Survey
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
Securitization wikipedia , lookup
Financial literacy wikipedia , lookup
Systemic risk wikipedia , lookup
Financial economics wikipedia , lookup
Global financial system wikipedia , lookup
Mark-to-market accounting wikipedia , lookup
Global saving glut wikipedia , lookup
Financial crisis wikipedia , lookup
Systemically important financial institution wikipedia , lookup
CSL Limited Financial Report 1999 - 2000 CSL Board of Directors CSL Limited ABN 99 051 588 348 CSL Limited develops, manufactures and markets pharmaceutical products of biological origin. Contents Our business is health care: 1 CSL Board of Directors 2 Financial Calendar • Life-saving products derived from human plasma; 2 CSL Monthly Share Price • Pharmaceuticals and diagnostics essential to 3 Directors’ Report 6 Profit and Loss Statement 7 Balance Sheet 8 Statement of Cash Flows 9 Notes to the Financial Statements 34 Directors’ Declaration 35 Auditor’s Report 36 Financial Highlights 36 Five Year Summary 37 CSL Business Offices community health; • Veterinary vaccines and diagnostics to protect livestock and companion animals; • Cell culture and blood grouping reagents. Peter H Wade, FCPA, FAICD - Chairman (age 66) - Finance, Management (resident in Victoria) Ian A Renard, BA, LLM, FAICD (age 54) - Law (resident in Victoria). Mr Wade was elected to the Board in 1994. He had previously served CSL as a Commissioner and Director from 1985 to 1993 including a period as Acting Chairman during 1988. Mr Wade is a Director of Tabcorp Holdings Limited, former Managing Director, North Limited and former Chairman of Acacia Resources Limited, Energy Resources of Australia Limited, and Gunns Kilndried Timber Industries Limited. Mr Renard was appointed to the CSL Board in August 1998. He is a Partner of Arthur Robinson & Hedderwicks, solicitors, practising in company and commercial law. He is a Director of AMP Limited, Newcrest Mining Limited, Ericsson Australia Pty Ltd and Hillview Quarries Pty Ltd, and was formerly a Director of North Limited. Mr Renard is also a Member of the Council of the University of Melbourne and a Member of the Board of Governors of Melbourne University Private Limited. Mr Renard is a Member of the Audit and Risk Management Committee. Brian A McNamee, MB, BS - Managing Director (age 43) - Pharmaceutical Industry, Medicine (resident in Victoria). Dr McNamee is the Chief Executive and Managing Director of CSL. Dr McNamee completed Bachelor of Medicine and Bachelor of Surgery Degrees at the University of Melbourne in 1979. Before taking up his present position in 1990, Dr McNamee was Managing Director and Chief Executive of Pacific Biotechnology Limited in Sydney, NSW (1988-89), General Manager, Faulding Product Divisions, F H Faulding & Co Limited, Adelaide, South Australia (1984-87), and International Product Manager, Dr Madaus & Co, based in Cologne, West Germany (1982-84). Elizabeth A Alexander, AM. BCom, FCPA, FAIM, FCA, FAICD (age 57) - Accounting (resident in Victoria). Miss Alexander was appointed to the CSL Board in July 1991. She is a Partner of PricewaterhouseCoopers, and a Director of Amcor Limited and Boral Limited. She is National Vice President of the Australian Institute of Company Directors, a Member of the Corporations and Securities Panel of the Australian Securities and Investment Commission, past National President of the Australian Society of Certified Practising Accountants, a Member of the Council of the Australian Defence Force Academy and a Member of the Deputy Prime Minister’s Trade Policy and Advisory Committee. She was a Member of the National Commission of Audit. Miss Alexander is Chairman of the Audit and Risk Management Committee. C Ian R McDonald, BSc (Hons) (age 67) - International Pharmaceutical Industry (resident in NSW). Front Cover photographs: Inside the ZLB plasma products facility at Bern in Switzerland. In June 2000, CSL entered into a conditional agreement to purchase the plasma fractionation assets and business (ZLB) from a foundation affiliated with the Swiss Red Cross. Through the ZLB acquisition, CSL will become the largest fractionator of recovered plasma in the world and a major producer of intravenous immunoglobulin (IVIG) products. Mr McDonald was appointed a Director of CSL in October 1992. Mr McDonald was formerly Group Vice President, Pharmaceuticals, of Syntex Corporation, President of Syntex Pharmaceuticals International Limited, Vice President Asia Pacific of G D Searle & Co and a former Director of Agen Limited Group. He is a past Managing Director of Searle Australia Pty Limited and Mead Johnson Pty Limited, and is a Director of Rothschild Bioscience Managers Limited. Mr McDonald is a Member of the Audit and Risk Management Committee. Kenneth J Roberts, AM, BEc, FCPA, FAIM, FAICD (age 62) - International Pharmaceutical Industry, Management, Marketing (resident in NSW). Mr Roberts was appointed to the Board in February 1996. Formerly, he was Chairman and Managing Director of Wellcome Australasia and Director of Marketing Development for the Wellcome worldwide group. He is Chairman of the Royal Australasian College of Physicians Research and Education Foundation, Start-up Australia Pty Ltd, and Open Software Associates Limited. Mr Roberts is also a Member of the Boards of the Australian Genome Research Facility and the University of Queensland Centre for Drug Design and Development, and a Council Member of the National Museum of Australia. Arthur C Webster, BVSc, DipBact (Lond) (age 56) - Animal Health Industry, Commerce (resident in NSW). Dr Webster was appointed to the CSL Board in March 1998. He was formerly Technical Director then Managing Director of the animal health company Cyanamid Webster Pty Ltd and a Member of the Board of Governors, University of Western Sydney. Antoni M Cipa, B.Bus (Acc), Grad.Dip (Acc), ACIS (age 45) - Finance (resident in Victoria) Mr Cipa was appointed to the CSL Board as Finance Director in August 2000. Mr Cipa commenced his employment at CSL in 1990 as Finance Manager. He was instrumental in the float of the Company in 1994 at which time he was appointed Chief Financial Officer. Prior to joining CSL, Mr Cipa was employed at large public companies where he had significant exposure to mergers and acquisitions. Company Secretary Peter R Turvey, BA/LLB CSL Limited and Controlled Entities (ACN 051 588 348) 1 CSL Board of Directors CSL Limited ABN 99 051 588 348 CSL Limited develops, manufactures and markets pharmaceutical products of biological origin. Contents Our business is health care: 1 CSL Board of Directors 2 Financial Calendar • Life-saving products derived from human plasma; 2 CSL Monthly Share Price • Pharmaceuticals and diagnostics essential to 3 Directors’ Report 6 Profit and Loss Statement 7 Balance Sheet 8 Statement of Cash Flows 9 Notes to the Financial Statements 34 Directors’ Declaration 35 Auditor’s Report 36 Financial Highlights 36 Five Year Summary 37 CSL Business Offices community health; • Veterinary vaccines and diagnostics to protect livestock and companion animals; • Cell culture and blood grouping reagents. Peter H Wade, FCPA, FAICD - Chairman (age 66) - Finance, Management (resident in Victoria) Ian A Renard, BA, LLM, FAICD (age 54) - Law (resident in Victoria). Mr Wade was elected to the Board in 1994. He had previously served CSL as a Commissioner and Director from 1985 to 1993 including a period as Acting Chairman during 1988. Mr Wade is a Director of Tabcorp Holdings Limited, former Managing Director, North Limited and former Chairman of Acacia Resources Limited, Energy Resources of Australia Limited, and Gunns Kilndried Timber Industries Limited. Mr Renard was appointed to the CSL Board in August 1998. He is a Partner of Arthur Robinson & Hedderwicks, solicitors, practising in company and commercial law. He is a Director of AMP Limited, Newcrest Mining Limited, Ericsson Australia Pty Ltd and Hillview Quarries Pty Ltd, and was formerly a Director of North Limited. Mr Renard is also a Member of the Council of the University of Melbourne and a Member of the Board of Governors of Melbourne University Private Limited. Mr Renard is a Member of the Audit and Risk Management Committee. Brian A McNamee, MB, BS - Managing Director (age 43) - Pharmaceutical Industry, Medicine (resident in Victoria). Dr McNamee is the Chief Executive and Managing Director of CSL. Dr McNamee completed Bachelor of Medicine and Bachelor of Surgery Degrees at the University of Melbourne in 1979. Before taking up his present position in 1990, Dr McNamee was Managing Director and Chief Executive of Pacific Biotechnology Limited in Sydney, NSW (1988-89), General Manager, Faulding Product Divisions, F H Faulding & Co Limited, Adelaide, South Australia (1984-87), and International Product Manager, Dr Madaus & Co, based in Cologne, West Germany (1982-84). Elizabeth A Alexander, AM. BCom, FCPA, FAIM, FCA, FAICD (age 57) - Accounting (resident in Victoria). Miss Alexander was appointed to the CSL Board in July 1991. She is a Partner of PricewaterhouseCoopers, and a Director of Amcor Limited and Boral Limited. She is National Vice President of the Australian Institute of Company Directors, a Member of the Corporations and Securities Panel of the Australian Securities and Investment Commission, past National President of the Australian Society of Certified Practising Accountants, a Member of the Council of the Australian Defence Force Academy and a Member of the Deputy Prime Minister’s Trade Policy and Advisory Committee. She was a Member of the National Commission of Audit. Miss Alexander is Chairman of the Audit and Risk Management Committee. C Ian R McDonald, BSc (Hons) (age 67) - International Pharmaceutical Industry (resident in NSW). Front Cover photographs: Inside the ZLB plasma products facility at Bern in Switzerland. In June 2000, CSL entered into a conditional agreement to purchase the plasma fractionation assets and business (ZLB) from a foundation affiliated with the Swiss Red Cross. Through the ZLB acquisition, CSL will become the largest fractionator of recovered plasma in the world and a major producer of intravenous immunoglobulin (IVIG) products. Mr McDonald was appointed a Director of CSL in October 1992. Mr McDonald was formerly Group Vice President, Pharmaceuticals, of Syntex Corporation, President of Syntex Pharmaceuticals International Limited, Vice President Asia Pacific of G D Searle & Co and a former Director of Agen Limited Group. He is a past Managing Director of Searle Australia Pty Limited and Mead Johnson Pty Limited, and is a Director of Rothschild Bioscience Managers Limited. Mr McDonald is a Member of the Audit and Risk Management Committee. Kenneth J Roberts, AM, BEc, FCPA, FAIM, FAICD (age 62) - International Pharmaceutical Industry, Management, Marketing (resident in NSW). Mr Roberts was appointed to the Board in February 1996. Formerly, he was Chairman and Managing Director of Wellcome Australasia and Director of Marketing Development for the Wellcome worldwide group. He is Chairman of the Royal Australasian College of Physicians Research and Education Foundation, Start-up Australia Pty Ltd, and Open Software Associates Limited. Mr Roberts is also a Member of the Boards of the Australian Genome Research Facility and the University of Queensland Centre for Drug Design and Development, and a Council Member of the National Museum of Australia. Arthur C Webster, BVSc, DipBact (Lond) (age 56) - Animal Health Industry, Commerce (resident in NSW). Dr Webster was appointed to the CSL Board in March 1998. He was formerly Technical Director then Managing Director of the animal health company Cyanamid Webster Pty Ltd and a Member of the Board of Governors, University of Western Sydney. Antoni M Cipa, B.Bus (Acc), Grad.Dip (Acc), ACIS (age 45) - Finance (resident in Victoria) Mr Cipa was appointed to the CSL Board as Finance Director in August 2000. Mr Cipa commenced his employment at CSL in 1990 as Finance Manager. He was instrumental in the float of the Company in 1994 at which time he was appointed Chief Financial Officer. Prior to joining CSL, Mr Cipa was employed at large public companies where he had significant exposure to mergers and acquisitions. Company Secretary Peter R Turvey, BA/LLB CSL Limited and Controlled Entities (ACN 051 588 348) 1 Directors’ Report Financial Calendar 22 28 12 18 31 2000 September September October October December 20 6 11 25 30 21 21 27 11 17 31 2001 February April April April June August September September October October December The Board of Directors of CSL Limited has pleasure in submitting the balance sheet of the Company and of the economic entity at 30 June 2000, and the related profit and loss statement and statement of cash flows for the year then ended, and reports as follows: Shares traded ex-dividend Record date for final dividend Final dividend paid Annual General Meeting Half year ends 1. Directors The directors of the Company in office at the date of this report are: 2. Directors’ Shareholdings and Interests At the date of this report, the relevant interests of the directors in, and their rights or options over, shares of the Company and related bodies corporate were: June 2000 CSL Limited $32.00 Ordinary Shares $30.00 P H Wade $28.00 $26.00 $24.00 120,000 E A Alexander - A M Cipa 500 $22.00 $20.00 C I R McDonald $18.00 I A Renard K J Roberts $16.00 June 1999 $14.00 12,824 (SESOP I) 154,770 (SESOP II) 40,000 500 2,000 A C Webster - 3. Directors‘ Interests in Contracts June 1997 $10.00 $8.00 June 1996 Remuneration Committee 4 4 1 1 P H Wade 13 13 2 2 B A McNamee 12 13 3 5 2 2 E A Alexander 13 13 5 5 1 2 C I R McDonald 12 13 3 5 1 2 I A Renard 12 13 4 5 2 2 K J Roberts 13 13 2 2 A C Webster 13 13 2 2 * C J Harper retired from the board on 12 October 1999 5. Principal Activities The principal activities of the economic entity during the financial year were the research, development, manufacture, marketing and distribution of pharmaceutical and allied products. No significant change in the nature of those activities has taken place during that period. 6. Operating Results The consolidated profit of the economic entity for the financial year, after providing for income tax, amounted to $54.4m. This represents a 14.8% improvement on the 1998-99 result of $47.4m. 7. Dividends 300,000 (SESOP II) June 1998 $12.00 $6.00 Share Options 16,400 B A McNamee Audit and Risk Management Committee Attended Maximum Attended Maximum Attended Maximum Particulars of all directors who held office during or since the end of the financial year are to be found in Note 23 of this Financial Report. $34.00 The attendances of directors at meetings of the Board and its Committees were: C J Harper * Particulars of the directors' qualifications, experience, special responsibilities and ages are set out on Page 1 in the Directors' Profiles section of this Financial Report. CSL Monthly Share Price: June 1995 to June 2000 During the year, the Board held thirteen meetings. The Audit and Risk Management Committee met five times and the Remuneration Committee twice. The Nomination Committee comprises the full Board and meets in conjunction with Board Meetings. Board of Directors Mr P H Wade (Chairman) Dr B A McNamee (Managing Director) Miss E A Alexander, AM Mr A M Cipa Mr C I R McDonald Mr I A Renard Mr K J Roberts, AM Dr A C Webster Half year profit and interim dividend announcement Shares traded ex-dividend Record date for interim dividend Interim dividend paid Year ends Annual profit and final dividend announcement Shares traded ex-dividend Record date for final dividend Final dividend paid Annual General Meeting Half year ends 4. Directors‘ Meetings Particulars of Directors' interest in contracts are to be found in Note 29 of the financial statements. The following dividends have been paid or declared since the end of the preceding financial year: 1998-1999 A final dividend for the year ended 30 June 1999 of 14 cents per ordinary share, franked at 36%, was paid on 14 October 1999 out of profits for that year as declared by the directors in last year's Directors' Report. 1999-2000 An interim dividend on ordinary shares of 8 cents per share, fully franked at 36% was paid on 26 April 2000. The directors of the Company have declared a final dividend of 15 cents per ordinary share for the year ended 30 June 2000, to be paid out of profits for that year. The dividend is fully franked at 34%. June 1995 $4.00 $2.00 J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J 2 CSL Limited and Controlled Entities (ACN 051 588 348) CSL Limited and Controlled Entities (ACN 051 588 348) 3 Directors’ Report Financial Calendar 22 28 12 18 31 2000 September September October October December 20 6 11 25 30 21 21 27 11 17 31 2001 February April April April June August September September October October December The Board of Directors of CSL Limited has pleasure in submitting the balance sheet of the Company and of the economic entity at 30 June 2000, and the related profit and loss statement and statement of cash flows for the year then ended, and reports as follows: Shares traded ex-dividend Record date for final dividend Final dividend paid Annual General Meeting Half year ends 1. Directors The directors of the Company in office at the date of this report are: 2. Directors’ Shareholdings and Interests At the date of this report, the relevant interests of the directors in, and their rights or options over, shares of the Company and related bodies corporate were: June 2000 CSL Limited $32.00 Ordinary Shares $30.00 P H Wade $28.00 $26.00 $24.00 120,000 E A Alexander - A M Cipa 500 $22.00 $20.00 C I R McDonald $18.00 I A Renard K J Roberts $16.00 June 1999 $14.00 12,824 (SESOP I) 154,770 (SESOP II) 40,000 500 2,000 A C Webster - 3. Directors‘ Interests in Contracts June 1997 $10.00 $8.00 June 1996 Remuneration Committee 4 4 1 1 P H Wade 13 13 2 2 B A McNamee 12 13 3 5 2 2 E A Alexander 13 13 5 5 1 2 C I R McDonald 12 13 3 5 1 2 I A Renard 12 13 4 5 2 2 K J Roberts 13 13 2 2 A C Webster 13 13 2 2 * C J Harper retired from the board on 12 October 1999 5. Principal Activities The principal activities of the economic entity during the financial year were the research, development, manufacture, marketing and distribution of pharmaceutical and allied products. No significant change in the nature of those activities has taken place during that period. 6. Operating Results The consolidated profit of the economic entity for the financial year, after providing for income tax, amounted to $54.4m. This represents a 14.8% improvement on the 1998-99 result of $47.4m. 7. Dividends 300,000 (SESOP II) June 1998 $12.00 $6.00 Share Options 16,400 B A McNamee Audit and Risk Management Committee Attended Maximum Attended Maximum Attended Maximum Particulars of all directors who held office during or since the end of the financial year are to be found in Note 23 of this Financial Report. $34.00 The attendances of directors at meetings of the Board and its Committees were: C J Harper * Particulars of the directors' qualifications, experience, special responsibilities and ages are set out on Page 1 in the Directors' Profiles section of this Financial Report. CSL Monthly Share Price: June 1995 to June 2000 During the year, the Board held thirteen meetings. The Audit and Risk Management Committee met five times and the Remuneration Committee twice. The Nomination Committee comprises the full Board and meets in conjunction with Board Meetings. Board of Directors Mr P H Wade (Chairman) Dr B A McNamee (Managing Director) Miss E A Alexander, AM Mr A M Cipa Mr C I R McDonald Mr I A Renard Mr K J Roberts, AM Dr A C Webster Half year profit and interim dividend announcement Shares traded ex-dividend Record date for interim dividend Interim dividend paid Year ends Annual profit and final dividend announcement Shares traded ex-dividend Record date for final dividend Final dividend paid Annual General Meeting Half year ends 4. Directors‘ Meetings Particulars of Directors' interest in contracts are to be found in Note 29 of the financial statements. The following dividends have been paid or declared since the end of the preceding financial year: 1998-1999 A final dividend for the year ended 30 June 1999 of 14 cents per ordinary share, franked at 36%, was paid on 14 October 1999 out of profits for that year as declared by the directors in last year's Directors' Report. 1999-2000 An interim dividend on ordinary shares of 8 cents per share, fully franked at 36% was paid on 26 April 2000. The directors of the Company have declared a final dividend of 15 cents per ordinary share for the year ended 30 June 2000, to be paid out of profits for that year. The dividend is fully franked at 34%. June 1995 $4.00 $2.00 J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J 2 CSL Limited and Controlled Entities (ACN 051 588 348) CSL Limited and Controlled Entities (ACN 051 588 348) 3 12. Options and Shares or Other Interests Under Options Total dividends for the 1999-2000 year are: $’000 Ordinary shares Interim fully franked dividend paid 26 April 2000 10,600 Final fully franked dividend payable on 12 October 2000 22,361 8. Review of Operations Contributions to the increase in profit came from continuing growth in the Bioplasma Division, the Pharmaceutical Group and cell culture revenues, and a continuation of the steady performance of the Animal Health Group. Close management of costs has been a priority. Specific factors contributing to the results of the business units are described elsewhere in the Annual Report. 9. Significant Changes in the State of Affairs Apart from the proposed acquisition of the ZLB business and associated equity raising which is further disclosed in the consolidated financial statements, there were no other significant changes in the state of affairs of the economic entity during the financial year not otherwise disclosed in this report or the consolidated financial statements. Directors are not aware of any other matter or circumstance, not otherwise dealt with in this report or in the consolidated financial statements, which has arisen since the end of the financial year which has significantly affected or may significantly affect the operations of the economic entity, the results of those operations or the state of affairs of the economic entity in subsequent financial years. 10. Likely Developments and Future Results In the opinion of the directors, it would unreasonably prejudice the interests of the economic entity if this report were to refer to the likely developments in the operations of the economic entity and expected results from those operations in future financial years. 11. Environmental Regulatory Performance The economic entity's environmental obligations and waste discharge quotas are regulated under both State and Federal law. All environmental performance obligations are monitored by the Board and subjected from time to time to government agency audits and site inspections. The economic entity has a policy of complying and, where appropriate, exceeding its environmental obligations. No environmental breaches have been notified by any government agency during the year ended 30 June 2000. 4 CSL Limited and Controlled Entities (ACN 051 588 348) Details of options granted to directors or relevant officers as part of their remuneration and details of shares and interests under option or issued during or since the end of the financial year due to the exercise of an option are set out in this Report and in Note 24 of the financial statements. 13. Directors and Officers Remuneration Remuneration of directors and senior executives within the Company is established by the Remuneration Committee. Remuneration is determined as part of an annual performance review having regard to market factors, a performance evaluation process and independent remuneration advice. For executive directors and officers, remuneration packages generally comprise salary, a performance-based bonus and superannuation. Executives are also provided with longer term incentives through the Senior Executive Share Ownership Plan I and II and the General Employee Share Ownership Plan, and in the case of the Chief Executive Officer, an individual, long term performance incentive, which act to align the executives’ actions with the interests of the shareholders. The incentive for the Chief Executive Officer is designed to encourage him to conduct the Company’s business with a view to the Company’s share price outperforming an appropriate ASX industrial index progressively over a period of ten years and for him to remain with the Company over that period. If the Company’s share price underperforms the said ASX index over a relevant period, no amount is payable in respect of that period. C J Harper P H Wade B A McNamee A Cipa E A Alexander C I R McDonald I A Renard K J Roberts A C Webster D Gearing T Giarla A Cuthbertson P Bordonaro P Turvey Base Salary Fee Bonus Super Other Cash Total Options Total Number of Options Granted 569,644 179,644 60,404 223,821 173,034 199,297 172,000 23,044 75,218 57,500 52,500 52,500 45,000 45,000 - 200,000 42,000 44,764 23,000 56,250 40,000 1,613 5,265 30,356 30,356 4,025 3,412 3,675 3,150 3,150 12,648 13,597 25,703 28,000 246,840 35,000 100,000 - 271,497 80,483 835,000 352,000 61,525 55,912 56,175 48,150 48,150 73,052 268,585 209,631 281,250 240,000 208,000 582,250 374,400 384,600 208,000 208,000 271,497 80,483 835,000 560,000 61,525 55,912 56,175 48,150 48,150 655,302 642,985 594,231 489,250 448,000 50,000 85,000 90,000 60,000 50,000 50,000 Note 1: T Giarla (JRH Biosciences Inc) was not an employee of the chief entity during the financial year. Note 2: P Turvey is included to disclose the top five executives of the chief entity. Note 3: A Cipa is included in the top five executives as he was not appointed to the Board until after the end of the financial year. Note 4: Options issued under the Senior Executive Share Ownership Plan have been valued using the Black-Scholes option valuation methodology as at the date of issue. These options are subject to company and individual performance hurdles and are only exercisable if these hurdles have been achieved. 14. Indemnification of Directors and Officers During the financial year, the following insurance and indemnity arrangements were entered into concerning directors and officers of the economic entity: Non-executive directors are not entitled to performance based bonuses or share options. The Company paid insurance premiums of $59,628 in respect of a contract insuring each individual director of the Company and each full time executive officer, director and secretary of the Company and its controlled entities, against certain liabilities and expenses arising as a result of work performed in their respective capacities. The Board meets annually to review its own performance. The Chairperson also holds discussions with individual directors to facilitate this peer review. The non-executive directors are responsible for evaluating the performance of the Chief Executive who in turn evaluates the performance of all other senior executives. These evaluations are based on specific criteria including the Company business performance, whether the long term strategic objectives are being achieved and the achievement of individual performance objectives. Under Rule 146 of the Company’s Constitution, the Company is required to indemnify each "officer" of the Company and of each wholly owned subsidiary of the Company out of the assets of the Company "to the relevant extent" against any liability incurred by the officer in the conduct of the business of the Company or in the conduct of the business of such wholly owned subsidiary of the Company or in the discharge of the duties of the officer unless incurred in circumstances which the Board resolves do not justify indemnification. Details of remuneration provided to directors ($A) and the five most highly remunerated officers are as follows: For this purpose, "officer" includes a director, executive officer, secretary, agent, auditor or other officer of the Company. The indemnity only applies to the extent the Company is not precluded by law from doing so, and to the extent that the officer is not otherwise entitled to be or is actually indemnified, including under any insurance policy. 15. Rounding The chief entity is a company entitled to release under Australian Securities and Investment Commission Class Order 98/100. In accordance with that Class Order, amounts in the financial statements and the Directors' Report have been rounded to the nearest $1,000, unless specifically stated to be otherwise. This report has been made in accordance with a resolution of directors. Signed Peter H Wade (Director) Signed Brian A McNamee (Director) Melbourne 15 August 2000 CSL Limited and Controlled Entities (ACN 051 588 348) 5 12. Options and Shares or Other Interests Under Options Total dividends for the 1999-2000 year are: $’000 Ordinary shares Interim fully franked dividend paid 26 April 2000 10,600 Final fully franked dividend payable on 12 October 2000 22,361 8. Review of Operations Contributions to the increase in profit came from continuing growth in the Bioplasma Division, the Pharmaceutical Group and cell culture revenues, and a continuation of the steady performance of the Animal Health Group. Close management of costs has been a priority. Specific factors contributing to the results of the business units are described elsewhere in the Annual Report. 9. Significant Changes in the State of Affairs Apart from the proposed acquisition of the ZLB business and associated equity raising which is further disclosed in the consolidated financial statements, there were no other significant changes in the state of affairs of the economic entity during the financial year not otherwise disclosed in this report or the consolidated financial statements. Directors are not aware of any other matter or circumstance, not otherwise dealt with in this report or in the consolidated financial statements, which has arisen since the end of the financial year which has significantly affected or may significantly affect the operations of the economic entity, the results of those operations or the state of affairs of the economic entity in subsequent financial years. 10. Likely Developments and Future Results In the opinion of the directors, it would unreasonably prejudice the interests of the economic entity if this report were to refer to the likely developments in the operations of the economic entity and expected results from those operations in future financial years. 11. Environmental Regulatory Performance The economic entity's environmental obligations and waste discharge quotas are regulated under both State and Federal law. All environmental performance obligations are monitored by the Board and subjected from time to time to government agency audits and site inspections. The economic entity has a policy of complying and, where appropriate, exceeding its environmental obligations. No environmental breaches have been notified by any government agency during the year ended 30 June 2000. 4 CSL Limited and Controlled Entities (ACN 051 588 348) Details of options granted to directors or relevant officers as part of their remuneration and details of shares and interests under option or issued during or since the end of the financial year due to the exercise of an option are set out in this Report and in Note 24 of the financial statements. 13. Directors and Officers Remuneration Remuneration of directors and senior executives within the Company is established by the Remuneration Committee. Remuneration is determined as part of an annual performance review having regard to market factors, a performance evaluation process and independent remuneration advice. For executive directors and officers, remuneration packages generally comprise salary, a performance-based bonus and superannuation. Executives are also provided with longer term incentives through the Senior Executive Share Ownership Plan I and II and the General Employee Share Ownership Plan, and in the case of the Chief Executive Officer, an individual, long term performance incentive, which act to align the executives’ actions with the interests of the shareholders. The incentive for the Chief Executive Officer is designed to encourage him to conduct the Company’s business with a view to the Company’s share price outperforming an appropriate ASX industrial index progressively over a period of ten years and for him to remain with the Company over that period. If the Company’s share price underperforms the said ASX index over a relevant period, no amount is payable in respect of that period. C J Harper P H Wade B A McNamee A Cipa E A Alexander C I R McDonald I A Renard K J Roberts A C Webster D Gearing T Giarla A Cuthbertson P Bordonaro P Turvey Base Salary Fee Bonus Super Other Cash Total Options Total Number of Options Granted 569,644 179,644 60,404 223,821 173,034 199,297 172,000 23,044 75,218 57,500 52,500 52,500 45,000 45,000 - 200,000 42,000 44,764 23,000 56,250 40,000 1,613 5,265 30,356 30,356 4,025 3,412 3,675 3,150 3,150 12,648 13,597 25,703 28,000 246,840 35,000 100,000 - 271,497 80,483 835,000 352,000 61,525 55,912 56,175 48,150 48,150 73,052 268,585 209,631 281,250 240,000 208,000 582,250 374,400 384,600 208,000 208,000 271,497 80,483 835,000 560,000 61,525 55,912 56,175 48,150 48,150 655,302 642,985 594,231 489,250 448,000 50,000 85,000 90,000 60,000 50,000 50,000 Note 1: T Giarla (JRH Biosciences Inc) was not an employee of the chief entity during the financial year. Note 2: P Turvey is included to disclose the top five executives of the chief entity. Note 3: A Cipa is included in the top five executives as he was not appointed to the Board until after the end of the financial year. Note 4: Options issued under the Senior Executive Share Ownership Plan have been valued using the Black-Scholes option valuation methodology as at the date of issue. These options are subject to company and individual performance hurdles and are only exercisable if these hurdles have been achieved. 14. Indemnification of Directors and Officers During the financial year, the following insurance and indemnity arrangements were entered into concerning directors and officers of the economic entity: Non-executive directors are not entitled to performance based bonuses or share options. The Company paid insurance premiums of $59,628 in respect of a contract insuring each individual director of the Company and each full time executive officer, director and secretary of the Company and its controlled entities, against certain liabilities and expenses arising as a result of work performed in their respective capacities. The Board meets annually to review its own performance. The Chairperson also holds discussions with individual directors to facilitate this peer review. The non-executive directors are responsible for evaluating the performance of the Chief Executive who in turn evaluates the performance of all other senior executives. These evaluations are based on specific criteria including the Company business performance, whether the long term strategic objectives are being achieved and the achievement of individual performance objectives. Under Rule 146 of the Company’s Constitution, the Company is required to indemnify each "officer" of the Company and of each wholly owned subsidiary of the Company out of the assets of the Company "to the relevant extent" against any liability incurred by the officer in the conduct of the business of the Company or in the conduct of the business of such wholly owned subsidiary of the Company or in the discharge of the duties of the officer unless incurred in circumstances which the Board resolves do not justify indemnification. Details of remuneration provided to directors ($A) and the five most highly remunerated officers are as follows: For this purpose, "officer" includes a director, executive officer, secretary, agent, auditor or other officer of the Company. The indemnity only applies to the extent the Company is not precluded by law from doing so, and to the extent that the officer is not otherwise entitled to be or is actually indemnified, including under any insurance policy. 15. Rounding The chief entity is a company entitled to release under Australian Securities and Investment Commission Class Order 98/100. In accordance with that Class Order, amounts in the financial statements and the Directors' Report have been rounded to the nearest $1,000, unless specifically stated to be otherwise. This report has been made in accordance with a resolution of directors. Signed Peter H Wade (Director) Signed Brian A McNamee (Director) Melbourne 15 August 2000 CSL Limited and Controlled Entities (ACN 051 588 348) 5 Profit and Loss Statement Balance Sheet for the year ended 30 June 2000 as at 30 June 2000 Economic Entity Notes Operating profit before income tax Income tax attributable to operating profit 2, 3 4 Operating profit after income tax Retained profits at the beginning of the financial year Total available for appropriation Dividends provided for or paid Retained profits at the end of the financial year 5 2000 1999 Chief Entity 2000 1999 $000 $000 $000 $000 80,575 26,173 70,292 22,910 71,231 22,228 64,564 20,310 54,402 144,553 47,382 124,865 49,003 142,875 44,254 126,315 198,955 33,074 172,247 27,694 191,878 33,074 170,569 27,694 165,881 144,553 158,804 142,875 The above profit and loss statement should be read in conjunction with the accompanying notes. Economic Entity Chief Entity Notes 2000 $000 1999 $000 2000 $000 1999 $000 6 7 8 9 4,501 73,174 412,126 118,163 840 2,893 49,113 42,691 98,065 1,940 112 56,148 412,126 65,582 575 311 35,286 42,691 58,172 2,550 608,804 194,702 534,543 139,010 5,788 7,178 313,747 10,962 10,277 37,028 307,644 11,887 44,419 47,135 284,917 8,014 38,709 40,636 282,831 9,350 Total Non-Current Assets 337,675 366,836 384,485 371,526 Total Assets 946,479 561,538 919,028 510,536 57,663 1,732 49,628 48,895 1,771 46,717 49,259 1,732 46,011 36,780 1,620 43,804 109,023 97,383 97,002 82,204 2,491 31,498 9,887 7,175 31,767 10,291 31,498 9,176 7,132 9,807 43,876 49,233 40,674 16,939 Total Liabilities 152,899 146,616 137,676 99,143 Net Assets 793,580 414,922 781,352 411,393 591,321 36,378 165,881 233,502 36,867 144,553 591,321 31,227 158,804 233,502 35,016 142,875 793,580 414,922 781,352 411,393 Current Assets Cash Receivables Investments Inventories Other Total Current Assets Non-Current Assets Receivables Investments Property, plant and equipment Other Current Liabilities Accounts payable Borrowings Provisions 10 11 12 14 15 16 17 Total Current Liabilities Non-Current Liabilities Borrowings Provisions Other 18 19 20 Total Non-Current Liabilities Equity Share capital Reserves Retained profits Total Equity 21 22 The above balance sheet should be read in conjunction with the accompanying notes. 6 CSL Limited and Controlled Entities (ACN 051 588 348) CSL Limited and Controlled Entities (ACN 051 588 348) 7 Profit and Loss Statement Balance Sheet for the year ended 30 June 2000 as at 30 June 2000 Economic Entity Notes Operating profit before income tax Income tax attributable to operating profit 2, 3 4 Operating profit after income tax Retained profits at the beginning of the financial year Total available for appropriation Dividends provided for or paid Retained profits at the end of the financial year 5 2000 1999 Chief Entity 2000 1999 $000 $000 $000 $000 80,575 26,173 70,292 22,910 71,231 22,228 64,564 20,310 54,402 144,553 47,382 124,865 49,003 142,875 44,254 126,315 198,955 33,074 172,247 27,694 191,878 33,074 170,569 27,694 165,881 144,553 158,804 142,875 The above profit and loss statement should be read in conjunction with the accompanying notes. Economic Entity Chief Entity Notes 2000 $000 1999 $000 2000 $000 1999 $000 6 7 8 9 4,501 73,174 412,126 118,163 840 2,893 49,113 42,691 98,065 1,940 112 56,148 412,126 65,582 575 311 35,286 42,691 58,172 2,550 608,804 194,702 534,543 139,010 5,788 7,178 313,747 10,962 10,277 37,028 307,644 11,887 44,419 47,135 284,917 8,014 38,709 40,636 282,831 9,350 Total Non-Current Assets 337,675 366,836 384,485 371,526 Total Assets 946,479 561,538 919,028 510,536 57,663 1,732 49,628 48,895 1,771 46,717 49,259 1,732 46,011 36,780 1,620 43,804 109,023 97,383 97,002 82,204 2,491 31,498 9,887 7,175 31,767 10,291 31,498 9,176 7,132 9,807 43,876 49,233 40,674 16,939 Total Liabilities 152,899 146,616 137,676 99,143 Net Assets 793,580 414,922 781,352 411,393 591,321 36,378 165,881 233,502 36,867 144,553 591,321 31,227 158,804 233,502 35,016 142,875 793,580 414,922 781,352 411,393 Current Assets Cash Receivables Investments Inventories Other Total Current Assets Non-Current Assets Receivables Investments Property, plant and equipment Other Current Liabilities Accounts payable Borrowings Provisions 10 11 12 14 15 16 17 Total Current Liabilities Non-Current Liabilities Borrowings Provisions Other 18 19 20 Total Non-Current Liabilities Equity Share capital Reserves Retained profits Total Equity 21 22 The above balance sheet should be read in conjunction with the accompanying notes. 6 CSL Limited and Controlled Entities (ACN 051 588 348) CSL Limited and Controlled Entities (ACN 051 588 348) 7 Statement of Cash Flows Notes to and Forming Part of the Financial Statements for the year ended 30 June 2000 1 Economic Entity Notes 2000 $000 1999 $000 Chief Entity 2000 $000 1999 $000 Inflows/(Outflows) Cash Flows from Operating Activities Receipts from customers Payments to suppliers and employees Interest received Income taxes paid Interest paid Advances to controlled entities Net cash used by operating activities Cash Flows from Investing Activities Proceeds from sale of property, plant and equipment Payment for property, plant and equipment Payment for other investments Payment for investment in managed funds Proceeds from disposal of managed fund investments Interest received from managed fund investments Dividends received from managed fund investments Purchase of business, net of cash acquired Payment for investment in controlled entities 32 The accounting policies adopted are consistent with those of the previous year. 439,225 (359,680) 1,854 (27,029) (296) - 418,519 (323,649) 1,402 (23,184) (711) - 341,504 (272,310) 1,760 (23,068) (10) (6,406) 343,852 (255,928) 1,335 (20,397) (43) (3,336) 54,074 72,377 41,470 65,483 (a) Principles of Consolidation The consolidated financial statements comprise the financial statements of the chief entity, CSL Limited, and all of its controlled entities referred to collectively throughout these financial statements as the Economic Entity. A controlled entity is any entity controlled by CSL Limited. Control exists where CSL Limited has the capacity to dominate the decision-making in relation to the financial and operating policies of another entity so that the other entity operates with CSL Limited to achieve the objectives of CSL Limited. A list of controlled entities is contained in Note 30 to the financial statements. All inter-company balances and transactions between entities in the economic entity, including any unrealised profits or losses, have been eliminated on consolidation. 328 (37,169) (6,499) (2,048) 38,492 884 1,199 (653) - 657 (39,022) (679) (2,132) 1,250 882 (517) 283 (31,996) (6,499) 38,492 - 639 (35,723) (679) (517) (5,466) (39,561) 280 (36,280) Cash Flows from Financing Activities Proceeds from issue of shares Dividends paid Repayment of borrowings 356,518 (29,144) (4,909) 758 (25,014) (5,820) 356,518 (29,144) - 758 (25,014) (197) Net cash used in financing activities 322,465 (30,076) 327,374 (24,453) Net increase in cash held Cash at the beginning of the financial year Exchange rate variations on foreign cash balances 371,073 43,813 9 2,740 41,033 40 369,124 41,382 - 4,750 36,632 - 414,895 43,813 410,506 41,382 33 Net cash used in investing activities Cash at the end of the financial year Summary of Significant Accounting Policies The financial statements have been prepared as a general purpose financial report in accordance with Australian Accounting Standards, Urgent Issues Group Consensus Views, and the Corporations Law. Except for certain assets which as noted in the financial statements are at valuation, the financial statements and group financial statements are prepared in accordance with the historical cost convention. Where controlled entities have entered or left the economic entity during the year, their operating results have been included from the date control was obtained or until the date control ceased. (b) Income Tax Tax effect accounting procedures are followed whereby the income tax expense in the profit and loss statement is matched with the accounting profit (after allowing for permanent differences). The future income tax benefit relating to tax losses is not carried forward as an asset unless the benefit can be regarded as being virtually certain of realisation. Income tax on net cumulative timing differences is set aside to the deferred income tax and future income tax benefit accounts at the rates which are expected to apply when those timing differences reverse. No provision has been made for withholding tax on unremitted earnings of foreign incorporated controlled entities as such profits are considered to be permanently invested. (c) Foreign Currency Transactions and Balances 31 The above statement of cash flows should be read in conjunction with the accompanying notes. Foreign currency transactions during the period are converted to Australian currency at the rates of exchange applicable at the dates of the transactions. Amounts receivable and payable in foreign currencies at balance date are converted at the rates of exchange ruling at that date. The gains and losses from conversion of short-term assets and liabilities, whether realised or unrealised, are included in operating profit before income tax as they arise. The financial statements of self-sustaining foreign operations are translated using the current rate method. Any exchange difference arising through the use of the current rate method is taken directly to the foreign currency translation reserve. The financial statements of integrated foreign operations are translated using the temporal rate method. Any exchange difference arising through the use of the temporal method is taken directly to the profit and loss statement. Exchange differences relating to monetary items are included in the profit and loss statement, as exchange gains and losses, in the period when the exchange rate changes, except where: - the exchange difference relates to the cost of acquisition of an asset under construction or otherwise being made ready for future productive use by the economic entity. In these cases the exchange difference is included in the cost of the asset; - the exchange difference relates to hedging part of the net investment in a self-sustaining foreign operation, in which case the exchange difference is transferred to the foreign currency translation reserve on consolidation; or - the exchange difference relates to a transaction intended to hedge the purchase or sale of goods or services, in which case the exchange difference is included in the measurement of the purchase or sale. 8 CSL Limited and Controlled Entities (ACN 051 588 348) CSL Limited and Controlled Entities (ACN 051 588 348) 9 Statement of Cash Flows Notes to and Forming Part of the Financial Statements for the year ended 30 June 2000 1 Economic Entity Notes 2000 $000 1999 $000 Chief Entity 2000 $000 1999 $000 Inflows/(Outflows) Cash Flows from Operating Activities Receipts from customers Payments to suppliers and employees Interest received Income taxes paid Interest paid Advances to controlled entities Net cash used by operating activities Cash Flows from Investing Activities Proceeds from sale of property, plant and equipment Payment for property, plant and equipment Payment for other investments Payment for investment in managed funds Proceeds from disposal of managed fund investments Interest received from managed fund investments Dividends received from managed fund investments Purchase of business, net of cash acquired Payment for investment in controlled entities 32 The accounting policies adopted are consistent with those of the previous year. 439,225 (359,680) 1,854 (27,029) (296) - 418,519 (323,649) 1,402 (23,184) (711) - 341,504 (272,310) 1,760 (23,068) (10) (6,406) 343,852 (255,928) 1,335 (20,397) (43) (3,336) 54,074 72,377 41,470 65,483 (a) Principles of Consolidation The consolidated financial statements comprise the financial statements of the chief entity, CSL Limited, and all of its controlled entities referred to collectively throughout these financial statements as the Economic Entity. A controlled entity is any entity controlled by CSL Limited. Control exists where CSL Limited has the capacity to dominate the decision-making in relation to the financial and operating policies of another entity so that the other entity operates with CSL Limited to achieve the objectives of CSL Limited. A list of controlled entities is contained in Note 30 to the financial statements. All inter-company balances and transactions between entities in the economic entity, including any unrealised profits or losses, have been eliminated on consolidation. 328 (37,169) (6,499) (2,048) 38,492 884 1,199 (653) - 657 (39,022) (679) (2,132) 1,250 882 (517) 283 (31,996) (6,499) 38,492 - 639 (35,723) (679) (517) (5,466) (39,561) 280 (36,280) Cash Flows from Financing Activities Proceeds from issue of shares Dividends paid Repayment of borrowings 356,518 (29,144) (4,909) 758 (25,014) (5,820) 356,518 (29,144) - 758 (25,014) (197) Net cash used in financing activities 322,465 (30,076) 327,374 (24,453) Net increase in cash held Cash at the beginning of the financial year Exchange rate variations on foreign cash balances 371,073 43,813 9 2,740 41,033 40 369,124 41,382 - 4,750 36,632 - 414,895 43,813 410,506 41,382 33 Net cash used in investing activities Cash at the end of the financial year Summary of Significant Accounting Policies The financial statements have been prepared as a general purpose financial report in accordance with Australian Accounting Standards, Urgent Issues Group Consensus Views, and the Corporations Law. Except for certain assets which as noted in the financial statements are at valuation, the financial statements and group financial statements are prepared in accordance with the historical cost convention. Where controlled entities have entered or left the economic entity during the year, their operating results have been included from the date control was obtained or until the date control ceased. (b) Income Tax Tax effect accounting procedures are followed whereby the income tax expense in the profit and loss statement is matched with the accounting profit (after allowing for permanent differences). The future income tax benefit relating to tax losses is not carried forward as an asset unless the benefit can be regarded as being virtually certain of realisation. Income tax on net cumulative timing differences is set aside to the deferred income tax and future income tax benefit accounts at the rates which are expected to apply when those timing differences reverse. No provision has been made for withholding tax on unremitted earnings of foreign incorporated controlled entities as such profits are considered to be permanently invested. (c) Foreign Currency Transactions and Balances 31 The above statement of cash flows should be read in conjunction with the accompanying notes. Foreign currency transactions during the period are converted to Australian currency at the rates of exchange applicable at the dates of the transactions. Amounts receivable and payable in foreign currencies at balance date are converted at the rates of exchange ruling at that date. The gains and losses from conversion of short-term assets and liabilities, whether realised or unrealised, are included in operating profit before income tax as they arise. The financial statements of self-sustaining foreign operations are translated using the current rate method. Any exchange difference arising through the use of the current rate method is taken directly to the foreign currency translation reserve. The financial statements of integrated foreign operations are translated using the temporal rate method. Any exchange difference arising through the use of the temporal method is taken directly to the profit and loss statement. Exchange differences relating to monetary items are included in the profit and loss statement, as exchange gains and losses, in the period when the exchange rate changes, except where: - the exchange difference relates to the cost of acquisition of an asset under construction or otherwise being made ready for future productive use by the economic entity. In these cases the exchange difference is included in the cost of the asset; - the exchange difference relates to hedging part of the net investment in a self-sustaining foreign operation, in which case the exchange difference is transferred to the foreign currency translation reserve on consolidation; or - the exchange difference relates to a transaction intended to hedge the purchase or sale of goods or services, in which case the exchange difference is included in the measurement of the purchase or sale. 8 CSL Limited and Controlled Entities (ACN 051 588 348) CSL Limited and Controlled Entities (ACN 051 588 348) 9 (d) Inventories All inventories are stated at the lower of cost and net realisable value. Cost includes direct labour and an appropriate proportion of variable and fixed overhead expenditure, the latter being allocated on the basis of normal operating capacity. (e) Acquisitions of Assets The cost method of accounting is used for all acquisitions of assets regardless of whether shares or other assets are acquired. Cost is the fair value of consideration given at the date of acquisition plus costs incidental to the acquisition. Where goodwill arises it is brought to account on the basis described in Note 1(j). (f) Freehold Property, Plant and Equipment Freehold land and buildings are initially recorded at cost which is not in excess of the recoverable amount. Properties are revalued every three years to reflect current market values based on existing use, as determined by an independent valuer. Revalued properties are not carried at values in excess of their recoverable amounts. Provision for depreciation of buildings has been made. Plant and equipment is stated at cost less depreciation or amortisation which is not in excess of the recoverable amount. Capital work in progress is stated at cost. The recoverable amount of all non-current assets has been determined using net cash inflows which have been discounted to their present values, with the exception of goodwill and future tax benefits where the net cash inflows have not been discounted. The potential capital gains tax is not taken into account in determining the revalued amounts. The Company is of the opinion that land and buildings are indivisible and constitute one class of asset. Land and buildings are disclosed separately in Note 12 to provide supplementary information regarding the depreciation of buildings. (g) Leasehold Improvements (m) Coselco Insurance Pty Ltd (In Liquidation) Coselco Insurance Pty Ltd, a controlled entity of CSL Limited, was established to provide insurance cover to CSL Limited and its controlled entities. The financial statements of Coselco Insurance Pty Ltd, including the treatment of Premium Revenue, Outward Reinsurance, Liability for Outstanding Claims and Reinsurance and Other Recoveries, have been prepared in accordance with Australian Accounting Standard AASB 1023 - Financial Reporting of General Insurance Activities. As a result of a corporate restructure on the 24 May 2000, the insurance activities previously undertaken by Coselco Insurance Pty Ltd were taken over by the chief entity. The Coselco Insurance Pty Ltd insurance licence was revoked on 29 May 2000 and the company was placed into members voluntary liquidation on 30 June 2000. The chief entity has returned to direct insurance and will continue to enter into reinsurance arrangements to offset risk arising from the provision of insurance cover to the economic entity. As CSL Limited or any of its controlled entities will no longer hold an insurance licence after this financial year, it will cease to report its insurance activities under AASB 1023 - Financial Reporting of General Insurance Activities. The Australian Government has indemnified CSL Limited for certain existing and potential claims made for personal injury and damage suffered through use of certain products manufactured by CSL Limited under government ownership. The indemnity covers AIDS and hepatitis related claims for blood products derived from Australian blood. The indemnity also covers CJD claims for human pituitary hormones (manufacture of which ceased in 1985) and claims for pertussis vaccines manufactured prior to June 1994. (n) Financial Instruments Financial Instruments included in Assets Trade debtors are initially recorded at the amount of the contracted sale proceeds. Provision for doubtful debts is recognised to the extent that recovery of the outstanding receivable balance is considered less than likely. The cost of improvements to or on leasehold properties is amortised over the unexpired period of the lease or the estimated useful life of the improvement whichever is the shorter. Bank deposits and bills of exchange are carried at cost. Managed unit trust investments integral to general insurance activities are carried at net market value. (h) Leases Operating leases are not capitalised. Rental payments are charged against profits in equal instalments over the terms of the leases. Financial Instruments included in Liabilities Liabilities are recognised for amounts to be paid in the future for goods and services received, whether or not billed to the Company or economic entity. Trade accounts payable are normally settled within 60 days. (i) Depreciation Depreciation is calculated on a straight line basis so as to write off the net cost or amount of each item of property, plant and equipment over its expected useful life. The useful economic lives of each class of assets are as follows: Bank and other loans are carried on the balance sheet at their principal amount. Interest expense is accrued at the contracted rate and included in Other Creditors in Note 15. Buildings Plant and Equipment Leasehold Improvements 5 - 25 years 5 - 15 years 5 - 10 years (j) Goodwill On acquisition of some or all of the assets of another entity, the identifiable net assets acquired are measured at their fair value. The excess of the fair value of the purchase consideration plus incidental expenses over the fair value of the identifiable net assets is brought to account as goodwill and is amortised on a straight line basis over the period of expected benefit. The carrying value of goodwill is reviewed annually by the directors and written down where it is considered appropriate. (k) Research and Development, Patents and Intellectual Property Current expenditure on research and development and on patents is charged against operating profit as incurred. Expenditure on R&D equipment is capitalised in property, plant and equipment and depreciated over its estimated useful life. Purchased intellectual property in a controlled entity is carried at cost and is amortised on a straight line basis over the period of expected benefit, which is assessed on a case by case basis. The carrying value of intellectual property is reviewed annually by the directors and written down where it is considered appropriate. Financial Instruments included in Equity Ordinary share capital bears no special terms and conditions affecting income or capital entitlements of the shareholders. Derivative Instruments Derivative instruments, in the form of forward exchange contracts and interest rate swaps, are used exclusively to hedge foreign exchange and interest rate exposures. Gains and losses on forward foreign exchange contracts are accounted for as outlined in Note 1(c). Where a hedge transaction is terminated early and the anticipated transaction is still expected to occur, the deferred gains or losses that arose on the foreign currency hedge prior to its termination continue to be deferred and are included in the measurement of the purchase or sale when it occurs. When a hedge transaction is terminated early because the anticipated transaction is no longer expected to occur, deferred gains and losses that arose on the foreign currency hedge prior to its termination are included in the profit and loss statement for the period. (o) Other Investments Interests in non-subsidiary, non-associated corporations are included in investments at the lower of cost or the recoverable amount. (l) Employee Entitlements Provision is made for the economic entity’s liability for employee entitlements arising from services rendered by employees to balance date in accordance with AASB 1028 - Accounting for Employee Entitlements. Employee entitlements, including on costs, expected to be settled within one year together with entitlements arising from wages and salaries and annual leave which will be settled after one year, have been measured at their nominal amounts. Long service leave, including on costs, payable later than one year have been measured at the present value of the estimated future cash outflows to be made for those entitlements. Contributions are made by the economic entity to employee superannuation funds and are charged as expenses when incurred. The economic entity does not record, as an asset or a liability, the difference between the employer established superannuation plan’s accrued benefits and the net market value of the plan’s assets. 10 CSL Limited and Controlled Entities (ACN 051 588 348) CSL Limited and Controlled Entities (ACN 051 588 348) 11 (d) Inventories All inventories are stated at the lower of cost and net realisable value. Cost includes direct labour and an appropriate proportion of variable and fixed overhead expenditure, the latter being allocated on the basis of normal operating capacity. (e) Acquisitions of Assets The cost method of accounting is used for all acquisitions of assets regardless of whether shares or other assets are acquired. Cost is the fair value of consideration given at the date of acquisition plus costs incidental to the acquisition. Where goodwill arises it is brought to account on the basis described in Note 1(j). (f) Freehold Property, Plant and Equipment Freehold land and buildings are initially recorded at cost which is not in excess of the recoverable amount. Properties are revalued every three years to reflect current market values based on existing use, as determined by an independent valuer. Revalued properties are not carried at values in excess of their recoverable amounts. Provision for depreciation of buildings has been made. Plant and equipment is stated at cost less depreciation or amortisation which is not in excess of the recoverable amount. Capital work in progress is stated at cost. The recoverable amount of all non-current assets has been determined using net cash inflows which have been discounted to their present values, with the exception of goodwill and future tax benefits where the net cash inflows have not been discounted. The potential capital gains tax is not taken into account in determining the revalued amounts. The Company is of the opinion that land and buildings are indivisible and constitute one class of asset. Land and buildings are disclosed separately in Note 12 to provide supplementary information regarding the depreciation of buildings. (g) Leasehold Improvements (m) Coselco Insurance Pty Ltd (In Liquidation) Coselco Insurance Pty Ltd, a controlled entity of CSL Limited, was established to provide insurance cover to CSL Limited and its controlled entities. The financial statements of Coselco Insurance Pty Ltd, including the treatment of Premium Revenue, Outward Reinsurance, Liability for Outstanding Claims and Reinsurance and Other Recoveries, have been prepared in accordance with Australian Accounting Standard AASB 1023 - Financial Reporting of General Insurance Activities. As a result of a corporate restructure on the 24 May 2000, the insurance activities previously undertaken by Coselco Insurance Pty Ltd were taken over by the chief entity. The Coselco Insurance Pty Ltd insurance licence was revoked on 29 May 2000 and the company was placed into members voluntary liquidation on 30 June 2000. The chief entity has returned to direct insurance and will continue to enter into reinsurance arrangements to offset risk arising from the provision of insurance cover to the economic entity. As CSL Limited or any of its controlled entities will no longer hold an insurance licence after this financial year, it will cease to report its insurance activities under AASB 1023 - Financial Reporting of General Insurance Activities. The Australian Government has indemnified CSL Limited for certain existing and potential claims made for personal injury and damage suffered through use of certain products manufactured by CSL Limited under government ownership. The indemnity covers AIDS and hepatitis related claims for blood products derived from Australian blood. The indemnity also covers CJD claims for human pituitary hormones (manufacture of which ceased in 1985) and claims for pertussis vaccines manufactured prior to June 1994. (n) Financial Instruments Financial Instruments included in Assets Trade debtors are initially recorded at the amount of the contracted sale proceeds. Provision for doubtful debts is recognised to the extent that recovery of the outstanding receivable balance is considered less than likely. The cost of improvements to or on leasehold properties is amortised over the unexpired period of the lease or the estimated useful life of the improvement whichever is the shorter. Bank deposits and bills of exchange are carried at cost. Managed unit trust investments integral to general insurance activities are carried at net market value. (h) Leases Operating leases are not capitalised. Rental payments are charged against profits in equal instalments over the terms of the leases. Financial Instruments included in Liabilities Liabilities are recognised for amounts to be paid in the future for goods and services received, whether or not billed to the Company or economic entity. Trade accounts payable are normally settled within 60 days. (i) Depreciation Depreciation is calculated on a straight line basis so as to write off the net cost or amount of each item of property, plant and equipment over its expected useful life. The useful economic lives of each class of assets are as follows: Bank and other loans are carried on the balance sheet at their principal amount. Interest expense is accrued at the contracted rate and included in Other Creditors in Note 15. Buildings Plant and Equipment Leasehold Improvements 5 - 25 years 5 - 15 years 5 - 10 years (j) Goodwill On acquisition of some or all of the assets of another entity, the identifiable net assets acquired are measured at their fair value. The excess of the fair value of the purchase consideration plus incidental expenses over the fair value of the identifiable net assets is brought to account as goodwill and is amortised on a straight line basis over the period of expected benefit. The carrying value of goodwill is reviewed annually by the directors and written down where it is considered appropriate. (k) Research and Development, Patents and Intellectual Property Current expenditure on research and development and on patents is charged against operating profit as incurred. Expenditure on R&D equipment is capitalised in property, plant and equipment and depreciated over its estimated useful life. Purchased intellectual property in a controlled entity is carried at cost and is amortised on a straight line basis over the period of expected benefit, which is assessed on a case by case basis. The carrying value of intellectual property is reviewed annually by the directors and written down where it is considered appropriate. Financial Instruments included in Equity Ordinary share capital bears no special terms and conditions affecting income or capital entitlements of the shareholders. Derivative Instruments Derivative instruments, in the form of forward exchange contracts and interest rate swaps, are used exclusively to hedge foreign exchange and interest rate exposures. Gains and losses on forward foreign exchange contracts are accounted for as outlined in Note 1(c). Where a hedge transaction is terminated early and the anticipated transaction is still expected to occur, the deferred gains or losses that arose on the foreign currency hedge prior to its termination continue to be deferred and are included in the measurement of the purchase or sale when it occurs. When a hedge transaction is terminated early because the anticipated transaction is no longer expected to occur, deferred gains and losses that arose on the foreign currency hedge prior to its termination are included in the profit and loss statement for the period. (o) Other Investments Interests in non-subsidiary, non-associated corporations are included in investments at the lower of cost or the recoverable amount. (l) Employee Entitlements Provision is made for the economic entity’s liability for employee entitlements arising from services rendered by employees to balance date in accordance with AASB 1028 - Accounting for Employee Entitlements. Employee entitlements, including on costs, expected to be settled within one year together with entitlements arising from wages and salaries and annual leave which will be settled after one year, have been measured at their nominal amounts. Long service leave, including on costs, payable later than one year have been measured at the present value of the estimated future cash outflows to be made for those entitlements. Contributions are made by the economic entity to employee superannuation funds and are charged as expenses when incurred. The economic entity does not record, as an asset or a liability, the difference between the employer established superannuation plan’s accrued benefits and the net market value of the plan’s assets. 10 CSL Limited and Controlled Entities (ACN 051 588 348) CSL Limited and Controlled Entities (ACN 051 588 348) 11 Economic Entity 2 Operating Revenue Sales revenue Other revenue Interest received/receivable Proceeds from sale of non-current assets Proceeds from disposal of managed fund investments Dividend received/receivable Other 3 12 Chief Entity Economic Entity 2000 $000 1999 $000 2000 $000 1999 $000 450,598 413,471 353,981 343,197 3,745 328 38,492 1,199 9,898 2,267 657 1,250 7,274 4,221 283 38,492 8,159 2,100 639 4,448 504,260 424,919 405,136 350,384 3,745 96 2,267 348 2,757 1,464 96 1,320 780 340 1,199 1,250 - - 4 Operating Profit Operating profit before income tax is arrived at after crediting and charging the following specific items: Credits Interest received/receivable Other persons and/or corporations Controlled entities Profit on sale of non-current assets Dividends received/receivable Other persons and/or corporations Charges Interest paid/payable Other persons and/or corporations Controlled entities Foreign currency translation (gains)/losses Loss on sale of non-current assets Depreciation Buildings Plant and equipment 326 30 23 708 (428) 215 10 15 8 32 52 4,124 29,248 7,830 25,042 3,504 26,107 6,825 22,549 Total depreciation 33,372 32,872 29,611 29,374 Amortisation Leasehold improvements Goodwill 312 - 275 517 - - Total amortisation 312 792 - - Provisions Officer and employee entitlements Other provisions Diminution in value of inventories 16,683 (450) 2,479 13,602 115 3,315 16,249 (450) 2,296 13,258 2,521 Total provisions 18,712 17,032 18,095 15,779 Rental expenses relating to operating leases Research and development 4,176 43,594 2,517 40,830 2,786 39,435 1,360 37,257 CSL Limited and Controlled Entities (ACN 051 588 348) 5 Chief Entity 2000 $000 1999 $000 2000 $000 1999 $000 Operating profit before income tax 80,575 70,292 71,231 64,564 Income tax calculated at 36% 29,007 25,305 25,643 23,243 Tax effect of permanent differences Building depreciation Reduction in tax arising from the tax incentive for R&D Under/(over) provision in previous year Restatement of deferred tax balances due to change in tax rate Amortisation of goodwill Other non-allowable/assessable items 356 (3,002) 480 (677) 9 370 (2,603) (778) 186 430 356 (3,002) (114) (664) 9 370 (2,603) (773) 73 Income tax expense adjusted for permanent differences 26,173 22,910 22,228 20,310 113 47 113 47 Interim ordinary dividend of 8c per share paid 26 April 2000 fully franked (1999: 7c per share fully franked) 10,600 9,216 10,600 9,216 Proposed final ordinary dividend of 15c per share fully franked (1999: 14c per share fully franked) 22,361 18,431 22,361 18,431 33,074 27,694 33,074 27,694 64,914 46,677 51,160 36,921 Income Tax The aggregate amount of income tax attributable to the financial year differs by more than 15% from the amount calculated on the operating profit. The differences are reconciled as follows: Dividends - Paid and Proposed Appropriation of 1999 final dividend (14c per share fully franked) in respect of shares issued after 30 June 1999 and before the record date for dividends (1998: 12c per share fully franked) The amount of retained profits and reserves that could be distributed as fully franked dividends from franking credits that exist or will arise after payment of income tax in the next year, excluding credits attaching to the proposed dividend shown above. Class C - franked to 34% CSL Limited and Controlled Entities (ACN 051 588 348) 13 Economic Entity 2 Operating Revenue Sales revenue Other revenue Interest received/receivable Proceeds from sale of non-current assets Proceeds from disposal of managed fund investments Dividend received/receivable Other 3 12 Chief Entity Economic Entity 2000 $000 1999 $000 2000 $000 1999 $000 450,598 413,471 353,981 343,197 3,745 328 38,492 1,199 9,898 2,267 657 1,250 7,274 4,221 283 38,492 8,159 2,100 639 4,448 504,260 424,919 405,136 350,384 3,745 96 2,267 348 2,757 1,464 96 1,320 780 340 1,199 1,250 - - 4 Operating Profit Operating profit before income tax is arrived at after crediting and charging the following specific items: Credits Interest received/receivable Other persons and/or corporations Controlled entities Profit on sale of non-current assets Dividends received/receivable Other persons and/or corporations Charges Interest paid/payable Other persons and/or corporations Controlled entities Foreign currency translation (gains)/losses Loss on sale of non-current assets Depreciation Buildings Plant and equipment 326 30 23 708 (428) 215 10 15 8 32 52 4,124 29,248 7,830 25,042 3,504 26,107 6,825 22,549 Total depreciation 33,372 32,872 29,611 29,374 Amortisation Leasehold improvements Goodwill 312 - 275 517 - - Total amortisation 312 792 - - Provisions Officer and employee entitlements Other provisions Diminution in value of inventories 16,683 (450) 2,479 13,602 115 3,315 16,249 (450) 2,296 13,258 2,521 Total provisions 18,712 17,032 18,095 15,779 Rental expenses relating to operating leases Research and development 4,176 43,594 2,517 40,830 2,786 39,435 1,360 37,257 CSL Limited and Controlled Entities (ACN 051 588 348) 5 Chief Entity 2000 $000 1999 $000 2000 $000 1999 $000 Operating profit before income tax 80,575 70,292 71,231 64,564 Income tax calculated at 36% 29,007 25,305 25,643 23,243 Tax effect of permanent differences Building depreciation Reduction in tax arising from the tax incentive for R&D Under/(over) provision in previous year Restatement of deferred tax balances due to change in tax rate Amortisation of goodwill Other non-allowable/assessable items 356 (3,002) 480 (677) 9 370 (2,603) (778) 186 430 356 (3,002) (114) (664) 9 370 (2,603) (773) 73 Income tax expense adjusted for permanent differences 26,173 22,910 22,228 20,310 113 47 113 47 Interim ordinary dividend of 8c per share paid 26 April 2000 fully franked (1999: 7c per share fully franked) 10,600 9,216 10,600 9,216 Proposed final ordinary dividend of 15c per share fully franked (1999: 14c per share fully franked) 22,361 18,431 22,361 18,431 33,074 27,694 33,074 27,694 64,914 46,677 51,160 36,921 Income Tax The aggregate amount of income tax attributable to the financial year differs by more than 15% from the amount calculated on the operating profit. The differences are reconciled as follows: Dividends - Paid and Proposed Appropriation of 1999 final dividend (14c per share fully franked) in respect of shares issued after 30 June 1999 and before the record date for dividends (1998: 12c per share fully franked) The amount of retained profits and reserves that could be distributed as fully franked dividends from franking credits that exist or will arise after payment of income tax in the next year, excluding credits attaching to the proposed dividend shown above. Class C - franked to 34% CSL Limited and Controlled Entities (ACN 051 588 348) 13 Economic Entity 6 Current Assets - Receivables Trade debtors Less: provision for doubtful debts Related bodies corporate Controlled entities Other debtors 7 Current Assets - Short Term Investments 11am cash deposits Bank endorsed bills of exchange Chief Entity 2000 $000 1999 $000 2000 $000 1999 $000 70,010 878 42,774 847 54,636 500 28,677 500 69,132 41,927 54,136 28,177 4,042 7,186 2,012 867 6,242 73,174 49,113 56,148 35,286 371,902 40,224 7,300 35,391 371,902 40,224 7,300 35,391 412,126 42,691 412,126 42,691 The bank bills mature within 3 - 30 days and have an average yield of 6.06% (1999: 4.92%). 8 9 11 Non-Current Assets - Investments Investments integral to general insurance activities carried at net market value Managed Unit Trusts (refer Note 1 (m)) Investments in non-controlled entities - at cost Shares in controlled entities - at cost (refer Note 30) 12 Non-Current Assets - Property, Plant and Equipment Land At independent valuation 1999 Buildings At independent valuation 1999 At cost Less: accumulated depreciation Chief Entity 2000 $000 1999 $000 2000 $000 1999 $000 7,178 - 36,349 679 - 7,178 39,957 679 39,957 7,178 37,028 47,135 40,636 27,250 27,265 25,029 25,229 27,250 27,265 25,029 25,229 69,142 5,743 4,124 69,142 - 59,800 1,523 3,504 59,800 - 70,761 69,142 57,819 59,800 98,011 96,407 82,848 85,029 2,519 1,104 1,775 772 171 171 171 171 1,415 1,003 - - Current Assets - Inventories Raw materials and stores - at cost Less: provision for diminution in value 27,264 1,210 22,852 667 15,670 811 15,521 367 Raw materials and stores - net 26,054 22,185 14,859 15,154 Work in progress - at cost Less: provision for diminution in value 33,533 711 26,885 2,184 25,711 546 20,839 2,184 Work in progress - net 32,822 24,701 25,165 18,655 Finished goods - at cost Less: provision for diminution in value 61,998 2,711 54,884 3,705 27,240 1,682 26,804 2,441 Plant and equipment Plant and equipment at cost Less: accumulated depreciation 394,265 224,703 364,168 196,264 372,341 213,301 345,068 187,903 Finished goods - net 59,287 51,179 25,558 24,363 Total plant and equipment 169,562 167,904 159,040 157,165 118,163 98,065 65,582 58,172 Capital work in progress 44,759 42,330 43,029 40,637 313,747 307,644 284,917 282,831 840 1,940 575 2,550 Current Assets - Other Prepayments 10 Non-Current Assets - Receivables Related bodies corporate Controlled entities Loan to managing director (refer Notes 24 and 29) Loans to employees (refer Note 24) Other 14 Economic Entity CSL Limited and Controlled Entities (ACN 051 588 348) 276 4,660 852 558 6,866 2,853 38,631 276 4,660 852 28,432 558 6,866 2,853 5,788 10,277 44,419 38,709 Land and buildings Leasehold improvements Leasehold improvements at cost Less: accumulated depreciation Valuation of land and buildings The basis of valuation of land and buildings is fair market value based on existing use. The 1999 valuations in Australia and New Zealand were carried out by Gary R Longden, AAPI, of Jones Lang LaSalle Advisory Services Pty Ltd. The 1999 valuations in the USA were carried out by Kenny Meyers, SRA, of Bliss Associates Inc., and by P Richard Seevers, MAI, of Seevers Jordan Ziegenmeyer. CSL Limited and Controlled Entities (ACN 051 588 348) 15 Economic Entity 6 Current Assets - Receivables Trade debtors Less: provision for doubtful debts Related bodies corporate Controlled entities Other debtors 7 Current Assets - Short Term Investments 11am cash deposits Bank endorsed bills of exchange Chief Entity 2000 $000 1999 $000 2000 $000 1999 $000 70,010 878 42,774 847 54,636 500 28,677 500 69,132 41,927 54,136 28,177 4,042 7,186 2,012 867 6,242 73,174 49,113 56,148 35,286 371,902 40,224 7,300 35,391 371,902 40,224 7,300 35,391 412,126 42,691 412,126 42,691 The bank bills mature within 3 - 30 days and have an average yield of 6.06% (1999: 4.92%). 8 9 11 Non-Current Assets - Investments Investments integral to general insurance activities carried at net market value Managed Unit Trusts (refer Note 1 (m)) Investments in non-controlled entities - at cost Shares in controlled entities - at cost (refer Note 30) 12 Non-Current Assets - Property, Plant and Equipment Land At independent valuation 1999 Buildings At independent valuation 1999 At cost Less: accumulated depreciation Chief Entity 2000 $000 1999 $000 2000 $000 1999 $000 7,178 - 36,349 679 - 7,178 39,957 679 39,957 7,178 37,028 47,135 40,636 27,250 27,265 25,029 25,229 27,250 27,265 25,029 25,229 69,142 5,743 4,124 69,142 - 59,800 1,523 3,504 59,800 - 70,761 69,142 57,819 59,800 98,011 96,407 82,848 85,029 2,519 1,104 1,775 772 171 171 171 171 1,415 1,003 - - Current Assets - Inventories Raw materials and stores - at cost Less: provision for diminution in value 27,264 1,210 22,852 667 15,670 811 15,521 367 Raw materials and stores - net 26,054 22,185 14,859 15,154 Work in progress - at cost Less: provision for diminution in value 33,533 711 26,885 2,184 25,711 546 20,839 2,184 Work in progress - net 32,822 24,701 25,165 18,655 Finished goods - at cost Less: provision for diminution in value 61,998 2,711 54,884 3,705 27,240 1,682 26,804 2,441 Plant and equipment Plant and equipment at cost Less: accumulated depreciation 394,265 224,703 364,168 196,264 372,341 213,301 345,068 187,903 Finished goods - net 59,287 51,179 25,558 24,363 Total plant and equipment 169,562 167,904 159,040 157,165 118,163 98,065 65,582 58,172 Capital work in progress 44,759 42,330 43,029 40,637 313,747 307,644 284,917 282,831 840 1,940 575 2,550 Current Assets - Other Prepayments 10 Non-Current Assets - Receivables Related bodies corporate Controlled entities Loan to managing director (refer Notes 24 and 29) Loans to employees (refer Note 24) Other 14 Economic Entity CSL Limited and Controlled Entities (ACN 051 588 348) 276 4,660 852 558 6,866 2,853 38,631 276 4,660 852 28,432 558 6,866 2,853 5,788 10,277 44,419 38,709 Land and buildings Leasehold improvements Leasehold improvements at cost Less: accumulated depreciation Valuation of land and buildings The basis of valuation of land and buildings is fair market value based on existing use. The 1999 valuations in Australia and New Zealand were carried out by Gary R Longden, AAPI, of Jones Lang LaSalle Advisory Services Pty Ltd. The 1999 valuations in the USA were carried out by Kenny Meyers, SRA, of Bliss Associates Inc., and by P Richard Seevers, MAI, of Seevers Jordan Ziegenmeyer. CSL Limited and Controlled Entities (ACN 051 588 348) 15 Economic Entity 13 Non-Current Assets - Intangibles Goodwill Less: accumulated amortisation Intellectual property Less: accumulated amortisation 14 Non-Current Assets - Other Future income tax benefit Attributable to provisions Attributable to carried forward losses 15 Current Liabilities - Accounts Payable Trade creditors Other creditors Outstanding claims - insurance Related bodies corporate - controlled entity 16 Current Liabilities - Borrowings Bank overdrafts (unsecured) 17 Current Liabilities - Provisions Dividends Taxation Employee entitlements Other 18 Non-Current Liabilities - Borrowings Bank borrowings (unsecured) 19 Non-Current Liabilities - Provisions Claims provision including IBNR Employee entitlements Chief Entity Economic Entity 2000 $000 1999 $000 2000 $000 1999 $000 5,585 5,585 5,679 5,679 - - - - - - 956 956 956 956 - - - - - - 10,962 11,887 8,014 9,350 10,346 616 11,700 187 7,793 221 9,350 - 10,962 11,887 8,014 9,350 33,610 23,688 365 - 26,452 21,830 613 - 24,894 12,393 365 11,607 22,005 14,775 - 57,663 48,895 49,259 36,780 1,732 1,771 1,732 1,620 1,732 1,771 1,732 1,620 22,361 14,436 11,674 1,157 18,431 15,813 10,904 1,569 22,361 12,925 10,725 - 18,431 14,740 10,183 450 49,628 46,717 46,011 43,804 2,491 7,175 - - 2,491 7,175 - - 24,635 6,863 24,635 7,132 24,635 6,863 7,132 31,498 31,767 31,498 7,132 20 Non-Current Liabilities - Other Provision for deferred income tax 21 Share Capital - CSL Limited Share Capital Movements in Share Capital for the year ended 30 June 2000: Issued and paid up capital at 30 June 1999 Share premium reserve transferred to share capital following amendments to Corporations Law Shares issued on equity placement (a) Shares issued to employees through participation in SESOP (b) Shares issued to employees through participation in GESOP (c) Share capital at 30 June 2000 Movements in issued shares for the year: Opening number of shares Issued under equity placement Issued to employees through participation in GESOP Issued to employees through participation in SESOP Closing number of shares Chief Entity 2000 $000 1999 $000 2000 $000 1999 $000 9,887 10,291 9,176 9,807 591,321 233,502 591,321 233,502 233,502 131,261 233,502 131,261 353,925 3,719 175 101,302 939 - 353,925 3,719 175 101,302 939 - 591,321 233,502 591,321 233,502 131,653 16,500 13 910 131,261 392 131,653 16,500 13 910 131,261 392 149,076 131,653 149,076 131,653 (a) On 7 June 2000, the chief entity issued 16,500,000 fully paid shares at $22.00 per share for the purpose of acquiring the plasma fractionation assets and business of Zentrallaboratorium Blutspendedienst (ZLB). Costs associated with the equity raising having been applied against share capital. (b) Options exercised under SESOP as disclosed at Note 24 during the year were as follows: - 391,550 issued @ $2.40 150,000 issued @ $5.01 257,652 issued @ $5.29 21,000 issued @ $5.73 90,000 issued @ $6.05 939 752 1,363 121 544 939 - 939 752 1,363 121 544 939 - 3,719 939 3,719 939 - 175 - (c) Shares issued to employees under GESOP as disclosed at Note 24 were as follows: - 13,460 issued @ $12.98 175 The claims provision including IBNR (incurred but not reported), transferred from Coselco Insurance Pty Ltd (In Liquidation) to the chief entity, is determined on an actuarial basis as the present value of potential future payments, using statistics based on past experience and trends. The liability covers claims incurred but not paid, incurred but not reported claims and the anticipated direct and indirect costs of settling those claims. 16 CSL Limited and Controlled Entities (ACN 051 588 348) CSL Limited and Controlled Entities (ACN 051 588 348) 17 Economic Entity 13 Non-Current Assets - Intangibles Goodwill Less: accumulated amortisation Intellectual property Less: accumulated amortisation 14 Non-Current Assets - Other Future income tax benefit Attributable to provisions Attributable to carried forward losses 15 Current Liabilities - Accounts Payable Trade creditors Other creditors Outstanding claims - insurance Related bodies corporate - controlled entity 16 Current Liabilities - Borrowings Bank overdrafts (unsecured) 17 Current Liabilities - Provisions Dividends Taxation Employee entitlements Other 18 Non-Current Liabilities - Borrowings Bank borrowings (unsecured) 19 Non-Current Liabilities - Provisions Claims provision including IBNR Employee entitlements Chief Entity Economic Entity 2000 $000 1999 $000 2000 $000 1999 $000 5,585 5,585 5,679 5,679 - - - - - - 956 956 956 956 - - - - - - 10,962 11,887 8,014 9,350 10,346 616 11,700 187 7,793 221 9,350 - 10,962 11,887 8,014 9,350 33,610 23,688 365 - 26,452 21,830 613 - 24,894 12,393 365 11,607 22,005 14,775 - 57,663 48,895 49,259 36,780 1,732 1,771 1,732 1,620 1,732 1,771 1,732 1,620 22,361 14,436 11,674 1,157 18,431 15,813 10,904 1,569 22,361 12,925 10,725 - 18,431 14,740 10,183 450 49,628 46,717 46,011 43,804 2,491 7,175 - - 2,491 7,175 - - 24,635 6,863 24,635 7,132 24,635 6,863 7,132 31,498 31,767 31,498 7,132 20 Non-Current Liabilities - Other Provision for deferred income tax 21 Share Capital - CSL Limited Share Capital Movements in Share Capital for the year ended 30 June 2000: Issued and paid up capital at 30 June 1999 Share premium reserve transferred to share capital following amendments to Corporations Law Shares issued on equity placement (a) Shares issued to employees through participation in SESOP (b) Shares issued to employees through participation in GESOP (c) Share capital at 30 June 2000 Movements in issued shares for the year: Opening number of shares Issued under equity placement Issued to employees through participation in GESOP Issued to employees through participation in SESOP Closing number of shares Chief Entity 2000 $000 1999 $000 2000 $000 1999 $000 9,887 10,291 9,176 9,807 591,321 233,502 591,321 233,502 233,502 131,261 233,502 131,261 353,925 3,719 175 101,302 939 - 353,925 3,719 175 101,302 939 - 591,321 233,502 591,321 233,502 131,653 16,500 13 910 131,261 392 131,653 16,500 13 910 131,261 392 149,076 131,653 149,076 131,653 (a) On 7 June 2000, the chief entity issued 16,500,000 fully paid shares at $22.00 per share for the purpose of acquiring the plasma fractionation assets and business of Zentrallaboratorium Blutspendedienst (ZLB). Costs associated with the equity raising having been applied against share capital. (b) Options exercised under SESOP as disclosed at Note 24 during the year were as follows: - 391,550 issued @ $2.40 150,000 issued @ $5.01 257,652 issued @ $5.29 21,000 issued @ $5.73 90,000 issued @ $6.05 939 752 1,363 121 544 939 - 939 752 1,363 121 544 939 - 3,719 939 3,719 939 - 175 - (c) Shares issued to employees under GESOP as disclosed at Note 24 were as follows: - 13,460 issued @ $12.98 175 The claims provision including IBNR (incurred but not reported), transferred from Coselco Insurance Pty Ltd (In Liquidation) to the chief entity, is determined on an actuarial basis as the present value of potential future payments, using statistics based on past experience and trends. The liability covers claims incurred but not paid, incurred but not reported claims and the anticipated direct and indirect costs of settling those claims. 16 CSL Limited and Controlled Entities (ACN 051 588 348) CSL Limited and Controlled Entities (ACN 051 588 348) 17 Economic Entity 2000 $000 22 Reserves (a) Composition Asset revaluation reserve Foreign currency translation reserve General reserve Options reserve 1999 $000 2000 $000 Economic Entity 1999 $000 23 Directors‘ and Executives‘ Remuneration (a) Directors‘ Remuneration Income received or due and receivable by all directors1 of each entity in the economic entity from all companies in the economic entity and any related bodies corporate. 22,308 5,667 5,618 2,785 22,308 2,367 5,618 6,574 22,824 5,618 2,785 22,824 5,618 6,574 36,378 36,867 31,227 35,016 Income received or due and receivable by all directors of the chief entity from the chief entity and any related bodies corporate. 22,308 - 13,921 8,387 22,824 - 13,877 8,947 22,308 22,308 22,824 22,824 Under Article 89, the amount currently approved for the purpose of paying fees to directors of the chief entity who are not full time employees of the economic entity is $400,000 per annum. Of this amount such directors in 2000 received $375,050 (1999: $356,250). Foreign currency translation reserve Opening balance Net exchange differences on translation of foreign controlled entity 2,367 3,300 5,781 (3,414) - - Closing balance 5,667 2,367 - - Share premium reserve Opening balance Transfer to share capital - 101,302 (101,302) - 101,302 (101,302) Closing balance - - - - Options reserve Opening balance Options exercised during the period 6,574 3,789 7,514 940 6,574 3,789 7,514 940 Closing balance 2,785 6,574 2,785 6,574 (b) Movements Asset revaluation reserve Opening balance Increment on revaluation of land and buildings Closing balance Number of options outstanding at balance date SESOP SESOP II 18 Chief Entity CSL Limited and Controlled Entities (ACN 051 588 348) 2000 $000 1999 $000 1,363 1,219 Chief Entity 2000 $000 1999 $000 1,269 1,119 Number of chief entity directors whose income from the chief entity and any related bodies corporate was within the following bands: Number $10,000 $20,000 $40,000 $50,000 $60,000 $80,000 $680,000 $830,000 - $19,999 $29,999 $49,999 $59,999 $69,999 $89,999 $689,999 $839,999 1 2 2 1 1 1 1 4 2 1 1 - Directors’ remuneration includes the value of insurance premiums made for the benefit of directors. 532,616 2,172,160 1,455,970 1,115,140 532,616 2,172,160 1,455,970 1,115,140 2,704,776 2,571,110 2,704,776 2,571,110 1 For the purposes of Note 23(a) the definition of director excludes any person who is a full time employee of the economic entity, unless that person is a director of the chief entity. CSL Limited and Controlled Entities (ACN 051 588 348) 19 Economic Entity 2000 $000 22 Reserves (a) Composition Asset revaluation reserve Foreign currency translation reserve General reserve Options reserve 1999 $000 2000 $000 Economic Entity 1999 $000 23 Directors‘ and Executives‘ Remuneration (a) Directors‘ Remuneration Income received or due and receivable by all directors1 of each entity in the economic entity from all companies in the economic entity and any related bodies corporate. 22,308 5,667 5,618 2,785 22,308 2,367 5,618 6,574 22,824 5,618 2,785 22,824 5,618 6,574 36,378 36,867 31,227 35,016 Income received or due and receivable by all directors of the chief entity from the chief entity and any related bodies corporate. 22,308 - 13,921 8,387 22,824 - 13,877 8,947 22,308 22,308 22,824 22,824 Under Article 89, the amount currently approved for the purpose of paying fees to directors of the chief entity who are not full time employees of the economic entity is $400,000 per annum. Of this amount such directors in 2000 received $375,050 (1999: $356,250). Foreign currency translation reserve Opening balance Net exchange differences on translation of foreign controlled entity 2,367 3,300 5,781 (3,414) - - Closing balance 5,667 2,367 - - Share premium reserve Opening balance Transfer to share capital - 101,302 (101,302) - 101,302 (101,302) Closing balance - - - - Options reserve Opening balance Options exercised during the period 6,574 3,789 7,514 940 6,574 3,789 7,514 940 Closing balance 2,785 6,574 2,785 6,574 (b) Movements Asset revaluation reserve Opening balance Increment on revaluation of land and buildings Closing balance Number of options outstanding at balance date SESOP SESOP II 18 Chief Entity CSL Limited and Controlled Entities (ACN 051 588 348) 2000 $000 1999 $000 1,363 1,219 Chief Entity 2000 $000 1999 $000 1,269 1,119 Number of chief entity directors whose income from the chief entity and any related bodies corporate was within the following bands: Number $10,000 $20,000 $40,000 $50,000 $60,000 $80,000 $680,000 $830,000 - $19,999 $29,999 $49,999 $59,999 $69,999 $89,999 $689,999 $839,999 1 2 2 1 1 1 1 4 2 1 1 - Directors’ remuneration includes the value of insurance premiums made for the benefit of directors. 532,616 2,172,160 1,455,970 1,115,140 532,616 2,172,160 1,455,970 1,115,140 2,704,776 2,571,110 2,704,776 2,571,110 1 For the purposes of Note 23(a) the definition of director excludes any person who is a full time employee of the economic entity, unless that person is a director of the chief entity. CSL Limited and Controlled Entities (ACN 051 588 348) 19 Economic Entity 2000 $000 1999 $000 Chief Entity 2000 $000 Economic Entity 1999 $000 23 Directors‘ and Executives‘ Remuneration (continued) (b) Directors‘ Retirement Benefits The following prescribed benefits were given to a person, or to a prescribed superannuation fund, in connection with the retirement of a person from a prescribed office in relation to an entity in the economic entity during the financial year. Benefits approved by the Members 246 127 12,604 8,116 246 127 12,604 8,116 The number of executive officers whose income was within the following bands: Number CSL Limited and Controlled Entities (ACN 051 588 348) 1999 $000 $240,000 - $249,999 $250,000 - $259,999 $260,000 - $269,999 $270,000 - $279,999 $280,000 - $289,999 $290,000 - $299,999 $300,000 - $309,999 $310,000 - $319,999 $360,000 - $369,999 $370,000 - $379,999 $390,000 - $399,999 $440,000 - $449,999 $480,000 - $489,999 $490,000 - $499,999 $560,000 - $569,999 $590,000 - $599,999 $650,000 - $659,999 $680,000 - $689,999 $830,000 - $839,999 3 1 2 1 1 1 1 1 1 1 1 1 1 1 Number 1 1 1 1 1 1 - 3 1 2 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 - (e) Chief Executive Officer Memorandum of Understanding The chief entity has entered into a Memorandum of Understanding with Dr Brian McNamee to give him an incentive to align his actions with the interests of the shareholders. Remuneration for the 1999-2000 financial year includes the value of options issued to certain executives under SESOP II. 20 2000 $000 Number Income received or due and receivable by Australian-based executive officers (including executive directors) of the chief entity, from the chief entity and any related bodies corporate, whose income is $100,000 or more $100,000 - $109,999 $110,000 - $119,999 $120,000 - $129,999 $130,000 - $139,999 $140,000 - $149,999 $150,000 - $159,999 $160,000 - $169,999 $180,000 - $189,999 $190,000 - $199,999 $200,000 - $209,999 $210,000 - $219,999 $220,000 - $229,999 $230,000 - $239,999 1999 $000 23 Directors‘ and Executives‘ Remuneration (continued) (d) Executive Officers‘ Remuneration (continued) (c) The names of chief entity directors who have held office during the past two financial years unless otherwise stated are: C J Harper (retired 12 October 1999) P H Wade D S Adam (retired 15 October 1998) E A Alexander Dr B A McNamee K J Roberts C I R McDonald Dr A C Webster I A Renard (appointed 19 August 1998) (d) Executive Officers‘ Remuneration Income received or due and receivable by Australian-based executive officers (including executive directors) of the economic entity, from all entities in the economic entity and any related entities, whose income is $100,000 or more 2000 $000 Chief Entity 10 9 4 3 5 1 1 3 1 1 2 2 24 Employee Entitlements Aggregate employee entitlement liability (refer Notes 17 and 19) Number 15 10 4 5 2 1 1 1 3 1 10 9 4 3 5 1 1 3 1 1 2 2 The incentive is designed to encourage him to conduct the Company’s business with a view to the Company outperforming an appropriate ASX industrial index progressively over a ten year period. If the Company’s share price underperforms the said ASX index over the relevant period, no amount is payable in respect of that period. 15 10 4 5 2 1 1 1 3 1 18,537 18,036 17,588 17,315 (a) Employee Option Ownership Scheme CSL limited offers to senior employees options over ordinary shares. CSL Limited operates two types of option plans. Senior Executive Share Ownership Plan (SESOP) Under the rules of SESOP the chief entity has provided an interest free loan to each participant which was used to acquire the options. A receivable is included in the financial statements in Note 10. In the event of lapse, the chief entity has undertaken to acquire the options at an amount equal to the option price. This amount will be used to discharge the participants’ loans. Options issued under SESOP ceased during the year ended 30 June 1997. Performance hurdles for both the economic entity and employees must be met before the options can be exercised. The exercise price is calculated using the weighted average price over the 5 days preceding the issue date of the option. CSL Limited and Controlled Entities (ACN 051 588 348) 21 Economic Entity 2000 $000 1999 $000 Chief Entity 2000 $000 Economic Entity 1999 $000 23 Directors‘ and Executives‘ Remuneration (continued) (b) Directors‘ Retirement Benefits The following prescribed benefits were given to a person, or to a prescribed superannuation fund, in connection with the retirement of a person from a prescribed office in relation to an entity in the economic entity during the financial year. Benefits approved by the Members 246 127 12,604 8,116 246 127 12,604 8,116 The number of executive officers whose income was within the following bands: Number CSL Limited and Controlled Entities (ACN 051 588 348) 1999 $000 $240,000 - $249,999 $250,000 - $259,999 $260,000 - $269,999 $270,000 - $279,999 $280,000 - $289,999 $290,000 - $299,999 $300,000 - $309,999 $310,000 - $319,999 $360,000 - $369,999 $370,000 - $379,999 $390,000 - $399,999 $440,000 - $449,999 $480,000 - $489,999 $490,000 - $499,999 $560,000 - $569,999 $590,000 - $599,999 $650,000 - $659,999 $680,000 - $689,999 $830,000 - $839,999 3 1 2 1 1 1 1 1 1 1 1 1 1 1 Number 1 1 1 1 1 1 - 3 1 2 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 - (e) Chief Executive Officer Memorandum of Understanding The chief entity has entered into a Memorandum of Understanding with Dr Brian McNamee to give him an incentive to align his actions with the interests of the shareholders. Remuneration for the 1999-2000 financial year includes the value of options issued to certain executives under SESOP II. 20 2000 $000 Number Income received or due and receivable by Australian-based executive officers (including executive directors) of the chief entity, from the chief entity and any related bodies corporate, whose income is $100,000 or more $100,000 - $109,999 $110,000 - $119,999 $120,000 - $129,999 $130,000 - $139,999 $140,000 - $149,999 $150,000 - $159,999 $160,000 - $169,999 $180,000 - $189,999 $190,000 - $199,999 $200,000 - $209,999 $210,000 - $219,999 $220,000 - $229,999 $230,000 - $239,999 1999 $000 23 Directors‘ and Executives‘ Remuneration (continued) (d) Executive Officers‘ Remuneration (continued) (c) The names of chief entity directors who have held office during the past two financial years unless otherwise stated are: C J Harper (retired 12 October 1999) P H Wade D S Adam (retired 15 October 1998) E A Alexander Dr B A McNamee K J Roberts C I R McDonald Dr A C Webster I A Renard (appointed 19 August 1998) (d) Executive Officers‘ Remuneration Income received or due and receivable by Australian-based executive officers (including executive directors) of the economic entity, from all entities in the economic entity and any related entities, whose income is $100,000 or more 2000 $000 Chief Entity 10 9 4 3 5 1 1 3 1 1 2 2 24 Employee Entitlements Aggregate employee entitlement liability (refer Notes 17 and 19) Number 15 10 4 5 2 1 1 1 3 1 10 9 4 3 5 1 1 3 1 1 2 2 The incentive is designed to encourage him to conduct the Company’s business with a view to the Company outperforming an appropriate ASX industrial index progressively over a ten year period. If the Company’s share price underperforms the said ASX index over the relevant period, no amount is payable in respect of that period. 15 10 4 5 2 1 1 1 3 1 18,537 18,036 17,588 17,315 (a) Employee Option Ownership Scheme CSL limited offers to senior employees options over ordinary shares. CSL Limited operates two types of option plans. Senior Executive Share Ownership Plan (SESOP) Under the rules of SESOP the chief entity has provided an interest free loan to each participant which was used to acquire the options. A receivable is included in the financial statements in Note 10. In the event of lapse, the chief entity has undertaken to acquire the options at an amount equal to the option price. This amount will be used to discharge the participants’ loans. Options issued under SESOP ceased during the year ended 30 June 1997. Performance hurdles for both the economic entity and employees must be met before the options can be exercised. The exercise price is calculated using the weighted average price over the 5 days preceding the issue date of the option. CSL Limited and Controlled Entities (ACN 051 588 348) 21 24 Employee Entitlements (continued) (a) Employee Option Ownership Scheme Economic Entity 2000 $000 Revised Senior Executive Share Ownership Plan (SESOP II) Under the rules of SESOP II no loan is made to the recipients of options until the option is exercised. Consequently, no amounts are recorded in receivables until the option is exercised. Performance hurdles for both the economic entity and employees must be met before the options can be exercised. The exercise price is calculated using the weighted average price over the 5 days preceding the issue date of the option. SESOP and SESOP II Options Issue Date No. of Employees No. Options 01-Jul-99 13 3 11 1 1 1 12 11 26 1 1 391,550 450,000 429,420 35,000 150,000 300,000 462,000 353,140 - SESOP - November 1994 SESOP - July 1996 SESOP - July 1996* SESOP - February 1997 SESOP - April 1997 SESOP II - November 1997 SESOP II - March 1998 SESOP II - July 1998* SESOP II - July 1999 SESOP II - November 1999 SESOP II - February 2000 Total Issued (Exercised) No. Options (Cancelled) 30-Jun-99 (391,550) (150,000) (270,804) (21,000) (90,000) (30,530) 942,550 85,000 60,000 2,571,110 300,000 158,616 14,000 60,000 300,000 462,000 322,610 942,550 85,000 60,000 1999 $000 Chief Entity 2000 $000 1999 $000 26 Commitments (a) Acquisition of assets from Rotkreuzstiftung Zentrallaboratorium Blutspendedienst SRK (the “Foundation”). On the 7 June 2000, CSL Limited signed a conditional agreement to acquire the plasma fractionation assets and business of ZLB for an initial consideration of approximately CHF 860 million (AUD $898 million) from the Foundation. Further payments of up to CHF 113.2 million (AUD $115.1 million) may be made if certain performance targets are achieved. The Foundation will be paid 77.5% of the initial consideration on settlement and the further 22.5% of consideration as a deferred payment in 2005. Exercise Price Expiry Date $2.40 $5.01 $5.29 $5.73 $6.05 $8.93 $11.45 $10.82 $13.23 $20.84 $21.01 Nov-99 Jul-01 Jul-01 Feb-02 Apr-02 Nov-04 Mar-05 Jul-05 Jul-06 Nov-06 Feb-07 CSL Limited has entered into a forward exchange contract to hedge the consideration of CHF 666 million payable on settlement as disclosed in Note 38. At balance date, conditions necessary to complete the acquisition had not been achieved and as a result the acquisition is not reflected in the financial statements. (b) Capital Commitments Total capital expenditure contracted for at balance date but not provided for in the financial statements, payable: Not later than one year * During the year a total of 30,530 (July 1998) and 13,152 (July 1996) options were cancelled. (1) Options in CSL Limited are not listed and as such have no market value. (2) Options issued under SESOP and SESOP II have been valued for the purpose of disclosing executive remuneration using the Black-Scholes option valuation methodology as at the date of issue. 5,696 6,208 5,696 3,087 4,014 840 2,508 3,443 - 1,827 1,720 - 1,557 1,573 - 7,941 5,951 3,547 3,130 7,941 5,951 3,547 3,130 (c) Lease Commitments Total lease expenditure contracted for at balance date but not provided for in the financial statements, payable: Not later than one year Later than one year but not later than five years Later than five years 2,704,776 6,266 Representing: Non-cancellable operating leases Operating leases entered into relate predominately to the leasing of motor vehicles. (b) General Employee Share Ownership Plan (GESOP) During 1999-2000, the chief entity offered employees the option of taking a bonus entitlement earned under either the Enterprise Bargaining Agreement or the performance management system in the form of shares in the chief entity in lieu of cash payments. The shares were offered under a share plan complying with the legislative requirements, including a limit on the value of shares, for concessional tax treatment in the hands of the recipient. A total of 45,552 shares were issued to employees. Economic Entity 25 Remuneration of Auditors Amounts received, or due and receivable, by chief entity auditors for: - auditing the financial statements - other services Amounts received, or due and receivable, by other auditors for: - auditing the financial statements 22 CSL Limited and Controlled Entities (ACN 051 588 348) (d) Other On 19 June 1998, CSL Limited entered into an agreement with Aviron to develop and register for sale Aviron’s intranasal influenza vaccine. Upon successful achievement of a series of milestones related to the registration and PBS listing of the product, Aviron will become entitled to options over 1,000,000 ordinary shares in CSL Limited at an exercise price of $9.82 per share plus a premium of up to $2.00 depending on when exercised. Chief Entity 2000 $000 1999 $000 2000 $000 1999 $000 157 294 153 7 143 294 140 5 119 117 - - CSL Limited and Controlled Entities (ACN 051 588 348) 23 24 Employee Entitlements (continued) (a) Employee Option Ownership Scheme Economic Entity 2000 $000 Revised Senior Executive Share Ownership Plan (SESOP II) Under the rules of SESOP II no loan is made to the recipients of options until the option is exercised. Consequently, no amounts are recorded in receivables until the option is exercised. Performance hurdles for both the economic entity and employees must be met before the options can be exercised. The exercise price is calculated using the weighted average price over the 5 days preceding the issue date of the option. SESOP and SESOP II Options Issue Date No. of Employees No. Options 01-Jul-99 13 3 11 1 1 1 12 11 26 1 1 391,550 450,000 429,420 35,000 150,000 300,000 462,000 353,140 - SESOP - November 1994 SESOP - July 1996 SESOP - July 1996* SESOP - February 1997 SESOP - April 1997 SESOP II - November 1997 SESOP II - March 1998 SESOP II - July 1998* SESOP II - July 1999 SESOP II - November 1999 SESOP II - February 2000 Total Issued (Exercised) No. Options (Cancelled) 30-Jun-99 (391,550) (150,000) (270,804) (21,000) (90,000) (30,530) 942,550 85,000 60,000 2,571,110 300,000 158,616 14,000 60,000 300,000 462,000 322,610 942,550 85,000 60,000 1999 $000 Chief Entity 2000 $000 1999 $000 26 Commitments (a) Acquisition of assets from Rotkreuzstiftung Zentrallaboratorium Blutspendedienst SRK (the “Foundation”). On the 7 June 2000, CSL Limited signed a conditional agreement to acquire the plasma fractionation assets and business of ZLB for an initial consideration of approximately CHF 860 million (AUD $898 million) from the Foundation. Further payments of up to CHF 113.2 million (AUD $115.1 million) may be made if certain performance targets are achieved. The Foundation will be paid 77.5% of the initial consideration on settlement and the further 22.5% of consideration as a deferred payment in 2005. Exercise Price Expiry Date $2.40 $5.01 $5.29 $5.73 $6.05 $8.93 $11.45 $10.82 $13.23 $20.84 $21.01 Nov-99 Jul-01 Jul-01 Feb-02 Apr-02 Nov-04 Mar-05 Jul-05 Jul-06 Nov-06 Feb-07 CSL Limited has entered into a forward exchange contract to hedge the consideration of CHF 666 million payable on settlement as disclosed in Note 38. At balance date, conditions necessary to complete the acquisition had not been achieved and as a result the acquisition is not reflected in the financial statements. (b) Capital Commitments Total capital expenditure contracted for at balance date but not provided for in the financial statements, payable: Not later than one year * During the year a total of 30,530 (July 1998) and 13,152 (July 1996) options were cancelled. (1) Options in CSL Limited are not listed and as such have no market value. (2) Options issued under SESOP and SESOP II have been valued for the purpose of disclosing executive remuneration using the Black-Scholes option valuation methodology as at the date of issue. 5,696 6,208 5,696 3,087 4,014 840 2,508 3,443 - 1,827 1,720 - 1,557 1,573 - 7,941 5,951 3,547 3,130 7,941 5,951 3,547 3,130 (c) Lease Commitments Total lease expenditure contracted for at balance date but not provided for in the financial statements, payable: Not later than one year Later than one year but not later than five years Later than five years 2,704,776 6,266 Representing: Non-cancellable operating leases Operating leases entered into relate predominately to the leasing of motor vehicles. (b) General Employee Share Ownership Plan (GESOP) During 1999-2000, the chief entity offered employees the option of taking a bonus entitlement earned under either the Enterprise Bargaining Agreement or the performance management system in the form of shares in the chief entity in lieu of cash payments. The shares were offered under a share plan complying with the legislative requirements, including a limit on the value of shares, for concessional tax treatment in the hands of the recipient. A total of 45,552 shares were issued to employees. Economic Entity 25 Remuneration of Auditors Amounts received, or due and receivable, by chief entity auditors for: - auditing the financial statements - other services Amounts received, or due and receivable, by other auditors for: - auditing the financial statements 22 CSL Limited and Controlled Entities (ACN 051 588 348) (d) Other On 19 June 1998, CSL Limited entered into an agreement with Aviron to develop and register for sale Aviron’s intranasal influenza vaccine. Upon successful achievement of a series of milestones related to the registration and PBS listing of the product, Aviron will become entitled to options over 1,000,000 ordinary shares in CSL Limited at an exercise price of $9.82 per share plus a premium of up to $2.00 depending on when exercised. Chief Entity 2000 $000 1999 $000 2000 $000 1999 $000 157 294 153 7 143 294 140 5 119 117 - - CSL Limited and Controlled Entities (ACN 051 588 348) 23 Economic Entity 2000 $000 Chief Entity 1999 $000 2000 $000 1999 $000 27 Contingent Liabilities (a) Details and estimates of maximum amounts of contingent liabilities, classified in accordance with the party from whom the liability could arise for which no provisions are included in the financial statements, are as follows: 29 Related Parties (a) Directors The following persons held the position of director of CSL Limited during all of the past two financial years unless otherwise stated: C J Harper (retired 12 October 1999), P H Wade, D S Adam (retired 15 October 1998), E A Alexander, Dr B A McNamee, C I R McDonald, K J Roberts, Dr A C Webster and I A Renard (appointed 19 August 1998). Information in relation to remuneration of directors is disclosed in Note 23. (b) Directors‘ Shareholdings Chief entity guarantee of controlled entity borrowings Bank guarantees - - 2,491 7,175 1,055 23 1,055 23 1,055 23 3,546 7,198 (b) As explained in Note 30, the chief entity has entered into a deed of cross guarantee in accordance with a class order issued by the Australian Securities and Investments Commission. The chief entity, and the controlled entity which is 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. (c) The maximum contingent liabilities for benefits under service agreements, in the event of an involuntary redundancy, with the managing director and persons who take part in the management of the companies in the economic entity, amount to: 3,787 2,756 3,787 2,756 Issued by the chief entity Shares and options held at the end of the year Ordinary shares (refer Directors‘ Report) Options - SESOP - SESOP II 2000 1999 178,900 300,000 504,660 120,000 300,000 (c) Loan to Director In accordance with the rules of the Senior Executive Share Ownership Plan (SESOP) as adopted at the general meeting held on 15 August 1994, Dr B A McNamee received an interest free loan (disclosed in Note 10) from the chief entity which was used to take up an offer of options over ordinary shares in the chief entity. During 1999-2000, Dr B A McNamee exercised the remaining 120,000 SESOP options and made loan repayments totalling $281,653. 28 Superannuation Commitments The economic entity has established one superannuation plan as set out below. CSL Superannuation Plan CSL Limited commenced contributions to the CSL Superannuation Plan in July 1990. The Plan is a combination defined benefit and defined contribution plan. Defined benefits are provided to members based on the level of the member’s contribution (which is voluntary), the member’s period of service and the member’s highest average salary. The defined benefit plan was closed to new members eligible to join the CSL Superannuation Plan on or after 1 July 1996. The chief entity makes contributions of between 8% and 15% dependent on the level of the employee contribution to the scheme. There is no legally enforceable obligation, other than in respect of compliance with the superannuation guarantee, on the chief entity to contribute to the superannuation plan. The last actuarial assessment of the Plan was at 1 July 1998 and was performed by Wayne Adams, FIAA of Buck Consultants Pty Ltd. In the actuary’s view, the position of the Plan as revealed in that review was sound. The assets of the Plan at 1 July 1998 were sufficient to pay all benefits that would have been payable from the Plan in the event of voluntary termination of employment of each employee at that date. Date at which the following amounts were determined: 30 June 2000 $000 30 June 1999 $000 (unaudited) Net market value of Plan assets Vested benefits 56,781 54,300 48,653 47,101 The accrued benefits of the Plan have not been estimated since the actuarial review was conducted as at 1 July 1998. At that date the net market value of Plan assets was $42.6m and accrued benefits $41.6m. The Plan at that date had a surplus of assets against accrued benefits of $1.0m. 24 CSL Limited and Controlled Entities (ACN 051 588 348) (d) Other Transactions of Directors and Director-Related Entities The directors of the economic entity, or their director-related entities, have the following transactions with entities within the economic entity that occur within a normal employee, customer or supplier relationship on terms and conditions no more favourable than those which it is reasonable to expect the entity would have adopted if dealing with the director or director-related entity at arm‘s length in similar circumstances: Provision of taxation and information technology services by PricewaterhouseCoopers, a firm in which E A Alexander is a partner, to a value of $756,844 (1999: PricewaterhouseCoopers $408,000). Provision of legal services by Arthur Robinson & Hedderwicks, a firm in which I A Renard is a partner, to a value of $330,020 (1999: $74,111). C I R McDonald is a director of Rothschild Bioscience Managers Limited, the manager of the Australian Bioscience Trust in which the chief entity invested $872,794 during the financial year (1999: $679,000). The chief entity made contributions during the period, as detailed in Note 28, to the CSL Superannuation Plan. Dr B A McNamee is a shareholder of the Plan’s trustee company, but not a member of the Plan. (e) Transactions with Related Parties in the Economic Entity The chief entity entered into the following transactions during the year with related parties in the economic entity: • 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 product; • Payment of insurance premiums to controlled entity; • Provision of marketing services by controlled entity; and • Management fees were received from a controlled entity. The sales, purchases, insurance premiums and other services were undertaken on commercial terms and conditions. Payment for intercompany transactions is through the intercompany loan accounts which are subject to extended payment terms. CSL Limited and Controlled Entities (ACN 051 588 348) 25 Economic Entity 2000 $000 Chief Entity 1999 $000 2000 $000 1999 $000 27 Contingent Liabilities (a) Details and estimates of maximum amounts of contingent liabilities, classified in accordance with the party from whom the liability could arise for which no provisions are included in the financial statements, are as follows: 29 Related Parties (a) Directors The following persons held the position of director of CSL Limited during all of the past two financial years unless otherwise stated: C J Harper (retired 12 October 1999), P H Wade, D S Adam (retired 15 October 1998), E A Alexander, Dr B A McNamee, C I R McDonald, K J Roberts, Dr A C Webster and I A Renard (appointed 19 August 1998). Information in relation to remuneration of directors is disclosed in Note 23. (b) Directors‘ Shareholdings Chief entity guarantee of controlled entity borrowings Bank guarantees - - 2,491 7,175 1,055 23 1,055 23 1,055 23 3,546 7,198 (b) As explained in Note 30, the chief entity has entered into a deed of cross guarantee in accordance with a class order issued by the Australian Securities and Investments Commission. The chief entity, and the controlled entity which is 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. (c) The maximum contingent liabilities for benefits under service agreements, in the event of an involuntary redundancy, with the managing director and persons who take part in the management of the companies in the economic entity, amount to: 3,787 2,756 3,787 2,756 Issued by the chief entity Shares and options held at the end of the year Ordinary shares (refer Directors‘ Report) Options - SESOP - SESOP II 2000 1999 178,900 300,000 504,660 120,000 300,000 (c) Loan to Director In accordance with the rules of the Senior Executive Share Ownership Plan (SESOP) as adopted at the general meeting held on 15 August 1994, Dr B A McNamee received an interest free loan (disclosed in Note 10) from the chief entity which was used to take up an offer of options over ordinary shares in the chief entity. During 1999-2000, Dr B A McNamee exercised the remaining 120,000 SESOP options and made loan repayments totalling $281,653. 28 Superannuation Commitments The economic entity has established one superannuation plan as set out below. CSL Superannuation Plan CSL Limited commenced contributions to the CSL Superannuation Plan in July 1990. The Plan is a combination defined benefit and defined contribution plan. Defined benefits are provided to members based on the level of the member’s contribution (which is voluntary), the member’s period of service and the member’s highest average salary. The defined benefit plan was closed to new members eligible to join the CSL Superannuation Plan on or after 1 July 1996. The chief entity makes contributions of between 8% and 15% dependent on the level of the employee contribution to the scheme. There is no legally enforceable obligation, other than in respect of compliance with the superannuation guarantee, on the chief entity to contribute to the superannuation plan. The last actuarial assessment of the Plan was at 1 July 1998 and was performed by Wayne Adams, FIAA of Buck Consultants Pty Ltd. In the actuary’s view, the position of the Plan as revealed in that review was sound. The assets of the Plan at 1 July 1998 were sufficient to pay all benefits that would have been payable from the Plan in the event of voluntary termination of employment of each employee at that date. Date at which the following amounts were determined: 30 June 2000 $000 30 June 1999 $000 (unaudited) Net market value of Plan assets Vested benefits 56,781 54,300 48,653 47,101 The accrued benefits of the Plan have not been estimated since the actuarial review was conducted as at 1 July 1998. At that date the net market value of Plan assets was $42.6m and accrued benefits $41.6m. The Plan at that date had a surplus of assets against accrued benefits of $1.0m. 24 CSL Limited and Controlled Entities (ACN 051 588 348) (d) Other Transactions of Directors and Director-Related Entities The directors of the economic entity, or their director-related entities, have the following transactions with entities within the economic entity that occur within a normal employee, customer or supplier relationship on terms and conditions no more favourable than those which it is reasonable to expect the entity would have adopted if dealing with the director or director-related entity at arm‘s length in similar circumstances: Provision of taxation and information technology services by PricewaterhouseCoopers, a firm in which E A Alexander is a partner, to a value of $756,844 (1999: PricewaterhouseCoopers $408,000). Provision of legal services by Arthur Robinson & Hedderwicks, a firm in which I A Renard is a partner, to a value of $330,020 (1999: $74,111). C I R McDonald is a director of Rothschild Bioscience Managers Limited, the manager of the Australian Bioscience Trust in which the chief entity invested $872,794 during the financial year (1999: $679,000). The chief entity made contributions during the period, as detailed in Note 28, to the CSL Superannuation Plan. Dr B A McNamee is a shareholder of the Plan’s trustee company, but not a member of the Plan. (e) Transactions with Related Parties in the Economic Entity The chief entity entered into the following transactions during the year with related parties in the economic entity: • 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 product; • Payment of insurance premiums to controlled entity; • Provision of marketing services by controlled entity; and • Management fees were received from a controlled entity. The sales, purchases, insurance premiums and other services were undertaken on commercial terms and conditions. Payment for intercompany transactions is through the intercompany loan accounts which are subject to extended payment terms. CSL Limited and Controlled Entities (ACN 051 588 348) 25 29 Related Parties (continued) (e) Transactions with Related Parties in the Economic Entity (continued) Amounts payable to and receivable from parties in the economic entity: Appropriate disclosure of these amounts is contained in the notes to the financial statements. 30 Controlled Entities (continued) A deed of cross guarantee between CSL International Pty Ltd and CSL Limited was enacted on 20 June 1995 and relief was obtained from preparing financial statements of CSL International Pty Ltd under the ASIC Class Order. Under the deed, both entities guarantee to support the liabilities and obligations of each other. Ownership interests: The ownership interests in related parties in the economic entity are disclosed in Note 30. Financial information for the class order group comprising CSL Limited and CSL International Pty Ltd is as follows: All transactions with controlled entities have been eliminated on consolidation. (f) Transactions with Other Related Parties Amounts payable to and receivable from other related parties: Appropriate disclosure of these amounts is contained in the notes to the financial statements. (g) Ultimate Controlling Entity The ultimate controlling entity is CSL Limited. 30 Controlled Entities Country of Incorporation Chief Entity: CSL Limited Controlled Entities of CSL Limited: Coselco Insurance Pty Ltd Filtron Pty Ltd Cervax Pty Ltd CSL (New Zealand) Limited Iscotec AB CSL International Pty Ltd CSL Europe Pty Ltd CSL (UK) Limited JRH Biosciences Limited CSL US Inc JRH Biosciences Inc Biocor Animal Health Inc CSL Bioplasma Inc Percentage Owned 2000 % 1999 % 100 100 74 100 100 100 100 100 100 100 100 100 100 100 100 74 100 100 100 100 100 100 100 100 100 Australia Australia Australia Australia New Zealand Sweden Australia Australia England England USA USA USA USA (a) Audited by affiliates of the chief entity auditors. (b) Audited by Ernst & Young, Chartered Accountants, London. (c) Audited by Ernst & Young LLP, Chartered Accountants, Kansas City. (d) Coselco Insurance Pty Ltd was placed in members voluntary liquidation on 30 June 2000 (refer Note 1(m)). (e) During the year JRH Biosciences Limited changed its name from JRH Europe Limited. (d) (a) (a) (b) (b) (e) (c) (c) (c) (c) Balance Sheet 2000 $000 1999 $000 Current Assets Cash Receivables Investments Inventories Other 112 56,148 412,126 65,582 575 311 35,286 42,691 58,172 2,550 Total Current Assets 534,543 139,010 Non-Current Assets Receivables Investments Property, plant and equipment Other 44,419 46,972 284,917 8,014 38,709 40,473 282,831 9,350 Total Non-Current Assets 384,322 371,363 Total Assets 918,865 510,373 Current Liabilities Accounts payable Borrowings Provisions 49,259 1,732 46,011 36,780 1,620 43,804 Total Current Liabilities 97,002 82,204 Non-Current Liabilities Provisions Other 31,498 9,176 7,132 9,807 Total Non-Current Liabilities 40,674 16,939 Total Liabilities 137,676 99,143 Net Assets 781,189 411,230 Equity Share capital Reserves Retained profits 591,321 31,064 158,804 233,502 34,853 142,875 Total Equity 781,189 411,230 Profit and Loss Statement The profit and loss of the closed group is identical to that of the chief entity as disclosed in the profit and loss statement in this financial report. 26 CSL Limited and Controlled Entities (ACN 051 588 348) CSL Limited and Controlled Entities (ACN 051 588 348) 27 29 Related Parties (continued) (e) Transactions with Related Parties in the Economic Entity (continued) Amounts payable to and receivable from parties in the economic entity: Appropriate disclosure of these amounts is contained in the notes to the financial statements. 30 Controlled Entities (continued) A deed of cross guarantee between CSL International Pty Ltd and CSL Limited was enacted on 20 June 1995 and relief was obtained from preparing financial statements of CSL International Pty Ltd under the ASIC Class Order. Under the deed, both entities guarantee to support the liabilities and obligations of each other. Ownership interests: The ownership interests in related parties in the economic entity are disclosed in Note 30. Financial information for the class order group comprising CSL Limited and CSL International Pty Ltd is as follows: All transactions with controlled entities have been eliminated on consolidation. (f) Transactions with Other Related Parties Amounts payable to and receivable from other related parties: Appropriate disclosure of these amounts is contained in the notes to the financial statements. (g) Ultimate Controlling Entity The ultimate controlling entity is CSL Limited. 30 Controlled Entities Country of Incorporation Chief Entity: CSL Limited Controlled Entities of CSL Limited: Coselco Insurance Pty Ltd Filtron Pty Ltd Cervax Pty Ltd CSL (New Zealand) Limited Iscotec AB CSL International Pty Ltd CSL Europe Pty Ltd CSL (UK) Limited JRH Biosciences Limited CSL US Inc JRH Biosciences Inc Biocor Animal Health Inc CSL Bioplasma Inc Percentage Owned 2000 % 1999 % 100 100 74 100 100 100 100 100 100 100 100 100 100 100 100 74 100 100 100 100 100 100 100 100 100 Australia Australia Australia Australia New Zealand Sweden Australia Australia England England USA USA USA USA (a) Audited by affiliates of the chief entity auditors. (b) Audited by Ernst & Young, Chartered Accountants, London. (c) Audited by Ernst & Young LLP, Chartered Accountants, Kansas City. (d) Coselco Insurance Pty Ltd was placed in members voluntary liquidation on 30 June 2000 (refer Note 1(m)). (e) During the year JRH Biosciences Limited changed its name from JRH Europe Limited. (d) (a) (a) (b) (b) (e) (c) (c) (c) (c) Balance Sheet 2000 $000 1999 $000 Current Assets Cash Receivables Investments Inventories Other 112 56,148 412,126 65,582 575 311 35,286 42,691 58,172 2,550 Total Current Assets 534,543 139,010 Non-Current Assets Receivables Investments Property, plant and equipment Other 44,419 46,972 284,917 8,014 38,709 40,473 282,831 9,350 Total Non-Current Assets 384,322 371,363 Total Assets 918,865 510,373 Current Liabilities Accounts payable Borrowings Provisions 49,259 1,732 46,011 36,780 1,620 43,804 Total Current Liabilities 97,002 82,204 Non-Current Liabilities Provisions Other 31,498 9,176 7,132 9,807 Total Non-Current Liabilities 40,674 16,939 Total Liabilities 137,676 99,143 Net Assets 781,189 411,230 Equity Share capital Reserves Retained profits 591,321 31,064 158,804 233,502 34,853 142,875 Total Equity 781,189 411,230 Profit and Loss Statement The profit and loss of the closed group is identical to that of the chief entity as disclosed in the profit and loss statement in this financial report. 26 CSL Limited and Controlled Entities (ACN 051 588 348) CSL Limited and Controlled Entities (ACN 051 588 348) 27 Economic Entity 2000 $000 1999 $000 Chief Entity 2000 $000 1999 $000 Facilities available to the economic entity are in the form of bank overdraft, term loan and bill discount facilities. 31 Reconciliation of Cash For the purpose of this statement of cash flows, cash includes: (1) cash on hand and at call deposits with banks or financial institutions, net of bank overdrafts; and (2) investments in money market instruments Cash at the end of the year is shown in the balance sheet as: Cash on hand 11am cash deposits Bank endorsed bills of exchange Bank overdrafts 32 Reconciliation of Cash Flows from Operations with Operating Profit after Tax Operating profit after tax Non-cash flows in operating profit Depreciation and amortisation Loss/(Profit) on sale of property, plant and equipment Reclassification of investment income to investing activities Changes in assets and liabilities, net of the effects of purchase of controlled entities (Increase)/decrease in receivables (Increase)/decrease in inventories (Increase)/decrease in prepayments Increase/(decrease) in creditors Increase/(decrease) in provisions Increase/(decrease) in taxes payable Cash flows from operations 33 Businesses Acquired During the current reporting period the economic entity acquired operating assets of Imperial Laboratories Limited an entity incorporated in the United Kingdom. Details of the acquisition are as follows: Consideration Fair value of net assets acquired Property, plant and equipment Inventories Cash outflows on acquisition of operating assets 34 Credit Standby Facilities Firmly committed long term financing facilities of $65.8m (1999: $64.2m) were available to the economic entity at the end of the financial year. As at that date, $2.5m (1999: $7.2m) of these facilities were in use. A loan facility of $400 million subject to certain condition precedents is available for the purpose of acquiring ZLB as disclosed in Note 26. The provision of finance under all facilities to the chief entity and the economic entity is subject to certain borrowing requirements and financial ratios being met. Economic Entity 4,501 371,902 40,224 (1,732) 2,893 7,300 35,391 (1,771) 112 371,902 40,224 (1,732) 311 7,300 35,391 (1,620) 414,895 43,813 410,506 41,382 47,382 49,003 44,254 33,684 (73) (2,083) 33,664 (133) (2,132) 29,611 (81) - 29,374 (288) - (5,975) (13,623) (789) 13,731 526 (274) (30,965) (7,409) 1,975 873 (697) (840) (7,833) (6,800) (51) 5,987 927 (87) 54,074 72,377 41,470 65,483 603 50 653 36.1 35.4 133,369,553 131,404,281 36 Segment Information CSL Limited operates primarily in the pharmaceutical industry and in the following geographic areas: Australasia $000 USA $000 Europe $000 Revenue from customers outside the economic entity 414,832 Intersegment revenue 7,235 84,267 106 5,161 1,803 (9,144) 504,260 - Total Revenue 422,067 84,373 6,964 (9,144) 504,260 Segment Result 50,406 3,824 172 - 54,402 Segment Assets 859,927 84,438 2,114 - 946,479 Australasia $000 USA $000 Europe $000 Revenue from customers outside the economic entity 353,041 Intersegment revenue 9,264 71,869 53 9 2,754 (12,071) 424,919 - Total Revenue 362,305 71,922 2,763 (12,071) 424,919 Segment Result 45,923 2,224 (765) - 47,382 Segment Assets 496,655 64,295 588 - 561,538 Geographic segments - 1999 653 40.8 40.0 Diluted earnings per share is calculated after classifying all options on issue at the end of the financial year as potential ordinary shares. Geographic segments - 2000 (23,155) (16,941) 1,100 7,907 89 (856) 1999 cents 35 Earnings Per Share Basic earnings per share Diluted earnings per share Weighted average number of ordinary shares outstanding during the year used in the calculation of basic earnings per share: 54,402 2000 cents Eliminations Consolidated $000 $000 Eliminations Consolidated $000 $000 The pricing on intersegment transactions is comparable to prices charged on transactions with parties outside the economic entity. The geographic segment Australasia comprises Australia and New Zealand. 37 Significant Purchaser Significant volumes of the chief entity’s sales of human pharmaceutical and plasma products are to the Australian Government. 28 CSL Limited and Controlled Entities (ACN 051 588 348) CSL Limited and Controlled Entities (ACN 051 588 348) 29 Economic Entity 2000 $000 1999 $000 Chief Entity 2000 $000 1999 $000 Facilities available to the economic entity are in the form of bank overdraft, term loan and bill discount facilities. 31 Reconciliation of Cash For the purpose of this statement of cash flows, cash includes: (1) cash on hand and at call deposits with banks or financial institutions, net of bank overdrafts; and (2) investments in money market instruments Cash at the end of the year is shown in the balance sheet as: Cash on hand 11am cash deposits Bank endorsed bills of exchange Bank overdrafts 32 Reconciliation of Cash Flows from Operations with Operating Profit after Tax Operating profit after tax Non-cash flows in operating profit Depreciation and amortisation Loss/(Profit) on sale of property, plant and equipment Reclassification of investment income to investing activities Changes in assets and liabilities, net of the effects of purchase of controlled entities (Increase)/decrease in receivables (Increase)/decrease in inventories (Increase)/decrease in prepayments Increase/(decrease) in creditors Increase/(decrease) in provisions Increase/(decrease) in taxes payable Cash flows from operations 33 Businesses Acquired During the current reporting period the economic entity acquired operating assets of Imperial Laboratories Limited an entity incorporated in the United Kingdom. Details of the acquisition are as follows: Consideration Fair value of net assets acquired Property, plant and equipment Inventories Cash outflows on acquisition of operating assets 34 Credit Standby Facilities Firmly committed long term financing facilities of $65.8m (1999: $64.2m) were available to the economic entity at the end of the financial year. As at that date, $2.5m (1999: $7.2m) of these facilities were in use. A loan facility of $400 million subject to certain condition precedents is available for the purpose of acquiring ZLB as disclosed in Note 26. The provision of finance under all facilities to the chief entity and the economic entity is subject to certain borrowing requirements and financial ratios being met. Economic Entity 4,501 371,902 40,224 (1,732) 2,893 7,300 35,391 (1,771) 112 371,902 40,224 (1,732) 311 7,300 35,391 (1,620) 414,895 43,813 410,506 41,382 47,382 49,003 44,254 33,684 (73) (2,083) 33,664 (133) (2,132) 29,611 (81) - 29,374 (288) - (5,975) (13,623) (789) 13,731 526 (274) (30,965) (7,409) 1,975 873 (697) (840) (7,833) (6,800) (51) 5,987 927 (87) 54,074 72,377 41,470 65,483 603 50 653 36.1 35.4 133,369,553 131,404,281 36 Segment Information CSL Limited operates primarily in the pharmaceutical industry and in the following geographic areas: Australasia $000 USA $000 Europe $000 Revenue from customers outside the economic entity 414,832 Intersegment revenue 7,235 84,267 106 5,161 1,803 (9,144) 504,260 - Total Revenue 422,067 84,373 6,964 (9,144) 504,260 Segment Result 50,406 3,824 172 - 54,402 Segment Assets 859,927 84,438 2,114 - 946,479 Australasia $000 USA $000 Europe $000 Revenue from customers outside the economic entity 353,041 Intersegment revenue 9,264 71,869 53 9 2,754 (12,071) 424,919 - Total Revenue 362,305 71,922 2,763 (12,071) 424,919 Segment Result 45,923 2,224 (765) - 47,382 Segment Assets 496,655 64,295 588 - 561,538 Geographic segments - 1999 653 40.8 40.0 Diluted earnings per share is calculated after classifying all options on issue at the end of the financial year as potential ordinary shares. Geographic segments - 2000 (23,155) (16,941) 1,100 7,907 89 (856) 1999 cents 35 Earnings Per Share Basic earnings per share Diluted earnings per share Weighted average number of ordinary shares outstanding during the year used in the calculation of basic earnings per share: 54,402 2000 cents Eliminations Consolidated $000 $000 Eliminations Consolidated $000 $000 The pricing on intersegment transactions is comparable to prices charged on transactions with parties outside the economic entity. The geographic segment Australasia comprises Australia and New Zealand. 37 Significant Purchaser Significant volumes of the chief entity’s sales of human pharmaceutical and plasma products are to the Australian Government. 28 CSL Limited and Controlled Entities (ACN 051 588 348) CSL Limited and Controlled Entities (ACN 051 588 348) 29 38 Additional Financial Instruments Disclosure Interest Rate Risk The economic entity has entered into interest rate swap contracts. These contracts allow the economic entity to raise short and long term borrowings at floating rates and effectively swap them into fixed rates. Maturities of swap contracts are generally between 1 and 2 years. No interest rate swap contracts are in place at 30 June 2000 (1999: nil). Interest Rate Risk Exposures The economic entity is exposed to interest rate risk through primary financial assets and liabilities. The following table summarises interest rate risk for the economic entity. Floating Non-interest Average Rates Bearing Total Interest June 2000 $000 $000 $000 Rate (a) Financial Assets Cash Trade debtors Other debtors 11am cash deposits Bank endorsed bills of exchange Loans to managing director and employees Other loans Investment in non controlled entities Financial Liabilities Trade creditors Other creditors Bank loans Bank overdraft June 1999 Financial Assets Cash Trade debtors Other debtors 11am cash deposits Bank endorsed bills of exchange Loans to managing director and employees Managed unit trusts Other loans Investment in non controlled entities Financial Liabilities Trade creditors Other creditors Bank loans Bank overdraft 38 Additional Financial Instruments Disclosure (continued) Foreign Exchange Risk The economic entity enters into forward exchange contracts to buy and sell specified amounts of foreign currencies in the future at stipulated exchange rates. The objective in entering into these contracts is to protect the economic entity against exchange rate movements. The accounting policy with regard to forward exchange contracts is outlined in Note 1(c). At balance date the details, in Australian Dollars, of outstanding forward exchange contracts are: Currency 4,501 371,902 40,224 852 - 70,010 4,042 4,936 7,178 4,501 70,010 4,042 371,902 40,224 4,936 852 7,178 417,479 86,166 503,645 2,491 1,732 33,610 23,688 - 33,610 23,688 2,491 1,732 4,223 57,298 61,521 Floating Rates $000 Non-interest Bearing $000 Total $000 2,893 7,300 35,391 17,980 2,853 - 42,774 7,186 7,424 18,369 679 2,893 42,774 7,186 7,300 35,391 7,424 36,349 2,853 679 66,417 76,432 142,849 7,175 1,771 26,452 21,830 - 26,452 21,830 7,175 1,771 8,946 48,282 57,228 Average Exchange Rate 2000 1999 2000 1999 Buy $000 Sell $000 Buy $000 Sell $000 4.75% 5.92% 6.06% 6.00% 7.90% 9.20% Average Interest Rate (a) US Dollars 3 months or less 3 to 12 months 0.6024 0.6008 0.6558 0.6596 - (20,748) (1,331) 1,412 1,319 (13,996) - Pounds Sterling 3 months or less 0.3963 0.4189 197 - 72 - New Zealand Dollars 3 months or less 1.2878 - - (280) - - Swedish Kronor 3 months or less 5.3296 5.6379 - (89) - (532) Deutschemarks 3 months or less 3 to 12 months 1.2626 1.2545 1.0690 340 85 - 441 - Euro 3 months or less - 0.6359 - 122 - 0.9848 0.9571 - 696,338 - - Swiss Francs 3 months or less Purchase consideration for ZLB (2,233) - 3.50% The sell contracts in this table relate primarily to forward contracts entered into by the chief entity to hedge foreign currency receivables from other entities within the economic entity. These receivables are eliminated on consolidation; however, the hedges are in place to protect the chief entity from movements in exchange rates that would give rise to a profit and loss impact. 4.70% 4.92% The Swiss Francs buy contract in this table relates primarily to a forward contract entered into by the chief entity to hedge the purchase of the investment in ZLB as disclosed in Note 26. 5.16% 6.00% 5.62% 7.45% (a) most recently determined rate applicable at balance date. 30 CSL Limited and Controlled Entities (ACN 051 588 348) CSL Limited and Controlled Entities (ACN 051 588 348) 31 38 Additional Financial Instruments Disclosure Interest Rate Risk The economic entity has entered into interest rate swap contracts. These contracts allow the economic entity to raise short and long term borrowings at floating rates and effectively swap them into fixed rates. Maturities of swap contracts are generally between 1 and 2 years. No interest rate swap contracts are in place at 30 June 2000 (1999: nil). Interest Rate Risk Exposures The economic entity is exposed to interest rate risk through primary financial assets and liabilities. The following table summarises interest rate risk for the economic entity. Floating Non-interest Average Rates Bearing Total Interest June 2000 $000 $000 $000 Rate (a) Financial Assets Cash Trade debtors Other debtors 11am cash deposits Bank endorsed bills of exchange Loans to managing director and employees Other loans Investment in non controlled entities Financial Liabilities Trade creditors Other creditors Bank loans Bank overdraft June 1999 Financial Assets Cash Trade debtors Other debtors 11am cash deposits Bank endorsed bills of exchange Loans to managing director and employees Managed unit trusts Other loans Investment in non controlled entities Financial Liabilities Trade creditors Other creditors Bank loans Bank overdraft 38 Additional Financial Instruments Disclosure (continued) Foreign Exchange Risk The economic entity enters into forward exchange contracts to buy and sell specified amounts of foreign currencies in the future at stipulated exchange rates. The objective in entering into these contracts is to protect the economic entity against exchange rate movements. The accounting policy with regard to forward exchange contracts is outlined in Note 1(c). At balance date the details, in Australian Dollars, of outstanding forward exchange contracts are: Currency 4,501 371,902 40,224 852 - 70,010 4,042 4,936 7,178 4,501 70,010 4,042 371,902 40,224 4,936 852 7,178 417,479 86,166 503,645 2,491 1,732 33,610 23,688 - 33,610 23,688 2,491 1,732 4,223 57,298 61,521 Floating Rates $000 Non-interest Bearing $000 Total $000 2,893 7,300 35,391 17,980 2,853 - 42,774 7,186 7,424 18,369 679 2,893 42,774 7,186 7,300 35,391 7,424 36,349 2,853 679 66,417 76,432 142,849 7,175 1,771 26,452 21,830 - 26,452 21,830 7,175 1,771 8,946 48,282 57,228 Average Exchange Rate 2000 1999 2000 1999 Buy $000 Sell $000 Buy $000 Sell $000 4.75% 5.92% 6.06% 6.00% 7.90% 9.20% Average Interest Rate (a) US Dollars 3 months or less 3 to 12 months 0.6024 0.6008 0.6558 0.6596 - (20,748) (1,331) 1,412 1,319 (13,996) - Pounds Sterling 3 months or less 0.3963 0.4189 197 - 72 - New Zealand Dollars 3 months or less 1.2878 - - (280) - - Swedish Kronor 3 months or less 5.3296 5.6379 - (89) - (532) Deutschemarks 3 months or less 3 to 12 months 1.2626 1.2545 1.0690 340 85 - 441 - Euro 3 months or less - 0.6359 - 122 - 0.9848 0.9571 - 696,338 - - Swiss Francs 3 months or less Purchase consideration for ZLB (2,233) - 3.50% The sell contracts in this table relate primarily to forward contracts entered into by the chief entity to hedge foreign currency receivables from other entities within the economic entity. These receivables are eliminated on consolidation; however, the hedges are in place to protect the chief entity from movements in exchange rates that would give rise to a profit and loss impact. 4.70% 4.92% The Swiss Francs buy contract in this table relates primarily to a forward contract entered into by the chief entity to hedge the purchase of the investment in ZLB as disclosed in Note 26. 5.16% 6.00% 5.62% 7.45% (a) most recently determined rate applicable at balance date. 30 CSL Limited and Controlled Entities (ACN 051 588 348) CSL Limited and Controlled Entities (ACN 051 588 348) 31 38 Additional Financial Instruments Disclosure (continued) The following table, expressed in Australian Dollars, summaries the foreign exchange risk carried by the economic entity as a result of the existence of foreign currency denominated financial assets and liabilities. Financial assets and liabilities where all amounts are denominated in Australian Dollars are excluded from the table. June 2000 Financial Assets Cash Trade debtors Other debtors Other loans Financial Liabilities Trade creditors Other creditors Bank loans Other loans Aust $ $000 US $ $000 Other $000 Total $000 1,146 56,142 2,012 852 1,723 11,629 1,806 - 1,632 2,239 224 - 4,501 70,010 4,042 852 60,152 15,158 4,095 79,405 25,369 12,527 1,732 7,418 10,799 2,491 - 823 362 - 33,610 23,688 2,491 1,732 39,628 20,708 1,185 61,521 38 Additional Financial Instruments Disclosure (continued) Credit Risk The maximum exposure to credit risk at balance date to recognised financial assets is the carrying amount, net of any provision for doubtful debts, as disclosed in the balance sheet and notes to the financial statements. 2000 $000 1999 $000 483,540 14,556 5,549 123,677 13,163 6,009 503,645 142,849 Customer/Industry Classification % % State and Federal Government Financial Institutions Other 5 83 12 12 57 31 Location of Credit risk Australia USA Other Derivatives The economic entity incurs credit risk on forward exchange contracts entered into with major Australian banks. At balance date the economic entity's credit exposure in respect of such contracts is $721.6m (1999: $17.9m). Net Fair Values of Financial Assets and Liabilities The approach to determining the fair value of financial instruments is disclosed in Note 1 (n). The fair value of financial instruments is equal to the carrying value as disclosed in this note. June 1999 Aust $ $000 US $ $000 Other $000 Total $000 Financial Assets Cash Trade debtors Other debtors Other loans 1,776 27,767 6,551 2,853 559 13,276 452 - 558 1,731 183 - 2,893 42,774 7,186 2,853 38,947 14,287 2,472 55,706 21,737 15,011 1,620 3,839 6,541 7,175 151 876 278 - 26,452 21,830 7,175 1,771 38,368 17,706 1,154 57,228 Financial Liabilities Trade creditors Other creditors Bank loans Other loans 32 CSL Limited and Controlled Entities (ACN 051 588 348) CSL Limited and Controlled Entities (ACN 051 588 348) 33 38 Additional Financial Instruments Disclosure (continued) The following table, expressed in Australian Dollars, summaries the foreign exchange risk carried by the economic entity as a result of the existence of foreign currency denominated financial assets and liabilities. Financial assets and liabilities where all amounts are denominated in Australian Dollars are excluded from the table. June 2000 Financial Assets Cash Trade debtors Other debtors Other loans Financial Liabilities Trade creditors Other creditors Bank loans Other loans Aust $ $000 US $ $000 Other $000 Total $000 1,146 56,142 2,012 852 1,723 11,629 1,806 - 1,632 2,239 224 - 4,501 70,010 4,042 852 60,152 15,158 4,095 79,405 25,369 12,527 1,732 7,418 10,799 2,491 - 823 362 - 33,610 23,688 2,491 1,732 39,628 20,708 1,185 61,521 38 Additional Financial Instruments Disclosure (continued) Credit Risk The maximum exposure to credit risk at balance date to recognised financial assets is the carrying amount, net of any provision for doubtful debts, as disclosed in the balance sheet and notes to the financial statements. 2000 $000 1999 $000 483,540 14,556 5,549 123,677 13,163 6,009 503,645 142,849 Customer/Industry Classification % % State and Federal Government Financial Institutions Other 5 83 12 12 57 31 Location of Credit risk Australia USA Other Derivatives The economic entity incurs credit risk on forward exchange contracts entered into with major Australian banks. At balance date the economic entity's credit exposure in respect of such contracts is $721.6m (1999: $17.9m). Net Fair Values of Financial Assets and Liabilities The approach to determining the fair value of financial instruments is disclosed in Note 1 (n). The fair value of financial instruments is equal to the carrying value as disclosed in this note. June 1999 Aust $ $000 US $ $000 Other $000 Total $000 Financial Assets Cash Trade debtors Other debtors Other loans 1,776 27,767 6,551 2,853 559 13,276 452 - 558 1,731 183 - 2,893 42,774 7,186 2,853 38,947 14,287 2,472 55,706 21,737 15,011 1,620 3,839 6,541 7,175 151 876 278 - 26,452 21,830 7,175 1,771 38,368 17,706 1,154 57,228 Financial Liabilities Trade creditors Other creditors Bank loans Other loans 32 CSL Limited and Controlled Entities (ACN 051 588 348) CSL Limited and Controlled Entities (ACN 051 588 348) 33 Directors’ Declaration Independent Audit Report To the Members of CSL Limited: The directors’ declare that: (a) the financial statements and associated notes comply with the accounting standards and Urgent Issues Group Consensus Views; (b) the financial statements and notes give a true and fair view of the financial position as at 30 June 2000 and performance of the company and economic entity for the year then ended; (c) in the directors’ opinion; (i) 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 that the company and chief entity, who are party to the deed described in Note 30, will together be able to meet any obligations or liabilities to which they are, or may become subject by virtue of the deed of cross guarantee dated 20 June 1995; and (ii) the financial statements and notes are in accordance with the Corporations Law, including sections 296 and 297. Made in accordance with a resolution of the directors. Scope We have audited the financial report of CSL Limited for the financial year ended 30 June 2000 as set out on pages 6 to 34. The financial report includes the consolidated financial statements of the consolidated entity comprising the company and the entities it controlled at the year's end or from time to time during the financial year. The company's directors are responsible for the financial report. We have conducted an independent audit of the financial report in order to express an opinion on it to the members of the company. Our audit has been conducted in accordance with Australian Auditing Standards to provide reasonable assurance whether the financial report is free of material misstatement. Our procedures included examination, on a test basis, of evidence supporting the amounts and other disclosures in the financial report, and the evaluation of accounting policies and significant accounting estimates. These procedures have been undertaken to form an opinion whether, in all material respects, the financial report is presented fairly in accordance with Accounting Standards, other mandatory professional reporting requirements and statutory requirements, in Australia, so as to present a view which is consistent with our understanding of the company's and the consolidated entity's financial position, and performance as represented by the results of their operations and their cash flows. The audit opinion expressed in this report has been formed on the above basis. Audit Opinion In our opinion, the financial report of CSL Limited is in accordance with: (a) the Corporations Law, including: Peter H Wade Chairman Brian A McNamee Managing Director (i) giving a true and fair view of the company’s and consolidated entity’s financial position as at 30 June 2000 and of their performance for the year ended on that date; and (ii) complying with Accounting Standards and the Corporations Regulations; and Melbourne (b) other mandatory professional reporting requirements. Dated this fifteenth day of August 2000 Chartered Accountants Partner Melbourne 15 August 2000 34 CSL Limited and Controlled Entities (ACN 051 588 348) CSL Limited and Controlled Entities (ACN 051 588 348) 35 Directors’ Declaration Independent Audit Report To the Members of CSL Limited: The directors’ declare that: (a) the financial statements and associated notes comply with the accounting standards and Urgent Issues Group Consensus Views; (b) the financial statements and notes give a true and fair view of the financial position as at 30 June 2000 and performance of the company and economic entity for the year then ended; (c) in the directors’ opinion; (i) 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 that the company and chief entity, who are party to the deed described in Note 30, will together be able to meet any obligations or liabilities to which they are, or may become subject by virtue of the deed of cross guarantee dated 20 June 1995; and (ii) the financial statements and notes are in accordance with the Corporations Law, including sections 296 and 297. Made in accordance with a resolution of the directors. Scope We have audited the financial report of CSL Limited for the financial year ended 30 June 2000 as set out on pages 6 to 34. The financial report includes the consolidated financial statements of the consolidated entity comprising the company and the entities it controlled at the year's end or from time to time during the financial year. The company's directors are responsible for the financial report. We have conducted an independent audit of the financial report in order to express an opinion on it to the members of the company. Our audit has been conducted in accordance with Australian Auditing Standards to provide reasonable assurance whether the financial report is free of material misstatement. Our procedures included examination, on a test basis, of evidence supporting the amounts and other disclosures in the financial report, and the evaluation of accounting policies and significant accounting estimates. These procedures have been undertaken to form an opinion whether, in all material respects, the financial report is presented fairly in accordance with Accounting Standards, other mandatory professional reporting requirements and statutory requirements, in Australia, so as to present a view which is consistent with our understanding of the company's and the consolidated entity's financial position, and performance as represented by the results of their operations and their cash flows. The audit opinion expressed in this report has been formed on the above basis. Audit Opinion In our opinion, the financial report of CSL Limited is in accordance with: (a) the Corporations Law, including: Peter H Wade Chairman Brian A McNamee Managing Director (i) giving a true and fair view of the company’s and consolidated entity’s financial position as at 30 June 2000 and of their performance for the year ended on that date; and (ii) complying with Accounting Standards and the Corporations Regulations; and Melbourne (b) other mandatory professional reporting requirements. Dated this fifteenth day of August 2000 Chartered Accountants Partner Melbourne 15 August 2000 34 CSL Limited and Controlled Entities (ACN 051 588 348) CSL Limited and Controlled Entities (ACN 051 588 348) 35 Financial Highlights CSL Business Offices Financial Highlights Year ended 30 June 1999-2000 1998-1999 % change Total revenue 504.3 424.9 18.7 Sales revenue 450.6 413.5 9.0 Research and development 43.6 40.8 6.9 Operating profit before interest and income tax 77.2 68.7 12.4 Operating profit after tax 54.4 47.4 14.8 Capital investment 37.2 39.0 (4.6) Total assets at 30 June 946.5 561.5 68.6 Shareholders’ funds at 30 June 793.6 414.9 91.3 Net tangible assets per share at 30 June ($) 5.32 3.15 68.9 Weighted average number of shares (million) 133.4 131.4 1.5 Earnings per share (cents) 40.8 36.1 13.0 Dividend per share (cents) 23.0 21.0 9.5 All figures in $A million unless otherwise stated. 36 CSL (New Zealand) Limited Pharmaceutical Group Bioplasma Division Biosciences Group Level 4, Building 10 666 Great South Road Central Park, Penrose Auckland 6 New Zealand Telephone: +64 9 579 8105 Facsimile: +64 9 579 8106 Victoria and Tasmania 45 Poplar Road Parkville Victoria 3052 Telephone: - Pharmaceutical: + 61 3 9389 1408 - Animal Health: + 61 3 9389 1251 - Biosciences: + 61 3 9389 1644 Facsimile: + 61 3 9389 1727 New South Wales 25-27 Paul Street North North Ryde New South Wales 2113 Telephone: (02) 9887 4433 Facsimile: (02) 9887 3171 1998-99 1997-98 1996-97 1995-96 Total revenue 504.3 424.9 366.7 318.1 290.6 Sales revenue 450.6 413.5 353.5 305.0 281.1 Research and development 43.6 40.8 39.1 36.6 30.2 Operating profit before interest and income tax 77.2 68.7 58.5 48.1 41.6 Operating profit after tax before abnormal item 54.4 47.4 40.9 35.2 29.0 - - 3.9 - - Profit after tax and abnormals 54.4 47.4 44.8 35.2 29.0 Capital investment 37.2 39.0 21.3 16.6 16.2 Total assets at 30 June 946.5 561.5 523.8 511.1 474.7 Shareholders’ funds at 30 June 793.6 414.9 390.3 363.0 341.6 Net tangible assets per share at 30 June ($) 5.32 3.15 2.97 2.79 2.62 Weighted average number of shares (million) 133.4 131.4 131.1 130.0 130.0 Earnings per share (cents) 40.8 36.1 34.2 27.0 22.3 Dividend per share (cents) 23.0 21.0 18.0 15.5 13.0 CSL Limited and Controlled Entities (ACN 051 588 348) Registered Head Office 45 Poplar Road Parkville Victoria 3052 Australia Telephone: + 61 3 9389 1911 Facsimile: + 61 3 9389 1434 State Sales Offices 1999-2000 Abnormal income tax credit International Offices Bioplasma Division 189 Camp Road Broadmeadows Victoria 3047 Telephone: + 61 3 9246 5200 Facsimile: + 61 3 9246 5299 Five Year Summary All figures are in $A million unless otherwise stated. CSL Limited Queensland 14 Dividend Street Mansfield Queensland 4122 Telephone: (07) 3849 6140 Facsimile: (07) 3849 6141 South Australia and Northern Territory 11 Coongie Avenue Edwardstown South Australia 5039 Telephone: (08) 8276 3200 Facsimile: (08) 8277 0556 CSL (New Zealand) Limited Animal Health Group 2-6 Shakespeare Avenue Upper Hutt New Zealand Telephone: +64 4 527 9088 Facsimile: +64 4 527 9332 CSL UK Limited JRH Biosciences Limited Smeaton Road West Portway Andover Hampshire SP10 3LF England Telephone: +44 1628 333 311 Facsimile: +44 1628 332 412 JRH Biosciences Inc 13804 W. 107th Street Lenexa Kansas 66215 USA Telephone: +1 913 469 5580 US Toll Free: +1 800 255 6032 Facsimile: +1 913 469 5584 Biocor Animal Health Inc 2720 North 84th Street Omaha Nebraska 68134 USA Telephone: +1 402 393 7440 Facsimile: +1 402 393 4712 Western Australia 293-297 Fitzgerald Street Perth Western Australia 6000 Telephone: (08) 9328 7322 Facsimile: (08) 9227 6196 CSL Limited and Controlled Entities (ACN 051 588 348) 37 Financial Highlights CSL Business Offices Financial Highlights Year ended 30 June 1999-2000 1998-1999 % change Total revenue 504.3 424.9 18.7 Sales revenue 450.6 413.5 9.0 Research and development 43.6 40.8 6.9 Operating profit before interest and income tax 77.2 68.7 12.4 Operating profit after tax 54.4 47.4 14.8 Capital investment 37.2 39.0 (4.6) Total assets at 30 June 946.5 561.5 68.6 Shareholders’ funds at 30 June 793.6 414.9 91.3 Net tangible assets per share at 30 June ($) 5.32 3.15 68.9 Weighted average number of shares (million) 133.4 131.4 1.5 Earnings per share (cents) 40.8 36.1 13.0 Dividend per share (cents) 23.0 21.0 9.5 All figures in $A million unless otherwise stated. 36 CSL (New Zealand) Limited Pharmaceutical Group Bioplasma Division Biosciences Group Level 4, Building 10 666 Great South Road Central Park, Penrose Auckland 6 New Zealand Telephone: +64 9 579 8105 Facsimile: +64 9 579 8106 Victoria and Tasmania 45 Poplar Road Parkville Victoria 3052 Telephone: - Pharmaceutical: + 61 3 9389 1408 - Animal Health: + 61 3 9389 1251 - Biosciences: + 61 3 9389 1644 Facsimile: + 61 3 9389 1727 New South Wales 25-27 Paul Street North North Ryde New South Wales 2113 Telephone: (02) 9887 4433 Facsimile: (02) 9887 3171 1998-99 1997-98 1996-97 1995-96 Total revenue 504.3 424.9 366.7 318.1 290.6 Sales revenue 450.6 413.5 353.5 305.0 281.1 Research and development 43.6 40.8 39.1 36.6 30.2 Operating profit before interest and income tax 77.2 68.7 58.5 48.1 41.6 Operating profit after tax before abnormal item 54.4 47.4 40.9 35.2 29.0 - - 3.9 - - Profit after tax and abnormals 54.4 47.4 44.8 35.2 29.0 Capital investment 37.2 39.0 21.3 16.6 16.2 Total assets at 30 June 946.5 561.5 523.8 511.1 474.7 Shareholders’ funds at 30 June 793.6 414.9 390.3 363.0 341.6 Net tangible assets per share at 30 June ($) 5.32 3.15 2.97 2.79 2.62 Weighted average number of shares (million) 133.4 131.4 131.1 130.0 130.0 Earnings per share (cents) 40.8 36.1 34.2 27.0 22.3 Dividend per share (cents) 23.0 21.0 18.0 15.5 13.0 CSL Limited and Controlled Entities (ACN 051 588 348) Registered Head Office 45 Poplar Road Parkville Victoria 3052 Australia Telephone: + 61 3 9389 1911 Facsimile: + 61 3 9389 1434 State Sales Offices 1999-2000 Abnormal income tax credit International Offices Bioplasma Division 189 Camp Road Broadmeadows Victoria 3047 Telephone: + 61 3 9246 5200 Facsimile: + 61 3 9246 5299 Five Year Summary All figures are in $A million unless otherwise stated. CSL Limited Queensland 14 Dividend Street Mansfield Queensland 4122 Telephone: (07) 3849 6140 Facsimile: (07) 3849 6141 South Australia and Northern Territory 11 Coongie Avenue Edwardstown South Australia 5039 Telephone: (08) 8276 3200 Facsimile: (08) 8277 0556 CSL (New Zealand) Limited Animal Health Group 2-6 Shakespeare Avenue Upper Hutt New Zealand Telephone: +64 4 527 9088 Facsimile: +64 4 527 9332 CSL UK Limited JRH Biosciences Limited Smeaton Road West Portway Andover Hampshire SP10 3LF England Telephone: +44 1628 333 311 Facsimile: +44 1628 332 412 JRH Biosciences Inc 13804 W. 107th Street Lenexa Kansas 66215 USA Telephone: +1 913 469 5580 US Toll Free: +1 800 255 6032 Facsimile: +1 913 469 5584 Biocor Animal Health Inc 2720 North 84th Street Omaha Nebraska 68134 USA Telephone: +1 402 393 7440 Facsimile: +1 402 393 4712 Western Australia 293-297 Fitzgerald Street Perth Western Australia 6000 Telephone: (08) 9328 7322 Facsimile: (08) 9227 6196 CSL Limited and Controlled Entities (ACN 051 588 348) 37 About CSL The CSL Group develops, manufactures and markets biologically-based health care products that benefit the community. Our products include human and veterinary pharmaceuticals (notably vaccines), products derived from human plasma, diagnostics, and cell culture reagents. We continue to build CSL in ways that benefit our shareholders by: • Meeting customers’ expectations with quality products and excellent service; • Investing in development of new products - and introducing those products into domestic and international markets; • Pursuing national and international collaborations that build on our scientific, manufacturing and marketing expertise; • Developing a flexible, committed and skilled workforce rewarded for excellence and innovation; • Ensuring our workplaces are healthy for employees and the community; • Striving for continuous improvement in all areas of our business. CSL is firmly committed to research and development, quality assurance and the development of international product and marketing alliances. In Australia, we are a leading investor in pharmaceutical research and development, and one of the largest employers in the pharmaceutical manufacturing industry. Our earnings are supported by established brands with strong market shares. We continue to achieve improvements in profitability as the Company expands its business nationally and internationally through products developed both by CSL and in collaboration with partners. Internet http://www.csl.com.au