,655	286.591	331,271	282.419
lotal.	10,829,806	11 639 803	9,022,714	9864699
Post-employment
Superannuation benefits	520,348	446,034	441,652	367,834
fotall	520.348	446.094	441.652	367,834
Other long-term - Long service leave and equivalents	447.035	652,321	361,843	256.381
Share-based payments
Equity settled shares / units	1,625,820	720,877	1,416,676	637,363
Equity settled options / nants	998,719	903.581	840.379	703.579
	2,624,539	1.624.458	2,257,055	1,340,942
Total	14,421,728	14.362676	12,083,264	11,820,856

Loans to key management personnel and their related parties (consolidated entity)

		Opening balance S.	Interest charged	Closing balance ¢,	Mumber ли скоша:
Total for key management personnel	2006	5.982.000	149.000	5.385.000	10.
	2005	3.812.000	143.000	5,982,000	12.
Total for other related parties	2006				$\sim$
	2005.
Total for key management personnel	2006.	5.982.000	149.000	5,385,000	10.
and their related parties	2005.	3.812.000	143000	5,982,000	12.

an an an Aonaichte

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CSL Limited and its controlled entities. Notes to the Financial Statements continued

for the year ended 30 June 2006.

27 Key management personnel disclosures (continued)

Loans to key management personnel and their related parties (continued)

Details regarding loans outstanding at the reporting date to key management personnel and their related parties at any time during the reporting period, are as follows.

	Balance at 1 huw 2005	Interest charged.	Balance at 30 June 2006	Haghest owner in pernod	interest rat charged.
		X.	s
Executive Directors
B A McNamee	893.000	36.000	447,000	893.000	18.000
A M Cipa	48.000	2000	46.000	48.000	2.000
Key Management Personnel
Patranec	110.000	4.000	310,000	110.000	4.000
C. Armit	2537000	40.000	1,615,000	3,460,000	62.000
P Bordonaro	330.000			330.000	2000
A Cuthberson	1.008.000	37.000	1.513,000	1,784,000	91.000
P Jurvey	593.000	20.000	1.702,000	1702,000	50.000
K MILOV	463,000			463,000	3.000
A von Bibra
1 Giana		11.000

mmmmmm

Other key management personnel transactions with the company or its controlled entities

The Company has a number of contractual relationships, including property leases and collaborative research arrangements. with the University of Melbourne of which Mr lan Renard is the Chancellor and Miss Elizabeth Alexander is the Chair of the Finance Committee and a member of the Council.
* 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.

CSL Limited and its controlled entities Notes to the Financial Statements continued for the year ended 30 June 2006.

27 Key management personnel disclosures (continued)

SESOP and SESOPIE Quaems	Balarice at 1 luly 2005	Mumber Exercised	Balance at 30 June 2006	Munber vested during the year	Vested and exercisable at 30 June 2006
Executive Directors
B A McNamee
А М Ста	75.000.	50.000	25.000	15.000	25.000.
Executives
Patrick	175.000	145000	30.000	65.000
C Arrut	90.000	40.000	50,000	70.000	30.000
P Bordonaro	76.000	75.000		15.000
A Cuthbertson	87.000	57.000	30,000	57,000
Pillurvey	100.000	80.000	20,000	40.000
K Miroy	70.000.	28.000	42,000	7.000
Tuskaria.	103.500.	45.000	58.500	54.000	36.000
A von Bibra	-39.600	21.120	18,480	6.280
lotal	816.100	541.120	273,980	328.280	91.000

No options held by key management personnel are vested but not exercisable.

For further details, including the key terms and conditions, grant and exercise dates for options granted to executives, referincte 26.

Manifestania

______________________________________

an an an Aonaichte

TANA ARA

CSL Limited and its controlled entities

Notes to the Financial Statements continued

for the year ended 30 lune 2006.

Key management personnel disclosures (continued)

,,,,,,,,,,,,	balance at	Mumber	Balance at
Performance Rights	1 July 2005	Granted.	30 June 2006
Executive Directors
B.A.McNamee	70.000	77500	147,500
A M Cipa	40.000	30.000	70,000
Executives
$P$ if $a$ a.e.	24.800	29.660.	54,350
C Arrut	14.400	7450	21,850
P. Bordonaro	20.800	7.450	28,250
A Cuthbertson	33. 100.	14,250	25,350
Pillavey	17 100	10.250.	27,350
К Миру	$-800$	4.450	10,250
J Giarla	6.000	6,850	12,850
A von Bibra	1.500	3.300	4,800
Total	211,500	191,050	402,550

Performance Rights were granted during the current year as follows

Date granted	Ехрігу date	Exercise price	Fair value
15 July, 2005	7 June 2012	Ni	\$24.53
7 September, 2005	7 June 2012	Na	\$24.40
7 March, 2006	20 December 2012	Νi	\$43.58
6 April, 2006	20 December 2012	Na	\$42.97

No Performance Rights have been granted since the end of the financial year. The Performance Rights have been provided at no cost to the recipients.

No Performance Rights held by key management personnel have vested.

For further details, including the key terms and conditions, grant and exercise dates for all Performance Rights granted to executives, refer note 26.

Modification of terms of equity-settled share-based payment transactions

CSL Limited and its controlled entities Notes to the Financial Statements continued

for the year ended 30 lune 2006.

27 Key management personnel disclosures (continued)

Exercise of equity instruments granted as compensation

During the reporting period, the following shares were issued on the exercise of options or performance rights granted
as compensation:

		30 June 2006	Paid		30 June 2005
	Date Option Granted	Number of shares	per share \$	Date Ootton Gramed	Number of sharps.	Paid new share. Æ.
Directors
B A McNamee		н		November 1997	100.000	\$8.93
A M Cipa	August 2000	50,000	\$34.04	July 1998	6.054	\$10.82
				July 1999	20.000	\$13.23
Executives
F Turnet	July 2002	45,000	\$27.97	$h$ ny 1998.	10.192	\$10.82
	August 2000	100,000	\$34.04
C Armit	February 2000	40,000	\$23.07	February 2001	160.000	\$23.07
P Bordonaro	August 2000	75,000	\$34.04	July 1998	6.000	\$10.82
A Cuthbertson	February 2000	12,000	\$21.01	huy 1999	20.000	\$1323
	July 2002	45,000	\$27.97	February 2000	48.000	\$21.01
E liney	August 2000	50,000	\$34.04	lulv 1998	5.024	\$10.82
	July 2002	30,000	\$27.97	huv 1999	20,000	\$13.23
K Milroy	June 2001	28,000	\$37.54	luv 1999	14.000	\$13.23
1 Giarla	July 2003	45,000	\$12.19	July 1999	36.000	\$13.23
A von Bibra	June 2001	21,120	\$37.54
	Total:	541,120			446.070

There are no amounts unpaid on the shares as a result of the exercise of options or performance rights.

		Balance at Options/Performance Rights	Other changes	Balance at
Movemerts in shares	1 Luy 2005	Exercised during year	during year	30 June 2006
Executive Directors
B A McNamee	343.511		(50,000)	293,511
AMCpa	8.547	50.000	(50,000)	8,547
Non-Executive Directors
P H Wade	30 910		1,241	32,151
Akenurst	6,313		531	6,844
L. A. Alexander	6,516		531	7,047
1 A Renand	6373		531	6,904
MA Renshaw	659		531	1,190
Ki Roberts	5838		(469)	5,369
A C Webster	8.842		531	9,373
Executives
Pillumer	12,242	145,000	1145.0001	12,242
C Armit	110910	40,000	(80,000)	70,910
P Bordonaro	26.760	75,000	(101,000)	760
A Cuthbertson	48.379	57.000	(46,000)	57,379
Pilavey	46,971	8000	(15, 713)	51,258
К Мігоу	36,603	28.000	(62, 832)	1,771
1 Giarla		45,000	(45,000)
A von Bibra	1.283	21.120	(21.765)	638
Total	100657	541.120	675,883	565,894

There have been no movements in shareholdings of key management personnel between 30 lune 2006 and the date of this report.

28 Non key management personnel related party disclosure

Ultimate Controlling Entity

The ultimate controlling entity is CSL united.

Identity of related parties

The parent entity has a related party relationship with its subsidiaries (see note 31) and with its key management personnel (see note 27)

Other related party transactions

The parent entity entered into the following transactions during the year with related parties in the consolidated entity.

Wholly owned subsidiatios

* Loans were advanced and repayments received on the long term intercompany accounts,
· Interest was charged on outstanding intercompany loan account balances;
· Sales and purchases of products,
· Licensing of intellectual property
· Provision of marketing services by controlled entities; and
· 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 intercompany loan accounts and may be subject to extended payment terms.

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

Partly owned subsidiaries

· No transactions occurred during the year.

Amounts payable to and receivable from parties in the partly owned subsidiaries are set out in the notes to the financial statements.

Transactions with key management personnel and their related parties

Disclosures relating to key management personnel are disclosed in note 27.

Transactions with other related parties

During the year, the parent and subsidiaries made contributions to defined benefit and contribution superannuation plans as disclosed in note 25.

Ownership interests in related parties

The ownership interests in related parties in the consolidated entity are disclosed in note 31. All transactions with subsidiaries have been eliminated on consolidation.

,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,

CSL Limited and its controlled entities Notes to the Financial Statements continued for the year ended 30 lune 2006.

		Consolidated Entity		Parent Indry
	2006 S	2005	2006 s	2005 Æ.
29 Remuneration of Auditors Amounts received, or due and receivable, for the audit and review of the financial reports of the parent entity and its subsidiaries by: tra a King Ernst & Young related practices	751,500 2,541,364	590.217 2,391,655	751,500	590.217
	3.292.864	2.981.872	751.500	590.217
Amounts received, or due and receivable, for the other services. in relation to the parent entity and its subsidiaries by Ernst & Young
due diligence / completion audits accounting advice	16,000	488.408 67.600	16,000	488.408 67.500
compliance and other audits.	13,050	46.764	13,050	46,764
Emst & Young related practices due oligence / completion audits accounting advice		19.695
complance and other auclits.	181,193
	210,243	622.367	29,050	602.672
	3,503,107	3604.239	780,550	1.192.889

30 Commitments and contingencies

		Consolidated Entity	Parent Entity
	2006 \$000	2005 SOCIO-	2006 \$000	2005 ROOD
(a) Operating leases
Non-cancellable operating lease rentals are payable as follows:
Not later than one year.	35.667	31.889	1.259	1433.
Later than one year but not later than five years	86.466	86.222	2.084	2613.
Later than twe years	117.482	132.2681	370	378.
	239.615	250 370	3.713	2.430

(b) Finance leases

Future minimum lease payments are payable as follows:
Not later than one year	4.771	4,242
Later than one year but not later than five years.	17,416	16.614
Later than twe years	49,160	49.095
lotal minimum lease payments	71.347	69.951
Future aname charges	(29, 826)	(29.710)
Finance lease liability	41,521	40.241
The present value of finance lease liabilities is as follows:
Not later than one year.	2.198	1.850
Later than one year but not later than five years.	8.372	7.969
Later than tive years	30,951	30,422
	41,521	40.243
Finance lease - current liability (refer note 17)	2.111	1756
Finance lease - non-current liability liefer note 17	39.410	38.485
	41.521	AC 241

CSL Limited and its controlled entities

Notes to the Financial Statements continued

for the year ended 30 June 2006.

		Consolidated Entity	Parent Entity
	2006 \$000	2005 3000	2006 \$000	2006 SOOO
30 Commitments and contingencies (continued)
(c) Total lease hability
Current
Finance leases (refer note 17)	2,111	1756
Surplus lease space (refer note 19) mmummummes	2,343	6.720
	4.454	84/6
Non-aurent
Finance leases trefer note 171	39,410	38.485
Surplus lease space (refer note 10)	948	3.844
	40,358	42,329
	44.812	50.805
(d) Capital commitments Capital expenditure contracted for at balance date but not provided for in the financial statements, payable, Not later than one year	40.109	11.808	13,832	4.500
Later than one year but not later than five years Later than twe years	8,160
	48,269	11.608	13,832	4.500

(e) Contingent assets and habilities

Guarantees

SRAKALBRETAL S RS:	Patent entry quarantee of subsidiary borrowings.	26.632	858.451 4.995
		26.632	863.446

Service agreements

				-------	~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~							-682-			-5.463.
		.									,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,

Deed of cross guarantee

CSL Limited and its controlled entities Notes to the Financial Statements continued
for the year ended 30 line 2006

	Country of incorporation	Percentage Owned
		2006 ℅	2005 !!!!!?‱ ▒
Controlled Entitles M.
Parent Eminy
CSL Limited	Australia
Subsidiaries of CSL Limited:
Cervax Pty Ltd	Australia	74	74.
CSL (New Zealand) Limited	New Zealand	100	100 (a)
Iscoter AB	Sweden	100	100(a)
CSL International Pty Ltd	Australia	100	100
CSL Finance Pty Ltd CSL Denmark ApS	Australia Denmark	100 100	100 $100$ $(a)$
2LB Behring AG	Switzerland	100	$100$ $(a)$
ZLB GmbH	Germany	100	100(a)
CSL JK Hodings Limited	England	100	100(6)
ZLB Bioplasma UK Limited	England	100	$100$ $(a)$
ZLB Holdings Inc.	USA	160	100.
CSL Brotherapies Inc.	USA	100	.lb)
ZLB Bioplasma (Hong Kong) Limited	Hang Kong	100	100 (a)
ZLB Benning LLC	USA	100	$100$ $(a)$
ZLB Behring Sales Force Inc.	USA	100	$100$ (a)
ZLB Bioplasma fire	USA	100	$100$ (a)
ZLB Behring Canada Inc.	Canada	100 100	100 (a)
ZLB Behiing Brazil Comercio de Produtos Farmaceuticais Ltda ZLB Behring KK	Brazil Japan	100	100(a) $100$ (a)
ZLB Behring S.A. de C.V.	Мехісо	100	100 (a)
ZLB Benting S.A.	France	100	100 (a)
ZLB Prarma Grubal	Germany	160	$100$ $(a)$
ZLB Behring Foundation for Research and Advancement of Patient Health
	USA	100	100 (a)
ZLB Behring Verwaltungs GmbH ZLB Behring Beteiligungs GmbH & Co KG	Germany Germany	100 100	$100$ $(a)$ 100(p)
ZLB Plasma Services GmbH	Germany	100	$100$ (a)
2.B Behring GrinbH	taesmann	100	$100$ $(a)$
ZLB Behring (Switzerland) AG	Switzerland	100	$100$ (a)
1999 - Andrea Andrewski, filozof a strong a strong and a strong and a strong and a strong and a strong and a ZLB Behring GmbH	Austria	100	$100$ $(a)$
ZLB Benang S.A.	Spain	100	100(a)
ZLB Behring A.B.	Sweden	100	$100$ $(a)$
ZLB Behring S.p.A.	Italy	100	100(a)
ZLB Behring N.V.	Belgium	100	$100\,$ (a)
4.3 Behing Lda ZLB Betting MEPE	Portugal Стенсе	100 100	$100$ $(a)$ 100 (a)
ZLB Behring Asia Pacific Limited!	Hong Kong	100	100(6)
ZLB Behring S A	Argentina	100	100 (a)
ZLB Behring Holdings Ltd.	England	100	$100$ $(a)$
ZLB Behring UK Ltd.	England	100	$100$ $(a)$
CSL Biotherapies Asia Pacific Limited	Hong Kong	100	O)

(a) Audited by affiliates of the parent entity auditors.
(b) CSL Biotherapies Inc and CSL Biotherapies Asia Pacific Limited were incorporated during the year.

anana

ammannannan

Notes to the Financial Statements continued
for the year ended 30 line 2006

			Consolidated Entity		Parent Entity
	Noves	2006 \$000	2005 \$000	2006 \$000	2005 \$000
32 Statement of Cash Hows
(a) Reconditation of cash and cash equivalents and non-cash financing and investing activities Cash at the end of the year is shown in the cash flow stotement as:
Castrat bank and on hand	7	384.064 369,630	258.528 465.314	28.066
Cash deposits Bank overchafts	17.	(5,706)	(4.091)	149.224	461,769
		747,988	/19/51	177.290	461.769

(b) Reconciliation of Profit after Tax to Cash Hows from Operations
Profit after tax		117.357	481 74	16.034	56.296
Non-cash items in profit after tax
Contingent consideration		233,536
Depreciation and amortisation.		116,064	125.137	31,122	29.746
Loss / (Gain) on sale of property, plant and equipment		(421)	1994	75	67
Finance costs		1.351	1,268
Unwinding of discount		7.360	9.271
Realised exchange loss on disposal of foreign subsidiaries. reclassified to the income statement			11 164
Share based payments expense		4.684	2.294	4,684	2.294
Changes in assets and labilities, net of the effects of purchase / disposal of subsidiaries.
Increase/decrease in trade and other receivables.		24,704	(86, 707)	(16, 803)	113.988)
Increasevecrease in inventories		30,500	157972	(6.975)	6.696
(Increase/decrease in retrement benefit assets		(19, 342)	921	213
lincreasei/decrease in deferred tax assets		6,809	113,235	(14, 216)
Increase/Idecrease) in trade and other payables		(6,066)	31.036	10,751	892
Increase/Idecrease) in deferred government grants		1.504	2.460	1,504	2.460
Increase/Idecrease) in provisions		(3,713)	122.2221	5.862	(2.316)
Increase/Inemease) in retirement benefit liabilities		(5, 714)	(37,060)	(158)	(336)
Increase/(decrease) in deferred tax liabilities		13.551	(53.024)	23.958	(5.081)
	6.	522,164	805.509 231687	56,051	15/23
Less: Gain on sale of discontinued operations, net of tax		522,164	567.622	56.051	75,723
Net cash inflow from operating activities

MARKA ANDRO DE LA CALCACIÓN DE LA CALCACIÓN DE LA CALCACIÓN DE

WWW

(c) Financing Facilities

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

	Consolidated Entity			Parent Entity
	\$000	Accessible Drawn down SAAA	Unused \$000	Accessible saan	Drawn down \$000	lmused \$000
June 2006
Bank overdraft facility (b), (d)	10.219	5.706	4.513	4.513		4.513
Bank loan facilities (a), (d)	655.132	486,778	168.354
Total financing facilities (c)	665.351	492.484	172.867	4.513

CSL Limited and its controlled entities Notes to the Financial Statements continued

for the year ended 30 June 2006.

32 Statement of Cash Flows (continued) [1999]

(c) Financing Facilities (continued)

		Consolidated Entity			Parery Friday
	Accessible Drawn down -9990	ಾಂಬ	AIGHT-COLL 3000	Accessible Drawn down 30000	5000	Unused -9000
June 2005
Bank overdraft facility (b) (d)	9.383	4.091	-92	4.482		4482
Bank Ican facilities (a) (d)	658.514	458.260	200.245
lotal financing facilities (c).	667.897	462.360	205.537	4 482		4.482

(a) Drawn facilities expire in March 2007 and March 2009.

(b) No specific explividate.

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

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

33 Deed of Gross Guarantee

		Consolidated Entry
Summarked Impare Statement and Retained Earnings	2006 \$000	2005 5000
Profit before tax.	243,272	206,493
Income tax expense.	(10, 268)	្រាច, 356)
Net profit.	233.004	191.137
Set out below is a summary of movements in consolidated retained earnings of the closed group:
Retained earnings at beginning of the financial year.	581.196	474.071
Net profit	233.004	191137
Actuarial gain / floss) on defined benefit plans, net of tax	1.437	-38.
Dividends provided for or paid.	(124, 394)	(84,950)
Retained earnings at the end of the financial year.	691.243	581 196

CSL Limited and its controlled entities

Notes to the Financial Statements continued

for the year ended 30 June 2006.

33 Deed of Cross Guarantee (continued)

		Consolidated Entry
	2006	2005
Balance Sheet	\$000	400a
CURRENT ASSETS
Cash and cash equivalent	434,383	461 769
Irade and other recevables.	58,975	53,370
Current tax assets	57,374
Inventories Other financial assets	66,426	59.451

fotal current assets	617,158	574 590
NON-CURRENT ASSETS trade and other receivables	429,080	456.876
Other financial assets	1,259,318	1,298.641
Property plant and equipment.	268,881	261,402
Deferred tax assets	24,457
Intangible assets	20,000	20,000
Retrement benefit assets	1,840
Total non-current assets	2,003,576	2,036,919
TOTAL ASSETS	2,620,734	2611,509
CURRENT LIABILITIES
frade and other payables.	109,361	138.221
Interest-bearing liabilities and borrowings	359,855	11111111111112
Other financial liabilities		111111111111111111111111111111111111111
Current tax liabilities	24,801	111111111111111111111111111111111111111
Provisions	26,116	17848
Deferred government grants	371	296
Retirement benefit liabilities
Total Current Liabilities	520,504	156,365
NON-CURRENT LIABILITIES
Irade and other payables	69.813	1.328
interest-bearing liabilities and borrowings.	274,399	595 520
Non-current tax liabilities
Deferred tax liabilities	37,225	31,61%
Provisions	5,223	16,397
Deterred government grants	4,093	2664
Retirement benefit liabilities		159
Total Non-Current Labilities	390,753	64/6/9
TOTAL LIABILITIES KAMANAN MANA (KAMAN	911,257	804,044
NET ASSETS	1,709,477	1.807.465
EQUITY
Contributed equity	994,101	1,223,466
Reserves	24,133	2.803
Retained earnings Maria Maria (Maria Maria Maria Maria Maria Maria Maria Maria Maria Maria Maria Maria Maria Maria Maria Maria	691,243	581 196
TOTAL EQUITY	1,709,477	160/465

www.

mmer

CSL Limited and its controlled entities Notes to the Financial Statements continued for the year ended 30 June 2006.

		Consciunted Entity
	2006 \$000	2005 5000
34 Earnmos Per Share
Earnings used in calculating basic and cliutive earnings per share comprises.
Profit from continuing operations	117.357	234.729
Profit from discontinuing aperations.		253.045
Profit attributable to ordinary shareholders	117,357	481.114

		Mimber of shares
	2006	2005
Weighted average number of ordinary shares used in the calculation of basic earnings per share:	182.025.674	195 988 194
Effect of clique securities.
Senior Executive Share Ownership Plan options	697,530	500 953
Employee Performance Rights	587.904	321.154
Global Employee Share Plan	29.299	7551
Contingent Consideration	7.098.615	4.852.093
Adjusted weighted average number of ordinary shares used in the calculation of diluted. earnings per share.	190.439.022	201609345

Contingent consideration

Conversions, calls, subscription or issues after 30 June 2006.

Since the end of the financial year, no ordinary shares have been issued.

35 Events occurring after reporting date

......................................

CSL Limited and its controlled entities Notes to the Financial Statements continued for the year ended 30 June 2006

36 Financial Instruments

Objectives for holding derivative financial instruments

The purpose of specific derivative instruments that may be used by the consolidated entity is as follows:

Foreign currency forward exchange contracts are purchased predominantly to hedge the foreign currency value of receivables. and payables, forward exchange contracts are purchased when considered necessary to create a desired hedge position, and
Interest rate 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.

Interest Rate Risk Exposures

			Fixed interest rate maturing in
	Floating	1 year	Over 1 year	Over	Non-interest		Average
Consolidated Entity - June 2006	Rate (a) \$000	or less \$000	to 5 years \$000	5 years \$000	Bearing \$000	Total \$000	Interest Rate %
Financial Assets
Cash and cash equivalents.	753,694			۰	$\mathbf{r}$	753.694	4.75%
Trade and other receivables				٠	611,352	611,352
Other financial assets					12.600	12,600
	753,694			٠		623,952 1,377,646

Financial Liabilities
Trade and other payables				۰	388,979	388,979
Bank loans - ansecured	486,922			÷	٠	486,922	2.59%
Deferred consideration -intangibles acquired	٠	9.261	16.459		٠	25.720	2.78%
Deferred consideration -subsidiary acquired	۰	80.228	82,262	٠	٠	162.490	4.35%
Bank overdraft - unsecured	5,706	÷	۰	÷		5.706	5.10%
Senior unsecured notes	۰	18.993	75,713	241.764		336,470	5.22%
Lease liabilities		2.111	8,394	31,016		41,521	6.14%
	492,628	110,593	182,828	272,780		388,979 1,447,808

CSL Limited and its controlled entities Notes to the Financial Statements continued for the year ended 30 June 2006

36 Financial Instruments (continued)

			Fixed interest rate maturing in
	Floating Rate (a)	1 year or less	Over 1 year to 5 years.	Over Sheats	Man-interest Bearing	lotal	Average Interest Rate
Consolidated Enuty - June 2005	\$000	5000	3000	3000	\$000	2006	96.
Financial Assets
Cash and cash equivalents	123.842					723,842	4.29%
Irade and other receivables					573.253	573,253
Other financial assets					16,566	16.566
	723.842			890000000000000000000000000000000000000		589 819 713 661
Financial Liabilities
frace and other payables.		×.			396.656.	398.555
Bank overdraft	4.031					4.091	2.45%
Bank loans - unsecured	458,269					456.269	1.82%
Deterred consideration -intangibles acquired		8.283	24.255			32.538	2.50%
Deferred consideration –subsidiary acquired.		×	150950			150.950	4.36%
Senior unsecured notes			14.258	250633		324.891	570%
Lease labilities		1756	11/33	26.752		40.241	5.95%
	462,360	10.039	261.196	211.385	398.555	1409.35

* Notional principal amounts

	Fixed interest rate maturing in
	Floating	1 year	Over 1 year	Over	Non-interest		Average
Parent Entity - June 2006	Rate (a) \$000	or less \$000	to 5 years \$000	5 years \$000	Bearing \$000	Total \$000	Interest Rate

Financial Assets
Cash and cash equivalents	177.290					177.290	-5.62%
Trade and other receivables					110.851	-110.851
Other financial assets					1,232,935 1,232,935
	177.290				1.343.786 1.521.076
Financial Liabilities
Trade and other payables					688.999	688.999
					688.999	688.999

.......................................

CSL Limited and its controlled entities Notes to the Financial Statements continued

for the year ended 30 June 2006.

36 Financial Instruments (continued)

Fixed interest rate maturing in
Parent Entry - Arme 2005	Hoating Hate (a) SOOT	A year OF RESS -5166	Over 1 year AO 5 Vears - 1000	CASE Sycars -5000	Nor-merest Bearing \$000	lotal. 5000	Average interest itate - 200
Financial Assets
Cash and cash equivalents	461.769					461.769	5.54%
lizde and other receivables.					-91-324)	-91.324
Other financial assets					1,232.905	1,232,905
	461769				1.324.229 1 785.998
Financial Liabilities
Trade and other payables.					595.199.	-595.199
					595.199	-596.199

Notional principal amounts

(a) Floating interest rates represent the most recently determined rate applicable to the instrument at balance sheet date.

Foreign Exchange Risk

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

Hedges of net investment in foreign subsidiaries

Sensitivity analysis

At 30 june 2006 it is estimated that a general increase of one percentage point in interest rates would increase/(decrease) the consolidated entity's profit after tax by approximately \$1.8m (2005: \$1.8m).

CSL Limited and its controlled entities Notes to the Financial Statements continued

for the year ended 30 lune 2006

36 Financial Instruments (continued)

Fair values

The fair values, together with the carrying amounts of Financial Asset and Financial Liabilities shown in the balance sheet, are as follows:

	Carrying amount	Fair Value	Carrying amount	f air Value
	2006	2006	2005	2005
Consolidated Entity	\$000	\$000	5000	SOO0
Financial Assets
Cash and cash equivalents ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,	753,694	753,694	723,842	123,842
trade and other receivables.	611,352	611,352	513.253	5/3,283
Other thancial assets
Derivatives
Unlisted equity securities	4,728	4,728	4.698	4.698
Managed financial assets	7,872	7,872	11.668	11,868
Financial Liabilities	1,377,646	1,377,646	$-1, 3, 13, 66, 1$	1.313.661
Bank overdraft
	5,706 388,979	5,706 388,979	-4.091 398,555	4.091 398,555
frace and other payables Interest bearing liabilities and borrowings 00000000000000000000000000000000000000
Unsecured bank loans	486,922	486,922	458,269	459,287
Unsecured notes	336,470	338,462	324,891	321,225
Deferred cash settlement	188,210	188,210	183.488	183,486
Finance leases	41.521	41,521	40 241	40.241
Other financial liabilities
Derivatives
mmmmmmmm	1,447,808	1,449,800	1,409,535	1.412,687
There are no unrecognised gains or losses.
Parent Entity
Financial Assets
Cash and cash equivalents	177,290	177,290	461.769.	461,769
trade and other receivables.	110,851	110,851	91,324	91,324
Other financial assets
Derivatives
Unlisted equity securities	4,728	4,728	4.698	4,698
Longiterin deposits
Managed financial assets
	292,869	292,869	55/191	557,791
Financial Liabilities
Bank overdraft trade and other payables	688,999	688,999	595.199	595,199
Interest bearing liabilities and borrowings
Unsecured bank loans
Unsecured notes
Deferred cash settlement
Finance leases
Other financial liabilities
Derivatives
	688,999	688,999	595,199	595.199
There are no unrecognised gams or losses

aanaanaana

CSL Limited and its controlled entities Notes to the Financial Statements continued for the year ended 30 june 2006

36 Financial Instruments (continued)

The following methods and assumptions were used to determine the net fail values of financial assets and liabilities.

trade and other receivables I payables

Other financial assets - Derivatives

Other financial assets - other

Interest bearing liabilities and borrowings

Fair value is calculated based on the discounted expected future principal and interest cash flows.

Interest hearing liabilities and borrowings - Finance leases

Credit Risk

The consolidated entity infrienties the credit risks associated with trade and other debtors by undertaking transactions with a large number of customers in various countries.

The credit quality of financial assets that are neither past due, nor impaired is as follows:

For the year ended 30 June 2006	Financial Institutions	Governments	Hospitals	Buying Groups	Other	Total
Cash and cash equivalents.	753.694					753,694
Trade and other receivables.	1.242	36.104	209.817	170.555	193.634	611.352
Other financial assets	12.600					12.600
	767.536 .	36.104	209.817	170.555	193.634	1.377.646

1989 - Johann Stein, fransk politiker (d. 1989)

The consolidated entity has not renegotiated any material collection/repayment terms of any financial assets in the current financial year.

CSI Limited and its controlled entities Notes to the Financial Statements continued for the year ended 30 June 2006.

36 Financial Instruments (continued)

Credit Risk (continued)

An analysis of trade receivables that are past due and the allowance for doubthal debts is as follows. All other financial assets are less than 30 days overdue.

			Allowance
			for doubtful
For the period ended 30 June 2006:	Not impaired	impaired	debts
Trade and other receivables:
less than 30 days overdue	357,451
more than 30 but less than 90 days overdue	84.605
more than 90 days overdue.	82.926	13.744	13,744
	524.982	13.744	13.744

37 Explanation of transition to AIFRS

As stated in significant accounting policies note 1, these consolidated financial statements are the first prepared in accordance with AIFRS.

22000000000000000000000000000000000000

_______________________________________

CSL Limited and its controlled entitles Notes to the Financial Statements continued for the year ended 30 June 2006.

37 Explanation of transition to AIFRS (continued)

(a) Reconciliation of equity reported under previous Australian Generally Accepted Accounting Principles (AGAAP) to equity under Australian equivalents to IFRS (AIFRS)

iiiiiiiiiiiiiiiiiiiiii

,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,

......................................

,,,,,,,,,,,,,,,,,,,,,,,,,

i). At the date of transition to AIFRS: 1 July 2004

		Consolidated Entity			Parent Entity
Notes	Previous Agaap \$'000	Effect of transition to AIFRS \$'000	AIFRS \$'000	Previous AGAAR \$ 000	Effect of *transition* to Alfre \$1000	airs \$3000
CURRENT ASSETS
Cash and cash equivalents	114,896		114.896	12,700		12.700
frade and other receivables. TX.	532,396	31,860	564,056	43,265	3.894	47 159
Inventones	1,352,578	$\overline{\phantom{a}}$	1,352,578	66.147		66.147
Other Ű.	31,860	(31,860)		3,894	(3,894)
Total Current Assets	2,031,530		2,031,530	126,006		126,006
NON-CURRENT ASSETS
trace and other receivables	6,489		6,489	305.109		305.109
Citier financial assets	8,223		8,223	204.058		1,204,058
Property, plant and equipment	887,017		887,017	259, 190		259,199
Deferred tax assets M.	77,644	192,825	270,469	0825	(9 825)
thangible assets	859,870	$\overline{\phantom{a}}$	859,870	20000		20.000
Other зā,	4,610	(4,610)
Retirement benefit assets M.		1,026	1,026
Total Non-Current Assets	1,843,853	189,241	2,033,094	1.798,191		(0,825) 1 768.366
TOTAL ASSETS	3,875,383	189,241	4,064,624	1.924.197		(9.825) 1.914.372
CURRENT LIABILITIES
trade and other payables.	458,502		458,502	53,905		53,905
Interest bearing liabilities and www. borrowings X.	13,297	(5,353)	7,944
Otter financial liabilities
Current tax liabilities	26,903		26,903	21.960		21,960
Provisions X.	199,406	5,353	204,759	15.843		15,843
Deferred government grants ÎV.		296	296		296.	296
Total Current Liabilities	698,308	296	698.404	91/08	296.	02.004
NON-CURRENT LIABILITIES
Interest bearing liabilities and borrowings X, M	854,347	${13,759}$	840,588
Deferred tax liabilities $\mathcal{U}$	80,577	61,239	141,816	12.699	(2, 822)	0.817
Provisions W(X)	168,309	${86,023}$	82,286	20.112		20.712
Deferred government grants JV.		204	204		204	204
Retirement benefit liabilities W.		116,591	116,591	M.	\$33	633
Total Non-Current Liabilities	1,103,233	78,252	1,181,485	33.411	(2085)	31.326
TOTAL LIABILITIES mw	1,801,341	78,548	1,879,889	125.110	(1/89)	123,330
NET ASSETS	2,074,042	110,693	2,184,735	1/99.076 ▥		$(0.036)$ 1 $101.042$
EQUITY
Contributed equity	1,502,417		1,502,417	1.502A11		1,502,417
Reserves XV.	77,373	(76, 432)	943	22824	(21.883)	941
ketained earnings XVI.	494,252	187,125	681,377	213831	13.847	287.684
TOTAL EQUITY	2,074,042	110,693	2,184,735	199078		(6.036) 1.01.042

23.

CSL Limited and its controlled entities Notes to the Financial Statements continued for the year ended 30 lune 2006

37 Explanation of transition to AIFRS (continued) ii). At the end of the last reporting period under previous AGAAP: 30 June 2005

		Consolidated Entity			Parent Entity
Notes.	Previous agaap \$'000	Effect of transition to AIFRS \$'000	AIFRS \$'000	Previous ACAAR 8 DUQ	Effect of transmon 10 AIPS \$'000	AIFRS \$ 000
CURRENT ASSETS
Cash and cash equivalents	723,842		723,842	461,769		461,769
trade and other receivables	536,983 ÌХ.	22,244	559,227	68,864	2419.	71,283
Inventones	946,583	$\overline{\phantom{a}}$	946,583	59,401		59,451
Other	22,244 ĨХ	(22.244)		2,419	(2.419)
Other financial assets
Total Current Assets	2,229,652		2,229,652	592.503	mill	-592.503
NON-CURRENT ASSETS
Irade and other receivables	11,014 ÌХ.	3,012	14,026	20,041	X.	20.041
Other financial assets	19,578 ijĶ.	(3.012)	16,566	1232905		1,232,905
Property plant and equipment	769,143	$\overline{\phantom{a}}$	769,143	261.402		261.402
Deferred tax assets	97,414 V.	(20, 755)	76,659	10.400	(10 400)
Intangible assets TM. Other	744,143	42,292	786,435	20,000		2000
Retrement benefit assets	3,352 XI. W	(3,352) 50	50
lotal Non-Current Assets	1,644,644	18,235	1,662,879	1,544,748		(10,400) 1,534,348
TOTAL ASSETS	3,874,296	18,235	3,892,531	2137251		(10.400) 2.126.651
CURRENT LIABILITIES
trade and other payables	398,555 $\mathcal{Q}$		398,555	573,540	21.659	595,199
Interest bearing liabilities and
borrowings	21,861 Х	(6, 720)	15,141
Other financial liabilities
Current tax liabilities	37,130		37,130
Provisions Deferred government grants	75,171 Χ IV.	6,720 296	81,891 296	17 848	296.	17846 296.
Total Current Liabilities	532,717	296	533,013	591.366	21.955	613,343
NON-CURRENT LIABILITIES
Interest bearing liabilities and
$X \times V$ DONOWIDOS	1,003,035	(7, 196)	995,839
Deferred tax liabilities	106,814 ÿ	(28, 537)	78,277	33.968	(24,010)	9968
Provisions ЦX,	157,218	(78, 672)	78,546	16,301	99	16,391
Deterred government grants.	W	2,664	2,664		2.664	2,664
Retirement benefit liabilities Total Non-Current Liabilities	W. 1,267,067	95,667 (16, 074)	95,667 1,250,993		159 $(2 - 187)$	159 29.172
TOTAL LIABILITIES	1,799,784	(15, 778)	1,784,006	90,359 641,747	768	642.515
NET ASSETS	2,074,512		34,013 2,108,525	1.495.504		(11.168) 1.484.336
EQUITY
Contributed equity	1,223,034 TI.	432	1,223,466	1,223,034		432 1223,466
Reserves X).	(62,093)	(120, 915)	(183,006)	22824	(20.021)	2,803
Retained earnings ma l	913,569	154,496	1,068,065	249,646	8.421	258.067
TOTAL EQUITY	2,074,512	34,013	2,108,525	1.495.004		$[11.168]$ 1.464.336

minimini

www.

CSL Limited and its controlled entities

Notes to the Financial Statements continued

for the year ended 30 June 2006.

37 Explanation of transition to AIFRS (continued)

(b) Reconciliation of profit under previous AGAAP to profit under Australian equivalents to IFRS (AIFRS).

i). Reconciliation of profit for the year ended 30 June 2005

			Consolidated Entity			Parent Fritty
	Notes	Previous AGAAP \$'000	Effect of transition to AIFRS \$'000	AIFRS \$'000	Previous AGAAP \$ 0.00	Friest of transform to All'RS \$000	AIFRS \$000
Sales revenue	M	2.749,934	(140.969)	2,608.965	363.320		363.320
Cost of sales	VLXIV.	(1,686,776)		67,943 (1,618,833)	(169.872)	(981)	(170 ssa)
Gross profit		1,063,158	(73,026)	990,132	193,448	(981)	102.467
Other revenue	17.VI.XII	502,976	(461,682)	41,294	33.471	(2.473)	30.998
Research and development expenses	M.	(145, 721)	4.763	(140,958)	(59.192)		(59.192)
Selling and marketing experises	vil.	(332, 336)	7.470	(324, 866)	(42.512)		(42.517)
General and administration. expenses	1 ш.м.ха хи хи	(174, 583)	58,079	(116, 504)	155.577	4981)	(56, 566)
Other expenses Met assets of discontinued operations	VI.	(178, 548)	178,548
Other expenses	4.VOMBI	(51, 366)	51,366
Finance costs	VIII	(41, 640)	2,825	(38, 815)	13871		(387)
Profit before income tax expense - continuing operations		641,940	(231,657)	430.283	69.246	(4.435)	64,811
Ілсотне тах ехрепье – солтигшло operations	M.	(95, 422)	(80, 132)	(175, 554)	(8,481)	(1 029)	(9, 516)
Net Profit after tax from continuing operations		546,518	(311,789)	234.729	60.750	(5.464)	55.205
Net Profit after tax from discontinued operations	VIII		253,045	253,045
Net profit attributable to members of CSL Limited		546,518	(58.744)	487.774	60 759	(5, 464)	55.295

(c) Reconciliation of cash flow statement for the year ended 30 June 2005 The adoption of AIFRS has not resulted in any material adjustments to the cash flow statement.

(d) Adoption of AASB 132 Financial Instruments: Presentation and Disclosure and AASB 139 Financial Instruments: Recognition and Measurement

The adoption, effective 1 July 2005, of AASB 132 and AASB 139 has not resulted in any material adjustments to the consolidated balance sheet.

CSL Limited and its controlled entitles Notes to the Financial Statements continued for the year ended 30 June 2006.

37 Explanation of transition to AIFRS (continued)

(e) Notes to the reconciliations

(i) Goodwill

	Consolidated Entity		Parent Frinty
	1 luly 2004 \$000	30 June 2005 \$000	3000	1 luly 2004 30 lune 2005 5000
increase intangible assets.		43.052
(increase) deterred tax liabilities.		(10, 676)
MET ASSETS		32,376
Decrease foreign currency translation reserve		1,951
(Increase) retained earnings		(34, 327)
total eolity WARRANGANGANGAN		(32, 376)
The incernental effect on the income statement is as follows:		Year ended 30 June 2005 \$000		Year ended 30 Any 2005 - 000
(Decrease) other expenses.		(45.564)
Incease income tax expense		11,237
MELPROFIE		(34, 327)

(ii) Employee Benefits

The incremental effect on the balance sheet is as follows:

	Consolidated Entity		Parent Emiry.
	1 July 2004 \$000	30 June 2005 \$000	SOOT	1 длу 2004 - 30 для 2005. -5600
increase retirement benefit assets.	1,026	50.
Increase deferred tax assets	8,229	5,066	160.	48.
(Increase) retirement benefit liabilities.	(533)	(159)	(533)	1159)
(Increase) non-current provisions	(20, 886)	(12,992)
(increase) deterred tax labilities	(225)	(11)
NET ASSETS	${12,389}$	(8,046)	1373)	00 O
(Increase) foreign currency translation reserve		(1,002)
Decrease retained earnings	12,389	9,048	373	174
TOTAL EQUITY	12,389	8.046	313	111
The incremental effect on the income statement is as follows:		Year ended 30 June 2005 \$000		Year ended 30 June 2005 30OO
(Decrease) general and administration experies.		(29,967)		(319)
Increase income tax expense.		10,490		96
NET PROFIL		(19.477)		(224)

CSL Limited and its controlled entities

Notes to the Financial Statements continued

for the year ended 30 line 2006

37 Explanation of transition to AIFRS (continued)

--------------		Consolidated Entity	Parent Entity
,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,	\$000	1 luly 2004 30 lune 2005 \$000	1 для 2004 - 30 для 2005 A TARA DA MARTIN
Decrease non-current provisions.	116.058	95.508
Increase) non-current retirement benefit. Isbilities	(116.058).	(95.508)
NET ASSETS

(iii) Share-based payments

......................

The incremental effect on the balance sheet is as follows:

		Consolidated Entity	Farem Entity
	1 luly 2004 \$000	30 June 2005 \$000	SOUTH	1 Any 2004 30 Aug 2005 5000
(increase) contributed equity		(432)		(432)
(Increase) share based payments reserve	(941)	(2,803)	19411	(2.803)
Decrease retained earnings	941	3.235	-941	3.235
10 AL EQUITY
The incremental effect on the income statement is as follows.		Year ended 30 June 2005 \$000		Year ended 30 June 2005 \$000
Increase general and administration expenses		2.294		2.294
nei profil		2.294		2.294

(iv) Government Grants

The incremental effect on the balance sheet is as follows:

		Consolidated Entity		Parent Entity
	1 luly 2004 \$000	30 June 2005 \$000	1 kuw 2004 \$000	30 June 2005 \$000
Increase deferred tax assets	350	888	150	888
Increase) current deferred government grants	(296)	(296)	(296)	(296)
fincrease) non-current deterred government grants.	(204)	(2,664)	(204)	(2.664)
NET ASSETS	(350)	(2,072)	(350)	(2.072)

Decrease retained earnings	350	2.072	350	2072
total equity	350	2.072	350	2012
The incremental effect on the income statement is as follows.		Year ended 30 June 2005 \$000		Year ended. 30 hmc 2005 \$000
Decrease other revenue		2.460		2,460
(Decrease) income tax expenses		(738)		(788)
NET PROFIT		1,722		1.122

CSL Limited and its controlled entities Notes to the Financial Statements continued for the year ended 30 June 2006.

37 Explanation of transition to AIFRS (continued)

(v) Income laxes

the incremental effect on the balance sheet is as follows.

	Consolidated Entity		Parent Fittity
	1 luly 2004 \$000	30 June 2005 \$000	5000	1 July 2004 30 June 2005 1000
Increase/Idecrease) deferred tax assets	184.446	(26.709)	110.1357	111 336)
dncrease)/decrease deferred tax habilities	(61.014)	39.224	2822	24.030
(increase) decrease current trade and other payables				(21,659)
NET ASSETS	123,432	12.515	(7.313)	18.9851
Decrease foreign currency translation reserve		14.345
drorease/decrease retained earnings	(123, 432)	(26.860)	7.313.	6,985
total equity.	(123.432)	(12.515)	7313	8.985

	Consolidated Entity		Parent Enrity
	1 luly 2004 \$000	30 June 2005 \$000	$-5000$	1 длу 2004 - 30 для 2005 3000
Deferred tax assets
balance sheet approach / set-off (above)	184,446	${26.709}$	440 4351	01 3361
employee benefits inote al-	8,229	5.066	160.	48
querment grants (note iv)	150	888	150	888
	192,825	${20.755}$	(9.825)	(10, 400)
Deterred tax habilities
balance sheet approach / set off (above)	(61,014)	39.224	2822	24.010.
goodwill trote it		(10.676)
employee benefits incite in	(225)	(13)
	(61.239)	28.537	2.822	24.010.

KARA MANAMAN MANAMAN MANAMAN MANAMAN MANAMAN MANAMAN MANAMAN MANAMAN MANAMAN MANAMAN MANAMAN MANAMAN MANAMAN

CSL Limited and its controlled emities

Notes to the Financial Statements continued

for the year ended 30 line 2006.

37 Explanation of transition to AIFRS (continued)

(v) Income Taxes (continued)

The total incremental effect on the income statement arising from transition to AIFRS is as follows:

	Consolidated Entity	Parent Entity
	Year ended 30 lune 2005 \$000	Year ended 30 June 2005 -3000
Income tax experise - continuing operations
balance sheet approach (above).	96.572	16/2
goodwill (note ill	11.237
employee benefits (note ii)	10.490	-96
government grants (note w)	(738)	(738)
discontinued operations inote vil	(37, 429)
	80.132	- 129

(vi) Profit on sale of business unit

The incremental effect on the balance sheet is as follows:

	Consolidated Entity		Parent Emily
	1 luly 2004 \$000	30 June 2005 \$000	\$000	1 km 2004 - 30 km 2005 \$000
(Decrease) intangible assets		(760)	UUNGU MANAHAN
NET ASSETS		(760)
(increase) foreign currency translation reserve		(11,200)
Decrease retained earnings		11.960	88
TO AL EQUIDY		760
the incremental effect on the income statement is as follows.		Year ended 30 June 2005 \$000		Vear ended 30 June 2005 \$000
(Increase) other expenses		(796)
(Decrease) net profit from discontinued operations		(11, 164)
NET PROFIT		(11,960)

	Year ended 30 Ame 2005 \$000	Year ended 30 ame 2005 \$000
Decrease sales revenue	140,969
(Decrease) cost of sales	(94,091)
Decrease other revenue	458.530
(Decrease) research and development expenses	(4,763)
(Decrease) selling and marketing expenses	(7.470)	ж
(Decrease) general and administration expenses	(9,348)
(Decrease) other expenses - net assets of discontinued operations	(178,548)
(Decrease) other expenses	(796)
(Decrease) finance costs	(2,825)
(Decrease) income tax expense - continuing operations	(37, 429)
fincrease) net profit after tax from discontinued operations.	(264, 209)
NET PROFIT

CSL Limited and its controlled entities Notes to the Financial Statements continued for the year ended 30 June 2006.

37 Explanation of transition to AIFRS (continued)

(vii) Foreign currency translation reserve: curridative translation differences

The effect on the balance sheet is as follows: www.www.www.www.

		Consolidated Emiry.	Parent Enuty
	\$000	July 2004 30 June 2005 \$000	ПАЛИ 2004 30 две 2005 SOUT
Decrease foreinn currency translation reserve	54.536	96.787
tincrease) retained earnings.	(54.536)	496.787)
kojal eoliin.

There is no effect on the income statement.

(viii) Land and Buildings

The effect on the balance sheet is as follows:

		Consolidated Entity	Parent Emm
	July 2004 \$000	30 June 2005 \$000	1 July 2004 30 Aug 2005 SOOO.
Decrease asset revaluation reserve	22.837	22.837	22.824 -22 824.
Increase/retained earnings/	(22,837)	${22,837}$	122724 22.824
ofa foliim

There is no effect on the income statement.

(ix) AIFRS presentational adjustment - Prepayments and other receivables

	Consulated Entry		Parent Entity
	1 July 2004. \$000	30 June 2005 \$000	5000	1 lub 2004 30 kmc 2005 1000
increase current trade and other receivables.	31.860	22.244	3.894	2419
(Decrease) other assets)	(31,860)	${22.244}$	(3.894)	12.4191
ulcrease non-current trans and other receivables.		3.012
(Decrease) other financial assets		(3,012)
NET ASSETS.

(x) AIFRS presentational adjustment - Surplus lease space provisions

In accordance with AASB 101 Presentation of Financial Statements Surplus lease space provisions have been reclassified from Interest bearing liabilities to Provisions as follows....

	Conscitutional Entity		Parent Entity
	- July 2004 \$000	30 June 2005 \$000	1 July 2004 30 Julie 2005 - 3100	3000
Decrease current interest bearing liabilities	5.353	6.720
(increase) current provisions	(5,353)	(6.720)
Decrease non-current interest bearing liabilities	9.149	3.844
(Increase) hon-current provisions	(9,149)	(3.844)
NET ASSETS

CSL Limited and its controlled entities

Notes to the Financial Statements continued

for the year ended 30 June 2006.

37 Explanation of transition to AIFRS (continued)

(xi) AIFRS presentational adjustment - Borrowing costs

		Aonsolidated Entity	Parent Ernity
	\$000	1 iulv 2004 - 30 iune 2005 - \$000	1 дам 2004 30 липе 2005 -3000 -3000
flecrease non-current other assets	(4.610).	${3,352}$
Decrease non-current interest bearing liabilities and borrowings	4.610	3.352
ne assets

(xii) AIFRS presentational adjustment - Other Revenue

	Year ended 30 Ame 2005 \$000	year ended 20 June 2005
Decrease other revenue
(Decrease) general and administration expenses

(xiii) AIFRS presentational adjustment - Other Expenses

,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,	Year ended Year ended 30 ляте 2006 30 June 2005 \$000
Increase general and administration expenses	5.802
(Decrease) other expenses

(xiv) AIFRS presentational adjustment - Inventory write-downs

	Year ended 30 June 2005 \$000	Vear ended 30 June 2005
Increase cost of sales	26.148
Decrease) general and administration expenses	(26,148)

CSL Limited and its controlled entities Notes to the Financial Statements continued for the year ended 30 June 2006.

37 Explanation of transition to AIFRS (continued)

(xv) Reserves

The Committee of the Committee

The total incremental effect on Reserves of the above noted adjustments is as follows.

		Consolidated Entity		Parent Emily
	1 July 2004 \$000	30 June 2005 \$000	SHOU	- 1 100 1004 - 10 10 10 10 10 10 10 10 10 -5000
Reserves
goodval (note iji		1.953
employee benefits (note in		(1.002)
share-based payments (note iii)	(941)	(2,803)	(94.1)	42.8031
income taxes (note w)		14.345
profit on sale of business unit (note vi)		${11,200}$
foreign currency translation reserve cumulative translation differences inote vill	54,536	96.787
land and buildings (note viii)	22,837	22.837	22824	-22 824
	76.432	120.915	21.683	20.021

(xvi) Retained earnings

The total incremental effect on Retained earnings of the above noted adjustments is as follows:

		Consolidated Emiry		Parent Eurity
	1 luly 2004 \$000	30 June 2005 \$000	1 1uly 2004 - - 600	30 kmc 2005 3000
Retained earnings
- doowll (rote 1)		${34,327}$
employee benefits (note ii).	32.389	9.048	313	411
share-based payments (note 11)	941	3.235	041	3.235.
government grants (note W)	350	2.072	350.	2.012
theome taxes (note v)	(123, 432)	(26.860)	7313	8985
profit on sale of business unit (note vi)		11.960
foreign currency translation reserve curriculative translation. differences inote will	(54,536)	${96.787}$
land and buildings (note viii)	(22, 837)	${22,837}$	4228241	(22.824)
	(187.125)	(154.496)	(13.847)	18.4211

,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,

ana amin'ny fisika

33333333333333333333333333333333333333

,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,

summummum

CSL Limited and its controlled entities Directors' Declaration

(1) In the opinion of the Directors:

(i) giving a true and fair view of the company's and consolidated entity's financial position as at 30 June 2006 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
(2) This declaration has been made after receiving the declarations required to be made to the directors in accordance with section: 295A of the Corporations Act 2001 for the financial period ending 30 June 2006.
(3) In the opinion of the Directors, as at the date of this declaration, there are reasonable grounds to believe that the members. of the Closed Group identified in note 33 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 + Made Chairman minimum minimum

Melbourne 23 August 2006

Brian A McNamee Managing Director

EII FRNST & YOUNG

F Ernst & Young Building 8 Exhibition Street Melbourne VIC 3000 Australia

GPO Box 67 Melbourne VIC 3001

# Tel 61 3 9288 8000 Fax 61 3 8650 7777

Independent Audit Report

to Members of CSL Limited

Scope

The financial report, remuneration disclosures and directors' responsibility

Audit approach

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 the remuneration disclosures; and
assessing the appropriateness of the accounting policies and disclosures used and the reasonableness of significant accounting estimates made by the directors.

Liability limited by a scheme approved under Professional Standards Legislation.

Independence

Audit opinion

Іп сил оринов.

1 the financial report of CSL Limited is in accordance with the top of

(a) the Corporations Act 2001 including:

(i) giving a true and fair view of the financial position of CSL Limited and the consolidated entity at 30 June 2006 and of their performance for the year ended on that date: and
(ii) complying with Accounting Standards in Australia and the Corporations Regulations 2007, and

(b) other mandatory financial reporting requirements in Australia.

2 the remuneration disclosures that are contained on pages 42 to 57 of the directors' report comply with Accounting Standard AASB 124 Related Party Disclosures AASB 124 Related Party

Ennt 9 yours

Ernst & Young

Wignen

wan Wingreen management Partner Methourne

23 August 2006

Registered Head Office

Maria Gregoria

CSL Limited 45 Poplar Road Parkville Victoria 3052 Australia

Telephone: +61 3 9389 1911 Facsimile: +61 3 9387 8454 www.csl.com.au

Dear Shareholder

I have much pleasure in inviting you to our 16th 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 Wednesday, 18 October, 2006, commencing at 10.00 a.m. Refreshments 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. At either Entrance A or Entrance D, take a ticket from the gate on arrival. You will be able to validate this ticket at the validation machine in the venue during registration. You can then use the validated ticket to exit the venue after the Annual General Meeting.

Please bring this Notice with you as the barcode printed on it will assist registration and admission.

If you cannot attend but wish to appoint a Proxy, a personalised proxy form is enclosed 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 the "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.

The Managing Director and Elizabeth Alexander, as your new Chairman, will be reviewing the operations of the Group over the past 12 months, concentrating on the performance of CSL Behring during the year and the initiatives the Company is taking in respect to expanding its investments in its influenza vaccine.

Shareholders will be asked, among other things, to adopt the Remuneration Report relating to Directors and Executives remuneration, which Report is detailed in the Directors' Report published in the Company's 2006 Annual Report and which outlines the Board's policies for determining the remuneration of Directors and Executives and the relationship between those policies and CSL's performance.

At the 2003 Annual General Meeting, shareholders approved the grant of performance rights to the Company's two executive directors over a three year period. That period is due to expire and as a result shareholders will also be asked to approve a further maximum number of performance rights over the next three year period.

As announced at the last Annual General Meeting, I will retire as at 30 September, 2006, and Elizabeth Alexander will succeed me as Chairman of your Company. May I express my appreciation for the support and encouragement that I have received from shareholders, the Board and management during my time as Chairman.

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

Yours sincerely

a fode.

Peter Wade CHAIRMAN

15 September 2006

CSL Limited ABN 99 051 588 348

CSE

Nongs Africa Sea Sala Mean 19

NOTICE IS GIVEN that the Sixteenth 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 18 October 2006 at 10.00 am (EST).

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 2006, and to note the final dividend in respect of the year ended 30 June 2006 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 Professor John Shine, a Director appointed in accordance with Rule 87 of the Constitution, being eligible, is elected as a Director of the Company.'.

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

'That Mr David Simpson, a Director appointed in accordance with Rule 87 of the Constitution, being eligible, is elected as a Director of the Company.".

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

'That Miss Elizabeth A Alexander, 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.'.

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

'That Mr Antoni M Cipa, a Director retiring from the 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 election and re-election, together with information about voting by any significant foreign shareholder in the Company, is included in the Explanatory Notes.

SPECIAL BUSINESS

3. Adoption of the Remuneration Report

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

'That the Remuneration Report (which forms part of the Directors' report) for the year ended 30 June 2006 be adopted.".

For information on the Remuneration Report, see the Explanatory Notes.

4 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 three 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.

Approval of 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 up to a maximum of 500,000 performance rights from time to time under, and in accordance with, the Company's Performance Rights Plan to any of the executive directors of the Company as at the date this resolution is passed, during the 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

• 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; or
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 a proxy;
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 purposes of voting at the meeting, shares will be taken to be held by those who hold them at 10.00pm on 16 October 2006.

BY THE ORDER OF THE BOARD

Bueney,

Peter R Turvey - Company Secretary 15 September 2006

EXPLANATORY NOTES

RESOLUTION 2 - ELECTION OF DIRECTORS

Candidates for Election to the Office of Director

John Shine, AO, FAA (Age 60) Pharmaceutical Industry, Medicine (resident in NSW)

Professor Shine was appointed to the CSL Board in June 2006. He is the Executive Director of the Garvan Institute of Medical Research and a Board Member of the Garvan Research Foundation. He is Professor of Molecular Biology and Professor of Medicine at the University of New South Wales, and a Director of many scientific research and medical bodies throughout Australia. Professor Shine was also Chairman of the National Health and Medical Research Council (NHMRC) and a member of the Prime Minister's Science, Engineering and Innovation Council (PMSEIC) up to 30 June 2006.

David J Simpson, (Age 66) Finance and Management (resident in Victoria)

Mr Simpson was appointed to the CSL Board in September 2006. He is a Fellow of the CPA Australia. Mr Simpson is the non executive Chairman of Aristocrat Leisure Limited and a Director of Lighthouse Foundation. For many years Mr Simpson was Finance Director of Tabcorp Holdings Limited and before that Executive General Manager Finance of Southcorp Holdings Ltd. Mr Simpson has taken over responsibility of Chairman of the Audit and Risk Management Committee from Elizabeth Alexander.

Candidates for Re-election to the Office of Director

Elizabeth A Alexander.

AM, BCorn, FCPA, FCA, FAICD (Age 63) Finance and Risk Management (resident in Victoria)

Miss Alexander was appointed to the CSL Board in July 1991. She is a Director of Boral Limited and D.B. RREEF. She is a Member of the Takeovers Panel, Deputy Chairman of the Financial Reporting Council and past National President of the Australian Society of Certified Practising Accountants and of the Australian Institute of Company Directors. She is Chairman of the Board of Advice to the Salvation Army (Southern Command), Deputy Chairman of the Winston Churchill Fellowship Trust and Chairman of the Finance Committee of Melbourne University. Miss Alexander was Chairman of the Audit and Risk Management Committee and will become Chairman of the Board.

Antoni M Cipa,

B.Bus (Acc), Grad.Dip (Acc), CPA, ACIS (Age 51) 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.

Retiring Directors

Peter H Wade, a director on the CSL Board since 1994 and Chairman from 1999 to 2006, will resign as a director of the Company with effect from 30 September 2006.

Arthur C Webster, a director on the CSL Board since 1998. will be retiring from the Board by rotation at the conclusion of this year's meeting, and will not be seeking re-election.

Pursuant to Rule 78 of the Company's Constitution the Board has determined that, as a result of the retirements of Mr Wade and Mr Webster, and the appointments of Professor Shine and Mr Simpson, the number of Board members will remain at 9.

Voting restrictions on any significant foreign shareholder

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 O class directors must be the number nearest to but not exceeding one third of the directors. Thus in a Board of 9 members, there would need to be 3 O class directors and 6 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 entitles 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 members of the Barclays Global Investors Australia Limited are part of a significant foreign

shareholding, because Barclays Global Investors Australia Limited, which is owned by Bardays Group (a foreign company), 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 members of the Barclays Global Investors Australia Limited exceed 40% of the total Based on the last substantial shareholding notice lodged with the Australian Stock Exchange, Barclays Global Investors Australia Limited had relevant interests in 5.19% of the ordinary shares in the Company at 28 February 2006.

Accordingly, Barclays Global Investors Australia Limited, its controlled entities and its nominees (to the extent they own or hold shares in which the Barclays Group 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 2006 Annual General Meeting.

In accordance with the Constitution, the Board of Directors has determined that as at the date of the Annual General Meeting Elizabeth Alexander, Ian Renard and John Shine be classified as O class directors, with the rest of the Directors being classified as A class directors.

At the 2006 Annual General Meeting, 1 A class director (being Mr Antoni M Cipa) and 1 O class director (being Miss Elizabeth A Alexander) will retire by rotation and have made themselves available for re-election. In addition, 1 A class director (being Mr David Simpson) and 1 O class director (being Professor John Shine) will be up for election.

RESOLUTION 3 - ADOPTION OF THE REMUNERATION REPORT

Under the Corporations Act 2001 (Cth), the Company is required to include, in the Directors' Report, a detailed Remuneration Report setting out certain prescribed information relating to directors' and executives' remuneration, and submit this for adoption by resolution of shareholders at the AGM.

The Directors' Report for the year ended 30 June 2006 contains such a Remuneration Report. A copy of the report is set out on pages 42 to 57 of the 2006 Annual Report and can also be found on the CSL website at www.csl.com.au.

The Remuneration Report discusses matters including (but not limited to):

Board policies for determining the remuneration of directors and executives;
The relationship between the policies and CSL's performance;
If the remuneration of directors and executives are performance based, details of these performance conditions; and

Certain 'prescribed details' of the directors and the topfive highest remunerated executives of the Company group.

Shareholders are asked to adopt the Remuneration Report.

The shareholder vote is advisory only and does not bind the directors of the Company.

RESOLUTION 4 - RENEWAL OF PARTIAL 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.

A proportional takeover bid would involve a bidder conducting an off-market takeover bid for a specified proportion of the shares in the Company held by each shareholder

It is a requirement of the Corporations Act that proportional takeover bid approval rules apply for a maximum period of three years unless renewed. As the Company's proportional takeover bid approval rule (Rule 147) was last renewed at the 2003 Annual General Meeting on 16 October 2003, it is due to expire on 16 October 2006. To continue the operation of Rule 147, it is necessary for Rule 147 to be renewed at the 2006 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 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 inaccordance 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 last renewal unless renewed by a further special resolution of shareholders.

Reasons for Proposing the Resolution

The Board considers that shareholders should continue to have the opportunity to vote on a proposed 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. This could place shareholders under pressure to accept the bid. If Rule 147 is renewed, it will minimise the risk to shareholders by enabling 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 147) 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 Advantage 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 recommendation on whether a proportional takeover bid should be accepted.

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 proportional takeover 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

The Directors consider that the renewal of Rule 147 is in the interests of shareholders as it allows shareholders (excluding the bidder and its associates) to have a continuing right to vote on any proportional takeover and to determine whether a proportional takeover bid should proceed. The Directors recommend that shareholders vote in favour of the renewal of Rule 147.

RESOLUTION 5 - APPROVAL OF ISSUE OF PERFORMANCE RIGHTS TO EXECUTIVE DIRECTORS

Resolution 5 seeks approval, for the purposes of ASX Listing Rule 10.14, for the issue of up to a maximum of 500,000 Performance Rights under the Company's Performance Rights Plan (the Plan) from time to time to any of the Executive Directors of the Company, as at the date the resolution is passed, during the period of three years from the date the resolution is passed (ie, until 18 October 2009). Any such issue of Performance Rights to any Executive Director is subject to that Executive Director having performed to a required performance level. Shares may subsequently be issued to the Executive Directors upon the exercise of such Performance Rights without the need for further shareholder approval.

The Plan was approved by shareholders at the 2003 Annual General Meeting and a summary of the Plan can be found in the Remuneration Report on pages 45 and 46 of the Company's 2006 Annual Report.

The current Executive Directors of the Company are:

Dr Brian 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 Plan. No other Executive Directors in future will be able to participate in the Plan without future shareholder approval being obtained under ASX Listing Rule 10.14.

The participation of the Executive Directors in the Plan is a result of the Company's current remuneration strategy that all senior and strategic employees (including the Executive Directors) largely receive their long term incentives in the form of Performance Rights. Those Performance Rights will be a combination of Performance Rights with no exercise price (Rights) and with an exercise price based on the market price for the Company's shares at or about the time the offer is made (Options).

It is currently proposed that Dr McNamee and Mr Cipa will continue to participate in the Plan annually on the following basis:

· each year, the Board will determine a "Target Value" of Performance Rights to be offered to each Executive Director. The Target Value is initially expected to approximate 30% of the total remuneration of the Executive Director given that they are highly valued executives. The Target Value will then be indexed each vear
Rights with a value of 40% of the applicable Target Value, and Options with a value of 60% of the applicable Target Value, will be offered to each Executive Director;
for this purpose, the value of the Rights and Options to be offered will be the value as at the time of offer, based on standard option valuation methodology (such as the Black-Scholes model), taking into account such factors as the prevailing share price, historical price volatility, the performance hurdles and the vesting periods.
Under certain circumstances, the Board may seek to make an allocation of so called Cliff Options or Rights to its Executive Directors. Such Cliff Options or Rights will have a single vesting date which would be longer than that provided for ordinary rights or options. Such vesting date may coincide with the expiry of an Executive Director's contract and would provide a means of ensuring ongoing tenure to a prescribed date. It is proposed that any use of such Cliff Options or Rights would be within the 500,000 aggregate rights for which approval is sought.

The maximum number of Performance Rights that may be acquired by those Executive Directors over the 3 year approval period is 500,000 in aggregate. The actual number of Performance Rights issued will, as mentioned above, depend on changes to the applicable Target Value, the

Company's share price, the valuation of Performance Rights, the remuneration and performance of the Executive Director, over the period.

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 consideration (in the case of Rights) or an exercise price based on the market price of the Company's shares at or about the time of the offer (in the case of Options).

Pursuant to shareholder approval in October 2003, the following Performance Rights have been granted to the Executive Directors since the introduction of the Plan in October 2003 (in each case the acquisition price and exercise price of the Performance Right was nil):

Dr Brian McNamee	147.500
Mr Tony Cipa	70.000

It is also expected that, as part of the annual performance review process, further Performance Rights will be granted to Dr McNamee and Mr Cipa prior to the date of the 2006 Annual General Meeting. These Performance Rights will be issued within the 3 year limit of 350,000 approved by shareholders at the 2003 Annual General Meeting.

No loans were provided (in relation to previous issues) or 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 Plan.

Details of any Performance Rights issued to an Executive Director under the 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.

C31 Linked ABN 99 05 1588 248 Latin Richard Tarkville Victoria (152 AVENITA Phoney 461 3 9389 1911 Fax: +61 3 9889 1484

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as aceador de la componentación

CSL Limited

ABN 99 051 588 348

Proxy Form

All correspondence to:

Computershare Investor Services Pty Limited GPO Box 242 Melbourne Victoria 3001 Australia

Enquiries (within Australia) 1800 646 882 (outside Australia) 61 3 9415 4000 61 3 9473 2555 Facsimile www.computershare.com

Appointment of Proxy

I/We being a member/s of CSL Limited and entitled to attend and vote hereby appoint

the Chairman of the Meeting ΩR (mark with an 'X')
------------------------------------------------------------	--

Mark this box with an 'X' if you have made any changes

to your name or address details (see reverse of this form)

Write here the name of the person you are appointing if this person is someone other than the Chairman of the Meeting.

or failing the person named, or if no person is named, the Chairman of the Meeting, as my/our proxy to act generally at the meeting on my/our behalf and to vote in accordance with the following directions (or if no directions have been given, as the proxy sees fit) at the Annual General Meeting of CSL Limited to be held at the Function Centre, National Tennis Centre, Melbourne Park, Batman Avenue, Melbourne on Wednesday, 18 October 2006 at 10:00am and at any adjournment of that meeting.

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IMPORTANT: FOR ITEM 5 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 item 5 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 that item 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, the Chairman of the Meeting will not cast your votes on Item 5 and your votes will not be

	COUNTED IN CONDUCTIVE RECORDED MICHAELD IN A DOMESTIC ON THIS RENT. THE CHAMBIAN OF THE MACHINE RECORD DIVIDENCE OF DOVES IN ROUGH OF RENT O.
	Voting directions to your proxy – please mark $\vert \bm{\mathsf{X}} \vert$ to indicate your directions	For	Against	Abstain*
Item 2a	To elect Professor John Shine as a Director
Item 2b	To elect Mr David Simpson as a Director
Item 2c	To re-elect Miss Elizabeth A Alexander as a Director
Item 2d	To re-elect Mr Antoni M Cipa as a Director
Item 3	To adopt the Remuneration Report for the year ended 30 June 2006
ltem 4	Renewal of nartial Takenwer Provision

Approval of Issue of Performance Rights to Executive Directors Item 5

* 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 poll, 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

We wish to appoint a second proxy.

Mark with an 'X' if AND vou wish to appoint	$\%$	0F	State the percentage of your voting rights or the number of securities for this Proxy
a second proxy.			Farm.

PLEASE SIGN HERE This section must be signed in accordance with the instructions overteal to enable your directions to be implemented.

Individual or Securityholder 1

Securityholder 2

idividual/Sole Director and Sole Company Director	Director

Director/Company Secretary

Contact Name

Contact Daytime Telephone

Date

Securityholder 3

HOW TO COMPLETE THE PROXY FORM

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.

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.

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.

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:

indicate that you wish to appoint a second proxy by marking the box. $(a)$
(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.

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 Holdina:	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 Monday 16 October 2006. 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

AI assistant

CSL Ltd. — Annual Report 2006

17854_rns_2006-09-14_606c2a3a-6d25-4536-9848-7e62b948c0b1.pdf

a a como de contrador de la contrad CSL LinitedAfrikai Report 2005 2006

Contents

Financial Calendar

Annual General Meeting

AGM Lite Webcast

CSLS Year in Review Highlights 2005-2006

Highlights:

OSLS YEAR IN REVIEW Financial Results

Dividends to Shareholders

Five Year Summary

Year in Review PIA (REPART)

Dividends and Financial Results

Business Reports

CSL Behring

CSL Bioplasma

CSL Biotherapies

New Product Development

The CSL Board

Our Thanks to Management and Staff

The CSL Story 1916-2006

In June 2006, the US Food and Drug Administration (FDA) and Australia's Therapeutic Goods Administration granted approval to sell Gardasil – the world's first vaccine against cervical cancer.

Our Future Research and Development Focus

18 CSL Limited Annual Report 2005-2006

Healthy Workplaces

7,500 People with Great Ideas

Our People, Our Communities

Our People, Our Communities continued

Contributing to Our Communities

Learning and Leadership

CSL Group Employees by Region

Directors' Profiles

PETER H WADE, FCPA, FAICD - (age 72) Finance, Management (resident in Victoria).

ELIZABETH A ALEXANDER, AM. BCom, FCPA, FCA, FAICD - (age 63)

BRIAN A MCNAMEE, MB, BS, FAICD - (age 49) Pharmaceutical Industry, Medicine (resident in Victoria). Chief Executive Officer and Managing Director

JOHN AKEHURST, MA (Oxon), FIMechE - (age 57) Engineering, Management (resident in Western Australia).

IAN A RENARD, BA, LLM, FAICD - (age 60) Law (resident in Victoria).

MAURICE A RENSHAW, B.Pharm. - (age 59) International Pharmaceutical Industry (resident in NSW).

KENNETH J ROBERTS, AM, FRACP (Hon), BEC, FCPA, FAIM, FAICD. - (acre 68)

JOHN SHINE, AO, FAA - (Age 60) Pharmaceutical Industry, Medicine (resident in NSW).

DAVID J SIMPSON, FCPA - (Age 66) Finance and Management (resident in Victoria).

ARTHUR C WEBSTER, BVSc, DipBact (Lond) - (age 62) Animal Health Industry, Commerce (resident in NSW).

The Company of the Company of Management

Gancolleg Entities

CSL LIMITED

ZLB HOLDINGS INC.

ZLB BEHRING HOLDINGS GMBH

Controlled Entities contracted

CSL LIMITED

CSL BIOTHERAPIES

CSL BIOPLASMA

CSL BEHRING

ZLB PLASMA SERVICES

Information

CSL Limited Issued Capital: Ordinary shares: 181,889,019 as at 30 June 2006

Details of Incorporation

Substantial Shareholders

Voting Rights

Significant Foreign Shareholdings

DISTRIBUTION OF SHAREHOLDINGS AS AT 30 JUNE 2006

SiarenderInformation

CSL'S TWENTY LARGEST SHAREHOLDERS AS AT 30 JUNE 2006

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Share Registry

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SHAREHOLDERS AS AT 30 JUNE 2006

Conodiate Govenaard

1. THE BOARD OF DIRECTORS

1.1 The Board Charter

1.2 Composition of the Board

Corporate Governance condition

1.3 Independence

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

Corporate Governance continued

CSL Ltd. Annual Report 2006

a a como de contrador de la contrad CSL Linited
Afrikai Report 2005 2006

Siarender
Information

CSL Limited and its controlled entities Income Statement
for the year ended 30 June 2006

CSL Limited and its controlled entities Balance Sheet
as at 30 June 2006

CSL Limited and its controlled entities Statement of Recognised Income and Expense
for the year ended 30 June 2006