YEAR IN REVIEW

1 Highlights
2 Financial Results
3 Year in Review

OUR COMPANY

18 Our People
20 Health, Safety and Environment
22 Our Communities
24

FINANCIAL REPORT

38 Directors’ Report
55 Auditor’s Independence Declaration
56 Income Statements
57 Balance Sheets

BUSINESS FEATURES

8 CSL Behring
12 CSL Bioplasma
14 CSL Biotherapies
16 New Product Development
26 Executive Management Group
27 CSL Group Business Operations
28 Share Information
29 Shareholder Information
31 Corporate Governance
58 Statements of Recognised Income and Expense
59 Cash Flow Statements
60 Notes to the Financial Statements
114 Directors’ Declaration
115 Independent Auditor’s Report

FINANCIAL CALENDAR

ANNUAL GENERAL MEETING

AGM LIVE WEBCAST

SHARE REGISTRY

YEAR IN REVIEW 2008-2009 HIGHLIGHTS

DEAR SHAREHOLDER,

The strong international growth in demand for our plasma products and signifi cant continuing revenues from GARDASIL[1] vaccine sales and royalties underpin the pleasing result achieved by CSL this year.

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Group net profi t after tax increased by 63% on the previous year to $1.15 billion. Underlying operational profi t[2] was $1.02 billion, up 45% on the previous year. CSL’s balance sheet is strong with net cash of $1.81 billion. Cash fl ow from operations grew 49% this year to $1.03 billion.

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In June 2009, CSL announced an on-market share buyback of up to 54,863,000 shares[3] . Our shareholders will benefi t from improved investment return ratios such as on earnings per share and return on equity. The buyback will return funds received from shareholders last year to support our acquisition of Talecris Biotherapeutics, a merger proposal from which we have now withdrawn.

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CSL received royalty payments of $161 million from international sales of human papillomavirus vaccine (HPV) and Australia’s national immunisation program generated $159 million in sales of the GARDASIL[1] vaccine.

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In February 2008, CSL launched Privigen[®] in the US. This year, we opened a new Privigen[®] facility, and a further facility is well advanced. Our new generation intravenous immunoglobulin will be a key driver of margin expansion and value.

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CSL is carrying out clinical trials of its H1N1 pandemic infl uenza vaccine. The Australian Government has ordered 21 million doses of the vaccine. CSL also has a contract with the US Department of Health and Human Services to provide vaccine with the initial order valued at US$180 million.

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Our expenditure this year on research and development increased by 38% to $312 million.

1 GARDASIL is a trademark of Merck & Co. Inc. 2 Excludes one-off benefi cial items to facilitate comparison. Items excluded – foreign exchange earnings and costs associated with discontinuing the Talecris deal, tax and other adjustments. 3 CSL reserves the right to suspend or terminate the share buyback at any time.

2 CSL Limited Annual Report 2008-2009 > Year in Review

YEAR IN REVIEW 2008-2009 FINANCIAL RESULTS

FINANCIAL HIGHLIGHTS FOR THE YEAR ENDED 30 JUNE 2009

DIVIDENDS TO SHAREHOLDERS

On 9 April 2009, shareholders received an interim unfranked dividend of 30 cents per share, an increase of 30% on the same period last year. A fi nal unfranked dividend of 40 cents per share will be paid on 9 October 2009. Total ordinary dividends for the year were 70 cents per share, up 52% on the previous year.

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CSL TOTAL REVENUE CSL PROFIT BEFORE CSL NET PROFIT [(2)] CSL R&D INVESTMENT
($A MILLIONS) INTEREST AND TAX [(2)] ($A MILLIONS) ($A MILLIONS)
($A MILLIONS)
1,146
5,039 1,368 312
3,803
967 225
3,313 702
786 191
2,650 [2,906] 539 161
141
515
432 351
235
04-05 05-06 06-07 07-08 08-09 04-05 05-06 06-07 07-08 08-09 04-05 05-06 06-07 07-08 08-09 04-05 05-06 06-07 07-08 08-09
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FIVE YEAR SUMMARY ALL FIGURES ARE IN $A MILLION UNLESS STATED OTHERWISE[(1)] .

	2008-09	2007-08	2006-07	2005-06	2004-05
Total revenue	5,039	3,803	3,313	2,906	2,650
Sales revenue	4,622	3,557	3,172	2,849	2,609
Research and development investment	312	225	191	161	141
Prof t before income tax expense(2)	1,370	952	774	499	410
Net prof t(2)	1,146	702	539	351	235
Capital investment	286	218	205	122	105
Total assets at 30 June	7,367	4,695	4,200	4,186	3,893
Total equity at 30 June	5,463	2,806	2,269	1,990	2,109
Net tangible assets per share at 30 June ($)(4)	7.49	3.44	2.44	2.14	2.34
Weighted average number of shares (million)(4)	595	550	548	546	588
Basic earnings per share (cents)(2) (4)	192.5	127.6	98.5	64.3	39.9
Dividend per share (cents)(3) (4)	70.0	46.0	34.7	22.7	15.7

(1) The Group’s results are reported in accordance with the Australian Equivalents to International Financial Reporting Standards (A-IFRS).

(2) Excludes the recognition of contingent consideration payable for the acquisition of Aventis Behring and the profi t after tax from discontinued operations for years ended 30 June 2006 and 30 June 2005.

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

(4) Restated for the years ended 30 June 2007, 30 June 2006 and 30 June 2005 following the 3 for 1 share split undertaken on 24 October 2007.

YEAR IN REVIEW 2008-2009

CSL GROUP SALES BY REGION 2008-09

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North America 38% Europe 30% Australia 15% Asia 9% Other 8%

CSL GROUP SALES BY MAJOR PRODUCTS 2008-09

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ELIZABETH ALEXANDER BRIAN MCNAMEE CHAIRMAN CHIEF EXECUTIVE OFFICER AND MANAGING DIRECTOR

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Immunoglobulins 34% Plasma-derived coagulants 16% Helixate 13% Gardasil 4% Albumin 10% Other 23%

DIVIDENDS AND FINANCIAL RESULTS

On 9 April 2009, shareholders received an interim unfranked dividend of 30 cents per share. A fi nal unfranked dividend of 40 cents per share will be paid on 9 October 2009. Total ordinary dividends for the year were 70 cents per share, up 52% on the previous year.

The CSL Group achieved a net profi t after tax of $1.15 billion, up 63% on the previous year. This result was boosted by some one-off benefi cial items including foreign exchange earnings associated with the withdrawal from the Talecris acquisition, some one-off tax benefi ts and other smaller items. Underlying operational profi t[†] was $1.02 billion up 45% on the previous year. Group sales revenue grew 30% to $4.62 billion. Cash fl ow from operations was up 49% to $1.03 billion. Earnings before interest, taxes, depreciation and amortisation (EBITDA) grew 40% to $1.55 billion.

CSL BEHRING

Plasma product sales grew 34% to $3.79 billion (17% in constant currency terms) when compared to the twelve months ended 30 June 2008. Strong contributions from immunoglobulins and critical care products have underpinned the growth.

Immunoglobulins grew 26% in constant currency terms with vigorous growth in Privigen[®] , consistent with the company’s transition program in favour of liquid over lyophilised presentations. Vivaglobin[®] (subcutaneous immunoglobulin), a product which provides the convenience of immunoglobulin self administration, attracted signifi cant patient growth. Volume and price growth as well as the product mix all contributed to global growth in immunoglobulin sales. Specialty products Rhophylac[®] (Anti-D) and Tetagam[®] P (Tetanus) also boosted sales.

BUSINESS REPORTS

CSL’s business activities include CSL Behring, CSL Bioplasma, CSL Biotherapies and our global research and development operations.

[†] Excludes one-off benefi cial items to facilitate comparison. Items excluded – foreign exchange earnings and costs associated with discontinuing the Talecris deal, tax and other adjustments.

4 CSL Limited Annual Report 2008-2009 > Year in Review

YEAR IN REVIEW 2008-2009 CONTINUED

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In May, Peter Saltonstall, President and CEO, National Organization for Rare Disorders (NORD), presented Peter Turner (left), President, CSL Behring, with the NORD corporate award for developing RiaSTAP™ and bringing this unique product to market in the US. See feature on page 10.

Recent approval of the fi rst of two manufacturing facilities for Privigen[®] supports further expansion of this 10% liquid IVIg in the next year. The marketing application for our new proline stabilised 20% liquid subcutaneous immunoglobulin product is being reviewed by the US Federal Drugs Administration (FDA). We anticipate approval in mid 2010 so that we will be able to offer primary immune defi ciency (PID) patients even more convenience.

The critical care segment grew 18% in constant currency terms underpinned by price and volume growth of albumin, particularly in the US and emerging markets. Specialty products, particularly Haemocomplettan[®] P, Beriplex[®] P/N and Berinert[®] P, also made a signifi cant contribution. RiaSTAP™ (human fi brinogen) was approved by the FDA in January 2009 for the treatment of patients with a congenital defi ciency of this coagulation protein.

Haemophilia sales grew 8% in constant currency, after adjusting for short-term supply issues with Monoclate-P[®] . Total sales volume grew by 11% with pricing steady, even though the total average price was affected by growth in lower priced emerging and tender markets.

In the US, immunoglobulins contributed signifi cantly to the 20% growth in sales. European sales benefi ted from recent product launches including Beriplex[®] P/N (prothrombin complex) for rapid improvement of blood coagulation in patients receiving anticoagulant therapy, and Berinert[®] (C1 esterase inhibitor) for the treatment of edema caused

by hereditary defi ciency of this protein. Sales in Latin America, the Middle East and Canada were exceptionally strong.

Our research and development team is concentrating on expanding the registration of our products throughout the global marketplace, as well as new indications for existing products. One example is a pilot study assessing the benefi t of fi brinogen in patients undergoing surgery who develop a defi ciency of this protein which is essential to prevent bleeding. We continue to develop our recombinant coagulation protein candidates through the preclinical phase with the goal of commencing human trials with one prospect in 2011.

We are investing signifi cant capital in our manufacturing base. This year we completed a second manufacturing facility in Bern for Privigen[®] . In Marburg, we are in the process of validating new aseptic fi lling and lyophilisation suites which will support future growth in coagulation and critical care products. These investments together with new albumin manufacturing facilities in Bern and Marburg will enable balanced manufacturing and sales volumes as we grow our business.

We also completed the renovation or relocation of 10 US plasma collection centres and a new state-of-the-art testing laboratory for plasma donations in Knoxville, Tennessee. CSL Plasma is well positioned to deliver plasma volumes that meet projected demand.

CSL BIOPLASMA

Ongoing demand for our plasma fractionation services together with growth in our Asian markets for commercial products manufactured by CSL Behring has delivered a 32% increase in CSL Bioplasma sales this year to $334 million.

Our plasma fractionation facility in Melbourne has continued to provide plasma fractionation services under contracts with Australia, New Zealand, Hong Kong, Malaysia, Singapore, and Taiwan. Again this year, Australia and New Zealand increased volumes of plasma for fractionation.

Our continuing robust operation has been ensured by the equipment upgrades and the process automation and control system that we introduced last year. The ongoing success of our manufacturing operations is underpinned by close attention to continuous improvement and to operational excellence. Expansion is planned to meet future needs in Australia and for our international toll fractionation customers.

Growth in Asia has been underpinned by increased sales of albumin in China. As the leading supplier of plasma fractionation services and products in the Asia Pacifi c, we have worked with our distributors to expand the regional sales of products surplus to the demands of our contract fractionation customers.

We completed Phase III clinical trials of Intragam[®] 10 NF, our high-yielding, chromatographically purifi ed 10% intravenous immunoglobulin for idiopathic thrombocytopenic purpura and primary immune defi ciency. A dossier for this product has been submitted to the Therapeutic Goods Administration (TGA) seeking registration. In Australia and New Zealand, recruitment has progressed for the Phase III trial of our highyielding, chromatographically purifi ed 16% immunoglobulin for subcutaneous use.

During the year, both the TGA and the New Zealand Medicines and Medical Devices Safety Authority (MedSafe) approved registration of our Biostate[®] (Factor VIII/von Willebrand Factor) for the treatment of von Willebrand disease.

GARDASIL achieved a signifi cant milestone in March this year when vaccine distribution reached fi ve million doses across Australia. Funded by the Australian Government, this vaccination program against cervical cancer has been a very successful public health campaign with GARDASIL provided free to females aged 12 to 26 years – and more than 70% in this age group now vaccinated.

Cervical cancer is the second most prevalent cancer in women, typically affecting those aged 35 to 55, and causing an estimated 250,000 deaths globally each year.

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Mary Sontrop, CSL Biotherapies General Manager, Australia and New Zealand (centre) with members of the GARDASIL* vaccine marketing team: Daniella Arturi (Brand Manager), Greg Whiteside (Senior Brand Manager), Helen Concilia (Vaccines Marketing Director) and Belinda Whyte (Associate Brand Manager).

* GARDASIL is a trademark of Merck & Co. Inc.

6 CSL Limited Annual Report 2008-2009 > Year in Review

YEAR IN REVIEW 2008-2009 CONTINUED

CSL’s Chief Scientifi c Offi cer, Dr Andrew Cuthbertson, and Director of Public Affairs, Dr Rachel David, at the launch of the Novel Type A (H1N1) ‘swine’ infl uenza vaccine clinical trial in Adelaide, South Australia on 22 July this year.

This clinical trial involved two hundred and forty healthy adult volunteers aged 18 to 64 receiving two doses of the vaccine three weeks apart to determine the generated immune response.

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CSL BIOTHERAPIES

CSL Biotherapies manufactures and markets vaccines and pharmaceutical products in Australia and New Zealand and is responsible for global sales of our infl uenza vaccines. In-licensed pharmaceutical products include vaccines and a range of neurological, cardio-thoracic, dermatological, analgesic, urological, allergy and emergency products.

Our sales revenue reached $502 million this year (up 5%) with a strong contribution from GARDASIL* vaccine, continuing expansion of our global infl uenza vaccine business, and a solid performance by in-licensed pharmaceuticals.

The success of the human papillomavirus (HPV) national immunisation program has continued with more than fi ve million doses of GARDASIL distributed and more than 70% of females aged 12 to 26 now vaccinated. The Australian Government has announced an extension of the program until December 2009 to enable females who have commenced the three-dose vaccination schedule to complete their courses. During the year, the Therapeutic Goods Administration (TGA) approved extending the indications for use of GARDASIL to include all females aged 9 to 45 years. In New Zealand, an HPV national immunisation program with GARDASIL* has commenced with the launch of a two-year catch-up program offering free vaccination to females up to 18 years of age.

Merck & Co. Inc. is our exclusive licensee for the GARDASIL* vaccine with global marketing rights. CSL has distribution rights for Australia and New Zealand and receives royalties from global sales.

Following the successful rollout of the HPV program in Australia by the Commonwealth Government, sales of GARDASIL* are expected to substantially decline as the catch-up immunisation programs draw to a close.

International markets for CSL’s Afl uria[®] and Enzira[®] brands of seasonal infl uenza vaccine continue to expand with a 60% increase in global sales achieved this year. The recently completed dispensing and packaging facilities at our Kankakee site will further enhance our infl uenza vaccine manufacturing capabilities and assist in meeting anticipated growth in US demand. CSL has submitted a Biologics License Application (BLA) supplement for this new plant to the US FDA.

The new Q-Vax[®] manufacturing facility at CSL’s Broadmeadows site in Melbourne was offi cially opened on 1 July 2009, following approval by the TGA. CSL manufactures the Q-Vax[®] vaccine against Q-Fever as part of an ongoing commitment to products of national signifi cance. Q-Fever is primarily an occupational disease of people working in Australia’s meat and livestock industry.

* GARDASIL is a trademark of Merck & Co. Inc.

NEW PRODUCT DEVELOPMENT

CSL continues to invest in the development of protein-based medicines to treat serious human illnesses. Today, most of our licensed medicines are purifi ed from human plasma or made from traditional sources, like infl uenza vaccines. In addition, CSL is building the capabilities required to develop future products using recombinant DNA technology.

We have continued to strengthen our capabilities in later stage clinical and commercial development of biopharmaceutical products. This has been achieved through hiring world class scientifi c and medical leaders for key projects, ensuring access to R&D manufacturing capacity through relationships with contract manufacturers, and judicious investment in our own facilities.

Global research and development activities support CSL’s core licensed product businesses and three other areas of new product development:

R&D investment remains an important avenue to future growth for CSL. We continue to search globally for high quality new product opportunities that match our technical skills in protein-based medicines, as well as our development and commercial capabilities.

Replacement therapies that enhance our plasma products portfolio;
Therapeutic proteins based on recombinant proteins and antibodies; and
Vaccines that use our proprietary ISCOMATRIX[®] adjuvant and/or our infl uenza vaccine capabilities.

OUR THANKS TO MANAGEMENT AND STAFF

CSL develops and produces life-saving medicines essential to the health of many thousands of people around the world. For continuing success in this satisfying work, we depend on the commitment, skills and experience of a talented international workforce.

Our replacement therapies focus has been on supporting the launch of Privigen[®] in Europe, completing the clinical development of our 20% subcutaneous immunoglobulin product, progressing the recombinant coagulation projects in preclinical development, and expanding the geographical registrations and medical indications for existing plasma products.

Your Board of Directors greatly appreciates all that management and staff have achieved this year to deliver another strong result for the Company.

The advent of the H1N1 pandemic infl uenza threat required an immediate response from CSL scientists to develop a vaccine for Australia and other markets including the US. A candidate vaccine is undergoing clinical testing in Australia and the US (see feature on page 16).

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An adjuvant enhances the immune response when formulated with a vaccine antigen. We continue to make good progress with our ISCOMATRIX[®] adjuvant and have several commercial partners with vaccine candidates at various stages of clinical development. The management focus for this developing technology has moved to our King of Prussia offi ce in the US to ensure close coordination with regulatory agencies and partners. To facilitate the supply of ISCOMATRIX[®] for clinical trials, commercial scale production is now being carried out at our Kankakee site in the US.

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BRIAN MCNAMEE CHIEF EXECUTIVE OFFICER AND MANAGING DIRECTOR

ELIZABETH ALEXANDER CHAIRMAN

CSL Limited Annual Report 2008-2009 > Business Feature

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BUSINESS FEATURE CSL BEHRING

In CSL’s expanded Bern facility for the production of Privigen[®] , Ernst Stalder changes a fi lter cartridge. Privigen[®] is a 10% immunoglobulin, prolinestabilised preparation that can be stored at room temperature for up to two years. Through this new generation product, CSL is now well positioned to benefi t from the increasing global demand for intravenous immunoglobulin.

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CSL Behring is committed to saving lives and improving the quality of life for patients with rare and serious diseases. 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, lifethreatening disorders and work to address their needs. By providing safe and effective products and services, we help patients to improve their quality of life. We continue to develop programs and provide educational tools that help patients and families to manage the daily challenges of living with chronic conditions. CSL Behring is dedicated to collaboration with patient groups and stakeholders around the world to advocate for patient access to care.

Our therapies are indicated for treatment of coagulation disorders including haemophilia and von Willebrand disease, primary immune defi ciencies and inherited respiratory disease. CSL Behring products are also used to prevent haemolytic diseases in newborns, speed recovery from heart surgery, prevent infection in people undergoing solid organ transplants, and help victims of shock and burns to recover faster.

A global leader in biotherapies with substantial markets in the US, Europe and Japan, we offer the broadest range of quality products in our industry.

A MILESTONE FOR RHOPHYLAC[®]

Erwin Rindlisbacher sets up a fi lter press in CSL’s Rhophylac[®] facility. The Bern facility has now produced more than fi ve million syringes of Rhophylac[®] since manufacturing commenced there in 2002.

Rhophylac[®] protects against haemolytic disease of the newborn (HDN) allowing pregnant women with a Rhesus-negative factor to give birth to healthy babies. HDN is caused by incompatibility between the blood of an Rh-negative pregnant woman and her Rh-positive foetus.

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

CSL Behring is well positioned to develop its biotherapeutics business with a broad portfolio of quality products, global marketing that meets customer needs, an ongoing pipeline of new and improved plasma therapies, cost effective, high yield manufacturing processes and effi cient operations.

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

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Vial fi lling (left) and vial washing being carried out by Markus Freiling in the expanded fi lling and freeze-drying facility in Marburg where our coagulation, wound healing and specialty products are manufactured.

MAJOR PRODUCTS MARKETED BY CSL BEHRING

HAEMOPHILIA AND OTHER COAGULATION DISORDERS

Coagulation therapies are used to treat bleeding disorders such as haemophilia and von Willebrand disease.

Plasma-derived Factor VIII

and von Willebrand Factor

Beriate[®] P
Monoclate-P[®]
Humate-P[®]
Haemate[®] P
Biostate[®]

Recombinant Factor VIII

Helixate[®] FS
Helixate[®] NexGen
Plasma-derived Factor IX
Berinin[®] P
Mononine[®]

Plasma-derived Factor X

Factor X P

Other Products

Stimate[®]
Octostim[®]
Minirin[®]

CRITICAL CARE CONDITIONS

Critical care products are used to treat shock, sepsis and severe burns, and are used in cardiac surgery.

Coagulation Disorders

Beriplex[®] P/N
Fibrogammin[®] P
Haemocomplettan[®] P
Kybernin[®] P

Trauma Therapies

Albuminar[®]
Human Albumin
AlbuRx™

Other Critical Care

Berinert[®] P
Minirin[®] Parenteral
Innohep[®]
Streptase[®]

WOUND HEALING

Wound healing therapies are used to facilitate healing.

Beriplast[®] P
Tachocomb[®]

IMMUNE DISORDERS AND IMMUNE THERAPY

Immunoglobulins are used to treat infections and autoimmune diseases, and to prevent haemolytic disease in the newborn.

Polyvalent Immunoglobulins

Privigen[®]
Carimune[®] NF
Redimune[®]
Redimune[®] NF Liquid
Sandoglobulin[®]
Sandoglobulin[®] NF Liquid
Sanglopor[®]
Lymphoglobuline[®]

Subcutaneous Immunoglobulins

Vivaglobin[®]

Specifi c Immunoglobulins

Beriglobin[®] P
Berirab[®] P
Hepatitis B Immunoglobulin
Rhophylac[®]
Tetagam[®] P
Varicellon[®] P
Cytogam[®]

ALPHA 1-PROTEINASE INHIBITOR DEFICIENCY

For people at risk from life-shortening emphysema through a genetic defi ciency in their synthesis of this protein.

Zemaira[®]

For more information about these products, see www.cslbehring.com

10 CSL Limited Annual Report 2008-2009 > Business Feature

CSL BEHRING CONTINUED

INDUSTRY FORUM PROMOTES WORK-LIFE BALANCE

In February this year, CSL Behring in Japan participated in an industry forum promoting diversity and female representation in the workplace.

Although the number of female medical representatives in the industry is increasing in Japan, those who are married can face particular diffi culties in managing their work-life balance.

Namiko Hirakawa (above right), Logistics Manager for Sales Promotion in the National Sales Division, facilitated a panel discussion about issues faced by medical representatives with childcare responsibilities.

CSL Behring took part in this event as part of an ongoing commitment to ensuring that female employees receive worklife balance support when family circumstances change as a result of marriage or childbirth.

NEW KNOXVILLE LABORATORY OPENED

In May 2009, CSL Behring President, Peter Turner offi cially opened a new state-of-the-art, plasma-testing laboratory in Knoxville, Tennessee (US).

A signifi cant investment in plasma collection and testing capabilities, this new CSL Plasma laboratory was completed in just over a year.

CSL Plasma is the largest collector of human blood plasma in the world.

NORD AWARD TO CSL BEHRING FOR RIASTAP™

At their annual gala event on 14 May 2009, the National Organization for Rare Disorders (NORD) presented CSL Behring with an award for developing RiaSTAP™ and bringing this unique therapy to market.

The NORD award was accepted by Peter Turner, President, CSL Behring, from Peter Saltonstall, President and CEO, NORD. In presenting the award, Peter Saltonstall paid tribute to pioneers

in public health policy, the sciences and health-related education and awareness for showing compassion and concern for what was once a forgotten community – people with rare diseases.

Approved by the US FDA in January 2009, RiaSTAP™ is the fi rst and only treatment for acute bleeding episodes in patients with congenital fi brinogen defi ciency, an extremely rare and potentially life-threatening bleeding disorder.

NORD is a non-profi t, voluntary health agency committed to identifi cation, treatment and cure of rare disorders through education, advocacy, research, and service. The agency represents nearly 30 million Americans with rare diseases. In the United States, a disease is considered rare if it affects fewer than 200,000 people. Many rare diseases are serious, life-threatening and chronic.

CSL PLASMA

CSL Behring’s plasma collection business, CSL Plasma, has collection centres throughout the US and eight in Germany, along with plasma testing laboratories and logistics centres in both countries.

Millions of donations every year provide the plasma used to produce life-saving products for critically ill patients. CSL Plasma offers a reliable and secure source of plasma for those essential medications.

CSL Plasma has its headquarters in Boca Raton, Florida (US), a logistics centre in Indianapolis, Indiana (US), and a new plasma-testing laboratory in Knoxville, Tennessee (US) offi cially opened in May this year.

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, CSL Plasma sources the plasma required by CSL Behring through its plasma collection operations and commercial purchases.

In this stringently regulated industry, CSL Behring and CSL Plasma meet or exceed international standards, use the most sophisticated systems and continue to explore avenues of innovation.

US STATES AND GERMAN CITIES WITH CSL PLASMA COLLECTION CENTRES

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USA GERMANY
WA
OR MN Kiel
WI
MI Bremen
Berlin
IA
NE OH Bielefeld Braunschweig
IL IN
UT WV Goettingen
CO
KS MO KY
NC
Offenbach
TN
AZ OK SC
NM Nurenberg
LA
TX
FL
German cities with
CSL Plasma collection centres
US States with CSL Plasma collection centres
----- End of picture text -----

CSL PLASMA

US HEADQUARTERS – BOCA RATON, FLORIDA US TESTING LABORATORY – KNOXVILLE, TENNESSEE US LOGISTICS CENTRE – INDIANAPOLIS, INDIANA

EU HEADQUARTERS – MARBURG, GERMANY EU TESTING LABORATORY – GOETTINGEN, GERMANY EU LOGISTICS CENTRE – MARBURG, GERMANY

CSL Limited Annual Report 2008-2009 > Business Feature

BUSINESS FEATURE CSL BIOPLASMA

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CSL Bioplasma scientist, Grace O’Brien, uses gel electrophoresis to characterise the protein profi le of a plasma product. R&D work at CSL Bioplasma has a signifi cant focus on enhancing manufacturing processes for our thrombosis and haemostasis products.

CSL Bioplasma has four Product Liaison Specialists in Australia and one in New Zealand who provide information and supporting reference materials about our products to specialists, nurses and hospital blood bank scientists.

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In the Australian Red Cross Blood Service (ARCBS) mobile unit at CSL Bioplasma, Catherine Finn takes a blood donation from Steven Jacovou.

CSL staff organise regular visits of the ARCBS mobile unit to Parkville and Broadmeadows providing the opportunity for fellow employees to donate blood during their working day.

This service supports the appropriate use of products manufactured under the Plasma Products Agreement with the National Blood Authority in Australia and the Manufacturing Agreement with the New Zealand Blood Service (NZBS).

The information provided includes changes to registered indications and storage conditions, registered dose, administration, and known side effects. This Product Liaison Team service is particularly valued by new medical staff, or those who irregularly use these products, and helps to underpin patient welfare.

The Product Liaison Team also provides information about the fractionation processes used at our Broadmeadows facility in Melbourne and the safety profi le of the plasma products we manufacture. This covers the multiple and overlapping procedures and processes to optimise product safety including donor deferral policies used by the blood services, testing of every donation prior to use, and the manufacturing process for every product with at least two dedicated steps solely to optimise pathogen safety.

CSL Bioplasma works with appropriately qualifi ed experts at the Australian Red Cross Blood Service (ARCBS) and the NZBS to develop information which can be used by health care professionals during discussions with their patients prior to the administration of our products.

The team also provides information to donor service staff of the ARCBS and NZBS about products manufactured from donations and the conditions they treat. This empowers staff to communicate their knowledge to voluntary and non-remunerated donors - the people who the blood supplies of Australia and New Zealand rely on.

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MAJOR PLASMA PRODUCTS MANUFACTURED BY CSL BIOPLASMA

HAEMOPHILIA AND OTHER COAGULATION DISORDERS

Coagulation therapies are used to treat bleeding disorders such as haemophilia and von Willebrand disease.

Biostate[®]

(human coagulation factor VIII/von Willbrand Factor concentrate)

MonoFix[®] -VF

(human coagulation factor IX)

IMMUNE DISORDERS AND IMMUNE THERAPY

Immunoglobulins are used to treat immunodefi ciency, modify the function of the immune system, and for protection against specifi c infections.

Intragam[®] P

(6g liquid intravenous immunoglobulin)

Normal Immunoglobulin-VF

(human normal immunoglobulin)

DIAGNOSTIC PRODUCTS

Diagnostic products are used in the testing of blood to prevent haemolytic transfusion reactions and haemolytic disease of the foetus and newborn, and for snake venom detection.

Reagent Red Blood Cells

Monoclonal Reagents

Supplementary Reagents

Prothrombinex[®] - VF

(human prothrombin complex)

CRITICAL CARE CONDITIONS

Critical care products are used in fl uid resuscitation, for replacement of albumin, and to treat specifi c factor defi ciencies.

Albumex[®]

(human albumin)

Thrombotrol[®] -VF

(human antithrombin III)

Rh(D) Immunoglobulin-VF (human Rh (D) immunoglobulin)

CMV Immunoglobulin-VF

(human cytomegalovirus immunoglobulin)

Hepatitis B Immunoglobulin-VF

(human hepatitis B immunoglobulin)

Zoster Immunoglobulin-VF

(human zoster immunoglobulin)

Tetanus Immunoglobulin-VF

(human tetanus immunoglobulin)

Snake Venom Detection Products

Used to detect venom in snakebite victims and indicate the appropriate monovalent antivenom for treatment.

Special Access Scheme

Under Australia’s Special Access Scheme, CSL Bioplasma distributes several life-saving, plasma-derived products for the treatment of rare conditions.

Sandoglobulin[®] NF Liquid

(12% liquid intravenous immunoglobulin) manufactured by CSL Behring and distributed in Australia by CSL Bioplasma.

Toll Fractionation

CSL Bioplasma performs plasma fractionation for Australia’s National Blood Authority, a role pivotal to Australia’s policy of self-suffi ciency. CSL Bioplasma is also the national fractionator of New Zealand, Hong Kong, Malaysia and Singapore.

14 CSL Limited Annual Report 2008-2009 > Business Feature

BUSINESS FEATURE CSL BIOTHERAPIES

==> picture [232 x 148] intentionally omitted <==

Olympic swimmer and GARDASIL Ambassador, Libby Trickett (left), with Associate Brand Manager, Belinda Whyte. In Australia, more than 70% of females aged 12 to 26 have now been vaccinated with GARDASIL.

* GARDASIL is a trademark of Merck & Co. Inc.

CSL operates one of the largest infl uenza vaccine manufacturing facilities in the world at our Parkville site in Melbourne and has more than 40 years experience in the production of these vaccines.

In 2008, we signifi cantly expanded the capacity of our Melbourne plant to support the continuing international growth of this vaccine business. CSL also has infl uenza vaccine dispensing and packaging facilities at Marburg in Germany and Kankakee, Illinois in the US.

Our Melbourne plant can produce up to 80 million doses of vaccine each year to help meet demand for both Southern and Northern Hemisphere infl uenza seasons. CSL’s infl uenza vaccines are now registered and marketed in twenty-seven countries.

PANDEMIC INFLUENZA VACCINE

Following the June 2009 World Heath Organisation announcement of an infl uenza pandemic, CSL has developed a pandemic vaccine (H1N1) and is carrying out clinical trials to establish an optimum vaccine dose. As soon as clinical trials are successfully completed, CSL will seek approval from the Therapeutic Goods Administration (TGA) to register a vaccine.

The initial order from the Australian Government for the pandemic vaccine is for 21 million (15mcg) doses. CSL has also signed a $US180 million contract with the US Department of Health and Human Services (HHS) to provide bulk H1N1 infl uenza antigen. The HHS contract includes the opportunity to use our infl uenza vaccine dispensing and packaging facilities in the US and Germany. We also have contracts for pandemic vaccine with New Zealand and Singapore.

Q-FEVER FACILITY OPENED

Richard Marles MHR, Parliamentary Secretary for Innovation and Industry, and Mary Sontrop, General Manager, CSL Biotherapies, Australia and New Zealand, at the 1 July 2009 offi cial opening of CSL’s Q-Fever vaccine facility. Q-Vax[®] is our vaccine against Q-Fever which is primarily an occupational disease of people working in Australia’s meat and livestock industry.

Last year, the TGA approved CSL’s Panvax[®] pandemic avian infl uenza vaccine for Australian use in the event of an outbreak of that virus strain. That Panvax[®] (H5N1) vaccine was also developed in collaboration with the Australian Government.

The current pandemic is the result of a novel type A virus (H1N1) emerging and then spreading rapidly through populations not previously exposed to it.

==> picture [256 x 136] intentionally omitted <==

At the syringe inspection machine is Halina Doktor, one of the Packaging team at Parkville that processes Fluvax[®] , Enzira[®] and Afl uria[®] seasonal infl uenza vaccines. This year, they also processed the pandemic Panvax[®] H1N1 vaccine for use in clinical trials that commenced in July.

==> picture [219 x 214] intentionally omitted <==

TRADEMARKS

MAJOR PHARMACEUTICAL PRODUCTS MARKETED BY CSL BIOTHERAPIES IN AUSTRALIA

CSL , Bioplasma , ZLB and ISCOMATRIX are all trademarks of the CSL Group

® Registered trademark of

Trademarks of companies other than CSL and referred to in this Annual Report are listed below:

listed below:	listed below:
*Merck & Co. Inc.*
Comvax	GARDASIL	H-B-Vax II
M-M-R II	PedvaxHIB	Pneumovax
Rotateq	Vaqta	Varivax
ZOSTAVAX
*Merck KGaA*		EpiPen
*Shire*		Solaraze
		Vaniqa
*Astellas*		Flomaxtra
*Berna Biotech*		Vivotif Oral
*Cephalon Inc.*		Modavigil
*Controlled Therapeutics*
*(Scotland) Limited*		Cervidil
*Grunenthal GmbH*		Tramal
*Intendis GmbH*		Advantan
		Finacea
		Scheriproct
*Intercell AG*		JESPECT
*Leo Pharmaceutical*		Burinex
*Products Limited AS*		Daivobet
		Daivonex
		Fucidin
*Novartis*		Menjugate
		Rabipur
*Encysive*
*Pharmaceuticals Inc.*		Thelin
*The Medicine Company*		Angiomax

VACCINES

OTHER PRODUCTS

For prevention of: *Fluvax®* Inf uenza *ADT® Booster* Diphtheria and Tetanus *Q-Vax®* Q-Fever Comvax* Haemophilus inf uenzae B and Hepatitis B infection GARDASIL* Cervical cancer and genital warts **H-B-Vax II*** Hepatitis B infection JESPECT* Japanese encephalitis Menjugate* Meningococcal C disease **M-M-RII*** Measles, mumps and rubella PedvaxHIB* Haemophilus inf uenzae B Pneumovax 23Pneumococcal infection Rabipur Rabies infection Rotateq* Rotavirus-induced gastroentiritis Vaqta* Hepatitis A infection Varivax* Varicella Vivotif Oral* Typhoid infection ZOSTAVAX* Herpes zoster (shingles) ANTI-INFECTIVES	For treatment of:
	Advantan* Eczema and psoriasis
	Angiomax* Patients undergoing percutaneous coronary intervention (PCI)
	*Antivenoms* Envenomation
	Burinex* Oedema
	Cervidil* Complications during childbirth requiring induced labour
	Daivobet* Psoriasis
	Daivonex* Psoriasis
	EpiPen* Severe allergic reactions
	Finacea* Rosacea
	Flomaxtra* Benign prostatic hyperplasia
	Modavigil* Excessive daytime sleepiness in narcolepsy
	Scheriproct* Haemarrhoids, proctitis and anal f ssures
	Solaraze* Actinic keratosis
	*Streptase®* Myocardial infarction and arterial thrombosis
	Thelin* Pulmonary arterial hypertension
	Tramal* Moderate to severe pain
	Vaniqa* Unwanted facial hair in women
For treatment of:
*BenPen®* Bacterial infections
Fucidin* Bacterial infections

	For treatment of:
*BenPen®*	Bacterial infections
Fucidin*	Bacterial infections

16 CSL Limited Annual Report 2008-2009 > Business Feature

BUSINESS FEATURE NEW PRODUCT DEVELOPMENT

==> picture [131 x 183] intentionally omitted <==

At CSL’s H1N1 pandemic infl uenza vaccine clinical trial in Adelaide, Nurse Supervisor Luiza Duszynski prepares to vaccinate volunteers.

PANDEMIC VACCINE CLINICAL TRIALS

CSL HAS A GLOBAL ROLE

The advent of the global pandemic infl uenza threat in April this year required an immediate response from CSL scientists to develop a vaccine. By 22 July, clinical trials of CSL’s Novel Type A (H1N1) ‘swine’ infl uenza vaccine commenced in Adelaide, South Australia.

The candidate vaccine being tested in the clinical trials was produced using CSL’s well established, large scale production technologies. The purpose of this clinical trial is to establish an optimum vaccine dose for protection against this new strain of infl uenza. Both a standard dose (15 mcg) and a higher dose (30 mcg) are being tested.

Two hundred and forty healthy adult volunteers aged 18 to 64 are taking part in the trial at the Royal Adelaide Hospital. Each volunteer receives two doses of the candidate vaccine three weeks apart, with blood tests taken to measure the strength and appropriateness of the immune response. As with any of our clinical trials, the safety of the vaccine is also being monitored.

In August, clinical trials in children commenced using the same dosing with 400 healthy volunteers aged six months to nine years taking part. Additional studies are being carried out in the United States.

Data from these clinical trials will help governments decide how best to deploy the H1N1 vaccine as it becomes available.

CSL operates one of the largest infl uenza vaccine manufacturing facilities in the world at our Parkville site in Melbourne and has more than 40 years experience in the production of these vaccines.

The WHO Global Infl uenza Surveillance Network collects samples of infl uenza virus throughout the year and determines which new strains in the constantly changing viruses are becoming dominant. As usual, this year the WHO provided CSL with virus samples including those from which our pandemic vaccine has been developed.

CSL scientists take the candidate WHO viruses through a process known as reassortment to create viruses with good vaccine properties, and that will grow well in eggs. The seed lots obtained through this process are used to produce

As one of only three laboratories in the world that produces the Type A virus seed lots for the World Health Organisation (WHO), CSL has a global role in developing pandemic and

During the past 10 years, all the Type A seasonal H1N1 viruses used by manufacturers worldwide to produce infl uenza vaccine have been from seed virus developed by scientists at CSL.

==> picture [95 x 136] intentionally omitted <==

At the launch of CSL’s H1N1 pandemic infl uenza vaccine clinical trial in Adelaide, South Australia on 22 July this year, Nurse Supervisor Luiza Duszynski vaccinates Chloe Gibbons (left). This clinical trial involved two hundred and forty healthy adult volunteers aged 18 to 64 receiving two doses of the vaccine three weeks apart to determine the generated immune response.

==> picture [174 x 136] intentionally omitted <==

CSL’s Chief Scientifi c Offi cer, Dr Andrew Cuthbertson, at the launch of the Novel Type A (H1N1) ‘swine’ infl uenza vaccine clinical trial in Adelaide, South Australia on 22 July this year.

==> picture [136 x 183] intentionally omitted <==

==> picture [239 x 129] intentionally omitted <==

CSL scientists Tony Nguyen and Sonia Finotello inoculate eggs with an H1N1 virus isolate in our infl uenza vaccine seed preparation laboratory at Parkville in Melbourne.

RESEARCH AND DEVELOPMENT INVESTMENT

CSL invested $312 million in research and development this year.

==> picture [239 x 107] intentionally omitted <==

----- Start of picture text -----

350 $312m
300
250 $225m
$191m
200 $161m
150
100
50
0
2005-06 2006-07 2007-08 2008-09
----- End of picture text -----

New Product Development activities focus on innovative new treatments for life-threatening diseases.

Market Development strategies seek to maximise market opportunities for existing products.

Life Cycle Management is a global program of continuous improvement to ensure existing products remain competitive.

RESEARCH AND DEVELOPMENT OPERATIONS

==> picture [224 x 157] intentionally omitted <==

----- Start of picture text -----

Bern, Switzerland
Immunoglobulins and Marburg, Germany
rHDL (reconstituted Coagulation, wound healing
high density lipoprotein) and specialty products
----- End of picture text -----

==> picture [308 x 246] intentionally omitted <==

----- Start of picture text -----

Kankakee, US
Alpha-1 Proteinase Inhibitor
and ISCOMATRIX [®] adjuvant King of Prussia, US
Tokyo, Japan
Melbourne, Australia
Influenza vaccines and
recombinant proteins
----- End of picture text -----

Clinical and regulatory affairs teams operate from Melbourne, King of Prussia, Bern, Marburg and Tokyo.

Plasma fractionation and associated research and development activities are carried out in Melbourne, Kankakee, Bern and Marburg.

18 CSL Limited Annual Report 2008-2009 > Our Company

OUR PEOPLE GLOBAL CONNECTIONS

The CSL Group gives its businesses a signifi cant level of autonomy to enable them to be accountable and effective. At the same time, we value and encourage those things which give CSL its corporate cohesion and support our distinctive CSL culture. These include our common values, our global commitment to Corporate Responsibility and high Health, Safety and Environment standards, and our effective use of international assignments to share skills, knowledge and experience.

==> picture [232 x 128] intentionally omitted <==

In July this year, Debbie Drane moved to the US to take up an assignment as Senior Vice President, R&D at the CSL Behring Head Offi ce in King of Prussia, Pennsylvania.

Debbie has been pivotal in the scientifi c and commercial development of CSL’s ISCOMATRIX[®] adjuvant technology and this assignment enables her to be in closer proximity to major partners, regulatory agencies and our adjuvant manufacturing site.

In the past few years, CSL has entered into a number of ISCOMATRIX[®] license and option agreements with major vaccine manufacturers and has also established a large-scale manufacturing facility for this adjuvant at our Kankakee site in Illinois.

We also offer highly successful global leadership programs which not only boost our leadership strength but also build international connections which support effective collaboration.

This year, we developed new ways to support corporate cohesion – our Code of Responsible Business Practice, new tools for virtual teams and a global system to support succession and talent development.

CODE OF RESPONSIBLE BUSINESS PRACTICE

We have created a new Code of Responsible Business Practice which underpins all our policies and practices worldwide. This guide, which replaces and enhances our previous Code of Conduct, clearly explains the standards of professional and ethical behaviour required from all our people. We have included new references to corporate responsibility, created clear statements on bioethics, added references to third party expectations and market practices and committed ourselves to relevant international standards.

The new Code has had input from across the Company and refl ects what CSL stands for. It has been approved by the Board and a user-friendly document, translated into ten languages, is now being launched across the globe.

Our Values bind the CSL group of companies together through a shared commitment to:

Customer Focus - being passionate about meeting the needs of our customers
Innovation - seeking better ways of doing things
Integrity - behaving ethically and honestly at all times
Collaboration - working together to achieve better results for everyone
Superior performance - striving to be the best at what we do

==> picture [371 x 214] intentionally omitted <==

Staff at CSL Behring’s US headquarters in King of Prussia discuss the new Code of Responsible Business Practice which underpins all CSL’s policies and practices worldwide.

CREATING EFFECTIVE CROSS-CULTURAL PROJECT TEAMS

CSL’s projects need input and collaboration from talented employees across many locations and this is particularly important for the Global Research and Development business where staff often work in cross-functional, cross-cultural teams with infrequent face-to-face contact.

This year, a collaborative project involving Global R&D and CSL Behring colleagues found new ways to enhance the functioning of virtual teams. The project had three components: a “ Global Team Toolkit ”, a “ Team Launch ” process, and a web-based “ Culture Tool ” to boost cross-cultural awareness and competence.

CSL’s global project management system and capabilities are essential components in ensuring project milestones are achieved in this complex environment. They give teams a roadmap for what needs to be done.

The Global Team Toolkit helps teams to fi gure out how work is done – how to manage confl icts, relationships and all the dynamics which come with diverse teams. We have developed thirteen practical tools after researching best practice among high performing cross-functional teams. These tools support the team leader in establishing goals, clarifying roles and accountabilities, creating operational norms and strengthening team relationships.

Our Team Launch prototype has been designed to ensure maximum value from face-to-face kick-off meetings and enables more long-distance work to be undertaken by teams.

The web-based Culture Tool gives staff access to an on-line interactive e-learning guide to build cultural awareness.

This valuable and accessible resource is available to support virtual teams, business travellers and international assignees. It allows us to gain even greater value from the diversity in our businesses.

We are confi dent this collaborative project will accelerate the performance of global teams and the achievement of project outcomes. Learning from this pilot, we will offer the new project tools across the business.

SUCCESSION AND TALENT DEVELOPMENT

CSL people are strongly committed to our business. This helps us retain talent but we also need to ensure we develop staff to meet future business needs and that we respond to employees’ aspirations to learn and progress.

Succession and talent development have always been taken seriously at CSL and in 2007 we began holding global talent discussions across our businesses. We have continued to enhance this global process to ensure that we make the most of the opportunities we can offer to develop the talent in our businesses worldwide. In this way we can identify employees holding the skills we need for the future and prepare them for a bigger challenge or an overseas assignment.

Senior executive succession has oversight from the Board but business leaders throughout the Company engage in regular discussions with staff to better understand their abilities and motivation and to plan for development and progression.

CSL’s introduction this year of a global software system to support development and succession planning gives us a strong platform for continuing to successfully develop the careers of our people and ensure smooth transitions.

20 CSL Limited Annual Report 2008-2009 > Our Company

HEALTH, SAFETY AND ENVIRONMENT

==> picture [232 x 143] intentionally omitted <==

In the Occupational Health Centre at Parkville, Louise Hord gives Karen Del Castillo her Fluvax[®] infl uenza vaccination, part of the health and well-being programs offered across locations.

HEALTH AND SAFETY

CSL protects and promotes the health and well-being of our people and works to minimise our impact on the environment. Fundamental to our strategic goals being achieved is a global commitment to the continuous improvement of our Health, Safety and Environment (HS&E) activities.

CSL operates an integrated Health, Safety and Environment Management System that is binding for all sites to ensure we maintain high standards in HS&E. We are committed to conducting all operations in ways that protect and promote the health and well-being of our people and minimise our impact on the environment.

CSL’s global HS&E Management System underpins our ongoing review of regulatory compliance and in-house performance. To further enhance the integration of our global reporting systems, this year we extended the number of key indicators used as standard tools to monitor HS&E performance.

Lost time incident data continues to record performance improvement. With enhanced early intervention injury management strategies, improvements in recordable incident results should continue to be expected.

All our sites around the world maintain certifi cations to relevant external occupational health and safety management systems. Strategic in-house initiatives this year included critical hazard reduction plans in Australia and the implementation of a Safety and Health Accident Reduction Process (SHARP) at our Kankakee site in the US.

Preparatory works have been completed to assess the capacity of the global HS&E auditing program to integrate internal and external reporting requirements into a single auditing tool. Such works include use of a common database as the platform for audit completion and assessment. Independent review of the auditing tools will occur to ensure the integrated system meets all reporting and compliance needs.

We continue to create opportunities for our employees to be involved in HS&E workplace health and well-being programs operating at all sites. These programs aim to improve workplace and community engagement. Among many events our employees have participated in this year have been the Penn Relays at the University of Pennsylvania, the Bern Grand Prix run, the BRW Triathlon in Melbourne and the Tokyo Marathon.

MEDICAL TREATMENT INJURY FREQUENCY RATE (MTIFR) AND LOST TIME INJURY FREQUENCY RATE (LTIFR) JULY 2005 TO JULY 2009

==> picture [346 x 105] intentionally omitted <==

----- Start of picture text -----

10 9.31
8.08 8.05 8.38
8
6.34
5.68
6 5.07
4.12 4.33
4 3.16
2
0
2005 2006 2007 2008 2009
Frequency Rate
----- End of picture text -----

==> picture [21 x 6] intentionally omitted <==

----- Start of picture text -----

MTIFR
----- End of picture text -----

LTIFR

Global figures presented are in accordance with Australian Standard AS1885 and are based on the number of incidents reported per million hours worked.

==> picture [226 x 179] intentionally omitted <==

----- Start of picture text -----

CO2-e
100% Intensity
35%
50%
Waste Energy
Intensity 20% 0% Intensity 41%
2004/05
2005/06
2006/07
Water 2007/08
Intensity
34% 2008/09
----- End of picture text -----

The above chart shows how CSL’s plasma manufacturing locations continue to reduce energy consumption, greenhouse gas emissions, water use and waste per unit of production from the base year 2004/05.

EUROPEAN UNION’S ECO-MANAGEMENT AND AUDIT SCHEME

CSL Behring registered with the European Union’s Eco-Management and Audit Scheme (EMAS) in 2004. EMAS is a voluntary program through which companies in the European Union evaluate, improve and report their environmental performance. EMAS registered organisations are legally compliant, operate an environmental management system and report on environmental performance through the publication of an independently verifi ed environmental statement.

In August 2008, CSL Behring’s Marburg site successfully requalifi ed to the EMAS II Eco Audit regulation. Our Marburg site was certifi ed as one of the ten best by independent auditors, according to the comparison of industries in Germany.

ENVIRONMENT

CSL published its fi rst Global Environmental Report this year covering key environmental issues including energy consumption and greenhouse gas emissions, water use and the management of waste. As covered in this Report, CSL is working to address important environmental issues through innovation, skills development and prudent investments.

In line with a broadening strategy on environmental issues, commitment to the environment is clearly expressed in our new Code of Responsible Business Practice launched this year to employees across the globe and translated into ten languages.

CSL was included in the Goldman Sachs JBWere Climate Disclosure Leadership Index in Australia as a result of our submission to the Carbon Disclosure Project on climate change strategy, management and practices.

We submitted Environment and Resource Effi ciency Programs to the Environment Protection Authority (EPA) this year for our Australian sites. The program was well received meeting all our obligations under the legislation. Our program targets better management of energy, water and waste to reduce environmental impacts.

CSL is reviewing opportunities to integrate sustainability principles into the design of new and refurbished buildings and trialling introduction of new environmental criteria into our capital projects evaluation process.

We monitor climate change policy developments in all the jurisdictions where we are located to assess how emerging policy directions might impact our current business and future directions. CSL remains well prepared for the greenhouse gas reporting regimes being introduced around the world.

CSL TAKES PART IN EARTH HOUR 2009

More than four thousand towns, cities and municipalities in 88 countries and over one billion people around the world united for Earth Hour 2009 on 28 March this year, switching off their lights to show they care about our living planet.

CSL’s Australian manufacturing sites in Melbourne took part again and achieved a 26% (1710 kWh) reduction in electricity consumption – more than twice last year’s savings – demonstrating how simple changes can make a signifi cant difference in slowing the rate of global warming.

Teams across Melbourne sites identifi ed lighting, equipment, heating and cooling that could be shutdown then coordinated and monitored these activities. Participation in Earth Hour by our US sites of Kankakee and King of Prussia also saw energy-saving ideas being captured across the broader business.

In Melbourne, CSL’s Future Spark bicycle team provided enough pedal power to generate 748 watt hours of clean energy for the Earth Hour concert.

22 CSL Limited Annual Report 2008-2009 > Our Company

OUR COMMUNITIES

==> picture [232 x 137] intentionally omitted <==

CSL Plasma employees from Wichita, Kansas raised over US$4000 for the March for Babies campaign to help infants and children in their local community.

At CSL, we actively contribute to the health and well-being of our communities. This year alone we initiated new access programs to support our patient communities, increased our efforts to foster talent in our medical research communities and contributed to disaster relief and charitable efforts in our local communities.

INCREASING ACCESS TO MEDICINES

On World Hemophilia Day we announced a new multi-year commitment to the World Federation of Hemophilia (WFH). Each year for the next three years, CSL Behring will donate two million units of Factor VIII to the WFH’s Global Alliance for Progress (GAP) program. GAP aims to improve the diagnosis and treatment of haemophilia in developing countries by creating sustainable national haemophilia care programs. Additionally, CSL Behring renewed its pledge to provide WFH with separate fi nancial support, taking the full value of our contribution to almost US$3 million over the next three years.

We also continued to support international efforts to improve access to snake antivenom. Snake bite is a serious, yet much neglected, socio-economic problem affecting millions of lives, particularly in tropical developing countries. In November, CSL helped bring together experts from all around the world to agree on a new approach to snake bite control. A global initiative was launched and an interdisciplinary working group has since begun to formulate practicable solutions. At a regional level, CSL has commissioned the Nossal Institute of Global Health to review snake bite problems in Papua New Guinea and recommend ways in which we can best assist.

FOSTERING MEDICAL RESEARCH

In Australia, we announced partnerships with the National Youth Science Forum and the Undergraduate Research Opportunities Program, both of which aim to attract bright young minds to careers in the sciences. We also commenced sponsorship of the prestigious Florey Medal which recognises researchers for signifi cant achievements in biomedical science, providing important role models for young scientists.

In Germany, we announced the winners of the 2009 Professor Heimburger Awards in memory of coagulation therapy pioneer and long-time CSL employee, Professor Dr Norbert Heimburger. Five young clinicians each received a €20,000 grant for preclinical or clinical research in coagulation. The awards are designed to help the next generation of coagulation researchers establish themselves professionally and to support their efforts to improve patient outcomes.

ASSISTING DISASTER RELIEF

In February this year, CSL’s home state in Victoria, Australia, suffered the most devastating bushfi re in its history, with a signifi cant number of lives and homes lost. To directly assist individuals and communities affected by the fi res, the Victorian Government in partnership with the Australian Red

CSL responded immediately by pledging a $250,000 donation. Our staff also took swift action by organising fundraising events, having donations deducted from their pay and providing household goods to help relief efforts. The generosity of our people extended beyond Australian shores with CSL Behring staff contributing additional funds.

In recognition of the community spirit shown by our staff in response to this disaster, CSL matched all employee donations. Together we contributed a total of $412,760.90 to the Victorian Bushfi re Fund, the proceeds from which are being distributed to the most fi re-ravaged areas to help rebuild lives, homes and communities.

ADVOCACY FOR ACCESS

OUR COMMITMENT TO PATIENT HEALTH

At CSL we recognise that access to medicines is not just a developing world issue. That’s why in the US we operate a Patient Assistance Program, providing medically necessary therapies to patients who cannot afford our biotherapies. Through the Local Empowerment for Advocacy Development (LEAD) program, we also help patient organisations with their grass-roots advocacy efforts. This year, CSL Behring awarded LEAD grants totalling $US165,000 to 11 organisations. The Myositis Association (TMA), which provides assistance to people with muscle swelling resulting from an autoimmune disorder of unknown origin, was the recipient of one of these grants. TMA will use our LEAD grant to develop online tools to enable rapid communication with its constituents about important advocacy issues, including improving access to intravenous immunoglobulin (IVIg) therapies.

exploratory study of the needs of people with bleeding disorders within Latino and Hispanic communities and an observational study of post-operative Deep Vein Thrombosis (DVT) in people with haemophilia undergoing major orthopaedic surgery.

CSL Behring is committed to advancing the health of people affected by bleeding disorders. We make annual contributions to research, education, awareness and patient support initiatives. In the United States alone this year we awarded $US1.2M to 19 projects, including an

CSL SHAREHOLDERS SUPPORT THE RED CROSS

the Asia Pacifi c, and to expand nutrition programs for indigenous children in remote areas of South Australia. The ‘Good Start Breakfast Clubs’ will enable Red Cross volunteers to provide disadvantaged school children with a healthy breakfast each morning and deliver an education program focussed on the provision of nutrition, social and living skills.

In December 2008, we were pleased to present a donation of $119,689 to the Australian Red Cross (ARC) on behalf of our shareholders. The donation represented excess funds remaining after the completion of our Shareholder Share Purchase Plan. The ARC will use the donation to support an inaugural meeting in Melbourne of blood donor recruiters from

CONTRIBUTING LOCALLY

CSL has a signifi cant presence in the communities in which its manufacturing facilities and plasma collection centres are located. In the US, we partner with United Way to help address signifi cant social challenges in our local communities. Together with our staff, we donated more than US$300,000 to United Way this year, supporting programs aimed at alleviating poverty, unemployment and social exclusion.

==> picture [232 x 135] intentionally omitted <==

Our Kankakee Senior Leadership Team presents 13 year-old local girl, Balei Chinksi, and her mother, with a donation to help manage her severe immunodefi ciency disorder and improve her quality of life.

One of the most rewarding contributions made by our Kankakee workforce this year was being able to help Balei Chinksi, a local 13 year-old girl with undefi ned severe combined immunodefi ciency. A donation of immunoglobulin was arranged, helping Balei to manage her condition, stay in school and spend time with her friends. Kankakee staff also rallied to raise funds for Balei, which her family used to purchase special shoes and install railings and a motorised hospital bed in their home.

In Bern this year, CSL supported Coin Bear, a fundraising campaign conducted by the Children’s Hospital in Bern to help sick and injured children get back to a regular and active life. Our staff also worked with the University of Bern to improve employment prospects for unemployed scientists by providing practical in-house training in Good Manufacturing Practice.

Movember was a big hit in Australia this year with 148 of our staff growing moustaches to raise funds for research into prostate cancer and depression. Our staff also helped to raise funds for a paediatric burns unit in El Salvador and rolled up their sleeves to help Foodbank and FareShare prepare food for the homeless and hungry.

24 CSL Limited Annual Report 2008-2009 > Our Company

DIRECTORS’ PROFILES

ELIZABETH A ALEXANDER, AM,

BCom, FCA, FCPA, FAICD - (AGE 66)

Finance and Risk Management (resident in Victoria) Chairman

Miss Alexander was appointed to the CSL Board in July 1991 and became Chairman on 1 October 2006. She is a Director of the Dexus Property Group and of Medibank Private Limited. Miss Alexander is a former National President of the Australian Society of Certifi ed Practising Accountants and of the Australian Institute of Company Directors. She is Chairman of the Board of Advice to the Salvation Army (Southern Command), National President of the Winston Churchill Fellowship Trust and Chairman of the Finance Committee of Melbourne University. Miss Alexander is a Member of the Audit and Risk Management Committee.

BRIAN A MCNAMEE, AO,

JOHN H AKEHURST,

MA (Oxon), FIMechE - (AGE 60)

Engineering, Management (resident in Western Australia)

Mr Akehurst was appointed to the CSL Board in April 2004. He had 30 years’ executive experience in the international hydrocarbon industry, including 7 years as Managing Director and CEO of Woodside Petroleum Ltd. Mr Akehurst is a member of the Board of the Reserve Bank of Australia. He is a Director of Origin Energy Limited and of Securency International Pty Ltd. He was formerly Chairman of Alinta Limited and of Coogee Resources Limited and is a former Director of Oil Search Limited. He is Chairman of The National Centre for Asbestos Related Diseases and The Fortitude Foundation and a Director of the University of Western Australia’s Business School and of Curtin University’s Sustainable Development Institute. Mr Akehurst is a Member of the Human Resources Committee.

MB, BS, FAICD, FTSE - (AGE 52)

Pharmaceutical Industry, Medicine (resident in Victoria) Chief Executive Offi cer and Managing Director

Dr McNamee was appointed to the CSL Board in 1990 and is the Chief Executive Offi cer and Managing Director. He is a former Director of the Peter MacCallum Cancer Foundation Ltd. Dr McNamee completed Bachelor of Medicine and Bachelor of Surgery Degrees at the University of Melbourne in 1979. Dr McNamee is a Fellow of the Australian Academy of Technical Services and Engineering (FTSE).

ANTONI M CIPA,

B.Bus (Acc), Grad.Dip (Acc), CPA, ACIS - (AGE 54)

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 fl oat of the Company in 1994 at which time he was appointed Chief Financial Offi cer.

DAVID W ANSTICE,

BEc - (AGE 61)

International Pharmaceutical Industry (resident in Pennsylvania, USA)

Mr Anstice was appointed to the CSL Board in September 2008. Mr Anstice was a long-time member of the Board of Directors and Executive Committee of the US Biotechnology Industry Organisation, and has 40 years’ experience in the global pharmaceutical industry. Until recently, Mr Anstice was for many years a senior executive of Merck & Co. Inc. serving at various times as President of Merck Human Health for US/Canada/Latin America, Europe, Japan and Asia, and as Executive Vice President. Mr. Anstice is a Director of Alkermes, Inc., in Cambridge, Massachusetts, a Director of the United States Studies Centre at the University of Sydney, and Chairman of the USA Foundation of the University of Sydney. He is an Adjunct Professor in the Faculty of Economics and Business at Sydney University and holds a Bachelor of Economics from that University which he obtained in 1970. Mr Anstice is a member of the Human Resources Committee and the Innovation and Development Committee.

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Elizabeth Alexander Chairman

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Brian McNamee Chief Executive Offi cer and Managing Director

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Tony Cipa Finance Director

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John Akehurst

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David Anstice

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Ian Renard

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Maurice Renshaw

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Professor John Shine

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David Simpson

IAN A RENARD,

BA, LLM, LLD(Hon), FAICD - (AGE 63)

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 from 1998 until September 2006, and is a Director of Hillview Quarries Pty Ltd, SP Australia Networks (Distribution) Ltd and SP Australia Networks (Transmission) Ltd. Mr Renard was the Chancellor of the University of Melbourne until 10 January 2009. Mr Renard is Chairman of the Audit and Risk Management Committee.

MAURICE A RENSHAW,

B.Pharm - (AGE 62)

JOHN SHINE, AO,

BSc (Hons), PhD, DSc, FAA - (AGE 63)

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 scientifi c research and medical bodies throughout Australia. Professor Shine was formerly Chairman of the National Health and Medical Research Council (NHMRC) and a Member of the Prime Minister’s Science, Engineering and Innovation Council (PMSEIC). Professor Shine is a member of the Innovation and Development Committee.

International Pharmaceutical Industry (resident in NSW)

Mr Renshaw was appointed to the CSL Board in July 2004. Formerly, he was Vice President of Pfi zer Inc, USA, Executive Vice President, Pfi zer Global Consumer Group and President of Pfi zer’s Global Consumer Healthcare Division. Prior to his positions in Pfi zer, Mr Renshaw was Vice President of Warner Lambert Co. and President of Parke-Davis USA. Mr Renshaw has had more than 30 years’ experience in the international pharmaceutical industry. Mr Renshaw is Chairman of the Innovation and Development Committee.

DAVID J SIMPSON,

FCPA – (AGE 69)

Finance and Management (resident in Victoria)

Mr Simpson was appointed to the CSL Board in September 2006. He is the non-executive Chairman of Aristocrat Leisure Limited. 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 is Chairman of the Human Resources Committee and a member of the Audit and Risk Management Committee.

EDWARD H BAILEY,

LLB, B.Com, FCIS

Company Secretary

26 CSL Limited Annual Report 2008-2009 > Our Company

EXECUTIVE MANAGEMENT GROUP

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Brian McNamee Chief Executive Offi cer and Managing Director

Tony Cipa Finance Director

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Peter Turner Jeff Davies President General Manager CSL Behring Asia Pacifi c CSL Bioplasma

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Jill Lever Senior Vice President Human Capital

Greg Boss Senior Vice President - CSL Behring, and CSL Group General Counsel

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Edward Bailey Company Secretary and Australian General Counsel

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Mary Sontrop General Manager CSL Biotherapies Australia and New Zealand

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Paul Walton Senior Vice President Corporate Development

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Dr Andrew Cuthbertson

CSL GROUP BUSINESS OPERATIONS

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----- Start of picture text -----

MARBURG Germany
CSL Behring KING OF PRUSSIA US
R&D and Manufacturing
CSL Behring
BERN Switzerland SCHWALMSTADT GOETTINGEN KANKAKEE US Administration, R&D,
CSL Behring R&D, Manufacturing, GermanyCSL Plasma GermanyCSL Plasma CSL Behring R&D and Sales and Distribution CSL Biotherapies
Sales and Distribution EU Logistics Centre Testing Laboratory Manufacturing Sales and Marketing
KNOXVILLE US INDIANAPOLIS US
CSL Plasma CSL Plasma
Testing Laboratory Logistics Centre
BOCA RATON US
CSL Plasma
Administration
MELBOURNE Australia
CSL Limited
Group Head Office, R&D
CSL Biotherapies
Manufacturing, Sales,
Warehousing and Distribution
CSL Bioplasma
R&D, Manufacturing,
Sales and Distribution
KEY
Regional Sales and Distribution
----- End of picture text -----

REGIONAL SALES AND DISTRIBUTION LOCATIONS

CSL BIOTHERAPIES Australia Sydney Brisbane Adelaide Perth New Zealand Auckland China Hong Kong US King of Prussia	CSL BIOPLASMA
	Australia Sydney Brisbane Adelaide Perth
	New Zealand Auckland
	China Hong Kong Beijing Chengdu Shanghai Guangzhou

CSL BEHRING
Canada	Ottowa
Mexico	Mexico City
Brazil	Sao Paulo
Argentina	Buenos Aires
United Kingdom	Haywards Heath
Belgium	Leuven
France	Paris
Portugal	Lisbon
Spain	Barcelona
Denmark	Copenhagen
Sweden	Stockholm
Germany	Hattersheim
Austria	Vienna
Italy	Milan
Switzerland	Zurich and Bern
Greece	Athens
Japan	Tokyo
China	Shanghai

28 CSL Limited Annual Report 2008-2009 > Our Company

SHARE INFORMATION

CSL LIMITED

Issued Capital Ordinary Shares: 602,487,176[1] as at 30 June 2009

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 fl oat 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 signifi cant foreign shareholdings, and certain restrictions on the Company itself.

SUBSTANTIAL SHAREHOLDERS

As at 30 June 2009, there were no substantial shareholders of CSL.

VOTING RIGHTS

At a general meeting, subject to restrictions imposed on signifi cant foreign shareholdings 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 signifi cant 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 offi ce at any particular time. A signifi cant 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 2009, there were no signifi cant foreign shareholdings in CSL.

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

DISTRIBUTION OF SHAREHOLDINGS AS AT 30 JUNE 2009

RANGE	HOLDERS	SHARES	% TOTAL SHARES
1 - 1,000	64,764	27,045,276	4.49
1,001 - 5,000	31,487	75,069,347	12.46
5,001 - 10,000	5,654	39,093,024	6.49
10,001 - 100,000	2,621	48,634,148	8.07
100,001 and over	123	412,645,381	68.49
Total shareholders and shares on issue1	104,649	602,487,176	100.00
Number of shareholders with less than a marketable parcel
of 16 shares (based on the share price at 30 June 2009)	583	5,043

1 As at 30 June, the Company had entered into contracts to buy back an additional 3,247,748 ordinary shares, with settlement and amendment to the share register pending. The cancellation of these shares has been refl ected in the reconciliation of outstanding ordinary shares in Note 20 to the fi nancial report.

SHAREHOLDER INFORMATION

CSL’S TWENTY LARGEST SHAREHOLDERS AS AT 30 JUNE 2009

SHAREHOLDER	SHAREHOLDER	ACCOUNT	SHARES	%TOTAL SHARES
1	HSBC Custody Nominees (Australia) Limited		129,183,873	21.44
2	J P Morgan Nominees Australia Limited		100,668,955	16.71
3	National Nominees Limited		67,473,423	11.20
4	Citicorp Nominees Pty Limited		31,745,398	5.27
5	ANZ Nominees Limited	Cash Income A/c	12,390,235	2.06
6	Cogent Nominees Pty Limited		7,190,634	1.19
7	AMP Life Limited		5,505,316	0.91
8	Queensland Investment Corporation		4,891,521	0.81
9	UBS Wealth Management Australia Nominees Pty Ltd		4,529,889	0.75
10	UBS Nominees Pty Ltd		3,274,509	0.54
11	Citicorp Nominees Pty Limited	CFS WSLE Imputation Fund A/c	2,501,497	0.42
12	ANZ Nominees Limited	SL Cash Income A/c	2,399,649	0.40
13	Perpetual Trustee Company Limited		2,180,789	0.36
14	Cogent Nominees Pty Limited	SMP Accounts	1,927,290	0.32
15	Citicorp Nominees Pty Limited	CFS Imputation Fund A/c	1,775,859	0.29
16	RBC Dexia Investor Services
	Australia Nominees Pty Limited	BCUST A/c	1,510,292	0.25
17	Australian Reward Investment Alliance		1,397,550	0.23
18	Citicorp Nominees Pty Limited	BHP Billiton ADR Holders A/c	1,344,923	0.22
19	Citicorp Nominees Pty Limited	CFS WSLE Aust Share Fund A/c	1,229,632	0.20
20	RBC Dexia Investor Services
	Australia Nominees Pty Limited	MLCI A/c	985,391	0.16
	Top 20 holders of ordinary and employee shares		384,106,625	63.75
	Remaining holders balance		218,380,551	36.25
	Total shares on issue1		602,487,176	100.00

30 CSL Limited Annual Report 2008-2009 > Our Company

SHAREHOLDER INFORMATION CONTINUED

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 4178 Investor enquiries facsimile: 61 3 9473 2500 Website: www.computershare.com Email: [email protected]

Shareholders with enquiries should email, telephone or write to the Share Registry at the above address.

Separate shareholdings may be consolidated by advising the Share Registry in writing or by completing a Request to Consolidate Holdings form which can be found online at the above website.

Change of address should be notifi ed to the Share Registry online via the Investor Centre at www.computershare.com, by telephone or 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 providing a payment instruction online via the Investor Centre at www.computershare.com or by obtaining a direct credit form from the Share Registry or by advising the Share Registry in writing with particulars.

The Annual Report is produced for your information. The default option is an online Annual Report via the company’s website. If you opted to continue to receive a printed copy

and you receive more than one or you wish to be removed from the mailing list for the Annual Report, please advise the Share Registry. You will continue to receive Notice 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 14 October 2009. There is a public car park adjacent to the Function Centre which will be available to shareholders at no charge.

SUPPORTING THE ENVIRONMENT THROUGH eTREE

CSL Limited is a participating member of eTree and proud to support this environmental scheme encouraging security holders to register to access all their communications electronically. Our partnership with eTree is an ongoing commitment to driving sustainable initiatives that help security holders contribute to a greener future.

For every email address registered at www.eTree.com.au/csl, a donation of up to $1 is made to Landcare Australia towards reforestation projects to help restore degraded plant, animal and water resources. With your support, CSL has registered over 14,200 email addresses which in turn has facilitated the planting of more than 45,800 trees in Australia and New Zealand.

We also encourage you to visit eTree if your email address has changed and you need to update it. For every updated registration, $1 dollar will be donated to Landcare Australia. To register, you will need your Security Holder Reference Number (SRN) or Holder Identifi cation Number (HIN).

SHAREHOLDERS AS AT 30 JUNE 2009

SHAREHOLDERS AS AT 30 JUNE 2009
	SHAREHOLDERS	SHARES
Australian Capital Territory	1,834	3,051,656
New South Wales	29,574	319,023,631
Northern Territory	311	331,274
Queensland	15,359	28,497,845
South Australia	6,148	11,981,329
Tasmania	1,528	2,161,929
Victoria	36,747	218,923,066
Western Australia	9,442	12,564,252
International shareholders	3,706	5,952,194
Total shareholders and shares on issue1	104,649	602,487,176

CORPORATE GOVERNANCE

CSL’s Board and management maintain high standards of corporate governance as part of their commitment to maximise shareholder value through promoting effective strategic planning, risk management, transparency and corporate responsibility.

This statement outlines the Company’s principal corporate governance practices in place during the fi nancial year. The Board believes that the Company complies with the ASX Corporate Governance Council’s Revised Corporate Governance Principles and Recommendations, released in August 2007. Furthermore, the Board and management remain committed to continuing to review the Company’s corporate governance practices in response to changes in market conditions or recognised best practices.

1. THE BOARD OF DIRECTORS

1.1 THE CSL 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 fi nancial 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, fi nancial 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 specifi c authority to fi ve 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, the Innovation and Development 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 is set out below. The Board also delegates specifi c responsibilities to ad hoc committees from time to time.

The CSL Board Charter sets guidelines as to the desired term of service of non-executive directors. This charter recognises that whilst board renewal is essential, a mixture of skills and differing periods of service provides for balance and optimal outcomes at a Board level. Prior to the expiry of a director’s term of offi ce, the Board reviews

that director’s performance. In the event that such performance is considered less than adequate, the Board may decide that it will not support the re-election of that director.

Directors are entitled to access independent professional advice at the Company’s expense to assist them in fulfi lling their responsibilities. To do so, a director must fi rst 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.

Details of Board meetings held during the year and individual directors’ attendance at these meetings can be found on page 38 of the Directors’ Report attached to the fi nancial report.

The CSL Board Charter is available on the Company’s website.

1.2 COMPOSITION OF THE BOARD

Throughout the year there were nine directors on the Board. Two of the directors – the Managing Director and the Finance Director – are executive directors. The CSL Board Charter provides that a majority of directors should be independent. No director acts as a nominee or representative of any particular shareholder. A profi le of each current director, including details of their skills, expertise, relevant experience, term of offi ce and Board committee memberships can be found on pages 24 and 25 of this Report.

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

1.3 INDEPENDENCE

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

All CSL directors are aware of, and adhere to, their obligation under the Corporations Act 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,

32 CSL Limited Annual Report 2008-2009 > Our Company

CORPORATE GOVERNANCE CONTINUED

details of any related party dealings are set out in full in Note 28 of the fi nancial report. All directors have agreed to give the Company notice of changes to their relevant interests in Company shares within fi ve days to enable both them and the Company to comply with the Australian Securities Exchange (ASX) Listing Rules. If a potential confl ict of interests exists on a matter before the Board then (unless the remaining directors determine otherwise), the director concerned does not receive the relevant briefi ng papers, and takes no part in the Board’s consideration of the matter nor exercises any infl uence 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 fi nancial 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 specifi c disclosures made by directors pursuant to their obligations under the CSL 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;
any family or other relationships a director may have with another person having a relevant relationship or interest; and
length of service.

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. The Nomination Committee comprises all of the independent non executive directors. 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.

Details of Committee meetings held during the year and individual directors’ attendance at these meetings can be found on page 38 of the Directors’ Report attached to the fi nancial report.

The Nomination Committee Charter is available on the Company’s website.

1.5 DIRECTOR APPOINTMENTS

One new director was appointed to the Board during the fi nancial year. David Anstice was appointed as of 1 September 2008 and was elected at the 2008 Annual General Meeting.

Ken Roberts retired as a director on 15 October 2008. Elizabeth Alexander and David Simpson were each re-elected as directors at the 2008 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 suffi cient 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 CSL Board Charter sets out procedures relating to the removal of a director whose contribution is found to be inadequate.

1.6 PERFORMANCE EVALUATION

As mentioned above, the Nomination Committee meets annually to review the Board’s performance. The Chairman also holds discussions with individual directors to facilitate peer review. The Nomination Committee is 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 specifi c criteria including the Company’s business performance, whether the long term strategic objectives are being achieved and the achievement of individual performance objectives. These performance evaluations took place in accordance with these processes during the last fi nancial year.

In addition to the briefi ng 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 including all major operating sites in the US, Europe and Australia 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 fi nancial reporting, risk management and compliance systems.

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

The fi nancial statements and associated notes comply with IFRS Accounting Standards as required by the Corporations Act, the Corporations Regulations and the CSL Group Accounting Policies;
The fi nancial statements and associated notes give a true and fair view of the fi nancial position as at the relevant balance date and performance of the Company for the year then ended as required by the Corporations Act;
They have established and maintained an adequate risk management and internal compliance and control system to facilitate the preparation of a reliable fi nancial report which in all material respects implements the policies adopted by the Board and the statements made above are based on that system.

These written declarations were received by the Board in respect of the fi nancial year ended 30 June 2009.

2.2 AUDIT AND RISK MANAGEMENT COMMITTEE

The Audit and Risk Management Committee is responsible for assisting the Board in fulfi lling its fi nancial 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 fi nancial reporting and safeguarding its integrity;
overseeing risk management and compliance systems and the internal control framework (other than the management of risk associated with research and development projects which is the responsibility of the Innovation and Development Committee);
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 nonexecutive directors. Details of the Committee’s current members, including their qualifi cations and experience, are set out in the directors’ profi les on pages 24 and 25 of this Report. The Committee’s 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 qualifi cations 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 38 of the Directors’ Report attached to the fi nancial report.

The Audit and Risk Management Committee Charter is available on the Company’s website.

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; and

34 CSL Limited Annual Report 2008-2009 > Our Company

CORPORATE GOVERNANCE CONTINUED

2.3 RISK FRAMEWORK

The Company has adopted and follows a detailed and structured Risk Framework to ensure that risks in the CSL Group are identifi ed, evaluated, monitored and managed. This Risk Framework sets out the risk management process, the roles and responsibilities for different levels of management, the risk tolerance of the Company, the matrix of risk impact and likelihood for assessing risk, and risk management reporting requirements.

As part of the Risk Framework, a Corporate Risk Management Committee of responsible executives reports to the Audit and Risk Management Committee on a quarterly basis. Its task is to implement, coordinate and facilitate the risk management process across the CSL Group. This includes quantifying and monitoring certain business risks identifi ed and evaluated as part of the risk management process, including those relating to operating systems, the environment, health and safety, product quality, physical assets, security, disaster recovery, insurance and compliance. Each business unit and manufacturing site in the Group has its own Risk Management Committee which reports to the Corporate Risk Management Committee on a quarterly basis, and the Group has a Global Risk and Insurance Manager who is responsible for monitoring and coordinating the implementation of the Risk Framework throughout the CSL Group.

In addition, the oversight of risk management associated with research and development projects is one of the responsibilities of the Innovation and Development Committee (see below). The research and development operations have a number of management committees that report into the Innovation and Development Committee.

Risk assessment and management policies are reviewed periodically, including by the CSL Group’s internal audit function.

2.4 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 fi nancial 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 fi ve 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 30 of the fi nancial report.

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

The external auditor attends each Annual General Meeting to be available to answer questions from shareholders.

3. HUMAN RESOURCES COMMITTEE

Detail on the Company’s remuneration policies and practices (including details of the Human Resources Committee of the Board and its charter, 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 and human resources priorities and succession planning) are set out in the Remuneration Report on pages 41 to 53 of the Directors’ Report attached to the fi nancial report. Details of Committee meetings held during the year and individual directors’ attendance at these meetings can be found on page 38 of the Directors’ Report attached to the fi nancial report.

The Human Resources Committee Charter is available on the Company’s website.

4. INNOVATION AND DEVELOPMENT COMMITTEE

The Board has delegated authority to the Innovation and Development Committee to provide the Board with oversight of CSL’s programs and development opportunities. The Committee comprises at least three members, being at least two independent non-executive directors and the Managing Director. The Committee is authorised by the Board to:

monitor the strategic direction of CSL’s technology, research and product development programs;
provide guidance on issues and priorities, additions to the research and development pipeline and signifi cant development milestones; and
oversee the management of risk associated with the research and development projects.

The Committee generally meets at least four times a year. The Company’s Chief Scientifi c Offi cer is a required attendee. The Board Chairman or any other director may attend any meeting of the Committee in an ex offi cio capacity. Details of Committee meetings held during the year and individual directors’ attendance at these meetings can be found on page 38 of the Directors’ Report attached to the fi nancial report.

The Innovation and Development Committee Charter is available on the Company’s website.

5. MARKET DISCLOSURE

5.1 CONTINUOUS DISCLOSURE

The Company has a Communications and External Disclosure Policy, which was adopted by the Board this year in place of its previous Continuous Disclosure Policy. This policy is available on the Company’s website, and operates in conjunction with the Company’s more detailed internal continuous disclosure policy. Together, these policies are designed to facilitate the Company’s compliance with its obligations under the ASX Listing Rules by:

providing guidance as to the types of information that may require disclosure, including examples of practical application of the rules;
providing practical guidance for dealing with market analysts and the media;
identifying the correct channels for passing on potentially market-sensitive information as soon as it comes to hand;
establishing 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
allocating responsibility for approving the substance and form of any public disclosure and communications with investors.

5.3 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 and shareholder review;
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 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, policies 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 refl ect any such developments.

5.2 SECURITIES AND MARKET DISCLOSURE COMMITTEE

Signifi cant ASX announcements (such as announcements of fi nancial results or major transactions) are the subject of full Board approval. The Board has also delegated authority to a Securities and Market Disclosure Committee, which has a formal charter. The Committee is designed to be convened at short notice to enable the Company to comply with urgent or less signifi cant continuous disclosure obligations and miscellaneous 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 fulfi lment 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.

From time to time, the Committee may also be specifi cally authorised by the Board to approve minor amendments to signifi cant ASX announcements following full Board approval.

Details of Committee meetings held during the year and individual directors’ attendance at these meetings can be found on page 38 of the Directors’ Report attached to the fi nancial report.

The Securities and Market Disclosure Committee Charter is available on the Company’s website.

6. 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 or margin loan arrangements in relation to Company securities. The Company has a comprehensive securities trading policy which applies to all directors and employees and is available on the Company’s website. The policy aims to inform directors and employees of the law relating to insider trading, and provide them with practical guidance for avoiding unlawful transactions in Company securities.

As a basic principle, the policy states that directors and employees should not buy or sell securities in the Company when they are in possession of price sensitive information which is not generally available to the market. In addition, the policy identifi es certain “blackout periods” during which no directors or employees are allowed 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.

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

36 CSL Limited Annual Report 2008-2009 > Our Company

CORPORATE GOVERNANCE CONTINUED

7. CORPORATE RESPONSIBILITY

The Company’s approach to Corporate Responsibility is guided by its Group Values, Code of Responsible Business Practice and related policies.

7.1 GROUP VALUES

The Company has developed a set of values common to the diverse business units that form the CSL Group. The CSL Group Values, endorsed by the Board, serve as the foundation for every day decision-making. These values are superior performance, innovation, integrity, collaboration and customer focus.

7.2 CODE OF RESPONSIBLE BUSINESS PRACTICE

The Board adopted a new Code of Responsible Business Practice (the Code) in December 2008. Based upon the CSL Group Values and guiding principles, the Code outlines CSL’s commitment to responsible business practices and ethical standards. The Code replaces the previous CSL Limited Code of Conduct and sets out the rights and obligations that all employees have in the conduct of the Company’s business. These rights and obligations relate to:

business integrity, including statements relating to compliance with applicable laws and standards, ethical and transparent business practices, privacy and political donations;
the safety and quality of products, including statements on bioethics (including animal ethics) and human rights principles;
maintaining a safe, fair and rewarding workplace, which covers many employee relations issues such as:
labour standards;
equal employment opportunity/workplace harassment;
learning and development;
occupational health and safety;
professional behaviour;
employee counselling;
recruitment and selection;
recognition of employee contribution;
rehabilitation; and
reporting and management of incidents;
the community, incorporating policy statements on charitable donations; and
environmental management.

In accordance with the Code, the Company is committed to ensuring that employees, contractors, suppliers and partners are able to raise concerns regarding any illegal conduct or malpractice and to have such concerns properly investigated. This commitment is implemented through the Company’s internal Whistleblower Policy, which sets out the mechanism by which employees, contractors, suppliers and partners can confi dently, and anonymously if they wish, voice such concerns in a responsible manner without being subject to victimisation, harassment or discriminatory treatment.

A copy of the Code was distributed to all employees in March/April 2009 and an enhanced training program is being developed and will be implemented across the CSL Group in the next fi nancial year.

The Company expects its contractors and suppliers to 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 and suppliers also observe the principles set out in the Code.

A copy of the Code can be accessed in 11 languages on the Company’s website.

7.3 SUPPORTING POLICIES

A review of the CSL policy framework was conducted in conjunction with the introduction of the Code. The new framework provides for three levels of policy making within the CSL Group as follows:

Board Policies cover any operational issue of strategic importance that applies to all CSL Group business units and all CSL Group employees and are approved by the Board;
Global Policies cover issues of an operational nature requiring consistent implementation across all CSL Group business units and are approved by a member of the Executive Management Group or the Chair of a CSL Global Functional Committee; and
Local Policies cover issues that apply to a particular CSL Group business unit or a part of a particular CSL Group business unit and are approved by the appropriate site leader or functional leader.

The new framework ensures that policy issues are reviewed and approved at the appropriate level within the CSL Group and that the principles outlined in the Code are properly implemented.

Communication of the revised CSL policy framework has been undertaken to ensure that all employees have a clear understanding of the policy structure and decision making processes within the CSL Group.

CSL LIMITED FINANCIAL REPORT 2008-2009

38 Directors’ Report
55 Auditor’s Independence Declaration
56 Income Statements
57 Balance Sheets 58 Statements of Recognised Income and Expense
59 Cash Flow Statements
60 Notes to the Financial Statements

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114 Directors’ Declaration
115 Independent Auditor’s Report

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38 CSL Limited Financial Report 2008-2009

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DIRECTORS’ REPORT

The Board of Directors of CSL Limited has pleasure in presenting their report on the consolidated entity for the year ended 30 June 2009.

1. Directors

The following persons were Directors of CSL Limited during the whole of the year and up to the date of this report: Miss E A Alexander, AM (Chairman)

Dr B A McNamee, AO (Managing Director)

Mr J H Akehurst Mr A M Cipa Mr I A Renard Mr M A Renshaw Professor J Shine, AO

Mr D J Simpson

Mr K J Roberts, AM, was a Director from the beginning of the fi nancial year until his retirement on 15 October 2008.

Mr D W Anstice was appointed Director on 2 September 2008 and continues in offi ce at the date of this report. Particulars of the directors’ qualifi cations, 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’ Profi les section of the Annual Report.

2. Company Secretary

Mr E H Bailey, B.Com/LLB, FCIS, was appointed to the position of Company Secretary on 1 January 2009 and continues in offi ce at the date of this report. Mr Bailey joined CSL Limited in 2000 and had occupied the role of Assistant Company Secretary from 2001. Before joining CSL Limited, Mr Bailey was a Senior Associate with Arthur Robinson & Hedderwicks. Mr P R Turvey, BA/LLB, MAICD, having been appointed to the position of Company Secretary in 1998 acted in that capacity during the fi nancial year until his retirement from offi ce on 31 December 2008. Mr Turvey remains in the capacity of Assistant Company Secretary as well as performing other senior management roles within the Company.

3. Directors’ Meetings

During the year, the Board held fourteen meetings. The Audit and Risk Management Committee met four times, the Human Resources Committee met four times, the Innovation and Development Committee met four times and the Nominations Committee met once. The Securities and Market Disclosure Committee met eleven 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:

			Audit and Risk	Audit and Risk		Securities and			Innovation and	Innovation and
	Board of		Management		Market Disclosure Human Resources				Development		Nomination
	Directors		Committee			Committee		Committee	Committee		Committee
	Attended Maximum		Attended Maximum			Attended	Attended Maximum		Attended Maximum		Attended
E A Alexander	14	14	4	4		11	42	4	21		1
B A McNamee	14	14	42	4		11	42	4	4	4
J H Akehurst	14	14					4	4			1
A M Cipa	13	14	42	4		3
I A Renard	14	14	4	4		5			12		1
M A Renshaw	12	14							4	4	1
K J Roberts	5	5					2	2
J Shine	14	14							4	4	1
D J Simpson	14	14	4	4		5	4	4			1
D W Anstice	7	9					2	2	2	2	1

1 Attended for at least part in ex offi cio capacity

2 Attended for at least part by invitation

CSL Limited Financial Report 2008-2009 39

4. Principal Activities

The principal activities of the consolidated entity during the fi nancial year were the research, development, manufacture, marketing and distribution of biopharmaceutical and allied products.

5. Operating Results

The Group’s net profi t was up 63.3% to $1.145 billion. Total income was $5.04 billion up 32% on the previous year, with research and development expenditure of $311.6 million up 38% on the previous year. Net operating cash fl ow was $1.024 billion, up 49% on the previous year.

6. Dividends

The following dividends have been paid or declared since the end of the preceding fi nancial year:

2007-2008 As declared by the Directors in last year’s Directors’ Report, a fi nal dividend for the year ended 30 June 2008 of 23 cents per share, 100% franked, was paid on 10 October 2008. 2008-2009 An interim dividend of 30 cents per share, unfranked, was paid on 9 April 2009. The Company’s Directors have declared an unfranked fi nal dividend of 40 cents per ordinary share for the year ended 30 June 2009.

In accordance with determinations by the Directors, the Company’s dividend reinvestment plan remains suspended. Total dividends for the 2008-2009 year are:

Haemophilia sales grew at 8% in constant currency terms, after adjusting for short term supply issues with Monoclate-P[®] as indicated in the half year result. Total sales volume grew by 11% with pricing steady, albeit the total average price was affected by growth in lower priced emerging and tender markets.

Sale of plasma raw material declined consistent with the new supply contract with Talecris Biotherapeutics (“Talecris”).

CSL Bioplasma sales were up by 32% to $334 million driven by strong demand and improved pricing for albumin in China. Demand for plasma therapies from Hong Kong, Singapore and Taiwan was also strong. Australian sales grew by 8%.

CSL Biotherapies sales were up 5% to $502 million. Growth in infl uenza vaccine sales into the Northern Hemisphere was offset by reduced Australian sales of Gardasil[®] (Human Papillomavirus Vaccine). The current period included Gardasil[®] sales into the Australian market of $159 million and $26 million into the New Zealand market, compared with $227 million in the prior comparable period arising from strong demand during the initial take-up by women in the 18-26 year old cohort. Infl uenza vaccine sales totalled $124 million for the period, up 60% compared to the prior comparable period.

Other revenue/income grew 69% to $417 million, the key driver being a $157 million foreign exchange gain arising from the conversion back to Australian dollars of US$1.5 billion of funds held in deposit in anticipation of the closure of the Talecris acquisition.

8. Signifi cant changes in the State of Affairs

	On	Ordinary shares $000
Interim dividend paid 9 April 2009		180,982
Final dividend payable on 9 October	2009	239,695

7. Review of Operations

CSL Behring product sales grew 17% in constant currency terms to $3.8 billion when compared to the 12 months ended 30 June 2008. Strong contribution from immunoglobulins and critical care products have underpinned the growth.

Immunoglobulins grew 26% in constant currency terms with vigorous growth in Privigen[®] , consistent with the company’s transition program in favour of liquid over lyophilised presentations. Vivaglobin[®] (subcutaneous Immunoglobulin) attracted signifi cant patient growth. Volume and price growth and, above all, product mix contributed to global growth in immunoglobulin sales. Specialty products Rhophylac[®] (Anti-D) and Tetagam[®] P (Tetanus) also boosted sales.

The Critical Care segment grew by 18% in constant currency terms underpinned by volume growth of albumin, particularly in the US and emerging markets. Specialty, particularly Haemocomplettan[®] P, Beriplex[®] P/N and Berinert[®] P, also made a signifi cant contribution.

On 13 August 2008, the Company announced that it had signed an agreement to acquire Talecris from Cerberus Partners, L.P. and Ampersand Ventures for US$3.1 billion. This acquisition was subject to the Company obtaining required regulatory approvals, including approval by the United States’ Fair Trade Commission (“FTC”).

The proposed acquisition was to be funded in-part through an institutional share placement that raised approximately $1.685 billion and a share placement plan that raised approximately $145 million.

On 9 June 2009, following the announcement that the FTC intended to challenge the Company’s proposed acquisition of Talecris, the Company announced that the Company and Talecris had mutually agreed to terminate the merger agreement. On the same day, the Company announced its intention to conduct an on-market buyback of up to 54,863,000 shares. Up to 30 June 2009 4,261,134 shares had been bought on market. Subsequent to year end and from 1 July until 10 July 2009, an additional 4,282,285 shares were purchased. Post 10 July and up to 19 August 2009, no further shares have been bought back.

There were no other signifi cant changes in the state of affairs of the consolidated entity during the fi nancial year not otherwise disclosed in this report or in the fi nancial statements.

CSL Limited Financial Report 2008-2009

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DIRECTORS’ REPORT CONTINUED

9. Signifi cant events after year end

Other than as disclosed in the fi nancial statements, the Directors are not aware of any matter or circumstance which has arisen since the end of the fi nancial year which has signifi cantly affected or may signifi cantly affect the operations of the consolidated entity, results of those operations or the state of affairs of the consolidated entity in subsequent fi nancial years.

10. Likely Developments, Business Strategies and Future Prospects

In the medium term the Company expects to continue to grow through developing differentiated plasma products, expanding fl u vaccine sales internationally, receiving royalty fl ows 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 and 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 fi nancial years of the consolidated entity, are contained in the 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.csl.com. au. Any further information of this nature has been omitted as it would unreasonably prejudice the interests of the Company to refer further to such matters.

11. Environmental Regulatory Performance

The consolidated entity maintains a global Health, Safety and Environment Management System to ensure its facilities operate to internationally recognised standards. These standards include strict compliance with Government regulations and a commitment to minimising the impact of operations on the environment.

The consolidated entity’s environmental obligations and waste discharge quotas are regulated under applicable Australian and foreign laws. Environmental regulatory performance is monitored by the Board and subjected from time to time to government agency audits and site inspections. Throughout the Company’s operations, environmental leadership groups continue to refi ne data collection systems and processes to ensure the Company is well prepared for new regulatory requirements.

No environmental breaches have been notifi ed 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, European or Asia Pacifi c operations during the year ended 30 June 2009, except for two minor notifi cations which were submitted to applicable U.S. regulatory authorities during the reporting year. Following submission of response reports, no further action was required of CSL by the applicable regulatory authorities.

The Company’s global Health, Safety and Environment Management System ensures the consolidated entity continuously reviews its environmental responsibilities, including regulatory compliance, and seeks to continuously improve its approach to environmental management. As part of continuous improvement in environmental reporting, both regulatory and voluntary, CSL released its fi rst Global Environmental Report during the reporting year. Reporting on key environmental issues including energy consumption, emissions, water use and management of waste, the report outlined the many ways CSL is working to maintain compliance and actively address CSL’s important environmental issues through innovation, skills development and prudent investments.

Whilst it is the Company’s view that climate change does not pose any signifi cant risks to its operations in the short to medium term, climate change continues to drive new regulatory regimes around the world. Climate change is monitored and acted upon by the Company as applicable to ensure compliance to new and emerging regulatory requirements. For example, Environment and Energy Resource Effi ciency Plans submitted for Australian operations were approved by the Environmental Protection Authority (Victoria) in the reporting year, and preparatory works were assessed for completeness against reporting requirements of the Australian Government’s National Greenhouse Energy Reporting Act (2007) due by 31 October 2009.

12. Directors’ Shareholdings and Interests

At the date of this report, the interests of the directors who held offi ce at 30 June 2009 in the shares, options and performance rights of the Company are set out in Section 15 (and in Tables 7 and 10) of this Report and Note 28 of the Financial Report. It is contrary to Board policy for key management personnel to limit exposure to risk in relation to these securities. From time to time the Company Secretary makes inquiries of key management personnel as to their compliance with this policy.

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 27 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 registered managed investment scheme.

The number of options and performance rights exercised during the fi nancial year and the exercise price paid to acquire fully paid ordinary shares in the Company is set out in Note 27 (b) and (c) of the Financial Statements. Since the end of the fi nancial year, 975 shares were issued under the Company’s Performance Rights Plan and 67,800 shares were issued under the SESOP II plan.

CSL Limited Financial Report 2008-2009 41

15. Remuneration Report

This remuneration report summarises the remuneration arrangements applicable to the key management personnel and the top 5 most highly remunerated offi cers of both the Company and the Group in accordance with the requirements of the Corporations Act 2001 and its Regulations.

The information provided in this report has been audited as required by section 308(3C) of the Corporations Act 2001.

Key Management Personnel

For the purposes of this report, key management personnel (KMP) are defi ned as those persons having authority and responsibility for planning, directing and controlling the major activities of the Company and the Group, and include:

a. All executive and non executive directors of CSL Limited, as listed in Table 3 of this report;
b. Those executives who have the authority and responsibility for planning, directing and controlling the activities of the Company and the Group.

Board and Human Resources Committee

The Board and its Human Resources Committee have various responsibilities in relation to the Group’s human resource and remuneration framework.

The full Board has responsibility for:

a. Determining remuneration payable to non-executive directors;
b. Deciding the remuneration package of the CEO, inclusive of fi xed pay and short and long term incentive components;
c. Reviewing and making decisions in relation to the appointment and the terms of employment of the CEO;
d. Approving remuneration proposals from the Committee in relation to senior management; and
e. Overseeing the Group’s Senior Executive Share Ownership Plan and Global Employee Share Plan and any other employee share, option and performance right plans (including approval of the establishment of, or any amendment to, those plans), and determining the policies which will apply to the implementation of those plans.

The Board’s Human Resources Committee is responsible for approving human resources initiatives of the CSL Group generally. The Committee’s responsibilities include:

a. Recommending to the Board a framework or policy for employee remuneration. The policy should aim to set remuneration which:
i. is competitive, equitable and designed to attract and retain high quality employees;
c. Reviewing recommendations from the Managing Director on short and long term incentive and retention schemes and share ownership plans, inclusive of allocations and measurement and making recommendations to the Board;
d. Reviewing, approving and monitoring the implementation of the Company’s Human Resources Strategic Plan and Performance Management Systems;
e. Reviewing and recommending to the Board the total individual remuneration package of each member of senior management who reports to the Managing Director;
f. Reviewing the CSL Group’s executive management succession plan; and
g. Reporting to the Board the fi ndings and recommendations of the Committee after each meeting.

The Committee comprises three independent, non-executive directors, namely David Simpson (Chairman, effective 15 October 2008), John Akehurst and David Anstice. Ken Roberts AM was Chairman of the Committee until his retirement on 15 October 2008. Jill Lever, Senior Vice President – Human Capital, acts as the Secretary of the Committee. The Board Chairperson may attend any meeting of the Committee in an ex offi cio capacity. 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’s or executive’s remuneration is made without that director or executive being present.

Non-Executive Directors’ Remuneration

As approved by shareholders on 17 October 2007, the Company’s constitution sets the current maximum aggregate amount of remuneration which may be paid to non-executive directors at $2,000,000. Any increases to this sum in the future are subject to shareholder approval at a general meeting.

Subject to the aggregate remuneration cap, non-executive director fees are set at levels which:

  - a.  enable the Company to attract and retain suitably qualifi ed directors with appropriate experience and expertise; and

  - b.  have regard to directors’ Board responsibilities and their individual roles on Board committees.

ii. motivates executives to pursue the long-term growth of the CSL Group; and
iii. establishes a clear relationship between executives’ performance and their remuneration;
b. Reviewing, and recommending to the Board the design of any long term incentive and retention schemes and share ownership plans and any amendments to such schemes or plans;

42 CSL Limited Financial Report 2008-2009

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DIRECTORS’ REPORT CONTINUED

The Board determines the fees payable to non-executive directors based on advice from professional advisors and after considering the fees payable to non-executive directors by comparable organisations. Non-executive director remuneration is not linked to the Group’s short-term fi nancial performance and these directors are not entitled to performance based remuneration or participation in the Group’s equity incentive plans.

Table 1 below sets out non-executive director board and committee fees on a per annum basis. These fee levels became effective as of 1 July 2008.

The Chairperson of the Board does not receive any additional fees for committee responsibilities.

In addition to the fees detailed below, the Company’s constitution provides that the Board may approve the payment of additional amounts of remuneration to individual directors for extra services rendered from time to time. It also provides that directors be reimbursed for reasonable expenses incurred by them in the course of discharging their duties.

Non-executive directors participate in the Non-Executive Directors’ Share Plan approved by shareholders at the 2002 annual general meeting. Under this 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, twice yearly, subsequent to the announcement of the half and full year results.

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 fi ve 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 retirement plan as at 31 December 2003 and froze the retirement allowance as at that date.

Table 3 shows actual fees paid to non-executive and executive directors in respect to the 2009 and 2008 fi nancial years.

Executive Remuneration

In order to attract and retain high calibre employees, the Group aims to provide each individual executive with a market competitive remuneration package that is commensurate with their position and responsibilities and which is geared towards aligning their interests with those of shareholders. As such, executive remuneration packages include a fi xed remuneration element and performance related at risk elements in the form of short term cash based and long term equity based incentives.

The proportion of an executive’s maximum remuneration potential that is performance based or at risk varies depending on the executive’s seniority level. As an executive’s seniority level increases, so does the proportion of their maximum remuneration potential that is performance related or at risk. This proportion ranges from 10% to 60% of fi xed remuneration. The relative proportions of actual remuneration attributable to fi xed and performance based remuneration elements in respect to each of the Group’s executive key management personnel in 2009 is set out in Table 5.

CSL’s performance management system is central to the management of performance related remuneration. The extent to which executives meet or exceed the performance objectives as set out in the performance management plan infl uences an executive’s actual entitlement to short-term incentives as well as executives’ ability to participate in the Group’s longterm incentive programs. Performance as measured under the performance management system is also taken into consideration in reviewing fi xed remuneration.

Table 4 shows actual remuneration paid to non director executive key management personnel in respect to the 2009 and 2008 fi nancial years.

Fixed Remuneration

Depending on the country in which the executive is employed, an executive’s fi xed pay comprises “salary including benefi ts” or “salary plus benefi ts”.

Where a “salary including benefi ts” approach is adopted, an executive’s fi xed remuneration comprises benefi ts the executive has elected to receive in lieu of salary inclusive of any associated costs such as fringe benefi ts tax and mandatory superannuation, with the balance paid as cash salary. Where a “salary plus benefi ts” approach is adopted, the salary is specifi ed and the Company provides benefi ts 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 benefi ts 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.

Short-term Incentives

Subject to meeting or exceeding agreed objectives, shortterm incentives may be awarded to executives based on their annual performance as evaluated under CSL’s performance management system.

Table 1 - Non-executive director board and committee fees

					Securities
		Audit & Risk	Human		& Market	Innovation
		Management	Resources	Nomination	Disclosure	& Development
Role	Board	Committee	Committee	Committee	Committee	Committee
Chairman	470,000	30,000	20,000	-	-	20,000
Members	180,000	15,000	10,000	-	-	10,000

CSL Limited Financial Report 2008-2009 43

At the commencement of each fi nancial year each executive’s performance objectives are set. The Board approves the Managing Director’s performance objectives and ensures that they are consistent with Board approved corporate objectives, plans and budgets. Similarly, and in that context, the Managing Director sets the performance objectives of his direct reports and he reviews and approves the objectives of their staff. Performance objectives include a blend of fi nancial, corporate and individual objectives and typically include targets in relation to contribution to earnings, the successful implementation of strategic initiatives, management of operating expenses, customer service, risk management, market share and portfolio management. These objectives have been adopted because the attainment of each is likely to directly correlate to an increase in shareholder value. Additionally each executive is expected to conduct themselves in a manner which supports and demonstrates behaviour, consistent with our Company values. A formal review of each executive’s progress against their specifi c objectives is conducted twice annually, with the full year performance review of the Managing Director’s direct reports discussed and agreed to by the Board. The Board has responsibility for reviewing the Managing Director’s performance annually. Short term incentive rewards are then paid subsequent to the completion of the fi nancial year if individual executives have met or exceeded their performance objectives.

Long-term Incentives

Long-term incentives are reserved for executives (and other employees) who have performed to a required performance level and who are regarded as being of strategic and/or operational importance to the Group. These incentives are also used in order to attract certain new employees. The Group currently offers long term incentives in the form of:

a. Cash incentives subject to deferred settlement, the value of which is ultimately determined via reference to the Company’s future share price. Only the Managing Director has a long term incentive of this type.

In any given year, where the Managing Director’s performance generates an entitlement to a cash settled STI, it simultaneously generates an entitlement to a further cash based reward which is subject to deferred settlement. When the Managing Director is eligible to receive this particular reward, its amount is determined and payable as follows:

50% of the STI awarded to the Managing Director for a given fi nancial year’s performance (the ‘entitlement year’) is divided by the volume weighted share price during the last week of that fi nancial year to give a number (‘A’).
3 years from the end of the ‘entitlement year’ (or earlier at the Board’s discretion), and subject to his continuing employment with the Group over the intervening period, the Managing Director is entitled to the payment of a cash amount equivalent to ‘A’ multiplied by the volume weighted share price during the last week immediately prior to the end of that 3 year period (or such earlier period as the Board may determine).
b. Equity rewards. Equity rewards take the form of performance rights and performance options and options issued under the Senior Executive Share Ownership Plan II (“SESOP II”). During the years ended 30 June 2008 and 2009, only performance rights and performance options were issued to eligible executives under the CSL Performance Rights Plan, as approved by shareholders at the 2003 annual general meeting. No SESOP II options were issued during the 2009 year. As set out in section 12 of this report, it is contrary to Board policy for key management personnel to limit exposure to risk in relation to performance rights and options which may be granted to them.

Performance Rights and Performance Options

In October 2008 the long-term incentive grants made to executives incorporated both performance rights and performance options. Grants of performance rights and performance options to the Executive Directors at that time were made in accordance with the resolution approved by shareholders at the 2006 Annual General Meeting. Each longterm incentive grant generally consists of 50% performance rights and 50% performance options. For a specifi ed group of Senior Leadership Executives, a mix of 40% performance rights and 60% performance options was granted. The use of a higher proportion of the grant as performance options is consistent with our intent of providing a higher level of at risk remuneration, for the most senior staff in the Group, including the Managing Director and executive key management personnel.

Performance rights and performance options are subject to different quantitative performance hurdles. The use of two types of quantitative performance hurdles aligns long term incentive rewards more closely with corporate performance, increases the market competitiveness of remuneration packages and facilitates the attraction and retention of high calibre executives. In addition, the vesting of performance rights and options is also contingent on a qualitative hurdle which requires executives to obtain a satisfactory (or equivalent) rating under the Company’s performance management system for the fi nancial year prior to vesting of the performance rights and performance options. Performance rights and performance options which vest may be exercised any time between their vesting date and their expiry date. Any vested but unexercised performance rights and options expire seven years from the date of their initial grant. Current offers provide for a portion to become exercisable, subject to satisfying the relevant performance hurdles, after the second anniversary of the date of grant. Full vesting does not occur until four years post grant date. If the portion tested at the applicable anniversary meets the relevant performance hurdle, then those particular rights and options vest and become exercisable until the expiry date. If the portion tested fails to meet the performance hurdles then those particular rights and options may be carried over to the next anniversary and retested. Any performance rights and options that have not vested on the fi fth anniversary of their initial grant date lapse.

CSL Limited Financial Report 2008-2009

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DIRECTORS’ REPORT CONTINUED

Performance rights

Performance rights are issued for nil cash consideration and represent the right to subscribe for one share for nil consideration. The number of performance rights granted, refl ects an executive’s seniority, job value and location and the relevant market conditions in each region of the world in which CSL recruits for talent.

The performance hurdle attached to performance rights is a relative Total Shareholder Return (“TSR”) hurdle with a peer group 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). Relative TSR was chosen as the LTI performance hurdle, as it provides an alignment between comparative shareholder return and potential reward for staff. The peer group for the October 2008 performance rights allocation was established on 1 October 2008, which was also the date of grant. Each performance right grant is split into three tranches, each with a different vesting period. Tranche 1 (25% of total grant), Tranche 2 (35% of total grant) and Tranche 3 (40% of total grant) have vesting periods of 2, 3 and 4 years, respectively, from date of grant. Vesting of performance rights at the end of the relevant vesting period occurs if the Company’s TSR ranking is at or above the 50th percentile on the relevant test date. Subject to performance hurdles being met over applicable vesting periods, each vested performance right entitles an eligible executive to an ordinary share in the Company for nil cash consideration. The performance hurdle for performance rights issued prior to October 2006 is such that 50% of performance rights vest at the 50th percentile, with the balance vesting on a straight line basis between the 50th and 75th percentile, with 100% of rights vesting if the 75th percentile is reached.

Performance options

Performance options are issued for nil cash consideration with an exercise price equal to the volume weighted average CSL share price over the week up to and including the day of grant.

Performance options have a basic earnings per share (EPS) performance hurdle. The target is 10% compound EPS growth per annum measured from 30 June in the fi nancial year preceding the grant of options until 30 June in the fi nancial year prior to the relevant test date. The Board considers that an EPS hurdle is appropriate since a key approved corporate objective is the pursuit of sustainable earnings growth.

Each grant of performance options is split into three tranches with different vesting periods, mirroring the arrangements detailed above with respect to performance rights. Vesting of performance options is subject to the EPS performance hurdle being met over applicable vesting periods. When a performance option vests, it entitles the eligible executives to purchase an ordinary share in the Company at the exercise price applicable to the option tranche.

The Company does not provide loans to fund the exercise of performance options.

Changes to Performance Rights Plan

The Performance Rights Plan is an integral feature of the Company’s remuneration philosophy. It is aimed at delivering outcomes that serve CSL’s needs to operate its global businesses successfully by attracting and retaining high calibre employees and motivating them to pursue ongoing growth of the business, thus aligning their interests with those of shareholders. Consistent with this objective, CSL is committed to providing performance related at risk remuneration incentives in the form of Performance Rights and Performance Options. However, following a recent review of the Performance Rights Plan and arising from a compatibility test with trends in current market practice, it has been decided that any grants made on or after 1 January 2010 will be subject to modifi ed provisions as follows:

a. Provided that relevant individual and CSL Group performance hurdles are met, vesting of 50% of Performance Rights and Performance Options granted will occur after the third anniversary with the remaining 50% vesting after the fourth anniversary of the date of grant;
b. Each tranche of performance rights and performance options will have only one retest opportunity, namely, if the fi rst tranche of 50% does not vest after the third anniversary, it will be retested at the fourth anniversary and the second tranche of 50%, eligible for initial vesting at the fourth anniversary will be retested after the fi fth anniversary of the date of grant; and
c. The performance hurdle will be revised in respect of performance rights so that 50% of performance rights vest when CSL reaches the 50th percentile of a ranked group of comparator companies on Total Shareholder Return, with the balance vesting on a straight line basis between the 50th and 75th percentile, where 100% of rights vest.

Alongside these agreed changes the Board intends to review the Company’s Performance Rights Plan in the light of outcomes from various Australian government reviews as yet incomplete and alongside the need to retain competitive remuneration practices in the 18 countries in which our executive employees are operating.

SESOP II

Prior to the introduction of performance rights and performance options, the Senior Executive Share Ownership Plan II (“SESOP II”) had been used for the purpose of delivering long-term incentives. All SESOP II options which were capable of vesting have vested and there have been no SESOP II options granted since the 2003 fi nancial year.

Under the rules of SESOP II, participants could be provided with a loan to fund the exercise of the options as at the date of exercise. Interest 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 46.5%) is charged on loans where provided. The SESOP II loan terms provide that the Company can seek immediate 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 ensures that the full loan amount remains recoverable by the Company.

CSL Limited Financial Report 2008-2009 45

Certain KMP have outstanding SESOP II loans as at 30 June 2008 and 2009, respectively. The difference between interest calculated at market rates versus that which is calculated pursuant to the terms above is included in the relevant KMP’s remuneration as a non monetary benefi t.

Total amount of equity issued to employees

As at 30 June 2009 the total number of shares, performance rights and options issued under all Company equity plans was 5,349,182 representing 0.89% of the total number of issued shares.

Relationship between Company performance and executive remuneration

The Company’s remuneration framework aims to incentivise executives towards creating shareholder value. The creation of shareholder value in recent years is evidenced by increases in earnings per share (EPS). The Company’s EPS performance is displayed graphically below:

CSL Limited - Basic earnings per share (cents)*

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----- Start of picture text -----

200
180
160
140
120
100
80
60
40
20
0
2004 2005 2006 2007 2008 2009
----- End of picture text -----

Table 2- Annual compound growth of EPS

Year of grant	Compound EPS growth to the end of the f nancial year
	2007 2008 2009
2006	53% 41% 41%
2007	30% 35%
2008	41%

Since October 2003, the Company has provided long-term incentives using performance rights which have a total shareholder return (TSR) hurdle. On 30 September 2008 (test date), the vesting period of the performance rights granted on 7 June 2005 and 2 October 2006 (Tranche 1) concluded and an assessment was undertaken to determine whether the TSR hurdle had been met or exceeded between the grant and test dates applicable to each grant. An external, independent party calculated the respective TSR from the date of each grant and up until the test date. The TSR in respect of the 7 June 2005 grant was 301.29%, ranking the Company at the top of the comparator group. The TSR in respect to tranche 1 of the performance rights granted on 2 October 2006 was 110.6%, also ranking the Company at the top of the comparator group. Accordingly, as the TSR performance hurdle was exceeded in each instance, each issue of performance rights vested, thereby entitling eligible executives to an ordinary share per vested right for nil consideration.

Employment 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 specifi c employment contracts with non-executive directors.

Employment Contracts -

In certain years, the earnings per share used for performance management purposes has been adjusted to exclude the profi t and loss impact attributable to signifi cant events or transactions.

The generation of an increasing level of EPS and shareholder value over the 6 years to 30 June 2009, has meant performance objectives which are linked to fi nancial results have been met (or exceeded) and accordingly over that timeframe the component of each executive’s short term incentive that is linked to the consolidated group’s fi nancial result has been payable.

Similarly, long term equity rewards in the form of options and rights that have had testing dates within this 6 year timeframe have been found to have exceeded relevant performance hurdles and accordingly have vested.

Table 2 below illustrates the Group’s annual compound growth in basic earnings per share (EPS) in respect to performance options granted in 2006, 2007 and 2008 respectively. The compound growth rate applicable to Tranche 1 of the 2006 performance options grant exceeded the 10% hurdle over their 2 year vesting period and accordingly those performance options vested in October 2008. Based on the growth rates below, it appears likely that Tranche 2 of the 2006 performance option grant and Tranche 1 of the 2007 performance option grant will each vest in October 2009.

Executive Key Management Personnel

All executive key management personnel are employed under individual service contracts. Each contract outlines the key terms of employment including the executive’s fi xed 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 seniority levels.

It is the Group’s general practice that employment contracts for

It is the Group’s policy that employment contracts for executives contain provisions for termination with notice or payment in lieu thereof. Accordingly, each executive key management person is entitled to 6 months notice on termination or to the payment of 6 months salary in lieu of notice. They are also entitled to 12 months of salary (excluding non cash benefi ts) on termination, irrespective of the notice period given. Each individual is required to give the Group 6 months notice if they intend to resign from their role. An executive’s employment may also be terminated by the Group without notice and, without payment in lieu, for serious misconduct and breach of contract.

46 CSL Limited Financial Report 2008-2009

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DIRECTORS’ REPORT CONTINUED

Table 3 - Directors’ remuneration

Directors	Year	Short term benef ts	Short term benef ts	Short term benef ts	Post employment	Post employment	Other long term	Other long term	Equity	Equity
		Cash salary and fees1 $	Cash bonus $	Non- monetary benef ts $	Super- annuation $	Retirement benef ts $	Long service leave $	Deferred cash incentives $	Performance rights2 $	Performance options2 $	Total $
Executive Directors
Dr B A McNamee Managing Director	2009 2008	2,165,780 2,048,741	1,120,000 1,167,645	- -	100,000 100,000	- -	124,439 193,565	560,000 583,822	1,187,280 1,059,728	816,823 561,291	6,074,322 5,714,792
A M Cipa Finance Director	2009 2008	785,393 841,851	367,356 333,960	- 212	66,458 64,266	- -	52,502 60,480	- -	468,611 407,137	326,222 209,538	2,066,542 1,917,444
Non-executive Directors
E A Alexander Chairman	2009 2008	431,193 376,147	- -	- -	38,807 33,853	- -	- -	- -	- -	- -	470,000 410,000
J H Akehurst Non-executive director	2009 2008	175,138 161,376	- -	- -	15,762 14,299	- -	- -	- -	- -	- -	190,900 175,675
I A Renard Non-executive director	2009 2008	186,388 166,376	- -	- -	16,775 14,636	- -	- -	- -	- -	- -	203,163 181,012
M A Renshaw Non-executive director	2009 2008	185,137 163,876	- -	- -	16,662 14,524	- -	- -	- -	- -	- -	201,799 178,400
K J Roberts3 Non-executive director	2009 2008	52,836 171,376	- -	- -	27,046 14,974	263,725 -	- -	- -	- -	- -	343,607 186,350
Professor J Shine Non-executive director	2009 2008	175,138 163,876	- -	- -	15,762 14,524	- -	- -	- -	- -	- -	190,900 178,400
D J Simpson Non-executive director	2009 2008	203,888 183,876	- -	- -	18,350 15,874	- -	- -	- -	- -	- -	222,238 199,750
D W Anstice4 Non-executive director	2009	149,281	-	-	13,735	-	-	-	-	-	163,016
Total of all Directors5, 6	2009 2008	4,510,172 4,277,495	1,487,356 1,501,605	- 212	329,357 286,950	263,725 -	176,941 254,045	560,000 583,822	1,655,891 1,466,865	1,143,045 770,829	10,126,487 9,141,823

1 As disclosed in 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 onmarket at prevailing share prices. The value of this remuneration element is included in cash, salary and fees.
2 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 and prior year remuneration includes amounts referable to options and rights that we granted in the year under report and in prior years.
3 Mr K J Roberts retired from the offi ce of Director on 15 October 2008. Accordingly, his 2009 remuneration is referrable to the period from 1 July 2008 until 15 October 2008.
4 Mr D W Anstice was appointed Director on 2 September 2008 and his remuneration is referrable to services rendered from that date until 30 June 2009.

5 There were no termination benefi ts paid to key management personnel listed in Table 3 during the years ended 30 June 2008 or 2009. During the 2009 fi nancial year, Mr KJ Roberts received a retirement benefi t of the type disclosed in the section titled “Non Executive Director Remuneration”.

6 All non executive and executive directors are considered to be key management personnel.

CSL Limited Financial Report 2008-2009 47

Table 4 – Non director executive key management personnel and other executive remuneration

Executive	Year	Short term benef ts	Short term benef ts	Short term benef ts	Post employment	Post employment	Other	Other Long Term	Other Long Term	Equity	Equity
		Cash salary and fees1 $	Cash bonus1 $	Non- monetary benef ts1 $	Super- annuation1 $	Retirement benef ts $	Termination benef ts $	Long service leave $	Deferred cash incentives $	Performance right2 $	Performance options2 $	Total $
Key Management Personnel
P Turner President, CSL Behring	2009 2008	1,342,671 934,728	646,324 500,151	14,217 12,344	245,512 276,999	- -	- -	129,470 111,513	- -	447,966 395,443	326,222 209,538	3,152,382 2,440,716
A Cuthbertson Chief Scientif c Off cer	2009 2008	558,585 500,755	183,206 142,684	10,298 36,396	47,659 41,720	- -	- -	24,239 14,300	- -	248,206 220,931	180,312 120,812	1,252,505 1,077,598
P Turvey3 Company Secretary and General Counsel	2009 2008	305,034 538,764	97,550 245,410	1,304 10,309	68,260 250,152	- -	- -	20,006 39,723	- -	70,069 149,392	45,762 91,454	607,985 1,325,204
M Sontrop GM, CSL Biotherapies Australia & New Zealand	2009 2008	391,765 370,653	154,875 160,908	- 21,719	109,892 127,746	- -	- -	26,237 23,055	- -	137,592 100,877	142,067 82,501	962,428 887,459
J Davies4 GM, CSL Bioplasma, Asia Pacif c	2009 2008	344,284 100,841	137,700 43,746	- 1,880	93,364 2,930	- -	- -	25,000 16,541	- -	114,210 24,870	140,301 25,524	854,859 216,332
A von Bibra5 GM, Human Resources	2009 2008	76,310 334,247	- 74,000	- 1,369	16,929 28,994	- -	521,285 -	13,796 8,540	- -	- 67,160	- 70,013	628,320 584,323
E Bailey6 Company Secretary	2009	160,255	43,400	3,782	12,798	-	-	18,269	-	15,185	11,654	265,343
G Boss6 Group General Counsel	2009	217,978	101,826	11,706	12,372	-	-	-	-	53,225	60,630	457,737
J Lever7 Senior VP, Human Capital	2009	27,996	-	-	2,339	-	-	650	-	-	-	30,985
T Giarla8 President, Bioplasma Asia Pacif c	2008	244,755	210,974	86,324	27,881	3,187	-	-	-	79,667	51,413	704,201
C Armit President, CSL Biotherapies	2008	105,246	-	-	18,462	-	-	-	-	-	-	123,708
Total KMP remuneration	2009 2008	3,424,878 3,129,989	1,364,881 1,377,873	41,307 170,341	609,125 774,884	- 3,187	521,285 -	257,667 213,672	- -	1,086,453 1,038,340	906,948 651,255	8,212,544 7,359,541
Other Executives9
P Perreault Executive VP, Commercial Operations	2009	549,471	267,801	45,571	26,789	-	-	-	-	203,586	190,199	1,283,417
G Naylor Executive VP, Plasma/Supply Chain	2009	542,389	263,418	23,412	21,625	-	-	19,238	-	133,804	150,935	1,154,821

48 CSL Limited Financial Report 2008-2009

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DIRECTORS’ REPORT CONTINUED

Table 4 – Non director executive key management personnel and other executive remuneration (Continued)

1 Cash salary and fees, cash bonuses and superannuation paid in foreign currency in respect to executives based overseas have been converted to Australian dollars at an average exchange rate for the year. Both the amount of remuneration and any movement in comparison to prior years may be infl uenced by changes in the respective currency exchange rates. Mr P Turner, Mr G Boss, Mr P Perreault and Mr G Naylor are all based in the United States and accordingly elements of their total remuneration are impacted by the AUD/USD exchange rate. All other executives listed in Table 4 are based in Australia and their remuneration is denominated in Australian dollars.
2 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 hurdles being achieved. This valuation was undertaken by PricewaterhouseCoopers. The amounts disclosed 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 and prior year remuneration includes amounts referable to options and rights that were granted in the year under report and in prior years.
3 Mr P Turvey resigned as Company Secretary on 31 December 2008. Accordingly Mr Turvey’s 2009 remuneration refl ects amounts paid to him from 1 July 2008 until his date of resignation.
4 Mr J Davies became a key management person on 1 March 2008 and therefore remuneration disclosed for 2008 purposes refl ects amounts paid or payable to Mr Davies from that date until 30 June 2008.
5 Ms A von Bibra ceased to be a key management person upon leaving the Company on 31 December 2008. Accordingly, Ms von Bibra’s 2009 remuneration refl ects amounts paid to her from 1 July 2008 until 31 December 2008.
6 Mr E Bailey became a key management person on 1 January 2009 when he was appointed as Company Secretary. Similarly, Mr G Boss became a key management person on I January 2009 when he became Group General Counsel. Accordingly, their respective 2009 remuneration amounts as disclosed above refl ect amounts paid or payable to them from the date on which each became a key management person until 30 June 2009.
7 Ms J Lever became a key management person on 1 June 2009. Accordingly, Ms Lever’s remuneration refl ects amounts paid to her from 1 June 2009 to 30 June 2009.
8 Mr T Giarla ceased to be a key management person effective 30 June 2008. Mr T Giarla was previously on an international assignment contract. Mr Giarla repatriated to the USA in February 2008, and was retained in a part time advisor capacity until December 2008. Consistent with the terms of his contract at the conclusion of Mr Giarla’s advisory role he received a termination payment consisting of 1 year base salary, health benefi ts for two years after termination date and US$32,000 as compensation for other ongoing benefi ts. These amounts did not enter into the calculation of Mr Giarla’s remuneration for the 2008 fi nancial year, as disclosed above, and are not included in 2009 remuneration amounts as Mr Giarla was not a key management person during the 2009 fi nancial year.

9 Mr P Perreault’s and Mr G Naylor’s 2009 remuneration has been disclosed pursuant to the requirements of section 300A(1) of the Corporations Act 2001, as each received remuneration in 2009 which placed them amongst the Group’s 5 most highly remunerated executives in that year. Mr P Perrault and Mr G Naylor are not KMP in the context of AASB 124 Related Party Disclosures .

CSL Limited Financial Report 2008-2009 49

Executive Key Management Personnel

Fixed and Performance Remuneration Components

Table 5 – Executive key management personnel remuneration components in the 2009 fi nancial year

Remuneration			Performance Related Remuneration	Performance Related Remuneration	Performance Related Remuneration	Total
components as a proportion of total remuneration	Remuneration not linked to Company performance1	Cash based bonuses2	Equity Based		Total
			Performance rights	Performance options
Executive Directors
B A McNamee A M Cipa	39% 44%	28% 18%	20% 22%	13% 16%	61% 56%	100% 100%
Other executives
P Turner A Cuthbertson P Turvey E Bailey G Boss M Sontrop J Davies A von Bibra J Lever	55% 51% 65% 74% 53% 55% 54% 100% 100%	21% 15% 16% 16% 22% 16% 16% - -	14% 20% 11% 6% 12% 14% 13% - -	10% 14% 8% 4% 13% 15% 17% - -	45% 49% 35% 26% 47% 45% 46% - -	100% 100% 100% 100% 100% 100% 100% 100% 100%

1 Remuneration not linked to Company performance means fi xed remuneration as outlined in the section “Executive Remuneration” of this report and comprises cash salary, superannuation and non monetary benefi ts.

As stated under the “Fixed Remuneration” section of this report, any recommendations concerning senior executive fi xed remuneration levels are signifi cantly infl uenced by the executive’s performance as assessed under the CSL Group’s performance management system.

2 Cash based bonuses include amounts awarded which are due and payable shortly after the conclusion of the fi nancial year as well as that component of Dr McNamee’s entitlement which is subject to deferred settlement terms.

50 CSL Limited Financial Report 2008-2009

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DIRECTORS’ REPORT CONTINUED

Table 6 - Executive key management personnel performance remuneration components in the 2009 fi nancial year

Key management person	Cash incentives1	Cash incentives1	Accounting values being amortised in respect of the 2009 equity grants in future years2	Accounting values being amortised in respect of the 2009 equity grants in future years2	Accounting values being amortised in respect of the 2009 equity grants in future years2	Accounting values being amortised in respect of the 2009 equity grants in future years2	Remuneration consisting of options & rights	Grant date value of options & rights granted during 2008/09	Value of options & rights exercised during 2008/09 at exercise date3
	Percentage Awarded1	Percentage Not Awarded1	2010 $	2011 $	2012 $	2013 $	%	$	$
Executive Directors
B A McNamee	80.0%	20.0%	582,369	421,721	219,391	42,555	33%	1,700,022	6,478,500
A M Cipa	80.0%	20.0%	262,178	189,856	98,769	19,158	38%	765,337	-
Other executives
P Turner	95.0%	5.0%	262,178	189,856	98,769	19,158	24%	765,337	3,488,560
A Cuthbertson	75.0%	25.0%	130,996	94,860	49,349	9,572	34%	382,396	1,733,293
P Turvey	75.0%	25.0%	-	-	-	-	19%	-	1,179,150
E Bailey	70.0%	30.0%	20,745	14,986	7,769	1,505	10%	60,465	610,762
G Boss	100.0%	-	116,988	84,717	44,072	8,549	25%	341,506	778,537
M Sontrop	87.5%	12.5%	143,113	103,636	53,916	10,458	29%	417,771	1,353,831
J Davies	85.0%	15.0%	143,113	103,636	53,916	10,458	32%	417,771	-
A von Bibra	-	-	-	-	-	-	-	-	721,857
J Lever4	-	-	-	-	-	-	-	-	-

1 Cash incentives awarded and not awarded relate to the period ended 30 June 2009 only. All cash incentive amounts are payable in full shortly after the conclusion of the 30 June 2009 fi nancial year with the exception of that component of Dr McNamee’s cash incentive that is subject to deferred settlement. The percentage awarded and not awarded in respect to Dr McNamee’s cash paid incentive components (comprising an amount paid shortly after the conclusion of the fi nancial year and an amount subject to deferred settlement terms) are the same.

The extent to which an individual executive meets and exceeds their annual performance objectives determines the level of award received. To be awarded 100% of an executive’s potential short-term incentive, the executive is required to have exceeded all performance objectives.

2 The value of performance rights and performance options is determined at grant date and is then amortised over the applicable vesting period. The amount which will be included in a given executive’s remuneration for a given year is consistent with this amortisation amount.

3 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) multiplied by the number of options/rights exercised during 2009.

4 Ms J Lever commenced employment on 1 June 2009 and was therefore not eligible to participate in the 2009 short term incentive program.

CSL Limited Financial Report 2008-2009 51

Executive Key Management Personnel

Options and Rights Holdings

Table 7 – Key management personnel performance right holdings

Key management person	Balance at 1 July 2008	Number granted	Number exercised	Number lapsed / forfeited	Balance at 30 June 2009	Number vested during the year	Balance at 30 June 2009	Balance at 30 June 2009
							Vested and exercisable	Unvested
Executive Directors
B A McNamee A M Cipa	513,480 176,340	21,600 9,720	210,000 -	- -	325,080 186,060	244,230 94,290	244,230 154,290	80,850 31,770
Other executives
P Turner A Cuthbertson P Turvey E Bailey G Boss M Sontrop J Davies A von Bibra J Lever	114,990 57,870 42,270 9,840 21,690 31,830 20,010 18,360 -	9,720 4,860 - 960 4,340 5,300 5,300 - -	92,940 45,150 32,625 - 14,445 23,625 - 11,280 -	- - - - - - - 7,080 -	31,770 17,580 9,645 10,800 11,585 13,505 25,310 - -	92,940 45,150 32,625 3,180 14,445 23,625 11,925 11,280 -	- - - 7,380 - - 11,925 - -	31,770 17,580 9,645 3,420 11,585 13,505 13,385 - -
Total	1,006,680	61,800	430,065	7,080	631,335	573,690	417,825	213,510

The number of ordinary shares issued on exercise of performance rights is equivalent to the number of performance rights exercised. No amounts are payable on exercise of performance rights.

Table 8 - The terms and conditions of the performance rights granted to key management personnel (amongst others) in the 2008 and 2009 fi nancial years

Grant Date	Tranche	Value per right at grant date	First exercise date	Last exercise date
1 October 2007 1 October 2007 1 October 2007 1 October 2008 1 October 2008 1 October 2008	1 2 3 1 2 3	28.65 26.78 25.20 33.30 31.72 30.15	1 October 2009 1 October 2010 1 October 2011 30 September 2010 30 September 2011 30 September 2012	1 October 2014 1 October 2014 1 October 2014 30 September 2013 30 September 2013 30 September 2013

52 CSL Limited Financial Report 2008-2009

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DIRECTORS’ REPORT CONTINUED

Options and Rights Holdings

Table 9 - Shares issued to key management personnel on exercise of performance rights during the 2009 fi nancial year

Executive	Dateperformance rightsgranted	Number of shares issued
B A Mc Namee	26 October 2003	90,000
	30 March 2004	120,000
P Turner	7 June 2005	52,950
	20 December 2005	35,700
	2 October 2006	4,290
A Cuthbertson	7 June 2005	15,750
	20 December 2005	27,000
	2 October 2006	2,400
P Turvey	7 June 2005	18,750
	20 December 2005	12,000
	2 October 2006	1,875
G Boss	7 June 2005	13,050
	2 October 2006	1,395
M Sontrop	7 June 2005	22,050
	2 October 2006	1,575
A von Bibra	7 June 2005	9,900
	2 October 2006	1,380

No amount is payable on exercise of performance rights. One ordinary share is issued on the exercise of each performance right.

Table 10 - Key management personnel option holdings

Key management person	Balance at 1 July 2008	Number Granted	Number Exercised	Number Lapsed / Forfeited	Balance at 30 June 2009	Number Vested during the year	Balance at 30 June 2009	Balance at 30 June 2009
							Vested and exercisable	Unvested
Executive Directors
B A McNamee A M Cipa	236,400 87,840	74,880 33,720	- -	- -	311,280 121,560	39,690 14,535	39,690 14,535	271,590 107,025
Other executives
P Turner A Cuthbertson P Turvey E Bailey G Boss M Sontrop J Davies A von Bibra J Lever	87,840 50,280 38,340 25,140 38,460 47,520 32,100 36,240 -	33,720 16,840 - 2,220 15,040 18,420 18,420 - -	14,535 8,130 - 18,600 9,600 15,000 - 12,600 -	- - - - - - - 23,640 -	107,025 58,990 38,340 8,760 43,900 50,940 50,520 - -	14,535 8,130 6,345 1,080 4,740 5,310 5,310 4,680 -	- - 6,345 1,080 4,740 5,310 5,310 - -	107,025 58,990 31,995 7,680 39,160 45,630 45,210 - -
Total	680,160	213,260	78,465	23,640	791,315	104,355	77,010	714,305

Table 11- Terms and conditions of the options granted to key management personnel (amongst others) during the 2008 and 2009 fi nancial years

Grant Date	Tranche	Value per option at Grant Date	First Exercise Date	Last Exercise Date
1 October 2007 1 October 2007 1 October 2007 1 October 2008 1 October 2008 1 October 2008	1 2 3 1 2 3	12.06 12.33 12.59 13.31 13.58 13.85	1 October 2009 1 October 2010 1 October 2011 30 September 2010 30 September 2011 30 September 2012	1 October 2014 1 October 2014 1 October 2014 30 September 2013 30 September 2013 30 September 2013

CSL Limited Financial Report 2008-2009 53

Options and Rights Holdings

Table 12 – Shares issued on exercise of options during the 2009 fi nancial year

Executive	Date options granted	Number of shares issued	$ amount paid per share	$ amount unpaid per share
P Turner A Cuthbertson A von Bibra A von Bibra E Bailey G Boss M Sontrop	2 October 2006 2 October 2006 2 October 2006 1 July 2003 1 July 2003 1 July 2003 1 July 2003	14,535 8,130 4,680 7,920 18,600 9,600 15,000	17.48 17.48 17.48 4.06 4.06 4.06 4.06	- - - - - - -

One ordinary share is issued on the exercise of each option.

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 Group has a number of contractual relationships, including property leases and collaborative research arrangements, with the University of Melbourne of which Mr Ian Renard was the Chancellor until 10 January 2009 and of which Miss Elizabeth Alexander is the Chair of the Finance Committee and a member of the Council and Dr Virginia Mansour (whose husband is Dr Brian McNamee) is a member of the Council.

of Directors and

During the fi nancial year, the insurance and indemnity arrangements discussed below were in place concerning directors and offi cers 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:

(a) an ongoing and unlimited indemnity to the relevant director against liability incurred by that director in or arising out of the conduct of the business of the Company or of a subsidiary (as defi ned in the Corporations Act) or in or arising out of the discharge of the duties of that director. The indemnity is given to the extent permitted by law and to the extent and for the amount that the relevant director is not otherwise entitled to be, and is not actually, indemnifi ed by another person or out of the assets of a corporation, where the liability is incurred in or arising out of the conduct of the business of that corporation or in the discharge of the duties of the director in relation to that corporation;
(b) that the Company will maintain, for the term of each director’s appointment and for seven years following cessation of offi ce, an insurance policy for the benefi t of each director which insures the director against liability for acts or omissions of that director in the director’s capacity or former capacity as a director ; and
(c) 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 offi ce. Access is permitted where the director is, or may be, defending legal proceedings or appearing before an inquiry or hearing of a government agency or an external administrator, where the proceedings, inquiry or hearing relates to an act or omission of the director in performing the director’s duties to the Company during the director’s period of appointment.

In addition to the Director’s Deeds, Rule 146 of the Company’s constitution requires the Company to indemnify each “offi cer” 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 offi cer 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 offi cer unless incurred in circumstances which the Board resolves do not justify

For this purpose, “offi cer” includes a director, executive offi cer, secretary, agent, auditor or other offi cer 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 offi cer is not otherwise entitled to be or is actually indemnifi ed by another person, including under any insurance policy, or out of the assets of a corporation, where the liability is incurred in or arising out of the conduct of the business of that corporation or in the discharge of the duties of the offi cer in relation to that corporation.

54 CSL Limited Financial Report 2008-2009

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DIRECTORS’ REPORT CONTINUED

The Company paid insurance premiums of $780,334 in respect of a contract insuring each individual director of the Company and each full time executive offi cer, 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 entity’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 satisfi ed 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 satisfi ed 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

19. Rounding

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

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

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Elizabeth Alexander (Director)

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Brian A McNamee (Director)

Melbourne 19 August 2009

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 in respect to the year ended 30 June 2009:

Due diligence and completion audits	$21,481
Compliance and other services	$222,554
Total fee paid for non-audit services	$244,035

CSL Limited Financial Report 2008-2009 55

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AUDITOR’S INDEPENDENCE DECLARATION

TO THE DIRECTORS OF CSL LIMITED

In relation to our audit of the fi nancial report of CSL Limited for the fi nancial year ended 30 June 2009, 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.

E rns t & Y oung

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Denis Thorn Partner Melbourne 19 August 2009

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56 CSL Limited Financial Report 2008-2009

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CSL LIMITED

INCOME STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2009

		Consolidated Group	Consolidated Group	Parent Company	Parent Company
		2009	2008	2009	2008
Notes		$000	$000	$000	$000
Continuing operations
Sales revenue	3	4,622,387	3,556,662	569,212	553,674
Cost of sales		(2,399,720)	(1,928,683)	(402,453)	(362,355)
Gross prof t		2,222,667	1,627,979	166,759	191,319
Other revenues	3	247,666	237,630	510,411	524,150
Other income	3	169,352	9,080	9,274	4,526
Research and development expenses		(311,615)	(225,121)	(175,614)	(124,233)
Selling and marketing expenses		(489,150)	(396,100)	(69,448)	(74,738)
General and administration expenses	3(i)	(407,264)	(251,648)	(36,006)	(53,649)
Finance costs	3	(61,909)	(49,796)	-	(437)
Prof t before income tax expense		1,369,747	952,024	405,376	466,938
Income tax (expense) / benef t	4	(223,815)	(250,222)	7,819	(33,111)
Prof t attributable to members of the parent company	22	1,145,932	701,802	413,195	433,827
Earnings per share	5	Cents	Cents
Basic earnings per share		192.51	127.58
Diluted earnings per share		191.74	126.85

The above income statements should be read in conjunction with the accompanying notes.

CSL Limited Financial Report 2008-2009 57

CSL LIMITED BALANCE SHEETS AS AT 30 JUNE 2009

		Consolidated Group	Consolidated Group	Parent	Company
		2009	2008	2009	2008
	Notes	$000	$000	$000	$000
CURRENT ASSETS
Cash and cash equivalents	6	2,528,097	701,590	-	-
Trade and other receivables	7	885,884	709,390	2,900,012	671,824
Inventories	8	1,522,039	1,198,133	90,108	77,453
Current tax assets	16	12,174	-	58,161	40,136
Other f nancial assets	9	854	1,513	-	-
Total Current Assets		4,949,048	2,610,626	3,048,281	789,413
NON-CURRENT ASSETS
Trade and other receivables	7	10,225	8,160	6,408	4,832
Other f nancial assets	9	8,397	8,442	1,348,974	1,340,144
Property, plant and equipment	10	1,197,502	975,936	379,849	348,242
Deferred tax assets	11	227,096	173,238	12,384	-
Intangible assets	12	974,547	910,510	-	-
Retirement benef t assets	13	-	8,052	-	3,518
Total Non-Current Assets		2,417,767	2,084,338	1,747,615	1,696,736
TOTAL ASSETS		7,366,815	4,694,964	4,795,896	2,486,149
CURRENT LIABILITIES
Trade and other payables	14	663,818	444,723	1,149,211	684,820
Interest-bearing liabilities and borrowings	15	332,358	128,052	55,055	5,789
Current tax liabilities	16	101,173	123,018	-	54,157
Provisions	17	126,959	139,525	31,797	30,328
Deferred government grants	18	469	469	469	469
Derivative f nancial instruments	19	873	167	-	-
Total Current Liabilities		1,225,650	835,954	1,236,532	775,563
NON-CURRENT LIABILITIES
Interest-bearing liabilities and borrowings	15	385,420	825,134	-	-
Deferred tax liabilities	11	108,062	93,677	-	593
Provisions	17	38,811	41,553	6,573	6,687
Deferred government grants	18	12,083	6,950	12,083	6,950
Retirement benef t liabilities	13	133,894	85,571	2,772	-
Total Non-Current Liabilities		678,270	1,052,885	21,428	14,230
TOTAL LIABILITIES		1,903,920	1,888,839	1,257,960	789,793
NET ASSETS		5,462,895	2,806,125	3,537,936	1,696,356
EQUITY
Contributed equity	20	2,760,207	1,034,337	2,760,207	1,034,337
Reserves	21	15,198	(134,299)	55,565	27,823
Retained earnings	22	2,687,490	1,906,087	722,164	634,196
TOTAL EQUITY	24	5,462,895	2,806,125	3,537,936	1,696,356

The above balance sheets should be read in conjunction with the accompanying notes.

58 CSL Limited Financial Report 2008-2009

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CSL LIMITED

STATEMENTS OF RECOGNISED INCOME AND EXPENSE

FOR THE YEAR ENDED 30 JUNE 2009

		Consolidated Group	Consolidated Group	Parent	Company
		2009	2008	2009	2008
	Notes	$000	$000	$000	$000
Prof t for the year		1,145,932	701,802	413,195	433,827
Exchange differences on translation of foreign operations,
net of hedges	21	121,011	51,894	-	-
Gains/(losses) on available-for-sale f nancial assets, net of tax 21		-	(2,957)	-	(2,957)
Actuarial gains/(losses) on def ned benef t plans, net of tax	22	(45,037)	(3,534)	(5,734)	(2,973)
Net income/(expense) recognised directly in equity		75,974	45,403	(5,734)	(5,930)
Total recognised income and expense for the year
attributable to equity holders	24	1,221,906	747,205	407,461	427,897

The above statements of recognised income and expense should be read in conjunction with the accompanying notes.

CSL Limited Financial Report 2008-2009 59

CSL LIMITED CASH FLOW STATEMENTS FOR THE YEAR ENDED 30 JUNE 2009

		Consolidated Group	Consolidated Group	Parent Company	Parent Company
		2009	2008	2009	2008
	Notes	$000	$000	$000	$000
Cash f ows from Operating Activities
Receipts from customers		4,756,195	3,648,044	384,296	373,671
Payments to suppliers and employees		(3,440,962)	(2,709,521)	(280,773)	(202,227)
Cash generated from operations		1,315,233	938,523	103,523	171,444
Income taxes paid		(294,150)	(237,859)	(63,953)	(26,417)
Interest received		66,198	33,574	2,510	1,943
Finance costs paid		(62,457)	(44,982)	-	(5)
Net cash inf ow from operating activities	25	1,024,824	689,256	42,080	146,965
Cash f ows from Investing Activities
Proceeds from sale of property, plant and equipment		1,411	845	-	-
Dividends received		-	-	4,346	857
Trust distribution received		-	7,325	-	7,325
Payments for property, plant and equipment		(285,611)	(218,086)	(70,975)	(62,102)
Payments for other investments		-	(42)	-	(42)
Payments for intellectual property		(32,292)	(26,578)	-	-
Payments for restructuring of acquired entities and businesses		-	(186)	-	-
Payments for onerous contracts		-	(2,399)	-	-
Payments related to discontinued acquisition activities		(133,037)	-	-	-
Net cash outf ow from investing activities		(449,529)	(239,121)	(66,629)	(53,962)
Cash f ows from Financing Activities
Proceeds from issue of shares		1,859,903	13,099	1,859,903	13,099
Dividends paid	23	(319,492)	(227,431)	(319,492)	(227,431)
Advances (to)/from subsidiaries		-	-	(1,510,187)	174,263
Repayment of borrowings		(397,340)	(36,858)	-	-
Payment for shares bought back		(54,941)	-	(54,941)	-
Receipts/(payment) for settlement of f nance hedges		(34,004)	26,080	-	-
Net cash inf ow/(outf ow) from f nancing activities		1,054,126	(225,110)	(24,717)	(40,069)

Net increase/(decrease) in cash and cash equivalents		1,629,421	225,025	(49,266)	52,934
Cash and cash equivalents at the beginning
of the f nancial year		695,596	474,138	(5,789)	(58,723)
Exchange rate variations on foreign cash
and cash equivalent balances		197,175	(3,567)	-	-
Cash at the end of the f nancial year	25	2,522,192	695,596	(55,055)	(5,789)

For non-cash fi nancing activities refer to note 25.

The above cash fl ow statements should be read in conjunction with the accompanying notes.

60 CSL Limited Financial Report 2008-2009

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CSL LIMITED AND ITS CONTROLLED ENTITIES

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2009

1. Corporate information

CSL Limited is a company incorporated and domiciled in Australia and limited by shares publicly traded on the Australian Stock Exchange. This fi nancial report covers both the separate fi nancial statements of CSL Limited, as an individual entity and the consolidated fi nancial statements for the consolidated entity consisting of CSL Limited (the Parent Company) and its subsidiaries (together referred to as the Group). The fi nancial report was authorised for issue in accordance with a resolution of the directors on 19 August 2009.

A description of the nature of the Group’s operations and its principal activities is included in the directors’ report.

Summary of signifi cant accounting policies

The principal accounting policies adopted in the preparation of the fi nancial report are set out below. These policies have been consistently applied to all the years presented unless otherwise stated.

(a) Basis of preparation

This general purpose fi nancial report has been prepared in accordance with Australian Accounting Standards, other authoritative pronouncements of the Australian Accounting Standards Board and the Corporations Act 2001. The fi nancial report also complies with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board. The fi nancial report has been prepared under the historical cost convention, except for “available-for-sale” and “at fair value through profi t or loss” fi nancial assets and liabilities (including derivative instruments), that have been measured at fair value.

The preparation of a fi nancial report in conformity with Australian Accounting Standards requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are signifi cant to the fi nancial report are disclosed in note 1(ee).

The Parent Company is of a kind referred to in Class Order 98/0100, issued by the Australian Securities and Investments Commission, relating to ‘rounding off’ of amounts in the fi nancial report. Amounts in the fi nancial report have been rounded off in accordance with that Class Order to the nearest thousand dollars.

Early Adoption of AASB 8 Operating Segments

AASB 8 Operating Segments was early adopted by the Group in 2009. AASB 8 replaces AASB 114 Segment Reporting. The new standard requires segment information to be presented on the same basis as that used for internal reporting purposes. This has resulted in an increase in the number of reportable segments presented. The change in reportable segments has required a reallocation of Research & Development expense. There have been no impacts on the measurement of the segment assets and liabilities as a result of applying the new standard. Comparatives for 2008 have been restated.

(b) Principles of consolidation

i. Subsidiaries

The consolidated fi nancial statements comprise the fi nancial statements of CSL Limited and its subsidiaries. Subsidiaries are all of those entities over which the Group has the power to govern the fi nancial and operating policies so as to obtain benefi ts from their activities. The fi nancial statements of the subsidiaries are prepared using consistent accounting policies and for the same reporting period as the Parent Company.

In preparing the consolidated fi nancial statements, all intercompany balances and transactions have been eliminated in full. Subsidiaries are fully consolidated from the date on which control is obtained by the Group and cease to be consolidated from the date on which control is transferred out of the Group.

The acquisition of subsidiaries is accounted for using the purchase method of accounting. The purchase method of accounting involves allocating the cost of the business combination to the fair value of assets acquired and the liabilities and contingent liabilities assumed at the date of the acquisition.

In the individual fi nancial statements of CSL Limited, investments in subsidiaries are accounted for at cost.

ii. Employee share trust

The Group has formed a trust to administer the Group’s employee share scheme. This trust is consolidated as the substance of the relationship is that the trust is controlled by the Group.

CSL Limited Financial Report 2008-2009 61

CSL LIMITED AND ITS CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS CONTINUED FOR THE YEAR ENDED 30 JUNE 2009

1. Summary of signifi cant accounting policies (continued)

(c) Segment reporting

Operating segments, as defi ned in note 2, are reported in a manner consistent with the internal reporting to the chief operating decision maker. The Chief Executive Offi cer is considered to be the chief operating decision maker.

(d) Foreign currency translation

i. Functional and presentation currency

Items included in the fi nancial 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 fi nancial statements are presented in Australian dollars, which is CSL Limited’s functional and presentational currency.

ii. Translation and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year end exchange rates of monetary assets and liabilities denominated in functional currencies are recognised in the income statement, except when deferred in equity as qualifying cash fl ow hedges and qualifying net investment hedges or are attributable to part of the net investment in a foreign operation.

iii. Group companies

The results of foreign subsidiaries are translated into Australian dollars at average exchange rates. Assets and liabilities of foreign subsidiaries are translated to Australian dollars at exchange rates prevailing at balance date and resulting exchange differences are recognised in the foreign currency translation reserve in equity.

On consolidation, exchange differences arising from the translation of any net investment in foreign entities, and of borrowings and other fi nancial instruments designated as hedges of such investments, are taken to the foreign currency translation reserve in equity. When a foreign operation is sold or any borrowings forming part of the net investment are repaid, a proportionate share of such exchange differences are recognised in the income statement, as part of the gain on sale or loss on sale where applicable.

(e) Revenue recognition

Revenue is recognised and measured at the fair value of the consideration received or receivable. The Group recognises revenue when: the amount of revenue can be reliably measured, it is probable that the future economic benefi ts will fl ow to the Group and the specifi c criteria have been met for each of the Group’s activities as described below.

i. Sales revenue

Sales revenue comprises revenue earned (net of returns, discounts and allowances) from the provision of products to buyers external to the Group. Sales revenue is recognised when the signifi cant risks and rewards of ownership of the goods have passed to the buyer.

ii. Interest income

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

iii. Other revenue

Other revenue is recognised as it accrues.

iv. Dividend income

Dividend income is recognised when the shareholder’s right to receive the payment is established.

(f) Government grants

Government grants are recognised at their fair value where there is reasonable assurance that the grant will be received and the Group will comply with all attached conditions. Government grants relating to an expense item are deferred and recognised in the income statement over the period necessary to match them with the expenses that they are intended to compensate. Government grants received for which there are 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, 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.

62 CSL Limited Financial Report 2008-2009

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CSL LIMITED AND ITS CONTROLLED ENTITIES

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

FOR THE YEAR ENDED 30 JUNE 2009

1. Summary of signifi cant accounting policies (continued)

(h) 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 from a taxation authority in which case it is recognised as part of an asset’s cost of acquisition or as part of the expense. Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or payable to, taxation authorities is included in other receivables or payables in the balance sheet. Cash fl ows are presented in the cash fl ow statement on a gross basis. The GST component of cash fl ows arising from investing and fi nancing activities that are recoverable from or payable to a taxation authority are presented as part of operating cash fl ows. Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, a taxation authority.

(i) Income tax

The income tax expense or revenue for the period is the tax payable on the current period’s taxable income based on the applicable income tax rate for each jurisdiction adjusted for changes in deferred tax assets and liabilities attributable to temporary differences and to unused tax losses.

Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated fi nancial statements. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the reporting date and are expected to apply when the related deferred income tax asset is realised or deferred income tax liability is settled.

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 liabilities are not recognised for temporary differences between the carrying amount and tax bases of investments in controlled entities where the Parent Company is able to control the timing of the reversal of temporary differences and it is probable that the differences will not reverse in the foreseeable future.

Deferred tax assets and 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 are related to the same taxable entity or group and the same taxation authority.

Current and deferred tax balances attributable to amounts recognised directly in equity are also recognised directly in equity.

(j) Cash, cash equivalents and bank overdrafts Cash and cash equivalents in the balance sheet comprise cash on hand, at call deposits with banks or fi nancial institutions and 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 insignifi cant risk of changes in value. In the balance sheet bank overdrafts are included within current interest bearing liabilities and borrowings. For the purposes of the cash fl ow statement, cash at the end of the fi nancial year is net of bank overdraft amounts.

(k) Trade and other receivables

Trade and other receivables are initially recorded at fair value and are generally due for settlement within 30 to 60 days from date of invoice. Collectability of trade and other receivables is reviewed on an ongoing basis at an operating unit level. Debts which are known to be uncollectible are written off when identifi ed. An allowance for doubtful debts is recognised when there is objective evidence that the Group may not be able to fully recover all amounts due according to the original terms. The amount of the allowance recognised is the difference between the receivable’s carrying amount and the present value of estimated future cash fl ows that may ultimately be recovered. Cash fl ows relating to short term receivables are not discounted if the effect of discounting is immaterial. When a trade receivable for which a provision for impairment has been recognised becomes uncollectible in a subsequent period, it is written off against the provision.

Other current 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.

(l) Inventories

Raw materials and stores, work in progress and fi nished 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 fi xed 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.

CSL Limited Financial Report 2008-2009 63

CSL LIMITED AND ITS CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS CONTINUED FOR THE YEAR ENDED 30 JUNE 2009

1. Summary of signifi cant accounting policies (continued)

(m) Investments and other fi nancial assets

The Group’s fi nancial assets have been classifi ed into one of the three categories noted below. The classifi cation depends on the purpose for which the investments were acquired. The Group determines the classifi cation of its investments at initial recognition and re-evaluates this designation at each fi nancial year end when allowed and appropriate.

i. Financial assets at fair value through profi t and loss

Financial assets at fair value through profi t and loss are fi nancial assets held for trading. A fi nancial asset is classifi ed in this category if acquired principally for the purpose of selling in the short term. Derivatives are classifi ed as held for trading unless they are designated as hedges. Financial assets at fair value through profi t and loss are initially recognised at fair value and transaction costs are expensed in the income statement. After initial recognition, assets in this category are carried at fair value. Gains and losses on fi nancial assets held for trading are recognised in the income statement when they arise.

ii. Loans and receivables

Loans and receivables are non-derivative fi nancial assets with fi xed or determinable payments that are not quoted in an active market. They are included in current assets, except for those with maturities greater than 12 months after the reporting date which are classifi ed as non-current assets. Loans and receivables are carried at amortised cost using the effective interest rate method and are included in trade and other receivables in the balance sheet. Gains and losses are recognised in the income statement when the loans and receivables are derecognised or impaired.

iii. Available for sale investments

Available for sale investments, comprising principally marketable equity securities, are non-derivatives. They are included in non-current assets unless the Group intends to dispose of the investment within 12 months of the reporting date. Investments are designated as available for sale if they do not have fi xed maturities and fi xed or determinable payments and management intends to hold them for the medium to long term. Investments are initially recognised at fair value plus transaction costs. After initial recognition available for sale fi nancial assets are measured at fair value with gains or losses being recognised as a separate component of equity until the investment is derecognised or determined to be impaired, at which time the cumulative gain or loss previously reported in equity is recognised in the income statement. A signifi cant or prolonged decline in the fair value of an equity security below its cost is considered to be an indicator that the securities may be impaired.

Regular purchases and sales of fi nancial assets are recognised on the date when the Group commits to purchase or sell the asset. Financial assets are derecognised when the rights to receive cash fl ows from the fi nancial assets have expired or have been transferred and the Group has transferred substantially all the risks and rewards of ownership.

The fair values of investments that are actively traded in organised fi nancial markets are determined by reference to market prices. For investments that are not actively traded, fair values are determined using valuation techniques. These techniques include: using recent arm’s length transactions involving the same or substantially the same instruments as a guide to value, discounted cash fl ow analysis and various pricing models.

The Group assesses at each balance date whether there is objective evidence that a fi nancial asset or group of fi nancial assets is impaired.

(n) Business combinations

The purchase method of accounting is used for all business combinations regardless of whether equity instruments or other assets are acquired. Cost is measured as the fair value of assets given, shares issued or liabilities incurred or assumed at the date of exchange plus costs directly attributable to the combination. Where equity instruments are issued in a business combination, the fair value of the instruments is their published market price as at the date of the combination. Transaction costs arising on the issue of equity instruments are recognised directly in equity. Where settlement of any part of cash consideration is deferred, where material, 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 fi nancier under comparable terms and conditions.

Identifi able assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. The excess of the cost of acquisition over the fair value of the identifi able net assets acquired is recognised as goodwill. If the cost of the acquisition is less than the identifi able net assets acquired, the difference is recognised immediately in the income statement, but only after a reassessment of the identifi cation and measurement of the net assets acquired.

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 exchange. The discount rate used is the Group’s incremental borrowing rate, being the rate at which a similar borrowing could be obtained from an independent fi nancier under comparable terms and conditions.

64 CSL Limited Financial Report 2008-2009

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CSL LIMITED AND ITS CONTROLLED ENTITIES

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

FOR THE YEAR ENDED 30 JUNE 2009

1. Summary of signifi cant accounting policies (continued)

(o) Property, plant and equipment

Land, buildings, capital work in progress and plant and equipment assets are recorded at historical cost less, where applicable, associated depreciation and any accumulated impairment losses. Land and capital work in progress assets are not depreciated. Historical cost includes expenditure that is directly attributable to the acquisition of an asset. Costs incurred subsequent to an asset’s acquisition, including the cost of replacement parts, are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefi ts associated with the item will fl ow to the Group and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognised. All other repair and maintenance costs are charged to the income statement when incurred.

Depreciable assets are depreciated using the straight line method to allocate their cost, net of residual values, over their estimated useful lives, as follows:

Buildings 5 – 30 years Plant and equipment 3 – 15 years Leasehold improvements 5 – 10 years

Assets’ residual values and useful lives are reviewed and adjusted if appropriate at each reporting date. An asset’s carrying amount is written down immediately to its recoverable amount if its carrying amount is greater than its estimated recoverable amount. Items of property, plant and equipment are derecognised upon disposal or when no further economic benefi ts are expected from their use or disposal. Gains and losses on disposals of items of property, plant and equipment are determined by comparing proceeds with carrying amounts. Gains and losses are included in the income statement when realised.

(p) Impairment of assets

Goodwill and other assets that have an indefi nite useful life are not subject to amortisation and are tested annually for impairment or more frequently if events or changes in circumstances indicate that they may be impaired. Assets with fi nite lives are subject to amortisation and 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. For the purpose of assessing impairment, assets are grouped at the lowest levels for which there are separately identifi able cash fl ows (cash generating units). Impairment losses recognised in respect of cash generating units are allocated fi rst 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.

(q) 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 of property, plant and equipment where the Group, as lessee, has substantially all the risks and rewards of ownership are classifi ed as fi nance leases. Finance leases are capitalised at the lease’s inception at the fair value of the leased property or, if lower, the present value of the minimum lease payments. The corresponding rental obligations, net of fi nance charges, are included in interest bearing liabilities and borrowings. Each lease payment is allocated between the liability and fi nance cost. The fi nance cost is charged to the income statement over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The property, plant and equipment acquired under fi nance leases are depreciated over the shorter of the asset’s useful life and the lease term.

Leases in which a signifi cant portion of the risks and rewards of ownership are not transferred to the Group as lessee are classifi ed as operating leases. Payments made under operating leases are charged to the income statement on a straight line basis over the period of the lease.

CSL Limited Financial Report 2008-2009 65

CSL LIMITED AND ITS CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS CONTINUED FOR THE YEAR ENDED 30 JUNE 2009

1. Summary of signifi cant accounting policies (continued)

(s) Goodwill and intangibles

i. Goodwill

On acquisition of another entity, the identifi able net assets acquired (including 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 identifi able net assets, is brought to account as goodwill. Goodwill acquired is allocated to each of the cash-generating units expected to benefi t from the combination’s synergies. Goodwill is not amortised. Instead, following initial recognition, goodwill is measured at cost less any accumulated impairment losses.

ii. Intangibles

Intangible assets acquired separately or in a business combination are initially measured at cost. The cost of an intangible asset acquired in a business combination is its fair value as at the date of acquisition. Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and any accumulated impairment losses. Internally generated intangible assets, excluding capitalised development costs, are not capitalised and expenditure is recognised in profi t or loss in the year in which the expenditure is incurred.

The useful lives of intangible assets are assessed to be either fi nite or indefi nite. Intangible assets with fi nite lives are amortised over the useful life and tested for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method for an intangible asset with a fi nite useful life is reviewed at least at each fi nancial year-end. Changes in the expected useful life or the expected pattern of consumption of future economic benefi ts embodied in the asset are accounted for prospectively by changing the amortisation period or method, as appropriate, which is a change in accounting estimate.

Intangible assets with indefi nite useful lives are tested for impairment annually either individually or at the cash generating unit level. Such intangibles are not amortised. The useful life of an intangible asset with an indefi nite life is reviewed each reporting period to determine whether indefi nite life assessment continues to be supportable. If not, the change in the useful life assessment from indefi nite to fi nite is accounted for as a change in an accounting estimate and is thus accounted for on a prospective basis.

iii. Research and development costs

Research costs are expensed as incurred. An intangible asset arising from development expenditure on an internal project is recognised only when the Group can demonstrate: the technical feasibility of completing the intangible asset so that it will be available for use or sale, its intention to complete and its ability to use or sell the asset, how the asset will generate future economic benefi ts, the availability of resources to complete the development and the ability to measure reliably the expenditure attributable to the intangible asset during its development. Following the initial recognition of the development expenditure, the cost model is applied requiring the asset to be carried at cost less any accumulated amortisation and accumulated impairment losses. Any development expenditure so recognised is amortised over the period of expected benefi t from the related project.

(t) Trade and other payables

Liabilities for trade and other payables represent liabilities for goods and services provided to the Group prior to the end of the fi nancial year that are unpaid. Trade and other creditors are non-interest bearing and have various repayment terms but are usually paid within 30 to 60 days of recognition.

(u) Interest-bearing liabilities and borrowings

Interest-bearing liabilities and borrowings are recognised initially at fair value net of transaction 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. Fees paid on the establishment of loan facilities that are yield related are included as part of the carrying amount of the loans and borrowings. Borrowings are classifi ed as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the reporting date.

(v) Derivative fi nancial instruments

The Group uses derivative fi nancial instruments in the form of forward foreign currency contracts to hedge risks associated with foreign currency. Such derivative instruments 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 re-measurement to fair value is recognised immediately in the income statement. The fair value of forward foreign exchange contracts is calculated by reference to current forward exchange rates for contracts with similar maturity profi les.

The Group also has external loans payable that have been designated as a hedge of its investment in foreign subsidiaries (net investment hedge). Gains or losses on the hedging instruments relating to the effective portion of the hedge are recognised directly in equity while any gains or losses relating to the ineffective portion, if any, are recognised immediately in profi t or loss.

66 CSL Limited Financial Report 2008-2009

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CSL LIMITED AND ITS CONTROLLED ENTITIES

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

FOR THE YEAR ENDED 30 JUNE 2009

1. Summary of signifi cant accounting policies (continued)

(w) Provisions

Provisions are recognised when the Group has a present legal or constructive obligation arising from past transactions or events, it is probable that an outfl ow of resources will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are not recognised for future operating losses.

Provisions recognised refl ect management’s best estimate of the expenditure required to settle the present obligation at the reporting date. Where the effect of the time value of money is material, provisions are determined by discounting the expected future cash fl ows required to settle the obligation at a pre-tax discount rate that refl ects the current market assessments of the time value of money and the risks specifi c to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a borrowing cost.

(x) Employee benefi ts

Liabilities for wages and salaries, including non-monetary benefi ts and annual leave expected to be settled within 12 months of the reporting date are recognised in provisions in respect of employees’ services up to the reporting date and are measured at the amounts expected to be paid when the liabilities are settled.

The liability for long service leave is recognised in the provision for employee benefi ts and measured as the present value of expected future payments to be made in respect of services provided by employees up to the reporting date. 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 terms to maturity and currency that match, as closely as possible, the estimated future cash outfl ows.

(y) Pension plans

The Group contributes to defi ned benefi t and defi ned contribution pension plans for the benefi t of all employees. Defi ned benefi t pension plans provide defi ned lump sum benefi ts based on years of service and fi nal average salary. Defi ned contribution plans receive fi xed contributions from the Group and the Group’s legal and constructive obligation is limited to these contributions.

A liability or asset in respect of defi ned benefi t pension plans is recognised in the balance sheet, and is measured as the present value of the defi ned benefi t obligation at the reporting date less the fair value of the pension fund’s assets at that date and any unrecognised past service cost. The present value of the defi ned benefi t 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 outfl ows. Actuarial 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 pension fund are conditional on the employees remaining in service for a specifi ed 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 benefi t obligation are taken into account in measuring the net liability or asset.

Contributions to defi ned contribution pension plans are recognised as an expense as they become payable.

CSL Limited Financial Report 2008-2009 67

CSL LIMITED AND ITS CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS CONTINUED FOR THE YEAR ENDED 30 JUNE 2009

1. Summary of signifi cant accounting policies (continued)

(z) Share-based payment transactions

The Group provides benefi ts to its employees (including key management personnel) in the form of share-based payments, whereby employees render services in exchange for rights over shares (equity settled transactions). There are currently two plans in place to provide these benefi ts, namely the ‘Senior Executive Share Ownership Plan and Employee Performance Rights Plan’ and the ‘Global Employee Share Plan’.

Under the ‘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 Group and the individual achieve certain performance hurdles.

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

The fair value of options or rights is recognised as an employee benefi t expense with a corresponding increase in equity. The fair value is independently measured at grant date and recognised over the period during which the employees become unconditionally entitled to the options or rights. The fair value at grant date is independently determined using a combination of the Binomial and Black Scholes 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 Parent Company revises its estimate of the number of options and rights that are expected to vest. The employee benefi t 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 and that market condition is not met.

Share based payment awards granted by CSL Limited, the Parent Company, to the employees of its subsidiaries are recognised in the Parent Company’s separate fi nancial statements as an additional investment in the subsidiary with a corresponding credit to the share based payment reserve in equity. Effective 2008 and in accordance with the requirements of AASB Interpretation 11, the share based payment expense was refl ected in the entity whose employees benefi t from the share based payment award.

(aa) Contributed equity

Ordinary shares are classifi ed as equity. Incremental costs directly attributable to the issue of new shares are shown in equity as a deduction, net of tax, from the proceeds. Where the Parent Company reacquires its own shares, for example as a result of a share buy-back, those shares are cancelled. No gain or loss is recognised in the profi t or loss and the consideration paid to acquire the shares, including any directly attributable transaction costs net of income taxes, is recognised directly as a reduction from equity.

(bb) Earnings per share

Basic earnings per share is calculated by dividing the profi t attributable to equity holders of the Parent Company, excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during the fi nancial year.

Diluted earnings per share adjusts the fi gures used in the determination of basic earnings per share to take into account the after tax effect of interest and other fi nancing costs associated with dilutive potential ordinary shares and the weighted average number of additional ordinary shares that would have been outstanding assuming the conversion of all dilutive potential ordinary shares.

(cc) Dividends

Provision is made for the amount of any dividend declared, being appropriately authorised and no longer at the discretion of the entity, on or before the end of the fi nancial year but not distributed at balance date.

68 CSL Limited Financial Report 2008-2009

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CSL LIMITED AND ITS CONTROLLED ENTITIES

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

FOR THE YEAR ENDED 30 JUNE 2009

1. Summary of signifi cant accounting policies (continued)

(dd) New and revised standards and interpretations not yet adopted

Certain new and revised accounting standards and interpretations have been published that are not mandatory for the 30 June 2009 reporting period. With the exception of AASB 8, both the Group and the Parent Company have chosen not to early adopt these standards. An assessment of the impact of these new standards and interpretations is set out below.

i. AASB 8 Operating Segments replaces the presentation requirements of segment reporting in AASB 114 Segment Reporting. AASB 8 is applicable for annual reporting periods beginning on or after 1 January 2009 and as detailed in Note 1(a) the Group has elected to early adopt the standard in the preparation of Note 2.
ii. AASB 123 Borrowing Costs and AASB 2007-6 Amendments to Australian Accounting Standards arising from AASB 123 are applicable for reporting periods beginning on or after 1 January 2009. The revised AASB 123 has removed the option to expense all borrowing costs and, when adopted, will require the capitalisation of all borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset. There will be no material impact on the Group’s fi nancial report on adoption of this standard as the Group already capitalises directly attributable borrowing costs relating to qualifying assets.
iii. Revised AASB 101 Presentation of Financial Statements and consequential amendments as outlined in AASB 2007-8 and AASB 2007-10 are applicable to reporting periods beginning on or after 1 January 2009. These standards introduce a statement of comprehensive income, which in general discloses those items currently disclosed in the Statement of Recognised Income and Expenses, as well as other minor presentation changes. The amendments are expected to only affect the presentation of the Group’s fi nancial report and will not have a material impact on the measurement and recognition of amounts under the current AASB 101. The Group will apply the revised standard from 1 July 2009.
iv. AASB Interpretation 16 Hedges of a Net Investment in a Foreign Operation is applicable to reporting periods beginning on or after 1 October 2008. This interpretation clarifi es which foreign currency risks qualify as hedged risk in the hedge of a net investment in a foreign operation and that hedging instruments may be held by any entity or entities within the Group. The Group will apply the interpretation prospectively from 1 July 2009. There will be no material impact on the way the Group accounts for existing hedges of net investments in foreign subsidiaries.

(ee) Critical accounting estimates and judgements

The preparation of the fi nancial statements requires management to make judgements, estimates and assumptions that affect the reported amounts in the fi nancial statements. Management continually evaluates its judgements and estimates in relation to assets, liabilities, contingent liabilities, revenue and expenses. Management bases its judgements and estimates on historical experience and on other various factors it believes to be reasonable under the circumstances, the result of which form the basis of the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions and conditions. The estimates and assumptions that have a signifi cant risk of causing a material adjustment to the carrying amounts of assets and liabilities within subsequent fi nancial years are discussed below.

i. Testing goodwill and intangible assets for impairment

On an annual basis, the Group determines whether goodwill and its indefi nitely lived intangible assets are impaired in accordance with the accounting policy described in note 1(s). In the context of goodwill allocated to specifi c cash generating units, this requires an estimation of the recoverable amount of the cash generating units using a value in use discounted cash fl ow methodology. In the context of indefi nite lived intangible assets, this requires an estimation of the discounted net cash infl ows that may be generated through the use or sale of the intangible asset. The assumptions used in estimating the carrying amount of goodwill and indefi nite lived intangibles are detailed in note 12.

ii. Income taxes

Judgements are required about the application of income tax legislation in jurisdictions in which the Group operates. These judgements and assumptions are subject to risk and uncertainty, hence there is a possibility that changes in circumstances will alter expectations, which may impact the carrying amount of deferred tax assets and deferred tax liabilities recognised on the balance sheet. In such circumstances an adjustment to the carrying value of a deferred tax item will result in a corresponding credit or charge to the income statement.

CSL Limited Financial Report 2008-2009 69

CSL LIMITED AND ITS CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS CONTINUED FOR THE YEAR ENDED 30 JUNE 2009

2 Segment Information

Description of Segments

Reportable segments are:

CSL Behring – manufactures, markets and develops plasma products.
Intellectual Property Licensing – revenue and associated expenses from the licensing to unrelated third parties of Intellectual Property generated by the Group. This is a new reporting segment.
Other Human Health – comprises CSL Bioplasma and CSL Biotherapies. These businesses manufacture and distribute biotherapeutic products and are disclosed in aggregate as they exhibit similar economic characteristics.

Geographical areas of operation

The Group operates predominantly in four specifi c geographic areas, namely Australia, the United States of America, Switzerland, and Germany. The rest of the Group’s operations are spread across many countries and are collectively disclosed as ‘Rest of World’ in note 2.

Segment Accounting Policies

Inter-segment sales are carried out on an arm’s length basis and refl ect current market prices. Segment accounting policies are the same as the Group’s policies described in note 1. During the fi nancial year, there were no changes in segment accounting policies.

70 CSL Limited Financial Report 2008-2009

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CSL LIMITED AND ITS CONTROLLED ENTITIES

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

FOR THE YEAR ENDED 30 JUNE 2009

2 Segment Information (continued)

		Intellectual
		Property	Other Human	Intersegment	Consolidated
	CSL Behring	Licensing	Health	Elimination	Group
	2009	2009	2009	2009	2009
	$000	$000	$000	$000	$000
Sales to external customers	3,786,429	-	835,958	-	4,622,387
Inter-segment sales	112,024	-	6,147	(118,171)	-
Other revenue / other Income
(excl interest income)	10,666	165,282	8,954	-	184,902
Total segment revenue	3,909,119	165,282	851,059	(118,171)	4,807,289
Interest income					63,444
Unallocated revenue / income					168,672
Consolidated revenue					5,039,405
Segment EBIT	1,203,010	141,171	12,161	-	1,356,342
Unallocated revenue / income less
unallocated costs					11,870
Consolidated EBIT					1,368,212
Interest income					63,444
Finance costs					(61,909)
Consolidated prof t before tax					1,369,747
Income tax expense					(223,815)
Consolidated net prof t after tax					1,145,932
Amortisation and impairment loss	31,290	-	20,053	-	51,343
Depreciation	91,033	-	37,567	-	128,600
Segment EBITDA	1,325,333	141,171	69,781	-	1,536,285
Unallocated revenue / income less
unallocated costs					11,870
Unallocated depreciation
and amortisation					1,663
Consolidated EBITDA					1,549,818
Segment assets	4,686,061	33,051	748,707	(112,039)	5,355,780
Other unallocated assets					2,581,910
Elimination of amounts between
operating segments and unallocated					(570,875)
Total assets					7,366,815
Segment liabilities	1,537,109	5,481	379,261	(112,039)	1,809,812
Other unallocated liabilities					664,983
Elimination of amounts between
operating segments and unallocated					(570,875)
Total liabilities					1,903,920
Other information
Segment capital expenditure	214,027	-	71,584	-	285,611

CSL Limited Financial Report 2008-2009 71

CSL LIMITED AND ITS CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS CONTINUED FOR THE YEAR ENDED 30 JUNE 2009

2 Segment Information (continued)

		Intellectual
		Property	Other Human	Intersegment	Consolidated
	CSL Behring	Licensing	Health	Elimination	Group
	2008	2008	2008	2008	2008
	$000	$000	$000	$000	$000
Sales to external customers	2,822,359	-	734,303	-	3,556,662
Inter-segment sales	57,262	-	2,675	(59,937)	-
Other revenue / other income
(excl interest income)	4,208	185,323	17,450	-	206,981
Total segment revenue	2,883,829	185,323	754,428	(59,937)	3,763,643
Interest income					35,175
Unallocated revenue / income					4,554
Consolidated revenue					3,803,372
Segment EBIT	793,042	139,299	62,735	-	995,076
Unallocated revenue / income less
unallocated costs					(28,431)
Consolidated EBIT					966,645
Interest income					35,175
Finance costs					(49,796)
Consolidated prof t before tax					952,024
Income tax expense					(250,222)
Consolidated net prof t after tax					701,802
Amortisation	25,428	9,425	4,180	-	39,033
Depreciation	65,804	-	35,249	-	101,053
Segment EBITDA	884,274	148,724	102,164	-	1,135,162
Unallocated revenue / income less
unallocated costs					(28,431)
Unallocated depreciation
and amortisation					1,713
Consolidated EBITDA					1,108,444
Segment assets	3,579,450	35,356	676,198	(32,275)	4,258,729
Other unallocated assets					983,501
Elimination of amounts between
operating segments and unallocated					(547,266)
Total assets					4,694,964
Segment liabilities	1,285,813	5,518	234,278	(32,275)	1,493,334
Other unallocated liabilities					942,771
Elimination of amounts between
operating segments and unallocated					(547,266)
Total liabilities					1,888,839
Other information
Segment capital expenditure	155,901	-	62,185	-	218,086

72 CSL Limited Financial Report 2008-2009

==> picture [595 x 13] intentionally omitted <==

CSL LIMITED AND ITS CONTROLLED ENTITIES

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

FOR THE YEAR ENDED 30 JUNE 2009

2 Segment Information (continued)

		United			Rest of
Geographic areas	Australia	States	Switzerland	Germany	world	Total
June 2009	$000	$000	$000	$000	$000	$000
External sales revenue	613,269	1,739,585	199,752	759,915	1,309,866	4,622,387
Property, plant, equipment
and intangible assets	417,347	428,748	1,038,129	265,193	22,632	2,172,049
June 2008
External revenues	632,925	1,224,677	105,218	603,332	990,510	3,556,662
Property, plant, equipment
and intangible assets	405,792	321,286	923,388	216,879	19,101	1,886,446

		Consolidated Group	Consolidated Group	Parent	Company
		2009	2008	2009	2008
		$000	$000	$000	$000
3	Revenue and expenses from continuing operations
	Revenue
	Sales revenue	4,622,387	3,556,662	569,212	553,674
	Other revenue
	Royalties and licence revenue	165,282	185,323	165,282	185,323
	Trust distribution revenue	-	7,325	-	7,325
	Finance revenue	63,444	35,175	2,510	943
	Rent	1,049	1,155	1,049	1,155
	Dividend revenue – subsidiaries	-	-	334,346	324,959
	Other revenue	17,891	8,652	7,224	4,445
	Total other revenues	247,666	237,630	510,411	524,150
	Total revenue from continuing operations	4,870,053	3,794,292	1,079,623	1,077,824
	Finance revenue comprises:
	Interest income:
	Other persons and/or corporations	63,391	35,141	2,457	909
	Key management personnel	53	34	53	34
		63,444	35,175	2,510	943
	Other income
	Government grants	680	4,526	680	4,526
	Net foreign exchange gain	168,672	4,554	8,594	-
	Total other income	169,352	9,080	9,274	4,526

The Group has entered into various grant agreements relating to the development, commercialisation and production of pharmaceutical products. The grants received are deferred until all conditions or other contingencies attaching to them have been satisfi ed, at which time they are recognised as other income over the period necessary to match them with the expenses that they are intended to compensate.

Finance costs
Interest expense:
Other persons and/or corporations	61,909	49,623	-	437
Non-cash interest – unwinding of discount	-	173	-	-
Total f nance costs	61,909	49,796	-	437

CSL Limited Financial Report 2008-2009 73

CSL LIMITED AND ITS CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS CONTINUED FOR THE YEAR ENDED 30 JUNE 2009

			Consolidated Group	Consolidated Group	Parent	Company
			2009	2008	2009	2008
		Notes	$000	$000	$000	$000
3	Revenue and expenses (continued)
	Depreciation and amortisation
	included in the income statement
	Depreciation and amortisation of f xed assets
	Building depreciation	10	12,990	10,778	5,381	4,534
	Plant and equipment depreciation	10	109,675	86,887	32,782	31,353
	Leased property, plant and equipment amortisation	10	3,822	2,573	-	-
	Leasehold improvements amortisation	10	3,776	2,528	797	598
	Total depreciation and amortisation of f xed assets		130,263	102,766	38,960	36,485
	Amortisation of intangibles
	Intellectual Property	12	35,470	39,033	-	9,425
	Total amortisation of intangibles		35,470	39,033	-	9,425
	Impairment loss
	Intellectual Property	12	15,873	1,647	-	-
	Total depreciation, amortisation and impairment expense		181,606	143,446	38,960	45,910
	Other expenses
	Write-down of inventory to net realisable value		74,566	65,004	3,739	12,524
	Doubtful debts		4,331	3,071	-	-
	Net loss on disposal of property, plant and equipment		1,170	917	407	850
	Impairment loss on available for sale asset		-	5,000	-	5,000
	Net foreign exchange loss		-	-	-	62
	Lease payments and related expenses
	included in the income statement
	Rental expenses relating to operating leases		42,562	33,534	2,424	2,264
	Employee benef ts expense
	Salaries and wages		1,013,194	808,497	171,904	163,564
	Def ned benef t plan expense	26(a)	19,818	14,740	1,717	1,465
	Def ned contribution plan expense	26(b)	19,433	15,854	11,605	10,934
	Share based payments expense	21	16,801	12,607	7,972	6,266
			1,069,246	851,698	193,198	182,229

74 CSL Limited Financial Report 2008-2009

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CSL LIMITED AND ITS CONTROLLED ENTITIES

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

FOR THE YEAR ENDED 30 JUNE 2009

	Consolidated Group	Consolidated Group	Parent Company
	2009	2008	2009	2008
Notes	$000	$000	$000	$000

3 Revenue and expenses (continued)

Signifi cant items included in the calculation of profi t after tax

i. Discontinued acquisition and related costs.

In August 2008 the Group entered into a contract to acquire Talecris Biotherapeutics Holdings Corp. This transaction was opposed by regulators in the US and the contract terminated by agreement of the parties in June 2009.

Equity capital raised in August 2008 was converted to US Dollars and placed on interest bearing deposit and subsequently converted back to Australian Dollars giving rise to a foreign exchange gain. In addition, the Group incurred a break fee on termination of the contract, costs associated with the establishment of fi nancing facilities and professional fees. These items are considered to be signifi cant items and are non-recurring in nature. The amounts involved are set out below with a reference to the relevant line item in the income statement.

Interest income (Other Revenue) Foreign exchange gain (Other Income) Finance facility costs (Finance Costs) Break Fee (General & Administration Expenses) Professional Fees (General & Administration Expenses) Net impact on prof t before tax Tax benef t Net impact on prof t after tax	32,800 - - - 157,300 - - - (26,100) - - - (95,396) - - - (38,504) - - -
	30,100 - - - 48,582 - - -
	78,682 - - -

ii. Revaluation of certain deferred tax assets

While unrealised profi ts on inter-company transactions are eliminated on consolidation the shipping of inventory from one jurisdiction to another does result in a deferred tax balance being recorded in accordance with AASB112 – Income Taxes. During 2009 increasing divergence in the tax rates applicable to the selling and buying entity have necessitated an upwards revaluation of the deferred tax asset. The benefi t on revaluation is considered signifi cant in the context of the 2009 result. The amount involved is set out below and by its nature is volatile from one year to the next:

Benef t realised on the revaluation of certain deferred tax assets	32,356 - - -

CSL Limited Financial Report 2008-2009 75

CSL LIMITED AND ITS CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS CONTINUED FOR THE YEAR ENDED 30 JUNE 2009

			Consolidated Group	Consolidated Group	Parent Company	Parent Company
			2009	2008	2009	2008
		Notes	$000	$000	$000	$000
4	Income tax expense
	Income tax expense recognised in the income statement
	*Current tax expense*
	Current year		230,735	304,734	4,800	40,720
	*Deferred tax expense*
	Origination and reversal of temporary differences	11	6,654	(33,603)	422	(5,393)
	Tax losses recognised		(3,782)	(16,765)	-	-
			2,872	(50,368)	422	(5,393)
	Under/(over) provided in prior years		(9,792)	(4,144)	(13,041)	(2,216)
	Income tax expense		223,815	250,222	(7,819)	33,111
	Reconciliation between tax expense and pre-tax net prof t
	The reconciliation between tax expense and the product of
	accounting prof t before income tax multiplied by the Group’s
	applicable income tax rate is as follows:
	Accounting prof t before income tax		1,369,747	952,024	405,376	466,938
	Income tax calculated at 30% (2008: 30%)		410,924	285,607	121,613	140,081
	Research and development		(14,245)	(9,907)	(14,112)	(9,907)
	Exempt dividends received		-	-	(100,304)	(97,488)
	Other non-deductible/(non-assessable) items		(58,826)	20,857	(1,975)	2,641
	Utilisation of tax losses/unrecognised deferred tax		(3,782)	(18,154)	-	-
	Revaluation of deferred tax balances		(7,180)	(19,867)	-	-
	Effects of different rates of tax on overseas income		(93,284)	(4,170)	-	-
	Under/(over) provision in prior year		(9,792)	(4,144)	(13,041)	(2,216)
	Income tax expense (benef t)		223,815	250,222	(7,819)	33,111
	Income tax recognised directly in equity
	*Deferred tax benef t/(expense)*
	Share based payments	21	11,685	(8,324)	10,941	(1,092)
	Net actuarial (gain)/loss on def ned benef t plans	22	12,056	855	2,458	1,275
	Income tax benef t/(expense) recognised in equity	11	23,741	(7,469)	13,399	183

Tax consolidation in Australia

The Parent Company and its wholly owned Australian resident entities formed a tax consolidation group with effect from 1 July 2003 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 arising from temporary differences of the members of the tax consolidation group are recognised in the separate fi nancial 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 fi nancial 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 or from other entities in the tax consolidated group in conjunction with any tax funding arrangement amounts (refer below).

The Parent 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 profi ts of the tax consolidated group will be available against which the asset can be utilised.

76 CSL Limited Financial Report 2008-2009

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CSL LIMITED AND ITS CONTROLLED ENTITIES

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

FOR THE YEAR ENDED 30 JUNE 2009

4 Income tax (continued)

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 liability/ (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 inter-entity payable/(receivable) is at call.

Contributions to fund the current tax liabilities are payable as per the tax funding arrangement and refl ect 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 liabilities between the entities should the head entity default on its tax payment obligations. No amounts have been recognised in the fi nancial statements in respect of this agreement as payment of any amount under the tax sharing agreement is considered remote.

		Consolidated Group	Consolidated Group
		2009	2008
		$000	$000
5	Earnings Per Share
	Earnings used in calculating basic and dilutive earnings per share comprises:
	Prof t attributable to ordinary shareholders	1,145,932	701,802
		Number	of shares
		2009	2008
	Weighted average number of ordinary shares used in the calculation of basic earnings per share:	595,243,751	550,105,914
	Effect of dilutive securities:
	Senior Executive Share Ownership Plan options	642,387	999,873
	Employee Performance Rights	1,765,691	2,147,977
	Global Employee Share Plan	2,302	11,805
	Adjusted weighted average number of ordinary shares
	used in the calculation of diluted earnings per share:	597,654,131	553,265,569

Conversions, calls, subscription or issues after 30 June 2009

Subsequent to 30 June 2009, 975 shares have been issued to employees as a result of the exercise of performance rights and performance options and 67,800 shares have been issued as a result of the exercise of SESOP II options. There have been no other conversions to, calls of, or subscriptions for ordinary shares or issues of ordinary or potential ordinary shares since the reporting date and before the completion of this fi nancial report.

Options and performance rights

Options and performance rights granted to employees are considered to be potential ordinary shares that have been included in the determination of diluted earnings per share to the extent to which they are dilutive. The options and rights have not been included in the determination of basic earnings per share.

	determination of basic earnings per share.
		Consolidated Group		Parent Company
		2009	2008	2009	2008
		$000	$000	$000	$000
6	Cash and cash equivalents
	Cash at bank and on hand	410,278	156,927	-	-
	Cash deposits	2,117,819	544,663	-	-
		2,528,097	701,590	-	-

Note 25(a) contains a reconciliation of the above fi gures to cash at the end of the fi nancial year as shown in the statement of cash fl ows.

CSL Limited Financial Report 2008-2009 77

CSL LIMITED AND ITS CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS CONTINUED FOR THE YEAR ENDED 30 JUNE 2009

		Consolidated Group	Consolidated Group	Parent	Company
		2009	2008	2009	2008
		$000	$000	$000	$000
7	Trade and other receivables
	*Current*
	Trade receivables	779,140	615,656	33,376	26,490
	Less: Provision for impairment loss (i)	(20,254)	(20,415)	(118)	(118)
		758,886	595,241	33,258	26,372
	Sundry receivables	99,992	86,315	58,283	56,453
	Prepayments	27,006	27,834	2,834	2,285
	Receivables – wholly owned subsidiaries	-	-	2,805,438	584,154
	Receivables – partly owned subsidiaries	-	-	199	2,560
	Carrying amount of current trade and other receivables*	885,884	709,390	2,900,012	671,824
	*Non Current*
	Related parties
	Loans to key management personnel – executive directors**	-	46	-	46
	Loans to key management personnel – other executives**	620	701	1,599	701
	Loans to other employees	5,788	4,085	4,809	4,085
	Long term deposits	3,817	3,328	-	-
	Carrying amount of non current trade and other receivables*	10,225	8,160	6,408	4,832

The carrying amount disclosed above is a reasonable approximation of fair value. The maximum exposure to credit risk at the reporting date is the carrying amount of each class of receivable disclosed above. Refer to note 34 for more information on the risk management policy of the Group and the credit quality of trade receivables.
** Further information relating to loans to key management personnel is set out in note 28.

(i) Past due but not impaired and impaired trade receivables

As at 30 June 2009, the Parent Company and the Group had current trade receivables which were impaired and which had nominal values of $118,160 (2008: $118,160) and $20,253,449 (2008: $20,414,587) respectively. These receivables have been fully provided for within the company’s and the Group’s respective provisions for impairment loss. Amounts charged to the provision account are generally written off when there is no expectation of recovering additional cash. Movements in the provision for impairment loss are reconciled as follows:

Opening balance at 1 July	20,415	18,853	118	423
Additional allowance / (utilised)	(168)	1,260	-	(305)
Currency translation differences	7	302	-	-
Closing balance at 30 June	20,254	20,415	118	118

Debts which are past due and not impaired are set out in the credit risk analysis in note 34.

(ii) Other receivables

The other classes within trade and other receivables do not contain impaired or overdue receivable amounts and it is expected that all of these amounts will be received when due. Loans provided to key management personnel to purchase the company’s shares on the exercise of options are secured against those shares. Neither the company nor the Group holds any collateral in respect to other receivable balances.

8 Inventories

8 Inventories
Raw materials and stores – at cost	375,408	241,679	24,395	19,784
Less: Allowance for diminution in value	(7,008)	(2,546)	(389)	(407)
Raw materials and stores – net	368,400	239,133	24,006	19,377
Work in progress – at cost	549,458	506,467	40,287	29,454
Less: Allowance for diminution in value	(27,785)	(28,731)	(6,627)	(7,415)
Work in progress – net	521,673	477,736	33,660	22,039
Finished goods – at cost	647,634	494,828	33,323	36,876
Less: Allowance for diminution in value	(15,668)	(13,564)	(881)	(839)
Finished goods - net	631,966	481,264	32,442	36,037
Total inventories at the lower of cost and net realisable value	1,522,039	1,198,133	90,108	77,453

78 CSL Limited Financial Report 2008-2009

==> picture [595 x 13] intentionally omitted <==

CSL LIMITED AND ITS CONTROLLED ENTITIES

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

FOR THE YEAR ENDED 30 JUNE 2009

		Consolidated Group	Consolidated Group	Parent	Company
		2009	2008	2009	2008
		$000	$000	$000	$000
9	Other f nancial assets
	*Current*
	At fair value through the prof t or loss:
	Managed f nancial assets (held for trading)	854	1,513	-	-
	*Non-current*
	At fair value through the prof t or loss:
	Managed f nancial assets	8,397	8,442	-	-
	Shares in subsidiaries – at cost (refer note 32)	-	-	1,348,974	1,340,144
	Total non-current other f nancial assets as at 30 June	8,397	8,442	1,348,974	1,340,144
10	Property, Plant and Equipment
	Land at cost
	Opening balance 1 July	25,437	25,594	25,030	25,030
	Disposals	-	-	-	-
	Currency translation differences	152	(157)	-	-
	Closing balance 30 June	25,589	25,437	25,030	25,030
	Buildings at cost
	Opening balance 1 July	256,511	224,081	121,260	92,138
	Transferred from capital work in progress	20,921	32,668	1,183	29,122
	Other additions	465	656	-	-
	Disposals	(722)	-	(81)	-
	Transfers	(27,024)	-	-	-
	Currency translation differences	16,605	(894)	-	-
	Closing balance 30 June	266,756	256,511	122,362	121,260
	Accumulated depreciation and impairment losses
	Opening balance 1 July	61,813	52,699	35,235	30,701
	Depreciation for the year	12,990	10,778	5,381	4,534
	Disposals	(640)	-	(3)	-
	Transfers	(19,512)	-	-	-
	Currency translation differences	4,051	(1,664)	-	-
	Closing balance 30 June	58,702	61,813	40,613	35,235
	Net book value of buildings	208,054	194,698	81,749	86,025
	Net book value of land and buildings	233,643	220,135	106,779	111,055
	Leasehold improvements at cost
	Opening balance 1 July	14,399	8,772	8,128	159
	Transferred from capital work in progress	18,760	9,847	-	7,969
	Other additions	1,519	429	-	-
	Disposals	(1,447)	(2,112)	-	-
	Transfers	29,127	-	-	-
	Currency translation differences	5,121	(2,537)	-	-
	Closing balance 30 June	67,479	14,399	8,128	8,128
	Accumulated amortisation and impairment
	Opening balance 1 July	1,812	2,497	757	159
	Amortisation for the year	3,776	2,528	797	598
	Disposals	(1,432)	(1,742)	-	-
	Transfers	20,792	-	-	-
	Currency translation differences	4,663	(1,471)	-	-
	Closing balance 30 June	29,611	1,812	1,554	757
	Net book value of leasehold improvements	37,868	12,587	6,574	7,371

CSL Limited Financial Report 2008-2009 79

CSL LIMITED AND ITS CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS CONTINUED FOR THE YEAR ENDED 30 JUNE 2009

		Consolidated Group	Consolidated Group	Parent	Company
		2009	2008	2009	2008
		$000	$000	$000	$000
10	Property, Plant and Equipment (continued)
	Plant and equipment at cost
	Opening balance 1 July	1,098,728	993,405	584,702	533,075
	Transferred from capital work in progress	183,788	107,377	8,695	52,973
	Other additions	17,146	20,969	-	-
	Disposals	(31,857)	(12,675)	(484)	(1,346)
	Transfers	4,083	-	-	-
	Currency translation differences	80,915	(10,348)	-	-
	Closing balance 30 June	1,352,803	1,098,728	592,913	584,702
	Accumulated depreciation and impairment
	Opening balance 1 July	591,608	527,778	396,930	366,074
	Depreciation for the year	109,675	86,887	32,782	31,353
	Disposals	(29,970)	(11,348)	(154)	(497)
	Transfers	(1,280)	-	-	-
	Currency translation differences	60,857	(11,709)	-	-
	Closing balance 30 June	730,890	591,608	429,558	396,930
	Net book value of plant and equipment	621,913	507,120	163,355	187,772
	Leased property, plant and equipment at cost
	Opening balance 1 July	36,893	33,344	-	-
	Other additions	7,691	2,352	-	-
	Disposals	(1,698)	(318)	-	-
	Currency translation differences	2,407	1,515	-	-
	Closing balance 30 June	45,293	36,893	-	-
	Accumulated amortisation and impairment
	Opening balance	11,821	8,867	-	-
	Amortisation for the year	3,822	2,573	-	-
	Disposals	(1,102)	(299)	-	-
	Currency translation differences	1,406	680	-	-
	Closing balance 30 June	15,947	11,821	-	-
	Net book value of leased property, plant and equipment	29,346	25,072	-	-
	Capital work in progress
	Opening balance 1 July	211,022	165,539	42,044	70,006
	Other additions	266,481	196,032	70,975	62,102
	Transferred to buildings at cost	(20,921)	(32,668)	(1,183)	(29,122)
	Transferred to plant and equipment at cost	(183,788)	(107,377)	(8,695)	(52,973)
	Transferred to leasehold improvements at cost	(18,760)	(9,847)	-	(7,969)
	Transfers	(6,186)	-	-	-
	Currency translation differences	26,884	(657)	-	-
	Closing balance 30 June	274,732	211,022	103,141	42,044
	Total net book value of property, plant and equipment	1,197,502	975,936	379,849	348,242

80 CSL Limited Financial Report 2008-2009

==> picture [595 x 13] intentionally omitted <==

CSL LIMITED AND ITS CONTROLLED ENTITIES

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

FOR THE YEAR ENDED 30 JUNE 2009

		Consolidated Group	Consolidated Group	Parent	Company
		2009	2008	2009	2008
		$000	$000	$000	$000
11	Deferred tax assets and liabilities
	Deferred tax asset	227,096	173,238	12,384	-
	Deferred tax liability	(108,062)	(93,677)	-	(593)
	Net deferred tax asset / (liability)	119,034	79,561	12,384	(593)
	Deferred tax balances ref ect
	temporary differences attributable to:
	Amounts recognised in the income statement
	Trade and other receivables	3,651	6,464	(109)	(1,062)
	Inventories	75,380	30,647	(3,615)	(1,480)
	Property, plant and equipment	(54,887)	(54,694)	(16,864)	(17,344)
	Intangible assets	(8,874)	(7,828)	-	-
	Other assets	189	(546)	-	15
	Trade and other payables	11,072	9,179	7,977	7,253
	Interest bearing liabilities	4,279	4,248	-	-
	Other liabilities and provisions	35,940	64,647	14,577	13,096
	Recognised carry-forward tax losses	17,864	16,765	-	-
		84,614	68,882	1,966	478
	Amounts recognised in equity
	Other assets	18,416	6,731	9,031	-
	Other liabilities and provisions	16,004	3,948	1,387	(1,071)
		34,420	10,679	10,418	(1,071)
	Net deferred tax asset/(liability)	119,034	79,561	12,384	(593)
	Movement in temporary differences during the year
	Opening balance	79,561	65,141	(593)	7,670
	Credited/(charged) to the income statement	(6,654)	33,603	(422)	5,393
	Credited/(charged) to equity	23,741	(7,469)	13,399	183
	Amounts transferred to subsidiaries	-	-	-	(13,839)
	Currency translation difference	22,386	(11,714)	-	-
	Closing balance	119,034	79,561	12,384	(593)
	Unrecognised deferred tax assets
	Deferred tax assets have not been recognised in respect of the following items:
	Tax losses:
	Expiry date in less than 1 year	-	22	-	-
	Expiry date greater than 1 year but less than 5 years	132	-	-	-
	Expiry date greater than 5 years	-	-	-	-
	No expiry date	954	5,285	-	-
		1,086	5,307	-	-

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

CSL Limited Financial Report 2008-2009 81

CSL LIMITED AND ITS CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS CONTINUED FOR THE YEAR ENDED 30 JUNE 2009

			Consolidated Group	Consolidated Group	Parent	Company
			2009	2008	2009	2008
		Notes	$000	$000	$000	$000
12	Intangible Assets
	Carrying amounts
	Goodwill
	Opening balance at 1 July		672,519	655,665	-	-
	Currency translation differences		85,779	16,854	-	-
	Closing balance at 30 June		758,298	672,519	-	-
	Intellectual property
	Opening balance at 1 July		330,356	321,708	20,000	20,000
	Additions		-	-	-	-
	Disposals		(59)	(48)	-	-
	Currency translation differences		37,668	8,696	-	-
	Closing balance at 30 June		367,965	330,356	20,000	20,000
	Accumulated amortisation and impairment
	Opening balance at 1 July		92,365	49,779	20,000	10,575
	Amortisation for the year		35,470	39,033	-	9,425
	Current year impairment charge	3	15,873	1,647	-	-
	Amortisation written back on disposal		(59)	(48)	-	-
	Currency translation differences		8,067	1,954	-	-
	Closing balance at 30 June		151,716	92,365	20,000	20,000
	Net intellectual property		216,249	237,991	-	-
	Total net intangible assets as at 30 June		974,547	910,510	-	-

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

Impairment tests for cash generating units containing goodwill

For the purpose of impairment testing, goodwill is allocated to the business unit which represents the lowest level within the Group at which the goodwill is monitored for internal management purposes.

The aggregate carrying amounts of goodwill allocated to each unit are as follows:

CSL Behring	746,215	660,436	-	-
CSL Biotherapies	12,083	12,083	-	-
Closing balance of goodwill as at 30 June	758,298	672,519	-	-

The impairment tests for these cash generating units is based on value in use calculations. These calculations use cash fl ow projections based on actual operating results and the three-year strategic business plan, after which 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 fl ows have been discounted by using the implied pre-tax discount rate of 11.7% (2008: 11%) associated with the business valuation multiple discussed above.

Each unit’s recoverable amount exceeds the carrying value of its net assets, inclusive of goodwill. It is not considered a reasonable possibility for a change in assumptions to occur that would lead to a unit’s recoverable amount falling below the carrying value of each unit’s respective net assets.

82 CSL Limited Financial Report 2008-2009

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CSL LIMITED AND ITS CONTROLLED ENTITIES

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

FOR THE YEAR ENDED 30 JUNE 2009

		Consolidated Group	Consolidated Group	Parent	Company
		2009	2008	2009	2008
		$000	$000	$000	$000
13	Retirement benef t assets and liabilities
	Retirement benef t assets
	Non-current def ned benef t plans (refer note 26)	-	8,052	-	3,518
	Retirement benef t liabilities
	Non-current def ned benef t plans (refer note 26)	133,894	85,571	2,772	-
14	Trade and other payables
	*Current*
	Trade payables	271,835	160,630	71,865	50,232
	Accruals and other payables	391,983	284,093	64,862	14,964
	Payable – wholly owned subsidiaries	-	-	1,012,484	619,624
	Carrying amount of current trade and other payables	663,818	444,723	1,149,211	684,820
15	Interest-bearing liabilities and borrowings
	*Current*
	Bank overdrafts – Unsecured	5,905	5,994	55,055	5,789
	Bank loans – Unsecured (a)	305,518	104,001	-	-
	Senior Unsecured Notes - Unsecured (b)	17,706	15,313	-	-
	Lease liability – Secured (c)	3,229	2,744	-	-
		332,358	128,052	55,055	5,789
	*Non-current*
	Bank loans - Unsecured (a)	96,468	554,253	-	-
	Senior Unsecured Notes - Unsecured (b)	248,851	235,800	-	-
	Lease liability - Secured (c)	40,101	35,081	-	-
		385,420	825,134	-	-

(a) During the year the one year tranche ($250m) of the Group’s global multicurrency facility matured. The facility has two tranches with maturity dates in March 2010 ($400m) and March 2012 ($250m). Interest on the facility is paid quarterly in arrears at a variable rate. As at the reporting date the Group had $248m in undrawn funds available under this facility.

(b) Represents US$127.9 million and Euro 63.1 million of Senior Unsecured Notes placed into the US Private Placement market. The notes have biannual repayments and mature in December 2012. The interest rate on the US$ notes is fi xed at 5.30% and 5.90%. The interest

(c) Finance leases have an average lease term of 14 years (2008: 15 years). The weighted average discount rate implicit in the leases is 5.72% (2008: 6.35%). The Group’s lease liabilities are secured by leased assets of $29.3 million (2008: $25.1 million). In the event of default, leased assets revert to the lessor.

Note 34 has further information about the Group’s exposure to interest rate risk, foreign exchange risk and the fair value of fi nancial assets and liabilities.

CSL Limited Financial Report 2008-2009 83

CSL LIMITED AND ITS CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS CONTINUED FOR THE YEAR ENDED 30 JUNE 2009

			Consolidated Group	Consolidated Group	Parent	Company
			2009	2008	2009	2008
		Notes	$000	$000	$000	$000
16	Tax assets
	Current tax receivable		12,174	-	12,174	-
	Tax receivable – wholly owned subsidiaries		-	-	45,987	40,136
			12,174	-	58,161	40,136
	Tax liabilities
	Current income tax liability		101,173	123,018	-	54,157
			101,173	123,018	-	54,157
17	Provisions
	*Current*
	Employee benef ts	26	73,305	67,601	31,158	29,546
	Restructuring		7,757	6,941	-	-
	Onerous contracts		14,217	13,427	-	-
	Surplus lease space		77	195	-	-
	Provision for contingent consideration		26,247	49,437	-	-
	Other		5,356	1,924	639	782
			126,959	139,525	31,797	30,328
	*Non-current*
	Employee benef ts	26	37,326	40,005	5,423	5,485
	Other		1,485	1,548	1,150	1,202
			38,811	41,553	6,573	6,687

Restructuring

A restructuring provision is recognised when the main features of the restructuring are planned. Restructuring plans must set out the businesses, locations and approximate number of employees affected and the expenditures that will be undertaken, together with an implementation timetable. There must be a demonstrable commitment and valid expectation that the restructuring plan will be implemented prior to a provision being recognised.

Onerous contracts

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

Surplus 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 identifi ed as surplus to the Group’s current requirements.

Provision for contingent consideration on acquisitions

A provision for contingent consideration is recognised when it is probable that payment will be made and the amount can be measured reliably.

Discounting

Where the effect of discounting is determined to be material to the provision, the net estimated cash fl ows are discounted using a pre-tax discount rate refl ecting current market assessments of the time value of money and the risks specifi c to the liability.

84 CSL Limited Financial Report 2008-2009

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CSL LIMITED AND ITS CONTROLLED ENTITIES

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

FOR THE YEAR ENDED 30 JUNE 2009

		Consolidated Group	Consolidated Group	Parent Company
		2009	2008	2009	2008
		$000	$000	$000	$000
17	Provisions (continued)
	Movements in provisions
	Restructuring
	Opening balance	6,941	6,704	-	-
	Payments made	-	(186)	-	-
	Currency differences	816	423	-	-
	Closing balance	7,757	6,941	-	-
	Onerous contracts
	Opening balance	13,427	14,833	-	-
	Provisions recognised	-	571	-	-
	Payments made	-	(2,399)	-	-
	Currency differences	790	422	-	-
	Closing balance	14,217	13,427	-	-
	Surplus lease space
	Opening balance	195	724	-	-
	Payments made	(171)	(499)	-	-
	Currency differences	53	(30)	-	-
	Closing balance	77	195	-	-
	Contingent consideration
	Opening balance	49,437	83,472	-	-
	Payments made	(32,292)	(26,578)	-	-
	Currency differences	9,102	(7,457)	-	-
	Closing balance	26,247	49,437	-	-
	Other
	Opening balance	3,472	3,032	1,984	2,038
	Additional provision	5,214	1,859	795	1,289
	Payments made	(1,852)	(1,409)	(990)	(1,343)
	Currency differences	7	(10)	-	-
	Closing balance	6,841	3,472	1,789	1,984
18	Deferred government grants
	Current deferred income	469	469	469	469
	Non-current deferred income	12,083	6,950	12,083	6,950
	Total deferred government grants	12,552	7,419	12,552	7,419
19	Derivative Financial Instruments – current liabilities
	Forward Currency Contracts	873	167	-	-

The Group has entered into forward currency contracts as an economic hedge against variations in the value of certain trade payable amounts due to currency fl uctuations. All movements in the fair value of these forward currency contracts are recognised in the profi t and loss when they occur.

CSL Limited Financial Report 2008-2009 85

CSL LIMITED AND ITS CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS CONTINUED FOR THE YEAR ENDED 30 JUNE 2009

		Consolidated Group	Parent Company
		2009 2008	2009 2008
		$000 $000	$000 $000
20	Contributed equity
	Ordinary shares issued and fully paid	2,760,207 1,034,337	2,760,207 1,034,337
	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.

to one vote, either in person or proxy, at a meeting of the company.
	2009			2008
	Number		Number
	of shares	$000	of shares	$000
Movement in ordinary shares on issue
Opening balance at 1 July	550,400,606	1,034,337	549,126,066	1,023,941
Shares issued to parties other than
CSL employees through participation in:
- Institutional Offer for $36.75 consideration	47,500,000	1,745,625	-	-
- Retail Offer for $36.75 consideration	3,955,203	145,354	-	-
- Capital raising costs in respect to the institutional and retail offers	-	(39,723)	-	-
Shares issued to employees via:
- SESOP II (i)	347,000	3,066	847,300	7,101
- Performance Options (ii)	104,235	1,822	-	-
- Performance Rights (for nil consideration)	1,024,751	-	293,400	-
- GESP (iii)	168,767	5,334	133,840	3,295
Share buy-back, inclusive of cost (iv)	(4,261,134)	(135,608)	-	-
Closing balance	599,239,428	2,760,207	550,400,606	1,034,337

		Consolidated Group	Consolidated Group	Parent Company
		2009	2008	2009	2008
		$000	$000	$000	$000
(i)	Options exercised under SESOP II as disclosed in note 27 were
	as follows:
	- 194,400 issued at $4.06 (2008: 193,200 issued at $4.06)	789	785	789	785
	- Nil (2008: 18,000 issued at $6.89)	-	124	-	124
	- 32,600 issued at $9.32 (2008: 578,260 issued at $9.32)	304	5,390	304	5,390
	- Nil (2008: 39,240 issued at $12.51)	-	492	-	492
	- 120,000 issued at $16.44 (2008: nil)	1,973	-	1,973	-
	- Nil (2008: 18,600 issued at $16.65)	-	310	-	310
		3,066	7,101	3,066	7,101
(ii)	Options exercised under Performance Option plans as disclosed
	in note 27 were as follows
	- 104,235 issued at $17.48	1,822	-	1,822	-
(iii)	Shares issued to employees under Global Employee Share Plan
	(GESP) as disclosed in note 27 were as follows:
	- 72,350 issued at $31.24 on 5 September 2008	2,260	1,559	2,260	1,559
	- 96,417 issued at $31.88 on 10 March 2009	3,074	1,736	3,074	1,736
		5,334	3,295	5,334	3,295

(iv) Pursuant to the share buyback announced to the market on 9 June 2009, to 30 June 2009 the Parent Company purchased 4,261,134 ordinary shares on market at an average price of $31.83 per share, with prices ranging from $31.03 to $32.32. Subsequent to year end and from 1 July until 10 July 2009, an additional 4,282,285 shares were purchased with prices ranging between $30.39 and $31.85. Post 10 July and up to 19 August 2009, no further shares have been bought back.

CSL Limited Financial Report 2008-2009

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CSL LIMITED AND ITS CONTROLLED ENTITIES

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

FOR THE YEAR ENDED 30 JUNE 2009

		Consolidated Group	Consolidated Group	Parent	Company
		2009	2008	2009	2008
		$000	$000	$000	$000
21	Reserves
	Share based payments reserve	65,739	37,253	55,565	27,823
	Foreign currency translation reserve	(50,541)	(171,552)	-	-
	Carrying value of reserves at 30 June	15,198	(134,299)	55,565	27,823
	Movements in reserves
	Share based payments reserve (i)
	Opening balance at 1 July	37,253	30,147	27,823	30,147
	Share based payments expense	16,801	12,607	16,801	12,607
	Deferred tax on share based payments	11,685	(8,324)	10,941	(1,092)
	Transfers to subsidiaries (ii)	-	-	-	(13,839)
	Currency difference	-	2,823	-	-
	Closing balance at 30 June	65,739	37,253	55,565	27,823
	Net unrealised gains reserve (iii)
	Opening balance at 1 July	-	2,957	-	2,957
	Unrealised gains/(losses) on revaluation
	of available-for-sale investments	-	(2,957)	-	(2,957)
	Closing balance at 30 June	-	-	-	-
	Foreign currency translation reserve (iv)
	Opening balance at 1 July	(171,552)	(223,475)	-	-
	Transfers to retained earnings	-	29	-	-
	Net exchange gains/(losses) on translation
	of foreign subsidiaries, net of hedge	121,011	51,894	-	-
	Closing balance at 30 June	(50,541)	(171,552)	-	-

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) In 2008, in accordance with new accounting standard requirements, $13.8m of the reserve balance that was attributable to future tax benefi ts that may be realised by United States based subsidiaries was transferred to the balance sheets of those subsidiaries.

(iii) Net 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 classifi ed as available-for-sale. Amounts are recognised in profi t or loss when the associated assets are sold or impaired.

(iv) Foreign currency translation reserve

The foreign currency translation reserve is used to record exchange differences arising from the translation of the fi nancial 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 Financial Report 2008-2009 87

CSL LIMITED AND ITS CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS CONTINUED FOR THE YEAR ENDED 30 JUNE 2009

			Consolidated Group	Consolidated Group	Parent	Company
			2009	2008	2009	2008
		Note	$000	$000	$000	$000
22	Retained earnings
	Opening balance at 1 July		1,906,087	1,435,279	634,196	430,773
	Net prof t for the year		1,145,932	701,802	413,195	433,827
	Dividends	23	(319,492)	(227,431)	(319,492)	(227,431)
	Actuarial gain/(loss) on def ned benef t plans		(57,093)	(4,389)	(8,193)	(4,248)
	Transfers from reserves		-	(29)	-	-
	Deferred tax on actuarial gain/(loss) on def ned benef t plans		12,056	855	2,458	1,275
	Closing balance at 30 June		2,687,490	1,906,087	722,164	634,196
23	Dividends
	Dividends paid
	Dividends recognised in the current year by the Company are:
	Final ordinary dividend of 23 cents per share,
	franked to 100%, paid on 10 October 2008
	(2008: 18.33 cents per share, franked to 50%)		138,510	100,840	138,510	100,840
	Interim ordinary dividend of 30 cents per share,
	unfranked, paid on 9 April 2009
	(2008: 23 cents per share, unfranked)		180,982	126,591	180,982	126,591
			319,492	227,431	319,492	227,431
	Dividends not recognised at year end
	In addition to the above dividends, since year end the directors
	have recommended the payment of a f nal dividend of 40 cents
	per share, unfranked (2008: ordinary dividend of 23 cents per
	share, fully franked). The f nal dividend is expected to be paid
	on 9 October 2009. Based on the number of shares on issue
	as at reporting date, the aggregate amount of the proposed
	dividend would be:		239,695	126,592	239,695	126,592
	The actual aggregate dividend amount paid out of prof ts
	will be dependent on the actual number of shares on issue
	at dividend record date.

88 CSL Limited Financial Report 2008-2009

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CSL LIMITED AND ITS CONTROLLED ENTITIES

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

FOR THE YEAR ENDED 30 JUNE 2009

			Consolidated Group	Consolidated Group	Parent	Company
			2009	2008	2009	2008
		Notes	$000	$000	$000	$000
24	Equity
	Total equity at the beginning of the f nancial year		2,806,125	2,268,849	1,696,356	1,487,818
	Total recognised income and expense for the year
	attributable to equity holders		1,221,906	747,205	407,461	427,897
	Movement in contributed equity	20	1,725,870	10,396	1,725,870	10,396
	Dividends	23	(319,492)	(227,431)	(319,492)	(227,431)
	Movement in share based payments reserve	21	28,486	7,106	27,741	(2,324)
	Total equity at the end of the f nancial year		5,462,895	2,806,125	3,537,936	1,696,356
25	Statement of Cash Flows
	(a) Reconciliation of cash and cash equivalents
	and non-cash f nancing and investing activities
	Cash at the end of the year is shown
	in the cash f ow statement as:
	Cash at bank and on hand	6	410,278	156,927	-	-
	Cash deposits	6	2,117,819	544,663	-	-
	Bank overdrafts	15	(5,905)	(5,994)	(55,055)	(5,789)
			2,522,192	695,596	(55,055)	(5,789)
	(b) Reconciliation of Prof t after tax
	to Cash Flows from Operations
	Prof t after tax		1,145,932	701,802	413,195	433,827
	Non-cash items in prof t after tax
	Depreciation, amortisation and impairment charges		181,606	143,446	38,960	45,910
	(Gain)/loss on disposal of property, plant and equipment		1,170	917	407	850
	Finance costs		-	78		-
	Unwinding of discount		-	173	-	-
	Dividends and management fees		-	-	(388,236)	(401,885)
	Share based payments expense		16,801	12,607	7,972	6,266
	Changes in assets and liabilities:
	(Increase)/decrease in trade and other receivables		(115,545)	(113,016)	(9,305)	(29,249)
	(Increase)/decrease in inventories		(228,234)	(84,130)	12,708	(8,037)
	(Increase)/decrease in retirement benef t assets		9,150	4,252	3,518	4,369
	Increase/decrease in net tax assets and liabilities		(60,523)	12,433	(82,701)	21,191
	Increase/(decrease) in trade and other payables		97,996	24,530	24,831	81,119
	Increase/(decrease) in deferred government grants		-	2,358	-	2,358
	Increase/(decrease) in provisions		(12,693)	(10,398)	26,151	(5,506)
	Increase/(decrease) in retirement benef t liabilities		(10,836)	(5,796)	(5,420)	(4,248)
	Net cash inf ow from operating activities		1,024,824	689,256	42,080	146,965
	(c) Non cash f nancing activities
	Acquisition of plant and equipment by means of f nance leases		7,691	2,352	-	-

CSL Limited Financial Report 2008-2009 89

CSL LIMITED AND ITS CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS CONTINUED FOR THE YEAR ENDED 30 JUNE 2009

		Consolidated Group	Consolidated Group	Parent	Company
		2009	2008	2009	2008
		$000	$000	$000	$000
26	Employee benef ts
	A reconciliation of the employee benef ts recognised is as follows:
	Retirement benef t assets – non-current (note 13)	-	8,052	-	3,518
	Provision for employee benef ts – current (note 17)	73,305	67,601	31,158	29,546
	Retirement benef t liabilities – non-current (note 13)	133,894	85,571	2,772	-
	Provision for employee benef ts – non-current (note 17)	37,326	40,005	5,423	5,485
		244,525	193,177	39,353	35,031
	The number of full time equivalents employed at 30 June	10,340	9,276	1,697	1,570

(a) Defi ned benefi t plans

The Group sponsors a range of defi ned benefi t pension plans that provide pension benefi ts for its worldwide employees upon retirement. Entities of the Group who operate the defi ned benefi t plans contribute to the respective plans in accordance with the Trust Deeds, following the receipt of actuarial advice.

Movements in the net liability/(asset) for defi ned benefi t obligations recognised in the balance sheet

Movements in the net liability/(asset) for def ned benef t obligations recognised in the balance sheet
Net liability/(asset) for def ned benef t obligation:
Opening balance	77,519	72,485	(3,518)	(7,887)
Contributions received	(18,026)	(13,997)	(3,262)	(1,344)
Benef ts paid	(3,357)	(2,274)	-	-
Expense/(benef t) recognised in the income statement	19,818	14,740	1,717	1,465
Actuarial (gains)/losses recognised in equity	57,093	4,389	8,192	4,248
Other movements	(323)	935	(357)	-
Currency translation differences	1,170	1,241	-	-
Closing balance	133,894	77,519	2,772	(3,518)
Net liability/(asset) for def ned benef t obligation
is reconciled to the balance sheet as follows:
Retirement benef t assets – non-current (note 13)	-	(8,052)	-	(3,518)
Retirement benef t liabilities – non-current (note 13)	133,894	85,571	2,772	-
Net liability/(asset)	133,894	77,519	2,772	(3,518)

Amounts for the current and previous periods are as follows:

		Consolidated Group			Parent Company
	2009	2008	2007	2009	2008	2007
	$000	$000	$000	$000	$000	$000
Def ned benef t obligation	467,887	393,474	371,106	30,788	29,801	26,661
Plan assets	333,993	315,955	298,621	28,016	33,319	34,548
Surplus/(def cit)	(133,894)	(77,519)	(72,485)	(2,772)	3,518	7,887
Experience adjustments
on plan liabilities	(8,016)	14,723	(1,983)	699	(1,715)	2,038
Experience adjustments
on plan assets	(46,040)	(14,525)	12,253	(7,503)	(2,533)	3,725
Actual return on plan assets	(27,010)	1,898	28,018	(5,215)	(149)	5,736

The Group and the Parent 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).

90 CSL Limited Financial Report 2008-2009

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CSL LIMITED AND ITS CONTROLLED ENTITIES

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

FOR THE YEAR ENDED 30 JUNE 2009

		Consolidated Group	Consolidated Group	Parent	Company
		2009	2008	2009	2008
		$000	$000	$000	$000
26	Employee benef ts (continued)
(a)	Def ned benef t plans (continued)
	Changes in the present value of the def ned
	benef t obligation are as follows:
	Opening balance	393,474	371,106	29,801	26,661
	Service cost	19,240	15,514	2,335	2,294
	Interest cost	19,608	15,006	1,670	1,555
	Past service costs	-	644	-	-
	Contributions by members	5,234	3,885	-	-
	Actuarial (gains)/losses	8,016	(10,136)	689	1,715
	Benef ts paid	(18,038)	(12,844)	(3,129)	(2,156)
	Other movements	(544)	667	(578)	(268)
	Currency translation differences	40,897	9,632	-	-
	Closing balance	467,887	393,474	30,788	29,801
	The present value of the def ned benef t obligation comprises:
	Present value of wholly unfunded obligations	93,248	76,075	-	-
	Present value of funded obligations	374,639	317,399	30,788	29,801
		467,887	393,474	30,788	29,801
	Changes in the fair value of plan assets are as follows:
	Opening balance	315,955	298,621	33,319	34,548
	Expected return on plan assets	19,030	16,423	2,288	2,384
	Actuarial gains/(losses) on plan assets	(49,071)	(14,525)	(7,503)	(2,533)
	Contributions by employer	18,026	13,997	3,262	1,344
	Contributions by members	5,234	3,885	-	-
	Benef ts paid	(14,681)	(10,570)	(3,129)	(2,156)
	Other movements	(228)	(268)	(221)	(268)
	Currency translation differences	39,728	8,392	-	-
	Closing balance	333,993	315,955	28,016	33,319
	The major categories of plan assets as a
	percentage of total plan assets is as follows:
	Cash	2.7%	1.7%	2.0%	2.0%
	Equity instruments	28.0%	31.7%	56.3%	64.0%
	Debt instruments	51.9%	50.7%	8.9%	12.0%
	Property	15.6%	14.6%	11.8%	10.0%
	Other assets	1.8%	1.3%	21.0%	12.0%
		100.0%	100.0%	100.0%	100.0%
	Expenses/(gains) recognised in the
	income statement are as follows:
	Current service costs	19,240	15,514	2,335	2,294
	Interest on obligation	19,608	15,006	1,670	1,555
	Expected return on assets	(19,030)	(16,423)	(2,288)	(2,384)
	Past service costs	-	643	-	-
	Total included in employee benef ts expense	19,818	14,740	1,717	1,465

CSL Limited Financial Report 2008-2009 91

CSL LIMITED AND ITS CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS CONTINUED FOR THE YEAR ENDED 30 JUNE 2009

		Consolidated Group	Consolidated Group	Parent Company
		2009	2008	2009	2008
		$000	$000	$000	$000
26	Employee benef ts (continued)
(a)	Def ned benef t plans (continued)
	The principal actuarial assumptions at the balance sheet
	date (expressed as weighted averages) are as follows:
	Discount rate	6.0%	4.3%	5.6%	6.0%
	Expected return on assets and expected
	long-term rate of return on assets1	3.9%	5.0%	7.0%	7.0%
	Future salary increases	2.5%	2.3%	5.0%	5.0%
	Future pension increases	0.9%	0.7%	-	-
	1The expected long-term rate of return is based
	on the portfolio as a whole.
	Surplus/(def cit) for each def ned benef t plan on a funding basis

Surplus/(def cit) for each def ned benef t plan on a funding basis
	Plan	Accrued	Plan surplus
	assets1	benef t1	/ (def cit)
	$000	$000	$000
Consolidated Group – June 2009
CSL Pension Plan (Australia)2	28,016	(30,788)	(2,772)
CSL Bioplasma AG Pension Fund (Switzerland)	263,898	(287,552)	(23,654)
CSL Behring Union Pension Plan (US UPP)	42,079	(56,300)	(14,221)
CSL Behring GmbH Pension Plan (Germany)	-	(76,041)	(76,041)
CSL Pharma GmbH Pension Plan (Germany)	-	(1,560)	(1,560)
CSL Behring KG Pension Plan (Germany)	-	(3,608)	(3,608)
CSL Plasma GmbH Pension Plan (Germany)	-	(125)	(125)
CSL Behring KK Retirement Allowance Plan (Japan)	-	(11,913)	(11,913)
	333,993	(467,887)	(133,894)
Consolidated Group – June 2008
CSL Pension Plan (Australia)2	33,319	(29,801)	3,518
CSL Bioplasma AG Pension Fund (Switzerland)	240,694	(236,160)	4,534
CSL Behring Union Pension Plan (US UPP)	41,942	(51,438)	(9,496)
CSL Behring GmbH Pension Plan (Germany)	-	(63,755)	(63,755)
CSL Pharma GmbH Pension Plan (Germany)	-	(1,527)	(1,527)
CSL Behring KG Pension Plan (Germany)	-	(3,006)	(3,006)
CSL Plasma GmbH Pension Plan (Germany)	-	(117)	(117)
CSL Behring KK Retirement Allowance Plan (Japan)	-	(7,670)	(7,670)
	315,955	(393,474)	(77,519)

1 Plan assets at net market value and accrued benefi ts have been calculated at 30 June, being the date of the most recent fi nancial statements of the plans.

2 The CSL Pension Plan (Australia) is also the defi ned benefi t plan of the Parent Company. On 1 June 2007 the CSL Pension Plan ceased operation as a stand alone fund. The Assets and Liabilities of the Plan were transferred to AustralianSuper under a Successor Fund Transfer Deed and the Plan now operates as a sub-plan of AustralianSuper.

(b) Defi ned contribution plans

The Group and Parent Company makes contributions to various defi ned contribution pension plans. The amounts recognised as an expense for the year ended 30 June 2009 was $19,433,000 and $11,605,000 respectively (2008: $15,854,000 and $10,934,000).

92 CSL Limited Financial Report 2008-2009

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CSL LIMITED AND ITS CONTROLLED ENTITIES

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

FOR THE YEAR ENDED 30 JUNE 2009

27 Share based payments

(a) Share based payment schemes

The Company operates the following schemes that entitles key management personnel and senior employees to purchase shares in the Company under and subject to certain conditions:

Senior Executive Share Ownership Plan (SESOP II)

The SESOP II plan was approved by special resolution at the annual general meeting of the Company on 20 November 1997. The plan governed the provision of share based long term incentives in the form of options issued between 1997 and 1 July 2003 inclusive. There has been so SESOP II options issued since July 2003. Other than those which lapsed, all SESOP II options vested in earlier fi nancial years following the achievement of a 7% compound growth in earnings per share over their vesting period. 77,040 SESOP II options which have not yet been exercised as at 30 June 2009 must be exercised no later than 1 July 2010 or they will lapse. The price payable on exercise of SESOP II options equals the weighted average price over the 5 days preceding the issue date of the options. Upon request, interest bearing loans were available to employees to fund the exercise of their SESOP II options. The terms and conditions associated with the provision of SESOP II loans are set out in note 28(b) and the remuneration report.

Employee Performance Rights Plan (the plan)

The Employee Performance Rights Plan was approved by special resolution at the annual general meeting of the Company on 16 October 2003. The plan, as originally approved, governed the provision of share based long term incentives in the form of performance rights issued between 16 October 2003 and 6 April 2006 inclusive. Other than those which lapsed, all performance rights issued under the original plan vested prior to 30 June 2009. Vesting of the performance rights was contingent on the Company achieving a Total Shareholder Return (TSR) which was at or above the 50th percentile relative to the TSR of a peer group of companies comprising those entities within the ASX top 100 index by market capitalisation (excluding companies with the GICS industry codes of commercial banks, oil and gas and metals and mining). The original plan provided for vesting of 50% of the rights if the Company was ranked at the 50th percentile of TSR performance and for 100% of the rights to vest if the Company was placed at or above the 75th percentile. Relative TSR performance between the 50th and 75th percentile resulted in the proportion of performance rights that vested increasing on a straightline basis. Vested performance rights which are exercised entitle the holder to one ordinary share for nil consideration.

The plan was amended with effect from October 2006. Under the amended plan, share based long term incentives issued since October 2006 now comprise grants made to executives of both performance rights and performance options, each subject to a different performance hurdle. Each long-term incentive grant generally consists of 50% performance rights and 50% performance options. Grants of performance rights and performance options are issued for nil consideration. The new plan retained the TSR performance hurdle and provided for 100% vesting of performance rights at the expiration of their vesting period if the Company’s TSR performance was at or above the 50th percentile on the relevant test date. Under the new plan, performance options are subject to an earnings per share (EPS) performance hurdle. 10% compound EPS growth per annum is required for the performance options to vest at the expiration of their vesting period. EPS growth is measured from 30 June in the fi nancial year preceding the grant of options until 30 June in the fi nancial year prior to the relevant test date. Vested performance options entitle the holder to one ordinary share on payment of an exercise price equal to the volume weighted average CSL share price over the week up to and including the date of grant.

Under the Employee Performance Rights Plan, performance rights and performance options are issued for a term of seven years. Current offers provide for a portion becoming exercisable, subject to satisfying the relevant performance hurdle, after the second anniversary of the date of grant. Full vesting does not occur until four years post grant date. If the portion tested at the applicable anniversary meets the relevant performance hurdle, that portion of rights and options vest and become exercisable until the expiry date. If the portion tested fails to meet the performance hurdle the portion is carried over to the next anniversary and retested. After the fi fth anniversary, any performance rights and performance options not vested lapse. Importantly, there is an individual employee hurdle requiring an executive to obtain for the fi nancial year prior to exercise of the Performance Rights and Performance Options, a satisfactory (or equivalent) rating under the Company’s performance management system.

Company provided loans are not available to fund the exercise of performance options under the plan.

The last grant of performance rights and options to be issued on these terms will be in 2009. As set out in section 15 (Remuneration Report) of the Directors’ Report, certain changes will be made to the Performance Rights Plan with effect from 1 January 2010.

Global Employee Share Plan (GESP)

The ‘Global Employee Share Plan’ (GESP) operates whereby employees make contributions from after tax salary up to a maximum of $3,000 per each six month contribution period. The employees receive the shares at a 15% discount to the applicable market rate, as quoted on the ASX on the fi rst day or the last day of the six month contribution period, whichever is lower.

CSL Limited Financial Report 2008-2009 93

CSL LIMITED AND ITS CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS CONTINUED FOR THE YEAR ENDED 30 JUNE 2009

27 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 and rights are settled by physical delivery of shares.

									Vested at
	Opening					Closing	Exercise	Expiry	30 June
June 2009	Balance	Granted	Exercised	Forfeited	Lapsed	balance	Price	date	2009
Options
(by grant date)
21 August 2001*	120,000	-	120,000	-	-	-	$16.44	20-Aug-08	-
23 July 2002*	100,400	-	32,600	-	-	67,800	$9.32	23-Jul-09	67,800
1 July 2003	203,640	-	194,400	-	-	9,240	$4.06	1-Jul-10	9,240
2 October 2006	1,256,340	-	104,235	63,225	-	1,088,880	$17.48	2-Oct-13	203,415
1 October 2007	714,600	-	-	25,680	-	688,920	$35.46	30-Sep-14	-
1 April 2008	3,240	-	-	-	-	3,240	$36.56	31-Mar-15	-
1 October 2008	-	794,720	-	2,540	-	792,180	$37.91	30-Sep-15	-
1 April 2009	-	15,380	-	-	-	15,380	$32.50	31-Mar-16	-
	2,398,220	810,100	451,235	91,445	-	2,665,640			280,455
Performance Rights
(by grant date)
16 October 2003	90,000	-	90,000	-	-	-	Nil	27-Oct-10	-
15 December 2003	5,400	-	-	-	-	5,400	Nil	27-Oct-10	5,400
28 April 2004	180,000	-	120,000	-	-	60,000	Nil	31-Mar-11	60,000
21 June 2004	8,400	-	-	-	-	8,400	Nil	31-Mar-11	8,400
29 October 2004	45,300	-	7,200	-	-	38,100	Nil	25-Aug-11	38,100
15 July 2005	165,000	-	-	-	-	165,000	Nil	7-Jun-12	165,000
7 September 2005	890,850	-	642,506	3,494	-	244,850	Nil	7-Jun-12	244,850
7 March 2006	157,500	-	-	-	-	157,500	Nil	20-Dec-12	157,500
6 April 2006	114,150	-	98,250	-	-	15,900	Nil	20-Dec-12	15,900
2 October 2006	450,480	-	66,795	20,085	-	363,600	Nil	2-Oct-13	43,920
1 October 2007	274,980	-	-	9,180	-	265,800	Nil	30-Sep-14	-
1 April 2008	1,460	-	-	-	-	1,460	Nil	31-Mar-15	-
1 October 2008	-	287,860	-	1,080	-	286,780	Nil	30-Sep-15	-
1 April 2009	-	5,680	-	-	-	5,680	Nil	31-Mar-16	-
	2,383,520	293,540	1,024,751	33,839	-	1,618,470			739,070
GESP
(by grant date)
1 March 2008	72,350	-	72,350	-	-	-	$31.24	31-Aug-08	-
1 September 2008	-	96,417	96,417	-	-	-	$31.88	28-Feb-09	-
1 March 2009#	-	103,640	-	-	-	103,640	$27.33	31-Aug-09	-
	72,350	200,057	168,767	-	-	103,640
Total	4,854,090	1,303,697	1,644,753	125,284	-	4,387,750			1,019,525

*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 fi rst and last dates of the contribution period. Accordingly the exercise price and the fi nal number of shares issued is not yet known (and may differ from the assumptions and fair values disclosed below). The number of shares which may ultimately be issued based on entitlements granted on 1 March 2009 has been estimated based on information available as at 30 June 2009.

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

Options $36.69 Performance Rights $34.25 GESP $37.16

CSL Limited Financial Report 2008-2009

==> picture [595 x 13] intentionally omitted <==

CSL LIMITED AND ITS CONTROLLED ENTITIES

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

FOR THE YEAR ENDED 30 JUNE 2009

27 Share based payments (continued)

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

									Vested at
	Opening					Closing	Exercise	Expiry	30 June
June 2008	Balance	Granted	Exercised	Forfeited	Lapsed	balance	Price	date	2009
Options
(by grant date)
21 August 2001*	120,000	-	-	-	-	120,000	$16.44	20-Aug-08	120,000
23 August 2001*	39,240	-	39,240	-	-	-	$12.51	22-Aug-08	-
10 December 2001*	18,600	-	18,600	-	-	-	$16.65	09-Dec-08	-
23 July 2002*	696,660	-	578,260	18,000	-	100,400	$9.32	23-Jul-09	100,400
16 October 2002*	18,000	-	18,000	-	-	-	$6.89	16-Oct-09	-
1 July 2003	396,840	-	193,200	-	-	203,640	$4.06	01-Jul-10	-
2 October 2006	1,352,340	-	-	96,000	-	1,256,340	$17.48	02-Oct-13	-
1 October 2007	-	730,620	-	16,020	-	714,600	$35.46	30-Sep-14	-
1 April 2008	-	3,240	-	-	-	3,240	$36.56	31-Mar-15	-
	2,641,680	733,860	847,300	130,020	-	2,398,220			220,400
Performance Rights
(by grant date)
16 October 2003	90,000	-	-	-	-	90,000	Nil	27-Oct-10	90,000
15 December 2003	49,800	-	44,400	-	-	5,400	Nil	27-Oct-10	5,400
28 April 2004	180,000	-	-	-	-	180,000	Nil	31-Mar-11	180,000
21 June 2004	57,900	-	49,500	-	-	8,400	Nil	31-Mar-11	8,400
29 October 2004	235,500	-	190,200	-	-	45,300	Nil	25-Aug-11	45,300
15 July 2005	165,000	-	-	-	-	165,000	Nil	07-Jun-12	-
07 September 2005	978,600	-	-	87,750	-	890,850	Nil	07-Jun-12	-
07 March 2006	157,500	-	-	-	-	157,500	Nil	20-Dec-12	-
06 April 2006	122,550	-	-	8,400	-	114,150	Nil	20-Dec-12	-
02 October 2006	487,920	-	-	37,440	-	450,480	Nil	02-Oct-13	-
01 October 2007	-	282,420	-	7,440	-	274,980	Nil	30-Sep-14	-
01 April 2008	-	1,460	-	-	-	1,460	Nil	31-Mar-15	-
	2,524,770	283,880	284,100	141,030	-	2,383,520			329,100
GESP
(by grant date)
1 March 2007	70,344	-	70,344	-	-	-	$22.17	31-Aug-07	-
1 September 2007	-	63,496	63,496	-	-	-	$27.50	28-Feb-08	-
1 March 2008#	-	65,984	-	-	-	65,984	$30.35	31-Aug-08	-
	70,344	129,480	133,840	-	-	65,984			-
Total	5,236,794	1,147,220	1,265,240	271,050	-	4,847,724			549,500

*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 fi rst and last dates of the contribution period. Accordingly the exercise price and the fi nal number of shares 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 2008.

The weighted average share price at the dates of exercise, by equity instrument type, is as follows: Options $33.26 Performance Rights $32.39 GESP $35.56

CSL Limited Financial Report 2008-2009 95

CSL LIMITED AND ITS CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS CONTINUED FOR THE YEAR ENDED 30 JUNE 2009

27 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	Share	Exercise	Expected	Life	dividend	interest
	Value1	Price	Price	volatility2	assumption	yield	rate
Options (by grant date)
1 July 2003	$1.53	$4.03	$4.06	37.0%	3–5 years	2.5%	5.60%
2 October 2006 – Tranche 1	$5.71	$18.01	$17.48	27.0%	2 years	1.5%	5.67%
2 October 2006 – Tranche 2	$5.83	$18.01	$17.48	27.0%	3 years	1.5%	5.67%
2 October 2006 – Tranche 3	$5.96	$18.01	$17.48	27.0%	4 years	1.5%	5.67%
1 October 2007 – Tranche 1	$12.06	$35.93	$35.46	29.0%	2 years	1.5%	6.45%
1 October 2007 – Tranche 2	$12.33	$35.93	$35.46	29.0%	3 years	1.5%	6.45%
1 October 2007 – Tranche 3	$12.59	$35.93	$35.46	29.0%	4 years	1.5%	6.45%
1 April 2008 – Tranche 1	$12.64	$36.56	$36.23	32.0%	2 years	1.5%	6.00%
1 April 2008 – Tranche 2	$12.92	$36.56	$36.23	32.0%	3 years	1.5%	6.00%
1 April 2008 – Tranche 3	$13.18	$36.56	$36.23	32.0%	4 years	1.5%	6.00%
1 October 2008 – Tranche 1	$13.31	$38.75	$37.91	33.0%	2 years	1.5%	5.22%
1 October 2008 – Tranche 2	$13.58	$38.75	$37.91	33.0%	3 years	1.5%	5.22%
1 October 2008 – Tranche 3	$13.85	$38.75	$37.91	33.0%	4 years	1.5%	5.22%
1 April 2009 – Tranche 1	$9.27	$32.10	$32.50	33.0%	2 years	1.5%	3.94%
1 April 2009 – Tranche 2	$9.73	$32.10	$32.50	33.0%	3 years	1.5%	3.94%
1 April 2009 – Tranche 3	$10.15	$32.10	$32.50	33.0%	4 years	1.5%	3.94%
Performance Rights (by grant	date)
16 October 2003	$3.51	$5.42	Nil	37.0%	4 years	2.5%	5.61%
15 December 2003	$3.78	$5.84	Nil	37.0%	4 years	2.5%	5.79%
28 April 2004	$5.05	$7.64	Nil	35.0%	4 years	2.0%	5.71%
21 June 2004	$4.78	$7.24	Nil	34.0%	4 years	2.0%	5.63%
29 October 2004	$6.90	$9.60	Nil	34.0%	4 years	2.0%	5.32%
15 July 2005	$8.17	$11.63	Nil	27.0%	4 years	1.5%	5.19%
7 September 2005	$8.13	$11.58	Nil	27.0%	4 years	1.5%	5.10%
7 March 2006	$14.53	$17.75	Nil	27.0%	4 years	1.5%	5.37%
6 April 2006	$14.32	$17.80	Nil	27.0%	4 years	1.5%	5.51%
2 October 2006 – Tranche 1	$14.20	$18.01	Nil	27.0%	2 years	1.5%	5.67%
2 October 2006 – Tranche 2	$13.32	$18.01	Nil	27.0%	3 years	1.5%	5.67%
2 October 2006 – Tranche 3	$12.47	$18.01	Nil	27.0%	4 years	1.5%	5.67%
1 October 2007 – Tranche 1	$28.65	$35.93	Nil	29.0%	2 years	1.5%	6.45%
1 October 2007 – Tranche 2	$26.78	$35.93	Nil	29.0%	3 years	1.5%	6.45%
1 October 2007 – Tranche 3	$25.20	$35.93	Nil	29.0%	4 years	1.5%	6.45%
1 April 2008 – Tranche 1	$30.27	$36.56	Nil	32.0%	2 years	1.5%	6.00%
1 April 2008 – Tranche 2	$29.06	$36.56	Nil	32.0%	3 years	1.5%	6.00%
1 April 2008 – Tranche 3	$27.57	$36.56	Nil	32.0%	4 years	1.5%	6.00%
1 October 2008 – Tranche 1	$33.30	$38.75	Nil	33.0%	2 years	1.5%	5.22%
1 October 2008 – Tranche 2	$31.72	$38.75	Nil	33.0%	3 years	1.5%	5.22%
1 October 2008 – Tranche 3	$30.15	$38.75	Nil	33.0%	4 years	1.5%	5.22%
1 April 2009 – Tranche 1	$27.55	$32.10	Nil	33.0%	2 years	1.5%	3.94%
1 April 2009 – Tranche 2	$26.55	$32.10	Nil	33.0%	3 years	1.5%	3.94%
1 April 2009 – Tranche 3	$25.50	$32.10	Nil	33.0%	4 years	1.5%	3.94%

CSL Limited Financial Report 2008-2009

==> picture [595 x 13] intentionally omitted <==

CSL LIMITED AND ITS CONTROLLED ENTITIES

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

FOR THE YEAR ENDED 30 JUNE 2009

27 Share based payments (continued)

						Expected	Risk free
	Fair	Share	Exercise	Expected	Life	dividend	interest
	Value1	Price	Price	volatility2	assumption	yield	rate
GESP (by grant date)3
1 September 2007	$5.77	$32.35	$27.50	29.0%	6 months	1.5%	6.45%
1 March 2008	$5.51	$36.75	$31.24	32.0%	6 months	1.5%	6.00%
1 September 2008	$5.62	$37.50	$31.88	33.0%	6 months	1.5%	5.22%
1 March 2009	$4.82	$32.15	$27.33	33.0%	6 months	1.5%	3.94%

1 Options and rights granted are subject to a service condition. Options are also subject to a non-market vesting condition based on earnings per share. Service conditions and non-market conditions are not taken into account in the determination of fair value at grant date. Contrastingly, grants of rights are also subject to a market vesting condition based on total shareholder returns, a condition which is taken into account when the fair value of rights is determined.

2 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 volatility due to publicly available information.

3 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 fi rst and last dates of the contribution period.

28 Key management personnel disclosures

The following were key management personnel of the Group at any time during the 2009 and 2008 fi nancial years and unless otherwise indicated they were key management personnel during the whole of those fi nancial years:

Non-executive directors

Executive directors

B A McNamee (Chief Executive Offi cer and Managing Director) A M Cipa (Finance Director)

E A Alexander (Chairman) J Akehurst D W Anstice (appointed 2 Sept 2008)

I A Renard Executives M A Renshaw K J Roberts (retired 15 Oct 2008) J Shine D J Simpson

P Turner (President, CSL Behring) C Armit (President, CSL Biotherapies, retired 31 Dec 2007) A Cuthbertson (Chief Scientifi c Offi cer)

P Turvey (Company Secretary / General Counsel, ceased to be a KMP 31 Dec 2008) E Bailey (Company Secretary, appointed 1 Jan 2009) G Boss (General Counsel, appointed 1 Jan 2009)

T Giarla (President, CSL Bioplasma, ceased to be a KMP 29 Feb 2008) A von Bibra (General Manager Human Resources, resigned 31 Dec 2008 ) J Lever (Senior Vice President Human Capital, appointed 1 June 2009) M Sontrop (General Manager, CSL Biotherapies Australia & New Zealand) J Davies (General Manager, CSL Bioplasma, appointed 1 March 2008)

CSL Limited Financial Report 2008-2009 97

CSL LIMITED AND ITS CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS CONTINUED FOR THE YEAR ENDED 30 JUNE 2009

28 Key management personnel disclosures (continued)

(a) Total compensation for key management personnel

(a) Total compensation for key management personnel
	Consolidated Group		Parent	Company
	2009	2008	2009	2008
	$000	$000	$000	$000
Short term
Salary and Fees	7,935,050	7,407,484	6,374,401	6,472,756
Short term incentive cash bonus	2,852,237	2,879,478	2,104,087	2,379,327
Non-monetary benef ts	41,307	170,553	15,384	158,209
Total	10,828,594	10,457,515	8,493,872	9,010,292
Post-employment
Pension benef ts	938,482	1,291,873	680,598	784,835
Retirement benef ts	263,725	3,187	263,725	3,187
Total	1,202,207	1,295,060	944,323	788,022
Other long-term - Long service leave and equivalents	434,608	467,717	305,138	356,204
Deferred cash incentive	560,000	583,822	560,000	583,822
Termination benef ts	521,285	-	521,285	-
Share-based payments
Equity settled performance rights	2,742,344	2,505,205	2,241,153	2,109,762
Equity settled options	2,049,993	1,422,084	1,663,141	1,212,546
	4,792,337	3,927,289	3,904,294	3,322,308
Total	18,339,031	16,731,403	14,728,912	14,060,648

(b) Loans to key management personnel and their related parties (Group)

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

		Opening	Interest	Closing	Number in
		balance	charged	balance	group
		$	$	$	$
Total for key management personnel	2009	944,914	16,163	619,760	6
	2008	1,174,820	33,522	745,154	5
Total for other related parties	2009	-	-	-	-
	2008	-	-	-	-
Total for key management personnel	2009	944,914	16,163	619,760	6
and their related parties	2008	1,174,820	33,522	745,154	5

CSL Limited Financial Report 2008-2009

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CSL LIMITED AND ITS CONTROLLED ENTITIES

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

FOR THE YEAR ENDED 30 JUNE 2009

28 Key management personnel disclosures (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:

reporting period, are as follows:
			Highest
	Balance at	Balance at	owing	Interest	Interest not
	1 July 2008	30 June 2009	in period	charged	charged
	$	$	$	$	$
Key Management Personnel
A M Cipa	43,122	-	43,122	-	-
P Turner	110,000	-	110,000	-	-
A Cuthbertson	420,000	420,000	420,000	12,760	10,298
P Turvey	139,850	-	139,850	-	1,304
A von Bibra	32,182	-	32,182	-	-
E Bailey	199,760	199,760	240,363	3,403	7,563
Total	944,914	619,760	985,517	16,163	19,165

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 46.5%). The average commercial rate of interest during the year was 5.49% (2008: 9.59%).

(c) 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 Group 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 Group has a number of contractual relationships, including property leases and collaborative research arrangements, with the University of Melbourne of which Mr Ian Renard was the Chancellor until 10 January 2009 and of which Miss Elizabeth Alexander is the Chair of the Finance Committee and a member of the Council and Dr Virginia Mansour (whose husband is Dr Brian McNamee) is a member of the Council.

(d) Options over equity instruments granted as compensation

The movement during the reporting period in the number of options over ordinary shares in the Company held directly, indirectly or benefi cially, by each key management person, including their related parties, is as follows:

						Number	Vested and
				Number	Balance	Vested	exercisable	Unvested
Key management	Balance at	Number	Number	Lapsed /	at 30 June	during the	at 30 June	at 30 June
person	1 July 2008	Granted	Exercised	Forfeited	2009	year	2009	2009
Executive Directors
B A McNamee	236,400	74,880	-	-	311,280	39,690	39,690	271,590
A M Cipa	87,840	33,720	-	-	121,560	14,535	14,535	107,025
Other executives
P Turner	87,840	33,720	14,535	-	107,025	14,535	-	107,025
A Cuthbertson	50,280	16,840	8,130	-	58,990	8,130	-	58,990
P Turvey	38,340	-	-	-	38,340	6,345	6,345	31,995
E Bailey	25,140	2,220	18,600	-	8,760	1,080	1,080	7,680
G Boss	38,460	15,040	9,600	-	43,900	4,740	4,740	39,160
M Sontrop	47,520	18,420	15,000	-	50,940	5,310	5,310	45,630
J Davies	32,100	18,420	-	-	50,520	5,310	5,310	45,210
A von Bibra	36,240	-	12,600	23,640	-	4,680	-	-
J Lever	-	-	-	-	-	-	-	-
Total	680,160	213,260	78,465	23,640	791,315	104,355	77,010	714,305

The assumptions inherent in the valuation of options granted to key management personnel, amongst others, during the fi nancial year and the fair value of each option granted are set out in Note 27(c).

No options have been granted since the end of the fi nancial year. The options have been provided at no cost to the recipients.

For further details, including the key terms and conditions, grant and exercise dates for options granted to executives, refer note 27.

CSL Limited Financial Report 2008-2009 99

CSL LIMITED AND ITS CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS CONTINUED FOR THE YEAR ENDED 30 JUNE 2009

28 Key management personnel disclosures (continued)

(e) Performance Rights over equity instruments granted as compensation

The movement during the reporting period in the number of performance rights over ordinary shares in the Company held directly, indirectly or benefi cially, by each key management person, including their related parties, is as follows:

						Number	Vested and
				Number	Balance	Vested	exercisable	Unvested
Key management	Balance at	Number	Number	Lapsed /	at 30 June	during the	at 30 June	at 30 June
person	1 July 2008	Granted	Exercised	Forfeited	2009	year	2009	2009
Executive Directors
B A McNamee	513,480	21,600	210,000	-	325,080	244,230	244,230	80,850
A M Cipa	176,340	9,720	-	-	186,060	94,290	154,290	31,770
Other executives						-
P Turner	114,990	9,720	92,940	-	31,770	92,940	-	31,770
A Cuthbertson	57,870	4,860	45,150	-	17,580	45,150	-	17,580
P Turvey	42,270	-	32,625	-	9,645	32,625	-	9,645
E Bailey	9,840	960	-	-	10,800	3,180	7,380	3,420
G Boss	21,690	4,340	14,445	-	11,585	14,445	-	11,585
M Sontrop	31,830	5,300	23,625	-	13,505	23,625	-	13,505
J Davies	20,010	5,300	-	-	25,310	11,925	11,925	13,385
A von Bibra	18,360	-	11,280	7,080	-	11,280	-	-
J Lever	-	-	-	-	-	-	-	-
Total	1,006,680	61,800	430,065	7,080	631,335	573,690	417,825	213,510

The assumptions inherent in the valuation of performance rights granted to key management personnel, amongst others, during the fi nancial year and the fair value of each option granted are set out in Note 27(c).

No performance rights have been granted since the end of the fi nancial year. The performance rights have been provided at no cost to the recipients.

Modifi cation 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 modifi ed by the issuing entity during the reporting period.

(f) Exercise of equity instruments granted as compensation

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

	30	June 2009			30 June 2008
			Paid per			Paid per
	Date Option	Number of	share	Date Option	Number of	share
	Granted	shares	$	Granted	shares	$
C Armit				23 July 2002	30,000	9.32
P Turvey				23 July 2002	30,000	9.32
T Giarla				21 August 2001	30,000	12.51
J Davies				23 July 2002	18,000	9.32
P Turner	2 October 2006	14,535	17.48	23 July 2002	90,000	9.32
M Sontrop	1 July 2003	15,000	4.06	1 July 2003	15,000	4.06
A Cuthbertson	2 October 2006	8,130	17.48	23 July 2002	45,000	9.32
A von Bibra	1 July 2003	7,920	4.06	1 July 2003	7,920	4.06
A von Bibra	2 October 2006	4,680	17.48
E Bailey	1 July 2003	18,600	4.06
G Boss	1 July 2003	9,600	4.06
Total		78,465			265,920

There are no amounts unpaid on the shares issued as a result of the exercise of options.

100 CSL Limited Financial Report 2008-2009

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CSL LIMITED AND ITS CONTROLLED ENTITIES

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

FOR THE YEAR ENDED 30 JUNE 2009

28 Key management personnel disclosures (continued)

(f) Exercise of equity instruments granted as compensation (continued)

During the reporting period, persons who were key management personnel were issued the following shares on the exercise of performance rights granted as compensation:

	30 June 2009		30 June 2008
	Date Performance	Number of	Date Performance	Number of
	Option Granted	shares	Right Granted	shares
B McNamee	26 October 2003	90,000	-	-
	30 March 2004	120,000	-	-
P Turner	7 June 2005	52,950	-	-
	20 December 2005	35,700	-	-
	2 October 2006	4,290	-	-
A Cuthbertson	7 June 2005	15,750	-	-
	20 December 2005	27,000	-	-
	2 October 2006	2,400	-	-
P Turvey	7 June 2005	18,750	-	-
	20 December 2005	12,000	-	-
	2 October 2006	1,875	-	-
G Boss	7 June 2005	13,050	-	-
	2 October 2006	1,395	-	-
A von Bibra	7 June 2005	9,900	-	-
	2 October 2006	1,380	-	-
M Sontrop	7 June 2005	22,050	-	-
	2 October 2006	1,575	-	-
C Armit			29 October 2004	18,000
T Giarla			29 October 2004	18,000
Total		430,065		36,000

No amount is payable on the exercise of performance rights.

(g) Key management personnel shareholdings

Movements in the respective shareholdings of key management personnel during the year ended 30 June 2009 are set out below.

		Shares acquired	Shares acquired
		on exercise of	on exercise of
Movements	Balance at	performance	options during	(Shares sold)/	Balance at
in shares	1 July 2008	rights during year	year	Purchased	30 June 2009
Non-Executive Directors
E A Alexander	24,722	-	-	2,831	27,553
J Akehurst	22,239	-	-	6,752	28,991
D W Anstice	-	-	-	5,696	5,696
I A Renard	22,419	-	-	1,123	23,542
M A Renshaw	5,277	-	-	980	6,257
K J Roberts	17,814	-	-	682	18,496
J Shine	1,836	-	-	1,143	2,979
D J Simpson	1,323	-	-	1,116	2,439
Executive Directors
B A McNamee	625,533	210,000	-	136	835,669
A M Cipa	25,641	-	-	136	25,777
Executives
P Turner	74,526	92,940	14,535	(18,825)	163,176
A Cuthbertson	79,437	45,150	8,130	136	132,853
P Turvey	19,441	32,625	-	(47,299)	4,767
E Bailey	13,816	-	18,600	(18,410)	14,006
G Boss	3,912	14,445	9,600	(26,384)	1,573
A von Bibra	10,502	11,280	12,600	(12,748)	21,634
J Lever	-	-	-	-	-
M Sontrop	21,835	23,625	15,000	(14,810)	45,650
J Davies	14,463	-	-	272	14,735
Total	984,736	430,065	78,465	(117,473)	1,375,793

There have been no movements in shareholdings of key management personnel between 30 June 2009 and the date of this report.

CSL Limited Financial Report 2008-2009 101

CSL LIMITED AND ITS CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS CONTINUED FOR THE YEAR ENDED 30 JUNE 2009

29 Non key management personnel related party disclosure

Ultimate Controlling Entity

The ultimate controlling entity is CSL Limited.

Identity of related parties

The parent company has a related party relationship with its subsidiaries (see note 32) and with its key management personnel (see note 28). Other related party transactions

The Parent Company entered into the following transactions during the year with related parties in the Group:

Wholly owned subsidiaries

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 wholly owned subsidiaries are set out in the notes 7, 14 and 16.

Partly owned subsidiaries

No transactions occurred during the year.

Amounts receivable from partly owned subsidiaries are set out in the note 7.

Transactions with key management personnel and their related parties

Disclosures relating to key management personnel are disclosed in note 28.

Transactions with other related parties

During the year, the parent and subsidiaries made contributions to defi ned benefi t and contribution pension plans as disclosed in note 26.

Ownership interests in related parties

The ownership interests in related parties in the Group are disclosed in note 32. All transactions with subsidiaries have been eliminated on consolidation.

		Consolidated Group	Consolidated Group	Parent	Company
		2009	2008	2009	2008
		$	$	$	$
30	Remuneration of Auditors
	During the year the following fees were paid or were payable
	for services provided by the auditor of the parent entity and
	its related practices:
	(a) Audit services
	Ernst & Young	845,446	820,143	845,446	820,143
	Ernst & Young related practices	2,645,333	2,363,235	-	-
	Total remuneration for audit services	3,490,779	3,183,378	845,446	820,143
	(b) Other services
	Ernst & Young
	- due diligence / completion audits	-	48,668	-	48,668
	- compliance and other services	52,000	57,660	-	57,660
	Ernst & Young related practices
	- due diligence / completion audits	21,481	697,902	-	-
	- compliance and other services	170,554	15,356	-	-
	Total remuneration for non audit services	244,035	819,586	-	106,328
	Total remuneration for all services rendered	3,734,814	4,002,964	845,446	926,471

102 CSL Limited Financial Report 2008-2009

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CSL LIMITED AND ITS CONTROLLED ENTITIES

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

FOR THE YEAR ENDED 30 JUNE 2009

		Consolidated Group	Consolidated Group	Parent Company
		2009	2008	2009	2008
		$000	$000	$000	$000
31	Commitments and contingencies
	(a) Operating leases
	Commitments for minimum lease payments in relation
	to non cancellable operating leases are payable as follows:
	Not later than one year	38,305	30,076	1,415	1,199
	Later than one year but not later than f ve years	97,231	76,533	1,313	1,264
	Later than f ve years	132,220	116,296	62	123
		267,756	222,905	2,790	2,586

Operating leases entered into relate predominantly to leased land and rental properties. The leases have varying terms and renewal rights. Rental payments under the leases are predominantly fi xed, but generally contain infl ation escalation clauses. No operating lease contains restrictions on fi nancing or other leasing activities.

(b) Finance leases
Commitments in relation to f nance leases are payable as follows:
Not later than one year	5,484	4,900	-	-
Later than one year but not later than f ve years	20,000	17,786	-	-
Later than f ve years	40,709	38,972	-	-
Total minimum lease payments	66,193	61,658	-	-
Future f nance charges	(22,863)	(23,833)	-	-
Finance lease liability	43,330	37,825	-	-
The present value of f nance lease liabilities is as follows:
Not later than one year	3,229	2,744	-	-
Later than one year but not later than f ve years	12,381	9,962	-	-
Later than f ve years	27,720	25,119	-	-
	43,330	37,825	-	-
Finance lease – current liability (refer note 15)	3,229	2,744	-	-
Finance lease – non-current liability (refer note 15)	40,101	35,081	-	-
	43,330	37,825	-	-

Finance leases entered into relate predominantly to leased plant and equipment. The leases have varying terms but lease payments are generally fi xed for the life of the agreement. In some instances, at the end of the lease term the Group has the option to purchase the equipment. No fi nance leases contain restrictions on fi nancing or other leasing activities.

(c) Total lease liability

(c) Total lease liability
*Current*
Finance leases (refer note 15)	3,229	2,744	-	-
Surplus lease space (refer note 17)	77	195	-	-
	3,306	2,939	-	-
*Non-current*
Finance leases (refer note 15)	40,101	35,081	-	-
	43,407	38,020	-	-
(d) Capital commitments
Capital expenditure contracted for at balance date
but not provided for in the f nancial statements, payable:
Not later than one year	86,744	68,733	26,977	13,814
Later than one year but not later than f ve years	-	3,642	-	-
Later than f ve years	-	-	-	-
	86,744	72,375	26,977	13,814

CSL Limited Financial Report 2008-2009 103

CSL LIMITED AND ITS CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS CONTINUED FOR THE YEAR ENDED 30 JUNE 2009

31 Commitments and contingencies (Continued)

(e) Contingent assets and liabilities

Guarantees

The Group and Parent Company provide certain fi nancial guarantees in the ordinary course of business. No liability has been recognised in relation to these guarantees as the fair value of the guarantees is immaterial.

Service agreements

The maximum contingent liability for benefi ts 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 Group entities. The maximum liability that could arise, for which no provisions are included in the fi nancial statements is as follows:

	Consolidated Group	Consolidated Group	Parent Company
	2009	2008	2009	2008
	$	$	$	$
Service agreements	10,404	9,543	6,544	6,623

Litigation

The Group has recently been served with two lawsuits fi led in the US courts alleging that the Group and a competitor had conspired to restrict output and artifi cially increase the price of plasma-derived therapies in the US. Both actions were fi led by individual, private hospital groups but were fi led as class actions. The Group believes that these lawsuits are unsupported by fact and without merit and will robustly defend against these suits.

The Group 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 fi nancial effect of this litigation cannot be calculated as it is not practicable at this stage. The Group has disclaimed liability for, and is vigorously defending, all current material claims and actions that have been made.

Deed of cross guarantee

The Parent Company has entered into a deed of cross guarantee in accordance with a class order issued by the Australian Securities and Investments Commission. The Parent Company, 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.

104 CSL Limited Financial Report 2008-2009

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CSL LIMITED AND ITS CONTROLLED ENTITIES

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

FOR THE YEAR ENDED 30 JUNE 2009

32 Controlled Entities

The consolidated fi nancial statements incorporate the assets, liabilities and results of the following subsidiaries in accordance with the accounting policy described in Note 1.

accounting policy described in Note 1.
	Country of incorporation	Percentage Owned
		2009	2008
		%	%
*Company:*
CSL Limited	Australia
*Subsidiaries of CSL Limited:*
CSL Employee Share Trust	Australia	100	0	(d)
CSL Biotherapies Pty Ltd	Australia	100	100
Cervax Pty Ltd	Australia	74	74
CSL Biotherapies (NZ) Limited	New Zealand	100	100	(a)
Iscotec AB	Sweden	100	100	(a)
Zenyth Therapeutics Pty Ltd	Australia	100	100
Zenyth Operations Pty Ltd	Australia	100	100
Amrad Pty Ltd	Australia	100	100
CSL International Pty Ltd	Australia	100	100
CSL Finance Pty Ltd	Australia	100	100
CSL Behring ApS	Denmark	100	100	(a)
CSL Behring AG	Switzerland	100	100	(a)
CSL Behring (Switzerland) AG	Switzerland	100	100	(a)(c)
ZLB GmbH	Germany	100	100	(a)
CSL UK Holdings Limited	England	100	100	(a)
ZLB Bioplasma UK Limited	England	100	100	(a)
CSLB Holdings Inc	USA	100	100
CSL Biotherapies Inc	USA	100	100	(a)
ZLB Bioplasma (Hong Kong) Limited	Hong Kong	100	100	(a)
CSL Behring LLC	USA	100	100	(a)
CSL Behring Sales Force Inc.	USA	0	100	(a)(b)
CSL Plasma Inc	USA	100	100	(a)
CSL Behring Canada Inc.	Canada	100	100	(a)
CSL Behring Brazil Comercio de Produtos
Farmaceuticals Ltda	Brazil	100	100	(a)
CSL Behring KK	Japan	100	100	(a)
CSL Behring S.A. de C.V.	Mexico	100	100	(a)
CSL Behring S.A.	France	100	100	(a)
CSL Biotherapies GmbH	Germany	100	100	(a)
CSL Behring Foundation for Research
and Advancement of Patient Health	USA	100	100	(a)
CSL Behring Verwaltungs GmbH	Germany	100	100	(a)
CSL Behring Beteiligungs GmbH & Co KG	Germany	100	100	(a)
CSL Plasma GmbH	Germany	100	100	(a)
CSL Behring GmbH	Germany	100	100	(a)
CSL Behring GmbH	Austria	100	100	(a)
CSL Behring S.A.	Spain	100	100	(a)
CSL Behring A.B.	Sweden	100	100	(a)
CSL Behring S.p.A.	Italy	100	100	(a)
CSL Behring N.V.	Belgium	100	100	(a)
CSL Behring B.V	Netherlands	100	100	(a)
CSL Behring Lda	Portugal	100	100	(a)
CSL Behring MEPE	Greece	100	100	(a)
CSL Biotherapies Asia Pacif c Limited	Hong Kong	100	100	(a)
CSL Behring S.A.	Argentina	100	100	(a)
CSL Behring Holdings Ltd.	England	100	100	(a)
CSL Behring UK Ltd.	England	100	100	(a)

(a) Audited by affi liates of the Company auditors.

(b) CSL Behring Sales Force Inc was merged with CSL Behring LLC on 1 April 2009

(d) Special purpose vehicle established during the year to facilitate CSL’s employee share scheme

CSL Limited Financial Report 2008-2009 105

CSL LIMITED AND ITS CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS CONTINUED FOR THE YEAR ENDED 30 JUNE 2009

33 Deed of Cross Guarantee

On 28 June 2007, a deed of cross guarantee was executed between CSL Limited and some of its wholly owned entities, namely CSL International Pty Ltd, CSL Finance Pty Ltd, CSL Biotherapies Pty Ltd and Zenyth Therapeutics Pty Ltd. Under this deed, each company guarantees the debts of the others. By entering into the deed, these specifi c wholly owned entities have been relieved from the requirement to prepare a fi nancial report and directors’ report under Class Order 98/1418 (as amended) issued by the Australian Securities and Investments Commission.

The entities that are parties to the deed represent a ‘Closed Group’ for the purposes of the Class Order, and as there are no other parties to the Deed of Cross Guarantee that are controlled by CSL Limited they also represent the ‘Extended Closed Group’. In respect to the Closed Group comprising the aforementioned entities, set out below is a consolidated income statement and a summary of movements in consolidated retained profi ts for the year ended 30 June 2009 and a consolidated balance sheet as at that date.

Income Statement	Consolidated Group	Consolidated Group
	2009	2008
	$000	$000
Continuing operations
Sales revenue	686,063	666,088
Cost of sales	(412,843)	(360,739)
Gross prof t	273,220	305,349
Sundry revenues	341,515	198,277
Dividend income	244,993	333,616
Interest income	45,193	49,084
Research and development expenses	(175,614)	(130,357)
Selling and marketing expenses	(69,451)	(74,738)
General and administration expenses	(125,259)	(114,595)
Finance costs	(20,269)	(28,387)
Prof t before income tax expense	514,328	538,249
Income tax (expense) / benef t	6,634	(47,164)
Prof t for the year	520,962	491,085

106 CSL Limited Financial Report 2008-2009

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CSL LIMITED AND ITS CONTROLLED ENTITIES

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

FOR THE YEAR ENDED 30 JUNE 2009

		Consolidated Group	Consolidated Group
		2009	2008
		$000	$000
33	Deed of Cross Guarantee (continued)
	Balance sheet
	CURRENT ASSETS
	Cash and cash equivalent	2,078,414	513,897
	Trade and other receivables	121,853	508,317
	Current tax assets	17,414	-
	Inventories	122,604	120,324
	Total Current Assets	2,340,285	1,142,538
	NON-CURRENT ASSETS
	Trade and other receivables	279,176	198,901
	Other f nancial assets	1,797,493	1,235,573
	Property, plant and equipment	379,849	348,242
	Deferred tax assets	30,070	22,133
	Intangible assets	37,497	57,550
	Retirement benef t assets	-	3,518
	Total Non-Current assets	2,524,085	1,865,917
	TOTAL ASSETS	4,864,370	3,008,455
	CURRENT LIABILITIES
	Trade and other payables	287,290	145,881
	Interest-bearing liabilities and borrowings	200,648	16,540
	Current tax liabilities	-	54,157
	Provisions	31,798	30,328
	Deferred government grants	469	469
	Total Current Liabilities	520,205	247,375
	NON-CURRENT LIABILITIES
	Trade and other payables	54	994
	Interest-bearing liabilities and borrowings	177,607	548,013
	Deferred tax liabilities	11,997	14,704
	Provisions	6,573	6,687
	Deferred government grants	12,083	6,950
	Retirement benef t liabilities	2,772	-
	Total Non-Current Liabilities	211,086	577,348
	TOTAL LIABILITIES	731,291	824,723
	NET ASSETS	4,133,079	2,183,732
	EQUITY
	Contributed equity	2,760,207	1,034,337
	Reserves	66,349	38,608
	Retained earnings	1,306,523	1,110,787
	TOTAL EQUITY	4,133,079	2,183,732
	Summary of movements in consolidated
	retained earnings of the Closed Group
	Retained earnings at beginning of the f nancial year	1,110,787	850,107
	Net prof t	520,962	491,085
	Actuarial gain / (loss) on def ned benef t plans, net of tax	(5,734)	(2,974)
	Dividends provided for or paid	(319,492)	(227,431)
	Retained earnings at the end of the f nancial year	1,306,523	1,110,787

CSL Limited Financial Report 2008-2009 107

CSL LIMITED AND ITS CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS CONTINUED FOR THE YEAR ENDED 30 JUNE 2009

34 Financial Risk Management Objectives and Policies

The Group’s principal fi nancial instruments comprise receivables, payables, bank loans and overdrafts, unsecured notes, lease liabilities, available for sale assets and derivative instruments.

The Group’s activities expose it to a variety of fi nancial risks: market risk (including currency and interest rate risk), credit risk and liquidity risk. The Group’s policy is to use derivative fi nancial instruments, such as foreign exchange contracts and interest rate swaps, to manage specifi cally identifi ed risks as approved by the board of directors. The objective of the policy is to support the delivery of the Group’s fi nancial targets whilst protecting future fi nancial security. The accounting policy applied by the Group in respect to derivative fi nancial instruments is outlined in note 1(v). Derivatives are exclusively used for hedging purposes, i.e. not as trading or other speculative instruments. The Group uses different methods to measure different types of risk to which it is exposed. These methods include sensitivity analysis in the case of interest rate and foreign exchange risks.

Market Risk

1. Foreign exchange risk

The Group and parent entity operate internationally and are exposed to foreign exchange risk arising from various currency exposures. Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities denominated in a currency other than the entity’s functional currency and net investments in foreign operations. The Group’s Treasury risk management policy is to hedge contractual commitments denominated in a foreign currency.

The Group enters into forward exchange contracts to buy and sell specifi ed amounts of foreign currencies in the future at predetermined exchange rates. The objective is to match the contracts with committed future cash fl ows from sales and purchases in foreign currencies to protect the Group 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 table below summarises by currency the Australian dollar value of forward exchange agreements at balance date. Foreign currency amounts are translated at rates prevailing at reporting date. The Parent Company 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, however, the hedges are in place to protect the Parent Company and other Group subsidiaries from movements in exchange rates that would give rise to an income statement impact.

an income statement impact.
	Average
	Exchange Rate			2009	2008
			Buy	Sell	Buy	Sell
Currency	2009	2008	$000	$000	$000	$000
US Dollars
3 months or less	0.8113	0.9594	-	(97,146)	5,180	(277,820)
Swiss Francs
3 months or less	0.8767	0.9872	148,561	(24,457)	112,535	(21,877)
Argentina Peso
3 months or less	3.0738	2.8558	-	(9,272)	-	(9,017)
Euro
3 months or less	0.5737	0.6082	211,299	(173,170)	146,686	(118,795)
Pounds Sterling
3 months or less	0.4875	0.4767	3,815	(31,454)	-	(4,780)
Hungarian Florint
3 months or less	158.25	139.79	-	(2,891)	-	(1,237)
Japanese Yen
3 months or less	77.82	101.92	-	(15,721)	-	(14,329)
Swedish Kroner
3 months or less	6.1996	5.7198	-	(10,592)	-	(14,799)
Danish Kroner
3 months or less	4.2789	4.5188	1,439	(2,211)	843	(3,121)
Mexican Peso
3 months or less	10.6936	9.4658	7,469	(36,714)	-	(22,470)
Brazilian Real
3 months or less	1.5854	-	-	(1,451)	-	-
New Zealand Dollar
3 months or less	1.2400	-	484	-	-	-
Australian Dollars
3 months or less	0.7853	0.9596	39,897	(7,885)	231,268	(8,267)
			412,964	(412,964)	496,512	(496,512)

108 CSL Limited Financial Report 2008-2009

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CSL LIMITED AND ITS CONTROLLED ENTITIES

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

FOR THE YEAR ENDED 30 JUNE 2009

34 Financial Risk Management Objectives and Policies (continued)

The Group reduces its foreign exchange risk on net investments in foreign operations, by denominating external borrowings in currencies that match the currencies of its foreign investments.

Included in Interest Bearing Liabilities (refer note 15) as at 30 June 2009, are Unsecured Notes amounting to US$65.8m (2008: US$72.72m) and EUR 63.1m (2008: EUR 65.50m) that are designated as a hedge of the Group’s investment in CSL Holdings Inc and CSL Behring GmbH. A net foreign exchange loss of $23.1m (2008: gain of $6.7m) was recognised in equity on translation of these borrowings to Australian Dollars.

Included in Interest Bearing Liabilities (refer note 15) as at 30 June 2009, are Bank Loans amounting to CHF 160m (2008: CHF nil, EUR 130m) that are designated as a hedge of the Group’s investment in CSL Behring AG. A net foreign exchange gain of $29.0m (2008: loss of $7.3m) was recognised in equity on translation of these borrowings to Australian Dollars.

There was no ineffectiveness recognised on this hedging during the year.

2. Interest rate risk

The Group is exposed to interest rate risk through primary fi nancial assets and liabilities. In accordance with the Group entities approved risk management policies, derivative fi nancial instruments such as interest rate swaps are used to hedge interest rate risk exposures. As at 30 June 2009, no derivative fi nancial instruments hedging interest rate risk were outstanding (2008: Nil).

The following tables summarise interest rate risk for fi nancial assets and fi nancial liabilities, the effective interest rates as at balance date and the periods in which they reprice.

		Fixed	interest rate	maturing in	Non		Average
	Floating	1 year	Over 1 year	Over	interest		interest
Consolidated Group – June 2009	rate (a)	or less	to 5 years	5 years	bearing	Total	rate
	$’000	$’000	$’000	$’000	$’000	$’000	%
Financial Assets
Cash and cash equivalents	2,528,097	-	-	-	-	2,528,097	2.7%
Trade and other receivables	-	-	-	-	896,109	896,109	-
Other f nancial assets	-	-	-	-	9,251	9,251	-
	2,528,097	-	-	-	905,360	3,433,457
Financial Liabilities
Trade and other payables	-	-	-	-	663,818	663,818	-
Bank loans – unsecured	401,986	-	-	-	-	401,986	0.6%
Bank overdraft – unsecured	5,905	-	-	-	-	5,905	8.9%
Senior unsecured notes	-	17,706	248,851	-	-	266,557	5.2%
Lease liabilities	-	3,229	12,381	27,720	-	43,330	5.7%
Other f nancial liabilities	-	-	-	-	873	873	-
	407,891	20,935	261,232	27,720	664,691	1,382,469

CSL Limited Financial Report 2008-2009 109

CSL LIMITED AND ITS CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS CONTINUED FOR THE YEAR ENDED 30 JUNE 2009

34 Financial Risk Management Objectives and Policies (continued)

		Fixed	interest rate	maturing in	Non		Average
	Floating	1 year	Over 1 year	Over	interest		interest
Consolidated Group – June 2008	rate (a)	or less	to 5 years	5 years	bearing	Total	rate
	$’000	$’000	$’000	$’000	$’000	$’000	%
Financial Assets
Cash and cash equivalents	701,590	-	-	-	-	701,590	6.7%
Trade and other receivables	-	-	-	-	717,550	717,550	-
Other f nancial assets	-	-	-	-	9,955	9,955	-
	701,590	-	-	-	727,505	1,429,095
Financial Liabilities
Trade and other payables	-	-	-	-	444,723	444,723	-
Bank loans – unsecured	658,254	-	-	-	-	658,254	3.5%
Bank overdraft – unsecured	5,994	-	-	-	-	5,994	6.0%
Senior unsecured notes	-	15,313	235,800	-	-	251,113	5.2%
Lease liabilities	-	2,744	9,962	25,119	-	37,825	6.4%
Other f nancial liabilities	-	-	-	-	167	167	-
	664,248	18,057	245,762	25,119	444,890	1,398,076

(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 fi nancial assets and interest-bearing fi nancial liabilities, the effective interest rates as at balance date and the periods in which they reprice.

		Fixed	interest rate	maturing in	Non		Average
	Floating	1 year	Over 1 year	Over	interest		interest
Parent Company – June 2009	rate (a)	or less	to 5 years	5 years	bearing	Total	rate
	$’000	$’000	$’000	$’000	$’000	$’000	%
Financial Assets
Cash and cash equivalents	-	-	-	-	-	-	-
Trade and other receivables	-	-	-	-	2,906,420	2,906,420	-
Other f nancial assets	-	-	-	-	1,348,974	1,348,974	-
	-	-	-	-	4,255,394	4,255,394
Financial Liabilities
Trade and other payables	-	-	-	-	1,149,211	1,149,211	-
Bank Overdrafts – Unsecured	55,055	-	-	-	-	55,055	8.9%
	55,055	-	-	-	1,149,211	1,204,266

110 CSL Limited Financial Report 2008-2009

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CSL LIMITED AND ITS CONTROLLED ENTITIES

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

FOR THE YEAR ENDED 30 JUNE 2009

34 Financial Risk Management Objectives and Policies (continued)

		Fixed	interest rate	maturing in	Non		Average
	Floating	1 year	Over 1 year	Over	interest		interest
Parent Company – June 2008	rate (a)	or less	to 5 years	5 years	bearing	Total	rate
	$’000	$’000	$’000	$’000	$’000	$’000	%
Financial Assets
Cash and cash equivalents	-	-	-	-	-	-	-
Trade and other receivables	-	-	-	-	676,656	676,656	-
Other f nancial assets	-	-	-	-	1,340,144	1,340,144	-
	-	-	-	-	2,016,800	2,016,800
Financial Liabilities
Trade and other payables	-	-	-	-	684,820	684,820	-
Bank Overdrafts – Unsecured	5,789	-	-	-	-	5,789	6.0%
	5,789	-	-	-	684,820	690,609

(a) Floating interest rates represent the most recently determined rate applicable to the instrument at balance sheet date.

Sensitivity analysis

In managing interest rate and currency risks the Group aims to reduce the impact of short-term fl uctuations on the Group’s earnings. However, over the longer-term, permanent changes in foreign exchange and interest rates would give rise to a Group income statement impact.

At 30 June 2009 it is estimated that a general movement of one percentage point in the interest rates applicable to fl oating rate unsecured bank loans would have changed the Group’s profi t after tax by approximately $2.6 million. This calculation is based on applying a 1% movement to the total of the Group’s unsecured bank loans at year end. All other interest bearing debt amounts are subject to fi xed rate and therefore not subject to interest rate movements in the ordinary course.

It is estimated that a general movement of one percentage point in the value of the Australian Dollar against other currencies would change the Group’s profi t after tax by approximately $8.3m for the year ended 30 June 2009 comprising $3.9m, $3.7m, $0.3m and $0.4m against the Euro, Swiss Franc, US Dollar and all other currencies respectively. This calculation is based on changing the actual exchange rate of Australian Dollars to all other currencies during the year by 1% and applying these adjusted rates to the translation of the foreign currency denominated fi nancial statements of various Group entities.

These sensitivity estimates may not apply in future years due to changes in the mix of profi ts derived in different currencies and in the Group’s net debt levels.

Credit Risk

Credit risk represents the extent of credit related losses that the Group may be subject to on amounts to be exchanged under fi nancial 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 fi nancial instruments are with counterparties with whom the Group 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 Group’s policy is to only invest its cash and cash equivalent fi nancial assets with fi nancial institutions having a credit rating of at least ‘A’ or better, as assessed by independent rating agencies.

The Group minimises 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 provision for impairment, of each fi nancial asset in the balance sheet.

CSL Limited Financial Report 2008-2009 111

CSL LIMITED AND ITS CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS CONTINUED FOR THE YEAR ENDED 30 JUNE 2009

34 Financial Risk Management Objectives and Policies (continued)

The credit quality of fi nancial assets that are neither past due, nor impaired is as follows:

	Financial			Buying
For the year ended 30 June 2009	Institutions	Governments	Hospitals	Groups	Other	Total
Cash and cash equivalents	2,528,097	-	-	-	-	2,528,097
Trade and other receivables	1,388	52,831	301,889	267,506	272,495	896,109
Other f nancial assets	9,251	-	-	-	-	9,251
	2,538,736	52,831	301,889	267,506	272,495	3,433,457
For the year ended 30 June 2008
Cash and cash equivalents	701,590	-	-	-	-	701,590
Trade and other receivables	3,290	53,363	251,171	201,239	208,487	717,550
Other f nancial assets	9,955	-	-	-	-	9,955
	714,835	53,363	251,171	201,239	208,487	1,429,095

The Group has not renegotiated any material collection/repayment terms of any fi nancial assets in the current fi nancial year.

An analysis of trade receivables that are past due and, where required, the associated provision for impairment is as follows. All other fi nancial assets are less than 30 days overdue.

	Trade receivables	which are:	Provision for
For the year ended 30 June 2009:	Not impaired	Impaired	impairment
	$000	$000	$000
Trade and other receivables:
current but not overdue	497,175	-	-
less than 30 days overdue	92,628	-	-
more than 30 but less than 90 days overdue	48,065	-	-
more than 90 days overdue	121,018	20,254	20,254
	758,886	20,254	20,254
For the year ended 30 June 2008:
Trade and other receivables:
current but not overdue	391,033	-	-
less than 30 days overdue	93,624	-	-
more than 30 but less than 90 days overdue	46,378	-	-
more than 90 days overdue	64,206	20,415	20,415
	595,241	20,415	20,415

Financial assets are considered impaired where there is objective evidence that the Group will not be able to collect all amounts due according to the original trade and other receivable terms. Factors considered when determining if an impairment exists include aging and timing of expected receipts and the credit worthiness of counterparties. A provision for impairment is created for the difference between the assets carrying amount and the present value of estimated future cash fl ows. The Group’s trading terms do not generally include the requirement for customers to provide collateral as security for fi nancial assets.

112 CSL Limited Financial Report 2008-2009

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CSL LIMITED AND ITS CONTROLLED ENTITIES

NOTES TO THE FINANCIAL STATEMENTS CONTINUED

FOR THE YEAR ENDED 30 JUNE 2009

34 Financial Risk Management Objectives and Policies (continued)

Funding and liquidity risk

Funding and liquidity risk is the risk that CSL cannot meet its fi nancial commitments as and when they fall due. One form of this risk is credit spread risk which is the risk that in refi nancing its debt, CSL may be exposed to an increased credit spread (the credit spread is the margin that must be paid over the equivalent government or risk free rate or swap rate). Another form of this risk is liquidity risk which is the risk of not being able to refi nance debt obligations or meet other cash outfl ow obligations at any reasonable cost when required.

Liquidity and re-fi nancing risks are not signifi cant for the Group, as CSL has a prudent gearing level and strong cash fl ows. The focus on improving operational cash fl ow and maintaining a strong balance sheet mitigates refi nancing and liquidity risks enabling the Group to actively manage its capital position.

CSL’s objectives in managing its funding and liquidity risks include ensuring the Group can meet its fi nancial commitments as and when they fall due, ensuring the Group has suffi cient funds to achieve its working capital and investment objectives, ensuring that short-term liquidity, long-term liquidity and crisis liquidity requirements are effectively managed, minimising the cost of funding and maximising the return on any surplus funds through effi cient cash management, and ensuring adequate fl exibility in fi nancing to balance short-term liquidity requirements and long-term core funding, and minimise refi nancing risk.

The below table shows the profi le of fi nancial liabilities:

The below table shows the prof le of f nancial liabilities:
		Maturing in:
	1 year or	Over 1 year	Over
Consolidated Group – June 2009	less	to 5 years	5 years	Total
	$’000	$’000	$’000	$’000
Financial Liabilities
Trade and other payables	663,818	-	-	663,818
Bank loans – unsecured	305,518	96,468	-	401,986
Bank overdraft – unsecured	5,905	-	-	5,905
Senior unsecured notes	17,706	248,851	-	266,557
Lease liabilities	3,229	12,381	27,720	43,330
Other f nancial liabilities	873	-	-	873
	997,049	357,700	27,720	1,382,469
Consolidated Group – June 2008
Financial Liabilities
Trade and other payables	444,723	-	-	444,723
Bank loans – unsecured	104,001	554,253	-	658,254
Bank overdraft – unsecured	5,994	-	-	5,994
Senior unsecured notes	15,313	235,800	-	251,113
Lease liabilities	2,744	9,962	25,119	37,825
Other f nancial liabilities	167	-	-	167
	572,942	800,015	25,119	1,398,076
		Maturing in:
	1 year or	Over 1 year	Over
Parent Company – June 2009	less	to 5 years	5 years	Total
	$’000	$’000	$’000	$’000
Financial Liabilities
Trade and other payables	1,149,211	-	-	1,149,211
Bank Overdrafts – Unsecured	55,055	-	-	55,055
	1,204,266	-	-	1,204,266
Parent Company – June 2008
Financial Liabilities
Trade and other payables	684,820	-	-	684,820
Bank Overdrafts – Unsecured	5,789	-	-	5,789
	690,609	-	-	690,609

CSL Limited Financial Report 2008-2009 113

CSL LIMITED AND ITS CONTROLLED ENTITIES NOTES TO THE FINANCIAL STATEMENTS CONTINUED FOR THE YEAR ENDED 30 JUNE 2009

34 Financial Risk Management Objectives and Policies (continued)

Fair values

With the exception of certain of the Group’s fi nancial liabilities as disclosed in the table below, the remainder of the Group’s and the company’s fi nancial assets and fi nancial liabilities have a fair value equal to the carrying value of those assets and liabilities as shown in the Group’s and company’s respective balance sheet. There are no unrecognised gains or losses in respect to any fi nancial asset or fi nancial liability.

liability.
	Carrying	Fair	Carrying	Fair
	amount	Value	amount	Value
Consolidated Group	2009	2009	2008	2008
	$000	$000	$000	$000
Financial Liabilities
Interest bearing liabilities and borrowings
Unsecured bank loans	401,986	402,227	658,254	658,676
Unsecured notes	266,557	267,415	251,113	252,286

The following methods and assumptions were used to determine the net fair values of fi nancial assets and liabilities:

Trade and other receivables / payables

The carrying value of trade and other receivables/payables with a remaining life of less than one year is deemed to refl ect its fair value.

Forward exchange contracts are ‘marked to market’ using listed market prices.

Fair value is estimated using valuation techniques including recent arm’s length transactions of like assets, discounted cash fl ow analysis and comparison to fair values of similar fi nancial instruments.

Interest bearing liabilities and borrowings

Fair value is calculated based on the discounted expected future principal and interest cash fl ows.

Interest bearing liabilities and borrowings – fi nance leases

The fair value is estimated as the present value of future cash fl ows, discounted at market interest rates for homogeneous lease agreements. The estimated fair values refl ect change in interest rates.

Capital Risk Management

The Group’s and the Parent Company’s objectives when managing capital are to safeguard their ability to continue as a going concern whilst providing returns to shareholders and benefi ts to other stakeholders. The Group aims to maintain a capital structure which refl ects the use of a prudent level of debt funding so as to reduce the Group’s and the parent entity’s cost of capital without adversely affecting either of their credit ratings.

In the ordinary course, the parent targets to distribute 35% of each year’s profi t after tax by way of dividends. Amounts paid by way of dividend are disclosed in note 23.

During 2009, the parent raised $1.85 billion of new equity capital in anticipation of applying the funds raised, together with amounts available under newly secured debt fi nance facilities, to fund a potential acquisition opportunity as set out in note 3. Ultimately the acquisition did not proceed. The Parent Company announced a share buyback program on 9 June 2009. Up to 54,863,000 of shares, or 9% of total shares on issue as at 9 June 2009, may be bought back under the buyback program. The buyback is expected to improve investment return ratios such as earnings per share and return on equity to the benefi t of shareholders in the future. Up to 30 June 2009, the Parent Company had purchased 4,261,134 ordinary shares on market at an average price of $31.83 per share, with prices ranging from $31.03 to $32.32. Subsequent to year end and from 1 July until 10 July 2009, an additional 4,282,285 shares were purchased with prices ranging between $30.39 and $31.85. Post 10 July and up to 19 August 2009, no further shares have been bought back.

35 Subsequent events

Other than as disclosed elsewhere in the fi nancial statements, there are no other matters or circumstances which have arisen since the end of the fi nancial year which have signifi cantly affected or may signifi cantly affect the operations of the Group, results of those operations or the state of affairs of the Group in subsequent fi nancial years.

114 CSL Limited Financial Report 2008-2009

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CSL LIMITED

DIRECTORS’ DECLARATION

In the opinion of the Directors:
(a) the fi nancial report, and the remuneration report included in the directors’ report of the company and of the Group are in accordance with the Corporations Act 2001, including:
- (i) giving a true and fair view of the company’s and Group’s fi nancial position as at 30 June 2009 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.
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 fi nancial period ended 30 June 2009.
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 identifi ed 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 28 June 2007.

This declaration is made in accordance with a resolution of the directors.

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Elizabeth A Alexander Chairman Managing Director

Brian A McNamee

Melbourne

19 August 2009

CSL Limited Financial Report 2008-2009 115

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==> picture [36 x 122] intentionally omitted <==

INDEPENDENT AUDITOR’S REPORT

TO THE MEMBERS OF CSL LIMITED

Report on the Financial Report

We have audited the accompanying fi nancial report of CSL Limited, which comprises the balance sheet as at 30 June 2009, and the income statement, statement of recognised income and expense and cash fl ow statement for the year ended on that date, a summary of signifi cant accounting policies, other explanatory notes and the directors’ declaration of the consolidated entity comprising the company and the entities it controlled at the year’s end or from time to time during the fi nancial year.

Directors’ Responsibility for the Financial Report

The directors of the company are responsible for the preparation and fair presentation of the fi nancial report in accordance with the Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Act 2001. This responsibility includes establishing and maintaining internal controls relevant to the preparation and fair presentation of the fi nancial report that is free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. In Note 1, the directors also state that the fi nancial report, comprising the fi nancial statements and notes, complies with International Financial Reporting Standards as issued by the International Accounting Standards Board.

Auditor’s Responsibility

Our responsibility is to express an opinion on the fi nancial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. These Auditing Standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance whether the fi nancial report is free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the fi nancial report. The procedures selected depend on our judgment, including the assessment of the risks of material misstatement of the fi nancial report, whether due to fraud or error. In making those risk assessments, we consider internal controls relevant to the entity’s preparation and fair presentation of the fi nancial report in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the fi nancial report.

We believe that the audit evidence we have obtained is suffi cient and appropriate to provide a basis for our audit opinion.

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116 CSL Limited Financial Report 2008-2009

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Independence

In conducting our audit we have met the independence requirements of 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. In addition to our audit of the fi nancial report, we were engaged to undertake the services disclosed in the notes to the fi nancial statements. The provision of these services has not impaired our independence.

Auditor’s Opinion

In our opinion:

the fi nancial report of CSL Limited is in accordance with the Corporations Act 2001, including:
(i) giving a true and fair view of the fi nancial position of CSL Limited and the consolidated entity at 30 June 2009 and of their performance for the year ended on that date; and
(ii) complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Regulations 2001.
the fi nancial report also complies with International Financial Reporting Standards as issued by the International Accounting Standards Board.

Report on the Remuneration Report

We have audited the Remuneration Report included in Section 15 of the directors’ report for the year ended 30 June 2009. The directors of the company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.

Auditor’s Opinion

In our opinion the Remuneration Report of CSL Limited for the year ended 30 June 2009, complies with section 300A of the Corporations Act 2001.

Ernst & Young

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Denis Thorn Partner Melbourne 19 August 2009

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Paper stocks used for the production of this document are environmentally responsible papers manufactured by ISO 14001 certifi ed mills using Elemental Chlorine Free (ECF) pulp. They are FSC Mixed Sources certifi ed, which ensures that all virgin pulp is derived from well-managed forests and controlled sources.

CSL BEHRING

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

Our therapies are indicated for treatment of coagulation disorders including haemophilia and von Willebrand disease, primary immune defi ciencies and inherited respiratory disease.

CSL Behring products are also used to prevent haemolytic disease in newborns, speed recovery from heart surgery, prevent infection in people undergoing solid organ transplants, and help victims of shock and burns to recover faster.

CSL BIOPLASMA

CSL Bioplasma provides plasma fractionation services in Melbourne under contracts with Australia, New Zealand, Hong Kong, Malaysia, Singapore, and Taiwan. We market commercial plasma products in Asia (excluding Japan) and operate an immunohaematology blood grouping business in Australia.

CSL BIOTHERAPIES

CSL Biotherapies manufactures and markets vaccines and pharmaceutical products in Australia and New Zealand and is responsible for global sales of our infl uenza vaccines.

In-licensed pharmaceutical products include vaccines and a range of neurological, cardio-thoracic, dermatological, analgesic, urological, allergy and emergency products.

NEW PRODUCT DEVELOPMENT

Global research and development activities support CSL’s core licensed product businesses and three other areas of new product development:

Replacement therapies that enhance our plasma products portfolio;
Therapeutic proteins based on recombinant proteins and antibodies; and
Vaccines that use our proprietary ISCOMATRIX® adjuvant and/or our infl uenza vaccine capabilities.

CORPORATE DIRECTORY

REGISTERED HEAD OFFICE

CSL Limited

45 Poplar Road Parkville Victoria 3052 Australia Phone: +61 3 9389 1911 Fax: +61 3 9389 1434 www.csl.com.au

SHARE REGISTRY

Computershare Investor Services Pty Limited

Yarra Falls 452 Johnston Street Abbotsford VIC 3067

GPO Box 2975 Melbourne Victoria 3001 Enquiries within Australia: 1800 646 882 Enquiries outside Australia: +61 3 9415 4178 Investor enquiries facsimile: +61 3 9473 2500 Website: www.computershare.com Email: [email protected]

AUDITORS

Ernst & Young

Ernst & Young Building 8 Exhibition Street Melbourne Victoria 3000

GPO Box 67 Melbourne Victoria 3001 Phone: +61 3 9288 8000 Fax: +61 3 8650 7777

FURTHER INFORMATION

For further information about CSL and its operations, refer to Company announcements to the Australian Securities Exchange and our website:

AI assistant

CSL Ltd. — Annual Report 2009

17854_rns_2009-09-10_8e54d3f7-8a1e-4c6a-aa5e-58d9ad72f29e.pdf

CONTENTS

YEAR IN REVIEW

OUR COMPANY

FINANCIAL REPORT

BUSINESS FEATURES

FINANCIAL CALENDAR

ANNUAL GENERAL MEETING

AGM LIVE WEBCAST

SHARE REGISTRY

DEAR SHAREHOLDER,

YEAR IN REVIEW 2008-2009 FINANCIAL RESULTS

DIVIDENDS TO SHAREHOLDERS

DIVIDENDS AND FINANCIAL RESULTS

CSL BEHRING

BUSINESS REPORTS

CSL BIOPLASMA

YEAR IN REVIEW 2008-2009 CONTINUED

CSL BIOTHERAPIES

NEW PRODUCT DEVELOPMENT

OUR THANKS TO MANAGEMENT AND STAFF

BUSINESS FEATURE CSL BEHRING

A MILESTONE FOR RHOPHYLAC[®]

MAJOR PRODUCTS MARKETED BY CSL BEHRING

HAEMOPHILIA AND OTHER COAGULATION DISORDERS

Plasma-derived Factor VIII

and von Willebrand Factor

Recombinant Factor VIII

Plasma-derived Factor X

Other Products

CRITICAL CARE CONDITIONS

Coagulation Disorders

Trauma Therapies

Other Critical Care

WOUND HEALING

IMMUNE DISORDERS AND IMMUNE THERAPY

Polyvalent Immunoglobulins

Subcutaneous Immunoglobulins

Specifi c Immunoglobulins

ALPHA 1-PROTEINASE INHIBITOR DEFICIENCY

CSL BEHRING CONTINUED

INDUSTRY FORUM PROMOTES WORK-LIFE BALANCE

NEW KNOXVILLE LABORATORY OPENED

NORD AWARD TO CSL BEHRING FOR RIASTAP™

CSL PLASMA

US STATES AND GERMAN CITIES WITH CSL PLASMA COLLECTION CENTRES

CSL PLASMA

MAJOR PLASMA PRODUCTS MANUFACTURED BY CSL BIOPLASMA

HAEMOPHILIA AND OTHER COAGULATION DISORDERS

MonoFix[®] -VF

IMMUNE DISORDERS AND IMMUNE THERAPY

DIAGNOSTIC PRODUCTS

Reagent Red Blood Cells

Monoclonal Reagents

Supplementary Reagents

CRITICAL CARE CONDITIONS

Albumex[®]

Thrombotrol[®] -VF

Tetanus Immunoglobulin-VF

Snake Venom Detection Products

Special Access Scheme

Sandoglobulin[®] NF Liquid

Toll Fractionation

PANDEMIC INFLUENZA VACCINE

Q-FEVER FACILITY OPENED

TRADEMARKS

MAJOR PHARMACEUTICAL PRODUCTS MARKETED BY CSL BIOTHERAPIES IN AUSTRALIA

VACCINES

PANDEMIC VACCINE CLINICAL TRIALS

CSL HAS A GLOBAL ROLE

RESEARCH AND DEVELOPMENT INVESTMENT

RESEARCH AND DEVELOPMENT OPERATIONS

OUR PEOPLE GLOBAL CONNECTIONS

CODE OF RESPONSIBLE BUSINESS PRACTICE

Our Values bind the CSL group of companies together through a shared commitment to:

CREATING EFFECTIVE CROSS-CULTURAL PROJECT TEAMS

SUCCESSION AND TALENT DEVELOPMENT

HEALTH, SAFETY AND ENVIRONMENT

CSL Ltd. Annual Report 2009